Councillor Walls lets rip!

Yesterday and today, spurred by the stadium debate, Richard Walls provides opinion in the Otago Daily Times on Council debt levels, borrowings, investment and effect on rates. The newspaper properly credits the writer as a Dunedin ratepayer, city councillor and chair of the DCC’s Finance and Strategy committee. Far be it from us to add the word redoubtable before the good Councillor’s name.

### ODT Online: Opinion Thu, 12 Feb 2009
Answering stadium critics
Debt (read borrowings) has become something of a touchstone for those who oppose a particular capital works project. Indeed at times, I and others wonder if the confusing mix of opinion and “own fact” by regular critics of council borrowing is really another imaginative creation from the Miramar workshops of Weta!

### ODT Online: Opinion Fri, 13 Feb 2009
Actual borrowings by DCC ‘low’
Why does the Dunedin City Council borrow and how has Dunedin City Holdings Ltd performed over the past 15 years? In the second of a two-part article Richard Walls defends the council’s rates record.

****

Cr Walls was always going to have his field day. It would be no surprise then if he earned a stinging rebuttal from local resident Calvin Oaten who is mentioned severally throughout the mountains and valleys of Cr Walls’ thought.

We persisted with his views, not sure if other Councillors would share them or the historical account proffered to get us where we might be today. Nevertheless, we thank him for his trouble.

By the end of the read, perhaps, we had suffered or become faithless – or had slaved as devotees. But at any rate (!!) there is the tendency to become less critical of the stadium project itself at the expense of disproportionate rise in critical appreciation of the Council and its moral baggage, not all of it in a good calm light.

We look forward to public reaction as may suit writers, speakers and users of gestures!

54 Comments

Filed under Economics, Geography, Hot air, Inspiration, Media, Name, Other, Politics, Stadiums

54 responses to “Councillor Walls lets rip!

  1. Calvin Oaten

    Richard Walls, in his opinion piece 12/2/09 stated among many things, that I was wrong to add the sum of $92.4m to the long term debt of the DCHL as it had already been included in the DCC’s $360m long term debt projections. He is right on this point as this adjustment was made in the current plan from the previous one. I stand corrected. However, he is wrong when he states that the new company Dunedin City Venues Ltd when set up will be operated separately from DCHL.
    DCHL will take over the debt responsibility of DCVL, which will assume this when it takes over the stadium assets from the DCC.
    This means the DCC’s debt will shrink by $92.4m and DCHL’s debt will be increased by $108.8m.
    This can be seen when we read Athol Stephens’ report to the council last Monday wherein it shows that the amount involved has now risen from $92.4m to $108.8m ($16.4m increase? Just what is this stadium costing?).
    Therefore DCHL’s debt, which was $304m as at 30/6/08 will increase to $412.8m.
    So the combined debt of the DCC and DCHL will then be $680.4m not the $775m I previously claimed. It is nice to make a mistake in the right direction. Let’s face it, what is a measly $680.4m among 53,000 friends? Because, no matter what Richard says, we are the stakeholders in both the DCC and DCHL.
    Mr Stephens claims that the increase will not affect the rate charge as it is offset by a projected drop in interest from 9% to 7%. Whoopee! Regarding the rest of Mr Walls’ assertions, he makes no mention of the fact that there is still a funding gap of $31.3m which they want the government to plug with an underwrite of $15m plus an interest bearing loan of $16.3m. Guess who will be expected to service that.
    Seriously, I doubt that any councillors – with perhaps the exception of Dave Cull – have any clue whatsoever about the financial ramifications of this project. Never mind the Dunedin Centre $45m plus, and of course we should never forget the Harbourside Dream.

  2. Karetai

    The Harbourside Dream is a classic example of the DCC’s narrow minded vision.
    You could compare them with the Nazis.
    They wanted to get rid of the Jews. The DCC want to get rid of Dunedin’s industries.

    {editor: One thing I will not find acceptable in any forum is likening of our elected officials with that of the NAZI regime. I offered Elizabeth a role on this blog as reasoned debate from both sides is healthy for democracy. This is neither reasoned nor healthy. Your comments have been struck through this time, they will however be deleted next time. Refrain from such incindiary remarks or risk banning! Your comments are offensive not to mention erroneous. If Bev and others within the StS think it acceptable for the use of such language, it is no wonder her minions think it acceptable to parrott such crap. Clean up your act, you are not freedom fighters taking on the immoral and depraved NAZIs -Paul editor}

  3. KGB

    Along with DCC we must not forget the ORC. When it came time to set their sights on their new building on the waterfront they said that no firms would be affected. But straight away Painters and Plastics were given the shove by Port Otago. Mind you that was no suprise as the ORC owns Port Otago. So in the long run we will have heaps of cafes and bars. And all the redundant workers from all the firms that have had to close because of them can all go and help with the Auckland firm in building the stadium.

  4. Yawn! You people bore the bejesus out if me. The complete inability demonstrated by Karetai and KGB to form a civil and reasoned debate, resorting to crass metaphor and erroneous conclusions only demonstrates an inability to form reasoned argument based on truths and facts, with a want for the over exaggerated.

    You conclusions are baseless and the increasingly desperate crass line of argument is thoughtless and pathetic. Make your point without the overly dramatic lies and bullshit, otherwise please refrain from spreading your vile weak attempt at political discoures (and that’s being bloody generous).

