Overt feel-good marketing

The Otago Daily Times and the Carisbrook Stadium Trust are offering readers the chance to win two prime seats for every event to be held at the Forsyth Barr Stadium, in Dunedin, during the first year after its official opening (special conditions apply).

Read pages 1 and 37 in today’s print and digital editions for more information.

This is getting close ODT…

The offer follows earlier advertising by Carisbrook Stadium Trust when trying to raise private sector funding, in which the newspaper owners provided a logo – along with a bunch of other businesses – indicating support for the stadium. Editorially, this made things a trifle difficult for those trying to uphold independence of the press.

As they say, this is a small town and in it there is a microscope. As well as, now it seems, a really great prize up for grabs.

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To find out more about how you or your business can support the Forsyth Barr Stadium visit www.otagostadium.com

131 Comments

Filed under CST, Economics, Hot air, Media, Politics, Sport, Stadiums

131 responses to “Overt feel-good marketing

  1. Elizabeth

    An old story…

    ### The Press, 05 December 2005
    Sports: It’s okay to hate rugby
    By Anthony Hubbard

    We won the grand slam. Hooray! We’re hosting the World Cup. Hurrah! But what if, like a third of the country, you couldn’t give a toss about the game? Anthony Hubbard explains why it’s OK to hate rugby.

    Amid the hype and gush over the World Cup, it is good to remember these statistics. It helps to inure us against the marketing juggernaut that is trying to make rugby-going a patriotic duty.

    To download the article copy and paste this address into your browser:

    intranet.papanui.school.nz/file.php/100/Sports_-_Its_okay_to_hate_rugby.doc

  2. David

    THE DCC did a survey when rugby was at its peak in 2001.

    75% of ratepayers did not visit Carisbrook in the previous year.

    So presumably 25% did, however spectator numbers have fallen to less than half since then, so we can safely presume that currently around 85-90% of Dunedin ratepayers do not go to Carisbrook.

  3. David

    Apparently a referendum on the stadium was going to be “too difficult”.

    Other cities have them with no problems.

    I suspect the aspect that council found “too difficult” was that the result was likely to make the them look like thieves.

    Do you think they realise that regardless of a referendum a large number of ratepayers think that anyway.

    The world’s economy has collapsed because too many people accidentally got into far too much debt.

    And Dunedin City Council is getting into far too much debt deliberately.
    (even above their own set limits).

  4. kate

    The problem that the non pro stadium businesses/ people was that there was no place for fence sitting – the campaign was pro or anti- no one was allowed a middle ground. As my husband lamented the other day, the greatest pity of the stadium debacle has been that there was never a “save Carisbrook” campaign which would have been productive and positive. The strategy of opposing the new stadium was seen as too divisive and many individuals and businesses did not want to be linked to that – but it is a pity that the same energy for the STS wasn’t channeled into Save Carisbrook. That will be my greatest disappointment of this project. That opportunity was never timely considered.

  5. Richard

    There was never a ‘Save and Redevelop Carisbrook Campaign’ simply because few stood up against the often nasty and vitriolic campaign that effectively torpedoed the recommendation of the Carisbrook Working Party to do just that back in 2005.

    That is fact, not opinion and it is well recorded in the ODT and elsewhere.

  6. kate

    2005 was a long time ago in this debate and I do think there was a time in 2007/08/09 when the community would have welcomed a rethink – but that was where the negativity of a campaign called Stop the Stadium got in the way – no one was focussing on this issue in 2005 because then as Malcolm told every one it was going to be 75% privately funded – and the tui award goes to…?

    But if STS are successful as they claim today to have a good chance to be then maybe we will need to start the Save Carisbrook campaign.

  7. David

    I completely missed the “nasty and vitriolic campaign” as well Elizabeth.

    Perhaps it was a “secret” nasty and vitriolic campaign (mayby it was initiated by the “silent” majority)

    In fact there seemed to be a big gap between the council promising ratepayers that not a single dollar of their money would be spent on the Carisbrook upgrade……..to the DCC gettting the CST to explore the possibility of a brand new stadium where ratepayers would contribute the largest part.

  8. Elizabeth

    Good to have you here, Kate. In reply and in places off to the side of your comment:

    I’ll temper what you say with an observation that the people who formed STS were/are not negative people. We simply had to get something up and running fast as a legal entity to focus public opposition to public funding of the stadium. We had problems finding a suitable name to keep all the parties in the fold…a couple left or didn’t sign in because of the name, the rest said let’s get on with it!

    A few in governance at STS have subsequently been churned through, burnt off or resigned before being damaged. That’s the life of some committees where ‘diversity’ makes no room for compromise, or proper business procedure, support and facilitation to ensure healthy outcomes for all who give their time and energy.

    On more than one occasion you’ve commented that the name “Stop the Stadium” is negative. Perhaps it is. By association I could take it that you think the organisation’s reason for being, enshrined in the deed of constitution, is/was a negative strategy. It is/was a strategy; negative depends on where you sit and who is represented by that strategy – as it turns out a sizeable slice of the public identify with STS, some have become signed up members, donors, volunteer helpers or have remained independent and or anonymous with a cheque or three kindly forwarded.

    As a past member and committee member I can easily say the organisation SO wasn’t all bad.

    “Stop the Stadium” is an effective rally cry for what is a predominately single issue organisation; one with some strategies lacking at times. However, around the world stop the stadium organisations – using that phrase – are numerous and share the same sort of rankles over developer councils and private sector interests.

    Lacking at STS has been the proper direction, business management and leadership to turn that name (for council) into a rather more respected and consulted entity acting in the public interest.

    And now, hark, council finds there is substantial trouble at mill (which it steadfastly refuses to recognise as such, should the aim be to clean out STS bank accounts in award of costs) because STS has not given up and has achieved some help and bolstering from the community and independent business people to pursue legal action at the Appeal Court.

    Woe is council. It may well turn out to be woe is STS. Let’s see what happens.

    Have to – no, must – respect the right of citizens to test local authority processes and decisions. Be glad we in this country continue to have the freedom to exercise our rights in this way. Treat this as a positive.

    Lastly, it would’ve been fun – and would’ve made good business sense – to have a SAVE Carisbrook campaign, had the majority of councillors not rushed to have the sainted GMP contract signed.

    Not sure there’s any opportunity left to run that campaign even if STS gets traction at Court.

    Interesting times will continue…council’s face can’t easily be saved, and to this extent STS is the winner hands down.

  9. Why would we need to start a “Save Carisbrook campaign”?
    STS right from the get go were primarily concerned with the new stadium proposal. It was never its intention to campaign for Carisbrook.

    The whole issue arose long before 2005, in fact it was very early 2004 that the NZRFU pointed the gun at the ORFU stating that, in its opinion Carisbrook was no longer up to the standard required for the hosting of A category tests, and that if something was not done they also placed the Highlanders franchise in jeopardy.

    Problem, the ORFU was in financial difficulty and it decided to commission an independent report from Montgomery Watson Harza (MWH) into the matter. This was duly produced in October 2004 and was publicised at a meeting in the Skeggs Gallery hosted by the DCC. At this meeting a great deal of enthusiasm was expressed by Mayor Chin, Jim Harland, Russell Grey from the ORFU and Brian Sharplin the consultant. It was resolved at this meeting that a panel would be set up to investigate what if anything could be done to bring Carisbrook up to standard. A committee was convened chaired by Mr Harland. On deeper consideration it became clear from the MWH report that the ORFU was in no position to do anything as it was technically insolvent, owing $2million to the DCC and $4 million to the bank. Worse, it had consistently been running at a loss for several seasons.

    Realistically it should have stopped right there and left the ORFU to sort out what if anything it could do. After all, it was rugby’s problem.

    But no, Mr Harland and co, decided to set up an arms length independent committee and invited Mr Malcolm Farry to chair it. Thus came about the Carisbrook Stadium Trust (CST).

    First seeming conflict of interest was Mr Farry the immediate past chair of the Highlanders franchise. The CST for whatever reason quickly decided that Carisbrook was not a runner, but rather a new stand alone stadium should be built. In August 2005 at a public meeting Chairman Farry stated that a new stadium would be built at Awatea St, it would cost not a penny more than $188 million, and yes, it would have a roof. Further, he stated unequivocally that there would be no call on rate payers to fund it.

    First mistake, he soon came cap in hand saying that there would need to be some rate payer input, but hey, it would be multipurpose and a great city asset. Then Mayor Chin and Mr Harland put their shoulders to the wheel and started to fund the CST with DCC monies. They also canvassed the ORC and the OCT for contributions. By July 2007 the CST had used up some $3 million and the DCC incorporated into the 2007/08 annual plan a sum of $11.5 million for funding. And so on it went.

    STS arose out of a genuine feeling that the use of citizens’ treasure for the purposes of funding facilities for a technically bankrupt commercial operation was fundamentally wrong. It is as simple as that. It was not its intention to save Carisbrook or anything else for that matter, just stop the injustice of the activities of the DCC, ORC and others bent on forcing the rate payers to debt fund the project. Nothing more than that.

