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### DScene 14.7.10
Dissatisfaction trendy: council (page 4)
By Wilma McCorkindale
Disliking Dunedin City Council is trendy, the DCC believes. The latest Residents Opinion Survey gave several aspects of the council’s performance the thumbs down – but that could be because dissatisfaction was trendy this year, an executive summary said.
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Council reviewing card (page 5)
By Wilma McCorkindale
Dunedin City Council (DCC) is reviewiing its managerial credit card use because $7000 worth of coffees bought by staff appear questionable.
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Purchasing cards were introduced a number of years ago to improve efficiencies in the council’s accounts payable system, reducing manual invoicing, and to increase the transparency of staff spending. The resulting savings had been equivalent to the cost of employing a full time staff member.
-Jim Harland, Chief Executive
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Talk: Dunedin on Dunedin (page 8)
Letters to the editor
Tourism Campaign by John Milburn, Owner, Monarch Wildlife Cruises
Re Tourism Campaign Disappointing (D Scene, 30/6/2010). It is unfortunate that this article was perthaps less than balanced and contained a number of inaccuracies. Whilst the campaign may not have done a lot for accommodation providers, it was a success for a number of tourism operators.
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Plod’s patch With Paul Kennedy (page 9)
Policing Carisbrook
Part of community policing encompasses working at major sporting events with the latest being the recent farewell All Black test against the Welsh at Carisbrook.
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-What if? Eds. We love this quote! FuBar for the one person crowd.
“Getting into the middle of the terraces to make an arrest or eviction was always a difficult logistical task which won’t be an issue at The Forsyth Barr Stadium with its one seat, one person layout cutting out the rough and tumble of days gone by on the terraces.” -Paul Kennedy
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Note: “Fubar” is an acronym for “Fucked up beyond all repair” or “Fucked up beyond all recognition”. The stadium and the survey have something in common?
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Posted by Elizabeth Kerr
What if? Dunedin... 
Shit, I’m just trendy. :( That’s a first!
What a bunch of losers Dunedin people are.
They are dissatisfied with the council, not because there’s anything wrong – only because it’s trendy (according to DCC)
Harland and Chin live in La La land if they believe this kind of crap. It’s the hallmark of all delusional rulers – whether they are democratic or authoritarian – that they are always right and everybody else is wrong. The ‘born to rule’ mentality further manifests itself with egoistic and extravagant spending on themselves where they actually come to believe they have somehow earned it. This egoism is further punctuated by crawling for the bestowing of awards and titles. Remember Emperor Bokasssa of the Central African Empire and Big Daddy/ Field Marshall Idi Amin of Uganda? Next we’ll have Sir Peter Chin and Sir James Harland ‘for services to their community.’ Hah!
Here’s my take on the Resident’s Opinion Survey:
1. Council is doing OK at the feel good services (Library 94% satisfied, Gardens 92%, Museum 88%).
2. Council is not doing well at the infrastructure services (Sewerage 64%, Footpaths 53%, Building Consents 24%)
3. Council is failing in areas of challenge (new business 28%, leading development of sustainable community 26%, South Dunedin 11%).
4. Which gives terrible (and getting worse) overall satisfaction ratings for Council (value for money 26%, thriving city 29%).
5. So what has gone wrong? A paltry 27% are satisfied with consultation. Chin and Harland’s reported response to this is abysmal and quite ironic.
6. The opportunity has to be in the priorities for Council: (unfortunately badly reported by the consultants – could be much more in here).
• Finish new stadium
• Limit Council spending
• Elect new Council (as this was unprompted by the survey, think we can strongly interpret this as *NEW* Council).
• Reduce rates
• Address water / sewerage issues.
Cheers,
SaM
Samuel Mann
Sam
You point out in the survey it says, in point six, ‘finish the stadium’. The question remains with whose money? More ratepayers money? ‘Limit council spending’ and ‘reduce rates’ will be nigh on impossible given the blowouts and ongoing operating losses for years to come. We don’t know of course whether people responded to this under the illusion that it was the GMP of $130m. (With total maximum $198m) It will need to be established whether residents are prepared to finish it off no matter what the cost. I think not given the widespread opposition!
Good post, Sam.
But unfortunately for the City, the Greater Dunedin team seems to have changed from its previous policies of “financial responsibility” and “curtailing community expectations”, to pushing for significant new spending for the Digital Strategy and Sustainability.
Alistair,
I hope you don’t think I’m being smart or evasive, but I really am not aware of any such policy. The Greater Dunedin principles and policies document is about a commitment to communication, respect and long term thinking (http://www.greaterdunedin.co.nz/policies.html).
I’ve got a submission at the Digital Strategy hearing tomorrow (http://wp.me/p4GLt-BI). In it I propose a different kind of consultation for the Council, one based on participation and transparency. This is aligned with Greater Dunedin, and I see no reason why it should cost more. I do argue for attention to the specific needs of the city’s IT workforce and support the continuation of the IT internship programme. Lastly in my submission, I propose that the Council considers how IT can act as a “catalyst” for more effective and efficient delivery of Council services. Again, no reason to cost more.
On sustainability, you will be aware that I am a strong advocate that thinking about the longer term and wider impacts of everything we do is something we all need to take responsibility for. This should not be confused with something extra, but a way of looking at everything we do. At work, Otago Polytechnic, we refer to this as the “sustainable practitioner” and it applies to every department and very discipline. (http://computingforsustainability.wordpress.com/cfs-policy/). I would not like to see a separate department of sustainability at the Council – I think to do so would be to miss the point. Hence I see little argument for “significant new spending” on sustainability either.
You’ve touched on two of my passions. Hopefully I’ve gone some way to alleviating your concerns.
{Sorry Sam, there’s a glitch with WordPress that sends comments with more than one url to moderation automatically. Most frustrating – caught it now. Thanks for your posts today :D -Eds}
Peter,
These opinions coming through from residents certainly pose a challenge. These priorities are amalgamated from all the survey respondents so no one person set these seemingly conflicting priorities. This is indeed the challenge for the new Council. I do not advocate walking away from the half-built stadium (though I am aware others do).
One outcome here is that the Council must have a governance role in making sure the stadium is delivered as promised (I’m quite sure there are people desperately looking for loopholes and we must be watchful). Another opportunity is to work smarter – for example we have a student group looking at near-field communication within the stadium – increasing the experience for almost no cost. Students here are our greatest asset and we should make use of their energy.
Beyond the stadium itself I would like the city to learn from this debacle. What we did not hear from the incumbent Council is “we seem to have a spare $200 million dollars, what is the best way we could spend that for the long term betterment of the city?”. It wouldn’t have been that much of course, and the answer may have been trams, or sewage or something else, or somethings else, or maybe even a stadium. But we’ll never know as the question wasn’t asked. Crucial to the Greater Dunedin platform is a commitment to a different way of making decisions.
Looking forward to hearing from you and all submitters tomorrow Alistair. Good submissions and there is clearly a need for collaboration with other parties – it would appear from many submissions that the City has a role in leadership, but equally there are other parties that can do much of the implementation. I haven’t made up my mind yet on what the City needs to do – that is for the submitters to assist me on – so unsure about your suggestions. Financial Responsibility requires one to look at the inputs and outputs. If the community outputs far outweigh the Council inputs then there might be a case – reminds me of a comment that someone told me Pater Chin made when he first campaigned to be Mayor – one of the other readers might recall it – I was told something like make sure to get $10 for every $1 spent? Uncertain – but one needs to be careful to distinguish a strategy and implementation plan and the work that is needed looking at the business case in between.
I agree Sam, prior to being elected I submitted at annual plan on the stadium and asked “if the Stadium is the answer what was the question?” Because I never felt i had a chance to engage in what could have been a really good positive debate.
One of the ideas that i would have explored (and no doubt not financial but dreaming is fun) is a gondola/ chairlift (with bike attachments) from Logan park to the top of Signal Hill to help develop the bike area (well done Mountain Biking Otago for getting the NZ Championships) and to access a stunning viewing area.
Chairlifts were first used in summer for bikes as an add on to skifields in Europe but are being developed away from ski areas now as biking has grown substantially. But with our population maybe not (albeit driving into Dunedin yesterday i swear there were more bikes on the taieri than cars!) But imagine some of the ideas that could have been dreamed up and then considered.
Actually I hope the DCC forum groups will extend to blogs online for input from all ratepayers – and provide space for some dreaming, even small ideas can have amazing effects, and there is no mandate for staff or Councillors (or ex Councillors) to have all the good ideas. Maybe there is the chance for another facebook there Sam – the neurosurgery one is doing so well – hope all here are looking at it – is it about this topic – think so when the University and its future direction so underpins the Stadium debate – moreover it was a med student from Dunedin that last (and only time) lifted the Webb Ellis Trophy for NZ.
see: http://www.facebook.com/pages/Keep-Neurosurgery-in-Dunedin
Thanks for the Neurosurgery link, Kate.
Was thrilled to read in ODT that two appointments have been made despite the fiasco of the ongoing review. The new panel set up including David Russell, one of the best consumer advocates New Zealand has ever had, will only confirm the actions of the Southern District Health Board chief executive Brian Rousseau in bringing the two neurosurgeons to Dunedin from overseas despite the ministerial fumblings – I believe.
Unfortunately, or fortunately, was exposed to the excellent services of Dunedin’s neurosurgeons in a terminal case (a parent) in 1994/95 – that memory lingers. Any Otago Southland person, family or friend suddenly immersed in ‘brain medicine’ needs the care and support to be right here on the door. And that folks, is ALL about urban design and commitment to place.
PS. My priorities are all wrong, I would fight for the retention and development of our medical resources and medical research any day over that hunk of concrete down there on the Leith. I would be wrong again thinking it’s worth more than any hunk of concrete down there sinking into the Leith. I’m having such a wrong day, apparently.
I like the fact that health services is the largest employer in this little old town. The workshop group I was in at the city forum underlined that point in discussion, which was also recently made in the media.
Looking forward to hearing the submissions on the Digital Strategy tomorrow.
The written ones that I have seen are on balance, positive. There are underlying concerns regarding funding. I’d like to reiterate my position: the Digital Strategy IS a statement of intent, but one intended to use IT as a catalyst to enable broad industry sectors to make money or save money. For me, the Digital Strategy is not a statement of intent for the DCC to increase ownership of, control of or spending on, IT assets per se.
Sam
I go back to my point – whose money is used to fund the blowouts and ongoing operating losses? It’s all very well to talk about ‘working smarter’, but this will cost extra money. You can’t make a silk purse out of a sow’s ear. It’s not a question of leaving a half built stadium. The proponents can finish the stadium, but it is THEY who have to work smarter to finance it to finish it off. The ratepayers should not be left – again – to be the pooper scoopers of those who have instigated this debacle.
Greater Dunedin are digging themselves into a political hole on this one, I’m afraid. The perception will grow that they are prepared to be the pooper scoopers? What about the financial prudence which they promise to deliver?
Kate
Dreams are free, as they say. As you say, they can be ‘fun’ too. Of course for dreams to come to fruition, they have to be financed. It is then when dreams have to be looked at in the cold hard light of day to see if they have any implications – especially when public money is involved.
Looking at your gondola dream, for example. I am doubtful for these reasons. The first reason is why can’t bikers and walkers just bike and /or walk up there? (People can already drive up there if they can’t be bothered being more physical) Isn’t part of the joy, or fun, being the challenge of having ‘done it’? A gondola takes that away when temptation to take the easiest course is offered. It is natural to do what is easiest for most people. Secondly, there is the cost and upkeep. Would likely user numbers be justified? Thirdly, there is the environmental cost – the visual pollution of a gondola, the rubbish dropped all the way up the hill from the gondolas and the disturbance of the bush, in all its serenity, where it still exists. You have to then ask yourself, is this dream ‘sustainable’, to use a common word that is bandied about now? I don’t think so. A gondola would never be financially or ecologically sustainable as far as I can see.
I don’t mean to be a wet blanket, and I know you were just floating an idea, but we need to be careful about dreams when they take hold and are given unstoppable momentum – when more reflective and analytical thinking was needed. You only have to look at the stadium dream, or ‘vision’as they called it, to see how dreams can turn into nightmares.
Oh dear, more meddlers and improvers. Greater Dunedin is in danger of becoming just another spend and be blowed clone of what we already have. When, I wonder will we see some people who understand just what it is that elected councils are supposed to do.
Back in the mists of time the concept of peoples’ representatives was evolved as a consequence of the congregating of more and more folk in a community situation. This brought about a need for some form of consensus about regulating facilities and services for the good of the community as a whole rather than being dominated by the rich and powerful. It was to oversee and share services such as public right of ways – roading – water, common areas etc. The ability of the individuals to pursue their own agendas was sacrosanct providing they did not impose on the general public good. The creation of the peoples’ councils was to protect and nurture those rights, nothing more.
Unfortunately, in recent times the meddlers and improvers have gradually taken over the system and now feel it is their duty, indeed their right to decide unilaterally what is best for the people and interfere in almost any area which pleases. Worse, they not only see this as their God given right, but that the people should also pay the cost.
