Davies “in the middle of a conversation” – how to fudge DVML, DCC, ORFU and Highlanders

### ODT Online Wed, 14 Dec 2011
Mayor unhappy at ORFU release
By David Loughrey
A “premature” press release from the Otago Rugby Football Union is behind controversy and “conspiracy theories” about Dunedin Venues Management Ltd’s dalliance with the business of running rugby, Dunedin Mayor Dave Cull says. There was general agreement among councillors spoken to yesterday it would have been better if they had heard about the relationship between the two organisations before it appeared in the Otago Daily Times early this month.
Read more

Related Posts:
2.12.11 DVML gets into bed with ORFU
13.10.11 MAD Classics #26 – You’re a crook or a businessman?

Posted by Elizabeth Kerr

106 Comments

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

106 responses to “Davies “in the middle of a conversation” – how to fudge DVML, DCC, ORFU and Highlanders

  1. Hype O'Thermia

    The photo of Dave Cull that accompanies this story show him less chirpy than usual. Do you think he’s beginning to feel sore where the marionette strings are attached?

  2. Peter

    Don’t you just love the vogue lingo, picked up from elsewhere, about ‘having conversations’- in this case with interested parties, who continue to live up each others’ dark passages.
    Do people like David Davies, in their quieter moments, reflect on how far they are lost, on personal level, with the games they play with others and do they feel cheapened by it all?
    Anyone care to join me in this ‘conversation’?!

  3. Phil

    Just out of curiosity, since when did DVML have any money to buy or sponsor anything ? Last time I checked they were designed to run at a loss. They rely entirely on funding from DCHL or from the general rates fund.. So where is this sponsorship money coming from ? Obviously not from DVML. Unless I missed that line in their budget. DVML might be handing over the cheque, but someone else has signed it. Are we going to be allowed to know who ? Probably too “commercially sensitive”, I’m betting. Or an “operational matter”.

    • Elizabeth

      The way ODT relates it that a “premature” press release from ORFU is behind controversy and “conspiracy theories”, will only serve to inflame, anger and disgust more punters. Doh.
      If the powers that be were all acting above board (there’s a ‘white collar’ phrase) and not like greasy snakes they might be cut some slack. Until then, make the bed and lie on it.

  4. Anonymous

    It’s fairly straightforward, no conspiracies required.
    The Highlanders professional sports franchise depends on the ORFU and (to some extent) HPNZ to exist.
    Forsyth Barr Stadium depends to a large extent on both the ORFU and the Highlanders to exist.
    One organisation encompassing HPNZ, ORFU, the Highlanders and the venue management company naturally erases these dependencies and puts everything in one basket.
    Naturally, since DVML is the organisation then on which the DCC depends, then anything can be done to ensure that it continues.
    It is in the best interests of DVML to amalgamate in this way as it improves its chances of survival.
    It is in the best interests of the DCC (albeit somewhat of a Hobson’s Choice) for DVML to amalgamate in this way as it improves the chances of viability of the asset (FBS).
    It is not necessarily in the best interests of ratepayers for this to be necessary. The viability analysis was done by several outside DCC. If only it had been done prior to making the decision by those inside.

    {HPNZ, or more correctly HPSNZ, is the acronym for High Performance Sport New Zealand – formerly, NZ Academy of Sport. -Eds}

  5. Russell Garbutt

    Spot on – a mutual suicide pact is another name for it.

  6. Phil

    I don’t following the “conspiracy theory” statement either. It’s only a conspiracy theory if it’s not true. I didn’t see Dave coming out and denying any of the “theories”. He had the opportunity to do that if he was wanting to put people’s minds at rest.

    Great summary above. I will offer one slight correction. “Forsyth Barr Stadium depends ENTIRELY on both the ORFU and the Highlanders to exist.” According to the Horwath report commissioned by Council prior to them approving the stadium project for construction.

  7. Hype O'Thermia

    Anonymous, “It is in the best interests of the DCC … for DVML to amalgamate in this way as it improves the chances of viability of the asset (FBS)” and at the same time decrease visibility of pertinent facts regarding its ongoing non-viability.

  8. Russell Garbutt

    HPSNZ or formerly the Academy of Sport South Island was also the postal address for a very shady private company called The Centre for Excellence in Amateur Sport Ltd which, over a few years managed to soak up hundreds of thousands of dollars to provide employment and services for something which should come as no surprise. It was actually the front for the professional rugby academy.

    And who is getting a DCC subsidy to operate? Another chocolate fish for the right answer.

  9. Peter

    Why did the NZ Academy of Sport change its name, by the way? Just a case of ‘rebranding’ or did it feel that it didn’t have a good name? Particularly in Dunedin.

  10. anonymous

    Attendance 4628. at average of $20 per ticket didn’t break even tonight

  11. Phil

    A quick search tells me that the average ground attendance figure in Australia for an A-League football match is around 8,000 people. So I think they were always dreaming if they thought that they would get many more than the number who showed up tonight. Blame it on midweek, blame it on a lack of students, blame it on the Euro, blame it on global warming, but that’s about the number of people in Dunedin who are interested enough to go out at night and watch a football match. That’s about the same figures the Otago rugby team were drawing. A fair indication. Considering that the stadium car park is clearly off-limits to mere mortals, a trip to the rugby is still going to require a hefty walk on a cold winter night. Just like Carisbrook did. Being under a roof for 90 minutes probably isn’t a big deal clincher for most people faced with being wet going to and from.