  5. Elizabeth

    It’s well known that Painters and Plastics were rather quickly moved on from their site near the commercial slip at the Steamer Basin. It caused disquiet, it still rankles.

    Fair to say KGB’s comment isn’t comparable to Karetai’s (certainly not the part standing Paul’s deletion); irony aside, there are valid concerns underlying where KGB’s going with this.

    Soon… I’ll update the post ‘HOT PRESS – Dunedin Harbourside Zone’ with a reading of the plan change decision; it has contingency with the process that led to the new stadium zone. PC7 and PC8 deserve to be looked at together and apart!

    Hope to see more comments from KGB, you’re welcome.

  6. Richard

    C’mon Calvin!

    You sent out a challenge on this website three weeks or so ago. You said – more or less – than anyone like yourself challenging the claims you had made would not get a response.

    Well you were wrong, you got a response from me as Chair of Finance and Strategy.

    I took all your claims about debt financing over the past year, went through them several times over, checked them against council reports et all that are tabled at successive meetings of F&S (which you never attend), ran them past the council financial management andmy response in the ODT is the result.

    You snipe at the capability of council staff knowing they cannot answer back.

    So I have.

    I acknowledge you are entitled to your opinions. No problem with that, none at all. As I have said in the ODT, you are NOT entitled to your own facts.

    And yet, here you are again saying that DCVL will be part of DCHL. It won’t be. It will be as Athol Stephens has said, part of the DCC GROUP reporting directly to Council. Get it? Reporting direct to Council.

    Athol set it all out in an interview with David Loughrey in the ODT on 18 January: “Asked for an explanation of the full cost to ratepayers, Mr Stephens said if the stadium proceeds, it will be sold by the council to a council-controlled company, at this stage to be called Dunedin City Venues Ltd.

    The company would pay for the stadium by raising debt from Dunedin City Treasury, which the council would receive and use to pay off the debt it raised during construction.

    Dunedin City Venues Ltd would hold the debt, sit inside the council’s group of companies, and make a loss when interest expense and depreciation were taken into account.

    The losses it incurred would be offset against the profits of the other companies.

    That loss was estimated to be $5 million a year, which would translate to $66 a year for the average household.

    “There’s nothing else” in terms of costs to ratepayers,” he said.

    Calvin, I appreciate your interest in council affairs. In financial matters, the world has moved far from the times when you were a very much respected engineer and minority shareholder in Bonaire. I have had to undergo some new learning myself.

    I encourage you to do the same.

  7. Calvin Oaten

    Hi Richard,
    sorry, but you contradict yourself.
    You say DCVL won’t be part of DCHL, it will be part of the DCC Group reporting directly to council.
    Yet Athol Stephens, in his report presented to council 9th Feb. states that DCVL will carry debt of $108.8 million after July 1st. 2011, which will be serviced by the combined cash flows of all the other Council-owned trading operations.(Debt servicing will absorb around $10 million of the CCTO cash flows). The effect on DCHL’s dividends to council remains the same, as forecast in March 2008, that is, a reduction of $5 million. This is achieved because although the amount of debt taken on by the companies increases from $92.3 million to $108.8 million, there has been a 2% reduction (from 9% to 7%) in interest rates, which makes a material difference to the ability of the Council-owned companies to service the debt when spread over more than $100 million.
    Those are Mr Stephen’s words, not mine. Indeed, all the other facts are not mine either. They are simply facts culled from council literature.

    Sorry Richard, but you are wrong. Anyway, what difference does it make where the debt is lodged? As I say in my rebuttal of your opinion piece, it matters not if the money comes from the teapot, under the mattress or the bank. It must come from somewhere, and unfortunately, mostly, sooner or later the rate payer.
    You say that you have had to undergo some new learning. Pray tell me where, and indeed what was the result?

  8. Richard

    Calvin:
    “You say DCVL won’t be part of DCHL, it will be part of the DCC Group reporting directly to council.”.

    My Response:
    That is CORRECT. DCVL will be part of the GROUP, just as DCHL and CORE COUNCIL is.

    Athol Stephens’ Report to Council 9 February:
    Yes, but just what is your point? Please go back and read my previous post quoting Athol’s comments to David Loughrey in the ODT on 18 January. The two are complementary not contradictory! Just what do you not understand?

    Your comment “what difference does it make where the debt is lodged?” almost leaves me gasping for words to respond. Almost!

    Calvin, of course, it makes a difference – a very BIG difference – where “the debt is lodged”. Paul Hudson as Chair of DCHL, someone who has had far greater financial management experience than either you or I, has patiently and repeatedly explained that as much debt as possible should be placed within the companies.

    The reason should be apparent to anyone who has been in business.

    As for “teapots,mattresses or banks” well I am sorry, your analogy is rather dated. Only 50% of council’s revenue stream comes directly from rates and none of it goes to service company debts.

    Finally, as a parting shot comes your usual arrow loaded with sarcasm saying “you (Richard) say that you have had to undergo some new learning. Pray tell me where, and indeed what was the result?”

    I leave the answer to that to an objective reader of these posts.

  9. Calvin

    “It must come from somewhere, and unfortunately, mostly, sooner or later the rate payer.”

    Well if the rate payer wants a share of the spoils the rate payer must cough up. I want a share of those spoils, and I will pay up.

    I’m desperately coming to the conclusion that like government, the public doesn’t get the government it needs, it gets the government it deserves. In this case the people don’t deserve the stadium. But then Dunedin doesn’t deserve the likes of Bev Butler either, we deserve a hell of a lot better than that.