Now, instead of just overseeing the installation and maintenance of the community’s essential infrastructure and social services, such as libraries, swimming pools, parks and gardens, roads, water, waste water, rubbish control etc, they also see it as their right and duty to do what no sane business people would do. It is all in the name of ‘progress’, ‘visionary projections’, ‘sustainability’, ‘controlled town planning’, ‘economic development’ all embraced in ‘robust’ policy and long term planning.
The result is we get all the ‘do gooders’, ‘malcontents’, ‘agenda driven opportunists’ lobbying furiously these elected ‘improvers and meddlers’ for all manner of facilities to be publicly funded. Result, we get stadiums, Chinese gardens, ice skating rinks, open-air hot salt water pools, international conference centres, gas works museums, early settlers museums complete with multi-million dollar, air conditioned junk rooms.
None of which is core infrastructure requirements, none of which has any money provided by the respective support groups. Neither has the council any money over and above that which the community provides for the essentials. But does that give the meddlers and improvers pause to think? No, “there is a way” they will say, and “if we don’t do these things then the city will die”.
We should ask all these specific interest groups to put their money where their mouths are and fund their own projects. That way would prove the viability of their dreams. If they can fund it, or private enterprise will, it suggests the public are in favour. Then, and only then, should public money be applied. There is no better example than the Regent Theatre.
But no, we embrace all looney appeals and simply borrow on behalf of the citizens and leave them to pay at their pleasure. As a result we, the citizens are indebted over $12,000 (and growing) per capita. All without any more than a once in three years’ opportunity to be heard.
And as long as we keep getting the meddlers and improvers coming forward with their wacky ideas and agendas as campaign statements, and getting elected, the situation can only get worse.
Calvin, of course they are, they seek power and the baubles that come with it, as any candidate does, whether they admit it or not. Were they doing it for more altruistic reasons, they would take minimum compensation/ salaries. This is rarely, if ever the case. I can’t imagine anyone on the Greater Dunedin ticket, particularly Dave Cull and Samuel Mann, doing anything for nothing or out of a sense of Civic duty. They voted as a block to approve the Contract for the Stadium then told the city to get behind it. But now they are postitioning themselves to look like the “only alternative” to the supposed evils of the Stadium. Transparent and utterly ridiculous.
A deeper and more thorough examination of the Residents Opinion survey shows the average (doesn’t state mean or median) age of the respondent was 55! I’m pretty sure the mean age of Dunedin residents is much, much lower. Not a representative sample I’m afraid whether the results agree or not with your opinion. It’s also a very small sample, also unrepresentative.
Kate,
Thank you for the opportunity to present to the hearing today. There was a great many good suggestions from the public and really great engagement from the panel. Having listened for most of the morning (sorry Alistair, had to go teach class halfway through yours) there is a very strong community commitment to use IT to improve the lot of Dunedin. I heard very little “the DCC must spend this…” (except on things like improving its own website) or “the DCC must control that…”, instead there seems to be a call on the DCC to adopt a facilitation role.
Johnson and Calvin,
I don’t think we’ve met but you seem to know more about me than I do! A few corrections though:
– I am a very long way from being rich but I shall be taking a considerable pay cut if I am elected to Council.
– I am not on the incumbent Council so could not have voted for the stadium even if I had wanted to.
– I would like to think I have a very strong sense of Civic duty. I contribute to several city, regional and national organisations – all in a voluntary capacity.
So, why am I standing? The answer is that I want Dunedin to be here for my children. Of my 7th form class (Logan Park 1987), only a handful of my 120+ colleagues are still in Dunedin. I have three children (16, 13, 8). I would like Dunedin to be here for them – they shouldn’t be forced to leave like so many of my classmates had to. While they should be able to travel, I would very much like my children to want to stay here. For that we need a city we can be proud of. For both of these reasons we need to change the Council. We’re currently in a mess and things have to improve. I’m prepared to do my bit. I’m sorry if you think that I’m in it for some other reason.
Samuel: It’s the very strong sense of Civic duty which scares the crap out of me.
You want Dunedin to be here for your children. Where did you think it would be going?
Yes, we certainly need a change of council, and you want to do your bit. It’s that bit which again worries me, and that word ‘improve’.
What is really needed is for council to do an awful lot less. Get out of the way and out of peoples’ pockets. Let them have their own way. You will be surprised just how much better this city could be if only council would learn to stay out of the way. Ask yourself why only a handful of your 1987 7th form class colleagues are still in Dunedin. Better still, ask the ones who aren’t. You might find that it is the council which is a large part of the reason. But, Samuel, I don’t expect you would see it that way. After all you aspire to be a meddler/improver like the rest of them. That is the reason why your kids might just feel restricted and move on.
I hope that this may be helpful.
The main reason that I, and I sense a lot of others, want this lot out is that they have proven themselves to be the providers for a very greedy, rapacious private concern – the ORFU – to largely the exclusion of improvements to our core infrastructure.
The fact is that a few people have been able to profit enormously by the machinations of very few individuals who sit on either the DCC Council or the Otago Regional Council.
Think about it for a moment. If it wasn’t for about 8 DCC Councillors and about 5 ORC Councillors, none of this current debt crisis would have happened. The ORFU machine, and its attendant “tartan mafia” as it has oft been labelled, have, despite all reason and argument to the contrary, managed to bulldoze these series of actions through. What the ORC has to do with the provision of facilities for professional rugby is beyond me and a major clean-out of the rugby puppets is sorely needed there as well.
I no longer want this lot to be there carrying on in the same way when the really big bills start coming in and we are asked to bail out the operational costs for the new rugby stadium. Ditto for the cost over-runs and the “excluded” items. But I agree at some defined point there does need to be a firm stand taken on the stadium and it is not acceptable to just pour our money into the bottomless ORFU pit.
I don’t think this current lot have the necessary skills, objectivity, transparency or abilities to run a City.
The problem is coming up with a group of people with that mix that can, and have the time to do so. I do believe that they need personal beliefs to drive them to offer themselves for office – it will be an interesting campaign and I expect that we will see a great deal of muck about to hit the rotating device.
Let’s just hope that enough people that are determined to make a change happen know how to make their vote count and get out there and vote.
Calvin,
You seem to be setting an impossible bar. Impossible, not because of skill requirements nor policies – those ideals I can understand, rather I’m struggling with what seems to be circular logic. Do you want civic duty, or not? Would you rather I said I want to make things worse? I certainly wouldn’t want to be represented by someone who said their motivation for standing was to make the city worse for their children!
I don’t see any presumption in what I said above that the Council should be more/less involved in the community, nor about the size of Council and so on.
So yes, I stand by my comment that I am standing for Council out of a sense of civic duty and to improve the city for my kids (and consequently the rest of the community or vice versa). I’m afraid I don’t see how anyone could construe this as a bad thing.
Have to say:
– because of the split in governance/management imposed by the Local Government Act, Council is currently no place for anyone who wants to “do something”
– the kind of person who is needed on Council (to meet the challenges that Dunedin will face) is someone with strong governance and finance skills
What is needed over the next few years is a gradual reduction in control exerted by the DCC through its CCOs and CCTOs over assets in the City. That will take careful management on the operational side and strong direction from Council to the Chief Executive to achieve. The first directive that Council should give the Chief Executive is that lobby groups and “bubble up” ideas from staff for new initiatives are not welcome until further notice.
Anonymous said: “the kind of person who is needed on Council (to meet the challenges that Dunedin will face) is someone with strong governance and finance skills”
thankyouthankyouthankyouthankyouthankyouthankyouthankyou
Samuel, what’s impossible about keeping out of all and everything which council has no business in? We have had years of macro/micro control of the city and citizens. Just butt out. The trouble with the meddlers and improvers is that they see their ‘civic duty’ as controlling everything on the assumption the people are incapable. And look where that has got us. As you repeat, you feel a sense of civic duty to improve. Why you? Have you some God given insight into what is better for the people than they would
know for themselves? I just hope your kids appreciate it. The last generations’ kids didn’t, as you admit most of them have departed.
Stand by all means, but for goodness sake, think long and hard about what it is that needs to be done.
Anonymous, the first directive the new council should give the Chief Executive is, submit your letter of resignation. Next instruct all other managers to simultaneously submit their letters of resignation together with applications and resumés for their positions. And yes, close the door to lobby groups and visionary dreamers. Put a total hold on all non infrastructural capital spending. Put a hold on all extra spending over budgets on in-progress projects and tell the ginger groups promoting them to find the extra money themselves. This goes for the stadium as well. It is interesting to note that the prime beneficiaries of the stadium are the Otago/Southland rugby fraternity, and they have not so much as sizzled a sausage to raise a cent toward it.
Do these things and public confidence might be slowly restored in the system. This would result in renewed activity from the private quarter as long as the bureaucrats are kept out of the mix. Otherwise it will just be a continuation of the same old same old. Without a change of mindset in council that is the most likely outcome.
Calvin the context of my suggestion was as a submitter before I was a Councillor – and looking at what the question was that was being solved by the stadium – I think this City has a huge number of points of difference – emphasised today at the hearing by a number of people – and we could have back then considered developing more collaboratively – not necessarily the DCC itself, but NO we are NOT in that position for the next few years.
Peter – totally agree there would be a number of hurdles and the first should be to get a community mandate for such a project – whether it be Gondola or Stadium – at the time I had the impression they were talking about extreme ideas – after all if you go back to the pre 2007 papers there were some seriously whacky ideas associated with the Stadium proposal, if not the stadium itself!
Calvin I would be expecting if and when (probably when) there are blowouts I will be expecting CST to come back to us with a proposal to fundraise any extra and at the barest minimum an equal proportion to the public/private ratio funded from the private sector, ORC and CTO – they might not buy in but as the Council managers/agents of the project that is what I would expect from them and probably more depending what the overspend is needed for.
Anonymous, I do not believe that Council are restricted by anything but their collective will to take back control and govern the City. Certainly I am very clear about Governance and Finance needs and would happily see a Mayor take a leadership role, Chairs to front up to the media on issues, good and bad, and for us as Councillors to be responsible for the decisions we make, and to let the CEO know what we think if staff do not implement policy.
Personally, I fear that the conduit of information between CCOs and CCTOs is vague (eg how could DCHL invest in Jack’s Point without advising Council in a similar manner, how could QAC sell shares without at least councillor knowledge but more importantly ratepayer knowledge. Hardly surprising to see Eion supporting that – as a CST Trustee he happily thinks he knows better than Councillors and ratepayers. (I do need to concede he is richer!) I believe Councillors do need to be more aware of DCHL ambitions etc, but not directors per se. (Yes odd coming from me as a director of TGR but I was that long before I became a Councillor and put the money back into community projects!)
Johnston, I did not support Council funding of the Stadium – not sure where you get that from. Did confirm minutes that we agreed to it after 9 hours in a meeting not wanting to elongate the meeting longer. 5 Councillors voted against it, 3 GD Cull, Wilson, Staynes and Butcher and Stevenson.
Calvin it is easy to shoot down people willing to stand, but how about some positives?
I firmly believe that familiarity breeds contempt, not necessarily of people but definately of process, and so that is why I have clear views on short terms of service as Councillors. With Sam we have an intelligent, future focussed candidate and you slam him almost as you do Richard.
There are potential substantial savings and far more open democracy in some of the use of technology that Sam suggested at the hearing today – great stuff – you should post your submission here Sam – these would be great improvements and might get 18 year olds back believing there is a reason to vote, a reason to get involved in democracy and believe that this City wants them here – unlike most students after the way Peter dealt with the Undy 500 episodes. These are core functions of Council and definitely improvements.
Additional requirement – able to say NO!
Digital Strategy hearing today was interesting. Listening to the submissions certainly helped to clarify some of my thinking. And a couple of events during the day confirmed that technology could and should be used to make interaction with Council more effective.
e.g. Local Government hearings and committee meetings (at least the public portion thereof) should be broadcast and made available as widely as feasible.
(I’d like to think that public portions would comprise the majority of such sessions too…)
My fervent wish for a new council is that we elect people who have inner strength and are not easily swayed by the manipulations of outside lobbyists and cynical fellow councillors who have long ago lost that sense of civic duty that Sam speaks of. It annoys me when councillors avoid the unpleasant reality of ‘stuff’ that is clearly wrong/rotten because they can’t personally deal with it. With the stadium there have been so many lies and secrets all along the way. The conflicts of interest have been appallingly blatant. Yet very few publicly jump up and down about something like this. It is reported – sometimes only after pressure has been applied – and then nothing happens. Why? We need councillors who are not afraid to speak out very very firmly. For myself, I will vote for candidates who don’t have a ‘flake factor’.
Kate, it is not personal. I don’t even know Samuel Mann. But I am nervous with the rhetoric. You say he is an intelligent future focussed candidate and I accept that. But it’s the future focussing that worries me, because it tells nothing. The present lot have been future focussing all along and look where that has got us. Michael Guest frequently tells us if we don’t all get in behind then Dunedin will die.
You say you did not support funding for the stadium and I believe you. But that seems to be about where it stops for you. To meekly accept and say we must all get behind it and make it work is, to me a complete copout. Your due diligence should tell you it can’t possibly work and you should be protesting from the rooftops for the nonsense to stop. That’s the sort of focussing I look for but aren’t seeing.