    As a result of its efforts it has uncovered a deep undercurrent of unease in the citizenry about the actions of the DCC in all this. The Otago University’s professionally conducted survey showing an 80% opposition to the councils actions, plus the street march and the Town Hall protest manifested a deep well of support.

    Why some disaffected people see it as fair game to disparage and criticise STS’s efforts remain a mystery, especially when many of those people are themselves opposed to the project. It only plays into the proponents hands and gives them strength. The sad thing is that the council has carried this forward with the few councillors who opposed rolling over and getting in behind.

    An honest objective look at the whole financial model could only come to the conclusion that this stadium project will become a generational millstone around the city’s neck. And for what?

    In summary, it is simply not the citizens’ problem, and STS is only striving to protect their interests. Many critics voicing their views about STS are obviously uninformed on the matter, which tends to confuse the issues, and again plays into the proponents’ hands.

  10. kate

    I am not personalising any criticism of the name Stop the Stadium to the people in the group – past or present – but and as I expressed at the time to some members – the name was focussed – rightly for those involved, in stopping the new stadium -but that would leave a void – had it been to Save Carisbrook – it would have made the opportunity to focus many people positively into the debate – saving is generally positive while stopping people is or often can be considered negative. But in fact the time for Save carisbrook was probably after STS was formed but before or while some of the major milestones were met. I am equally at fault in not considering this at some earlier stage – but – and since this site is called What if? What if we had had a Save Carisbrook campaign – would it have made a difference to those otherwise termed fence sitters?

  11. Who knows? But as I reiterate, why a Save Carisbrook campaign when it was plainly a bankrupt operation using it? Let’s face it, just like the new stadium there is no other commercial use for either other than rugby. To dump the massive costs of either option on the citizens is an impost too far. But, as can be seen by the actions of the council it looks inevitable but for a faint chance of STS being successful. With the obdurate attitude of the main drivers of the project, would it have made a difference? I don’t think so.

  12. kate

    With all respect, Carisbrooks ground configuration has more uses possible than the new Stadium except that I do accept that the location of the new Stadium will mean that other uses for the other stadium facilities will probably mean more use of them. For example it is a pity that we will not be able to host international Twenty/20 or one day cricket games in Dunedin while it could have happenend at Carisbrook. Certainly the ownership and management issues needed to change, but isnt that what really drove this in the start and you are correct – it was the bungling handling of that issue which spawned the monster. Imagine if we dealt with every other Annual Plan submission on the same basis – organisation comes with problem of largely their own making but with an ‘asset’ to the City and we give them even more than they ask for!

  13. Richard

    Calvin: “But as I reiterate, why a Save Carisbrook campaign when it was plainly a bankrupt operation using it?”

    And it was precisely comment like that, my friends, that enveloped and sunk the work of the Carisbrook Working Party.

  14. Kate: You are on to it. It is, and has been, a case of crass mismanagement on the part of the ORFU, plus the dominating stance of the NZRU which created the problem in the first place. When they first approached the DCC they should have been told in no uncertain terms to go and get their house in order. Instead, we find that we, the rate payers are landed with the biggest single debt funded non strategic project ever undertaken. It is quite simply, not fair.

    Richard: “The Carisbrook Working Party enveloped and sunk,” is exactly what should have happened, and there it should have stopped.

  15. David

    Calvin: “But as I reiterate, why a Save Carisbrook campaign when it was plainly a bankrupt operation using it?”

    Richard says “And it was precisely comment like that, my friends, that enveloped and sunk the work of the Carisbrook Working Party.

    Then why oh why are ratepayers forking out $200m to build the same bankrupt organisation a completely new palace?

  16. David: A very good question. One I have been asking for over four years to no avail.

    Don’t expect a rational response to your query.

    As the saying goes, “there are none so blind as those who will not see.”

  17. David

    And then of course there’s the matter of DCC quietly channeling ratepayers cash straight into ORFU coffers through the backdoor via Delta.

  18. Richard

    David: “And then of course there’s the matter of DCC quietly channeling ratepayers cash straight into ORFU coffers through the backdoor via Delta.”

    Absolute rubbish!

  19. Richard

    Calvin: “It is, and has been, a case of crass mismanagement on the part of the ORFU, plus the dominating stance of the NZRU which created the problem in the first place.”

    More absolute rubbish.

  20. Richard: You say, “Absolute rubbish.”

    OK, then explain just why it is that the ORFU is in hoc to the DCC for $2million, the bank for $4million and has run operating trading losses for several consecutive years. Indeed, if it is rubbish why, in fact is the ORFU so determined to sell off their assets to the DCC?

    Sorry Richard, but to simply dismiss everything as rubbish without putting forward a viable alternative explanation is no answer at all.

  21. Richard

    I do not have to EXPLAIN it Calvin.

    The ORFU is not “in hock” to DCC. Never has been. The DCC has always had the security of a mortgage over part of the ORFU property.

    The problem that you have, is that you – and some others – could not separate the ownership and operation of a stadium from the sport, in this case, rugby.

    The debate was – and always should have been – about the need for Dunedin to have a major outdoor sporting stadium and whether it should be community owned.

    You – and others – could not separate the two.

    The simple fact is, because of the line you took – but on which, I readily acknowledge – you never descended to personalities etc – is that we have ended up with something entirely different to what we all expected,. i.e. The Forsyth Barr Stadium.

    You did not expect that. To be honest, nor did I.

    Actions reap consequences!

  22. David

    Richard, I was told directly by a Delta employee, that the reason Delta pay for an expensive corporate box from the ORFU, is so the DCC can channel money to the Union without looking like they are doing so.

    Why on earth would a ratepayer owned monopoly lines company need to have a corporate box – what advantage does the company / ratepayers get from having a corporate box?

  23. Richard

    Your homework is sloppy, David.

    Delta is a utility company, a subsidiary of Aurora.

    Not that it matters.

    It is the directors and management of the council-owned companies who determine what each does. Not COUNCIL.

    Council has no role in their governance and certainly none in operations. NONE!

  24. David

    That’s interesting Richard. That’s very close to what the Delta employee said
    – that the council can say it’s nothing to do with them.
    – that Delta can do whatever it wants with what is effectively ratepayers money.

  25. Richard

    David:

    It is not “interesting”. It is a fact. The responsibility of directors is governed by the Companies Act.

    Council cannot lawfully interfere with commercial decisions made by a council-owned company.

    It has nothing to do with what you refer to “as ratepayer’s money” whatever that means.

    I suggest you stop relying on casual and unattributed comment from an anonymous Delta employee who, quite frankly, I do not believe exists. In the real world anyway.

  26. David

    Richard – I notice you haven’t actually denied that a council owned company is paying tens of thousands of dollars to the ORFU for a corporate box.

    You say the Delta employee I talked to doesn’t exist – maybe the Delta Corporate Box is was full of ghosts.

    Do councilors or DCC staff ever get invited there?

  27. Richard,
    You say that the $2million of DCC money to the ORFU is secured by way of mortgage. Is it not a fact that the ORFU is behind in its principle commitments and indeed has even struggled with the interest component. Apart from that, why should the DCC be a banker to the ORFU?

    You say that we have ended up with something that neither you nor I expected. You can say that again. Why, after all these years, does it become of paramount importance for the city – ratepayers – to own a sports stadium?

    Let’s cut to the chase here Richard, the council has in its wisdom chosen to provide, at a cost of $200 million plus, a facility totally biased towards one sport – rugby – thus impoverishing the city for years to come. In so doing it places the city in a financial bind, exceeding its own fiduciary limits, which in these straitened times can only be described as reckless. I am sorry Richard, but you and your fellow councillors have seriously dropped the ball on this one. (pun intended). I suspect that the next election will test the true feelings of the citizens on this issue. After all, it is they who pay. And pay they most certainly will.

  28. Richard,
    You say that the Council owned trading companies are independent and governed by their own boards of directors. Further, Council cannot legally interfere with commercial decisions made by a council-owned company.

    Is that why the controlling company DCHL has increased its debt to $400 million so the directors can magnanimously produce $100 million from which to pay off over twenty years the $100 million of DCC’s commitment to the stadium? Its debt has progressively increased over recent years in order to provide dividends to the DCC way over the level of profits earned. This in order to allow council to fool the rate payers by keeping their rates unrealistically low. This in turn has allowed council to escalate its spending on glamour projects like the stadium and the Town Hall Conference Centre, both of which will be so underutilised as to be a farce.

    To say that these companies are free from direction from council is one big sick joke.

    As the saying goes Richard, “you can fool some of the people all of the time, and you can fool all of the people some of the time. But you can’t fool all of the people all of the time.”

  29. Richard

    Calvin: “You say that the $2million of DCC money to the ORFU is secured by way of mortgage. Is it not a fact that the ORFU is behind in its principle commitments and indeed has even struggled with the interest component.”

