WE NOW HAVE A STADIUM DEBT PLAN ~ lovely! thanks DCC

See comment. See red. See riot.

Posted by Elizabeth Kerr

25 Comments

Filed under DCC, DCHL, DVL, DVML, Economics, People, Politics, Project management, Site, Sport, Stadiums

25 responses to “WE NOW HAVE A STADIUM DEBT PLAN ~ lovely! thanks DCC

  1. Elizabeth

    Agenda – Council – 19/09/2011 (PDF, 110.4 KB)

    Agenda – FSD – 05/09/2011 (PDF, 61.3 KB)

    Report – FSD – 05/09/2011 (PDF, 105.0 KB)
    Forsyth Barr Stadium Debt Servicing Plan

    Report – FSD – 05/09/2011 (PDF, 340.5 KB)
    Increased Capital in Dunedin Venues Management Limited and Dunedin Venues Limited

    Minutes – FSD – 05/09/2011 (PDF, 147.2 KB)

    Note: The following information has not been formally confirmed by minute record of today’s meeting of the Dunedin City Council. Cr Vandervis says: “The figures quoted are tabulated in the FSD Committee agenda of 5/9/11 Item #4 (page 4.3). The contingencies left-over figure is cunningly not specified and had to be pried out of staff by repeated questioning.”


    Received from Cr Lee Vandervis this evening:

    I do not believe most Councillors understand what they have voted for in approving raising $170 million worth of overdraft for DVL & DVML – the stadium management/ownership organisations.

    In item #4 of the FSD Committee agenda of 5/9/11 approved today, the Councillors tried to save money by deferring the $6,359,000 Stadium maintenance fund for at least 5 years. [safely 2 elections away]

    In the very following item #5 of the same agenda they today approved giving DVL & DVML Stadium managers an unbelievable overdraft of $170,000,000 which included the $6,359,000 maintenance fund they had just voted to defer!!

    Worse, this new $170m ‘increase in capital’ [=overdraft facility], included some rather specific numbers suggesting that if not spent already, it very soon will be:

    • $29,089,000 to guarantee and pay interest on the so-called private sector funding which is expected to dribble in over the next ten years
    • $105,061,000 Stadium construction cost
    • $6,359,000 maintenance fund [which Councillors had just voted to defer]
    • $4,450,000 additional items [unspecified but presumably some of the ‘extras’ for the Stadium approved already this year]
    • $3,600,000 Academy of Sport [new building on Stadium north wall]
    • $1,400,000 relocatable Seats [more Stadium ‘extras’]
    • $500,000 Additional Items [unspecified], leaving a balance of
    • $20,040,500 which after I probed for an answer was described as ‘contingency’!

    I stridently pointed out the obvious $6,395,000 double dip of the maintenance fund, and the insanely high contingency figure, and how interest on ‘private funding’ was costing us, but few Councillors seemed to understand.

    The justification from Cr Brown for giving the Stadium managers this obscene new overdraft, was that “Stadium warrantees means there is no need for a maintenance fund, and that because Stadium managers are required to spend within the limits of their Statement of Intent means there is no risk to Council whatsoever”. !

    And then 11 out of 15 Councillors voted for it!!

    • Elizabeth

      PS. (Elizabeth says) Is this what you do to your new Chief Executive on his first day… just a wee question to float in the air a while.

      • Elizabeth

        I’m sure the Councillors are sorry they haven’t been able to communicate what their approval today will mean for every individual rate demand for XX years… I’m sure they’ve done all the sums, they’re good like that. Every citizen did deserve a full explanation but there simply wasn’t time, oh and… Annual Plans and the LTCCP mean NOTHING, possums.

        ****

        Remember, long before any of this NEW expenditure and extent of COUNCIL DEBT came to the surface (cumulative today)… independent finance and policy consultant Larry Mitchell, having reported on the financial sustainability of New Zealand’s 73 councils, said that based on audited annual accounts the average debt per Dunedin ratepayer was running at FOUR times the average across New Zealand at June 2010; and this was likely to go to FIVE times (June 2011).

        Repeat: that was before Dunedin City Council decided to approve a Stadium debt plan today.
        Wow. Wow. Wow.

        See more here: https://dunedinstadium.wordpress.com/2011/08/08/chinchin-whatisdebt/#comment-18048

        [wait for the stadium operating losses to kick in – not clear until the honeymoon is over]

  2. Phil

    God bless Cr Brown. Most manufacturer and supplier warranties specifically require that specified maintenance procedures at specified intervals be carried out in order for warranties to remain valid.

    The defects and liabilitiy period for the majority of trades is 12 months from the completion of their work. Not 5 years. Items of work completed early in the construction programme will already have passed their warranty period date.