Don’t you worry about Richard. He has very broad shoulders and can deal with me. I think.
Calvin, I agree with your views as much as anybody but I think that you should direct your grumpiness at those who voted for the Stadium rather than those who may have to clean up the mess. As for Sam, good on him for having a go, there would be something wrong if younger people didn’t have a bit of idealism.
As the saying goes, “If you are not a communist when you 20, there is something wrong with your heart. If you are not a capitalist when you are 40, there is something wrong with your head”. Not that I am suggesting Sam is a communist.
Let’s just debate the issues as they come up.
Calvin, the problem with this Council is that too many of them are trying to drive forward looking in the rear view mirror (not my line) none of the older mob (with perhaps the exception of Richard) at all understand the possibilities of a digital strategy or the risks of not having one, very few use computers so we are over using old technologies – photocopiers and papers to distribute information when it could be done without those costs – real savings compared to financial auditors! I am intrigued that a future focussed Council in your view would invest in a stadium for a sport that is well past its hey days. We have barely started to look at or address the real issues that are going to challenge us and we will be forced to react rather than plan for changes to the climate eg more extreme rain events considering known stormwater problems, as we are not looking into these issues sufficiently, rather we have diverted resources for a stadium.
Calvin if I acted like Lee Vandervis, as I think you think I should, I think I would end up like he did. The general public don”t like that behaviour, and it isnt in my nature, but that does not make me flakey.
Kate. You say above, ‘I would be expecting if and when (probably when) there are blowouts I will be expecting CST to come back to us with a proposal to fundraise any extra and at the barest minimum an equal proportion to the public/private ratio funded from the private sector, ORC and CTO – they might not buy in but as the Council managers/agents of the project that is what I would expect from them and probably more depending what the overspend is needed for.’
Aren’t there already blowouts? How about paying for the the exclusions from the GMP? (We have heard that we are now paying $2.6m to fit out the kitchens after caterers were asked to do so, but told Farry/CST to basically get stuffed. This kitchen fit out was one of the exclusions). How about the $7m cost of buying Carisbrook – a related stadium cost? How about our part of SH88 costs? You should know these are going to be transferred in other DCC budgets as if they don’t exist as cost blowouts for the stadium. Also remember council has already given extra for exclusion number 33 – marketing costs – because what they had wasn’t enough?
You say above, the CST request for any extra could be funded on an equal proportion of private funding, ORC and CTO – the latter two being public money. Would you support any further ratepayer money going into the cost blowouts and exclusions?
Oh and of course the initial $188m – not a cent over – is now ‘officially’ $198m. Kinda creeps up, doesn’t it.
It’s a touch idealistic to expect to be able to demand that CST come up with contributions towards the stadium cost over runs. Or you’ll do what ?? It’s past the point of no return now. If CST says “sorry, we don’t have any money”, what choices do the DCC have in reality ? There are few, if any, bargaining chips left to be played.
The biggest bargaining chip is to mothball the thing at the earliest possible stage.
I come back to my original point – at what point does an incoming Council say “enough”. There is no chance of getting any money out of the users – ie the ORFU as they are basically a failed business. Why on earth should we be forced to pay more via the ORC or the CTO? This is just more of our money via another pocket.
Ignoring all the posturing, spin, smoke and whatever surrounds the stadium and the unholy alliance with the ORFU, what BUSINESS decisions need to be made and what information exists to enable quality business decisions to be made by an incoming Council.
If the “real” information is that the stadium has a likely chance to turn a buck, to not being a millstone round our necks, to not prevent other more pressing projects or needs to be funded, then what and where is that information? Who holds it? Why can’t we see it?
If the “real” information is that the stadium will continually run at an operational loss that is unsustainable, that it will be a millstone round our necks, that other more pressing projects or needs cannot be funded, then what and where is that information?
You see, I simply don’t believe the effluent that has been emitted by the CST and the proponents of the stadium sitting on the Council and the ORC, and I dare say that they equally don’t want to see the realities that many of us are seeing and feeling in our back pockets.
What I do want to see is a definitive position that future Councillors are willing to take based upon sound business or governance decisions. It may be hypothetical, but it is one that they will need to face. I’m sure that they would apply this sort of reasoning to their own businesses or household expenditure – why not apply the same process to that of the City?
Phil
I don’t think I am being at all idealistic. Of course the CST would say that, wouldn’t they. We still don’t know which private funders have been approached and how they approached them initially. Basically, we as ratepayers shouldn’t own the problem of funding blowouts and exclusions. What could Central Government’s role be for showcasing the beloved stadium in RWC year? We knew this would happen, didn’t we. Do we reward the stadium promoters by acknowledging that we knew this was going to happen so…..oh well……? Where do we stop in terms of $m? During the last Draft Annual Plan councillors tentatively acknowledged cuts had to be made. This is now. For example, Kate and Chris felt one place to start was the library budget. With what is going to happen to fund the stadium disaster the DCC will have to cut other services more savagely. The library, for example, may not survive next time. How about water privatisation? That’s also on the cards.
Kate, you say that if you acted like Lee Vandervis you would end up like he did. This suggests that you would avoid any action which might result in your exit, even compromising your principles. That is exactly the problem, and the reason why we have the deadbeats we have.
Regarding your other reply, driving forward looking in the rear mirror is just a trite throw away meaningless line. The sort of thing one would expect from Michael Guest.
You are intrigued that a future focussed Council, in my view would invest in a stadium for a sport that is well past its hey day. Exactly what that means eludes me. Or is that you moving forward looking in the rear view mirror?
But hey! Let’s move on to the more esoteric problems like global warming. This is precisely my point. Councils, because they are full of ‘meddlers and improvers’, cannot help getting into areas where they have no business being. I just keep banging on about doing the basics, keep it simple stupid. It’s drains, water, roads, libraries, parks and gardens, rubbish. All of what Richard Walls describes as un sexy things. Leave the fibre optic high falutin’ technology stuff to the private experts. Leave the stadiums to the entrepreneurs to do. Leave the Gondolas to them as well. Concentrate on getting the city moving by freeing up all the suffocating costs and petty rules of the bureaucracy. Get to where the city can function at the lowest possible rate level then it will become attractive to live and do business in. Then we could promote and attract growth. Seems simple, doesn’t it?
Lee Vandervis and Leah Mc Bey were there long ago fighting against the kind of financial negligence we are now faced with. They were both hounded and disparaged mercilessly for standing up [against] what was wrong. At least people knew where they stood in terms of the stadium. Kate, there is nothing wrong with being assertive, not aggressive, by speaking up firmly. A political hole will be created for your team if you look like fudging on future stadium spend ups. Your previous anti stadium stance could be seen as now void if you vote for continued spend ups on the stadium with cuts in core services and other worthwhile initiatives elsewhere.
In Phil’s posting above substitute DCC for CST and vice versa. That may then be closer to the wishes of the ‘general public’ referred to by Kate above.
“It’s a touch idealistic to expect to be able to demand that CST (substitute DCC) come up with contributions towards the stadium cost over runs. Or you’ll do what ?? It’s past the point of no return now. If CST (substitute DCC) says “sorry, we don’t have any money”, what choices do the DCC (substitute CST) have in reality ? There are few, if any, bargaining chips left to be played.”
Hi Calvin, I realised I had left myself open for your comment – it is not about me being on Council – it is about being effective, and Lee has some good knowledge but did not use it it to assist. I could easily have ignored some legal issues of the Stadium – I didnt want a bit of it, but was so concerned with some of the papers I saw that I think the ratepayers are better off from some input by me than me refusing to do anything constructive.
I did not elect the council I am in. I have to accept what the electorate gave us and continue within those limitations to do my best for the City.
I was once on a committee that wanted to have a school fair, I didnt want it, but when I lost I still turned up and did my best. I know this is bigger but I was elected to do my best for the City and sorry but I cant see what is wrong to get KOed on one vote and then stand up and still try and do the best I can for the ratepayers at another level. I see no benefit jumping up and down bewailing past decisions.
Yes, Kate, this is much bigger than a school fair. We are also not talking just about past decisions, but ongoing ones concerning the funding of the stadium. At what point will you say ratepayers have spent enough on the stadium? After another $50m or $100m 0r $150m? Or will you say, once we have reached these landmarks, ‘Well, we have spent so much we have to continue to fund the stadium now. The ratepayers have to make it work.’
Possible cuts. Library budget? Gone by morning tea. Spending on heritage? Gone by lunch time.
Spending on water infrastructure? Sold off by dinner time.
Is this what we can expect from Greater Dunedin candidates?
Hi Kate, I hear what you are saying. But if you are opposed to the stadium issue why should you not continue to vigorously oppose it, and in doing so marshall all the arguments possible to try to bring about a reversal. It is not a question of assisting. If you earnestly believe a decision is wrong, you oppose and keep on opposing and highlight the paucity of the proponents arguments. If you have a stance which you believe your constituents support then it is your duty to hang tough. Otherwise you are there on a false basis. I know you are, and wish to be seen as a moderate, and go with a consensus, but that is not, in my opinion what being a councillor is about. It is doing what you perceive to be the right thing for your constituents. It is not bewailing like Guest’s ‘petulant children’, it is carrying on the fight with strong research and debate. The stadium issue does not in any way compare with a school fair, and to use that as a corollary is pathetic. We are talking about $100 million plus of citizens’ treasure. Lee Vandervis knew this and took his stance. He was pilloried for it, but in many eyes the honour lies with him.
Folks,
I read with much interest the comments above that make assumptions about Greater Dunedin voting as a block. What attracted me to Greater Dunedin was the promise of different way of thinking, not a common thunk – we might see voting in common, but not as a result of party whips.
Why I agreed to stand with Greater Dunedin is that I was taken by the commitment to integrity in decision making rather than having previously agreed stances on specific subjects. I am looking forward to vigorous and open debate with my colleagues.
Decision making over recent years at the Council has resulted in it being too easy to use the term “debacle” to describe many projects. I have admired the lone voices of people sticking to principles but wished they could have gained traction. More recently the trio of voices from the Greater Dunedin team – not always voting the same way – but having discussion based on principles and then pragmatically getting on with making the best of resultant decisions has, for me, proven the way to go.
I like this quote from John Quincy Adams “Always vote for principle, though you may vote alone, and you may cherish the sweetest reflection that your vote is never lost”. The principles of Greater Dunedin are about listening, participation and transparency, responsibility and inclusiveness, and long term vision.
To have any chance of getting out of the mess we are in we need a wholesale change of Council – not just of bodies but of principles and approach. I am standing with Greater Dunedin because I think we can deliver that change.
Cheers
SaM
For the record:
I am not on the incumbent Council so did not get a chance to vote for or against the Stadium. I have said publicly, and I’ll say it again, I would like to see it finished but am very opposed to any more public money being spent on it. The difficulty is that ring-fencing becomes problematic (what say the Anzac Ave railway crossing lights need reconfiguring, is that a Stadium expense?).
Sam
I don’t see any problem myself. Whatever needs to be done – because the stadium has made it imperative – then it is a stadium expense. The whole reconfiguration of SH88 was because it was a precondition of the university’s involvement with the stadium.
Principles and integrity, for me, start and end with the individual. I think it is difficult to ensure this as a group over time, but you can try. People can and do change and become complacent. It is a rare political beast who does not become politically self-serving.
Isn’t it time the elected representatives hauled in the council’s chief executive, CST, Stakeholders Group, DVML and DVL (I might have missed out somebody!) to a well-chaired meeting (with public gallery) and demanded the books be opened (as many of the books and pseudo books that can be found) by a specific date in August. From there the numbers to be collated and published – what is real money and what isn’t and exactly where the unknown/unaccounted for monies sit. Tell us what is in the bank, one of Mr Harland’s snapshots.
Then, those intending to stand for council can come up with direct short-, medium- and long-term plans for addressing the financial situation in residents’ and ratepayers’ favour.
Oh what, too hard? Then you don’t get the votes in October.
Isn’t it hard.
Great idea Elizabeth – but a number of small problems that I wish could be overcome.
How could you get Farry to open up the books on his dearly beloved private Trust? How would you get Chin to stay awake long enough to get through the meeting? How would you get Harland to agree to open up the books of the DCC? How would you get the likes of Acklin, Collins, Bezett, Weatherall et al to expose themselves to their complete lack of understanding of what is going on let alone what has happened. Where would you find Brown and Hudson?
However, lets create the demand. It would be so good to see the bunnies running for cover.
Exactly Russell~!! …bunnies everywhere this year
In the LGA review Bill I think there is a section asking for that, albeit I doubt it extends to the CCOs. I agree that it should be done as 1. It is going to be a hard term on Council with some difficult decisions to be made and people standing should be fully aware of the situation so they can campaign with honesty and 2. It is transparent and is a good marker of the state of the City to measure each Council by.
Go Elizabeth: If that meeting could be pulled off and be well reported, finally the public could be informed. It’s just that possibility which pretty much guarantees it won’t happen. Information is not “Jimbo” and “Peter’s” forté. If you put the whole lot through an MRI scan for intellect it wouldn’t light the screen.
janet: you are right about Fliss, between cloud 9 and her wings of fantasy, her feet never touch ground.
