Does the insolvent ORFU deserve any more community support?

Where are Mr Farry and friends when you really need them? Dunedin City Council shouldn’t touch this one with a barge pole, but that sentiment is a little too late.

### ODT Online Fri, 17 Feb 2012
ORFU is teetering but no bail-out
By Steve Hepburn
The Otago Rugby Football Union is set to post a loss of “several hundred thousand dollars” and admits it cannot pay creditors. It is calling on the support of the community to get out of a “very serious position”, and says a bail-out from the national body is not an option.
Read more

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[partial clarification]
“Mr Graham confirmed that part of the $7 million received from the Dunedin City Council for the sale of Carisbrook went to pay a loan for houses owned by the union. The union had bought houses around Carisbrook years ago as ground expansion was proposed. It formed a trust to own the houses. When Carisbrook was sold in August 2009, $1 million of the sale price was diverted to the trust to pay off loans on the houses.” -ODT

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Related Posts and Comments:
15.2.12 Carisbrook sale
11.2.12 Where’s this going, ODT?
14.12.11 Davies “in the middle of a conversation” – how to fudge DVML, DCC…
2.12.11 DVML gets into bed with ORFU
13.10.11 MAD Classics #26 – You’re a crook or a businessman?
31.5.11 Controlled funding pies and the suit-wearers for professional sport

Posted by Elizabeth Kerr

257 Comments

Filed under DCC, DVL, DVML, Economics, Media, ORFU, People, Politics, Project management, Property, Site, Sport, Stadiums

257 responses to “Does the insolvent ORFU deserve any more community support?

  1. Peter

    Great leading question to be answered soooo easily. No. ‘The community’ has already more than supported these fools. It is time ‘they packed up their troubles in an old kit bag and smile, smile, smile.’
    Such naysayers. They can get THEMSELVES out of their pickle. They just have to be ‘positive’.

    (Even Graham lets on that ‘maybe’ the stadium wasn’t such a good idea, but, of course, ‘we have it now’.)

  2. Rob Hamlin

    Perhaps I am wrong, but I thought that the DCC had guaranteed the ORFU’s loans in a series of ‘public excluded’ deals sometime in the last couple of years? Can anybody else recall any details that were made public? If my memory is correct, then this means that the ORFU’s debts are our debts – the banks, and maybe other lenders and off balance sheet entitites (eg creditors on overborrowed houses owned by previously unheard of subsidiary trusts) that we perhaps don’t yet know about will simply turn to the DCC. It’s an interesting legal question – if you offer ‘leaky’ guarantees to someone who subsequently offers guarantees to other entities, can you be made responsible for those additional loans too? I don’t know: But I have a nasty feeling that I might be about to find out.

    This is not taking into account the $40 million plus ‘poison pill’ of Farry’s ‘private funding’ that is apparently contingent upon the ORFU’s continued presence within the new stadium over the next ten years.

    Crisis? There is no serious crisis at the ORFU from what I can see. They have effective drawing rights on our rates bills of $40 million plus already, courtesy of the ‘private funding’ arrangments, and possibly quite a bit more besides if my recall of the guarantees is correct.

    • Elizabeth

      Rob – this is what Richard Walls said at What if?, without closing his own speech marks – a search at DCC (or a LGOIMA request) would provide the document he is citing from.

      Richard
      Submitted on 2010/04/23 at 2:11 pm

      That the ORFU would sell Carisbrook to either the DCC or a Trust has been the crucial part of every proposal since the original Carisbrook WP reported in 2004. And since what was then Awatea Street came into play, it has been part of every major resolution.

      On the question of valuations. I am surprised you bring that up given that was settled back on ODT Online in December last. Your opinions, Russell, then proved to be (well let’s say) “just that” although I am tempted to call them “own facts”.

      Your statement that “DCC decided to borrow $7m to purchase the property package from the ORFU is incorrect”. Council only borrowed $5m.

      Your statement that “DCC (then) guarantees to cover ORFU seasonal losses up to a significant amount” is also incorrect. The DCC “agreed to guarantee THE INTEREST on the ORFU’s seasonal debt for three years from the settlement date of 11 August 2009. The maximum seasonal debt covered by the agreement is up to $1.2 million.

  3. Russell Garbutt

    How long, how long, have so many of us been pointing out the inevitability of what is now apparent even to the most idiotic of the supporters of the whole stadium project?

    The whole project has been predicated upon professional rugby being able to financially support a stadium built for rugby. The most cursory of examinations led inevitably to the view that it was a non-runner.

    But we have got it. How?

    There will no doubt be a book written on the whole subject, but suffice to say that when Harland told everyone that the ORFU would be a strong anchor tenant of the new stadium, he was either telling porkies, or was so incompetent that he couldn’t see through what he might have been told. The ORFU are not an anchor tenant of the new stadium – they can’t even afford to pay the rent of their offices judging by today’s story. I suggest that they never could have been and the audited accounts of the Union showed that they never could have been. If we could see that then, why couldn’t he?

    Harland said that the City needed Carisbrook because the City had an urgent need for industrial land. Crap. The City (you and I) borrowed the $7m to buy Carisbrook and after a nonsensical charade of “consulting the community” about what to do with the purchase, no sign of any sale is apparent, and the City (you and I) are paying thousands and thousands of interest on the loan that the City took out to pay the ORFU in the first place.

    But Harland and his ilk were answerable to the people that we put in to the DCC and the ORC to wisely govern the City and the region and it is those that are ultimately responsible. Chin, Brown, the late Walls, Guest, Bezett, Weatherall, Noone, Collins, Acklin, Hudson, and Cairns over at the ORC are those that rammed this thing through. They had the benefit of many many submissions pointing out the folly of their ways and individually and collectively they chose to ignore what they were being told and chose to go along with the Tartan Mafia. Who was pulling the strings behind this shower of incompetence? We all have our ideas, but I’m afraid that until there is a full investigation of all matters concerning the DCC and all its entitites including the CST, that some names will remain obscure.

    The over-riding message that Dave Cull and this Council must get loud and clear is that there will be a ratepayer revolt if one more cent of ratepayer money heads in the direction of professional rugby.

    The ORFU needs to be declared bankrupt and if amateur rugby – which I support – sets up a new organisation that has nothing to do with any professional business, then I would think it would be the best thing for amateur rugby. If I was a member of a rugby club, I’d be asking the ORFU a couple of tough questions on the whole issue of this mysterious Trust that seems to have gobbled $1m of my money.

    Lastly, I believe that enough information now exists for some serious questions to be asked on the positions taken in the High Court and elsewhere with regard to the whole stadium project, the City debt, the relationships with key rugby and other business people. No doubt in my mind that there is a whole lot of very nasty things in the woodshed.

    • Elizabeth

      Citizens must demand of the Dunedin City Council its position on this growing fiasco, now not later. The damage is done but the absolute requirement for limiting, by the Council, isn’t over by a long way in the citizens’ interest.

      PS. Mr Cull, I think it’s true to say your stated hope to me, just prior to Christmas 2011, that stadium operations would break even was completely illogical in the best and worst of times. I thought it before, I thought it then, and I think it now.

  4. Phil

    And now the ORFU owns Dunedin’s arse. Without the rugby team, the stadium collapses. If the DCC wants the stadium, then they’re going to have to pay. Again. Council has totally lost control of this facility now.

  5. Hype O'Thermia

    Plenty now. What’s up? Dealing with the volume of responses – strangely, not calling for the ORFU to be allowed to enjoy the limp gormless beneficiary lifestyle at our expense.

  6. Russell Garbutt

    I know a response I posted there round 7am this morning has still not made it, but I have just been interviewed by National Radio on the subject – probably for Checkpoint. Seems like Radio NZ can’t track down Wayne Graham or anyone at the ORFU and there is a recorded message on the Union’s number along the lines of they no longer have phones until next week. Maybe one of their creditors is Telecom?

  7. Peter

    I’ve also heard a rumour the ORFU owes the ODT $50,000 – possibly credit given by their over zealous, rugby mad advertising manager. A case of divine justice for placing so much faith in these fools who talk tough, achieve little, and use shallow phrases like ‘moving on’. (Hard when you don’t know where you are moving to – except likely bankruptcy.) Rugby Love is blind.

  8. Anonymous

    Nothing short of deserving, that’s for sure. But it will probably be written off against the $70K given by ratepayers to Allied Press for its 150th birthday bash – courtesy of stadium Cr Syd Brown. The manager might even go so far as to fudge figures to look like a $20K profit when the financial report finally lands on Julian’s desk.

  9. Mike

    It’s an interesting conundrum, there’s millions of dollars worth of creditors, I bet no-one wants to be the first to call in the receivers, just think of the bad PR!

    But all it takes is one person and there will be a rush for the door – if they’re smart the ORFU are paying non-locals’ bills first, people who don’t care so much about their PR in Otago

    • Elizabeth

      As usual, What if? contributors are a wondrous mine of information, sometimes at the most subtle level. Lots of cards shuffling under the DCC/ORFU/DVML (et al) table in February, methinks.

  10. amanda kennedy

    Don’t worry Peter, these corporate buffoons will just go to Cr Hudson for a ratefund handout and then pay old Smith the $50,000. No problem.

    • Elizabeth

      Another blip of silence at ODT Online – can’t tell me they haven’t received a lot of comments since the last bunch published just before midday. Thorniness is a publisher’s delight normally…

  11. Mike

    they published mine not long after I wrote them (I’m a bit time shifted at the moment so I’m starting late) – I’ve always assumed that it’s someone’s second job and they do it when they’re a bit slow working on the paper – Saturday is of course the big edition

  12. Lindsay

    No comments posted on the ODT online site since 1:28 pm including one I posted at 7:00 this morning. How long does it take to skim through a paragraph to check for language or defamatory statements. And why the need to abridge so many posts, it is not as though they are going to run out of space.
    The online edition risks becoming as irrelevant as the printed version.

    Dave Cull needs to state categorically (among other things) that the DCC will not allow one cent more to pass to the ORFU in any guise, either directly or through one of the Council’s trading companies.
    Given that DVML doesn’t seem to be answerable to the Council, that would appear unlikely.

  13. amanda kennedy

    The problem for Cull is who will back him up? Hudson and co.? Greater Dunedin? Dunedin people? Who will stand strong at Cull’s back? No-one. I don’t blame him for keeping his mouth shut and bowing down to the stakeholders.

    • Elizabeth

      I think Dave Cull is relatively immaterial given the extent of the activities and debt the Dunedin City Council is responsible for in the last ten years. He may get chewed up and spat out. Bad luck.

  14. Lindsay

    The trouble with trying to please everybody is that you end up pleasing nobody!

  15. Mike

    Lindsay – if they do delay putting up what you had to say (maybe someone had to ask their boss about the content) it will still show up chronologically (ie not always on the ‘front page’)

    I also suspect there’s a bug or two in the ODT submission pages – I don’t think it’s ever a good idea to use the back button when you’re submitting, also don’t start another until after you see the full completion of a previous submission

    (I also wish they’d fix it so my browser’s spell checker works again)

  16. Russell Garbutt

    I understand that my letter submitted to the ODT close on a month ago which asked Paul Orders to supply the total cost of the stadium (direct and indirect) as well as asking him if he would support an independent audit of all the DCC entities will be published tomorrow morning along with Mr Order’s response.

    The DCC used up all their normal time to respond then said after a reminder that they were awaiting sign off. Bet if the dear old Tartan Mafia made a request of the DCC it would get much more timely attention. Nonetheless it will be interesting to see what Mr Orders has to say….any prior suppositions?

    I note that Checkpoint didn’t run any revealing stories on the plight of the ORFU. Maybe they couldn’t get hold of Mr Graham and his crowd who were probably away watching the Highlanders in their latest endeavours. Pays to be unavailable at times when serious questions need to be answered I suppose.

    • Elizabeth

      Russell – I admit I’m a little afeared… what on earth will they print? More ridiculous side-steps and obfuscation, or will Mr Orders come out shining for The People ? He better not rely solely on the stuff Athol’s been feeding him, or Chinese whispers from the Chair of Finance, Strategy and Development.

      RNZ may use your interview for Monday’s Morning Report – no statements from the rugger boys is always going to look bad, silence will not be their virtue, but neither will self-publishing the true extent of their debt. Hog tied.

