Lies, damned lies & experts

[finlo]

17 minutes ago, Chris Thomas said:

Piebaps is right, but pleased to summarize, although I agree with you that your question is not really about statistics and the purpose of this thread is clarification and consideration of statistics. 

The amount raised in sewerage rate in 2018/19 was around £6 million, as explained in MUA accounts on December 2019 Tynwald order paper.

This will be greater this year given rebalancing between water and sewerage rates agreed in Tynwald in October 2018 as follows: “Tynwald Notes that water and sewerage rates will be rebalanced, with water rates being reduced; approves a sewerage rate for the financial year commencing on 1 April 2019 of 210 pence in the pound plus the prevailing rate of inflation over the preceding 12 months as measured by the Manx Consumer Price Index to September 2018; and approves further sewerage rate increases for 1 April 2020, 1 April 2021, 1 April 2022 and 1 April 2023 at the prevailing rate of inflation over the preceding 12 months as measured by the Manx Consumer Price Index to the September of the preceding year.”

Sewerage rate is used for sewerage costs.

MUA external loan has been paid off, and internal loans reduced - in total approaching £150 million from memory. MUA has financial plan and pricing strategy for the medium and long term. 

 

It would be nice if in the private sector we got annual pay rises to keep up with all these annual increases whereas in the public sector its a given.

[Rushen Spy]

19 minutes ago, finlo said:

It would be nice if in the private sector we got annual pay rises to keep up with all these annual increases whereas in the public sector its a given.

Exactly. When they do give these annual pay rises to the public sector, it has an inflationary effect and causes the cost of living for the whole working population to increase, so private sector workers are being screwed over in more ways than just tax and NI.

[Derek Flint]

14 hours ago, Chris Thomas said:

 

MUA external loan has been paid off, and internal loans reduced - in total approaching £150 million from memory. MUA has financial plan and pricing strategy for the medium and long term. 

 

Chris, have I read that right?

We now only owe ourselves the money? If so, why don’t we just draw a line under it and reframe. I fail to see any benefit in an ongoing accountIng exercise.

[TheTeapot]

They paid it off from reserves and moved the debt to themselves knowing they could tap up the plebs for another £6m per year while at the same time denying the sewerage charge was being used to pay off the debt. 

[Non-Believer]

Howard Quayle stated in an article on iomtoday about 10 days ago (in fact it might have been the New Year statement) that in respect of the MUA debt;

£70M has now been tied up in issued Bonds

£230M - £240M remains outstanding with current repayment arrangements scheduled to see paydown between 2030 and 2033. So there are at least another 10 - 13 years of repayments including annual inflation rises in the Sewerage Charge to the consumer.

Cheers Mike. And Al. And the MEA Board.

[Chris Thomas]

1 hour ago, Derek Flint said:

Chris, have I read that right?

We now only owe ourselves the money? If so, why don’t we just draw a line under it and reframe. I fail to see any benefit in an ongoing accountI got exercise.

No. There are external debts comprising £260 million of Isle of Man Government bonds on which MUA pays interest, and a Finance Lease for the gas pipeline. What I meant was that the £120 million of 'discovered' bank loans were paid off several years ago. As summarised in NERA's report in summer 2017:

"Manx Utilities has two main sources of debt: £260 million of Isle of Man Government Treasury Bonds which were issued to finance substantive investment in water (£75 million) and energy (£185 million) infrastructure assets, and the Consolidated Loans Fund (CLF), which comprises a portfolio of loans drawn-down to finance on-going capital expenditure in the energy and sewerage businesses.  The total borrowings on the CLF (as at financial year end 2016) were around £270 million.  The interest rate on the CLF is determined by the Government on an annual basis; the rate from 1st April 2016 is 1.5 per cent, and 2 per cent from 1st April 2018. The two Treasury bonds have value at issuance and maturities as follows: Water: £75m bond at 5.625 per cent per annum with maturity date of 29 March 2030; Energy: £185m bond at 5.375 per cent per annum with maturity date of 14 August 2034. As well as the Treasury bonds and CLF, Manx Utilities has further debt instruments: a finance lease for its gas spur (which matures in September 2023), Local Authority loans, and Economic Development Fund loan, but these are far less material in terms of outstanding value.  Figure 3.1 shows Manx Utilities’ current debt composition."

In 2017/18 Treasury announced a debt reduction for MUA of £95 million http://www.iomtoday.co.im/article.cfm?id=36417&headline=MUA in weak financial position&sectionIs=news&searchyear=2017, alongside a utilities price freeze whilst the October 2018 MUA pricing strategy was prepared.

1 hour ago, TheTeapot said:

They paid it off from reserves and moved the debt to themselves knowing they could tap up the plebs for another £6m per year while at the same time denying the sewage charge was being used to pay off the debt. 