Further to Calvin’s comment about what councils are there for -: “Councils, because they are full of ‘meddlers and improvers’, cannot help getting into areas where they have no business being. I just keep banging on about doing the basics, keep it simple stupid. It’s drains, water, roads, libraries, parks and gardens, rubbish. All of what Richard Walls describes as un sexy things. Leave the fibre optic high falutin’ technology stuff to the private experts. Leave the stadiums to the entrepreneurs to do. Leave the Gondolas to them as well.”
Check out what Fliss Butcher has to say on her websire http://www.flissbutcher.co.nz
“What about forming a development company consisting of a collaboration of Dunedin City Council, University of Otago, Otago Polytechnic and the private sector. Let’s call it Dunedin City Development Company (DCDC). Its mission is to identify and buy up large blocks of land around the city and build beautiful, warm, comfortable, people friendly, sustainable urban neighbourhoods (eco-neighbourhoods) that would also include co-housing. Just a little mission!”
Fliss – Just can’t spend enough money.
Good God!
I know people who have gone down this path using their own money to develop areas of housing. Their experiences with the DCC tell me enough to put this idea way way down the list.
Time Fliss Butcher got on a cycle or a motorcycle and rode round Dunedin and its environs. The roads in our City are an absolute mess and reflect the hotch-potch approach of the provision of basic infrastructure. Metal manholes protruding from the roads by sometimes an inch or more, potholes everywhere, shocking joins in new seal. Examples of the latter are round the Macandrew Bay area, and then look at the Three Mile Hill road. How many months was that closed for major work and now the surface is breaking up and in summer becomes a skating rink. Road works in Dunedin carried out by M Mouse Enterprises.
Wasn’t Fliss Butcher initially opposed to the stadium but then was bought into line by some sort of promise that the thing would re-use rain water or something? That position told me something.
I’m all for a real transparency (I’m hoping that it might be an outcome of the Digital Strategy – see my submission http://wp.me/p4GLt-BI). That won’t be in time for this election, so I’m very keen for Elizabeth’s books laid bare.
Russell, I think it would be worthwhile even if we couldn’t get all the trusts, CCO’s etc to cooperate. I can see a useful diagram of the money and where it goes. Some stocks would be mysteries and flows would disappearing into black boxes, but at least those boxes would be clearly identified. I’ve nearly finished writing a book on communication by diagrams – so would be happy to help pull that together – anyone want to sit down with me and a whiteboard let me know.
Of course there is nothing stopping any present councillors to call for an ‘opening of the books’ on the stadium. Are they going to do so?
Yes Peter, it’s the governance arm of Dunedin City Council that should be demanding the opening of the books.
No member of the public should be diving around trying that task on, whether an election candidate or not. They wouldn’t get past first base.
It’s what we have a Chief Executive and General Manager Finance and Corporate Services and their staff available for.
Councillors merely need to vote that opening of the books into place. Merely being a very tricky word tied to stonewalling and fortress.
Elizabeth; why should the governance arm of Dunedin City Council change the habits of a lifetime? For goodness sake, look at the can of worms opened over a simple thing like credit cards. “Jimbo” was dragged kicking and screaming into the torchlight over that. Just imagine if they were forced to open the real books. We already know in the LTCCP how they handle problem debt. They just capitalise it and pretend it has gone away. And our dopey councillors swallow it hook line and sinker. Sorry, but what is needed, and desperately, is some nous and intestinal fortitude around the table. There’s none there at the moment, and no real sign of it in the offing so far.
Calvin, oh dear – did I raise the spectre of an opening of the books with a straight face. Of course not, as you well know. The likelihood of it ever happening is about zero, and certainly not before the local body elections. Those voted in will have no clues except the half-built stadium to go on, a few estimates at hand, and the LTCCP / Annual Plans – and if they are honest not one will have had a sound platform to stand on that includes an acute understanding and communication of Dunedin City Council’s financial position. Am I thinking to vote in the elections, can I do so with confidence. Have I ever not voted before. Do Dunedin people vote because they blindly want someone else to deal with the mess rather than themselves. It all comes to mind when ‘the bureaucracy’ has run away with the control elected representatives should have been exerting.
Yes, Elizabeth, stonewalling is par for the course when those with the information don’t want it out. Sometimes the stonewalling is pervasive where no one is willing to question whether it is out of fear or self interest.
It can be useful for the public to ask the questions and sometimes they do get past first base if they are persistent. Bev has been able to recently establish, through a series of emails, that no one – absolutely no one – on the DCC or ORC claims any knowledge, written, or ‘in their minds’, of any valuations done on the stadium land. In other words they signed off on the land without viewing any valuations. This information is known and held by the ODT and D Scene and various contacts – including all the local MPs. We are waiting for the media to publish these emails so the public can see for themselves the extraordinary efforts made to avoid any scrutiny on stadium land valuations.
Malcolm Farry refuses to tell the media who the valuers were and the CST has not claimed any reimbursement from the DCC for the cost of the valuations which leaves the question – who paid for them?
Peter, I like the sound of Bev’s recent work around the valuations and look forward to revelations. No doubt the timing of any release (are they brave enough to print?) will need to be fine tuned with media needing to sort some legals around it beforehand.
Elizabeth is correct – we know that a great deal of controversial Council business is conducted by way of “grey papers” which are presented to Councillors but the contents are not allowed to be discussed and remain confidential. My understanding is that whether a report or paper is to be considered to be “grey” is the decision or recommendation of the CEO – Harland – presumably done in conjunction with the Mayor.
So what we have in the electorate – call us the funders or stakeholders – are our representatives who may or may not know things which are crucial to our understanding of a situation, but who are not allowed to discuss those things and this ruling comes via the CEO who is only answerable to the Council itself. Interesting?
The reality is that through a lot of work by many people, little insights have been made into some of these secret decisions, but we don’t know very much at all. We suspect, some may know more than others, but until this culture of secrecy is broken one way or another, we won’t have proof of mis-management or worse.
We also know through prior experience that Harland and co will use every trick in the book not to give out information. It is now routine for even minor requests for information to be subjected to the process of the LGOIMA and this automatically puts a month long delay on anything. This applies to individuals or to the ODT. One method which Harland has been using for a while, is to respond that we will charge like a wounded bull for information that we hold.
Likewise, unfriendly representatives use every trick in the book – “this is operational, we are at an arm’s length sort of thing.” An example of this was my public request to know what Delta have been paying via grants or supply of services and product to the ORFU. We have a right to know as this is our money, but look at the response of well-known ORFU afficianado Deputy Mayor Syd Brown – I don’t know and I don’t want to know.
So, there is enough broad knowledge of loans that have been taken out, but as for the detail of who has got what and why – then we must rely on Councillors who at some point, may wish to consider letting the people who put them there, just what is going on. I don’t think there is any point in believing that the current core mob would agree to any change in the culture of non-transparency. To do so, would in my view, reveal them to be incompetent or acting in the interests of people or entities rather than the ratepayers. And they couldn’t have that – could they?
Elizabeth.
These were the questions asked under the Local Government Official Information and Meetings Act:
1. Who paid for the valuations of the stadium land?
2. Did the DCC reimburse any party for these valuations?
3. If so, who was reimbursed?
4. How much was paid for the valuations?
5. What is the name of the companies which did the valuations?
6. How much did each of the valuation companies receive in payment for their services?
7. Which councillors viewed the actual valuations before voting through the finances for buying the stadium land?
8. How was payment for the stadium land /leases financed?
Nothing short of brilliant, Peter – and Bev.
Appropriately modified do these questions apply similarly to the Carisbrook transaction?
Oh yes – I currently have a request into the DCC regarding the valuation for the purchase of the Carisbrook properties. I also have a similar request regarding the sponsorship of the ORFU by Delta – a wholly owned DCC company. Both requests were immediately put into the LGOIMA process and an automatic 20 working day delay is applied. Surprised?
As can be expected, the transparency of this transaction is non-existent. Readers may recall that the DCC paid $7m for the “package” of the ground, while interestingly the ORFU record an income of $6m. Even more interesting is the wordings of the press releases round this time about the “valuation” received to support the purchase price. Of course the “valuation” was used to justify the purchase price which was amazingly at the level that cleared the $2m debt owed by the ORFU to the DCC, and the $4m debt owed by the ORFU to the BNZ while giving the ORFU some money to be “an anchor tenant of the new rugby stadium”. That rationale by Harland has since to be shown to be empty – the ORFU will only pay for the stadium on a casual basis.
What I will be very interested in finding out is whether this “valuation” is registered and what the basis of the “valuation” was. This is very important of course as the intended use of the purchase is crucial to the basis of the valuation.
As far as I know, this “valuation” has not been produced and I have a suspicion that even Councillors have not sighted this “valuation”. I stress that in my books, a valuation is a lot different to “strong professional advice”. I also stress that any Council staff that advised that a purchase price of this package would be a good economic decision for the ratepayers needs to be able to back up that advice based upon an intended end use. If the end use has changed, then the decision and the basis for it ocurring is, at least, suspect.
Richard said that the valuation was registered in this thread:
https://dunedinstadium.wordpress.com/2010/06/29/future-of-carisbrook-note-cannot-be-the-advice-of-one-private-sector-planner/
Hi Alistair – yes, he did, so there should be no problem in making that valuation public now that the purchase has gone through should there? Equally no problem in telling us the basis for the “valuation”.
But have a close look at the wording of the various press releases concerning the purchase, and tell me whether you are confident of the wisdom of the purchase, and of the amount paid.
One of the problems in conducting City business in private – it does lead to suspicions of things that are needed to be kept quiet….
In the previous thread, I gave my interpretation:
“valuation of the current and future values across a range of land uses”
i.e. it might be worth this much some time in the future if the land was re-zoned.
The Council should make the valuation public.
If a buyer can be found to pay $7 million, then sign them up fast.
Sam
According to DCC press release a Carisbrook valuation was done by DTZ (now Colliers International) on 8 February 2009. At the time, ORC Crs Gerry Eckhoff and Bryan Scott accused Stephen Cairns of a conflict of interest as Cairns is the manager of Colliers International (formerly DTZ) and Chair of the Otago Regional Council.
It was reported in ODT that Stephen Cairns denied any conflict stating he was not ‘within an inch’ of the transaction. He also said he did not have access to the files even if he wanted to – even though he is the manager.
Bev recently found on the internet a current personal CV of Cairns’ where it states a ‘notable transaction’ of $6m on behalf of DCC. Is this Carisbrook or has Cairns been involved in some other ‘notable’ DCC transaction?
With Carisbrook the name of the valuation company has been revealed whereas Farry has refused with Awatea St stadium land valuations and it is claimed that no councillors or senior management of DCC and ORC know anything.
Registered my dog today.
Was highly amused to see the sign “Sorry no Credit” taped to the EFTPOS machine at the payment counter.
“Do as we say, not as we do”
Problem is Alastair that the Council are now saying that they are conducting “resident’s ideas” of what to do with Carisbrook now they have purchased it and they are “selling” this as being in a consultative mode.
This is BS, and the results reflect this. The stated intention of the purchase was to get hold of some industrial land and get the ORFU off the financial hook.
If this is the case, then I expect that the basis of the “valuation” was for the purpose of industrial land. In which case any valuation would have to take into account what it would cost to get the land ready for such a purpose.
To be frank, I don’t think the “valuation” will be made available and other options will have to be used to winkle out the reality of this very interesting purchase which once again, benefitted the ORFU at the expense of the ratepayer.
Can you imagine any private business lending money to a another business whose own auditors tell it is in the brown stuff, then buying its assets at a price that gets rid of the debt and gives it some spending money in the hope that it will become a customer of yours in a new facility that you are building for them? It used to be called due diligence didn’t it? How many Councillors looked at the published accounts of the ORFU before agreeing to this deal?
Russell says, ‘How many Councillors looked at the published accounts of the ORFU before agreeing to this deal?’ Not many, or any, I suspect. ‘Get on with the vote’, I suggest, was the common sentiment.
So that people know what I have asked of the DCC these are the questions I have asked in relation to the Carisbrook purchase:
1 What housing properties were purchased as part of the package – ie what street numbers in Burns Street?
2 Was the freehold purchased in each case?
3 If the freehold was not purchased in each case, which properties was the freehold purchased?
4 If the freehold was not purchased, who owns the underlying land?
5 Who owned any leasee interest prior to the DCC purchase?
6 Did the DCC obtain a registered valuation of any of the properties within the Carisbrook purchase prior to purchase?
7 What date was any valuation of any Carisbrook purchases registered, and by whom?
8 What was the underlying basis of any valuation – in other words, were any assumptions made for the use of the properties as a basis of valuation, or did the DCC provide the valuers with any intended use of the properties?
