Mayoral hopefuls split over Aurora sale decision
Cr Lee Vandervis said the Dunedin City Council company should be sold and the proceeds reinvested in diverse funds that could provide relief from rates increases.
"We need to sell Aurora because the DCC is too indebted to keep providing the increasing levels of debt necessary to keep Aurora going and to keep up with Central Otago expansion needs," he said.
Cr Vandervis described his position as unpopular, but necessary, and it would also make the council less vulnerable to changes in interest rates, he said.
His thoughts were outlined in a blog about his mayoral plans to control rates, debt and bureaucracy.
Mayoralty race rival Andrew Simms said the debate had occurred already and the will of the people won out when the council ended up deciding last year to keep the company.
"Nothing has changed, Lee," Mr Simms said.
"We still don't want you to sell Aurora out from under us to an Australian pension fund or anyone else."
Mr Simms said the council was "struggling to avoid a debt spiral".
"That needs to be fixed at the source — not masked by cashing in Aurora Energy, our most valuable asset that will deliver riches for Dunedin in the future."
Aurora Energy is owned by the city council, but the lines company also has a presence in Queenstown, Wānaka and Central Otago.
The issue of whether it should be sold re-emerged at a city council meeting last month, when Dunedin Mayor Jules Radich — who is standing for re-election — suggested it could have fetched as much as $1.9 billion if conditions were extremely favourable.
He also said he was unaware of any election candidate campaigning to sell Aurora.
Cr Vandervis said he was surprised by this.
"I have always advocated for reinvesting debt-hobbled Aurora in a fund that gives us a return and does not demand ever more debt, despite vocal public opinion against a sale."
Cr Vandervis said selling Aurora was the right thing to do.
"I do hope to convince the next council to sell Aurora if the current good sale conditions persist, but councillors may well be convinced more by the growing debt burden and the threat of a rates revolt if we do not sell."
Cr Vandervis, who chaired the council's finance and council-controlled organisations committee this term, said he, committee deputy chairwoman and deputy mayor Cherry Lucas and Dunedin City Holdings Ltd directors had viewed a sale as necessary.
There had been poor past management and a decade of deferred maintenance catchup, and "massive Central Otago expansion potential can only be realised by a very wealthy investor", Cr Vandervis said.
Mr Simms said Aurora was experiencing growth in demand for electricity and strong network growth in Central Otago.
"Aurora is investing heavily in growth and renewals at present, but this capital expenditure carries a guaranteed rate of return, and the value of Aurora continues to escalate."
Mr Simms said he was "proud to lead the effort" to retain the company.
"In reality, that role was straightforward, with such a weight of the community opposed to selling Aurora."
grant.miller@odt.co.nz
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