  17. Phil

    Progress Payments were made to Hawkins Construction each month for work completed and materials pre-purchased. Practical Completion was back in July or August of last year. The only outstanding payments left to be made are those pertaining to the partial repayment of retentions during the defects and liabilities period following Practical Completion. The bottom line of the Progress Payment form gives the current total cost to date, inclusive of any approved variations over the GMP and any retentions witheld. Can someone not open the folder, look at the bottom of the last progress payment form sent to Hawkins Construction and tell us what the final approved contract value for the physical construction of the stadium was ? That would at least be a start. People do this stuff every day. It’s not global economics here.

  18. Peter

    I accept that the ODT historically may not like many people in the ‘anti stadium brigade’, but hopefully the sincerity of these people is now acknowledged and that, at long last, they start to recognise the false dawn that is the stadium, which was supposed to bring economic nirvana to Dunedin/Otago. The owners might, just might, now recognise that the money that this sucker draws out of the community is less money for other businesses (aside from food and accommodation joints), including those buying their paper. Their slavish indoctrination of all things stadium does the paper no credit among its readers or potential readers. It’s time for them to be aware of the false prophets like Farry and Co, who are so imbued with their own bullshit. Pull the plug, ODT, on such characters. Be bold. Stick the boot into the charlatans.
    For a new beginning, make it clear that the ORFU should not be the recipient of any more public largesse. When you have dickheads there, who think it is cool to use helicopters for the ‘wow factor’, you’ll never get any commitment from them to achieve financial solvency.

  19. Calvin Oaten

    Whew!! What a day. I have read and watched speechless all day, not wishing to put my pennyworth in for starters. So what now? Russell, your blistering posting must surely get some serious ‘damage control’ actions going at DVML, the DCC and of course the whole ‘cabal’ of people who have pushed this thing to what is now the breaking point. Malcolm -on time,on budget- Farry, just has to be No1 on the hit list, followed by such notorieties as Judge Hansen, ex mayor Peter Chin, Jim Harland and Athol Stephens. Face it, one only had to be at the 2004 meeting when the MWH report into the ORFU was tabled to see that what has finally transpired was inevitable. It was technically insolvent then and since has only compounded the situation, aided and abetted by an ongoing programme of idiotic decisions by DCC Councillors over all protestations of the futility of it all. Even the efforts of the STS group was foiled in a court of law by what is now pretty much proven to be perjury and misrepresentation of facts of the worst order. There just has to be an enquiry of the whole saga, and people brought to account. Anything less would be an insult to the citizens. Even then, they are left carrying the results. I guess it is now just a matter of time till the ‘Highlanders’ franchise puts their hand up saying ‘we are broke as well’. That then will be that for the city, and it will be gently mismanaged into a backwater of irrelevancy. Oh what a good time not to be connected to City Hall in any way.

  20. JimmyJones

    Mike, at the ODT my spell-checker only works if I select “disable rich-text” (link just below the text box) – try that.

    Athol Stephens is the information gate-keeper. All requests for stadium information to Dave Cull and Paul Orders seem to be handled by Athol. Any question, like “how much has it cost so far” and “what is the estimated total cost” gets the same answer: “we don’t know the cost yet because all the costs are not yet available”. Even Cr Jinty was given this reply; she didn’t seem to realize that she was being fobbed-off. The estimated cost has been known for years; and has been carefully adjusted upwards from time to time.

    I think construction is still continuing, so it will be a long time until the final cost is known, but the estimated cost is known right now – but they aren’t telling. Don’t expect Allied Press to help.

  21. Rob Hamlin

    The ODT have given me a regular opinion column on their webpage – a bit like Chinnwag. Here is the first one on Elton’s economic impact:

    http://www.odt.co.nz/blogs/rob-hamlin/198166/eltons-economic-impact-how-odd-all-rosy

  22. Phil

    Fair enough if the contract has not yet been completed. But that still doesn’t negate the publishing of the total cost to date. It will be only minor fit out work remaining, if anything. I’m not going to be worried if they have to estimate the final value of a few square metres of ceiling paint.

  23. JimmyJones

    I agree Phil. There is also no reason why we can’t be told the most recent estimate of the final cost. Because most of the costs are known, the estimate should be quite accurate, except that it is very unlikely to include all costs like SH88 and the loss on the sale of Carisbrook.

  24. Russell Garbutt

    Well, there we go.

    Seems from Mr Order’s brief response to some pretty specific questions in my very delayed letter in the ODT today that the answers he is going to rely upon are from a committee of the CST. Sort of like asking the turkey about Christmas really.

    Clear to me that while Mr Orders may have taken about 3 weeks to come up with this response that it is less than satisfactory and that most people, if they read my letter, will be left a little disappointed in that he seems to have been stifled by Athol.

    Audit NZ wouldn’t know what was going on because, like most auditors, they rely on what they are being presented with and certainly rely on the client to explain to them any difficulties. We have all seen how ineffective they are and the truth and reality will not be revealed until Athol and the rest of the smoke and mirror’s merchants are removed from the scene.

    Overall – a big pity that Paul Orders seems to have crumpled.

    I think that it would probably be most helpful if a letter was submitted to the ODT in response to Mr Order’s non-reply detailing what most people understand to be some of the costs and perhaps Mike can remind us here of what that running tiotal is. One thing is for sure Farry will do all in his power to ensure that the costs are minimised – his, and his mates will want to distance themselves from the real cost of the project. The ODT are usually these days not accepting letters from people who have had letters “recently” published.

    However, I believe that there is enough “nothing” in Mr Order’s response to be ringing some bells at the ODT. Surely a reporter can see that there is a good story in here?

    • Elizabeth

      ### rnz.co.nz Sat 18 Feb 2012 Updated at 6:06 am
      News
      Otago Rugby Union rescue by council unlikely
      Dunedin Mayor Dave Cull says Dunedin City Council is unlikely to bail out the Otago Rugby Union. The Otago Daily Times reported on Friday the union can’t pay its creditors and it’s preparing to post another loss. The union has already lost a total of $4 million over the past five years. Union chairman Wayne Graham has said a bailout from the New Zealand Rugby Union is not an option and that they need the full support from the community to help save Otago rugby. Mr Cull says while the council has not yet been asked for assistance, there would not be a great inclination to help. He says past councils supported the union on a number of occasions and it would need convincing to do it again.
      RNZ Link

    • Elizabeth

      Russell, this is appalling handling by the DCC’s chief executive. I’m sure he knows better than this; he’s new, young, has arrived at a hell hole of a council, and there’s a lot at stake. Paul Orders’ reply is obsequious, he loses credibility immediately.

      So many people are wanting the same information! What does DCC have to hide?

      Without a comprehensive independent forensic audit – across all the entities, avenues and individuals for investigation that requires – there can be no confidence in this council whatsoever. Gone disappeared.

      The general public shouldn’t have to wait until the end of March 2012 for another dose of scrambled, shoved and dissembling numbers from DCC/CST/DVML “crutch” Mr Athol Stephens.

      DCC can release all detail of the “special audit” now; and anything else it cares to “share”, as Phil logically advises. What was that special audit about? Which professional(s) at Audit New Zealand undertook the work and according to whose brief?

      Another LGOIMA request to make.

      Oh. I spotted a wee typo in Mr Orders’ reply and that is the ability to save his professional reputation, when being sat on.

  25. Anonymous

    That is not a “no” but well considered political speak. We are going to bail them out based on that response. Stadium councillors Syd Brown and Paul Hudson already need to be thrown out before the next election and before they can do any further harm. It looks like the same concern is becoming clearer by the month with the new mayor.

    PROTECT THE FUTURE OF DUNEDIN
    NO TO PROFESSIONAL RUGBY
    NO TO STAKEHOLDERS
    YES TO DCC AUDIT

  26. Hype O'Thermia

    The radio news report said “indirect speech” that the Mayor of Dunedin Dave Cull had indicated […] unless changes were made [by ORFU]. “Changes” undefined: I am sure they were left vague by Cull. In other words, paint it a slightly different shade of In-The-Dung and we’ll roll over as usual.

  27. Lindsay

    “He says past councils supported the union on a number of occasions and it would need convincing to do it again.”

    Why even leave it as a possibility? Rule it out now!

    I know Cull has only one vote the same as the rest of them, but the ORFU have to be told that this is not an option under any circumstances and and the Mayor should be the one to say it.

  28. Calvin Oaten

    What more convincing would Cull need than the fact that, if the ORFU ceases to exist, what use then for the stadium? I can just hear Brown, Hudson and co. pointing out that fact once the ORFU has come with its begging cup. If rugby fails the whole house of cards comes crumbling down, and no-one knows that better than Cull. The fallout will be dramatic.

  29. Lindsay

    Well I am just so grateful that they built a multi-purpose stadium then.
    The worst case would be if the ORFU did vanish and the people left holding a now totally empty stadium might look at ways of filling it by taking in a leaderless group of rugby players. I am sure someone somewhere can whip up an economic impact study to support that move.

  30. Hype O'Thermia

    Is Athol Stephens hiding something? Is Athol Stephens protecting someone? If so, what, who, why? If he is an honourable man (and indeed may he not be an honourable man?) not at risk from honest transparency why does he not embrace honesty and transparency?
    For A.S. many other names may be substituted. But let’s start with him. He begins with A…….

  31. Russell Garbutt

    Sorry for such a long post but I was prompted to have a look at the blanket letter sent out by deposed Mayor Chin during the submission process. Remember this? Sometimes worthwhile looking at some of the BS that was served up to us all. The full document can be read online at the following URL but it is worthwhile looking at some statements that were made in that formal communication from the Mayor.

    http://www.dunedin.govt.nz/your-council/latest-news/june-2009/response-to-stadium-submissions

    26 June 2009
    Ratepayers Dunedin City
    Dear Ratepayer
    Customer Services Agency 477 4000

    Thank you for your submission to the Dunedin City Council’s (DCC) draft Long Term Council Community Plan.
    This comprehensive response is intended for all those who, like yourself, submitted on the Stadium, whether for or against, whether you spoke to your submission or whether you preferred not to.
    It attempts to succinctly respond to the many aspects of the Stadium that were canvassed by submissions and, we trust in sufficient detail to address the matters raised by you, or other submitters.
    For ease of reference, the various issued raised in the submissions are addressed under the relevant headings.

    **************
    Current Status

    You will now be aware that an application for a judicial review of the decision to proceed with the Stadium was dismissed by Justice Chisholm in the High Court in Christchurch on 24 April 2009. An appeal against that decision to the Court of Appeal was lodged on 8 May 2009.
    Separately, another application for a judicial review of the Otago Regional Council’s decision to support the Stadium has been heard and dismissed in the High Court in Dunedin this month.
    Following the Christchurch High Court decision on the application for a judicial review in Dunedin City Council’s favour on 24 April 2009, and in accordance with its earlier resolutions, a guaranteed maximum price contract (GMP) with the main contractor, Hawkins Construction Limited, was signed on 27 April 2009 for $130.4 million.

    *************
    Carisbrook should be upgraded

    (read online, but this bit is interesting) Given the location of Carisbrook there would have been no interest from the University of Otago in supporting the project and it would have essentially remained a rugby stadium. The Dunedin City Council also noted that the long-term economic benefit to the city was also lower than for a new multi-purpose stadium at a new location on Awatea Street.

    ******************
    Carisbrook should be used for public good purposes when freehold ownership passes to the Council

    At this time the Council has not discussed this matter, nor has any detailed research on options been carried out. Prior to any decision on the future of Carisbrook the Council will consult with the community and sporting organisations. (This statement does not square with what Harland told us were the reasons that Carisbrook was purchased. So who was not telling the truth?)

    ******************
    There have been no studies of the options

    (Read online, but this bit is interesting)
    Ratepayer contributions will become greater as the years go by
    In 2008/09 the average value residential property is paying $40 for the Stadium. In 2009/10 this will become $66, an increase of $26 per annum (pa). No increase beyond $66 pa is forecast – based on the current differential between residential, farmland and commercial property.