9 What was the settlement date of the Carisbrook purchases?
10 What payments were made to any land agent or broker in these sales and which agent or broker was used?
The second information I would like is:
1 Knowing that Delta (a wholly owned DCC company) is a major sponsor of the ORFU, and knowing that the Deputy Mayor does not wish to disclose any details of their sponsorship, knowing that the CEO of Delta does not wish to disclose any details of any sponsorship of the ORFU, and also knowing that Delta have no competition in the range of services that they supply in this region, can the DCC provide me with the guidelines or rules under which wholly owned DCC companies provide sponsorship?
2 What was the value of all sponsorship to the ORFU by Delta over the last 10 years?
My request was made to the DCC on the 6th July and no response other than an acknowledgement has to date been received.
The lay of the land is looking interesting now, Russell. Perhaps difficult for DCC to answer these on any basis that an auditor wouldn’t be interested in.
It’s 7:07 pm and the number of views today is already quite optimal at What if?, let’s say. Until midnight, folks!
Hi Elizabeth
Yes, I think the land is looking interesting and I’m pleased that people are at least logging on and hopefully getting something out of what is written.
As the days go on towards the elections, it seems that more and more people are interested in trying to find out exactly what has been going on at both the DCC and the ORC.
I sense that there is a very significant swing of opinion amongst many people from trusting these “names” to a determination to get them out of any role where they can carry on their culture of entitlement. People can see and read the reactions of people who are either in office, or have a desire to be in office, and they will make the judgement call.
What still concerns me is the amount of control that the existing core group will exert on the everyday lives of ratepayers and that extends to the amount of information that they will allow to be released. Concealment strikes at the very heart of democracy.
In this climate, rumours abound. Is the stadium project already running a long way behind? Are there issues between the parties involved in the stadium? Have approaches been made to Council for yet more money?
One thing is for sure – in a culture of secrecy, there is room for rorts, deception, self-serving actions and much worse. Wouldn’t it be good if we could trust that core group that are currently in the Councils?
Russell, I get the feeling that all the work you have been, and are doing, together with Bev Butler’s enquiring must bear fruit. The pressure is building, the unexplained actions being constantly exposed, the requests under the local government official information act (LGOIA) still to be addressed-which can’t be ignored – the devious answers, all add up to an apparent conspiracy to obfuscate. The conflict of position adopted by Richard Walls on this site and the answers to my questions by Jim Harland in the ODT on the Carisbrook purchase suggest that this must blow before the election so the people can begin to understand how they have been misled. There are a lot of characters in this multi act play and there could be some seriously dented reputations before the curtain falls.
Calvin, I agree.
The more anyone digs into what has transpired between the ORFU and the key people they identified within the DCC, the ORC and the CTO to solve their financial ineptitude, the more disturbed one feels. I would dearly love for some really determined people in the mainstream media to get hold of these issues and do some solid investigative work – there is still time for this to happen. But I’m not holding my breath.
But it does go deeper.
I really don’t think we have heard the half of it. There are those within the Dunedin establishment that have benefited enormously by the deals that have been done and are being done. They certainly don’t want to have those deals exposed in any light before an election.
It is more than time to get rid of all the old boys clubs, the “understandings”, the nod and wink mentality of how this City works. Time to flush out the wastes of space, the free-loaders, the incompetent. Time for a change. But who replaces the current mob is as important as getting rid of the dross. No point in replacing rubbish with more rubbish. But central to the process is exposing what has gone on, and what is going on.
Bev requested under the LGOIMA the following:
Q8. “What method of financing was used for the settlement of the stadium land/leases eg:bank loans/bonds/promissory notes or some other method of financing?”
DCC Response: “The funds were borrowed from Dunedin City Treasury Limited (DCTL). DCTL raise funds for the entire DCC group. DCTL uses a combination of term bonds and promissory notes. For this particular investment, DCTL raised the funds by issuing a term bond.”
Today’s on par with 1 July for total views at this site, thanks to each contributor.
Email or tweet links to this thread https://dunedinstadium.wordpress.com/2010/07/28/d-scene-dunedin-city-council-housekeeping/
or use this short link: http://bit.ly/bEvrqe
(to shorten your urls sign in for free at http://bit.ly/ )
…so more people ask the questions posted here.
What an amazing diatribe from Richard Walls in the ODT this morning. Lots of personal stuff as usual with little or no addressing of the main issues.
Clear from both Calvin’s previous piece and Richard’s piece that our debt is at record levels and the fact that this is so because of a very small group of Councillors at the DCC and the ORC deciding to build a new rugby stadium. Forget all the stuff about whether the debt is here or there within the DCC – it is all our debt and we owe it because of people like Chin, Brown, Weatherall, Bezett, Guest, Noone, Acklin, Collins and Walls.
That is the core of the issue and one which Richard failed to address.
Sadly, it is becoming increasingly apparent from comments made on this site and elsewhere that those who opposed the stadium on council are now prepared to throw more ratepayer money into ongoing operational losses and cost blowouts ‘to make the stadium work’. (After telling us it can’t) They do not seem committed to putting the onus on the stadium proponents to work smarter and get the additional funding from elsewhere – private funders and the government. They seem prepared to fatalistically accept it is up to the ratepayers alone.
Russell Garbutt …….dear..oh drear…you need to get out more and smell the rhodos!
I think we have met once and you have phoned me a few times to chew my ear.
No one got to me about anything to do with the Stadium. I am an independent and make my own choices and decisions based on information, experience and critical thinking.
I disagree with Malcom Farry about lots of things and I disagree with you and your negative cohorts about lots of things. But doesn’t give you and yours the right to right to publish lies about the way I vote or to publish lies about who I am.
Fliss – not too many rhododendrons are actually aromatic, but as a strong admirer of the genus I take great delight in admiring the many in my garden and I do so regularly.
I think you confuse negativity and criticism. I am not by nature a negative person and as you say you don’t know me. It may interest you to know that I responded to the recent DCC survey in glowing terms about a number of services, but in the main, these are amenities that have been in existence for many decades.
What I am highly critical of is the way in which this current Council has conducted its business. I, along with many others according to the survey, believe that the consultation with the community has been very poor. You and your fellow Councillors have had a large number of opportunities to listen – to really listen – and collectively you have chosen not to do so on the issue of the stadium – the single biggest cause of Council debt. This is a glowing example of “we know best” culture.
I think it interesting that now we are in build-up mode to an election where you want people to vote for you, that you are now engaging in dialogue with the electorate.
Maybe you would like to address the question so often posed on this site and others – will you continue to pour ratepayer funds into this project for over-runs, non-included items, and losses in operation? At what point will you say “enough” or will that point not come for you?
Now, I want to make this very clear. I do not publish lies or cause lies to be published. Read my post very carefully and you will see I posed a question. If you wish to respond in the way that you did, that is your choice. But better to address the questions about the governance capabilities and the decisions that you have been part of rather than take the tack so often taken by Richard Walls.
All that said, you are at least “exposed” to the blogosphere whereas many of your fellow Councillors are continuing to follow a path of non-dialogue with the community they are supposedly representing. I suppose they adopt the view that if they remain silent then they can’t be criticised or held accountable for anything.
Interesting. David Eagles is from one of the “five families”…or so he told me once…
Not sure what Anonymous is referring to regarding David Eagles. Maybe they can clarify.
I do note that Fliss Butcher has vanished without trace without answering the substantive questions I posed.
The “five families” is gangland mafia organised crime stuff, hmmm. Straight from NY NY (and now the world).
Mr Eagles himself…um, former SSC ICT financial manager. And informant.
I note that on The DCC has lost the plot. site that the concept of raising money for the stadium from gambling or pokie trusts has been raised.
I suggest that folks go to The Trusts Charitable Foundation site, and have a little look at what this particular Trust has already given to the ORFU over the last few years. People may recall that this particular Trust made the news recently when they granted one of their own Trustees a large amount of money to go round various pokie machine sites for reasons that caused some concern in official circles.
Don’t make a mistake about this – all this type of money should be going to grass-roots activities, not professional entertainment businesses.
TTCF Grants (The Trusts Charitable Foundation)
Approved Applications – 1 April 2007 to 30 September 2007
Otago Rugby Football Union $100,000.00
Otago Rugby Football Union $200,000.00
Approved Applications – 1 October 2007 to 31 March 2008
Otago Rugby Football Union $258,865.84
Grants Approved – 1 April 2008 to September 2008
Otago Rugby Football Union $29,067.48
Otago Rugby Football Union $60,244.66
Otago Rugby Football Union $119,443.35
Otago Rugby Football Union $168,706.76
Otago Rugby Football Union $200,000.00
Less Refunded:
Otago Rugby Football Union -$307.00
Grants Approved – 1 October 2008 to 31 March 2009
Otago Rugby Football Union $12,133.33
Otago Rugby Football Union $22,862.19
Otago Rugby Football Union $28,583.56
Otago Rugby Football Union $32,843.18
Otago Rugby Football Union $50,000.00
Otago Rugby Football Union $60,375.00
Otago Rugby Football Union $104,999.98
Less Refunded:
Otago Rugby Football Union -$375.00
Grants Approved – 1 April 2009 to 30 September 2009
Otago Rugby Football Union $107,321.30
Otago Rugby Football Union $121,358.00
Otago Rugby Football Union $174,844.68
Less Refunded:
Otago Rugby Football Union -$26,779.61
Otago Rugby Football Union -$4,899.05
Otago Rugby Football Union -$1,056.14
Otago Rugby Football Union -$226.67
Grants Approved – 1 October 2009 – 31 March 2010
Otago Rugby Football Union $140,980.00
Otago Rugby Football Union $53,169.00
Less Refunded:
Otago Rugby Football Union -$1,294.69
Otago Rugby Football Union -$1,874.31
Otago Rugby Football Union -$2,598.00
Otago Rugby Football Union -$3,661.30
Otago Rugby Football Union -$19,048.68
This took a while to come out through mainstream news, see discussions at What if? previously, on this thread, or here and here.
### ODT Online Thu, 30 Sep 2010
Pokie millions go to ORFU
By Hamish McNeilly
Rugby has received more than $108 million in pokie grants over the past five years, with the cash-strapped Otago Rugby Football Union ranking third overall for grants. Pokie grants to amateur rugby had increased from $9 million in 2005 to $29 million in 2008, raising questions over the sport’s reliance on grants, Problem Gambling Foundation chief executive Graeme Ramsey said.
Read more
I understood the comment regarding the “five families” to be a reference to the so-called Tartan Mafia that purportedly run this town.
Which comment?
Hi Elizabeth
Yes, as I say, TTCF have been paying the ORFU about $660,000 per annum for the last 3 years. Interesting when they don’t even appear as a sponsor. Wonder why that would be.
People will probably recall that I have been attempting for some time to get behind the lack of information regarding the purchase of Carisbrook and exactly what other ratepayer contributions are heading towards the Otago Rugby Football Union. I’m sorry this is such a long post, but I do feel that the information on this issue needs to be contained within one space.
Background:
It is best to perhaps give a very brief outline of some of the facts that surround the Carisbrook purchase so that people can best judge for themselves what has happened in the relationship between the Dunedin City Council and the Otago Rugby Football Union.
That relationship works on a number of levels and as time goes on, the relationship becomes less and less clear.
The ORFU knew many years ago that it was losing money at a rate that was unsustainable and at the same time it wished to embark upon some expansion and improvements at the Carisbrook ground, but it lacked the money to undertake those improvements. It caused an informal group to be formed consisting in the main of organisations and people within those organisations who were seen as being vital funding partners in such improvements. The organisations gathered together at that time were the DCC, the Otago Regional Council, the Community Trust of Otago and Sport Otago – as well as the ORFU.
This group met regularly over a period of time but then under the Chairmanship of the CEO of the DCC, it was decided that to “progress” then a different body would be needed and hence the formation of the Carisbrook Stadium Trust. What was an informal, non-elected committee became a private, non-elected, non-accountable Trust headed by Malcolm Farry. Needless to say, the organisations seen as being willing to fund the expansion of ORFU facilities for the professional game, remained as the DCC, the ORC and the CTO. The ORFU, despite being the recipient of this projected enormous spend-up of community money, were in no position to donate anything to the project, nor largely to even fund the costs of the “investigations”.
The ORFU indeed owed a great deal of money, and all they had to offer as collateral to the loans they had taken out, was their ownership of Carisbrook. Those loans were based upon the fact that Carisbrook was a functioning rugby ground with improvements and facilities based on that use. It was also the only such ground in Dunedin of that type. While the ORFU owed something in the region of $4 million to the Bank of New Zealand, it also owed $2 million to the ratepayers of this City. I don’t believe that it has ever been satisfactorily explained by anyone within the DCC why it should get in the business of becoming a money lender to an organisation primarily engaged in the business of professional rugby, nor why the interest rate charged to the ORFU by the DCC was about half the rate charged by the BNZ when they were behind the BNZ in the queue should the loans not be repayable. Nonetheless, this is what happened.
We all now know of the processes whereby the concept of doing up Carisbrook rapidly fell by the wayside, and then a few well-managed steps along the way of providing a new multi-use (I mean rugby and cricket) oval shaped stadium would be provided instead. As we all now know, all those plans went west and we are now ending up with a roofed rugby stadium that only has just over 17,000 permanent seats and an unknown number of exclusions at an unknown cost as well as a major cost of diverting a State Highway. There is widespread community belief that the project will cost a great deal more than what is already publicly acknowledged.