  10. Calvin Oaten

    Richard,
    What!? In your previous posting you said to me, “and yet, here you are again saying that DCVL will be part of DCHL.” It won’t be. It will be as Athol Stephens has said, part of the DCC GROUP reporting directly to council. Get it? Reporting direct to council.

    Now you are saying that I said DCVL won’t be part of DCHL, it will be part of the DCC group reporting directly to council. Read it again and you will see that I said nothing of the sort.

    You then say,”That is correct. DCVL will be part of the GROUP, just as DCHL and CORE COUNCIL is.”

    You then go on to say as much debt as possible should be placed within the companies. Well, you are certainly doing that.

    Excuse me if I seem confused. Tell me this, is the $108.8 million of debt going to show in DCHL’s books or the DCC’s? Athol Stephens makes it quite clear that it is DCHL.

    Again, you say none of council’s revenue stream goes to service company debts. I never said it did. Quite the reverse in fact. DCHL’s revenue stream goes to service the DCC’s debt. And it does it in spades.

    Finally Richard, I can’t wait for the objective reader with the answer.

  11. Richard

    Calvin : “Excuse me if I seem confused. Tell me this, is the $108.8 million of debt going to show in DCHL’s books or the DCC’s? Athol Stephens makes it quite clear that it is DCHL.”

    NO, HE DOES NOT!

    As stated in the second para under ‘Structure’ on page 2 of Athol’s report, “DCVL will carry the debt of $108.8 million after 1 July. ”

    Note: DCVL not DCHL.

    Nor did I say that “as much debt as possible should be placed within the companies.” I quoted Paul Hudson, Chair of DCHL and, of course, a councillor as well.

    There is a very simple reason for doing that, it saves council and thus the ratepayer hundreds of thousands of dollars each year.

    I’d say that’s good management!

  12. Calvin Oaten

    Richard: Yes, I am confused. Due to age, I suspect.

    Athol Stephens says that the stadium (if built) will be transferred into the ownership of a 100% council-owned company, provisionally known as Dunedin City Venues Ltd. (DCVL). DCVL will assume full responsibility for marketing, promoting and staging events and activities, of maintaining the stadium and operating the venue in a sound financial manner. As a CCTO, DCVL will have the flexibility to pursue opportunities outside the constraints, sometimes tight, imposed by strict annual planning disciplines. It will also co-ordinate other council-owned venues and optimise venue use.

    DCVL will carry debt of $108.8 million after 1st July 2011, which will be serviced by the combined cash flows of all the other Council-owned trading organisations. (Debt servicing will absorb around $10 million of the CCTO cash flows).

    The effect on Dunedin City Holdings Ltd’s dividends to the Council remains the same, as forecast in March 2008, that is, a reduction of $5 million (to be serviced by the rate payers at average $66 per year on rates) . This is achieved because although the amount of debt taken on by the companies increases from $92.3 million to $108.8 million, there has been a reduction of 2% (from 9% to 7%) in interest rates, which makes a material difference to the ability of the Council-owned companies to service the debt when spread over more than $100 million.

    That, Richard, is Athol’s statement. Now, please, does this not show conclusively that DCVL will be in the DCHL group?

    Also, the addition of $108.8 million to DCHL’s existing debt (as at 30/6/08 ) of $304 million to total $412 million is quite an impressive figure. Paul Hudson could have a job to convince a lot of people that this is a sustainable level of debt for DCHL to service while at the same time paying a dividend of $13.842 million plus interest of some $24 million back to the DCC as shown in the LTCCP for years 2011/12 onwards.

    Over to you Richard.

  13. Richard

    Good Morning, Calvin!

    Well, it’s not really. The garden etc may have needed the rain but it looks depressing when you look outside …. especially when you have just come back from a few days in the near-east!

    It is also a good morning because we are now largely on the ‘same page’.

    You quote Athol’s statement correctly. Then you say: “Now, please, does this not show conclusively that DCVL will be in the DCHL group?

    No, DCVL will lie within the COUNCIL GROUP. DCHL (comprising our trading companies) is part of that, albeit a very big part. It is within THE GROUP that the taxation advantages occur, not just DCHL.

    All very similar to what the position is in Christchurch with the CCC-owned V-BASE.

    Separate all that out and, I think, the confusion disappears.

    In regard to your query re DCHL, the Directors have stated to council that they foresee no problems in meeting their commitments and to maintaining the forecast dividend. Indeed Paul Hudson, as Chair of DCHL, said so yet again at the meeting of Finance and Strategy on 9 February.

    Finally, do not overlook that Dunedin City Venues Limited will take over the property ownership of the Dunedin Centre/Town Hall, Edgar Centre, Regent Theatre etc and not just the stadium. It is also intended to that DCVL will provide marketing services etc across all those venues.

    Hopefully that sorts it all out.

    Cheers!

  14. Calvin Oaten

    Thank you so much Richard, It has taken a long route to get to the point that the debt will lie with DCHL.

    That Paul Hudson states that it will be manageable for DCHL is very much a moot point with me, and no doubt, a lot of other people. There can be no denying that $412 million is a huge amount of debt for any group with revenue of less than $200 million per year. In fact DCHL’s revenue, year ending 30/6/08 was $199.154 million. It showed an operating surplus of $14.057 million before tax of $5.419 million to arrive at a profit of $8.638 million. And that was taking into account that City Forests trees were revalued up by $5.638 million.

