Councillors decided not to approve GHL’s draft Statement of Intent (SOI) —July 1, 2023 to June 30, 2026 — deciding instead on the other option before it, for GHL to recommend changes to be incorporated in an updated SOI by September 30.
The meeting was the first time councillors had discussed in public that the GHL dividend for the year ending June 30, 2023 would not be paid.
GHL’s financial results for the first six months of the 2022-2023 financial year were “above expectations” with a net profit of $1m, compared to a forecast loss of $707,000 and a $500,000 loss for the same period of the previous year.
But GHL chairman John Rae said in April that the second half of 2022-2023 would be extremely challenging after Cyclone Gabrielle, especially due to the impacts on Tauwhareparae Farms.
Councillor Colin Alder said the non-payment of a dividend was “another step in trying to force us into a decision that not many of us want to take”.
“This is a decision that’s saying the farms are not worth having.”
Cr Alder said the value of the farms “in the books” meant absolutely nothing in today’s values when the Overseas Investment Office had closed down a forestry sale.
The farms were being valued at “best use”, or as if they were all in forestry, and were being “constantly compared” to returns from the Waikanae Beach Top 10 Holiday Park.
Cr Alder said the holiday park had not been valued at “best use”.
It had been valued at $7 million, but if it was divided up into sections and sold, it would be worth closer to $25m.
The returns on the farms and the holiday park would then be similar.
“I feel we are being manipulated and being pushed in a direction I firmly believe is wrong.”
The farms were not useless but were “our best investment”.
Concern at lack of input on GHL’s non-payment
Cr Aubrey Ria asked if the lost dividend income would have to come from ratepayers, and if other options had been investigated.
Council chief financial officer Pauline Foreman said dividends were non-rates income.
But if there was no such revenue stream, “what have you got left?”
“You need to raise rates.”
There was no easy answer.
Cr Tony Robinson asked if there had been any business interruption insurance to overcome the impacts of Cyclone Gabrielle.
Ms Foreman said that was a matter to ask GHL in public-excluded business at the end of the committee meeting.
Cr Rawinia Parata expressed concern that there was no opportunity for even discussion of the non-payment of a dividend the council had been expecting.
Ratepayers were already struggling with weather events and the rising cost of living.
Cr Larry Foster said it would have been nice to have a Plan B, like a smaller dividend payment.
Ms Foreman said the assessment of an ability to pay was up to GHL.
There would be a GHL report for council at a later date.
Cr Josh Wharehinga said GHL had previously informed the council about the impacts of Cyclone Gabrielle.
There were two issues before the council, he said. The dividend issue had sidetracked them from the GHL draft Statement of Intent, and he had heard little debate about the SOI.
Councillors decided to adopt the second or alternative recommendation for changes to be incorporated into an updated SOI by September 30.