But this big cost is not the only one that the City has been meeting for the ORFU.
Delta:
If you were one of the few people that shows up to rugby matches at Carisbrook you will notice that Delta is a major sponsor of the ORFU and have been for a number of years. Delta is a wholly owned company of the DCC and while it acts as a commercial entity, its profits are returned to the ratepayers. Anything it does as a company, should be to the benefit of its shareholders, which is you and I. So what is Delta doing providing resources, services and/or cash to a professional rugby ground? I think that is a fair question to ask and so I did ask just that. I also asked for the guidelines provided to any such Council companies for the provision of commercial sponsorship.
The answer I got from the Deputy Mayor, Syd Brown, was that it was really up to Delta and so I should ask them. So I did, and the answer I received was that Delta couldn’t tell me without getting the permission of the ORFU who were the beneficiaries of our largesse.
So I asked the DCC via the provisions of the LGOIMA the following questions:
1 Knowing that Delta (a wholly owned DCC company) is a major sponsor of the ORFU, and knowing that the Deputy Mayor does not wish to disclose any details of their sponsorship, knowing that the CEO of Delta does not wish to disclose any details of any sponsorship of the ORFU, and also knowing that Delta have no competition in the range of services that they supply in this region, can the DCC provide me with the guidelines or rules under which wholly owned DCC companies provide sponsorship?
2 What was the value of all sponsorship to the ORFU by Delta over the last 10 years?
and the answer received after a month was that my request was denied because the DCC does not hold the information requested and that the DCC did not refer my specific requests to Delta on the grounds of commercial sensitivity.
I leave it to you to judge whether this response is satisfactory considering this is your money we are talking about.
The Carisbrook Purchase:
But now we must turn to the very interesting developments of the Carisbrook purchase.
The ORFU knew a new rugby stadium was being built for them on the other side of town at no cost to them, so clearly they then didn’t need the old one. But they still owed at least $6 million dollars. Solution was simple – the DCC would borrow some more money to buy it from them. Problem was, the purchase price needed to be set at such a level that enabled the debt owed to the BNZ to be repaid, and the debt to the DCC to be repaid while at the same time give the ORFU enough cash to continue to operate. The ORFU needed, in broad terms, $7 million dollars, and surprise, surprise, that is precisely what the DCC decided to pay for the ground.
But of course the DCC didn’t need two professional rugby grounds as they were already paying for another one to be built so they needed to come up with a reason for their purchase, and this was supplied by CEO Harland at the time. It was for needed industrial land, and to enable the ORFU to be put into a healthy financial position to become an anchor tenant of the new stadium being built for them. We were also told that the DCC would be on-selling their purchase as soon as possible. As we know, the ORFU had no intention of being an anchor tenant at the new stadium because they couldn’t afford to. They have already informed the City that they will be only hiring the new rugby stadium on a “as required” basis. What we weren’t told at the time of the purchase was that while the DCC would become the owners of the ground, it would retain it for use by the ORFU until at least the Rugby World Cup in 2011 because clearly if there were issues with the new stadium which meant that the new stadium weren’t ready, then Carisbrook would be used for those matches.
The other factor was that the value of Carisbrook was based on its use as a professional rugby ground with all the improvements on the ground such as grandstands and corporate boxes based on that use. If the ground was to become industrial sections, all these “improvements” would need to be removed, and this cost would obviously affect any valuation of the ground. Valuation is inextricably linked to purpose, and so the DCC told us that they obtained a valuation that provided them with the basis of their purchase price.
The Carisbrook purchase comprises 3 sections – the ground itself with all of its improvements, an empty carpark, and a portfolio of houses in Burns Street.
I was very interested in seeing the basis of what Mayor Chin said was strong professional advice used to support what can only be described as a very fortuitous valuation, and so I asked the DCC under the terms of the LGOIMA for the details of the valuation knowing that how much the DCC paid for these 3 lots of purchases and also knowing that the ODT had already published that the $7 million dollars was broken down into $1 million for the housing and $6 million for the ground and carpark. The specific questions I asked were:
1 What housing properties were purchased as part of the package – ie what street numbers in Burns Street?
2 Was the freehold purchased in each case?
3 If the freehold was not purchased in each case, which properties was the freehold purchased?
4 If the freehold was not purchased, who owns the underlying land?
5 Who owned any leasee interest prior to the DCC purchase?
6 Did the DCC obtain a registered valuation of any of the properties within the Carisbrook purchase prior to purchase?
7 What date was any valuation of any Carisbrook purchases registered, and by whom?
8 What was the underlying basis of any valuation – in other words, were any assumptions made for the use of the properties as a basis of valuation, or did the DCC provide the valuers with any intended use of the properties?
9 What was the settlement date of the Carisbrook purchases?
10 What payments were made to any land agent or broker in these sales and which agent or broker was used?
Again, after a month the response from the DCC was ………
The DCC purchased 8 residential properties of which 2 continue to have an underlying ownership of the Otago Foundation Trust Board. The valuation came from John Dunkley from DTZ and no confirmation was received that it was a registered valuation. No intended purpose of the purchase was provided to the valuer, and no broker or agent was used in the purchase.
Considering that this is our money, I leave it up to you to decide whether this is a good example of public accountability. It is my understanding that the “valuation document” is a single page which seems amazing. The most amazing aspect to this was that the “valuer” was not supplied with a purpose for the land.
There is another peculiar twist to the Carisbrook purchases and that is while the DCC clearly paid $7m, the ORFU only seems to have received $6m. Where this other $1m has gone is again unexplained which, in the interests of transparency, would seem to be strange.
I’m not too sure just how much investigation went on by the DCC into the financial strength of the ORFU on our behalf. If I was lending a lot of money to an organisation or business I’d want to know where they currently get their income and how much they are spending. Look at what happens if you go to the bank and ask for a mortgage or a loan! If a very significant amount of the income being received by the ORFU was from contestable pokie funds for example, then I think that my money might not be as safe as it looked on the surface. I wonder whether the DCC knows just how much such contestable money was received by the ORFU before loaning them our money? Details of grants are regularly published by these funds, but in the published financials of the ORFU it appears that the details are generally lumped together. But if I was the DCC or a lender, I’d be sure to want to know how that income was derived. We know that at least $660,000 per annum was donated to the ORFU by The Trusts Charitable Foundation.
But the DCC can provide professional rugby assistance in other areas as well. My understanding is that the Highlanders franchise and the Otago ITM team have access to facilities in and around Logan Park which are used for training. Are these provided on a commercial basis considering these are fully professional and business organisations? There doesn’t appear to be any transparency there either – or maybe the right people haven’t been asked.
It just seems to me that the more anyone looks at the relationships between the DCC and the ORFU and professional rugby, that the more one realises that the city’s ratepayers are subsidising a part of the entertainment business that has become out of control. And the DCC Councillors that have determined that the ORFU are more important that the ratepayers are even more out of control.
Richard has said several times that it is a registered valuation. Is it? How can this be independently verified?
My suggestion is to contact the DCC and ask to see any registered valuation. I suspect that you won’t be able to see it and I leave it up to you to figure out why.
All I have is the wording in the response that refers to a “valuation”. When you carefully read the media releases of the time, at no time do you read that there was a registered valuation. If you believe that such professional advice was in the form of a registered valuation, then I think that we all should be able to access such documentation that underpins Council decisions. The fact that I, after my requests, cannot do so, means something to me – what does it mean to you and others?
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The nature of grants to the ORFU, particularly from The Trusts Charitable Foundation with respect to professional aspects of the operation, was raised over a year ago in ODT comments forums.
Thanks Anonymous, I missed or overlooked the earlier discussion at ODT forums.
Did a quick search (of off-to-the-side matters on gaming trusts, to check the climate in 2009):
27.4.09 ODT Shake-up possible for pokies
23.4.09 ODT Downturn hits gaming trusts
27.3.09 ODT Internal Affairs clamps down on racing grants
Will they clean up racing, rugby…and beer? (the government has no desire to offend the liquor industry, now is a great time to focus audit attention on rugby/gaming trust alliances)
How much of the charitable funding received by the ORFU went to its amateur code, not to the professional business that is rugby?
****
During the search brought up this one by chance…
4.5.09 ODT Developers eye up Awatea St area
Anonymous and Elizabeth – you are certainly both correct in stating that this was raised in a number of places.
I happened to notice one day in the Sunday Star Times, a double page spread listing the grants supplied by The Trusts Charitable Foundation. In that spread was the news that the ORFU had been granted a huge amount of money and it was easy from that point onwards to get from the TTCF website a history of grants made each year to the ORFU – and some other entitities based in Dunedin that had also received a very large amount of money.
I thought it interesting at the time that despite the huge amount of money received by the ORFU from TTCF that the ORFU didn’t seem to specifically acknowledge this in their Annual Reports.
What is much more hidden is the other sponsorship deals that the ORFU receive and I refer specifically to Delta. Despite asking, no-one seems to know, or is willing to tell, just how much Delta has given to the ORFU by way of direct cash, by the provision of services, or the provision of resources. It should be public information as this is our money that is being donated. Even more interesting is that there doesn’t appear to be a code or policy governing what or who should get sponsorship from ratepayer owned companies.
But, as I’ve said earlier, there is a cultural acceptance within the DCC and DCHL that such support for professional rugby is OK and must carry on.
### ODT Online Mon, 13 Dec 2010
Trust not able to grant funds
By Hamish McNeilly
The charitable trust at the centre of poker-machine issues earlier this year is unable to return proceeds to the community, it has been revealed.
Read more
http://www.odt.co.nz/news/national/141844/rugby-southland-employee-admits-gaming-machine-fiddle
Elizabeth – to the question about how much money went to pro rugby and how much to amateur rugby – have a look at the protests that have been going on for years about how the amateur code has been deprived of resources.
How many employees including players, admin, coaching staff, support staff, talent spotting staff, travel costs etc etc are involved in the professional businesss – most of them. The amateur code is full of volunteers.
I heard that in order to simply break even at Carisbrook then a crowd of 10,000 fully paying people need to attend. When you get a couple of thousand with heaps of freebies, then, as the auditor for the ORFU says so plainly, you need to decrease costs, or increase revenue, or find some other source of funds to stop yourselves going bankrupt.
But never mind, the DCC or the ORC is always there to bail you out. One way or another…
Yeah, that was a sickly loaded question.
But a good one.
Interesting that no-one still wants to comment on the amount of ratepayer funding that is going the way of pro rugby via Delta.
I see that they are involved with the reinforced turf at the new rugby stadium. Mate’s rates? In other words yet more Dunedin residents paying in an indirect way for the stadium? Who is telling? Paul Hudson?
That would be telling, Russell. We can’t have that.
Said DCC, Delta, Paul Hudson – et al.
Might have to use crow bars and tyre irons.
Such that the LGOIMA did not work on some of that crowd.
The frustrations of the media have no limits. I had a letter published in the ODT, truncated to the point of nonsense. For what it is worth here is the original.
CST Chairman Malcolm Farry, in his article (Otago Daily Times 27/9/10) outlined with clarity the success of the Stadium building project. He pointed out the criteria set was based around five factors. What we now see being constructed seems to meet these points, no argument. He then goes on to exonerate the CST from any responsibility for the decision to proceed. This was left entirely to the Dunedin City Council, who as prime funders and subsequent owners, were finally responsible. No problem here. The rest of what Mr Farry had to say was essentially a sort of ‘George Bush’, “mission accomplished” missive. Let’s hope it has a better outcome than that did.
But for all this, there is and has been a serious missing conversation. A conversation between the citizens of Dunedin and the elected Mayor and Council. In fact, it would seem the Council itself didn’t fully discuss the issue. And the issue is a two part question of major importance. The question is simple, firstly, can the city afford to construct this stadium? Secondly, can the city afford to own and operate this stadium? This discussion has never really taken place. It seems that no-one yet really knows what the citizens’ financial burden will finally be, and councillors simply talk past the people, on a ‘trust us we know best’ basis. This could result in a major reshuffle around the council table on October 9th. But then it might not. Who knows?
Meanwhile, as Mr Farry says, “nothing our dwindling band of critics say, will deflect him from his primary purpose: to deliver, on time, on budget and fit for purpose, New Zealand’s first roofed multipurpose performance venue and something all can be proud of.” So there. As the recipients, it seems awfully like being given a large dose of medicine with the rejoinder it can only be good for you.
Calvin Oaten
Pine Hill
Thanks Calvin. The question of affordability has been on my mind also. I wrote this monologue, but it is not going to be printed:
In living memory, the DCC’s worst blunder has been the decision to build the FB Stadium. In making this mistake our councillors disregarded various warnings that the stadium was not financially viable in favour of creating a grand monument to their own egos.
In a failed attempt to ease our concerns we were told that it would only cost each average ratepayer $66 per year; the deception, now apparent, is that this relates only to construction funding and not to the total ratepayer burden which includes the large operating losses (about $20 million each year).