    The Phoenix don’t have a lot of money, so it’s a safe bet that they paid even less money to use the stadium than Capital C Concerts did. Still waiting for the first event where opening the doors doesn’t increase the level of debt.

  12. Peter

    That must have been disheartening for them. You could also blame it on the lack of a novelty factor for the new stadium as the first Phoenix game was the first game played there, wasn’t it? People have now had plenty of opportunities to experience the stadium – and nothing beats the first or second time for high.

  13. Phil

    Yes, the RWC might have been a mixed blessing. They probably would have gotten the same 30,000 to those key matches if they had been played at Carisbrook. Having a new stadium was never a required for securing those matches and no one really believes that visitors to the city increased (or will increase) because of a football stadium with a roof. Those people who went to the RWC matches managed to tick off two items with one outing, a RWC match, and checking out the new stadium. In hindsight, possibly delaying the opening of the stadium until the start of the next Super season might have been a smarter way to draw in a larger crowd and to hold them for the season.

  14. Russell Garbutt

    As the owners of the debt currently being incurred on a daily basis through the operation of DVML, all of us should be able to easily access the figures that pertain to income and debt of the operation of the stadium.

    The problem is that each day passes more lies, obfuscations and deceit have to be practiced to continue to conceal the reality. The only way that ratepayers will have any confidence whatsoever in the administration of the DCC will be from the findings of a full, transparent, forensic financial audit of the DCC, DCHL, DVL, DVML, the CST and all associated dealings. Can anyone think of any good reason why the DCC would not support such a move?

    We have learned to our cost that the Office of the Auditor General is not interested in anything to do with the propriety or wisdom of spending of ratepayer funds – all they are interested in is whether that spending has been recorded correctly. Frankly, this office is not interested in the protection of ratepayer’s interests, but merely being checkers of the books. It would have been interesting to see what they would have done if they had been involved in Hanover, or South Canterbury Finance.

    There is enough evidence now surely that shows that we have been collectively deceived over private funding, about total costs, about revenue projections, about effects of debt on vital infrastructure etc etc. Now the shady deals over the saving of pro rugby continue with “conversations” between one of our employees and the leeches of the ORFU and the Highlanders which can only result in greater subsidy of this private business.

    Isn’t it time that Mr Orders got to the bottom of what is going on? And if it is too hard, then he should employ the forensic analyst mentioned above.

  15. Hype O'Thermia

    The difference between the stadium and other facilities which the ratepayers’ contributions Farry’s Fairy-Godpersons write to the ODT about is that you and and a busload of tourists and a school group can visit the Museums, Library, Art Gallery any day of the week and see something. As an “attraction” to bring people to Dunedin, or for that matter deliver reasonable money’s worth to us the ratepayers, the Fubar is F for Fail. Every event so far has cost us $100,000 minus the pittance of what is laughably portrayed as profit, and that is on top of the day in, day out interest + principal. FFGs urge support: “get behind it” but the only way getting behind it would have any chance of success is if ratepayers took up guerilla action and leapt fully armed from behind it to hold up passers-by and divert the contents of their wallets to the council coffers.

  16. Russell Garbutt

    Dunedin is not the only City to find itself in this mutual suicide pact with a pro sports team. Have a look here folks

    http://missioncityloser.blogspot.com/
    or another
    http://www.fieldofschemes.com/news/archives/2011/09/

    If I can find these two in less than 10 seconds, why can’t Paul Orders? Or every City Councillor?

    I searched to find “how a city can rescue itself from new stadium debt” and interestingly not one applicable or appropriate result. Tons of results from “how to plunge your city into financial crisis through building a new stadium”. Says something I think……..

    • Elizabeth

      Russell, your current examples are of course preceded by international examples galore, many of which were publicly referred to by stadium opponents prior to DCC’s stadium funding decision.
      New Zealand economists actively advised against Dunedin entertaining a new stadium; this year the same economists tweeted and blogged ‘in reminder’ around the time construction was completed. The investment model (joke) was always bad, and especially ‘strong’ in highlighting how gullible, superficial and incompetent local authorities and a fair number of local citizens truly are. That now we can easily add ‘fraudulent’ to the rotten list is an indictment upon us all.

  17. Hype O'Thermia

    Don’t you think the call for forensic accounting should be made louder? A short snappy phrase suitable for small stickers that can be put in various places e.g. our own letter-boxes and fences, also used as a signature file in our emails. I loved the All I want for Christmas version, could perhaps start with that then go on to All I wanted for Christmas was….

    • Elizabeth

      Nice idea, Hype. Stickers, chalked pavements, talking heads, painted windows, signs, banners on houses, painted sheets (add a holly bough, flashing lights…), doesn’t cost each of us much… The most decorated (broke) little town ever, east, west, north, south o’ the stadium. This might jolly up the Occupy people too.

  18. Russell Garbutt

    “What did the Stadium Cost?
    What will it cost to run?
    Where did the money go?
    The DCC doesn’t know. Who does?
    An independent forensic financial analyst is the only answer
    We don’t trust anyone else”

    Those seem to be the key elements that need to be strung together somehow into that short snappy message.