Sewerage rate does not finance MEA electricity debt, but does finance substantial MUA sewerage infrastructure loan i.e. sewerage rate finances sewerage costs. The sewerage rate replaced the Treasury/Tynwald grant for sewerage.

1 hour ago, Non-Believer said:

Howard Quayle stated in an article on iomtoday about 10 days ago (in fact it might have been the New Year statement) that in respect of the MUA debt;

£70M has now been tied up in issued Bonds

£230M - £240M remains outstanding with current repayment arrangements scheduled to see paydown between 2030 and 2033. So there are at least another 10 - 13 years of repayments including annual inflation rises in the Sewerage Charge to the consumer.

Cheers Mike. And Al. And the MEA Board.

£70 million is about the size of the MUA/Treasury bond repayment fund. Either he mixed up words or the newspaper misquoted him I guess. I was not there.

£260 million remains outstanding on the bonds as they are not callable, fixed maturity bonds, with no sinking fund etc.. The maturities of the two bonds are 2030 and 2034.

The agreed pricing is for 5 years of inflationary increases, more or less. After that pricing is not yet determined.

[Chris Thomas]

PS Thanks for comments, and I will clarify or correct my comments when necessary and if I can.

[b4mbi]

26 minutes ago, Chris Thomas said:

£260 million remains outstanding on the bonds as they are not callable, fixed maturity bonds, with no sinking fund etc.. The maturities of the two bonds are 2030 and 2034.

 

Hi Chris, whilst you're in an explanatory mood, who invested in and owns these bonds?

[Derek Flint]

Thanks Chris. It sounds a bit like the six credit card trick, where you run up debt and then keep paying each off with the next one. It also shows that accountants are running the place, contrary to what should be happening.

What a mess.

This is a clear example of the need for an offence of misconduct in a Public Office on our statutes. The individuals involved operated so far out of their level of authority that the public would have expected sanctions.

Isle of Man Government finance is so incredibly complex, I don’t think anyone really has a clear picture on exactly where we are. There must be a way of simplifying things. I can’t imagine any other place of 80’000 souls having such a complex administration.

[finlo]

14 minutes ago, Derek Flint said:

Thanks Chris. It sounds a bit like the six credit card trick, where you run up debt and then keep paying each off with the next one. It also shows that accountants are running the place, contrary to what should be happening.

What a mess.

This is a clear example of the need for an offence of misconduct in a Public Office on our statutes. The individuals involved operated so far out of their level of authority that the public would have expected sanctions.

Isle of Man Government finance is so incredibly complex, I don’t think anyone really has a clear picture on exactly where we are. There must be a way of simplifying things. I can’t imagine any other place of 80’000 souls having such a complex administration.

 

Smoke and mirrors at its finest!

[english zloty]

10 minutes ago, Derek Flint said:

Thanks Chris. It sounds a bit like the six credit card trick, where you run up debt and then keep paying each off with the next one. It also shows that accountants are running the place, contrary to what should be happening.

What a mess.

This is a clear example of the need for an offence of misconduct in a Public Office on our statutes. The individuals involved operated so far out of their level of authority that the public would have expected sanctions.

Isle of Man Government finance is so incredibly complex, I don’t think anyone really has a clear picture on exactly where we are. There must be a way of simplifying things. I can’t imagine any other place of 80’000 souls having such a complex administration.

The water side of things was all sorted btw. The authority worked really hard to save money during its capital schemes and had about £20 mill in the ‘bank’ from underspending whilst delivering what was anticipated in the programme. This was all absorbed by the merger and used to pay down the immediate overspend on IRIs. Most of the remaining was used to start up the regional strategy as Drainage were only allowed about £2m a year by Treasury and needed about £20m

[quilp]

On the subject of lies, damned lies and experts Mr Thomas, was Lol Skelly's proclamation of "6 Chinese banks" a load of old fanny or not? Should be an easy answer, not swelled by obfuscation and delay. So what is it? You both work for me so cough up please...

[Bobbie Bobster]

16 minutes ago, quilp said:

"6 Chinese banks"

FlyMaybe.  CrApple.  Micro$oft.

So funny.

/s

[TheTeapot]

3 minutes ago, Bobbie Bobster said:

FlyMaybe.  CrApple.  Micro$oft.

So funny.

/s

Tynpotwald and Steam Racket

[Derek Flint]

24 minutes ago, english zloty said:

The water side of things was all sorted btw. The authority worked really hard to save money during its capital schemes and had about £20 mill in the ‘bank’ from underspending whilst delivering what was anticipated in the programme. This was all absorbed by the merger and used to pay down the immediate overspend on IRIs. Most of the remaining was used to start up the regional strategy as Drainage were only allowed about £2m a year by Treasury and needed about £20m

IRIS. 

Blimey, we've all forgotten about that one haven't we. Another huge infrastructure project that was flawed from the outset.