    *******************
    New Carisbrook Upgrade Options (read online)

    *******************
    Stadiums are not profitable (Read online, but suffice to say Chin says that this is not correct. Proven to be untrue)

    ******************
    The effect on ratepayers is not clear (This bit is really good and spells out the intention of a 20-year loan, so all that is said is now rubbish)

    In Volume One (page 19) of the Council’s Draft 2009/10-2018/19 Community Plan, under the headings “Stadium effect” and “Cash flows from CCTOs [Council Controlled Trading Organisation]” how the funding of the new Stadium will affect ratepayers is described. For the average value property owner, the current $40 pa will rise to $66 pa (incl GST) in 2009/10 and remain at that level for 22 years when the last of the Stadium debt in the CCTO is paid off. The 22 years comprises two years of construction plus 20 years for the loan duration.
    Of the total population of residential properties in Dunedin, 64% have rating valuations that are lower than average.
    It is worth restating how the ownership and operation of the Stadium will work. Following the successful model adopted by Christchurch, the Stadium, will be managed by a council owned company, provisionally known as Dunedin Venues Management Limited. It will be charged with operating the Stadium in a professional, business-like manner, co-ordinated and integrated with other Dunedin venues, to better ensure its commercial success. A second company, Dunedin City Venues Limited, also owned by the Council, will own the physical assets and carry the debt previously borne by the Council. The cash required to service the debt comes from the collective cash flows and financial efficiencies from within the group of council-owned companies as well as the release of the companies from an obligation to remit $5 million pa to its Council shareholder. In other words Council ratepayers contribute $5 million pa for the 20 years of the Stadium loan. The need to make up the dividend shortfall gives rise to the need to raise rates to the extent that the owner of the average value residential property will pay $66 pa for the duration of the loan.

    *******************
    There is no major tenant (Now this bit is really good. Was it true when it was written, is it true now?)

    The Otago Rugby Football Union has signed a Venue Hire Agreement for 35 years as the major tenant with a right of extension.

    *******************
    The World Cup is already set for Carisbrook (Read online, but we know the Government contribution was not $15m but a $10m gift and a $5m loan. No mention of how this is to be paid back anywhere that I can see)

    The World Cup organisers have reserved the right to shift the matches to the new Stadium if it is completed. The Crown’s $15 million contribution comes with an expectation that the Stadium will be available for the Rugby World Cup.

    *********************
    Operating revenue pays for capital costs

    Cash flows are the most important thing – like all business, some cash goes to meet operating costs, some is invested and some repays debt. The Stadium will have to optimise those cash flows.
    Accordingly, again like any other business, part of the “seating products” revenue (from the sale of corporate lounges, memberships, open club reserves, founders club) will be used to service the bridging finance that was needed when the market indicated it wanted to pay by instalments in arrears rather than lump sums up front. For now, the modelling assumes 75% of the lounge memberships and open club reserves will have been sold by opening day and that 70% of the annual income will be used to repay the estimated bridging loan of $30 million needed to fund the construction of the Stadium by the end of the 2010/11 year.

    **********************
    Only those who use the Stadium should pay for its construction (Read online)

    ********************
    There are no economic benefits (I urge you to read this bit online – it seems that truckloads of money will be coming in on an annual basis. If people believe DVML’s “research” they might believe this but most of us don’t)

    *********************
    Council keeps missing deadlines (Read online)

    ***********************
    Ratepayers should not fund the bridging loan (Really!)

    The private sector funding bridging loan is serviced and repaid entirely by a portion of private sector funding of seating products. It is not intended ratepayer funding goes towards repayment of that debt. Refer to paragraph under Operating Revenue pays for Capital Costs on page 4 for further detail.

    **********************
    Central Government’s contribution has bailed out the private sector (But hang on, we know that the grant was not $15m but $5m. Doesn’t that create a bit of a shortfall?)

    The Central Government contribution of $15 million has been made because they want the project to succeed in time for the World Cup. It covers the:
    1 timing changes when private funding will be received
    2 expected number of sales of seating products prior to opening
    3 increased costs in the project due to the unavailability of a surplus on disposal of
    Carisbrook, an increase in site acquisition costs and a shortfall in the anticipated contribution from the Community Trust of Otago.

    Whether the Crown’s grant is viewed as support for private sector, public sector or CTO funding does not matter in the long run. The Crown’s $15 million is a cash grant, expected on or about 1 July 2009. It is not an underwrite in the usual meaning of that word.

    ************************
    Targeted rates should be levied on those that benefit most (Read online)

    ************************
    Capital value rating does not reflect incomes (Read online)

    **********************
    Consultation (Read online, but the following bit is great!)

    In short, aside from widespread formal consultation there has been a considerable amount of detailed information available to the public from many sources.

    *********************
    Conclusion

    For those who have submitted we thank you. While you may still have reservations about the Stadium project, you may be assured that Councillors and the Carisbrook Stadium Trust have always sought the best advice and had it peer-reviewed before making final decisions. In this way the Council believes it has reduced the risks of the project to the point where we can be as confident as we can on undertakings of this size that it will be completed on budget and will operate successfully.
    After considering all submissions, the Council resolved to keep the proposed funding for the Stadium in the LTCCP and to proceed with its construction.
    Yours faithfully
    Peter Chin
    Mayor

    • Elizabeth

      Hah! Russell, most of us here received that letter – at the time I set it aside as a snow job, in disgust. That was June 2009. It is now February 2012. As submitters, we have yet to receive another comprehensive letter of the kind, in revision – this time from Mayor Cull. [Meanwhile, Mr Chin is somewhere detained on a Constitutional Advisory Panel until 13 September 2013, care of Bill English. In other words, Mr Chin can be found.]

      Your fresh dissection – no objection to long posts! – of Chin’s dry-horror composed for our collective disbelief (although that mightn’t have been his intention…) is perfectly timed, and has a destination, bundled with other scorched earth council documents, at the offices of the new Minister of Local Government. I do hope no-one has gotten to Nick Smith first, as his razor tendencies would be useful put to the right purpose – the flaying alive of Dunedin City Council and chums.

      The extraordinary degree of farce attaching to Chin’s letter would generate a monster live debate on television – or dumbed down, a jocular exercise for the Campbell Live crew. Since news is not news in New Zealand anymore, is it better to bring back McPhail.

  32. Calvin Oaten

    Who is Peter Chin? Was he the fellow who used to be the mayor of Dunedin. You know, the one in the wedding dress on the Town Hall stage. No, it was not meant to be a serious moment, because he didn’t do serious moments. He just preferred to sleep when things got serious. What Russell has just shown by covering Chin’s report at the time confirms that he should have stayed in his dress and maybe he would have been laughed out of town before chairing the mayhem he did. But then ‘crooked lawyer Michael Guest’ would have fronted up and kept the ship on course. It was a ‘lose lose’ deal right from the start, but what else could we expect from such a class of idiots?

  33. Calvin Oaten

    CEO Orders’ reply to Russell’s questions in today’s ODT reminds me of “jolly old Rodders” recent City Talk interview of Mr Orders. It was pitched in a nautical vein, implying that the CEO was in fact in charge of the ‘good ship Dunedin’.
    Playing on this theme I sort of pondered on the fate of our ‘good ship Dunedin’ writing the following. Needless to say, I didn’t send it anywhere. Just a bit of nonsense it seemed. Now I am not so sure.

    Calvin Oaten
    December 10, 2011 at 12:20 pm
    Never mind sport and FIFA, it is the summer cruise season and I have just received in my letter box a brochure from the “Dunedin Adventure Cruise Line”. On the cover is a “Happy Holidays” etched in the sand. It is of course only as good as the next tide.
    Inside it gives a run down on the activities available (mainly addressed to old folk) and then it talks about the wonderful aspects of the plumbing on board. It covers drinking water, sewage and storm water. Of course you can experience storms when cruising on the high seas, so it pays to be prepared. Next it covers the mundane matter of collecting and disposing of the rubbish which does tend to accumulate on these vessels. I think it mostly goes into wheelie bins which are possibly just emptied over the side,
 I don’t really know.
    It then gives a look into the private life of the captain – who was just recently appointed – and his family. He said he was thrilled to be given command of this elegant cruiser and he intended to run a ‘tight ship’. He said that “we are facing a number of pressures here in Dunedin, but that he would respond to them positively, not just lie down and let them roll over me”. He said that he is really impressed with the quality of the people at ‘Admiralty House’ (perhaps he should have gone to SpecSavers), they are a group who work well together, in a collegial way, and they are utterly committed to the good ship Dunedin. The relationship between Admiralty and crew also works well, with both respecting the other’s role and place.” It remains to be seen if he is ‘Captain Marvel’ or just the bosun in charge of the deck chairs.
    I then decided to go and visit the ship for myself.
    I take a look into the chart room. Here the navigators are busy at work plotting a course for a thirty-year voyage to ‘Nirvana’. They weren’t sure when that trip would leave, but were sure that it would be as soon as they had officially aborted the ill-fated one currently being sailed. I asked them if they knew which was red or green, port or starboard? They looked kind of mystified. I assumed that was because they wondered why on earth anyone wanted to know that.
    Then I am taken below decks where I meet Chief Engineer, Commander Stephens, he is in the engineroom where we find the boiler throbbing away ominously. There are noticeboards festooned with a lot of figures, all in percentages seeming to have something to do with achievements for all manner of abstract activities. CE Stephens highlights the fact that the boiler has a full head of steam and is now under strain and would need careful watching beyond 2012/13 until the pressure subsides somewhat. I look at the boiler again and see that it has two gauges fitted. One shows the DCC’s pressure of current and non current liabilities at a scary $400.37m. The other gauge shows the consolidated pressure of the whole ship at an alarming $752.66m. I then notice that the pressure relief valve is tied down with a piece of string. I asked CE Stephens why, and he said that but for the string the whole thing would blow. I noticed another valve which had a notice saying ‘debt servicing and reduction line’. Hung on this was a notice say “DO NOT UNDER ANY CIRCUMSTANCES OPEN”. I asked why, and CE Stephens replied that if we did that the whole ship would lose power and we would be stranded in the middle of the ocean. I then noticed that he was wearing a life jacket. I asked him why, and he said “it was just a personal precaution”. Fair enough, I thought. I then asked him what the boiler was fueled with. He said it was money. Huh? I asked where he got it from. “As much as we can from the peasants out there, topped up by bleeding our supply companies. The rest, we simply borrow.” I said that when I look at those pressure gauges that perhaps fuel might be getting in short supply and what then? “Oh not to worry,” said CE Stephens, “we will all just get into the lifeboats, that’s why I am wearing my life jacket now.”
    I then left him and returned to the upper deck in time to hear the bosun piping “Up Spirits” and saw the rum barrel being broached. It was “Tot time”.
    As I walked down the gangway I couldn’t help but notice the absence of any lifeboats. Hmmm? I thought, not sure about sailing on that ship. But I see where it has been given a certificate of sea worthiness by some government ‘wallah’ who is called an auditor. So I just went home.

    • Elizabeth

      Calvin, we’re thrilled to receive your nautical adventure again, a triumph! Last time, it shot views up hugely for two days! In the new context it does not pale, although by now we’ve taken to drinking a lot more rum. Possibly we’ll look to publish it once a week until there are planks walked. Sharks and life jackets don’t mix, fortunately.

  34. Anonymous

    Calvin, have you considered giving it to the D Scene as an opinion? Combined with a partial image of the City Talk in the story banner would make it a wildly entertaining piece for the newspaper. Might help alert some of those subscription-based readers who have been lulled into a false sense of safety with lite marketing of the shipping company.

    • Elizabeth

      The other day I was catching up on the life and times of (Dunedin’s) outstanding shipping magnate Sir James Mills (1847–1936), of Union Steam Ship Co fame. That, is enterprise. I’m not sure Dunedin City councillors would understand the essence behind that sort of business drive. Not if they still believe in the grounded hulk of concrete with black, white and grey plastic seats.

  35. Anonymous

    Dundeeboy and Farsighted go head-to-head on the ODT forum. I also like the reminder by Amanda. And it is good to see the ODT moderator (appears) not to have abridged the comments. It is time for the ODT to start reminding its readers the stadium fiasco was created by the stadium councillors. And mayor Dave Cull has since supported stadium Cr Syd Brown as the chair on the powerful finance committee…

    http://www.odt.co.nz/opinion/your-say/198071/stadium-parking-not-ratepayers#comment-27550

  36. Mike

    (Sorry I’m still a bit out of time and space, responding to things late) – Russell that’s interesting – the governments $15m was supposed to cover the cost of purchasing Carisbrook? then why did the DCC also take out a loan and borrow the money?