  19. Anonymous

    When is DVML due to make the first payment to DVL?
    Running at a loss per event, with $4 million annual fixed costs.
    Next events and estimated attendances (based on priors)
    3 soccer matches (Otago United: 1000-2000 @ $20/ticket = $20,000-$40,000
    7 Super 12 games: 7000-10,000 @ $30/ticket = $210,000-$300,000
    1 musical: 300-400? @ $40/ticket = $12,000-$16,000
    1 Test match: 28,000 @ $100/ticket = $2.8 million
    Total ticket revenue from announced events: about $3 million
    12 events @ $100K cost per event = $1.2 million

    1 event per day @ $1000 = $365,000 (room hire etc)
    RWC – $400K loss
    3 soccer games, total attendance 20,000 @ $20/ticket = $400K
    3 rugby games, total attendance 20,000 @ 20/ticket = $400K
    Total so far $2 million

    Elton John – 30,000 tickets @ $250/ticket = $7.5 million
    Total $9.5 million

    If DVML takes all the ticket revenue from all events, then it makes enough to pay the $5 million to DVL, meet its fixed costs and come out with a handsome $500K profit.

    Except that DVML doesn’t get the ticket revenue; it gets venue hire fees. And we know that full venue hire fees haven’t been charged (either that or George St Normal has rich parents)
    So the rest of its income has to come from other sources…

    What are its other sources of revenue?
    – catering concession to Compass
    – stand sponsorships – ODT, Mitre 10? $200K p.a.
    – advertising hoardings
    – corporate box signage?
    – leases/rents from HPSNZ and Highlanders/ORFU? $200K p.a.
    – car parking season tickets – 300 spaces @ $300 per year = $90K
    – naming rights revenue from Forsyth Barr? $500K p.a.? ($5 million over 10 years)
    Maybe $2 million p.a.?

    Remember, DCC cannot afford for DVML to fail. If DVML fails, DVL fails and the loan is defaulted unless DCC steps in.

    Let’s say DVML breaks even on its fixed costs of $4 million, which given the sources of revenue above, seems to be doable. That leaves $5 million in loan payments to find. How and when will this be supplied to DVML?

  20. Phil

    Yes, from memory the venue hire price for any “non test match” rugby game at the stadium is based on a percentage of the gate revenue. The ORFU hires the venue from the venue operators. For some reason the NZRFU doesn’t hire directly. The ORFU takes all the money from the ticket sales. They give that money to the NZRFU. The NZRFU gives a percentage (and I think this was around 15% depending on if it was a Super or Provincial match) back to the ORFU. The ORFU keeps a percentage (somewhere around 5% from memory) of that money as a handling fee. They then hand the remainder of the money given to them by the NZRFU over to the venue operator as a stadium hire fee. The only time that the venue operators receive anywhere near to the $100k required to cover full operating costs for an event is for a Bledisloe Cup or for a Lions test match. Those games have flat fee venue hire rates. Presumably this is done because those games are played at large capacity stadiums with large population densities where higher ticket prices can be absorbed. Ensuring the same level of revenue for the NZRFU. That’s the terms and conditions laid out by the NZRFU for anyone wanting to have a representative rugby match played in their stadium.

  21. Russell Garbutt

    Can you imagine any sane owner of a venue not charging a cost for the hire of such venue that would both cover the cost of hiring the venue and a profit?

    Tell you what – let’s suggest to our dearly beloved Tartan Mafia GOBs that they build a whole heap of really new flash student accommodation in town. They first of all buy up all the existing student flats with borrowed money, then they build all the new student flats with borrowed money and then hire out the flats at a fraction of the interest payments on their loans.

    Would they entertain that? Would they?

    So why should we?

    • Elizabeth

      For all those doubters…
      Otago Chamber of Commerce has commissioned a book to celebrate 150 years of business in Otago (1861-2011), available for purchase, “Tales of the Tartan Mafia”. See advert, today’s ODT page 6.

      • Elizabeth

        Someone I met today who looked and sounded like the mayor, couldn’t see anything wrong with packaging the stadium, ORFU amd Highlanders together, after all, that’s what they do overseas.

  22. Calvin Oaten

    Yes Phil, the NZRFU takes the gate money after leaving, as you say, the percentage with the ORFU. What then does the NZRFU do with it? Does it invest it in DCC bonds or establish a Dunedin charity? No, it takes it to Wellington to use as it deems best. Right there and then the “ECONOMIC BENEFIT” to Dunedin is blown right out of the water. And Malcolm seems to think that he has fooled us all. Unless of course he was fooled as well. I can understand the likes of Cr Acklin, Collins, Bezett, Stevenson and Butcher being suckered, but for the Mayor and his cohorts to play along with the charade is just too sickening for words.

  23. Peter

    Basically, the relationship between the NZRFU and the ORFU seems to be comparable to that of brothel owner and prostitute. The only difference in the equation is that it is the client getting screwed instead of the other way round. Is that what you are saying, boys? Or am I being unkind?

  24. Phil

    I’m sure there’s an economic boom alright, Calvin. If you happen to own one of the pubs in the Octagon. It’s only those unfortunate few people who don’t own pubs in the Octagon who miss out of the riches.

    In effect, the stadium would have to fill the entire permanent seated area for every Highlanders match, just to get within about 30% of breaking even on the operational costs for the day.

