We’re Being Sold a Line

Look at this headline from the Herald:

Rain boosts profit for Mighty River

Sounds good doesn’t it?  But then if you read a few lines down:

The company’s bottom line net profit was $17.6 million for the six months to December 31, down 81 per cent compared with the previous corresponding period.

That doesn’t sound so good at all!

And nor does this:

Mighty River said the fall was the result of non-cash “marked to market” movements in the value of its derivative financial instruments during the half-year, caused by the global fall in long-term wholesale interest rates.

So to a layperson like me it would seem Mighty River Power is making a lot of money but has lost it all playing with derivatives.  Tell me I’m wrong.

But of course they still find the money to pay a hefty chunk to the government:

The company announced an interim dividend of $74.8 million, up $10.1 million, or 16 per cent, on the previous corresponding period, and in line with the company’s policy of paying out 75 per cent of its profit.

So you make an actual profit of $17 million, but decide that was due to some strange one off stuff and you really made around $100 million, so you pay out 75% of that…

And of course since you’re up for sale, a big huge forecasted profit is the order of the day:

Mighty River said that based on the company’s interim results and a strong start to its second half, its forecast ebitdaf for 2011/12 was now in a range of $460 million to $475 million, up from an earlier guidance of $430 million to $450 million.

Man, this article is just a bunch of PR.  You’d actually need a lot more detailed info, and some figures backing it up to actually be in a position to decide what was actually going on here.

 

Why Do Business Premises Pay Do Much Rent?

Just look at this from the Herald:

Auckland’s business rates double

11:16 AM Saturday Mar 24, 2012

Auckland’s Chamber of Commerce has had enough of the Council using businesses as a cash cow.

The Council has confirmed businesses will be paying more than double the rates of comparable residential properties.

Chamber of Commerce chief Michael Barnett says they’re being used.

“There is no reason for businesses to be paying significantly more. To me, it’s just an opportunity for the councils to get their hand into the pockets of businesses because they believe they can afford more. It’s unfair, it’s not equitable,” he says.

Michael Barnett says it’s a lazy way to work out a charging system.

– Newstalk ZB

Now how on earth can this be justified? Why shoulld a business property around the same value of a residential property be rated double the amount?

If you think about it, surely the house would use more services: More rubbish, more water (and wastewater), more use of services like swimming pools, libraries, parks etc.

You know what, it’s not justifiable at all, but the reason it happens is this:  There are less business properties than residential ones and as a business owner, you don’t get a separate vote.

In fact do the owners of commercial/industrial properties get additional votes for those properties at all?  I imagine they don’t?  Which means they have very little say at all.  Especially if they live outside the area (i.e. live in a different council area) to the one they have their business property in.

And so THIS IS WHY THIS IS DONE.  It’s a political move.

Why on Earth are We Doing This?

A week or so ago, the United Nations were thwarted in their attempts to do anything about Syria by China and Russia vetoing any motions for action.

And it occurred to me we have an FTA with China and are trying very hard for one with Russia? From Stuff:

FTA ‘on track’ with Russia and friends

CATHERINE HARRIS

Last updated 05:00 24/03/2012

A free trade agreement between New Zealand and Russia and two associated countries is on track for a September announcement, according to New Zealand’s chief negotiator, Vangelis Vitalis.

Why are we so keen to do business with these countries?  They’re both essentially totalitarian regimes with very little in the way of human rights. The kind of regimes that like to support and prop up other totalitarian regimes e.g. Syria, Zimbabwe and so on.

And here we are eagerly wanting to trade with them. WTF? Why?

Do we care about the money more than anything else? Is this who NZ is now?  A bunch of unprincipled money grubbing types?  I frankly find it all quite amazing.

One of the most amazing things about all of this is the the FTA with China was negotiated and signed by a Labour government.  A political movement set up to protect workers rights signs an FTA with a country of 1.3 billion people most of whom will and do work for peanuts each day.  Talk about selling your constituency down the river!

And now National are continuing down this road trying to get FTA’s with anyone and everyone it can.  America, India, various asian countries and Russia…

Now the FTA with America is moving very slowly. But then one with Russia seems to be steaming right along.  Why is this I wonder?  An FTA with a large rich democracy takes ages but an FTA with a corrupt totalitarian regime moves along at a clip?

Money talks I guess.

Council Reforms

A good article in the Dominion Post on this:

 

Editorial: Council reforms strike right balance

Last updated 05:00 21/03/2012

OPINION: Local authorities have only themselves to blame for the Government forcing them to live within their means.

During almost a decade in which rates rose at more than twice the level of inflation and the debt owed by New Zealand’s 78 local bodies grew fourfold, councils have shown a disturbing lack of appreciation of the circumstances faced by their communities.

 

Rest of Article.

I think there’ll be very few people opposed to councils being restrained in the way that they are.