  37. Russell Garbutt

    The original deal was $15m of which we were told all was a gift, but then it was found out that $5m of that was a loan. I now have been told that this $5m is also now a gift. Not a clear process – and even less clear by Chin’s statement in his letter of “increased costs in the project due to the unavailability of a surplus on disposal of Carisbrook”. What does that actually mean? Of course Athol would have written that, or maybe Harland at the time. Certainly not Chin as he was probably asleep or off for a fitting for a new wedding dress.

    One thing that I’ve been thinking about is this loan of $2m to the ORFU made while acting as a private banker. It would be great to find out from DCC minutes of the day where that $2m came from, was a loan involved, did the DCC pass on the full costs of that loan to the ORFU and just how were the DCC able to provide money of that magnitude to a private organisation? It would also be interesting to find out the rationale that the ORFU used in asking for the loan. Was it because they were in the financial poo-poos? If so, wouldn’t that have raised big alarm bells to any prudent person? Why did Farry believe very strongly that this loan was to be “written off”?

    This knowledge will be quite useful I suspect when someone up north decides that a full investigation would be worthwhile. Just about the time that the full consolidated debt of the Council becomes more widely known.

    Mike, time to republish your running total of known costs?

  38. JimmyJones

    Elizabeth, it is quite a contrast between likes of Sir James Mills and our current ORC and DCC councillors. It reflects the two types of people: the wealth creators, and the wealth destroyers. I think that often the motivation of the creators has been self interest/greed, but the results have been beneficial to Otago. On the other hand the wealth destroyers sometimes have good intentions, but their dim-witted endeavours are disrespectful of common sense and interfere with the fruitful endeavours of everyone else. Not all wealth-destroyers have good intentions. To varying degrees all of our current councillors are destroyers. Council staff share the blame.

    • Elizabeth

      JimmyJones, [on wealth creators and wealth destroyers] that about sums it up! I completely agree. It may be said too, in many cases, that gamesmanship [wealth creation] – the urge to win, invent, lead or outshine – is a motivator, with greed the perceived after effect. It’s not enough to win just one championship roadrace… when the heart rate and anatomy can stand new challenges.

  39. JimmyJones

    Russell, I remember that at the start it wasn’t clear whether the $15m was to be a loan or a grant, but they called it an “underwrite”, which sounds better than “bail-out”. Don’t forget that the $15m was to help fix the massive funding shortfall of about $45m. Thanks to the ODT’s co-operative attitude, we never got to read the term “funding shortfall”. The rest of the funding shortfall ($30m) was called, for a start, the “Bridging Loan”. Then, after the DCC/CST paid lots of our money to a marketing company, the “Bridging Loan” became “Private Sector Funding”. It is still debt and is being paid off by the city’s renters and ratepayers.

    The financial spin-doctoring is quite clever, but the facts are unchanged: the large funding shortfall that should have scuttled the project is now being paid for by $30m (aprox) of DCC debt; and (except for some small donations) no private sector funding has gone into the Private Sector Funding; the whole thing is a big, fat, turd-sucking lie.

    The DCC wants us to think that the stadium revenues can pay-down this debt without further burdening the citizens. This is another lie, because even without this extra debt, the stadium would be making large losses. Including the extra debt, directly adds to the size of the losses and the size of the ratepayer subsidy. In other words the stadium revenues are insufficient to pay for its expenses and so the extra debt servicing cost of the “funding shortfall loan” flows directly to ratepayers. If you take off the lipstick and the expensive frilly marketing spin from the Private Sector Funding, all you have left is more ugly debt.

  40. Russell Garbutt

    Jimmy, and all this is exactly why we need the full independent forensic analysis of the whole project across all entitites. No-one, let alone the Councillors who are ready to act responsibly, can get a simple thing like the whole consolidated costs, debt levels both direct and indirect.

    But don’t take my word folks.

    Ring your friendly Councillor(s) today, send them an email, ask them to send you back those details. I would be willing to bet that most won’t even respond, and of those that do, none will be able to tell you anything of substance.

    If I’m proved right, then this is a pretty good lead as to what to ask them in the formal process of consultation where of course most will pretend to listen to you but some have perfected the art of being brain inactive while still keeping their eyes open. Cr Hudson has failed this last little bit.

  41. Calvin Oaten

    Russell, the $15m grant/loan, subsequently full loan, was gobbled up early on when the land purchase budget blew up. In Malcolm’s original “not a penny more than $188 million” budget the land purchase was to be about $15 million. It finally cost around $36 million. So that took up the Government money in one mouthful and then some. There was nothing for the Carisbrook purchase. In fact, at that time the ORFU was going to sell Carisbrook and there was to be a surplus of about $3.6 million which was in the original construction budget.
    Russell, you also might ask who owned the four lighting towers which Delta recently sold to Christchurch. Also, who picked up the tab over the years for the electricity consumed? There is no doubt but that the ORFU has been on the DCC’s ‘hind teat’ for years in all manner of dodges. I doubt a forensic accountant would in a life time unravel it all. Then of course, with the latest developments, what chance of the private funding coming through? Would you, if you had bought seats for events which probably won’t take place still shell out the money? We know that the contracts (supposedly) in place are only for five years with options to renew at re-negotiated rates for a further five years. A right toss up coming there, I would think. I don’t think ringing your councillor will achieve much. No-one at home (metaphorically)

  42. Hype O'Thermia

    “Bridging loan” is a well-known term. As most of us understand and many have experienced, e.g. it’s when you’re buying a house and your old one hasn’t sold but is worth at least as much as your shortfall on the new one. The bank gives you a bridging loan, you pay them back as soon as the old house sells.
    It’s these Orwell and Huxley-style word-redefinitions and the half-truths that are so damn cunning – people think they know the situation and it’s all OK so they take their eyes off it. Clever.

  43. Calvin Oaten

    Hype, most of the ones we talk of are simply a ‘bridge too far’.

  44. Hype O'Thermia

    Well Calvin, they don’t manage to fool all of the people all of the time but they have a good success rate overall.

  45. JimmyJones

    Here are some words from the ORFU. From ODT: “ORFU Faces Heavy Loss”, 31 Jan 2008 (By Hayden Meikle) –

    ORFU chief executive Richard Reid says ‘‘We’ve got to cut our cloth and live within our means. We’ve got to look at our income and our expenses and work out how to deal with that,” Reid said.
    ‘‘I’m confident the 2008 budget is prudent and achievable. It’s not going to be easy. But we’ve been very realistic looking at the next year as to what our income streams are and what our expenses are.”

    Subsequent losses were 2008 $0.5m, 2009 $0.8m (before abnormals), 2010 $0.6m, 2011 not released yet.
    It seems to me that the ORFU has revenues and expenses that are relatively stable and predictable. And so when it makes 6 years of losses in a row, this would have to be the result of intentional decisions. It would be easy to make that choice when you know how easy it is to get money from the DCC. I think we have given them more than enough.

  46. Anonymous

    Is there some sort of criminal conspiracy going down in this town? Because it feels like a frightening amount of inappropriate behaviour has occurred involving many entities who appear to be working together to destroy the city’s financial future, corrupt public morals and defraud the Dunedin City ratepayer.

    So many leaders and the so-called news media appear impotent or unwilling to do the right thing or tell the truth. They do bloody stupid things that make the greedy, fat-neck bastards wealthier while the masses suffer.

    What the hell is happening in this city?

  47. Mike

    Russell – the ORFU $2m loan from the DCC was at 4% (listed in the ORFU’s 2008 accounts, the same one with the missing million)

    Almost certainly less that the DCC could have borrowed money for so very much a gift that was costing ratepayers at least the difference between 4% and the going rate (7%? so 3% difference – $66k/year)

  48. JimmyJones

    Russell, the $2 million loan to ORFU was a 10 year loan for the purpose of rebuilding the Carisbrook Railway Stand. The loan ended November 2007 but wasn’t repaid. On 17/3/2008 the DCC FSC decided to extend the loan until 30/6/2009. The FSC did this in secret and the minutes are still not on the DCC website. It seems to me that by the time the loan needed to be repaid, that they fully expected the DCC to have purchased Carisbrook and fix up debt. (from ODT 23/5/8 “ORFU Loan Payment Date Further Extended”).

    The interest rate was a low 4%, but I don’t know if the ORFU paid all their interest. A 4% loan amounts to a ratepayer subsidy as Mike says. The BNZ debt had an interest rate of “8.76% – 9.55%”. I calculate the DCC subsidy to be (9% – 4%) x $2m = $100,000 per year.

    Security for this DCC $2 million loan included a “first mortgage over land at 22 Burns St” according to the ORFU Annual Report (year to 30/11/2008). This seems inconsistent with the ODT’s story about the missing one million which says the properties belonged not to the ORFU, but a trust. Also the ODT says the lost $1m was payed to the trust and used to pay their debt. However there can’t have been much debt for the property to have been the main part of the security for the $2m loan. More checking needed here.

    More interesting is the DCC loan guarantee of a $1.2 million BNZ loan. This was negotiated at the time of the sale of Carisbook and was a three year guarantee of interest and principal. The DCC Annual Reports have shown this amount as a contingent liability, but in the latest Annual report it has vanished. The guarantee doesn’t expire until 12/8/2012 and the chances of the ORFU being able to pay back the loan without our help seem remote, so where did it go. This should be revealed when the ORFU finally releases its 2011 Annual Report.

  49. Mike

    If the BNZ is smart they will call the loan 11/8/2012

  50. Calvin Oaten

    Could it have been that the DCC was in fact the trustee of the Burns St properties? All that would be required is a unconnected name to put all off the scent.

  51. Ben

    @ Rob,

    It depends if say the DCC has guaranteed a financial institution all obligations and ORFU and/or a related entity / subsidiary incurs further guarantees from that same institution then there would be a strong argument for yes, in other instances there would be a lot of toing and froing and eventually they would settle it for say 50-70%

  52. Russell Garbutt

    Jimmy Jones, what you are saying here in effect is that the DCC, in secret, approved of a loan to an organisation at a rate that effectively gave them a donation of $100k per annum, that the loan was secured on a property that the ORFU may not have owned, and that the ORFU with possible DCC collusion has been playing footloose with elements of the BNZ loan.

    Do you believe that this is possibly breaking criminal law, or civil law, and do you believe that the SFO or the Police would have been aware of any of this?

    • Elizabeth

      Russell – Interesting questions. On this matter, however, it may be unreasonable to attempt an opinion on criminal or civil liability at this forum. I suggest you contact JimmyJones offline for discussion – however, you are both welcome to comment around it here if you choose to do so.

  53. JimmyJones

    Russell, that’s a reasonable summary. I can’t tell yet if any law has been broken, but I hope we can find one or two transgressions, because that would be a good way to get the Minister’s attention.

    • Elizabeth

      ### ODT Online Mon, 20 Feb 2012
      No bail-out for ORFU – Tew
      By Steve Hepburn
      New Zealand Rugby Union chief executive Steve Tew will arrive in Dunedin today but is not making any promises about helping out the cash-strapped Otago union. Mr Tew will meet Otago Rugby Football Union officials late today to discuss the union’s financial plight and a possible course of action.
      Read more

      • Elizabeth

        There are people amongst us who have roughly toted up how much DCC might’ve spent on the ORFU in recent years, including the supply of goods and services from council departments and companies. All estimates welcome! (acknowledging the full lack of accountability and transparency available from DCC staff and elected representatives, as well as DCHL company managers and directors – and ORFU itself)

  54. Russell Garbutt

    Maybe helpful if it was put into broad headings:

    Delta – direct sponsorship of ORFU, lighting towers, supply of electricity, supply of ground services, cash

    DCC – under market rate for $2m loan equating to about $100k per annum, was there any failure to meet interest payments by ORFU? Purchase price of Carisbrook – what was real valuation? Issue of missing million needs to be resolved with reference to who had control of the mysterious Trust. Cost of allowing product packages to be worded so that ORFU had to be there.

    Rugby Academy and front of Centre of Excellence in Amateur Sport Ltd all going under banner of Academy – direct grant of rent paid by DCC. How much to build them the new change sheds, training grounds, lights etc on Logan Park? How much, if anything, did the ORFU/Highlanders pay for rent and exclusive use of the grounds?