    Sure, you would hope that DCHL’s revenue will increase by 2011/12, but, with the economic world we live in, that would be a very problematic bet. By then the $412 million will be in place. At 7% interest, this alone will require $28.84 million. Then there is the budgeted dividend of $13.842 million to the DCC plus interest of some $24 million.

    Looks like a job for Hercules to me, something like the cleaning out of the stables. Sorry Richard, if you and your colleagues continue along the way, increasing the indebtedness of this city as you are, you will bring it to its knees. Sad, really.

  15. Richard

    No, the debt for the Stadium – if it goes ahead – will lie with Dunedin City Venues Limited (DCVL) not DCHL.

    Paul Hudson’s comments relate only to Dunedin City Holdings Limited (DCHL) not DCVL.

    You must separate the two.

    My focus in this whole “ripping exercise” has been firmly on getting some facts and figures out there and how council debt is managed, not to take a position one way or the other on the merits of any particular project or, indeed, the extent of council borrowing and what is used for.

    I am certain you will continue to express your views on the latter, one way or the other. Fair enough!

    Nevertheless, the basic question remains. Just how are major capital projects to be financed and paid for by councils? The present blunt rating system with its base on property values is no longer equitable. As you well know, The Shand Enquiry has been a ‘non-event’.

    Auckland’s problems are so huge that it looks as if the “super city” is inevitable. That will bring with it new funding sources, surely?

    Just look at much-hyped Waitakere (out west). Under that council’s forecasts, their net debt is expected to peak at about 290% of revenue in this fiscal year. Ours will peak in 2009-10 at 135% in 2009-10 and then steadily decline to levels well below today.

    Now, other things to do!

  16. Calvin Oaten

    Richard, for goodness sake, they are not separate!

    Richard, you could always try not doing some of the “major capital” works. Such as stadium, Dunedin centre upgrade, harbourside dream etc. Instead, just concentrate on the essentials, like the sewage treatment, roading, and maintenance of what we already have. In other words, just pull our heads in and live within our means for a while. It would be a whole new experience and a lot easier on the poor suffering rate payers’ pockets. One of your colleagues’ constant mantra, “Dunedin will die if we don’t do this or do that” just doesn’t wash anymore. We won’t die, we will just be more relaxed and enjoy life a little better. Councils must come to that understanding, before Dunedin becomes a city for the elite only, with the rest looking on in pained wonder. It is simply not on to blithely go on, constantly increasing rates by double digit amounts, debt by prodigious amounts. Loading this and following generations, with ever increasing financial burdens, just to satisfy a lot of egotistical people’s dreams.

  17. KGB

    Calvin I totally agree with you.This council seems to have its head in the clouds by saying Dunedin will die if the stadium is not built.If they get it wrong Dunedin will most certainly die financially.But there again I would wonder if those on council who voted for the stadium are so sure it will be a success that they would put their houses,businesses etc as collateral.The reason I say this is while the city will be in great debt later on, this council will be long gone with no one left to be held accountable

  18. Richard

    That’s your opinion, Calvin. Fine. Many others do not share that view.

    I do not share the mantra you refer to. But nor do I want Dunedin to be turned into “a museum of modern plumbing”. And that is where we would have been now if we had not put in place our pioneering economic development policy some 22 years ago. Its big success – tourism. Without it, I shudder to think!

    If I have it right, initiating a discussion on the future of our city what Paul started this site for.

    Some of the things like Harbourside may not happen for 50 years. South Dunedin is more immediate.

    What we need are visionary ideas and robust discussion. It seems to me that this is the sort of place to really get the juices flowing, to get wide participation. In particular, on the rejuvenation of “The Flat”.The District Plan is too complex for most, too prescriptive. People generally take no interest in it – even although it is the community’s plan, not council’s – until something affects them.

    As I know from talking with many people, there are some great ideas out there. What we don’t want are ‘Noddy’ one-off ‘solutions’ such as proposed by the NZHTP for the The ‘Brook and its surrounds without regard for the wider area and communities.

    And don’t get me started on spending $350,000 on bloody sticks! Or an old brick building on Logan Park. Or another old brick building in The Octagon, fast becoming an expensive ‘lemon’ (sorry Elizabeth)!

    Sewage treatment, water, waste management and disposal, roading, and “maintenance of what we already have”(i.e. depreciation) are precisely the main drivers behind the projected rate increases. As you will indeed find when the Draft LTCCP (the Community and Draft Annual Plan) comes out next month.

    I look forward to your submission – after all I am just one of 15 – and maybe, just maybe, debating it with you at this year’s Expo.

    Now, I really do have other things to do.

  19. Richard

    KGB (that’s surely a blast from the Soviet past!) ….. whatever: Socrates did not waste time watching television!

  20. Calvin Oaten

    Richard, you say the main drivers behind the projected rate increases are sewage,water,waste management and maintenance.

    What if you and the rest of council simply deleted from the budget, Dunedin Centre upgrade, Stadium, Harbourside dream and realignment of state highway 88. And while you are at it take a serious look at the costs of staff and administration.That would that do wonders for the projected debt and rate increase requirements, no doubt about it.

    Just sit back for a year or two and all breath through your noses. Watch the world go by, and once we know just where we are, perhaps have another look. Let the other cities bury themselves in debt if they want to. We don’t have to keep up with any of them. People enjoy Dunedin for what it is. Leave them alone. Don’t price them out of it.