Air Conditioning Servicing

In my building, there is around $65,000 worth of air conditioning and fresh air systems.

And these HAVE to be serviced on a quarterly basis as part of the building WOF.  The guys who installed the gear did the servicing for the first year but have said they really only want to install this stuff and not service it.

So I had to find someone else to do it.  There are 6 a/c units and 4 fresh air systems, along with a bunch of toilet/kitchen extraction fans.  All these have to be checked, serviced and some forms signed stating the building WOF requirements are being met.

So last week I started trying to find someone to take on this work.  It’s been really hard to find someone good for a realistic price, but I’ve got someone now.

Here’s what I found:

  • The local company with offices across the road were hopeless to deal with again (I’ve tried them a few times over the years, they used to be good).  I drove out there to meet them but the guy had double booked himself, so couldn’t come.  then was supposed to email me but didn’t…
  • A company on the shore said they’d come out to look but the guy never rang back and then went on holiday.
  • Rang a couple of others who said someone would call me back but they didn’t.
  • Another company on the shore gave me a quote of $2800 plus GST per annum!
  • Got onto a good guy yesterday avo recommended by the development manager, he quoted me $800 per annum over the phone, and this morning he sent a contract which I’ve signed and sent back.  So this is $2000 less per annum than the other firm!  He sounds really practical and I’m sure we’ll get along well.

So all a bit of a hassle but a good result in the end.  And at $800 pa plus GST I’m very happy with the price!

Just goes to show how crappy some companies can be though.  You know companies are not supposed to be finding things all that easy just now.  You’d think they be interested in picking up extra work.  But they aren’t really.  Not sure why.

Local Government Reform

As I posted on a week or so ago, the government is in the process of putting some rules around what councils can and can’t do.  Today they announced a whole bunch of changes to the Local Government Act 2002, see here on Stuff.

1. The Local Government Act 2002 will be amended to replace references to the ‘social, economic, environmental and cultural well-being of communities’ (the four well beings) with a new purpose for councils of ‘providing good quality local infrastructure, public services and regulatory functions at the least possible cost to households and business.’

2. The Local Government Act 2002 will be amended to provide, by way of regulation, fiscal responsibility requirements in respect of income and expenditure, and prudent debt levels to be developed in consultation with Local Government New Zealand.

3.1 The Local Government Act 2002 will be amended to empower councils to set policy on the number of staff to be employed and overall remuneration policy. Councils’ annual reports will be required to include information on staff employed by salary bands.

3.2 The Local Government (Auckland Council) Act 2009 mayoral powers in respect of appointing deputy mayors, establishing committees, appointing committee chairpersons and proposing plans and budgets will be extended to all mayors from October 2013.

3.3 The Local Government Act (2002) is to be amended to provide a simpler, graduated scale of intervention linked to new fiscal responsibility requirements ranging from the request to provide information, to have a crown reviewer, observer or manager; or in extreme circumstances, commissioners or an early election.

4.1 The Local Government Act 2002 will be amended to streamline consideration of reorganization proposals and to extend the criteria to specifically include the benefits to be gained from simplifying planning processes and efficiency improvements.

4.2 The Local Electoral Act 2001 will be amended to give councils and the Local Government Commissiongreater flexibility in the determination of ward boundaries in rural areas to take into account communities of interest.

5. A Local Government Efficiency Taskforce will be established in consultation with Local Government New Zealand to review the planning, consultation and reporting requirements of the Local Government Act 2002 to report to Government by 31 October 2012

6. The Productivity Commission will undertake a review of the balance of functions allocated to local government by central government and ways to improve regulatory performance in the sector by April 2013. The Government will then, in consultation with Local Government New Zealand, develop a non-statutory framework for guiding decisions on which regulatory functions are best undertaken by local and central government.

7. Local government infrastructure provisions will be investigated by an expert advisory group to look at how good quality infrastructure to support a growing economy can best be delivered at least cost.

8. The Government will undertake a review of development contribution policy following the publication of the Auditor-General’s report on councils’ long term plans later this year.

Wow, is all I can say!  If they half of this it will make things soooo much better dealing with councils.  And about time too.

No longer will they be responsible for running the community, they will be responsible for providing good quality services at the lowest cost possible.

And just look at number 8.  Development contributions may be reviewed! We can only hope they’ll be reviewed downwards!

Update: And now Nic Smith has gone and resigned!  Aaaaaggghhh! Just when things look like they’re going to be sorted, the minister pushing it is forced to resign!  Will have to wait and see if Gerry Brownlee, the new minister for local government will undertake the same reforms.

 

Roller Grille Update

Well the company who supplied these grilles are now mucking me around.  The company is Metalbilt.  You’d think being one of the larger roller door manufacturing companies around, they’d give pretty good service.  But you’d be wrong.