  25. Hype O'Thermia

    And unlike museums, libraries etc a stadium is only worth going to see when there is something on. Which is – how often, compared with the above and art gallery and botanic gardens? On an hours per month basis the claim that it is a significant attraction look as delusional as the figures that have been willingly told to the public.

    • Elizabeth

      Malcolm desperately wants you to have pies and beers for lunch there, any day of the week is “fine”…at the stadium. LET THERE BE LUNCH. Because it’s not like we got our running track. And the training pool is a ways off.

  26. Phil

    I’m sure this article has been well circulated in the past, but it was a new one for me. And maybe for others:

    http://www.cato.org/pubs/regulation/regv23n2/coates.pdf

    “The evidence suggests that attracting a professional sports franchise to a city and building that franchise a new stadium or arena will have no effect on the growth rate of real per capita income and may reduce the level of real per capita income in that city.”

  27. Hype O'Thermia

    What does it cost to have the stadium opened for serving pies? Like, if events attracting a few thousand spectators are hugely subsidised, what would be the unsubsidised price [theoretical: we know “unsubsidised” ain’t a known word down yonder part of town] of a steak and cheese pie? What about with potato topping?

  28. Phil

    Here’s a great take on Malcolm’s “Build it and they will come” mantra, from another US study on the value of stadia:

    “Build it and they will leave… Government built and owned stadia transformed teams from owners to renters. It is always easier for a renter to move to get a better deal. So, government officials who advocate taxpayer-funded sports facilities to attract or keep a team virtually ensure that teams will continuing issuing threats and leaving”.

    Unless, of course, you buy the team as well ?

  29. Peter

    If you leave aside the venal side of pushing the stadium, as a motivational factor, and assume the promoters actually really believed in its worth, it makes you wonder why they decided to ignore the massive amount of literature that tells us stadiums are a financial dud as well as ignore their own peer reviews on their stadium, which were not finished.
    All I can think of is that people like Malcolm really believed in his slogans of ‘The Southern Way’ and ‘Build It and They will Come’. Let’s face it he and his top shelf supporters at the university, and elsewhere, are intelligent people, quite capable in the art of reading and comprehending information, weighing up the pros and cons etc.
    I guess you have to then look at the personality of someone like Malcolm Farry and his relationship with those around him and how they respond to him. That is the scary bit. Even a few anti stadium people thought we ‘owed him a debt of gratitude’ and could be talked around by sheer strength of argument.
    Was he the fall guy, as others have suggested, doing the work of others in the shadows? I think they are more like a team, but like any team have their stresses. They have been very good though at papering over their differences for the ‘common good’.
    Well, that’s this morning’s rave!

  30. Russell Garbutt

    Phil, your reference to the article was timely and still very relevant. What would be good would be to require ALL Councillors to read it and then be asked why they think Dunedin is any different.

    Of course there are issues with this suggested course of action. There are no pictures in the article and so some of our Councillors would be severely disadvantaged. Some Councillors also would not have the comprehension skills to understand the content. Yet others would not have the attention span to get to the end of such an article. Another small group may sincerely believe that because the case study is in the USA then somehow it is different. Others may adopt the position that someone else has read it and told them that it was all rubbish and so they don’t need to bother reading it. Others still have other priorities such as dreaming up ways of attending another Council afternoon tea. Many Councillors have all of these attributes.

    However, wouldn’t it be good to test the waters?

  31. Peter

    I think that’s about right, Russell. Those councillors who really can’t be bothered anymore, to think things through properly, should get out for our sakes – and also for themselves. Without getting personal, we all know which ones are completely burnt out. It must be a difficult job, at times, for those who are still conscientious and want to do their best for the city. Even if we don’t agree with some of their decisions we can still respect their dedication to the job. Compassion and patience wears thin, however, with those who are burnt out and don’t even try to function to the best of their ability. So frustrating when they hang in there, and survive the three yearly report card, by playing on their past glories or name recognition. It’d be enough to turn one into some melancholic alcoholic living like that.

  32. Anne Elliot

    Does anyone know what it cost George Street Normal School to use the Stadium for their school show? http://www.odt.co.nz/news/dunedin/190117/pupils-take-stage-stadium

    • Elizabeth

      Wouldn’t like the school to become a victim in all this. That’s just me. Easy enough to ask DVML’s commercial manager for the ‘rate card’ ?

  33. “Unless, of course, you buy the team as well ?”

    But don’t we own them already Phil?

    Sorry, not thinking straight, if we’re bright enough to get a stadium against it all then of course we’re bright enough to own a team twice but at the same time. But that doesn’t make sense…..

  34. Hype O'Thermia

    Did he have Paul Orders with him? Did he keep looking at Mr O to check that he was saying the right things? If so it was definitely the mayor you met.

  35. Phil

    Maybe they do. Although I suspect that Dear Leader has picked up the wrong end of the concern (consciously or not). I would be interested in knowing exactly which of those overseas sporting franchise/stadium packages are owned by local authorities. That’s the issue.

    Frankly, it’s irrelevant what they do in other towns or countries. Dunedin’s model needs to be able to stand on its own. That was always the problem.

    • Elizabeth

      Phil, he said we never thought the stadium would turn a profit…but if it can break even on the operationals… – to paraphrase. I was in shock by this time. Anyway, the ‘sporting franchise/stadium package’ –> “makes sense”. He seemed at sea. I had to run. Somewhere in there I mentioned water.