    I don’t know – this is just a start – who or where to go for all the underhand deals? The ORFU didn’t pay a share of the investigative reports in the early days either. I’d say that the cost of the stadium was a direct grant to rugby in any case.

    • Elizabeth

      Thanks for the headings Russell, they suggest millions or more :(

    • Elizabeth

      ### D Scene 22.2.12
      ‘No plan to bail out ORFU’ – Cull (page 2)
      By Wilma McCorkindale
      Rugby and Council officials are adamantly denying rumours of a planned Dunedin City Council (DCC) bail-out of the ailing Otago Rugby Football Club. D Scene received a tip off this week that a DCC bail-out of the ORFU was being planned behind closed doors and would take place next month. The ORFU is over its head in debt to a range of creditors, and also owes hundreds of thousands of dollars to the DCC. Mayor Dave Cull is vehemently denying the bail-out claim. “That’s not true. It’s not true at all,” he said “I ca categorially say there is no plan to bail out the ORFU.”
      {continues} #bookmark

  55. Mike

    The other day I railed against the NZRU’s spendthrift ways in flying down their bigwig to talk to the ORFU when they could have just used skype …. afterwards I realised the more interesting question was “Why are they flying someone down to visit the ORFU just to say ‘no’?” – isn’t that something usually best done over the phone?

    So I guess he’s here to lobby someone else on the ORFU’s behalf, maybe to put the boot in and threaten the city over the stadium “give us money or we pull out” sort of thing

  56. Phil

    I note that that term “bail out” is being specifically and very carefully used by both DCC and NZRU with regard to publicly denying any future help to the ORFU. Smacks quite a bit of political speak. At no point have either of them denied that they may, or intend to, give money to the ORFU. Quite the opposite. So, when they announce a joint venture shortly to “loan” the money to the ORFU, they can put their hands on their hearts and confirm that there was no “bail out”.

    I think you’re right on the money there, Mike. People don’t fly somewhere to say No.

    • Elizabeth

      Ah well. We all know Dunedin City councillors have held a secret squirrels meeting together – only topic: “The Stadium”. How cool is that.

  57. Russell Garbutt

    Aren’t some ratepayer funded employees of the City – DVML staff – already working for the ORFU but still being paid by the City?

    Only another step or two to “take over” the lot. Next step purchase the Highlander’s franchise.

    No matter what terms are used, or what reasons are used, if, and I repeat tthe term if, there is any form of action taken by the City that results in money, services or other assistance given to rugby in this town then the wrath of the citizenry will descend on City Hall to a degree not seen before. There is a growing awareness round the country that Local Govenment is out of control.

  58. Russell Garbutt

    I’m sure that there will be a link to the sport’s story where it is reported that David Davies attended the bailout meeting with the NZRU and the ORFU as DVML are a “partner” with the ORFU.

    Does anyone recall this “partnership” being discussed, has anyone seen the “partnership” paperwork, does anyone know a reason why anyone would form a “partnership” with a defaulting tenant?

    The ORFU need to be told to leave the stadium premises today. Meantime we will sit and watch City Hall wring its hands, work desperately on the wording of a press release to say something along the lines that the City needs professional rugby in the stadium to survive. Time to get ready for a lot of action folks IF this happens.

    There is an alternative. If those Councillors who were opposed to the stadium, are still opposed to the stadium actually stood up against those still on Council who don’t want to be exposed.

    {Link supplied: http://www.odt.co.nz/sport/rugby/198635/rugby-nzru-meeting-may-affect-otago -Eds}

    • Elizabeth

      Russell, couldn’t agree more. If councillors have any moral ethical integrity left, now’s the time to get themselves into national media strongly stating their opposition to ‘unnecessary’ stadium spending [beyond legal requirement] and opposing further cost to ratepayers where ORFU is concerned. However, I’m aware that not one councillor at the present time has the ability to handle themselves well in producing media statements, prepared or spontaneous, that might gain attention on behalf of their constituents, for the right reasons. The mayor appears not to understand leadership and is operating on a need to know basis only. We can’t be sure if the mayor is fully aware, as briefed by staff, management and senior councillors (?), of the precise nature of activities that have taken place under the rug in the name of Dunedin City Council; or if not in the name then via the council’s treasury, departments, companies and ‘partners’. Mr Cull is not a team of forensic auditors but he has the job whether he likes it or not, of ensuring the day comes to open that inquisitive door to independent professional scrutiny, keeping it ajar for as long as the process of forensic audit takes to establish serious wrongdoing and incompetence.

  59. Russell Garbutt

    I’ve been giving this nonsense with the ORFU a little more thought.

    Here is what I think the City is looking at.

    We all know that the stadium (DVML) is going to run at a huge operational loss each year. Even David Davies must recognise that. The shortfall in private funding was going to be coming out of operational profits. So they aren’t going to happen.

    We also know because of the incompetence of the people that drew up the packages that they aren’t payable if there is no rugby. The contracts will be not worth anything. But the contracts are only advance operational money spread over 5 years. They are not now, and never were private funding for construction. No matter how many times the likes of the stadium Councillors say it was, no matter how many times Farry says it was, we all now know that this was simply spin, smoke and mirrors.

    So, if the stadium remains open, we (the ratepayers) are exposed to all of the current construction debts, and all of the private funding debt of about $45m. We don’t know the total amount of debt because the City refuses to tell us, but let’s call it $250m on the lower end and $450m at the upper end because of the 40-year loan term adding another $100m of interest payments. We are also exposed to an annual operating loss of many hundreds of thousands of dollars.

    If we were to shut the stadium doors now, we are still exposed to all of the construction debt mentioned above, all of the private funding debt, but we would not be exposed to any of the operational losses. We would also not be exposed to the costs of running the ORFU or even worse purchasing all or any of the Highlanders franchise. They would be told to pay what they owe and go away.

    Seems to me that we are immediately in an improved, but still appalling position if we immediately shut the stadium. We would be even better off if we were to demolish the thing and sell what could be raised.

    Is this flawed? Is this what the City is grappling with? Can you imagine someone like Neil Collins or Bill Acklin grappling with this?

  60. Robert Hamlin

    The principle financial gun that may be being held to the DCC’s head by the Rugby ‘lads’ is the threat of not receiving the Stadium’s ‘private funding’ (AKA seat and box lease payments) that we now hear are dependent upon the Highlanders and ORFU being present within the Stadium.

    However, it is also worth remembering that if a product or service contract is ‘mis-sold’ – in other words the benefits are overstated or mis-stated to the purchaser at the time of sale, the contract may not be enforceable with regard to ongoing payments.

    A compelling case can now be made that the Stadium itself was ‘mis-sold’ to this community by CSCT etc, with regard to its capacity to attract acts and generate revenue.

    As the same silver-tongued sales teams sold the same product on much the same basis to the corporate box leaseholders etc – there may be an equally compelling case for mis-selling based on the difference between what they were promised (numerous and varied major events in the arena) and what has actually been delivered (bugger all in 2012 at least – beyond a handful of rumpty provincial rugby games).

    If a leaseholder decides not to pay up on the basis of mis-selling, and has significant evidence to support their position, DVML may well struggle to enforce payment under the contract in law. This is all the more so if the leaseholders still have the money – which they do, as they very sensibly did not bite on the 100% upfront payment option that I understand was initially offered to them. Current possession of the disputed dosh is easily 9/10 of the Civil Law in any jursidiction.

    Which means that the dangerous looking gun that the rugby ‘lads’ may be flying/driving walking down to City Hall in order to hold against the DCC’s head may not actually be loaded!

  61. Peter

    Yes, the private funding ‘contributors’ may well be relieved that they can walk away from committing money to a shyster promoted, dud stadium. Who would blame them? But, of course, where does that leave the ratepayers? Rhetorical question.
    Time, sometime soon, for striped or arrow designed ‘pyjama sets’ to be fitted for the culprits.

  62. amanda kennedy

    Yes I agree Russell, that is the only hope; Greater Dunedin, Vandervis and Stevenson must stand strong against Cr Hudson’s cabal, exposing the councillors who chose corporate rugby mates over the city’s future. This is a big ask though, it takes true courage and ballsiness.

    • Elizabeth

      I think Cr Brown will be the busiest he has ever been behind the council mirror of falsity, just now. Brown or the mayor to bring out the poisoned drinks tray for thirsty councillors? Or will spiking be enough?

  63. Calvin Oaten

    DVML partners?
    Submitted by Calvin Oaten on Wed, 22/02/2012 – 12:44pm.
    The ORFU signed an intent to rent facilities to stage rugby matches at the FB Stadium, no more, no less. There is no lease, no partnership, no anchor tenant, and no council announcement of one. The stadium is just that, empty of revenue. Unless, an arrangement has been made between DVML and the ORFU of which no-one knows except the parties concerned. Which, in any event would be of no use as the ORFU has declared that it cannot pay its bills.

    With respect to the ORFU needing to increase its revenue, that is a given. The fairest and simplist method is to do a comprehensive budget of the operating expenses, divide that into the number of affiliated clubs in the Otago region. Bill those clubs pro rata and let them collect from their members. If that doesn’t return the required revenue then there is a clear message that it is all over, time to call it quits.

  64. amanda kennedy

    I went to the asset sales debate last night. Guess who was all in favour of the country selling off its assets? Stuart McLauchlan. A member of the Highlander board. You don’t have to be a genius to see where this is going. He and other stakeholders are all in favour of selling off the city’s assets too in order to provide for corporate rugby. Who are waiting quietly until Cr Hudson’s cabal feel safe enough to push this agenda through? They will have some nice assets to buy. Maybe the stadium was always part of this agenda. Force the city to build an economically unviable stadium for Rugby then insist the only way to sustain paying the debt is by selling off assets. With some pretend wringing of hands and a threat that there is ‘simply no other option…’

    • Elizabeth

      Amanda, Stuart McLauchlan as we know is ‘strategically placed’ here, there and everywhere. He is said to have a strong influence over the Council (at the elected end, but has other inroads) – his backing for Richard Walls (former chair of Finance, Strategy and Development) was a little too strategic… he nominated Richard for re-election to Council on at least two occasions, however last time this backfired when Richard was dumped out. Chums, chums and fine-feathered ‘friends’ to get the business done. Slippery. Other terms. I nearly used the word malignant.

      His profile supplied for the PHARMAC Board reads:

      Stuart McLauchlan (Chair)
      Stuart is a practicing Chartered Accountant specialising in business advisory and governance. He has been a partner for 25 years in the firm G S McLauchlan where he held the position of Managing Partner for 24 of those years. He is a fellow of the Institute of Chartered Accountants and an Accredited Director of the Institute of Directors. He has a large portfolio of directorships in private, public and council owned companies as well as Government organisations. His current appointments include Chairman of Scott Technology & NZ Sports Hall of Fame. Stuart is a Director of the following: A D Instruments Pty Ltd, Aurora Energy Limited, City Bus Limited, City Forests Limited, Delta Utility Services Limited, Dunedin Casinos Ltd, Dunedin City Holdings Limited, Dunedin International Airport, Otago & Southland Employers Assn and Scenic Circle Hotels Ltd. Stuart is Pro-Chancellor of the University of Otago and has recently been appointed the Crown Monitor of the Southland District Health Board. Stuart joined the PHARMAC Board in August 2009 and his current membership expires on 31 July 2012.
      http://www.pharmac.govt.nz/AboutPHARMAC/board

  65. Calvin Oaten

    When we talk of the Private Funding contracts we need to bear in mind that the full payment period was to be ten years (2021) but the contracts are quite specific in as much as they are for five years with the right of renewal at an agreed renegotiated price. As Rob says they are dependent on the rugby games actually taking place. In fact, I suspect the Consumer Sale of Goods and Services Act would take care of that. Again as Rob indicates, no games no pay, no Private Funding, no revenue to service DVL’s interest obligations on the capital debt, and of course we all know who will cover that. The DCC is already covering the Private Funding component of the construction budget (around $45 million) on top of the official $98 million, morphed to $110 million, to take the total to at least $155 million. Not too bad for a deal which Malcolm promised “not a cent over $188 million” of which the DCC’s contribution was to be $85 million. Cull and co are sitting on a “time bomb” and you have got to believe that they know it.