Been trying to get some service out of them for 2 days now and just getting the run around.  The guy who gave the quote and who I had been speaking to yesterday, was away today.  So I spoke to his boss.  He said he’d look into it and call me back in half an hour.

Do you reckon he did? Nope.  How hopeless is that?  he also started to say things like it must have been used more than it was supposed to etc.

So I’ll give him until around 10:00 tomorrow morning and then ring him again.  I will certainly think twice about ever using Metalbilt for roller doors again though.

 

Update Friday Morning: Got an email from the service manager stating that they can fix the roller grille but it will cost me $1250 +GST.  Totally unacceptable.  I’ve emailed back.

Fancy installing something incorrectly, so it fails, and then expecting the customer to pay to have it fixed.  Shame MetalBilt.

Update Friday Lunchtime:  Just had a call from a higher up guy in the organisation. They are going to repair the damage at their cost. Phew. It will take a week or so for them to get the parts made and installed but they are going to do it.

Man I hate arguments like this, I actually couldn’t get to sleep until around 1am because of it. So relieved they are going to do the right thing. Shame they had to try it on first.

Update Friday a Week Later: The Metalbilt guys have been out there and fully repaired the doors!  So now they’re actually better than they were before.   So credit where credit is due, Metalbilt have stepped up and done what they needed to do to resolve this situation.

Compliance Schedule and Building WOF Hassles

Man owning buildings is not as much fun as it used to be.  There’s all sorts of BS you have to deal with these days.

Right now I’m in the middle of getting the first building WOF for my building at Papakura.  For buildings like this there is a list of specified systems called a Compliance Schedule which lists the systems in your building which have to be checked on a regular basis by independently qualified people to make sure they’re operating in a safe manner.

The list for my building as at yesterday was:

  • Automatic or Manual Emergency Warning Systems.  This is the Fire Alarm.
  • Automatic doors.  These are the sliding doors on the side of the building.
  • Emergency lights.  These light up if the fire alarm goes off so people can see the way out in the dark.
  • Mechanical ventilation and Air Conditioning.
  • Signs Relating to a specified system.  So this covers fire exit signs etc.
  • Final Exits / Means of Escape.  This refers to hallways, doorways, which must always be kept clear.
  • Smoke Separations. This is the walls of the building.  yep, I have to sign something once a month saying these are still OK, there’s no holes in the walls etc.

Now apart from the bottom item, these systems all have to be checked by independtly qualified people – building owners cannot do this themselves.  They used to be able to, but just used to sign everything off as working so now they’ve changed this.

So I have 3 sets of people come and check these things throughout the year (will be 4 soon, see below) and write out reports which I keep, and give to the building WOF guys who compile it all and issue a building WOF, and send a copy to the council.  This all costs around $4500 plus GST per annum.

This is what it is, it just has to be done.  So yesterday I might the building WOF guy there and we go right through the whole property.  Everything is fine apart fromteh fact that I have some doors which have swipe card access.  This is controlled by a door control system.  And this is not on the compliance schedule – AND it needs to be.

So, arrrgggh.  Another system needs to be added to the compliance schedule, and I have to get a new set of people to come to the building quarterly to check and produce something saying the door access control system is still working properly.

Which is just more cost and hassle.

And then I can get a building WOF, to please the pointy heads.  For those further interested, see here: http://www.dbh.govt.nz/building-warrant-of-fitness-guide

Roller Door Hassles

Noticed yesterday one of the roller grille doors on my property is damaged. It’s the one you can see below, on the rhs.

Finished Building

The horizontal rails have been rubbing up against the vertical guides and so some of the rails have worn down to around the half way point.

I got onto the company who supplied and installed them.  They were pretty relaxed about it and said they would get back to me about it.

But when I was there today, I noticed the door hasn’t been installed properly.  The rear roller grille door (there are 2 roller grille doors, one for entry, one for exit) has felt/material like bits running down the vertical runners which the horizontal grille bits touch.  The one at the front doesn’t have these!  So there’s been metal rubbing against metal for a year!

So rang the guy and told him this.  He didn’t believe me!  So there may be a small ‘debate’ over this…

And in the meantime the auto doors for entry to the apartments and offices upstairs jammed open.  So spent ages yesterday and today trying to get damn doors sorted!

Roller grille still out of action, such a pain.

Music to My Eyes!

Property investors gotta love this article!

Median weekly rent for three bedroom Auckland houses surged NZ$55 to NZ$550 in February

Posted in Property March 12, 2012 – 04:16pm, Gareth Vaughan

By Gareth Vaughan

The weekly median rent for a three bedroom Auckland house jumped NZ$55 during February to reach NZ$550, the highest level since interest.co.nz started tracking the data six years ago.

Yep, well I guess some chickens are coming home to roost!  All the pain property investors have been through in the last few years has been worth it.