    No, it is NEITHER TRUE OR A FACT.

  30. Richard

    Calvin:

    “You say that the Council owned trading companies are independent and governed by their own boards of directors. Further, Council cannot legally interfere with commercial decisions made by a council-owned company.”

    Well, they are. As with any other company, directors must act in the interest of the company and are responsible to shareholders for their actions.

    “To say that these companies are free from direction from council is one big sick joke.”

    That may be your opinion but it is derogatory to the integrity of those who serve on the boards. I’ll back them against your commercial ‘nous’ any time.

    You, of all people Calvin, should understand the advantages of the companies holding and managing debt even although things have changed somewhat since your days at Bonaire!

  31. Richard

    David

    Why should I know?

    I am not a director or involved in the management of Delta.

    I don’t even know what part of The Brook any box leased by Delta is in!

    This is puerile stuff.

    And it is not relevant.

  32. David

    Richard says “…directors must act in the interest of the company and are responsible to shareholders for their actions.”

    So presumably as a shareholders representative, you are happy with Delta spending tens of thousands of dollars each year on a corporate box, and you believe it is in the best interests of Delta to do this?

  33. Richard,
    I do understand the advantages of companies holding and managing debt. But most certainly in a conservative relationship to equity.

    I also understand the merits of a responsible dividend policy. In normal times it is generally considered prudent to pay out no more than sixty per cent of profit, with the balance committed to reserves to finance company undertakings.

    In DCHL’s case at 31st Dec. 2008 the total equity was $154.167ml. whilst its total Term Liabilities was $399.465ml.

    Year ending 30th June 2008 there was an operating surplus of $14.057ml. before tax, whilst dividend and interest payments to the DCC were $20.724ml.

    How do you sustain this? You constantly revalue upwards the assets of the group, some of which could be described as dubious. For instance, the non-current asset value of the Dunedin Airport (50% owned with the government) company was raised by $5.7ml. This in the face of diminishing frequencies of air traffic. City Forests trees were revalued up by $5.638ml.

    Combine those two and we have $11.338ml. Hey, that is just $2.719ml. short of the total surplus.

    My “commercial nous” tells me that despite your protestations all is not well in the halls of treasury. Certainly not in the interests of the citizens at least.

  34. Richard

    Elizabeth: “However, discussion is drifting wide here. Back to the stadium, folks.”

    Precisely. I was on the verge of reposting where this started.

    I fully respect the right of Calvin and David to hold opinions.

    Unfortunately they far too often do not respect the opinions of others.

    And, when they receive a factual answer to a question they have asked and which does not fit their opinions, or which they cannot refute or further debate, they take us on another detour and away from the original point.

    As has happened on this thread.

    I remind David that three months or so ago, he mounted a tirade because I would not respond to some information which he had sought.

    He completely overlooked that I had responded with the information some four weeks previously.

    The tirade only stopped when Elizabeth kindly reposted the response I made. Then what happened, “oh, I went to Australia”, or something like that! Excuse me, not even “a wee sorry, I missed it”.

    And off we went on another “tack”.

    I originally came to this site to tune in to some objective comment on the (then proposed) new I stadium.

    I have not been here much of late because all I “hear” is the same old record being replayed and replayed again. Hardly the stuff to stimulate thought!

    The decision on that has been made.

    That point having been reached, I anticipated, someone might actually be thinking about the future possible use/s of the existing Carisbrook Ground given that its ownership will soon pass to the DCC.

    While Council has yet to even have a preliminary discussion on the options for its future, it is the subject of some interest and discussion in the wider community, in particular, within the immediate environs.

    So let’s get off “replaying the old record” time and time again chaps and deal with what is actually before us.

  35. Richard,
    For us to get off “replaying the old record” would be tantamount to saying that it’s all OK with the stadium deal. As you say, “the decision has been made,” as if that makes it right. Well I am sorry Richard it is not all right. Time alone will tell, but it looks as though council is already abrogating themselves from any blame if it turns to custard. Pretty standard really.

  36. David

    Richard, I thought I did apologise for missing part of what I asked for – if not, I’m sorry.

    However many of your answers very very vague. Where does depreciation funding come from? (it seems to be missing from the stadium revenue / expenditure forecasts).

    Similarly, we can see how $5m per year comes from ratepayers / council companies, but not where the other $5m per year comes from to complete annual capital and interest payments.

    And while we’re at it.

    Who will pay any construction cost over runs?
    Who will pay any private funding shortfall?
    Who will pay for any added costs needed for pitch replacement, or additional lighting to make the grass grow? (as indicated as likely to be needed by the turf experts).
    Who will pay if the $20m savings as indicated by the Mayor cannot be found?
    Who will pay if people pull out of memberships because of the recession?
    Who will fund the shortfall if crowd numbers don’t turn around from their ten year trend?
    Who will pay if we don’t get lots of concerts, as per the forecasts?
    Who will pay the shortfall if conferences go to the new Dunedin Centre instead of the stadium?

  37. David,
    You should not berate Richard with all those who will pay questions. He is much too busy a person to be bothered with trivia. He is a big picture man, never mind the detail. Brush it aside. Anyway he knows who pays. It is the citizens. They always have, and they always will. That’s the beauty of council, spend up large, safe in the knowledge that no-one pays directly, but all pay ultimately. A version of divide and conquer, works every time. Take the credit for the winners, and obfuscate the bummers. It’s called politics.

  38. Richard

    David:

    Here you go again. You have not even checked what you asked and my answers have you?

    Well, as you are too lazy to bother – or so obsessed with the subject – here they are:

    The total DCC Loan for the Stadium”?

    $137 million. $108* million will stay in DCVL when it it takes ownership of the Stadium. The balance of $29 million stays with Council to cover the bridging loan. That is paid off over 10 years as the instalment payments on the subscribed seats come through.

    (1) The ‘memberships’ are all contracted.

    (2) Interest in Year 1: $7.459m. Year 5: $5.293m

    (3) Principal Repayments in Year 1 (on a table loan): $2.6 million. Year 5: $4.86 million.

    (4) Depreciation @ $2.83m is on a straight line basis, this is, of course, an operating expense.
    The city will not be funding any of this through rates.

    What is vague about that?

    The answers to your questions were very specific.

    *(later amended to $105 million)

    Four weeks or so later, you accused me “of failing to be open and honest about the annual figure you voted to commit the city to.”

    You went on to say, “You can be open and honest about the figure and give me an answer…..or you can fail to be open and honest about it.”

    I accept your apology.

    And Elizabeth has called “time”.

    I accept the “ref’s decision”. I suggest you do too!

    Or keep arguing with yourself!

  39. kate

    Richard without taking sides – your numbers are wrong to the extent that most seats are only definite for 5 not 10 years – so it is wrong to say they are covered.

    With respect to operational expenses I would not put those up as black and white – they are based on assumptions that my bank would not accept on a business plan right now – but then DCC is not a bank but a body that can tax as of right.

  40. David

    Richard,

    Thanks for the info on figures, but yet again it avoids the actual questions.

    The reason I keep asking, is because you keep telling us we won’t pay anything more than $5m per year, but your own figures show the loan will cost twice that amount.

    Your own figures above for interest and capital repayments show we need to pay $10m per year ($7.45m interest PLUS $2.6m capital in year one, through to $5.293m interest PLUS $4.86m capital in year five).

    So the same question remains – the one that’s never been answered. Who pays the other $5m per year?

    Depreciation was missing from the operational forecasts I’ve seen. With the $200m stadium forecast to make a pathetic annual return of 0.1% / $200k (return on capital of 1/1000th), if depreciation is added to the books, it would lose $2.5m every year.

    So the question remains (another one that’s never ever been answered) – who will pay depreciation?

  41. Richard

    Kate: They were not MY numbers and related to the position at the time the question was put. The information came from council papers. As you well know, while there is an acknowledged risk, the chance of a high percentage not renewing and/or others not taking their place is relatively low given the Westpac experience.

    You also overlook – as so many do – what can be taken “on the day” at the gate.

    Elizabeth: The problem is you see the stadium as being for sporting EVENTS only – and mainly rugby at that. Now it has the “go ahead”, others are seeing a multitude of other uses and what its proximity to the redeveloped Logan Park actually promises.

    What was it Thomas Bracken said: “Poor souls with stunted vision” (or words to the affect). A lot of things haven’t changed in the century since those words were written!

    I also remind you that, whatever our prior opinions on the project were, all councillors are now committed to getting the job done and meeting the targets. The time for ‘nitpicking is over’. Including the side issue of the road stoppings!

    Period!

  42. David

    The Memberships are a great example of how dodgy the whole project is.

    What should be counted as operating revenue is shifted foreward to capital (with a bridging loan courtesy of the ratepayer), but even then these amounts are false.

    A large part of the memberships have to be paid back again to the ORFU as ticket rebates.