  66. amanda kennedy

    The plan is so clear to sell off our local assets for stakeholders to make a killing at the expense of assets staying in public ownership. This is like a mafia protection raket extorting money with the ORFU and stakeholders saying to Cr Hudson and Greater Dunedin “…sell assets, pay for our Big Rugby salaries or we will leave this city and then who will you have to prove that you have a viable stadium? No one. You councillors will all be exposed as fiscally negligent…”. The thing is Cr Hudson’s cabal have more to lose than Greater Dunedin do.

  67. Lindsay

    The headline in the ODT on 2 December read “ORFU to be run by DVML”.
    As DMVL could borrow $1.4 million without discussing it with the council and without any means to pay it back, I am concerned about where this will end. DMVL don’t appear to be answerable to anybody, so the statement today that they are partners with the ORFU could well become a fact by the end of the week.
    It is like watching a train heading for a missing bridge. Everyone watching knows what will happen but are powerless to stop it. Those inside, seemingly unable to hear the warnings, party on oblivious.

    {See the following. -Eds}

    ODT Links:
    2.12.11 http://www.odt.co.nz/news/dunedin/189069/orfu-be-run-dvml
    14.12.11 http://www.odt.co.nz/news/dunedin/190750/mayor-unhappy-orfu-release

    What if? Posts and Comments:
    2.12.11 https://dunedinstadium.wordpress.com/2011/12/02/dvml-gets-into-bed-with-orfu/
    14.12.11 https://dunedinstadium.wordpress.com/2011/12/14/davies-in-the-middle-of-a-conversation-how-to-fudge-dvml-dcc-orfu-and-highlanders/

    • Elizabeth

      “It is very serious.”

      ### ODT Online Fri, 24 Feb 2012
      Hint axe to fall on ORFU board
      By Steve Hepburn
      New Zealand Rugby Union chief executive Steve Tew has given the first hint the Otago board may be asked to step aside in the wake of the union’s financial troubles. Mr Tew said an NZRU board meeting in Wellington yesterday had spent a considerable amount of time looking at the state of the Otago union.
      Read more

  68. Anonymous

    The collision will come with DVML’s annual report in 2012. The Mayans may have an interest, since it will certainly be the end of the world for someone.

  69. amanda kennedy

    It’s interesting how councillors are mentioned in media articles. Who the writer decides to write about is important because it can give the impression that the councillor mentioned is working hard and those not mentioned are not. I noted in the article about South Dunedin being left to flood that Cr Hudson was mentioned many times, heroically questioning if flooding South Dunedin was a good idea. The disenterested reader/voter unaware of Hudson’s role in putting the city in massive debt (so meaning less funds to protect South Dunedin from flooding) might conclude that Hudson is a ‘good guy’ fighting for the little people. They could not be more wrong.

  70. Phil

    While not strictly ORFU, I note that many people are starting to complain about not having yet received their Highlanders season tickets. With the season already underway. Despite, as they say, having paid in full to the Highlanders franchise prior to Christmas. Given the current state of affairs, should they be concerned ?

    {see link http://www.odt.co.nz/news/dunedin/199169/high-hopes-super-15-stadium-debut -Eds}

  71. Anonymous

    They probably can’t afford the postage…

  72. Russell Garbutt

    I see that tonight’s AGM is now at the University Club rooms – I assume that it was going to be held in more salubrious surroundings – FooBar? Will they start with the news that they are in statutory management? Will their President, Eion Edgar be in attendance? Will the ODT (another sponsor) be writing objective coverage? Will the amateur guys (who I support) have the courage to set up a new organisation to look after their interests and tell the pro mob to take a running jump?

    I also note that a major sponsor is listed as you and I masquerading as Delta and that Moana Pool is an Associate Sponsor. For the latter, read free entry to all facilities at any time for any pro rugby player. Not a bad little lark eh?

  73. Peter

    How will the insolvents get there? Will Wayne organise a helicopter, or two, or three or will they be like other mortals and arrive by car, bike, bus or foot?

  74. Calvin Oaten

    Interesting to note that the ORFU problem of statutory management embarrassment was first mentioned on radio NZ this morning and on both the main channel sports programmes. Not a mention on Channel 9’s 5.30 news nor is it on the ODT website breaking news. Why? Does the ODT think it is beneath them to inform the public of anything so trivial as this?

    • Elizabeth

      Rhetorical is a vast ocean, Calvin.

      ### radionz.co.nz Monday 27 Feb 2011 Updated at 11:59 am
      News
      Otago rugby union expected to appoint statutory manager
      The debt-laden Otago rugby union is expected to be placed in statutory management tonight. At it’s AGM in Dunedin the union’s set to announce a loss of several hundred thousand dollars with chairman Wayne Graham having previously said they’re unable to pay creditors. The board is expected to be dissolved after this evening’s AGM with the chief executive of the New Zealand rugby union, Steve Tew, saying the Otago union is insolvent.
      Link

      ****

      ### radiosport.co.nz February 27 2012 19:13
      NZRU to address Otago’s financial problems
      By: Tim Dower
      Members of the Otago Rugby Union are being told what the national union plans to do about its financial crisis. NZRU chief Steve Tew is addressing their AGM in Dunedin tonight, after admitting Otago is technically insolvent. Newstalk ZB understands a loss in excess of a million dollars will be revealed tonight, and the current board is likely to be dissolved. Otago’s chairman Wayne Graham has previously admitted the organisation can’t pay its creditors.
      Steve Tew says Otago can’t continue operating in the way it has been.
      Link

  75. Russell Garbutt

    It is sad, but the ODT is no longer an objective, dispassionate and neutral reporter of the news.

    I don’t know how long it will take, but more and more they are becoming irrelevant. It would be really interesting to know how people now get their news compared to 10 years ago, but my picking is that it is more and more through social media – especially for the young. As all us fogies start popping off the perch the ODT’s position in our town will probably do the same.

  76. Mike

    Oh to be a fly on that wall …. someone needs to smuggle in a video camera and youtube it, purely for posterity mind you

  77. Anonymous

    Still nothing on the ODT website about ORFU. Not even a story off the Associated Press news feed. I guess they’re seeking an opinion on the story…? But don’t think the rugby magazine is resting on its investigative laurels, they’ve been hard at work getting Highlanders bunny Rugby Gal on the front page to keep the rugby fans informed and stadium devout enraptured.

    (I love the posts under http://www.odt.co.nz/sport/rugby/fan-zone/198937/revealed-my-crush-highlanders – smells a little like another DVML marketing campaign.)

  78. Anonymous

    {Timing!}

  79. Calvin Oaten

    A $2m plus deficit including $862,000 to be announced tonight, and Wayne Graham has the audacity to suggest it is up to the community to indicate that it wants to save rugby. What!!! The absolute effrontery beggars belief. Having sponged off the citizens via the DCC for countless millions he still thinks they should come with more. Unbelievable. Hey! but doesn’t this pose a conundrum for the mayor and councillors who supported this incredibly flawed institution, even to committing the citizens to the funding of a $250+ million stadium to give the poor dears a nice place to display their ability to lose money. I wonder what Tori Campbell thinks now?

  80. Phil

    No, Calvin. It’s all our fault, see. If we had all bought tickets to the games then they wouldn’t be broke. If we don’t all buy tickets today then the team won’t be here to play in the stadium. Frightened enough yet ? It’s all our fault, so we have to fix it.

    Cough, cough

  81. Anonymous

    Top news story on Stuff.co.nz…

    Union to be liquidated
    8:18pm BREAKING NEWS:
    The Otago Rugby Football Union is headed for liquidation, with its debts reported to total more than $2 million.
    http://www.stuff.co.nz/sport/rugby/provincial/6489057/Otago-rugby-union-heading-into-liquidation

  82. Lindsay

    “We will now discuss with all interested parties the way forward from here in terms of future arrangements for delivering rugby across the region.”

    “We are not apportioning blame – the situation is far too complex for simple finger pointing and in the end that achieves nothing.”

    Which one of the above statements makes you laugh more?

  83. Calvin Oaten

    Phil, you might well cough, but make sure it is just to clear your throat. I have said this before, but the answer – if there is one – lies with the grass roots members. Levy the clubs, who in turn levy their members. Easy enough to work out how much that should be. If they can fund their operations that way then they will be disciplined by the members. Ticket sales should just be for the direct expenses of each event with the surpluses – ahem – to finance the professional circuit. It also needs to be self sustaining. That way, if the pro game goes to the wall the code needn’t go with it. Too late!!! The stupid B’s should have adopted that in the first place. It’s now terminal, unless our stupid council puts it on life support. And that ought to bring out the guns on the street.

  84. Mike

    So – the $2m question – did the DCC do the paperwork to make sure they weren’t still backing the ORFU’s BNZ loans after the ORFU stopped playing at Carisbrook? Or are we still on the hook?

    Alternately – was it the removal of those guarantees that triggered the whole slide into default? (in which case the ORFU must have known this was coming years in advance)

  85. Calvin Oaten

    For those interested, the full story of tonight’s ORFU fiasco is on ‘Stuff’

    {See links at new post: Another expensive nut cracks, ORFU liquidated -Eds}

  86. Mike

    I was wondering about things like trophies – will they get spirited away or will the in-liquidation ORFU have to sell them to the highest bidder (or quietly sell them to their successor at cents on the dollar)

  87. Phil

    We’ve been down this road enough times to know that DCC will ultimately form part of a bail-out package. Probably with Eion Edgar leading the charge. In the same way that they were always going to build a new stadium regardless of public opinion. It’s a lost cause. Shouldn’t happen, rotten to the core, but it will happen just the same. They’ll justify it as being in the community interest to have a representative rugby team based in the city and will no doubt try the notion that the stadium will lose even more money without the team using it. The small fact that the operating cost will be greater than the income every time will be dismissed as mere detail.

    If memory serves me correctly, there whould be a Springbok head sitting in the ORFU cabinet somewhere. Pretty sure they won that during a Springbok rugby team tour in the mid 90s. Might get a few bucks (pun intended) for that.

  88. Phil

    Prior to the arrival of the so called professional error, key players in the Otago rugby team were “employed” by the DCC. Mostly by the Parks department. A number were also “employed” by Delta. Never turned up for a days work, but they all sat on the payroll. I had a colleague during that time who went for an overseas holiday for a year. While he was away he rented his house to the DCC who then gave it to a member of the Otago rugby team as free accommodation for the duration of the season. There’s lots of hidden doors to be used before this saga is sorted.

  89. Hype O'Thermia

    Stuff says SO much more than the oddity already:
    ‘…last year Rugby Southland revealed it owed around $700,000 and in June its board resigned en masse.’
    But some people can’t count, even when they use their fingers: ‘Graham said the board had considered resignation, but instead opted to stay and try to resolve the issue. He said no one factor had contributed to the crisis, rather a combination of factors over several years. The money the union made from selling Carisbrook had not covered its debts, and it subsequently found it owed more money. Graham cited a 30 year lease on floodlights it was no longer using as an example. “We first were suspicious things weren’t right around September last year. As a board it took us two months to identify there was an issue,” Graham said.’
    And this makes me especially angry: ‘There are $750,000 of trade creditors in the community.’

    • Elizabeth

      Hype – the Stuff item shows how effective D Scene can be over ODT when it (via Mike Houlahan this time) works with its parent Fairfax NZ News.

  90. Hype O'Thermia

    Having read this I’m feeling shock and disbelief:
    ‘ONE News reporter Max Bania was at tonight’s meeting and said the atmosphere was one of “shock and disbelief.” ‘
    Somebody didn’t see this coming? Like – really? Gettaway!

  91. Hype O'Thermia

    Indeed, and the pointlessness of supplying tips to the ODT compared with the Warmington-on-sea Daily Chronicle and any other newspaper on the planet.

  92. Anonymous

    Delta pulled a bit of a fast one by holding ORFU to a 30-year lease on floodlights and then selling them to the temporary stadium in Christchurch. For those watching at home, Delta not only owned the floodlights, they supplied the electricity for them too. It just so happened that a “high voltage lighting test” was always done to coincide with an evening rugby game.

    Elizabeth, I think the shock and disbelief would be that the overall liability was $2.35M rather than the $1 million or so.