  36. Phil

    I don’t quite see how he can think the stadium will break even on its operational costs. For 9 months of the year we know that the fixed income will be less than its costs. Not just less, but significantly less. Unless the stadium can be operated for around $5,000 a week, including event costs. For 3/4 of the year. Every year. Capital C Concerts managed to hire the stadium for less than the operating cost. They aren’t going to start paying more for the use of the same facility. Their rate has foolishly now been fixed. So any concert coming via them will not break even. Where exactly is this money going to come from ? Is it coming from Guy Hedderwick and his latest dumbarse grasping at straws scheme to highjack stadium spectators by bringing retail into the stadium during events ? Sorry, Guy, if I want to buy groceries, I’ll go to a grocery store. If I want to watch a football match I don’t want to go to a grocery store. Try and force me to go to a grocery store when I don’t want to, and I’ll stay at home instead.

  37. Phil

    There was a brief, but interesting article in a US quantity surveying magazine a couple of months back. With regard to placing a value onto new stadium developments. I thought it was interesting given that we have just had our new stadium officially valued. Here’s what they have to say in the US: It is almost impossible to financially value a stadium. You can’t value it on the face of how much money someone would pay to buy it as a stadium. Because people don’t buy stadiums. So you can’t compare it against the perceived value of other stadiums. In the same way one can with a house. You can try to value it as what it is worth being sold for another purpose, such as a shopping mall. Minus redevelopment costs. You can try to value it based on the financial and social merits it brings to the town. That value is determined primarily by the success of the team using the stadium. A well performing team will increase the value, a poor performing team will decrease the value of the asset and the community.

    Finally, when considering the value of a publicly funded stadium, you have to deduct the value (financial and emotional) received by the community should that funding have been used elsewhere, and also the value of the stadium site should that land have been used for another purpose. In other words, that money and land hasn’t suddenly appeared. It was already in existence and would have been generating value with or without a stadium. Would the city have been a more attractive prospect for potential residents or investors if the $300 million had been spent fitting solar hot water heating to every home and business in the city ? Or not. Anyway, the difference between those two values, be it positive or negative, is the true value of a publicly funded facility.

    Obvious enough sentiments, but reassuring that we’re not all total idiots here.

  38. Hype O'Thermia

    Phil, this’ll be why a block of land zoned commercial in an area that isn’t experiencing growth can be worth peanuts to the seller. Then when it has been – surprise! amazement! – decided that a stadium MUST be built there, the person who bought it for peanuts has the delicious (and totally unexpected) good fortune to find there is a buyer willing to pay a nicely high price for it. Don’t some people have the luckiest coincidences?

  39. Calvin Oaten

    Phil, in the case of ‘our stadium’, I suspect the value arrived at was a mixture of the known costs of the bolts and nails (at that point in time) and the figure which was suggested by the owner would be advantageous to his position. Pretty much as the Carisbrook valuation was arrived at. In the end, in both cases, it is of no relevance whatsoever, simply serves to illustrate just how far some professionals will go to curry favour with their clients. Corruption? Never mention the word.

  40. Russell Garbutt

    Hype O’Thermia your cynicism is so well-founded.

    Apart from those that were occupying the land for commercial purposes – like Fonterra – so much of that land was fortuitously purchased by people who really had no interest or desire to develop it at all. All they had to do was wait until the pesky process of ensuring that their investment decisions were well-founded. I mean, who on earth would have thought that a hotel owner (just to use this as an example) would suddenly want to buy up some disused wool stores? What a surprise that must have been when they were suddenly worth three times the going rate and there was a cash buyer. Or a disused milk treatment plant that turned out to look like a piss in the bucket?

    Again, until the citizens of this town can trust those within the DCC, DCHL, DVML, DVL and most of all that wonderful, prosperous private trust, the CST, by having a fully independent, financial forensic audit of all the shennagins that has gone on with the GOBs, the suspicion will be that a lot of money has been moved from our pockets into those of the already well-endowed.

    A pox on them I say!

  41. Peter

    Funny how Mr Piss In The Bucket, John Farry, didn’t see it in his heart to give that small change of $1.6m back to the ratepayers. It would certainly help to pay for a sound system/curtains for the stadium. It would have also paid for the $1.4m for temporary seating in the stadium with a couple of hundred thousand left for private funding.
    Such a gesture MAY go some way in restoring the diminished Farry name, in the wider Dunedin area, beyond the Dunedin Club.

  42. amanda kennedy

    Poor Cull. Having to keep on selling a dud stadium to us so that certain ‘businessmen’ who pushed the stadium costs onto the people of Dunedin can keep on pretending to be ‘Visionaries’ and not, oh I don’t know, financial nincompoops.

  43. JimmyJones

    To cling to the hope that the stadium will break-even on its operational costs is sad, desperate and intended to mislead the average renter/ratepayer. I say mislead because the term “break-even” by itself is usually not overly concerning, but in this case it should be. To “break even on its operational costs” means that we are being asked to ignore the two biggest stadium costs:
    – interest on total DCC+DVL stadium debt $12.8 million/yr ($160m x 8.00%) (interest rate from Annual Plan page 148)
    – depreciation: about $5.0 million/yr

    In this case operational break-even means an annual subsidy of $17.8 million/yr (equivalent to $235 per ratepayer).
    Of course the total post-construction debt is likely to have already exceeded $160m and annual costs will increase if our dim-witted councilors agree to more rugby subsidies for the ORFU and Highlanders.