    In fact so much has to be paid back, that in initial CST forecasts the amount to be paid to ORFU in ticket rebates was GREATER that the venue hire for rugby.

    That will probably require some more unusual accounting to make it look a bit better.

    The whole “private funding” is a hollow farce. Except for the naming rights, there’s virtually no private money for the stadium.

    PS Where does the other $5m come from, and who pays depreciation?

  43. Richard

    David: “So the question remains (another one that’s never ever been answered) – who will pay depreciation?”

    It has been answered, several times. You may not – or choose not – to understand.

    So, for the last time, here is the definitive answer – from Athol Stephens, DCC Corporate and Finance GM, responding to a question from the ODT and reported on 17 January:

    “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. ”

    That is how the $66 rate for the average residential property with a valuation of $291,000 arises. (The rate for the current financial year was $33).

    I do not believe it can be explained more simply.

    Now I am sounding like a long-playing record! So that it is it. The record player is being turned OFF!

  44. David

    So effectively we’re paying $5m in rates, AND were losing a further $5m in dividends.

    Again, dodgy accounting can make it look like we’re only paying half what it’s actually costing us.

    So the $66 figure is clearly both false, and deceptive.

    Is it any wonder that no one trusts the current council when we get “not a cent over $66”, “not a dollar over $188m”, “council loan no bigger than $92m”, “not a dollar of ratepayer funding for the Carisbrook upgrade”. It’s all a pack of lies.

    Experience with this project has taught us to expect lies from council. And from your own information, we can see that the $66 cost to ratepayers is clearly a lie.

  45. David

    The public have been well and truely deceived by this council.

    As for councilor Guest – I think his track record (or should that be another sort of record) of money and numbers speaks for itself.

    The council are clearly part of a big con – they know the true cost is not $66, yet they continue to lie and deceive.

    And they use dodgy accounting –
    – to deceive ratepayers about the costs,
    – to deceive ratepayers about the fact that there’s very little private funding available,
    – to shift operational revenue into capital funding,
    – to hide the fact that much of this operational revenue (now called capital funding), is to be handed back over to the ORFU for to pay for ticket rebates for everyone who takes out a membership.

    It’s effectively theft of $200m from ratepayers, being forcibly taken against their will under DCC threat of confiscation of their house.

  46. Richard

    David, I respectfully suggest you control yourself. A simple, chronological reading of every bit of information available – I have five filing baskets of the stuff and goodness knows how much stored on my PC – absolutely torpedoes most of the fiction and fantasy you are writing.

    You are getting very “close to the line” when you talk of “dodgy accounting”. Very close.

  47. Richard

    Elizabeth, if it was just a rugby stadium that was in contention, then Carisbrook would have been the choice.

    And the rating contribution – which you are, with respect – rather confused about – debt etc, would have been about the same as for FB plus, of course, the on-going maintenance which would have been a direct charge against rates.

    The latter would not, of course, be a factor if it was part of DCVM but that option was not further explored once the decision was made to go with FB.

  48. David

    “dodgy” a. inf. 1/ dangerous 2/ unreliable 3/ tricky

    Dodgy Accounting 1

    Council telling ratepayers they won’t pay any more than $66. When in fact they’re also taking money from Council companies that would otherwise subsidise rates.

    This is like saying, you can pay me directly, but I’m going to also take money from your income, but because you’re not paying that directly we won’t count that part (or even tell you about it).

    Whether ratepayers pay the full amount directly, or nothing at all directly and it all comes from council companies that would otherwise subsidise rates, makes no difference to the real cost to ratepayers.

    Dodgy Accounting 2

    Taking money for memberships that should be operating revenue, and saying it is capital funding from the private sector.

    Dodgy Accounting 3

    Taking money from memberships YEARS into the future, that has NOT been paid, and with NO guarantee that it will ever be paid, and counting that as capital funding now.

    Dodgy Accounting 4

    Covering this possible future operating revenue with a bridging loan that ratepayers are responsible for.

    Dodgy Accounting 5

    Much of this operating revenue from memberships, now erroneously called capital funding, does not even exist, as a large part of it has to be handed BACK to the ORFU to pay for all the tickets that the city has to buy off the ORFU for all the members.

    This dodgy accounting points to several things.

    a/ The Council is trying to deceive the public over how much it will cost them.

    b/ The Council is trying to deceive the public over how much private funding is actually available.

    c/ The council believes they can take whatever they want out of ratepayers pockets under threat of losing their houses. And they can continue to shaft ratepayers for additional money for any operating loses, cost over runs, funding shortfalls etc.

    d/ The Council refuses to accept the fact that private capital funding has failed, and private funding targets they set as conditions for the stadium to continue were never even close to being met.

    e/ The Council does know the Stadium financials wouldn’t stand up to scrutiny on their own merits, without this massaging of figures.

  49. Richard

    “Council telling ratepayers they won’t pay any more than $66. When in fact they’re also taking money from Council companies that would otherwise subsidise rates.”

    For goodness sake, David. There is only ONE “$66”. That is the make up for the reduced dividend.

  50. David

    You insist we are paying no more than $5m per year for the loan, but you say the cost of the loan is $10m per year.

    Your own figures don’t add up Richard.

  51. Richard,
    You have certainly poked a hornets’ nest here. Pity about your “facts” though. You say that Athol Stephens said that “Dunedin City Venues Ltd would sit inside the city’s group of companies and make a loss when interest expenses and depreciation costs are taken into account.”
    The losses it incurred would be offset against the profits (assuming there are any) of the other companies.

    The loss was estimated to be $5 ml. per year, which would translate to $66 per year for the average household.”

    Actually, Richard, I don’t think that was what Athol said at all.

    If you check out the facts you will see that the $66 per household was to make up for the shortfall in the annual dividend to the city from DCHL of $5 ml. This is because DCHL is, from 2011 onwards for twenty years, going to pay back the capital of $100 ml. of debt held by DCVM against the stadium at $5 ml. per year. Now that, Richard, is a fact. The interest and other holding costs are supposedly to be met from operational surpluses after all costs of operation. The revenue of DCVM is to be enhanced by receiving the private funding contributions (assuming they continue to flow, and should really be treated as capital) which in turn, subject to surpluses being achieved, will be transferred to the DCC in order to allow it to pay down the bridging overdraft. That surplus is also designed to pay the holding costs i.e. interest of that overdraft.

    So you see Richard, an awful lot hinges on DCVM actually making a surplus. Therein lies the risk of the whole venture.

    David’s “nitpicking” questions seem to be difficult to answer, best ignore them or instead, spin the subject off in a tangent so the issue disappears.
    Your five baskets of chronological stuff (which have cost the rate payers a cool $20 ml. plus) seems to have confused you, as indeed all of your colleagues, as to the real situation.

    The deceit that David alludes to is definitely perpetrated by the proponents of the project. Perhaps less so, by the council. More likely the council have simply been suckered by a glib story, as manifested by Cr Guest’s mantra, “the city will die if we don’t do this.” It simply shows up the serious lack of intellect sitting around the table.

  52. Richard

    Calvin: “You say that Athol Stephens said that “Dunedin City Venues Ltd would sit inside the city’s group of companies and make a loss when interest expenses and depreciation costs are taken into account. The losses it incurred would be offset against the profits (assuming there are any) of the other companies. The loss was estimated to be $5 ml. per year, which would translate to $66 per year for the average household. Actually, Richard, I don’t think that was what Athol said at all.”

    Answer: Athol’s own words, ODT 17.1.09. Just one such reference.

    Calvin: “If you check out the facts you will see that the $66 per household was to make up for the shortfall in the annual dividend to the city from DCHL of $5 ml. Now that, Richard, is a fact.”

    Precisely. Apart from the company being DCVL, who is arguing?

    With your confirmation, David – will now hopefully understand my point that “there is only one $66”.

  53. “Dodgy Accounting 2

    Taking money for memberships that should be operating revenue, and saying it is capital funding from the private sector.”

    David call it what you like but this is standard practice around the world for this type of project.

    {spell check passed I hope}

  54. I’ve got a ‘rants law’. The inverse of the dyslexia is proportional to the bollox it’s rebutting.

    Have you met my friend Mrs Malaprop, or Reggie Perrin.

  55. David

    Richard – your own figures say you are paying $10m in annual loan payments with just $5m per year – impossible.

    If you can’t clearly explain where the missing $5m comes from every year, then you should never ever have voted for the stadium.

  56. Richard

    David: “your own figures say you are paying $10m in annual loan payments with just $5m per year – impossible.”

    I have said no such thing. The $5m you keep referring to solely relates to ratepayers making up the shortfall in the annual dividend to the city from DCHL. Period.

  57. David

    So who pays the other $5m?

  58. Richard,
    If you go to page 30 in the Draft Annual Plan you will read that DCVL will take ownership of the stadium once it is completed. The debt servicing costs will not be a charge on ratepayers. But it will have the effect of reducing the dividends from the companies. This SHORTFALL (debt servicing) in the council’s income is to be made up by the additional GENERAL RATES.