    There is no panic, we can get by without these fancy accessories, and we certainly need a breather from constant rate and debt increases. The citizens would probably applaud for you doing it. Think about it, Richard.

  21. Richard

    Put aside all but the realignment of SH 88 identified and agreed by all parties as strategically important (Port to Port) in the Transportation Study.

    The doors of the Town Hall are nailed shut for a few years (no point on spending $22-$25m for a regulatory upgrade and abandoning sources of increased income); instead of the stadium at Awatea Street we buy and do up Carisbrook instead as originally proposed back in 2004-05 for RUGBY ONLY (estimated @ $70m plus ongoing operational makeup as for Edgar Centre, Moana Pool etc resulting in more or less same level of council debt and rate requirement, maybe more debt); Harbourside is not an immediate priority and has been set back in the draft except where some buildings/land may need to be acquired because owners want to relocate.

    The savings? Back to that calculator my friend!

    As I said previously, I look forward to your submission to the LTCCP and just what existing standards of services you would cut and what staff you would dispense with. Don’t simply say “management”, building inspectors and planners. Please be specific!

    And I agree with you, there is no panic. Dunedin is no different in that respect than any other city or town in New Zealand.

    In fact, we actually have rising household income levels.

  22. Calvin Oaten

    Richard, some comments.

    Why do we buy and do up Carisbrook? It’s not council’s nor citizens’ problem. It is rugby’s, and theirs alone.

    Why are the Town Hall’s doors nailed shut? That is just rhetoric designed to push an agenda. Increased income? What increased income? again just unsustained by empirical evidence rhetoric to push the agenda. Leave it alone.

    State highway 88, again a local agenda. State Highways Authority has no plans for urgency on this for at least 15 years, see Annette King’s comments on the subject.

    Sorry Richard, all of these “visionary proposals” come from within the administration, none from citizen’s pressure groups. It’s a case of make jobs to justify their positions.

    The only substantial matter that excites the people is the Library, and then it is probably fear of the unknown. Largely brought about by council nitpicking over book purchasing costs. Small beans in the grand scheme of things.

    You talk about the success of the economic development policy and cite tourism. Tourism has been on a roll all over the Western world in recent times. Watch now for the tide to roll out. But then what about Fisher & Paykel? You and I debated that at length several years ago. Who has been proven right? That cost the city untold money, and for what? That was a beat up by Malcolm Farry and Peter Brown the former economic dept. manager. I have said it before and I will say it again, it is not for the council to try and pick winners. Rather, its job is to provide a level playing field for everyone at the lowest possible cost.

    Yes Richard, you really could make a difference if you only put your mind to it.

  23. Richard

    Oh dear! Oh dear! Oh dear! You sound a bit like George W riding into Washington to “cut the budget and the bureaucracy”. Just look what happened!

    The realignment of SH 88 is not only “a local agenda”nor was it for the previous Minister of Transport to determine.

    As for tourism, tides come in and go out. Dunedin wasn’t even on the tourist map 20 years ago and did not even have to concern itself. The economic recession won’t stop people wanting to travel, they just need a reason to. And that will create new opportunities.

    Fisher and Paykel did not cost the council “untold money”. They certainly got some rates relief on their various developments which ensured they remained here for some years when they may well have gone earlier, but that was “a discount” on their own rates, which council got back in spades anyway once the capital improvements were completed! And you foresaw the economic downturn that is now so adversely affecting them and so many other manufacturers around the world? Come off it!

    Calvin, back in the 70’s, there was a rather successful wee company over in Kaikorai Valley called Bonaire Industries. Had an innovative line of deep freezers, relatively new in those days. I recall it received regional development grants in the form of suspensory loans (which did not have to be paid back after 3 years or so) and freight subsidies etc. You would, of course, know more about that than me. Anyway, fair enough but I do not see how you can point the finger at F&P.

    F&P certainly did not cost the council “untold money”. They received rates relief in terms of council policy on their various developments – which ensured they remained here for some years when they may well have gone earlier -, but that was “a discount” on their own rates, the level of which which increased anyway once the capital improvements were completed!

    And you are wrong when you say: none of these “visionary proposals” come from from citizen’s pressure groups.

    Really?

  24. KGB

    Richard
    February 22, 2009 at 3:58 pm
    KGB (that’s surely a blast from the Soviet past!) ….. whatever: Socrates did not waste time watching television!

    KGB just happens to be my initials so words like yours from a former mayor,now a councillor, show how much respect you have for the citizens of Dunedin.No wonder you’re losing respect as a council.You can never answer any straight forward questions.
    This council would have to be Dunedin’s worst council in living memory and I for one refuse to lower myself to your standards Richard Walls.

  25. Richard

    KGB – If there is one distinguishing feature about extremists, it’s certainly not clear thinking. You hide behind a nom-de-plume, spend your lives spinning from falsehood to falsehood while being hostile to everyone and everything – especially facts.

  26. Calvin Oaten

    Richard, you would have to say all this, if only to justify the fact that you, our longest serving councilor have been there right through the longest most protracted period of double digit rate increases in the city’s history. These are a direct result of unrestrained extravagances, mostly under the guise of improving the lot of the citizens.

    Granted, the city is a more cosmopolitan place with today’s trend toward outside food and entertainment. Again, largely initiated by the private sector.

    Grand, uneconomic, hugely expensive projects are simply not the answer. However, I don’t expect anything I say would persuade you to change. Stuck in the “growth at all costs” mindset as you and your colleagues are, the mere thought of a pause gives you all grief. Pity really.