    All I want for Christmas is an Audit NZ Independent Review of the stadium decision-making and subsequent cover-up. A few resignations and/or prosecutions would be nice also.

    • Elizabeth

      “We have always said we wanted to go down to the stadium with a clean slate and no hangover from Carisbrook.” -Wayne Graham

      ### ODT Online Wed, 25 Jan 2012
      ORFU financial position ‘very tender’
      By Steve Hepburn
      Otago Rugby Football Union chairman Wayne Graham admits the union’s financial situation is “tender” but a full picture will not be known for another couple of weeks. The ORFU’s annual meeting is scheduled for next month and Graham confirmed the union would report a loss – “and we can’t afford a loss” – but he could not say how much it would be as the financial accounts had not been finalised.
      Read more

      Rogues and thieves are still struggling, boo.

  44. Hype O'Thermia

    Prosecutions would be excellent. They can’t turn the clock back but given that the perps are not your average impulse-driven bozos the knowledge that prosecution DOES follow fiddles and rorts in real life would have a profound effect throughout NZ, betcha last unrorted dollar.

  45. “All I want for Christmas is an Audit NZ Independent Review of the stadium decision-making and subsequent cover-up. A few resignations and/or prosecutions would be nice also.”

    Bugger the resignations, I want to see the arses in the pen. And no home D, hard time (if you can call it that) and long, after they are asset stripped…

  46. Russell Garbutt

    An Audit NZ investigation? A useless, ineffective body if ever there was one with as much to conceal as the pillagers of the ratepayers – the tartan mafia GOBs.

    No, what is needed is a full independent forensic financial investigation with the power to subpoena the DCC, DCHL, DVL, DVML and Farry’s private Trust, the CST. Make sure the rest of the leeches are included including all of pro rugby and the Centre for Excellence in Amateur Sport. Then put up a few gibbets in the Octagon.

    Only by taking this action will the truth be revealed.

  47. Anonymous

    Penny drops.
    Darren Burden of DVML is on the board of Otago United.
    Major sponsor of Otago United is Forsyth Barr.
    Crowd today was about 200-300.

    • Elizabeth

      Community group use of Dunedin Town Hall meeting rooms unaffordable since the redevelopment of the facilities, and completion of the competing stadium facilities…and professional rugby and the HPSNZ fraternity get off with hundreds of millions of dollars in ratepayer funds, gifted by DCC!

      ### ODT Online Sat, 4 Feb 2012
      DVML: groups to have access to venues
      By David Loughrey
      The head of the company in charge of Forsyth Barr Stadium and other city venues says that community groups will be catered for at its facilities, despite a $100,000 fund to help them having been deferred. But the future of community groups’ use of the popular Skeggs Gallery in the Municipal Chambers has not been decided.
      Read more

      DVML has been given the responsibility of running the stadium, the Dunedin Centre, Municipal Chambers and town hall complex, and the Edgar Centre.

      Dunedin Venues Management Ltd hire costs:
      – Skeggs Gallery (Municipal Chambers, holds 100 people): $400 a day, $250 a half-day.
      – Smaller suite (Forsyth Barr Stadium, holds 69 people): $300 a day.
      – Lounge suite (Forsyth Barr Stadium, holds 700 people): More than $1000 a day.

      • Elizabeth

        ### ODT Online Sat, 4 Feb 2012
        Build-up for Orientation under way
        By Matthew Haggart
        Event managers for this month’s University of Otago Orientation are finalising expanded plans for the traditional student welcome party. This year’s Orientation has a more inclusive approach between the event’s traditional planners, the Otago University Students’ Association and new partners the University of Otago and Dunedin City Council.

        Dubbed “Orientadium 2012”, the February 20-25 roster of activities will be centred around several concerts being held for the first-time at the multi-purpose Forsyth Barr Stadium.

        Read more

  48. Hype O'Thermia

    Daisy chains. Interpret the expression however seems appropriate.

  49. Anonymous

    Where is the money?
    $6M went to pay off the BNZ loan.
    Where’s the other $1M?

  50. Peter

    Wayne Graham’s LJ Hooker firm has a slogan.’Nobody does It Better.’ True or False in terms of the ORFU? True – if it means not being able to manage their financial affairs and keep out of debt.

  51. amanda kennedy

    “Tender”? I love that. Quick pass the smelling salts for the poor soft little dears. When will these gutless wonders wake up and realise no-one is fooled? Many now see them as nothing but greedy fat cats wanting nice fat salaries with a love of money and not rugby. They use rugby to line their own pockets it seems at the citizens of Dunedin expense. Poor professional rugby is going down the drain in this town.

  52. amanda kennedy

    “They” is the ORFU. The greedy, greedy ORFU.

  53. Hype O'Thermia

    Can’t get much epicker than that. I’m looking forward to all the donations and the proceeds from the sausage sizzle being put towards the Fubar’s debts.