    The ratepayers’ contribution ($66) will cover the $5 million shortfall (debt repayment) in dividends from Council owned companies over the 20 years it will take to pay off the stadium loan.

    This is exactly as written in the plan.

    Now, to me, and I suspect David, this clearly shows that the $66 is for the debt repayment. The increased general rate is to cover the estimated servicing costs. So this makes an absolute lie of the claim that the only cost to the ratepayer is $66.

    Richard, $66 for DCHL to pay $5 ml. per year off the debt.
    $66 to cover Athol’s estimated $5 ml. per year loss.

    And this is all based on the assumption that DCVL will run annual surpluses. “Yeah right”

  59. David

    And Richard also claims that $2.8m of annual depreciation is covered in operational costs, but it is not – it is missing from operational forecasts.

    So Richard has also failed to explain how depreciation will be funded, when there is no money in the operational budget to cover it.

  60. David,
    Does this not suggest that Richard either has no real understanding of the situation, or, is he merely trying to put people like you and I off the scent by by spreading a false trail?

    I know what I think.

  61. David

    Calvin – he’s never managed to explain where the extra $5m and $2.8m depreciation is coming from.

    If he (or any other councilors) can’t explain that clearly to the public, then their whole decision making ability has to be brought into question.

    In fact if you vote to commit the city to $200m of repayments, plus millions more per year in depreciation, without that ability to explain clearly to the public how it will all be paid, then I would say that is severely negligent.

    Or, as you say, if they are deliberately not telling us, then it’s plain deceptive.

  62. David

    Elizabeth – I was also wondering if the deception (or negligence) had a bearing on councillors legal responsibilities.

  63. Richard

    Gee Guys! It has been explained often enough. Depreciation and interest lie within DCVL … as you well know Calvin!

  64. Richard,
    You say that depreciation and interest lie with DCVL as though that is the end of it.

    I presume you mean that DCVL pay it. Question, how? That is what David and I have been asking all along, but you seem unable to explain. Unless all items of expenditure are clearly laid out and accounted for, how can one know the truth.

    Could it be that these factors are not published because they are in the too hard basket? Or that they just simply don’t fit the equation and are thus obfuscated with you, Richard, the designated spokesperson to promote the grand illusion.

  65. David

    Actually Richard, you have NEVER explained it.

    Where does the extra $5m to pay the loan, and the $2.8m to pay depreciation come from? There is no money in the operational forecasts to pay for it.

    If you can’t clearly explain to ratepayers where the money is coming from to pay the extra $5m of the loan and $2.8m depreciation for a massive project you’ve just voted for, then you should resign in shame.

  66. Richard

    No David, you have never understood it – or anything – and with respect you do not wish to understand. It simply does not suit you to do so!

    And, Calvin, I am not the ‘designated spokesperson’ on the matter for Council.

    When I discovered this site, I found the discussion interesting and indeed stimulating in the context of the decision/s to be made.

    I was prepared to make a contribution by contributing some relevant information and to answer relevant questions but I am not interested in continuing to recycle them just to fuel your obsessions!!

    There are piles and piles of papers available and lots of information on the DCC website on the matter.

    Just look back to where this thread started and what it was about and where you have both taken it!

    I’ll leave you to continue your conversation with each other.

    I doubt anyone other than Elizabeth is interested!

    Cheers!

  67. David

    Richard – you have made no attempt to clearly state how the vast commitment you voted for will be paid for.

    In fact you have failed repeatedly to do this. – completely failed.

    If you can’t clearly explain how the city will pay for this, then you should resign.

    As should any other councilor who puts the city into decades of debt but can’t come close to explaining where the money will actually come from to pay for it.

  68. Richard

    David; “absolute rubbish!” My position has always been clearly stated.

    A bit different to yours.

    ODT Website
    “Submitted by photonz on Fri, 05/06/2009 – 9:38am.

    The editorial hits the nail on the head. We’re looking to cut a few thousand here and a few thousand there, when we’ve just commited to an additional ten million per year just on loan repayments.”

    You have posted that in the full knowledge that the last statement is untrue.

  69. Richard; “absolute rubbish,” it has become your mantra. It could also be an overt admission that you can’t counter the logic of David’s perceptive points of argument which you so consistently evade.

  70. Could we apply the same ‘scrutiny’ to the insanity of the claims of the STS – would that be too much to ask.

    Why wasn’t the Terrorism, Global Warming, Structural Integrity qualms all given this same ‘professional dagger’. No they were published in the ODT and put out there in the public realm with only the likes of me questioning them.

  71. David

    Richard – you say your position has always been clearly stated – that’s so absurd I laughed.

    Your explanations have been pathetic.

    Funny that you now say $10m on loan payments is UNTRUE – they are YOUR own figures of capital plus interest.

    Stop the deception or resign.

  72. Richard

    David: “We’re looking to cut a few thousand here and a few thousand there, when we’ve just commited to an additional ten million per year just on loan repayments.”

    Those are your words, not mine.

  73. David

    Richard – your quote from just three days ago, on this very page for the cost of the loan repayments, states –

    “(2) Interest in Year 1: $7.459m. Year 5: $5.293m

    (3) Principal Repayments in Year 1 (on a table loan): $2.6 million. Year 5: $4.86 million.”

    So add interest and principal repayments for each year, and YOUR figures total
    – $10.0059m in year one,
    – $10.153m in year five.

    These are YOUR figures, and now you are disputing them.

    Do you realise how incompetent that looks?

  74. Richard

    “We’ve just commited (sic) to an ADDITIONAL ten million per year just on loan repayments.”
    That is YOUR statement, David, made in relation to the proposed rating levels in the LTCCP for 2009-10 Year.

    It follows these related comments you have posted on this thread:

    “So effectively we’re paying $5m in rates, AND were losing a further $5m in dividends. Again, dodgy accounting can make it look like we’re only paying half what it’s actually costing us. So the $66 figure is clearly both false, and deceptive.”

    “Experience with this project has taught us to expect lies from council. And from your own information, we can see that the $66 cost to ratepayers is clearly a lie.”

    “Council telling ratepayers they won’t pay any more than $66. When in fact they’re also taking money from Council companies that would otherwise subsidise rates.”

    The figures which you refer are a repasting of those I posted back on 7 April.

    There is “NO additional $10m”.

    Just as there is no ADDITIONAL $5 million being taken from rates or dividends.

    In 2009-10 and 2010-11, the $5 million forms part of the General Rate; in two years it will be funded from within the council group of companies. When that occurs, no rate will levied, i.e. it is essentially neutral.

    You have also levelled accusations of “Dodgy Accounting”. I quote this one specifically:

    Dodgy Accounting 2: “Taking money for memberships that should be operating revenue, and saying it is capital funding from the private sector.”

    You say that despite the independently sought opinion of Professor Roger Willett, head of the University of Otago accountancy and business law department, as reported in the ODT: http://www.odt.co.nz/on-campus/university-otago/51166/method-not-misleading-prof-says.

    Council has always sought the best possible advice before taking its decisions. I have never known the detail of any project to be so exhaustively questioned around the council table.

    The minutiae has been dealt with. The decision has been made. Council’s attention is turned to making it all work as planned.

    Whether you agree with the answers, whether you agree with the decision or not to proceed to build the FB Stadium, is entirely your prerogative.

    I accept that no matter what anyone says, nothing seems to satisfy you, David!

    Maybe you should visit Ayers Rock. Gives one a great lesson in real perspective!

    Cheers!

  75. Richard,
    Phew! I can’t believe you just said all that. I don’t believe I have ever seen so many admissions of error and contradictions in one statement before, not even by you.

    David says;
    “So the $66 is clearly both false, and deceptive.”

    “We can see that the $66 cost to the ratepayers is clearly a lie.”

    You say,
    “There is no ADDITIONAL $5ml. being taken from rates or dividends.”
    Then you say, “the $5 ml. forms part of the General Rate.” But only for two years. Then it will come from within the council group of companies. As owners of these companies, how can you say this is neutral when it is shareholders’ funds being applied? This, I suspect is part of the “dodgy accounting” David alludes to.

    Then as you also know, the $5 ml. shortfall in dividend from DCHL is to be made up by the ratepayers at $66 per year.

    Quite simple really, there is the $10 ml. David has been banging on about all along.

    And then of course there is the still ignored items of depreciation and private funding revenue being treated as operating expense when it is also claimed as part of the construction capital budget.

    Sorry Richard, but you will really have to go back and try again.

  76. David

    Richard – nice try.

    But you get an F for Fail yet again.

    The DCC have committed to a project which YOU say will cost $10m per year to repay.

    So a $108m (your figure) loan at 7.5% interest over 20 years (you can do this on any internet banking mortgage calculator) will attract $101m interest – That works out to 20 years at $10.44m per year – confirming your figure of just over $10m per year

    You failed to tell us how the $10m in loan repayments (YOUR figures) will be paid.