    • Elizabeth

      Agree, Anonymous. The lead-up in most media was the $1 million figure, plus or minus. Although to me that seemed too tidy, and possibly too small for NZRU not to have a plan fix for… and given the trust arrangement for the houses to Burns St remains unexplained, amongst all historical refusals to open the ORFU books to explain what went down for the sale of Carisbrook and show the extent of Delta sponsorhip (DCC wouldn’t say via Harland; Delta wouldn’t say via its Chief Executive). It’s been a long haul for everyone making formal enquiries by letter. So when they liquidate ORFU what else will come to light to “shock” us ?

  93. Mike

    They had a $2m letter of credit (backed by Carisbrook, and later the DCC), they could pay their bills so long as the amount they owed was always less than $2m (and they paid the interest on time) – it was supposed to cover them over the lean parts of the year when they had no income but still needed to pay grounds people, and the sherry got low – but hey free money! They only got into trouble when they had spent past the $2m limit – to go $800k over in a year and not plan ahead shows incredibly poor financial management.

    And presumably (hopefully!) the DCC pulled the plug on the loan guarantee when the Carisbrook contract ran out … otherwise we’re up for paying the first $2m.

  94. Phil

    You’ve highlighted the worst aspect of this, Hype O’Thermia. ‘There are $750,000 of trade creditors in the community.’ They did this to their own people. The same people they are now crying out to for help. That’s inexcusable. I can imagine that more than a few of those creditors were felt pressured to continue issuing credit in order to retain contracts. Or were pressured by the fact it was Otago rugby. Either way, there is no defence to do that to your own people. It’s a well known trick for property developers not to pay builders until after a number of finished buildings are sold, by using the pressure that the builder won’t get any further work in the subdivision if they kick up a storm after the first house. You would have hoped that the rugby union would have had a little more respect for their “community”.

  95. Russell Garbutt

    The only thing that professional rugby is concerned about is money. Wayne Graham, for the first time it seems, conceded that rugby was a business. It makes you think about just how good at running a business these guys are – real estate, house building etc. Eion Edgar could pay off all the debt of the ORFU (of which he is President) from the loose change he has in his pockets, but the reason that these guys get rich is by not spending their own money unless there is a very good return. Does the ORFU offer a good return? Never has, never will.

    The interesting thing to observe now will be the actions of DVML and the stadium councillors. All of a sudden the spectre of no “private funding” and exposure to people cancelling their seating contracts will be apparent. If we could all see that happening and specifically warned of it, why couldn’t they? Seems to me that this is the first card to fall in a tower of cards.

  96. Peter

    Such a bloody nerve to ask ‘the community’ to help them ‘move forward’ when they owe so much money to that same ‘community’. What kind of imaginary world does Wayne Graham and his cronies live in? Graham is reported to have been close to tears….just couldn’t see it coming. (Give the man a hanky.) Goes to prove that, if that is indeed the case, he and his crew were entirely the wrong people to run the ORFU. I’m sure because they have had such a dream run for so long, by being propped up, they thought it would continue. What a sick joke to think a brand new stadium – itself debt funded – would bring back revenue to them. To think they were going to be anchor tenants for the stadium. Well, that anchor has lost its chain, hasn’t it.
    Private sector funding for the stadium, which I don’t think ever really existed anyhow, is going to disappear and the ‘community’ will be left contributing yet more money due to the stuff-ups caused by these rugby buffoons. What a bunch of dickheads.

    • Elizabeth

      ### ODT Online Tue, 28 Feb 2012
      Otago needs $1m by Friday to keep rugby team
      The Otago community will need to stump up with $1 million by Friday if they want to keep an Otago ITM Cup team. […] There was no sign of fraudulent behaviour or forgery, [NZRU chief executive] Steve Tew said. “I think the issue is over a number of years, and quite a lot of it has to do with ownership, and then the selling and the management of the debt around Carisbrook.
      Read more

  97. Peter

    I notice on the back page of the ODT Wayne Graham is applying for the renewal of his auctioneer’s licence for his LJ Hooker real estate business. Maybe he could apply his auctioneer skills to the ORFU and stadium.

  98. Anonymous

    Worth remembering that the Board is jointly and severally responsible for the losses. Alone.

  99. Hype O'Thermia

    Are you sure, Anonymous? That’s an awfully high-risk position to put oneself into.
    Insurance??

    • Elizabeth

      Amazing how many people as directors of boards never check their exposure to liability when they first sign up. In it for the glory? Not really, good governance – not the champagne lifestyle.

  100. Hype O'Thermia

    Chirpbird has done a good job here with a reminder of the culpability of council staff in providing information to councillors – carefully timed, slanted or whatever, to get the desired decisions. There can be no doubt that some councillors were well in the loop, others were the standard mix of easily led, too lazy to read even the material hand-fed to them let alone do their own research, and the few conscientious ones who had been routinely bullied and disrespected since the day they got more votes than one of the comfy “old boys”. And remember the way Harland, a man not noted for his social skills, not a fellow who would easily have found fulsome welcome by high-placed people in that community, was immediately “befriended” a.k.a. co-opted by commercial rugby as soon as he hit town.

    [ODT Online] Local Government Accountability
    Submitted by Chirpbird on Mon, 27/02/2012 – 8:35pm.
    Staff employed by the Council are expected to have the expertise and competence to advise Councillors on matters of law. Remember our elected reps are our ‘peers’ i.e. our equals – and that’s how it should be. Otherwise we would be administered by managers, rather than being represented. Also remember that all Council staff are employed by the Council CEO who is in turn appointed by the elected Council.
    {continues}

    {Moderated. -Eds}

    • Elizabeth

      So many flaws in Chipbird’s arguments. You don’t expect anyone without a law degree and a practising certificate (and of proven professional standing at law) to provide you with advice on matters at law. How weird is that. Further, you don’t expect councillors to be our equals in this day and age – they must have competencies far and beyond, or we end up with… a new stadium. The water situation was known about at least 15 years ago by Council and that situation is documented.

  101. Hype O'Thermia

    The point is, they are supposed to be elected by and come from the community, unlike e.g. recruited by a professional firm because of their qualifications and experience. Their duties include evaluating what comes up – and there are legal, engineering and other reports, godnose consultants proliferate expensively around that place. Councillors are expected to be among the sector of our peers who can read briefing papers and ask questions about anything they don’t understand. Having done poorly in their formal education should not be relevant by the time they reach the age to get voted onto council. Many a turned-off kid turns into a very smart guy or gal later when they discover the need to use their wits.
    As for the water situation, it’s interesting (in a depressing way) how quickly knowledge dies. Dismantling the permanent staff structure and hiring private firms and consultants job by job is supposed to be more cost-effective. The loss of institutional memory is collateral damage.

    As an example of the rapidity of loss of memory – what about the documentary on Christchurch earthquakes & land instability that was aired not so many years before the council of the time bowed to developer pressure to open up IDENTIFIED vulnerable land for more housing? ALL memories of past quakes in Christchurch seemed to have disappeared before the recent catastrophe. Our crumbling pipes are much less dramatic, much more easily forgettable I reckon – not meaning this is OK!

  102. Hype O'Thermia

    Exactly, And there was sod-all of it in evidence the last several years. That’s why names have to be put up repeatedly in public. In out-of-town, out of NZ publications too, because of the way pieces get forwarded around both in the media and by private correspondents. What happens in Dunedin don’t stay in Dunedin any more – tough luck steakholders!

    • Elizabeth

      ### ODT Online Tue, 28 Feb 2012
      Six years of deficits hang over ORFU
      By Paul McBeth of BusinessDesk
      The Otago Rugby Football Union’s looming liquidation comes after six years of deficits for the club as dwindling ticket sales and mounting debt squeezed the life out of the sports administrator. APNZ
      Read more

  103. Anonymous

    Here’s a very good outline of those duties. I am not sure that the ORFU Board have fully realised the extent of their responsibilities yet.
    http://www.boardworksinternational.com/board5.htm

    • Elizabeth

      Anonymous, I hope you’ll also mail the link to DCC mayor and councillors, and directors of DCHL, DVL and DVML, oh that’s just for starters on the mailing list… I think they’ll need it soon, although it was possibly better sent when Adam was a boy.

      PS. I like the line: “A duty not to trade while insolvent”…
      Attaching to that is “When an organisation is insolvent and an action is brought against it by creditors, because there is no money in the organisation’s coffers, the directors’ personal assets are at risk.”

  104. Ro

    I like this line: “Increasingly a director’s fiduciary responsibility is seen as also including a responsibility for certain other categories of stakeholders such as, in certain instances, creditors. While the board does not owe a legal duty to employees, nonetheless there is a growing acceptance that it owes a moral duty to this group of special stakeholders.”

    • Elizabeth

      ### ODT Online Tue, 28 Feb 2012
      Former NZRU boss offers help to Otago union
      Former NZRU boss David Moffett has offered his services to the Otago Rugby Football Union after it said it would go into liquidation on Friday with debts of with $2.2 million.
      Read more

      Be warned, list of ‘helpers/supporters’ in the item is embarrassing – after so much debt, millions and millions, year in year out, and use of ratepayers money through front and back doors of DCC, apparently it is quite OK to get this rugby show back on the road. My reasons to leave Dunedin are multiplying at a very fast rate.

  105. Phil

    It’s sickening, Elizabeth. No one wanted to say a word when it came to paying for the stadium, but suddenly they are all charitable when it comes to saving “their” game.

    Save me a seat.

    • Elizabeth

      To add to that Phil….

      As of 10 minutes ago, today is our busiest day at What if? Dunedin… since Paul started the website in March 2007.

      Our last busiest day was 25 August 2009… (STS action…).

  106. Hype O'Thermia

    Save you a seat, Phil? Don’t you mean “pass me a bucket”?

  107. Anonymous

    @Hype, it turns out that the money was not so much pissed into the bucket but simply pissed away against the wall.

  108. Anne Elliot

    Astounding all the talk about finding enough money to have an Otago team in the ITM cup (what’s the ITM cup?) but NO talk about paying the creditors first. This includes rent arrears to the DCC.

  109. Phil

    Yes, the priorities of those involved speaks volumes.

  110. Russell Garbutt

    For “making a fresh start” read ignore your creditors, ignore the realities, and continue to bludge on the community. Time for you to tell us all just how much Delta (who are in the final washup answerable to the ratepayers) have coughed up over the years.

    To those that say that they didn’t see this coming and it was all a shock, I say you are either blind, stupid or lying. Maybe all three.

    To those that caused this whole mess – and you know exactly who you are – you could do the honourable thing and put some of your “personal” wealth into paying off the creditors and real community who you have been bludging off for years. Pious expressions of regret do not wash a bit.

    To those past pro rugby heads talking about proud traditions – there is no proud tradition of pro rugby in this province. While you might have made a bloated living out of it, you should know as Wayne Graham has finally admitted that pro rugby has torpedoed the amateur code.

    And finally to those stadium rugby Councillors still sitting round the table, we all saw this coming, warned you, and you had the stupidity to ignore what was obvious. We haven’t seen the worst of this by a long shot, but again, it is all beyond you. Pro rugby might have killed the code, but you lot are killing our City.

    • Elizabeth

      It does appear that ORFU Board members have continued to trade while knowing the ORFU has been insolvent. Creditors, go for the Board members’ personal assets.

  111. Anonymous

    On the plus side, this article finally includes the words “Malcom Farry” and “huge embarrassment to the city” in one sentence.

    http://www.odt.co.nz/sport/rugby/199483/mains-asking-business-help

  112. Anonymous

    Mayor Dave Cull is still protecting professional rugby and its stakeholders. Read his softly, softly responses. It is embarrassing. Stand up for your city Mayor Cull!

    http://www.odt.co.nz/news/dunedin/199478/unpaid-rent-situation-angers-councillor

  113. Phil

    I presume that Laurie and Eion’s money will be used to pay creditors ? Right ? Right ?

    Be a different story if GJ Garder was owned money.

  114. Peter

    Any new money given over by these businessmen through what’s left of the ORFU is not for the ORFU, but should be immediately handed on to creditors. I’m not sure of the process, but wouldn’t those who handle the liquidation have first call on this new money? You’d think so. For that reason, I can’t see these business people propping up the old ORFU by Friday. Bankruptcies happen. Another day goes by and you start up again.
    They talk about the proud 131 year old history of the ORFU but, let’s face it, sentiment was thrown to the wind with the disposal of Carisbrook. The fact is there is nothing ‘proud’ left.