  3. Hype O'Thermia

    “All those numbers….. I truly would have studied up on this if I’d had time you know ….. must be getting on to time for a tea break ….. I wonder what’s to eat?” Whoever’s first to guess who I’m channelling gets to stay back after class and clean the dusters.
    Sometimes you have to laugh because screaming alarms the neighbours.

    • Elizabeth

      The time for seeking legal remedy, natural justice AND paying off the debt more quickly. How deep can our collective pockets go. I worry about that answer.

  4. Hype O'Thermia

    How far can it go before the side effects of poverty show up in wider and wider sections of the population? Cold homes not because they aren’t insulated but because people a step higher on the income and house-quality ladder can no longer afford to heat them. Illness more severe because doctor’s visits are put off till it’s really urgent. Dental treatment likewise, extractions chosen over restoration because they’re affordable. Poor diets resorted to among people who are well aware of what an adequate healthy diet is. An even greater shame, poverty affecting an even greater proportion of the children in Dunedin – here in Godzone, a great place to bring up children…. yeahhhh.

  5. Peter

    Odd that this hasn’t been reported in the ODT today. Maybe tomorrow? Did I miss something? If it’s not reported, you’d have to come to the conclusion that something really subterranean is going on in this town.

  6. Mike

    I was wondering if this was some other bit of stadium funding, solid gold heated towel rails for the Highlanders or some such.

    Remember back during the election Cull said he’d only fund the stadium up until the RWC – times almost up, he has to start delivering on that promise in the next few weeks.

  7. Anonymous

    I see no media reports picking this up at all – local or national.

    • Elizabeth

      Anonymous – it is odd, only Channel 9 has carried a hint of news, a non story with an ineffectual video clip. The DVML & DVL funding is one thing. I’m not clear if the Council has adopted a 40-year debt management plan…. awaiting NEWS.

      • Elizabeth

        Cr Vandervis’ statement to Elizabeth Kerr received via email (published in full at What if? Dunedin…) appears, rehashed, in this week’s D Scene (page 7)

        • Elizabeth

          ### ODT Online Wed, 21 Sep 2011
          DCC now security for stadium loans
          By Chris Morris
          The Dunedin City Council, and ultimately the city’s ratepayers, are now the security for about $150 million in loans needed to pay for the Forsyth Barr Stadium. However, a claim by Cr Lee Vandervis the move has also granted a $20 million contingency fund to spend on other undisclosed stadium extras has been rejected. Councillors at this week’s full council meeting voted 11-4 to approve changes to the constitutions of Dunedin Venues Ltd and Dunedin Venues Management Ltd, the council-owned companies charged with owning and operating the stadium. The changes – opposed by Crs Vandervis, Paul Hudson, Jinty MacTavish and Teresa Stevenson – allowed the companies to issue uncalled shares to the council worth $170 million, to be called in only if needed.

          The uncalled capital approved by the council provided access to about $20 million more than the $150,459,000 in stadium-related debt to be held by the two companies.

          Cr Thomson said the arrangements could see a request for some of the uncalled capital sometime in the future – for example, if the stadium ran a continuing operating loss and needed extra capital to cover loan costs. If that happened, “I imagine [the council] would have to borrow it”, he said.

          Read more

  8. Hype O'Thermia

    “Until the RWC” – until it’s over? Until the very last item of bunting, the last piece of merchandising has disappeared from the city? Until the last post-mortem of games, players, venues, transport in Auckland have ceased? Until Tindall’s smoochy away-match has vanished from youtube? Doesn’t look like the DCC and ORC have any sense that “enough is e-bloody-NUFF already!”

  9. Peter

    What a plan! Just sink more money into a failed project. Too many wealthy people are milking this stadium for freebies, ‘to make it fly’, Dave. You’ve made your stand perfectly clear. A ‘run with the hares, hunt with the hounds’ Mayor. No bedrock values, or policies, beyond feel good cliches to keep interests groups thinking you’re ‘on to it’. Political jockeying takes the place of any sound direction for our city. You and your council are in such disarray, what hope has Dunedin got for a better future? A Greater Dunedin. What a joke. We’re deep in the shit, as copiously reported, with morons in control who are more intent on knifing each other in background committees – with the public excluded.

  10. Hype O'Thermia

    It’s the missing word thing. If only we’d known. Greater _____ Dunedin. Suggestions: Debt; Hypocrisy; Semi-opaqueness…………

  11. Calvin Oaten

    I love the $20,040,500 contingency fund. That will go towards covering the private funding which is now pretty much confirmed as being taken as revenue by DVML. Then of course, there is the small amount of nearly $1m every two months holding costs for Carisbrook. Oh Richard, wherefore art thou?

  12. Hype O'Thermia

    I blame the parents.
    You know the ones. Not the ones who gave regular pocket money and that’s that, spend it and there’s no more till next week – no, the entire council (elected and un-) are from the background of pester & whine and the olds will give you extra so you never have learn the word “or”. Movies OR comics. Bread OR circuses – bad example, sorry – our circus vs your bread: no contest.