  27. KGB

    I left Dunedin in 1990 when I returned 7 years later, my rates had doubled.
    What years were you mayor Richard?

  28. Richard

    Calvin –

    You change tack again. You make an allegation, then you duck when the response comes.

    I’ll stand by my record and achievements in public life.

    And you, of all people, know I am a fiscal conservative. You do not spend for the sake of it. Never.

    You do not want to leave a legacy for future generations.

    I do.

    I want to build on what our forebears (including my direct families) came here to do.

    So that is the difference between us.

    Yes, there are risks. Of course. Calculated risks. But this city is not at risk as you would paint it.

    I do not understand why you so ‘gleefully’ welcome the loss of jobs at Fisher & Paykel simply because it proves some personal – albeit – vague justification you had for opposing something in the past.

    I suspect something personal, that you carry some kind of grudge. I hope I am wrong.

  29. KGB

    You havn’t replied to this yet Richard

    KGB
    February 22, 2009 at 2:27 pm
    Calvin I totally agree with you.This council seems to have its head in the clouds by saying Dunedin will die if the stadium is not built.If they get it wrong Dunedin will most certainly die financially.But there again I would wonder if those on council who voted for the stadium are so sure it will be a success that they would put their houses,businesses etc as collateral.The reason I say this is while the city will be in great debt later on, this council will be long gone with no one left to be held accountable

  30. Richard

    Petrol dropped 5 cents today!

  31. KGB

    I’ll word my comment slightly different then Richard.
    Are you prepared to put your own house on the line as collateral for the stadium?

    For those who didn’t know,you were the mayor from 1989-1995.

  32. KGB

    “You havn’t replied to this yet Richard”

    No body is under any misguided impression that we are here to respond to every single post that people put up.

    Richard is not required to put his house up as collateral for this project. That is about as relevant as saying the Ants in Waverly have big feet. He has put his professional reputation on the line with support of this development, and that is no small matter.

    I had someone call me a hypocrite because I wasn’t prepared to buy an expensive corporate seat in the stadium. The mere fact that I wasn’t able to didn’t deter said opponent from crying all manner of foul accusations. Again not relevant.

  33. Richard

    KGB: February 22, 2009 at 7:53 pm
    “I left Dunedin in 1990 when I returned 7 years later, my rates had doubled”.

    Really?: Well here are the the actual increases for that period:

    1991-92: 1.7%
    1992-93: 4.2%
    1993-94: 3.7%
    1994/95: 5.6%
    1995/96: 1.9%
    1996/97: 2.8%

    Want to try again?

  34. KGB

    Sorry I don’t believe you.
    Try explaining to me then how my rates were $500 in 1990. $1000 in 1997 and $1500 (including ORC rates) in 2008

  35. KGB,

    if you don’t believe facts and figures then sorry you are going to find much about this development a little troubling. So in 18 years you rates have gone from $500 to $1500 and you are moaning, really? OMG what part of this wonderful city would you like to see maintained to the level of 1990. Shall we discharge poo back into our swimming water. St Clair hot water pool should have just been left to the elements, the Oval should be allowed to fill as a lake each winter, oh seriously the list is so immense that the time it would take to list the differences in this city between 1990 and 2008 – well I’d be an old man at the end of it and the stadium would be up to it’s third coat of new paint. Just as a matter of interest, I do dearly hope that you don’t assume that your wages are still at 1990 levels.

    Calvin a comment you made earlier.

    “all of these “visionary proposals” come from within the administration, none from citizen’s pressure groups. It’s a case of make jobs to justify their positions.”

    Call me a little confused here, but aren’t our elected officials here to drive the city forward. Don’t we elect them to create visions and opportunities? I’m obviously under the completely misguided impression that was what voting was all about, and I’m really going to have to think hard about who and what I am voting for in any election from now on.

    There are two possible outcomes for what you are suggesting.

    Citizens or more precisely pressure group controlled councils, which to be frank terrifies the heck out of me. This would allow the likes of Bev etc to hijack council for single issue platforms. That is no way forward for a city or town. It would never produce a solid consistent economic grounding for a city.

    Or more absurdly, do away with councils and allow paid officials to run the city at the whim of some sort of Citizens Initiated Referenda, which terrifies me even more. CIR again is just another political process in which motivated single issue pressure groups bring an inordinate amount of pressure on a city to meet their own ends. A hugely unproductive way to conduct an entity like council.

    Call me antiquated, but I like the system where on the whole you vote for a council(lor) on the merits of the issues for which they are willing to champion. This way they need to cater to a wider section of the community and no single issue pressure group dominates.

    If you or any of the other Anti Stadium folk think this issue has divided the city, it would be nothing compared to the divisions created if the Save St Clair Beach lobby dominated council, with little or no knowledge or experience of the greater business of running a council.

  36. Richard

    KGB:
    the percentages I listed are ACTUALS for DCC rates in the years shown. (For obvious reasons they do not include ORC rates).

    I obtained them from Council’s Financial Planner this morning. They are recorded in all council records for those years.

    Without specific property details, there is no way to ascertain the reasons for the increase you claim.

    Whether you choose to believe them or not, is up to you.

  37. KGB

    I’ve got another of those hard to answer questions Richard.
    Why is the $11.5 million that has already been spent plus the $6.4 million depreciation allowance not being included in the costs of the stadium anymore?
    The costs are supposedly $65 million for the construction plus the cost of the land.
    Did you really think people were so silly that they would forget about those rather large sums of THEIR money that had mysteriously disappeared.