  54. Phil

    No worries, Dave has it sorted. According to our Mayor, if sections of society want new things, then they have to help to pay for them. It’s only fair. If the people of Mosgiel want a new swimming pool, then they have to find the money. If the cyclists want cycleways, then they have to find the money. If the residents of South Dunedin want a new library, then they have to find the money.

    If the rugby players of Dunedin want a new stadium, then they ………….

    Told you Dave would fix everything.

  55. Anonymous

    “less than responsible decisions” made by the Board of an Incorporated Society? There’s an Act for that.

  56. Hype O'Thermia

    There’s an equal and opposite In-Act-ion which those punters who follow form expect to see.

  57. Phil

    Prior to the redevelopment, Skeggs Gallery was owned and managed by City Property, a DCC department. They offered use of the venue, free of charge, to fellow DCC departments. City Property no longer owns Skeggs Gallery. In fact, DCC no longer owns Skeggs Gallery. So why is it that DCC departments, if I read the article correctly, will continue to enjoy free use of the venue ? They should be treated exactly the same as any other group wishing to hire the room. DCC departments are the dominant users of the room, and it appears now that their operating costs for the venue will be subsidised by the few non DCC groups who wish to use the venue. I thought that DCC was now all about User Pays ? Or is this the latest attempt to cut DCC costs by getting ratepayers to pay for DCC internal activities ? Cunning move.

    • Elizabeth

      ### ODT Online Mon, 6 Feb 2012
      Venue subsidy plan
      By Rebecca Fox
      It will cost the Dunedin City Council at least $20,000 to provide community groups with a similar level of access to facilities, such as the Skeggs Gallery, as they had before the recent change of management. The Dunedin City Council recently decided against including $100,000 in its annual plan to subsidise groups using former council-controlled facilities now run by Dunedin Venues Management Limited (DVML). Council governance manager Sandy Graham has recommended the finance, strategy and development committee consider allocating additional funding to the mayor’s discretionary fund to enable community access to DVML and council meeting rooms, ring-fencing it for venue hire.
      Read more

      Report – FSD – 09/02/2012 (PDF, 96.9 KB)
      Community Access to DVML Facilities

  58. If DVML is responsible for running the Dunedin Centre, Municipal Chambers and Town Hall complex and the Edgar Centre, does DVML get the income or are they paid a management fee?

  59. Anonymous

    Dunedin City Council won’t pay for the use of meeting rooms managed by DVML because that would just create a money-go-round (DCC pays DVML, DVML pays DVL, DVL pays DCC) and we don’t do that any longer (quoth Athol Stephens). Overall, this may lead to modest DCC savings as there is no need for a Deputy Executive Assistant Liaison Officer (full time, benefits, Honours graduate, Grade 5) to manage the calendar.

    I note the delicious irony that the meeting room named after Sir Clifford now comes at a cost to the ratepayers. As indeed, did Sir Clifford.

  60. Hype O'Thermia

    Without a money-go-round how does Athol Stephens intend to do the “now you see it, now you don’t” tricks that leave the audience gasping in wonder? Transparency with mirrors?

  61. Looks like a money-go-round to me: ratepayers pay money to the Council so that the Council can give it to DVML. Maybe money-go-rounds are ok when DVML is the recipient.
    The report talks about “transfer of ownership”. What ownership has been transferred, and how has it been paid for?

  62. And who owns it?

    This is getting more bizarre all the time. So we as ratepayers pay for X, then use it. After whatever an amount of time council does a paper shuffle, we don’t seem to own it any more and have to pay to use it.
    Yep, perfect sense.

  63. Calvin Oaten

    The Skeggs Gallery, last time I saw it was in the Municipal Building. As I also understand it, that building was built and owned by the DCC, and by extension the citizens. Have they established stratified titles in that building? If so, how come there has been no public notification of that intent? Indeed, is there any documentation of council approving of that process? If the answer is no to all of those questions, then how can part of the whole be said to be sold? Even if it is ostensibly to a CCO. Something very peculiar seems to be going on here, and it does not look to be to the citizens’ advantage. And they think there is disfunction in Christchurch.

  64. Anonymous

    Greed is a terrible injustice. It is like serious gambling. Once you have lost all money and got into serious debt, then you start stealing and selling other peoples’ property. This is what the corrupt and corrupted within the Dunedin City Council and Otago Regional Council are doing to you, your children and their children. Why are they allowed to continue gutting the wealth, assets and future of Dunedin? Why doesn’t the government care? Who wins when we all lose? Those are frightening questions. Debt is fast becoming the new shackles for society.

  65. Anonymous

    Hype O’Thermia: Don’t you think the call for forensic accounting should be made louder? A short snappy phrase suitable for small stickers that can be put in various places…

    Elizabeth: …Stickers, chalked pavements, talking heads, painted windows, signs, banners on houses, painted sheets…

    Was a phrase suggested for the independent audit?

    DCC IS CORRUPT was an interesting message but a universal call for help needs to be out there and seeking the wider public, including subscribers of the ODT. (But mind the CCTV cameras in the Octagon, surely designed to deter ratepayers from giving the stadium councillors a hard time of it at their next election.)

    • Elizabeth

      The independent audit / financial investigation can only occur if the Council agrees, by taking a vote, to undertake it. Otherwise there’s no access to any books for anybody. Sad but true. The Minister of Local Government, however, has right of special powers. Zoning in on Nick Smith with the best information available is the only way.