    And you have failed to explain how $2.8m in depreciation funding will be paid. It is MISSING from operational forecasts, and if it were added there would be no money to pay it.

    So effectively the council has just over $10m (your figure) in loan payments every year, and $2.8m depreciation (your figure) every year – $13m total per year.

    And you can only explain where $5m is coming from.

    We need an explanation for the other $5m for the loan and $2.8m for depreciation.

  77. David

    Well Richard, that’s fantastic news about being able to count future revenue as capital funding.

    With this news I’m going to be rushing down to my bank first thing on Monday and get a $500,000 loan for a property.

    They’ll ask me how much capital I have, and I’ll say “not a bean, but I’m going to count the rent, for the next decade up til 2019 as my capital – even though I don’t actually have any of it, and won’t have most of it for years”.

    They’ll say no problem sir. When would you like the money.

    Then the alarm clock will ring and I’ll wake up.

    Capital (existing funds) should not be confused with “revenue”, or in this case “future revenue”, or more accurately “POSSIBLE future revenue”.

  78. David

    Oh, and I forgot. In my dream I could pay my $10,000 annual loan repayments with just $5000 – magic.

  79. Richard

    I will repeat again – it is the SAME $5 million.

    For two years the $5 million is levied as a rate.

    There is no reduction in the DIVIDEND for those two years. In fact, for 2009-10 it increases.

    When ownership transfers to DCVL, the rate ceases and the dividend from the companies REDUCES by $5m.

    Hence the change is NEUTRAL.

    You and David must stop double-adding!

  80. Richard

    David:

    Your response to Pofessor Willett rather proves my point. You just do not wish to accept any opinion that does not suit.

    So be it.

    At the outset, I took your questions seriously. What an error of judgement that was. You really just “want to play games”.

    So, I’ll now leave you and Calvin to it!

    Have fun!

  81. David

    Richard, How can it only cost $5m per year, when you yourself say the interest ALONE in the first year will be $7.459m.

    And you say the capital repayments that year will cost a further $2.6m.

    And you say the depreciation will cost a further $2.8m.

    And now you say this can all be paid with just $5m per year.

  82. Richard,
    Is the $66 per year to offset the reduction of DCHL’s dividend or not?

    Is the reduction of the dividend because DCHL will be paying $5 ml. per year off the stadium debt or not?

    If the answer is no, then what is the $66 per year for?

    If the answer is yes, then what covers the loss of $5 ml. per year DCVL is budgeted to make which you stated was to be made up by the $66 per year?

    The fact that the $66 doesn’t kick in till 2010/11 is beside the point. It would be equally fair to say that depreciation, interest etc. will only kick in then upon completion of the construction. Until then it involves holding costs only.

    So who is really “playing games?”

  83. David

    As for double accounting Richard – how about this.

    The five year stadium memberships (both signed and pending) were all counted twice, (just in case every single one of them changes their mind to a 10 year membership?).

    The council said the project would be stopped if private funding did not reach the 60% target.

    It didn’t reach that target. So they counted the five year memberships twice, to just meet the target.

  84. David

    Using Richard’s DCC figures we have

    $10m annual capital and interest repayments
    +$2.8m depreciation funding as required by law

    =$12.8m total annual payments for ratepayers.

    – $5m per year (Richard says this is the maximum the city will pay)

    =$7.8m annual shortfall x 20 years

    =$156m total shortfall (for 52,000 ratepayers, that’s an additional $3000 each).

    To check the totals, the city is borrowing
    $108m over 20 years
    +$101m interest
    +$56m depreciation

    =$265m total. But Richard says we are only paying back a maximum of $5m x 20 years ($100m total)

    $265m
    -$100m

    =$165m short.

    Either way, our shortfall is in the order of $156m to $165m.

    Missing, unexplained, and unaccounted for.

    But very, very likely to turn up as several thousand dollars extra per ratepayer, secretly trickled over time onto on your rates bill.

  85. Disregarding all the semantics expressed over the values or not of the stadium, and returning to the basics what do we find?

    A project with a price tag of some $200 million. Of this, some $100 million is to be financed by the DCC – read ratepayers – the ORC – ratepayers again – plus private finance, OCT and the Government.

    The DCC component as incorporated in the Annual Plan/ LTCCP clearly shows that the stadium plus other major capital works takes the city into debt at levels barely sustainable. Athol Stephens is on record as saying that once all projected debt is in place the city will be absolutely at its limits with no wriggle room whatsoever. It will for several years be in breech of its own fiduciary limits. Exceeding its costs of debt servicing ratios substantially.

    Now this situation is arrived at with the stadium financial model set at the optimum position. This means that it must be built absolutely to budget and all forecasts of operation are met.

    This leaves us needing to consider a number of what could be termed “what ifs”:

    a. What if the project does escalate in cost? This has already been a problem, as it first was to be not a penny over $188 ml. then it was $198 ml. and currently, according to Mr Harland’s sworn affidavit looking like $217.4 ml.

    b. What if the Private Funding does not eventuate fully? At present 97% of it is no more than promises, supposedly contracted. But the projected cash flow is over a ten year period whilst the contracts – which may or may not be enforceable – are only for five years.

    c. What if DCVL’s – the operating company – operational forecasts fail to be achieved? Price Waterhouse, Deloittes and the Horwath reports all express serious reservations about the robustness of these predictions.

    d. What if DCHL’s group of companies fail to achieve the revenue required to produce the profits necessary in order to meet the $5 ml. per annum of capital repayment off the stadium debt, plus pay the projected dividend of $7.862 ml. per annum to DCC, cover any shortfall in revenue of DCVL and of course service its own debt of $400 ml.? This in times when the terms of trade in the world at large are turning toxic.

    e. What if the interest rate on which the financial model is based changes? Presently it is assumed to be in the vicinity of 7.06%. But it is interesting to note in the Draft Annual Plan that a series of bonds have been issued with varying maturing dates ranging from 6.79% up to 8.7%. So, it would be a bold person who would say that 7.06% would apply for twenty years, the term of the stadium debt. Indeed, one has only to look back twenty years to realise that rates of 18% to 20% and even higher were experienced.

    d. What if the other substantial capital works escalate? The Dunedin Town Hall upgrade, started at $14.5 ml. moved to $29.4 ml. and is now in the plan at $45 ml. Watch it move towards $60 ml. Then there is the Tahuna Sewage Treatment upgrade in at $72 ml. Watch it move towards $90 ml. Where is the money for these to come from.

    e. What if there are any unforeseen events? Another attack by nature on the beach front could require emergency expenditure of who knows how much. Another possibility which ought not to be ignored is the fact that the city’s main water supply comes from Deep Stream via a single pipe line. This line traverses the Taieri Gorge and the engineers have acknowledged that this section is in very bad repair, at risk to a moderate seismic event. How would the city get by with its water supply cut? More importantly, what financial contingency could the city fall back on to cover this eventuality?

    This is just a small summary of how vulnerable the city would be if any of these factors were to move against its interests. There is no doubt that the city’s council and executive are recklessly exposing the citizens to financial hazards way beyond reason by their extravagant spending on grand unsustainable projects.

  86. and of course the “what if’ that we all expect to see,

    what if this is a bloody success.

    Wouldn’t that be a shame.

    {not sure why all the wishing it to fail, never known people more keen on seeing a city fail before – must be scratching a very weird underbelly of Kiwi Culture, something even deeper than the great Kiwi knocking machine}.

  87. David

    Paul – forcing tens of thousands of ratepayers who will never use it, to pay thousands of dollars each for your rugby stadium, might be a success to you.

    But for all those people who are forced to pay thousands of dollars for something they will never use, it has the same result as being the victim of theft.

    And will have that same result for a further 20 years.

    And every other sport and interest group in the city will miss out on council funding their projects for a generation.

    That’s not success – that’s a disaster.

  88. David – forcing tens of thousands of ratepayers who will never use it, to pay thousands of dollars each for your clean beaches, might be a success to you.

  89. David – forcing tens of thousands of ratepayers who will never use it, to pay thousands of dollars each for your Business Development, might be a success to you.

  90. David – forcing tens of thousands of ratepayers who will never use it, to pay thousands of dollars each for your Animal Control, might be a success to you.

  91. David – forcing tens of thousands of ratepayers who will never use it, to pay thousands of dollars each for your Sports Fields, might be a success to you.

  92. Paul – forcing tens of thousands of ratepayers who will never use it, to pay thousands of dollars each for your Otago Settlers Museum, might be a success to you.

  93. Welcome to Democracy.

  94. David

    Paul – your argument fails four times

    1/ You say thousands of ratepayers will never use the sewer system. I can’t speak for you, but EVERYBODY I know has a toilet.

    2/ Business Development does not cost every ratepayer thousands of dollars (and has a return to the city much better than 1/1000th, including more rates and new jobs).