Another piece of trickery is all of the current councillors pretending that they don’t know how big the forecast stadium loss is, and then telling us that they might be able to fix it if we vote for them. Council staff have finalised their forecasts for the stadium companies and councillors must be aware that this will very certainly be a non-profit business for many decades. The on-going loss is certain, and our councillors created it, along with a huge, smelly pile of debt.
Financial incompetence helped cause this problem, so our new council must have much better financial skills; mistakes like this must never happen again.
The interesting question to ask Jimmy Jones is whether any, or all, of the existing Councillors are liable in any way for making decisions if they were aware of financial implications of the stadium, or failed to find out what those financial implications were.
One or two in particular I suspect, knew a great deal more than the others and re-assured them that all was well.
Good question. Hilary Calvert might know. (?) You might remember the stadium consultation (part of the 2008~ annual plan consultation): The LGA requires that consultation happens with a well informed public. And it specifies that financial projections are shown, as well as monitored after the thing is constructed. We know that didn’t happen, and it is clear to me that most of the DCC & ORC councillors didn’t have the faintest clue; in fact, I would say that they were deceived. That is what can happen when your CEO starts doing favours for your Mayor and a few of his cling-ons. Power comes to those that control the information, and it is crystal clear that most councillors had been given incomplete and wrong information. Should we call that corruption? I think so.
The point I was making before is that council staff are fully aware of the forecast operating loss of their stadium. They have to produce this forecast for the LTCCP and that is what they have done. The forecasts exist.
It is reasonable to expect that our DCC councillors are aware of the stadium forecasts, but they sure as hell aren’t saying. I haven’t tried torture, but I have tried. Here’s an experiment you can do at home: randomly select a few councillors and send them an email asking “what have you been told about the forecast stadium operating loss?” I expect that you will get silence. Some might try to give you the Mayor’s official story that DVML will break-even. It will, but DVML will not be owning the stadium. My guess is that all the councillors have either been sworn to secrecy by the Mayor, or else they have collectively agreed that silence would be better (until after the election). Either way, I call that trying to manipulate election results by withholding information.
Jimmy Jones, I alluded in my piece, “The Stadium have we been sold a Pup?”, to the possibility of the promotors being sued for misrepresentation, whilst the councillors and senior staff could be sued for breaching the Local Government Act 2002, in as much as they have a duty of care to do all diligence and avoid at all cost doing harm. I was of course rubbished. Nevertheless, I suspect what has transpired with the stadium machinations that all is not kosher.
As I have said on many occasions, less than 20 people in this City caused this thing to happen. Demonstrably those people either had to want it to happen or were incompetent enough to understand why it shouldn’t happen.
I don’t think it takes too much mental power to assign those people to either category.
Just another little point to make regarding operating losses.
I was discussing the Stadium Southland with a resident of Invercargill who said that their stadium was delivered debt free, but the cost of running it meant that their rates have increased dramatically.
You will note that in Dunedin, the Stadium will be put into an entity that includes other facilities so finding out specific losses will be thus harder to determine.
Isn’t that a surprise?
I agree Russell. That makes it more important to get the official forecasts now, rather than when the Dunedin Centre and Edgar Centre are mixed in.
The funny thing is, that those two businesses and the stadium are all financial basket-cases. The Annual Reports of Dunedin Venues Ltd (DVL) will be very surprising for the councillors. I think the plan is to keep DVL well hidden from the public view.
A new mayor and council could clear all this up in a thrice, if it had the will. It will be thwarted at every step of course, by the bureaucracy, the CST and the powerful vested interests. But if there is ever to be trust again in this city it must happen. Roll on October 9th. We cannot go on being pandered to by the likes of Richard Walls and his old guard.
Yes Calvin. It looks promising for a cleanout with Dave Cull polling well, and the vote-count up on last time. The scary thing is, voters might concentrate on the clean-out, and not be discerning enough with the replacements. Imagine a council with 6 copies of Fliss Butcher (political crusaders with only a loose grip on reality). Poor financial decisions are how we got in this mess, and so a bunch of radical greeny-lefties could make things much worse. Vote carefully.
The last Finance and Strategy Committee and the last Council meetings happen tomorrow (Monday 1pm and 2pm). Council will finish with a secret session.
in the Brian Arnold Lounge ?
{No Phil, see here for times and venue. -Eds}
Meetings at DCC on Monday 4 October
FINANCE AND STRATEGY COMMITTEE
FULLWOOD ROOM, DUNEDIN CENTRE – COMMENCING AT 1.00 PM
Agenda – FSC – 04/10/2010 (PDF, 31.7 kb, new window)
Link to Report
DUNEDIN CITY COUNCIL
FULLWOOD ROOM, DUNEDIN CENTRE – COMMENCING AT 2.00 PM
Agenda – Council – 04/10/2010 (PDF, 89.0 kb, new window)
Link to Reports
I’ve read a lot of comments in the ODT etc recently about the potential profitability of the stadium. The original project report commissioned by CST stated very clearly that the stadium would only be sustainable if rugby at the stadium was successful. Yes, it’s multi-purpose. Just like Carisbrook and every bit of dirt we own can be classified as being multi-purpose. Having kids’ softball games and hosting the circus once a year makes the Oval a multi purpose facility. So I guess that we already have one of those. But, in the end, according to Council’s own advisors, the stadium will live or die through rugby.
What most of the public media posters haven’t picked up on (and the media themselves seem reluctant to mention it), is that it is the NZRFU who take the rugby gate takings. And not the stadium. On average, the stadium will receive about 20% of the gate takings, as a venue hire fee. So, look at the crowds attending the Super and NPC games, divide that crowd by 5, and that’s the gate takings that the venue will receive. The other 80% are not going to be consuming $50 of beer and pies each. So the lost revenue will not be made up through other avenues. There will be the odd test match against Tonga, but it’s those other 13 or 14 games that will be the measure each year. It costs the same amount of money to operate the stadium, no matter the crowd size.
This is all public information and I’m amazed that the mainstream media has either not picked this up, or has chosen not to mention it. Leaving readers with a false sense of reality, again.
If Otago, or the Highlanders, fail to draw significant crowds, then the stadium is not sustainable. That’s not scaremongering, that’s in Council’s own literature. So those teams need to win. A lot. That’s why we now have DCC (and assosciated arms) directly using ther resources to do whatever it takes to make the teams successful in order to boost stadium revenue. Did anyone really think that the Highlanders recently won the lottery and can now afford the new players and coaches that they couldn’t afford before DCC came on board? No, no-one is quite that stupid.
It is entirely fitting that the Council finish in secret.
This is the way that this Council have conducted their business.
They have been disconnected from the community that “sort of” elected them – in the last election, there was a significant proportion that simply came to believe that they couldn’t make a difference, so the incompetent and the familiar once more sat round the Council table.
I sense a change – I hope for a change – I trust in a change – so that the incompetent and those that have been working for private interests are finally put to pasture.
This City used to be a vibrant forward-looking collection of people. It still can be. But only if the incompetent and untrustworthy are consigned to where they belong – yesterday’s men.
It is to be hoped that we, collectively, can perhaps salvage some good out of whom we elect, and hopefully recoup some of the damage that has been inflicted on us by the “less than 20”. I look forward to seeing those having to face up to the community and pay for what they have done to us.
### ODT Online Fri, 1 Oct 2010
Voting returns pick up after decade of decline
By David Loughrey
Dunedin’s voters seem to be exhibiting a small but welcome surge of interest in the local government elections, a little over halfway through the voting period. In a polling environment of voting decline over more than 10 years, the percentage of voters who have marked and posted their ballot forms has increased in comparison with returns at the corresponding time during the most recent election, with the figure close to 2004 levels.
Read more
Elizabeth – that is hopeful. Wouldn’t it be good if we had 100% turnout!!!
I hope, and believe, that the surge in interest is representative of a vote against the incumbents. And logic would say that it was.
I have noticed the ads for Chin – pathetic as they are – which were absent last time. I think it fair to say that he senses defeat, and I trust that he is right.
I also note the photos accompanying some of the other hopefuls in their ads. Shot years ago, when they had their own hair, or their own hair colouring. Sort of digital magic….but when the reality appears in the OAP homes, I hope that reality sinks in.
Probably less opera singing in the homes this year, Russell !
Mayoral forums have not seen Peter shine as a leader with a suitable and acceptable mission.
During the forum held at The Hutton (Otago Museum), Peter fed back a couple of things he’d heard/swallowed/copied/stolen from members of the public active in presentations to DCC councillors just the day before, as part of Your City Our Future forums.
One instance: our Built Environment group agreed that, as well all the hard stuff we surely must do for the built environment, it is the case that Dunedin’s “ATTITUDE” (about itself) has to improve! (I won’t go into what we meant by that here) Peter grabbed that with both hands, verbatim. I later told our group presenters Emerson Yeoman and Hayden Cawte they’d made a dent~!!! Yeah, they did with bells on – but what it also showed up was that Peter had done NO HOMEWORK before the mayoral forum, and further, he was prepared to NOT CREDIT the two men who made a really great presentation.
I’m trying to figure where next Peter could convince a crowd – I’m thinking back to the historical debacle at the Proms where he ran into public resistance numbering in the thousands. And likely he isn’t entirely forgiven for jumping aboard the Neurosurgery wagon, a trace late –
If nothing else happens, at this strategic ‘stadium’ point in time for Dunedin… hopefully, the elections have raised awareness (if incrementally or momentarily) of local authority processes, and the much needed whipping of councillors to attend to proper constitutent matters in a timely, prudent way.
If we vote in a completely rotten or inept council I would be very surprised.
If existing prostadia councillors make it back, they’ll have a tough three-year term. We’ll see to it.
Phil, the HHTL report I remember reading, predicted that the Chin stadium would break-even if you didn’t count interest and depreciation. Although this is clear to me, most councillors ended up believing that the stadium would break-even. They missed the point, and for some reason they ended up thinking that they could ignore interest and depreciation. Since that report things have got a lot worse.
The secret DCC stadium financial forecasts will show losses so large that no amount of rugby success can bring it to break-even. If we decide to complete the construction, then we should try to minimise the operating losses. Nobody, however should swallow the line of Peter Chin and most of the councillors, that there is some chance of a break-even profit.
Remember what we are paying for with our $20 million/yr ratepayer funding: a roof, because Carisbrook didn’t have one, and about one test match every two years (because of a new policy decision of the NZRU). Because we already had Carisbrook, I am saying that what we are paying for is the additional functionality, which is very small for a big price. One test match every two years, works out to be $40 million per match. That’s more than enough to pay the airfares, alcohol and accommodation of 40,000 rugby fans to anywhere in NZ. Better still is to let us ratepayers keep our $40 million.
Phil. A lot of stock has been made out of the necessity of retaining A tests in the new stadium, even though it does not comply on seating capacity. So B tests are all we can expect to see. But really, tests are a misnomer. The crowd size is of no advantage to the ORFU as the NZRFU take the gate. It gives back a management fee and a KPI payment based on performance. In the MWH report this figure was said to amount to about $75,000 per test for the ORFU in recent years. So it can be seen there is no bonanza coming to the ORFU with tests as $75,000 would hardly cover the venue hire. Never mind the costs for the temporary seating. I am afraid this stadium, by relying on, and being created for rugby is doomed to be a disaster and no viable alternative revenue producing activities can make up the difference.
This council and Mr Harland, by going along with the CST’s highly speculative projections have put Dunedin City in a very invidious financial position which a new council will have to live with for better or worse. A depressing outlook all round.
Exactly right, Calvin. The crowd size does not aid the venue operation costs in any significant way. I’m just amazed that the ODT are choosing not to correct people who are thinking otherwise.
I was reading the other day about a number of English football clubs who were intending to bid for the London Olympic stadium once the Olympics have been and gone. And then I got to thinking some more. I remember seeing a number of top name English clubs playing regular matches against quite lowly ranked clubs in Sweden, Finland, and Norway. Why ? Because those countries play football out of season with the English clubs. So it was great pre-season training for those bigger clubs. Then I got to thinking some more. Maybe it would be more profitable to rent out the new stadium to those larger clubs where they could have extended training camps during the English summer when their home grounds are undergoing maintenance. Sure it costs a lot to travel to NZ, but, once here, it’s a cheap place to live. Certainly cheaper than Europe. It would mean that rugby may have to get shunted out to, dare I say it, Carisbrook from time to time. But, in these days of market forces, commercial returns, and all that, the biggest earner should take the front row. Given that they would be using it every day, instead of one rugby match every 2 weeks, an obscenely attractive low rental would still surpass the meagre venue income offered up by the NZRFU.
There’s already precedent for this with the northern hemisphere holding extended cross country ski training camps in Wanaka during the northern winters.
Frankly, anything to break the shackles of the NZRFU bully.
Phil; Brilliant thinking! Outside the square, but well worth investigation. Why don’t you put the idea to Mr Davies CEO of DVML? His reaction will tell you everything. Might put a few rugby zealots’ noses out of joint, but needs must as they say.
SUNK COSTS
This situation is all about sunk costs, and the political distortions that they create. A ‘sunk’ cost is money that has already been spent/committed and about which no further decisions can be made. It is the asset that may or may not have been created by the deployment of these sunk costs that should continue to form part of any decision process.
