Writing last week under the banner “Airport deal blow to democracy”, Karen Swaine made a series of factual errors which require correction.
The first is the assumption Queenstown Airport Corporation is a Council Controlled Organisation. It is not.
QAC is a Council Controlled Trading Organisation and the difference is very real.
A CCTO is able to make a profit – a CCO, like Lakes Leisure and Lakes Environmental, is not.
As a CCO, Lakes Leisure is not focused on making money but is concentrating on fair and reasonable cost
recovery for its services. This helps reduce the annual operating grant it receives from council which, in the current year, is a little over $1 million.
Ms Swaine has stated there has been an “airport sell-off”. There has not.
The directors of QAC have issued new shares in the company – as they are empowered to do under the company’s constitution, adopted in 1996.
The transaction has two stages. The first the directors have completed. The second, to increase the share issue from 24.9 per cent to between 33 and 35 per cent, requires a decision of council and public consultation is required.
When complete this transaction will deliver a strong, low-debt balance sheet for the airport company, a one-off special dividend of $10m to the council and an ongoing dividend to council and the community of around $2m per year.
It is my view that these funds should go into a Community Development Fund rather than the general rate.
That fund can deliver to the community of the Lakes District, from Makarora to Kingston, the activities, events and facilities that are currently not able to be delivered through the rating system if rate increases are to be kept as low as possible.
Council will remain the majority shareholder in QAC, will have the majority of directors on the board and will be able to control share sales or rights through a shareholder’s agreement.
Ms Swaine questions the use of “public excluded” for the consideration of sensitive agenda items. The public-excluded items heard by council on May 25 included reports on the fast hydroslide and heating coil at the aquatic centre. Both matters subject to legal action and rightly heard with the public excluded to protect council’s position.
Council also considered on a public excluded basis the appointment of a director to QAC and the Statement of Shareholder Expectations for Lakes Environmental.
Again, both matters requiring protection of public excluded for consideration. In both cases the full detail was released post the decision.
Finally, Ms Swaine has stated that the deputy chief executive advised council that a matter should be heard public excluded because it contained reference to a purchase of shares in QAC.
There is no such item on the agenda and there is no record or recollection of the deputy CEO providing any such advice to council.
Your say
Clearing up confusion.
Sorry if I did't make myself clear in my previous comment. The minutes from the meeting from which Karen quotes are indeed still up on the QLDC website and they definitely state that the Deputy CEO did provide that advice re. the purchase of shares in QAC.
12 Aug 2010 05:52PMMB
Minutes still on website.
Re. The Mayor's comment that: There is no such item on the agenda and there is no record or recollection of the deputy CEO providing any such advice to council.
As of this evening these meeting minutes still say the same thing, though I note that Mayor Geddes was not at the meeting according to apologies accepted.
12 Aug 2010 04:52PMMB
For the record, Your Worship
I downloaded from the QLDC website the unconfirmed "Minutes of a meeting of the Queenstown Lakes District Council held in the Council Chambers, 10 Gorge Road, Queenstown on Tuesday, 25 May 2010 commencing at 9.30 am."
Page 15 records that:
"Questions were raised over the need for item 18 (QLDC Tax Losses) to be considered with the public excluded, particularly as the decision would be reflected in the public accounts of both QLDC and QAC. Mr Burns advised that the decision concerned the purchase of shares in QAC and it had habitually in the past been the practice to consider such matters with the public excluded. Notwithstanding this, he was happy to alter the recommendation that the resolution be made public after the meeting. On the motion of Councillors Perkins and J S Wilson it was resolved that the public be excluded from the following parts of the proceedings of the meeting: Item 18: QLDC Tax Losses
The link to the QLDC website is (or was until today!): http://www.qldc.govt.nz/full_council_agendas/category/387/
-Karen-
12 Aug 2010 03:39PMKarenS
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