  38. Hang on a second, where did you get the idea that construction is going to be $65m including the land.

    Seemingly you don’t accept facts and figures but are willing to use made up sums for that very purpose.

    How does the saying go, you can’t have your cake and eat it too?

  39. KGB

    Whoops I missed out the 1.
    That should have been $165 million not $65 million.
    Plus the cost of the land not including it.
    Can’t you read

  40. Carol

    This is copied from the DCC’s 2008-2009 Annual Plan… The project cost is confirmed at not exceeding $188 million. The Council’s share of the projected budget
    cost from 1 July 2008 is a further $79.9 million made up of $73.5 million plus $6.4 million as a
    depreciation allowance. It is noted that the sum of $11.5 million was committed in the current year to 30
    June 2008 making a total Council commitment of $91.4 million to the project

    I got this info a few weeks ago.Lucky I saved it because when I had a look at the DCC’s website tonight and searched for the 2008-2009 annual plan, I got “no results found,try searching again”

  41. Carol

    And this

    DCC councillors went into that meeting yesterday knowing that the stadium that was supposed to cost $188 million was already costing $217 million.But of course they didn’t reveal those facts to the public.The facts they released did not include the $11.5 million that has already been spent plus the GST on it.On their website the 2008-2009 Annual Plan clearly states that the $11.5 million is included in the costs of the stadium as is another $6.4 million as a depreciation allowance.Those costs added on to the cost of the land $32.5 million and the construction cost of $165 million total $217 million.
    The shortfall in private funding has yet to be added to that.

  42. Peter

    From the February 2009 stakeholder report …

    ‘The $188m cost of the project is broken down into three components:
     design and construction
     land acquisition
     other administrative and fundraising costs’

    ‘Fixed sums
    GMP 129,759,285
    Professional costs 25,603,540
    155,362,540
    Adjustable sums 7,794,000
    Grand Total $163,156,825’

    Professional Costs:
    ‘The Trust has also set aside a cost for design, research and development, planning matters, legal
    matters. They therefore include more than just project management and design fees. While there are still some elements within this that are yet to be confirmed (such as building consent fees) these
    represent only approximately 3% of the total. Overall, professional costs can therefore be considered fixed’

    By my reading this would appear to include the $11.3 million expensed to date as part of the wider GMP calculation.

  43. Hey more than happy with the correction, thanks for that- calm restored.

    FYI these are 2011 figures too. The CST has been adamant all along that the costs etc should be in 2011 dollar figures, for it to make more sense.

    Look I’m not the one to argue the cost, as I am not associated with that side of the development. However from what I understand the money spent so far was included in construction projections.

    But don’t worry because KGB doesn’t believe in facts and figures, so it’s a moot point anyway.

  44. Carol

    Dunedin’s proposed new sports stadium to replace Carisbrook still has the backing of the Dunedin City Council, despite a $10 million increase in the price tag and less money from contributors.

    The council on Monday voted 10 to five in favour of continuing with the contentious enclosed stadium near the city’s university, but that is conditional on the Otago Regional Council, which meets on Wednesday, contributing $37.5 million to the now $198m project.

    The cost has risen $10 million from $188m because of the increase in land costs and less money than expected from the sale of Carisbrook.

    It included a cost of $165.4m for construction, based on a guarantee

  45. Peter

    Carol, and your point is? I’m assuming that it’s the ODT reporting the total cost is not $188m but $198m.

    First re $165.4m v 163,156,825:
    Design and Construction costs (including GMP, project management, fundraising) stands at $163,156,825. This leaves an unallocated amount of $2,243,175 from the original budget of $165.4m, which is proposed to be used as a contingency fund.

    Re Land Costs:
    The original land purchase cost was supposed to be $20m. The Feb Stakeholder report indicates that the cost after offsetting the sale of land for SH88 etc is $28,630,962.

    Total Project Cost:
    The $8.6m difference gives a total project cost of $195,037,787 as per the stakeholder report. If you add the $2.2 m contingency from design and construction costs you get $197.2, roughly the figure from the ODT.

  46. Richard

    Contrary to Carol’s claim, the updated ‘numbers’ considered and subsequently approved for inclusion in the draft 2009/10 Community Plan were covered in Agenda Paper 5 (and the attachments) at the Council meeting on 9 February – all public papers.

    To summarise:

    Design & Construction $165,400,000;
    Site Acquisition Costs $35,598,583;
    Trust Costs $3,250,000;
    Others $430,568
    Total: $204,679,151.

    Less:
    Land Acquisition and Rental Recovery Costs: $6,682,104.

    TOTAL NET COST: $197,997,047.

    This INCLUDES the $11.3m already expensed (as Peter has noted).

    It does not include interest of $14.377 million which is capitalised as the payments are made. (refer Attachment 2, page 5.8). This is normal practice under the relevant accounting standards.

    GST is not a factor as, of course, it is offset.

    Depreciation IS AN OPERATING COST that will be expensed within the accounts of Dunedin City Venues Limited. It therefore does not form part of the nett Development Cost.

  47. Richard

    KGB: Not so hard really!