      To be noticed, any call for help will need strategised administration, staged events, pre-prepared press statements, media focus, and a clear view of the law. That requires leadership – stickering is more like chicken pox, it’s visible, itchy, painful, communicable, but rarely serious.

      Concerned Dunedin citizens have to get deadly serious. And coordinated. Fast. Why Dunedin hasn’t got an extremely active Residents and Ratepayers association I will never know.

  66. Hype O'Thermia

    2-stage: thorough spread of XYZ is corrupt stickers followed by (underneath or crosswise over them if 1st ones are still there, to indicate this is a follow-up) then [snappy phrase] call for audit.

  67. Anonymous

    Like Christchurch, we need someone who is prepared to rally people. They would be bringing themselves to the public forefront and potentially into the firing line of stakeholders. Unlike Christchurch, the person will probably not receive supportive reporting from local media. Assume quite the opposite to be safe. So it’s a tough call and broad shoulders would be needed. But maybe there is a stadium councillor harbouring a change of conscience and prepared to stand up and do the right thing?

    • Elizabeth

      All councillors are compromised. And probably have gone too far down the track where liability lies.

  68. Hype O'Thermia

    What about the candidates who didn’t get in? There were some able-looking characters amongst them.

  69. Hype O'Thermia

    Stickering isn’t an end, it’s a means of getting people’s ears and eyes open, preparing them to be part of the subsequent action.

  70. Anonymous

    Good call. A lot of this blog gets forwarded around so likely some of those will pick up on it. At the last election those stadium councillors who were public about their stand were thrown out. Those who sat quietly on their support snuck back in (it was so close on Cr Paul Hudson). Since then many more people have become further disillusioned with this council and its leadership. That is a dream opportunity for a potential candidate looking to get their teeth stuck into a very public campaign. But it must be genuine if they want the votes at the end. Ratepayers are sick of the current talking heads and their hollow promises.

  71. Anonymous

    Round stickers. Put them on the crosswalk buttons. Label them “Press for Change”

  72. Phil

    Hopefully the new policy of doing away with the DCC “Money Go Round” game will apply throughout the entire organisation. The IT department charges each DCC employee $1,500 per month for the lease of a standard PC. That’s nearly $20k a year, for a standard office computer. Can you even buy a computer today for $20k?

    Building Control charges DCC departments for processing internal building consents. Those departments in turn pay Building Control from ratepayer income.

    City Property charges other DCC departments for work in preparing leases and the buying or selling of property on behalf.

    CitiFleet bills each department every month for the use of their vehicles.

    The staff involved in looking after Community Housing (there’s about 6 in total, including maintenance staff) are funded entirely by rental revenue gathered from the city’s pensioners. The level of costs determines the cost of the rent. Remember the $20k annual charge per PC from the IT department and the charging for bathroom renovation building consents from Building Control ?

    The Civic Centre building is rented by the DCC, to DCC departments, at standard CBD rental rates. Where does the money for that rental profit come from ?

    The list goes on.

  73. 20G a year for PC (and support I’ll assume)?? It’s taken me five minutes to pick myself back up off the floor after reading that. Not used to laughing then crying this much.

    I’ll do it for half and throw in a LT each….

  74. Phil

    The proverbial Pig’s Back, that little lark. A department is more than welcome to buy their own computers. For about a quarter of the Year One rental price including a copy of MS Office. No worries there. What they can’t do, is connect to the DCC network with that computer. Nope, if you want to talk to anyone else in the DCC, you need to rent a computer from the IT department. The type of computer one has is an extremely complicated and highly technical selection process, hence the need for the 20 grand fee every year. For example, a staff member who earns over a certain salary level must (as determined by the IT dept) have a larger and more expensive computer screen than those staff members who don’t earn as much money. Otherwise how would anyone know that they were more important ?

    As I recall, the computers are on a 3 year cycle, meaning that each employee receives a brand new PC every 3 years. Whether they want one or not. Apparently computers die after 3 years. Someone forgot to tell my 6 year old home PC about that. And new computers are more expensive than older computers (which cost $60,000 over the 3 years), so clearly cost more to rent.

  75. And that DCC network. Can I assume we also paid for that?

  76. Or should I be asking, what did we pay for that so we could rent it to ourselves….

  77. Anonymous

    That is incredible Phil. I don’t know any medium or large size business that would get away with it. Clearly those costs are being milked from the ratepayer otherwise it would not be financially viable. This is a very public scam.

    ODT news tip:
    IT support and user’s computer charged $20K per year per employee.

  78. Mike

    I’m in two minds here – this kind of internal cost recovery isn’t that unusual in big companies; it distributes overhead costs to the departments that are supposed to be making money.

    On the other hand this is the neoliberal slippery slope towards outsourcing- if I worked in that IT dept I’d be polishing my CV.

  79. This kind of thing also made more sense 10 years ago when a new PC could conceivably cost $6000, and require more maintenance, whereas now they are a more throwaway commodity. I remember a few years ago being shocked at a charitable organisation being locked into annual leases that as far as I could see would buy a new computer each and every year.
    Further, while full cost recovery doesn’t shock me, $1500 a month seems extraordinary.

  80. {Your comment has been relocated to another thread. -Eds}

  81. Anonymous

    Whatever else in this thread but this: Mr Davies sure is having a LONG conversation…