    3/ Animal Control costs a few dollars per ratepayer – not a few thousand dollars. And registration fees, impoundment fees and infringement fees cover a large part of their costs.

    4/ Sports fields have pretty low maintenance (largely cutting the grass), and are used every day by thousands of people for dozens of sports. And they are in every part of the city for everyone to use.

    Yesterday I was at one sports field and there were people kicking a rugby ball, walking (lots), walking their dog (lots), playing frisbee, jogging (lots), kicking a soccer ball and flying a kite. Nearby on a sealed part of the park there were skateboarders, bike and scooter riders, children in a playground, and kids playing basketball. All this on a cold Sunday afternoon.

    The ages ranged from under 3 to over nearly 80, all sorts, all sports. And every single person was actually using the sports field – not sitting watching someone else use it.

    Every city needs local sports and recreational fields. We don’t need two rugby stadiums.

  95. David

    Ah – two more points to be wrong on.

    5/ The Otago Settlers Museum will not cost thousands of dollars per ratepayer.

    6/ Democracy – isn’t that where representatives represent?

    Or is it the Dunedin version of “democracy” where representatives are unrepresentative?

  96. Paul,
    So what if it is a “bloody” sucess?

    Does that solve the city’s debt problem? There is no disconnect here. The city would still be in financial stress.

    I wonder what has happened to Richard?

  97. David

    Paul – now there’s new concerns with the stadium. Even a minor sea level rise of a few centimetres is expected to lift the water table under the stadium.

    This combined with nearby blasting at Palmers Quarry, will potentially have serious subsidence effects, to the point liquefying the substratum beneath the stadium.

    Extra weight – even 30cm of snow – would be enough to tilt the entire stadium (as the roof is tilted it would likely slip to one side) and hence the playing field of the whole Stadium project would not be level.

  98. David, like you I am very happy for the people like us which have toilets, but I also know hundreds of people still on septic tanks, or compost toilets.

    But your misinterpretation of my statement leads you a little astray. I was talking about the cleaning up of the beaches, not sewage system. Time and time again (erroneously) people threw up the opportunity cost of not cleaning up the sewage on the beaches due to the stadium construction. I can only put it down to too many years of bacteria infested beaches but at the march there was a group of surfers with banners “clean up your shit first” – even when the final stages of the Tahuna outflow upgrade were being completed.

    Having said that, of the 120,000 odd people that live in Dunedin, how many use the St Clair beaches as a swimming spot. Having lived and visited Dunedin for well over 20 years, I can honestly say, I have never swum at that beach, nor have my kids. I don’t know one person who has. I’m not saying that the sewage upgrade shouldn’t have taken place, but of all of the possible sewage upgrades available, a long pipe wasn’t my choice. I was forced to have my rates money spent on something I didn’t want, nor will ever use (in the sense of clean swimming on St Clair beach).

    2) So you are saying that SOME ratepayers money is used to fund SOME parts of council business, and others rates fund other parts of council business. Awesome, I’m writing a letter tomorrow asking if mine could be spent on my pet projects.

    3) I don’t care how much the money is, if I could be bothered spending even more than the one minute to have a dig at your argument today, I could have come up with many examples where MY money would amount to thousands of dollars spent by the council, which I may or may not have necessarily agreed with. My $66 a year will be rather nicely spent on some bricks and mortar at Awatea St thank you, not thousands. Or if you are to come up with that fantastical amount of thousands, I assume you are taking an accumulative amount over years, in which case the case for animal services (tagging bloody dogs which I hate and who poo everywhere) will add up to thousands of my dollars.

    4) Are you taking the piss re the sports grounds. Tens of thousands of dollars a year a spent maintaining bloody rugby grounds. How do you think us footballers feel when we hear grounds are closed, but to see Senior Rugby still on – that’s my blood and guts rates going into keeping their fields open. But then I could ask my best friend and all of their friends, and all of my co-workers, all of whom do not play sport, what do they think of their money going on sports grounds which they never use. Funny, all the people I work with don’t play any sport at all, but are all going to be going to the test this weekend, and will go to the stadium too.

    5) I don’t give two tosses how much the Settlers Museum costs, or any other council service, you just aren’t understanding the very basic social democratic principles I am illustrating to you.

    You are bemoaning the cost on the tax payer of a service that You and apparently everyone you know will never use. I am arguing that this is one of the pay-offs for living in a social democratic society. It’s exactly the same argument to that of central govt using ‘my’ or ‘our’ money on things you disagree with, in my case GE or Military spending. But then I shirt-tail off all of the other wonderful facilities and services that this social democratic contract provides me.

    Yes David, democracy is elected officials leading. Yes they represent us, but they are also elected to lead. Obviously you playing the selective memory game, because the last election was fought and largely won on a mandate to build a waterfront stadium, I voted accordingly, I hope you did, or it seems that your vote was wasted if you didn’t, or enough people didn’t agree with you. That is the very core of democracy. Not some mid-term con job in which an ‘irate’ confused and slightly deranged person whipping up some bloody moral campaign of lies and disinformation suddenly wanting to throw her toys out the cot and jump up and down. I voted for a council that would lead the development, and thankfully for me I got the council I asked for. I didn’t get the central govt I wanted, but then I doubt very much I’ll ever see a Green PM in NZ, that is my trade off.

  99. Calvin, if it is a success, and like Vector Arena in Auckland, and it more than pays for itself and indeed makes handsome returns (more than physically possible), then debt restraints on this city will ease.

    I love the fact that economic woes can only be the one feasible outcome of this project, yet any positives (and yes they bloody well can happen) are disregarded.

    Richard, imagine if he’s too busy to ‘play’ that would be a shame wouldn’t it. Those damned councillors working for us, the cheek of it.

  100. David, thank you very much, you have just made my evening, I was a little down until I saw your last post.

    Shall we have a little fun with this, as you obviously aren’t serious.

    Paul – now there’s new concerns with the stadium. Even a minor sea level rise of a few centimetres is expected to lift the water table under the stadium.

    Any chance you’ll illuminate us with who is providing these latest concerns. There wouldn’t actually be a name to this startling oversight of the developers whom over the last 15 years have produced over $1trillion USD worth of stadia and entertainment facilities globally.

    This combined with nearby blasting at Palmers Quarry, will potentially have serious subsidence effects, to the point liquefying the substratum beneath the stadium.

    You can fool some of the people some of the time, you can even take the piss out of them all of the time, and lead them up the garden path, but you can not be serious. Having a degree in coastal geomorphology, periglacial landscapes and meteorology I have some pretty good understanding of the physical processes which lead to liquefaction of fluvial landscapes. As this area of land is both a combination of reclaimed land and fluvial material from the Water of Leith, yes it is prone to the very process you describe. However I would assume (although I haven’t read the report from your esteemed professional expert) that, like in the real world, for any significant liquefaction movement to occur, sustained movement of the ground over a sustained period of time (usually associated with specific wave patterns affecting the land), not short one off events, which hardly produce any ground resonance of significance. In lay person’s terms. Stand in the bacterial free sand of St Clair beach, let the waves come in over your feet a few times and move your feet from side to side, what happens you start to sink. Take a step to the side, same sand, same amount of water. Take one decent jump into the air, your feet don’t sink into the ground any where near the distance that you did over the slow but steady movement.

    Further, engineers have devised methods of pole/pile/subsurface construction which allow developments in areas prone to liquefaction – even with or without rising sea levels and ground water. They have even devised methods which actually see the strength of the footings increase with movement about it, rather nifty eh. Those cunning buggers, gotta love a good engineer – but that’s right we don’t have good engineers working on ours, just some council pen pushers eh. Any chance of a reference for said concerns?

    Extra weight – even 30cm of snow – would be enough to tilt the entire stadium (as the roof is tilted it would likely slip to one side) and hence the playing field of the whole Stadium project would not be level.

    Excuse my french, bugger ME, anyone got the after hours number of the CST, this is startling. Just last week as I was shovelling 30cm of snow off my car at sea level in Dunedin, I was thinking to myself, I hope the shocks on my car can stand this.

    Sorry, right up there with the lunatic assertion that South Dunedin was going to float away into the sea, this is right up there with the silliest thing I have ever heard.

    The architects and engineers can plan for category 3 or 4 hurricanes, flooding, earthquakes etc, but sorry they can’t plan for the simply insane. Or they can, they can build a structurally sound building, which if ever 30cm of snow gets dumped on it, will not topple over like something in your kids’ sand pit. Sure calculating the weight of snow per sq foot on a structure is a little hard to generalise, is it soft light wind blown snow, is it heavy wet slushy snow, is this all at once, over a period of time?

    http://www.aragriculture.org/disaster/ice_snow/ice_snow_accumulation.pdf

    The above link provides a pretty good summary of this calculation, but then they tend to have to deal with this sort of thing in Arkansas or at 5,000 ft, neither of which this is. But I would assume that if you were suggesting that we have 30cm of snow in Dunedin sea level, the ETFE would be at greater risk of failure, but I don’t have the figures on that, it’s tough stuff. But then does your freak snow storm come down all at once, or is there even the slightest warming in the periods of settling of snow, or even a wetter layer of snow, in which case the accumulation of 30cm of snow that great on a sloped surface is more likely to slip, or in ‘Bev Butler alarmist’ terms – avalanche.