  48. Calvin Oaten

    Hi Richard, you say you stand by your record and achievements in public life. I accept that, and respect you for it.
    However, that does not automatically imply that you always make the right decisions.
    I, as you know feel that collectively the present council has got it very wrong, and is pursuing agendas, taking the city into dangerous financial territory.
    But then, this is only my opinion.
    I guess time will tell which of us is right, by which time it may well be too late. For this reason I sincerely hope you are right, but I would not be placing any bets on that.

  49. Richard

    Good Morning, Calvin

    Thank you. I appreciate your comment. I have certainly never claimed that I am always right, let alone council. That would be ‘Mission Impossible’. You will recall I have often said that “all wisdom does not reside in City Hall”.

    Councillors are elected to use their judgement to make decisions on behalf of those who elected them. We should so after as informing ourselves as best (or as fully) as possible. We are accountable to the electorate for those decisions every three years.

    In between elections – even at elections – there is very passive interest unless there is something controversial at issue. A classic example, Auckland in 2004. Toss John Banks. Auckland in 2007, welcome back John Banks.

    Things like roads, rats and rubbish just are not exciting enough.

    The stadium is. The Dunedin Centre was – to a point. The original ideas on that were in Annual Plans for two or three years before anyone really took notice, then it was more about Harrop Street and (from Elizabeth and Peter E’s view) the integrity of the buildings etc. I recall you as one of the few people who said anything in the early stages and your questioning it when we we were stood in front of the display on the stage of the Town Hall at one of the DAP Expos. Your concern was, of course, the cost.

    These two projects were ones that people easily understand. When does anyone question technology, wastewater treatment and water upgrades etc in any detail? Most just sit back and let the experts get on with the job. Well as you and I know, in the old days this led to Rolls Royce solutions when a Toyota would do the job perfectly and at less cost.

    The airport company has proven that ‘Toyotas’ will do the job splendidly with the new terminal building (it was what we could afford) and, more fundamentally, its new sewage treatment plant.

    I believe John Mackie and his team will do the same with the secondary treatment plant at Tahuna.

    When I took over as Chair of Finance and Strategy in partnership with Chris Staynes as my Deputy, we set out to give meaning to Strategy, to involve councillors in that part – important part – of council work which the previous Chair had reserved to herself and which, by default, under her and Sukhi Turner had been left almost entirely to management.

    It was no surprise to me that the councillors on THIS council wanted to be involved!

    Part of the task has been improving the flow of and detail of information. Instead of retrospectively pouring over low level information management papers, we are now dealing with high level papers that accord with our governance role.

    This stuff does not, however, hit the headlines unless something goes wrong or is “sexy” – like the stadium.

    So, three or four weeks I decided to do something on why council borrows and financial management and that our financial management is in good professional hands.

    After all, you and some others, have had a fair go over the last 12 months!

    My “wee essay” in the ODT was the outcome.

    Let’s have a debate – debates – by all means. Goodness knows this city needs robust debate and several notches above the level that the stadium debate has been dragged down to by the STS.

    But let’s start with a crowded mind and an empty page.

    Which is what Paul has given us here – if we want to use it.

    I really do look forward to what is coming on planning and what our City might look like 50, 100 years from now.

    Cheers!

    Richard

  50. Richard

    Whoops!

    That last para should have read: “I really do look forward to what is coming on planning and SOME STIMULATING DISCUSSION on what our City might look like 50, 100 years from now.

    Cheers!

    Richard

  51. Calvin Oaten

    Whew!
    What can one say to that? Richard, you say that I was one who early on challenged the Dunedin Centre upgrade, primarily on the grounds of cost. Partly right, but my main concern was, and still is, that the logic behind it was to bring a great many more conferences to Dunedin with its associated spending. That, I believe is a nonsense. The number of conferences predicted is purely speculation, and wishful thinking on the part of management, with no empirical evidence whatsoever to justify the spending of $14.5 million, then $18.5 million, then $29.5 million. This, as you know started in the time of Peter Brown as Economic Development senior manager. It has now ballooned out to $45 million, and counting, while the world’s economy has tanked. This puts the odds of more (or even the same number) conferences taking place highly unlikely. This project for one, should be stopped. Thus removing $45 million from the LTCCP capital expenditure programme. That will do for a start Richard.

  52. Richard

    Well Calvin, the very simple answer is that what you and I discussed it on-stage four or five years ago, it was very much conceptual and it was an error of misjudgement to even “float it”. As indeed acknowledged now by staff and the Mayor when we took it back to the drawing boards early last year.

    The original $18.5m estimate that included the so-called “clip-on” at $11m (a cost which did not change much) was simply ‘a ball park’ figure for the LTCCP/DAP’s. To be fair, it was never claimed as anything else.

    Now the detailed work is done, we know that the regulatory upgrade comes in at $22 million approximately. Without that the doors would be nailed up, or seating reduced to 600 or so.

    I have never heard talk of ‘many’ conferences and I do not intend to debate that here. That was all overtaken by the revised business case that came to council last year and was ticked off along with the project.

    I will say one thing, doing ‘nothing was not an option’. And neither was spending $25m to simply maintain the ‘status quo’ to provide for diminishing use. Nor building a standalone conference centre. Now the cost of doing that and if running it, would have got you going!

    We just have to make best use of what we have!

    To me, a higher priority than the stadium! And I have consistently said that – and publicly. It seems we will get both, anyway!

    That’s it, from me so if you want to respond, it will go unanswered. There is just no point in arguing over something that council has committed to.

  53. Calvin Oaten

    Exactly!

  54. Richard

    Do you mean “eggs-actly”?
    Cheers!

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