  13. Amanda kennedy

    Well, our own local version of Rupert Murdoch has always been quite clear that he is simply in love with all things stadium, so any sacrifice we can make is fine and dandy with him. Why would he want to report anything that might make people not very happy to pay their stadium tithe?

    • Elizabeth

      Amanda – you never know, perhaps ODT are doing some deep journalistic analysis and composing a biting editorial to throw at us on the morrow…

  14. Hype O'Thermia

    The tone has been sliding. Permitted online comments are now approaching overt vitriol, polite but definitely critical letters to the ed are more numerous, and blunter than would have been seen earlier. Editorials are heading in the direction of questioning previously unquestionable “vision” and “forward thinking”. Methinks a sinking ship has been spotted and action is being taken at speed judged commensurate with dignity.

  15. Peter

    If anyone had any doubts that the stadium is not a bottomless pit for future ratepayer money, this will rip that reassurance to pieces.
    Interesting move by Hudson with his vote. Transparent. Still… it doesn’t make Dave and his fellow travellers look very good, does it.

  16. Amanda kennedy

    Yes, I wondered when one of the stadium bunnies would figure out that to muddy the water of the stadium cabal one of them would vote a ‘non stadium’ positon – knowing of course that it would safely go through so long as other stadium cabal bunnies voted for it.

  17. Calvin Oaten

    Now that the DCC have confirmed the increase in authorised capital of DVL and DVML to $160m and $10m respectively and thus allowing for those entities to borrow up to those limits it seems propitious to revisit my letter to Dave Cull on that subject.

    Hello Dave
    Well, you do have an interesting life. The [FSD committee] meeting on Monday will be another nail in the coffin of the city’s financial body. I read with interest the latest manipulations proposed by the ‘Gurus’ of the money tree in the suggestions to increase the authorised capital structures of both DVL and DVML. DVL is to be set at $160 million $1 shares, and DVML at $10 million shares. In both instances these increases will be uncalled. This, however, places a legal obligation for the shareholder(s) to come forward with the cash should circumstances arise requiring it. It does, however, provide collateral security against which monies can be borrowed up to the amount of the authorised capital should it be required.

    In the case of DVL, it seems to me that this action anticipates doing just that. This means that the DCC’s commitment to the stadium has progressively risen from the $91.4m in 2008 (consisting of $85m plus $6.4m capital maintenance fund) to $98m, to $139m, to $144m, to $147m in the current Plan. Now we can see that there is likely to be a need for an additional $13m, a figure coincidental with a so-called gap identified. In all, an increase of almost 100% since first mooted. So much for the “on time on budget” mantra of the CST chairman. I suspect that these moves confirm that the so-called ‘private funding’ of some $45m (including the Govt $15m) which the public were led to believe was part of the construction capital is in fact to be treated as operational revenue for DVML.

    Coming to DVML, the increase in capital to $10m will enable it to carry debt to cover non budget features such as large screens, temporary seating, signage, catering, and sundry ‘goodies’ deemed necessary to the operation of the stadium. Well, why not? Then of course there is the already indentified loss of $900,000 to host the RWC, which will have been increased by the addition of more matches due to the Christchurch earthquakes.

    Of course there is no talk whatsoever, about how or where the extra money to service all of this additional debt is coming from, other than the expeditious use of time. We now hear of forty years instead of twenty to pay down the debt. We also hear of an additional $115m in interest as a result of this.

    Dave, when oh when, are you going to call a halt to all this nonsense. DCHL is on its knees, the city is technically bankrupt, the excavators are furiously digging the hole deeper as we speak, the money people within have gone completely berserk and still you are in denial. Please don’t tell us again that “your concerns have turned out to be justified; now we have to deal with it”. Just do it!! Stand up and shout ENOUGH!! this must stop.

    The dopey council won’t support you – except for Lee Vandervis – but at least the public will be awakened. As mayor your voice is power, if you will only use it. Declare that immediately after the RWC, that the stadium must be closed. DVML closed down. All expenditure stopped. Pending a full investigation by a totally independent panel, a clean-out of the whole culture existing at present by requesting written resignations from all senior and intermediate management together with their reapplications for their positions (if continued), and a review of all activities.

    The new CEO is coming at an opportune time to take a valid part in all of this. Let’s hope he [is] up to it. Dave, you have two years to turn this mess around, doing the pain now might just improve your chances of re-election. Do nothing, and the city won’t need a mayor, the only growth industry will be for “RECEIVERS”.

    You know this Dave. I know you have the intelligence to analyse the debacle you have been landed with. Do you have the intestinal fortitude to handle it? Let’s see it, and soon.

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