  101. David

    Paul – no one is arguing that we pay rates for services that not everyone uses.

    But I can guarantee you that we will not be spending $200m + $101m interest + $56m depreciation for dog control.

    A lot is spent on recreation grounds – but there are over 200 parks, sports fields, gardens and playgrounds, covering every suburb of the city, and they are used by a vast majority of citizens for dozens of different sports and recreational uses.

    A lot is spent on libraries, but their use is probably almost as high as recreation grounds – the latest survey shows 87% of the population used the Main Library last year.

    Then we have the stadium. Over $200m, plus more than $100m interest, plus depreciation funding, all for rugby.

    All to hold exactly the same events as Carisbrook currently holds.

    You think you got a council for development – you’ve just wiped out twenty years of Dunedin development (i.e. the council have just had the total embarrassment of having to go begging to charities to help pay for Octagon security cameras).

  102. “Then we have the stadium… all for rugby”

    Goodnight, we have nothing to say to each other.

  103. David

    Paul, no I’m not serious about the water table/quarry blasting/subsidence theory.

    How about a competition for the craziest ideas from both sides.

    Like bringing in temporary swimming pools to the stadium to hold large swim meets. (I can envisage circular lanes in large para pools)

    Or the temporary basketball floors for large basketball tournaments (which of course would kill all the grass pretty quickly, apart from being extraordinarily expensive – but what the hell – ratepayers are subsidising about a million dollars per event anyway).

    Or the temporary ice rink for ice concerts. That would be horrendously expensive and duplicate a facility the city already has – so that would fit nicely with the stadium (i.e. horrendously expensive and duplicate a facility the city already has).

    I think these silly ideas (which were all put forward by CST and stadium proponents) made most of Dunedin highly skeptical of the (desperate) multi-purpose claims.

  104. David

    Paul says “you can not be serious……Excuse my french, FUCK ME,…lunatic assertion ….silliest thing I have ever heard…….”

    Calm down Paul – it was a joke.

  105. As I said, David, we are done. No the above ideas are not stupid, or ‘insane’ they are in fact how foreign multi-purpose stadia operate.

    Actually you are quite wrong, the temporary Ice Skating rinks are not that expensive, and are used all over the place, including the likes of Hampton Court Palace – on the hallowed English grass too!

    It’s not a long bow to draw to assume that one day there could be an international tournament of some significance that could be held in Dunedin (and surrounding areas) that would see the need for an ice rink in the stadium. With the mini Winter Olympics about to be held in the south this winter, the profile of NZ as a winter sporting destination is growing. Couple that with the fact that Dunedin held recently one of the lower tier Ice Skating world Champs. Winning that event should see NZ qualify for the next level which from memory is one below top level. If NZ ever gets to host a tournament of any standing that requires a temporary ice rink in a stadium capable of holding a decent crowd, then all the CST was saying, is that unlike Auk, Wgtn or ChCh, Dunedin will be more than capable of doing so. Heck who ever thought that the first ever time the Edinburgh Tattoo was to be held outside of Edinburgh would be NZ, or that the Ellerslie Flower Show would be held anywhere other than Auckland. If it was to be held here, a little dead grass is a cost more than likely to be factored in – or again you are assuming that these people know nothing and haven’t thought about that.

  106. David

    Paul says “…you can not be serious……..Excuse my french, F*CK ME,…… lunatic assertion……silliest thing I have ever heard.”

    Calm down Paul – it was a joke.

    (previous post held up, presumably because I quoted your f word)

    {my colloquial comment has been amended, however considering I have been told that South Dunedin was to float away due to global warming, or any number of other ‘facts’ over the course of this, nothing surprises me any more from the anti-camp. But at least thanks for the clarification, I did assume a level of intelligence greater than that – hence my surprise. – Paul}

  107. David, I don’t remember the literature being “Ice Concerts” but if it is, no we DON’T have a duplicate facility for this. It’s like saying we have an airport, sure land your Airbus a380 here.

    The couple of hundred people crammed into the Dunedin Stadium (ice rink for out of town folk) is not a suitable arena for say Disney on Ice to perform, and don’t be disingenuous to suggest it would be. Having a stunning Zamboni and Olympic quality boards does not make it a first class entertainment facility.

  108. David

    Spending millions to duplicate our pool, our Edgar Centre and our ice rink, all for temporary one-off events?

    Who will pay the millions for this?

    Oh the ratepayer can pay for that.

    Paul – have you ever lived in the real world where your wage depends on your company earning MORE money than it spends?

    Or is your world a place where money comes in and goes out, but never has to be paid back?

  109. No David, they are not spending millions of your blood sweat and tears on duplication.

    They are spending millions of your dollars on a multi-purpose entertainment facility, which could include all of the above, not exclude them as is the current case.

    Yes David the ratepayer is paying for that, that is what this whole argument has been about. If the sum total of the users of Moana Pool were to exclusively pay for the project, to this day I imagine they would still be paying, likewise the sewage system. This is why large scale events rely on big purses, the kind which are normally associated with the public purse.

    Nah I don’t live in the real world, it’s too bloody boring, filled with people telling me all day long what can’t be done, and what’s not good for you. Heck if I was to listen to them, I’d believe that the world was falling down around me.

  110. David

    Well Paul, lucky for you that you don’t have to live in the real world to make a living – your company would go bust in minutes.

    As for the Pools. They get around 700,000 visits per year.

    Compare that to just 117,000 for the stadium – which is the latest Horwath HTL projection for the stadium of rugby spectators for all Super 14 and NPC games.

    And your “multi-purpose entertainment facility” is projected to get very few visitors except rugby.

    It is projected to make very little money, except from rugby.

    The turf experts were told to test for only about two events per year, except rugby.

    And at a cost to the ratepayer of around $1m per major event – who will ever hire it at anything approaching what it actually costs to run?

  111. David

    Elizabeth, if there was a comparison with Moana Pool, it would be tearing down the current pool, including the new upgrades, and building a new slightly smaller pool elsewhere, thereby wasting $200m of ratepayers money.

    Duplicating a facility that’s three quarters new is fanancial insanity.

    Mr Murdoch will be pleased the Dunedin public are passing the hat around to buy him a new studio to film the rugby teams he owns. (after all – it’s not like when you have $4000 million you’ve got anything to spare)

  112. Phil

    Have to agree with you both there. No comparison between a new stadium and a core business activity. So forget animal control, wastewater systems, they are Must Haves. If we need money for those, then that’s what we do. I’ll be generous to a new football stadium and say that it falls into the the same category as a new swimming pool or a Chinese gardens. Nice to have if you’ve got the spare cash, but not a must have. I’ll even be kind and put it gingerly into the community asset group. Although it’s a bit of a stretch because in the majority of cases one doesn’t actually do anything there, and it’s not quite the same mental or cultural stimulation as a public library, theatre or an art gallery. Unless you are culturally stimulated watching middle aged blokes seeing how fast they can down a six pack before half time. I don’t go to the library a lot but I have no problem in helping to fund it because my kids, my mum, the old lady who lives on the corner, can all go there and interact directly with the facility. And it’s there for the day when I choose that I want to go there, spend as long as I want, and enlighten myself. We can all choose to benefit directly from the facility, every day. I’ve heard many people say adamantly over the years that they won’t go to sit and watch rugby. Even to the existing stadium. I’ve never heard anyone say adamantly that they will never EVER go to the library or to the swimming pool. The stadium sits on its own, as something of an oddity. Compounding the problem it duplicates a number of existing community assets. I lived in an area where the local authority owned and operated a golf course. I wasn’t convinced that was the best use of community money either. Only used by a select group of people. But, everybody COULD use it. And for a low fee. It benefited the community in terms of health I guess. That brought it into the acceptability group. I’m glad someone shot down the temporary swimming pool idea again. Melbourne is still trying to recover from their world championships disaster. So let’s not go there. The Hampton Court ice rink was interesting. I had to check because I’ve been trying to think where on that magnificent site it would have been located. I see it’s formed over the metalled car park out in front of the palace. Looks a picture though. However, I’m going to throw out there a little gem which I am absolutely amazed CST etc have missed. The recently completed 6 plus million dollar Lion Foundation Arena which was designed, built, paid for, and operated by DCC, is one meter too short for top flight tennis such as Davis Cup or the WTC. Yes folks, you heard it correct. ONE metre. They made an exception for a one off game a few years back against Marshall Islands (from memory) but the next round against the Phillipines had to be moved to a larger venue out of the city. Now that’s something the stadium could be used for without taking revenue away from another existing ratepayer funded facility. Don’t say I never offer out anything constructive.

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