If they are large, these costs may be galling, but they are irrelevant, and are also potentially dangerous if the sunk costs associated with an asset are confused with its actual value.
Sometimes it is in the interests of certain parties to deliberately foster such confusion if they wish further costs to be ‘sunk’ (in their direction). This is particularly so if the organisation incurring these costs is a public one, and politics is a significant factor.
The elimination of these sunk costs is therefore a priority. As of their first day in office, the incoming Council have to forget about what has already been spent on the stadium, and acquire good quality answers to the following questions:
1- What exactly are the capabilities of the current structure if it is completed as per current design and specs?
2 – What fiscal and non-fiscal benefits will the structure generate for the community if it is completed to this specification?
3 – What additional (non-sunk) costs will be incurred to:
a) complete this structure?
b) run it as the ‘asset’ described above?
These figures should include all ‘unsunk’ cash and non-cash costs going forward, such as interest, maintainance and depreciation.
This analysis should be commissioned by the Council directly, after suspending further construction, using an external (preferably overseas) organisation that also reports to them directly, and not to the CEO or any of the other ‘helpful’ organisations involved in this project.
The terms of reference given to such an organisation is that: if the necessary information is not available or is not reliable/properly supported, or is withheld by participants in the project, then the most conservative assumptions should be used in their place. The default, as it always should be in an analysis of this nature, should be to NOT make any further investment, unless it can be adequately justified.
While Mr Harland will no doubt claim that this is illegal, I can’t see why it should be so. He is, after all, the Council’s only employee – or so we’re told, so he should do as he is told – even if that’s to do nothing and get out of the way. The report should be published in its entirety upon receipt.
When examining an asset in development it is important to observe good commercial practice. Sunk investments should not be considered, only the estimated value of the asset as it stands against any further costs required to fully realise that value.
While non-cash benefits have to be included in any community funded analysis, this needs to be set against its incremental benefits to the community. Haven’t we already got a stadium/indoor arena/conference centre/concert venue?
If this published report cannot justify completing the Stadium on these terms, and public consultation backs this position up (remember that everybody is promising to care/listen – so let’s see how honest they really are when the chips are down), then Mayor Cull? should order a permanent cease to construction, and a start on demolition. As to the form of consultation? – Well – this may well be a justifiable case for a referendum.
He should find that by setting the clock back to zero by ‘sinking’ costs up to the point that the report is commissioned, and judging the project purely on its discretionary costs and incremental benefits going forward, that the previously ‘politically impossible’ has become decidedly ‘doable’.
At that point the ‘sunk costs’ become realised community losses, the fiscal wound can be cauterised, and serious inquiries as to how these community losses were incurred to begin with can begin. This may also have to include any excessive contractually incurred costs to actually shut this project down.
Just because these losses have yet to be realised does not mean that they are not already real. It just requires some courage to flush them out of the DCC creative accounting closet.
If this is done, these losses are likely to be far exceeded by equally real community savings if this grotesque DCC/ORC/ORFU/RWC love child is dealt to at this point of its gestation.
Do you have that level of courage Sam/Kate/Dave?
An addendum:
I my previous posting I wrote:
“At that point the ‘sunk costs’ become realised community losses, the fiscal wound can be cauterised, and serious inquiries as to how these community losses were incurred to begin with can begin.”
This may be rephrased as: ‘business before pleasure’!
That is the most succinct assessment of the position as at the moment that has been put forward. Robert Hamlin is the first authoritative person to put forward the ‘cut our losses’ and get on with demolition scenario. As he suggests, political balls will be required, but in the fullness of time if the full independent inquiry points in that direction then that is what is required. Cauterisation, clean up and move on. The city will be the better off both with the capping of the costs and the cleansing of the city’s angst.
Robert Hamlin’s wise words will, I hope, be fully understood and followed by our new councilors. To help this happen here’s a summary of what he wrote:
Rob says that stadium construction should be suspended immediately and not resumed until we know a few answers – Whatever money has been spent so far, the critical question is: is it value for money to pay the additional money needed to complete and operate the stadium.
To answer this question we need to know how much more needs to be spent to finish it, and how much will it cost to run each year (NPAT deficit). These costs need to be weighed against the expected net benefit to the city from having a new stadium, compared to using the old stadium (“incremental benefit”).
Rob proposes that our new councillors commission a really, truly independent investigation/report to accurately assess these costs and benefits. When that is done we can balance the additional cost to completion, with the benefit of a new stadium (above and beyond the benefits of Carisbrook). The project must be killed if spending more money results in no benefits, or negative benefits. In that case we must be prepared to completely cancel the stadium even if the money spent so far is completely wasted.
Dunedin’s most sensible MP, Hilary Calvert said (the stadium was) “still in the position where stopping it now would be a lot cheaper than keeping on building it”.
To her and me, it’s obvious that it should be bulldozed tomorrow, but because we are talking about an absolute shit-load of public money, it is reasonable to have a proper process to make the decision. There are no other reasonable ways to make this decision apart from how Mr Hamlin has suggested.
The old councillors have until now decided that politics and self-glorification are more important than than the wellbeing of our City. I hope the new ones have the courage to make this crucial decision. They should know that a very powerful machine will fight them at every step to prevent them even considering whether or not they should make a decision. This is the same machine that has created fake information and hidden the real facts from councillors and us (citizens). The new councillors will need far more courage, determination and intelligence than the last council, if they are to succeed. What they lack in these areas will have to come from us. There is more to be done.
Jimmy Jones, you are dead right.
It would take a courageous step to call a halt to construction, but I believe strongly that our citizenry have been subjected to a deadly combination of deception, secrecy and downright lies. To undertake any project based on what we have been dished up is bad, but to continue may be even worse. I hope that once the facts of this project have been exposed – not Richard Walls’ “facts” – we may all have a chance to participate in a specific community decision to continue, or to mothball or dispose of the stadium.
Roll on tomorrow.
Refer to Phil’s comment 2010/08/01 at 11:20 am
Russell, I have my fingers crossed for tomorrow. Getting the facts exposed will be a challenge, but worth pursuing. A community decision shouldn’t be needed because once the facts are made public, the decision will be very obvious.
A rough scenario might be this:
$130 million spent so far, $125 million to finish, total economic benefit (of new vs Carisbrook) $1 million/yr, yearly operating losses (NPAT) $20 million/yr.
So if we finish building it and keep it for 50 years, it will cost us $125m + 50 x ($20m – $1m) = $125m +$950m = $1·075 billion. Spending the $125m provides a net detriment of $1 billion.
And if we dump it now it will cost us $1m (demolition), contract penalty payment $5m (wild guess) and proceeds of land sale $15m = $15 -$5m -$1m = $9m (net benefit).
In each case (finish it or dump it) the first $130m already spent, will stay with us until the debt is paid off, along with interest. So with this set of figures Dunedin will be $1 billion worse off over 50 years if we finish it, compared to bulldozing it next week. Once we have these facts there will be one clear answer and no debate will be needed. Oddly enough, the most important thing isn’t the total construction cost, it is the yearly operating loss and the ongoing (presumed) economic benefit. These are the facts we need to know; Rob Hamlin’s Independent Review will do this, but as I have said before, our unhelpful friends at the DCC have at their fingertips, comprehensive forecasts for these things, and I expect that they will be public soon (sooner if Bev gets in I think). We still, however, need the Hamlin Review and a complete stop to construction until the review is completed.
Thanks Elizabeth. I don’t think Phil is right, but if he was and the penalties for cancelling were say $150m, the cost of stopping now would be $15m (land sale) – $1m (demolition) – $150m (penalties) = $136m (detriment) still a big saving on building it and running it for 50 years = $1 billion (detriment). Remember, this is only one possibility; we don’t have the real figures yet.
That’s OK JimmyJones, good to keep bouncing this around then see how the new council copes with the numbers on file and maybe invented at council. Er, demolition isn’t a very energy conscious thing to do with all that concrete. Maybe some other uses for the hulk?
Yes, wasting a Billion dollars isn’t very Sustainable either, and what happened to Zero-Waste. I am sure there will be various alternative uses proposed, but it looks to me like rugby will still be the most profitable with an unsatisfactory $20million/yr loss.
JimmyJones – yes, the old ‘A loss is a profit’ trick. Where have I read that before? Wasn’t it the annual report for the Dunedin airport company? It’s all become a blur.
Talk of bulldozing is arrant nonsense.
If it gets to the point that the city cannot see a way to break even or limit losses, then sell it as a going concern minus the sunk cost or liquidate the company that owns the asset and have a firesale.
It would be a hard decision to make, but precedent is there in many scenarios where the first entrant to a market has not been able to make a business case stack up on the sheer cost of capital to be recovered; however a second entrant has been able to do so when the sunk cost is removed.
Talk of demolition is Luddism.
Hi Jimmy — While I agree with Rob Hamlin’s analysis that we should not be seduced by sunk cost, aren’t you double counting in your estimates? Your estimate of an annual $20m NPAT deficit appears to include the financing costs for the money that we have already spent (which we would still be paying if the stadium were bulldozed).
In fact, if Phil’s estimates that the cost of the penalties are approximately the same as finishing the stadium are correct, then your case has almost evaporated (the interest and depreciation costs are effectively the same in each scenario), it all hinges on whether revenue exceeds operating expenses.
Stu, you could try and sell it as a going concern, but any business that loses money is worth just the scrap value (land value). If the thing was marginally profitable then perhaps it could be saved, but it is likely to lose $20 million/yr. Everyone that hates the idea of bulldozing it should start a collection; you will need to raise $2o million every year. Better get cracking.
James, I think you are partly right. If Phil is correct or we pay to complete it, the interest cost will be the same whether we keep it or bulldoze it. However after the bulldozers there will be no depreciation/amortisation. Early on EBITDA was expected to be about $zero but then DVML’s costs of $2.4m/yr was included. The sooner construction is stopped the less money will be borrowed, with greater savings to the city.
Hi Jimmy, I think if you run a bulldozer through it, it will incur the depreciation instantly (still just a paper entry of course, because the money has already been spent). Amortisation is merely an analogous paper entry for the depreciation of goodwill (intangible assets). Thus, I don’t think there is any goodwill to amortise, but if there is, it will all be amortised when you run the bulldozer through it.
Interesting, James. After the bulldozers the stadium owning company DVL will have no value – the DCCs shares and the shareholder advance (loan) will have a value of zero. Apart from the interest on the loan used to pay for those things, there will be no other ongoing costs.
I believe that the DCC intend to revalue the stadium asset (downwards) in about a year’s time. If this happens during the ownership by DVL there will be some amortisation.
The important thing is to discover whether we are better off completing their stadium, or sending in the bulldozers. The sooner we know that the better.
I believe that the DCC intend to revalue the stadium asset (downwards) in about a year’s time. If this happens during the ownership by DVL there will be some amortisation.
I’m not sure either of those are true. The plan is to use the depreciation to lower DHCL group’s tax payments (saves us money). To re-value the stadium downward would reduce this saving (=no point).
Also, as we can see the stadium, it can only be depreciated not amortised. Only intangible things like loans, goodwill, and copyright can be amortised (although I’m not an accountant).
James, I am not an accountant either. I believe that amortisation will be required if DVL pays a huge price for the stadium which is worth nothing. The revaluation won’t put its value at nothing but there will be a big drop. This drop in value is like negative goodwill. Amortisation would be used to gradually adjust the book value.
There might be no amortisation because even though Dunedin and Otago paid heaps to build it, the DCC might sell it to DVL in a year’s time for a price closer to its real value, in which case the DCC will book a big loss and DVL won’t have to amortise anything.
The DCHL group will be unaffected by the stadium because the stadium company, DVL, is part of the DCC group. The DCC group also includes DCHL and DVML.
As far as I know the DCC has very little discretion about revaluing assets, amortisation and depreciation rates. These are governed by the accounting rules.
Interesting scenarios all of them. I personally like the idea of the bulldozers. I always like a good demolition, particularly if it involves explosives. Seriously though, it seems to me that one vital factor is the unknown matter of revenue over operational expenses. Over any given period of time it seems most likely that a deficit here will be the transcending straw on the proverbial camel’s back, rather than the cost of the construction debt. So, for the camel’s sake, I suspect the big explosion is the brave man’s solution. Problem? Will we get the required brave men? In politics? We have got to be kidding.
Hi Calvin. Jinty, Olive and Shane the vegetarian enviro-wimps might transform themselves into clear-thinking determined fighters for the citizens of Dunedin. Or not. Anyway you can’t just elect a bunch of new councillors and expect them to automatically do what you want, we need to keep them informed and following the right track. The stadium machine is more than just some ex-councillors and it will continue to try and influence whatever councillors are there. I think the newbies will want to have a communicative constituency and will want to understand the important issues.
The bulldozers won’t be coming unless good quality information is created and made public, and for that to happen I think we need the Hamlin Review.
Don’t mention Olive, she wants to wreck our teeth.
Clicking on word from home took me straight to this: http://freepaidsurveyreview.com/surveysowner. This explains why the post appeared to have little or no relevance to anything above.