  115. Peter

    Ahhh… just read the front page of today’s ODT. Yep. Go bankrupt and start again.
    ‘The community’ should ask for money up front for any goods and services requested by a new ORFU. That includes, the council, for any rental for use of the stadium by these cowboys. If not, they are suckers. It won’t be long before the same happens again with new debt racked up.

  116. Hype O'Thermia

    There’s a class of people whose “proud tradition” is ripping off people who trust you. It includes the guys who appear on Fair Go for pressuring people into paying bloated prices for roof painting then slop watered-down paint over the bits you can see from the ground then promptly disappear with the cash.

  117. Hype O'Thermia

    Isn’t there something in bankruptcy law that prevents going bankrupt then immediately starting up again? It may only apply to individuals e.g. sole traders.

  118. Ro

    You can start again if your creditors forgive the debt. That is what they are seeking. I for one creditor do not forgive the debt.

    For the-most-stupid-question-odt-readers-get-to-vote-on prize, today’s one gets the cake – check it out and point out out that no-one could vote the same way on the two halves of the question – unless they were terminally brain-dead.

  119. Hype O'Thermia

    Get with the spirit, Ro! Ahem… I voted :-) Stupid it undoubtedly is but since it will surely be interpreted as FOR or AGAINST letting rugby pick our pockets and leave their creditors in the dust, any way of saying no goddamn way is better than nothing.
    The online comments writers aren’t all that happy. There seems to be a bit of crabbiness about being ripped off in the first place let alone wanting another bite at the rort-cake.

  120. Robert Hamlin

    Dunedin businessman Malcolm Farry, who headed the Carisbrook Stadium Trust which organised the building of the stadium, said he had not been in Dunedin much recently.

    Build the Stadium (in Dunedin) and fhey will come – To Wanaka?

  121. Ro

    Ahem, Hype O’Thermia ;-)

  122. Peter

    What are Malcolm Farry’s credentials as a ‘businessman’ that made him stand out as a ‘mover and shaker’ to build a stadium? I know he is chairman of the Farry Group of Companies, but those businesses are in a different league to building a large public project like a stadium. His profession – dentistry – doesn’t seem to provide the necessary business background.
    I guess his role, all along, has been as a ‘facilitator’/spin doctor and, on that measure, he has undoubtedly succeeded. Most councillors and a large proportion of the population have been sucked in hook, line and sinker.
    Still, Malcolm chants the same mantra of ‘on time and on budget’. And why not? This has served our South Pacific swami so well. Also, let us not forget that he has stated that he always saw his role as providing a stadium for Dunedin (there’s that Messiah complex- again) and we were ‘only limited by our imaginations’ as to how we were going to use it. He was even helpful with providing us that wonderful list of possible uses (Dalai Lama, etc) in case our imaginations were indeed limited. That multi-purpose list remains the real delight of this fiasco and gave us a bit of light relief amid the gloom.

  123. amanda kennedy

    Yes. Exactly. Who designated Farry as some sort of expert? When he says the city will be embarrassed if the rugby team goes belly up, why should I listen to him? It is himself he is referring to. A freudian slip methinks.

  124. Peter

    Amanda. If there is anything freudian, I think it is because he has been suckling on his own ego for too long. Maybe his mum told him he was so wonderful for so long. Who knows.

    • Elizabeth

      Interesting comment from Julian Smith:
      “Allied Press was one of the companies owed money by the union. It was “an indictment” on the ORFU that it had failed, when no other union in New Zealand had got into such a situation, he said.” Link

  125. Calvin Oaten

    See ‘Stuff’, N Z Herald ,Sports, Chris Rattue Column. The rugby meltdown in support doesn’t stop at Otago. Politicians will eventually notice.

    {Chris Rattue: Rugby must not be bailed out yet again
    http://www.nzherald.co.nz/rugby/news/article.cfm?c_id=80&objectid=10788655 -Eds}

  126. anon

    ODT has corrected its atrocious poll. Still got start afresh though. ORFU must not be allowed to default on its creditors and raise the money to meet current responsibilities before wasting more money on a few games and administrative costs. Anything else would be offensive and immoral.

  127. Ro

    Rob Hamlin makes a devastating point: http://www.odt.co.nz/blogs/rob-hamlin/199532/time-tear-orfus-cloak-commercial-invisibility – the members of incorporated societies can do all kinds of things including paying themselves vast sums, but can’t be made responsible for the debts they run up.

  128. Calvin Oaten

    We might find that the Carisbrook Stadium Trust (CST) is also inc. thus the sipping at the well by a whole host of miscreants, whilst being highly immoral, may not be illegal.

  129. Mike

    They’re also a registered charity so some different rules also attach

    What I wonder is “did they pay their PAYE and GST”? not doing so could become a whole other sort of sad

  130. amanda kennedy

    “..There should be outrage and protest on the streets if one cent of public money goes towards the Otago union. Rugby is a private enterprise, and one that needs to stand on its own two feet, for its own sake as much as anything…” Here I completely agree with Chris Rattue

  131. Lindsay

    “Wayne Graham said the board had taken the only responsible action it had available to it by proposing to go in to liquidation.”

    Words almost fail me. Their situation is not markedly worse than it was a year ago – well over a million down the toilet, expenditure far exceeding income yet again and no real prospect of reversing the decline.
    The responsible action would have been to go into liquidation the first day they couldn’t pay their debts, not keep on racking up bills with local suppliers when they never had any prospect of paying them back.

    • Elizabeth

      Uh-oh, hear we go…

      Channel 9 (video)
      Otago Rugby Football Unions impact on local high schools
      February 29, 2012 – 6:09pm
      http://www.ch9.co.nz/node/17021

      • Elizabeth

        Dave Cull and others interviewed…

        ### radionz.co.nz Wednesday 29 February 2012
        Morning Report with Geoff Robinson & Simon Mercep
        07:36 Return to amateur rugby could solve domestic troubles
        A return to amateur rugby seems a far fetched idea for a country which boasts the best team in the world, but New Zealand’s domestic competition faces that threat as provincial unions continue to struggle. (6′50″)
        Audio | Download: Ogg Vorbis MP3 | Embed

  132. Anonymous

    It is strange reading comments on the ODT forum by people trying to justify or protect the interests of ORFU. This group is trying to clear its debt by taking an almighty dump on 180 creditors and ratepayers. One thing these so-called leaders and stakeholders demonstrate is how quickly they will discard responsibility when it suits their interests.

  133. The difference between the idiot that knocked over the middle pub in Alex the other week and this lot? He turned himself in….

    There has never been enough room for this much rugby, nzrfu *needs* to be held accountable right along side the local lot.
    DCC are just idiots.

  134. Then checking emails tonight this little gem was sitting there….

    Dear Daniel

    As a keen supporter of rugby in Otago we wanted to let you know about work underway by the NZRU following Otago Rugby Football Union’s announcement last night to cease trading.

    Like everyone associated with rugby in Otago, the New Zealand Rugby Union was also greatly disappointed by the news of the Otago Rugby Football Union to cease trading by this Friday.

    While the news will come as a blow to everyone associated with the game in Otago, the NZRU wants to assure you that community rugby and all the amateur players, volunteers, administrators, and others who have a role in the game in Otago will continue to be supported.

    We fully appreciate how disappointing these events will be for the many people who have worked hard backing rugby in this region.

    Community Rugby

    The NZRU is taking immediate steps to safeguard community rugby and will be appointing people to run community rugby in the coming week and paying those salaries, while meeting with clubs to assess their priorities and discuss how we best work together to maintain and grow community rugby is also a priority.

    ITM Cup
    An assessment of the viability of entering an ITM Cup team from the region in the 2012 competition is currently underway. This will be urgently discussed with players and potential sponsors to see if it can be achieved.

    Super Rugby
    It is important to also stress that the events do not impact on the Highlanders franchise which operates as a separate legal entity. Unlike ITM Cup players, Investec Super Rugby players are contracted by the NZRU and not by a union.

    Although the closure of the union creates many challenges, the New Zealand Rugby Union remains absolutely committed to rugby in this region and we will work together to ensure a strong future for the local game and maintain the proud tradition of rugby in Otago.

    If you would like more information relating to the situation in Otago, a Q&A sheet is available on our website.

    Regards,
    Brent Anderson
    General Manager, Community and Provincial Union Rugby

    Please do not reply to this email as it is sent by an automated system. This message has been sent to those registered as a rugby member in the Otago region on the New Zealand Rugby Union (NZRU) rugby database. Your details were collected when you completed a NZRU rugby registration form. The database is used by the NZRU to communicate with its members with rugby related messages.

    New Zealand Rugby Union – 1 Hinemoa Street, Harbour Quays, Wellington 6011

    Of course I tracked down some dude there and ripped off a reply, I would post that here but I know how sensitive some are around this spot.

  135. Ro

    I have posted the following question on oddity on-line directed to Rob Hamlin for his thoughts, and I’m posting it here too because I want to know the answer:

    In order to avoid being reponsible for any debts incurred by the newly formed ORFU, its officers will presumably have to apply to the registrar of incorporated societies for reregistration. Is he obliged to comply or has he to take into account objections? How does one object? Does one have to be a direct creditor of the previously formed society to have standing or can anyone, as a citizen of Dunedin and therefore corporately a creditor, object?

    {See post: ORFU insolvent for some time -Eds}

  136. Russell Garbutt

    I see that every Board member of the ORFU contacted by the Oddity are still professing shock and surprise at the financial plight of that entity.

    What in the hell were they reading when they read their Board papers? What in the hell were they reading when they read the financial reports? What in the hell did they see when the yearly news stories came out of yet another massive loss by the ORFU? The ones quoted in this morning’s issue are a surgeon and a lawyer!!!

    But what is not surprising is how Harland and Brown carefully weave their way past their direct responsibility in all these matters and their critical part in the grand plan of supporting pro rugby by the ratepayers. They can of course not expect rigorous questioning by their friends….

  137. Rob Hamlin

    Ro,

    I don’t know, but it would be well worth finding out, and quickly. I will look into as I hope will others. Many minds being better than one. If there is such a system – it should be used, and made public so that others can ‘feed in’.

    {See post: ORFU insolvent for some time -Eds}

  138. Peter

    I hope Bunton goes into surgery knowing the background to the operation he is about to perform.
    See how Harland tries to side step responsibility and dump on the ORFU’S financial problems. How about his role, as a public servant, trying to make a failing private business stand on its own two feet using public money? He has got a lot to answer for and now he’s not in a pivotal position to direct things he is ever more vulnerable.

  139. Anonymous

    Directors of the Board are solely responsible for the losses. Their personal assets are at risk. If they show shock and surprise at the situation, then they are open to a charge of recklessness. And that can carry jail time.

  140. Ro

    Anonymous, if only. It seems that ORFU is an incorporated society, not a business.

  141. amanda kennedy

    So wirehunt we are to believe…” …the New Zealand Rugby Union remains absolutely committed to rugby…?” Who do they think they are kidding? The Rugby Union and the ORFU are committed to keeping big salaries in their bank accounts. They don’t care about rugby at all. At all. They care about money. It is the fans that care about rugby, and some of them are confused and think the fiscal buffoons on the ORFU boards care about it too. They don’t, they want the gravy train to keep on coming, from the Rugby Union, or the DCC ratepayers….

  142. But of course they are, wouldn’t want the gravy train to stop….

  143. Mike

    damn abridged again … what I meant to say was:

    Why is this man spending all his time trying to start a new union? as chairman of the failing ORFU surely his prime responsibility is his creditors.

    Isn’t a captain supposed to go down with his sinking ship, evan after all the rats have left.

    apparently that last paragraph was a little too close to the bone

  144. amanda kennedy

    The ODT abriged the part of my post where I said that the media still is not keen to remind readers who on council are accountable for the stadium debt the city is saddled with. The ODT really does not want to remind us all that Crs Hudson, Brown, Bezett and fellow stadium councillors have every reason to help the ORFU out if they can; with no rugby at the stadium, even the most disinterested reader will start to wonder why we built it, and then they might wonder who made that decision.

  145. amanda kennedy

    A letter in the print version of the ODT today reminds us that Carisbrook was sold to get cash to pay for ORFU debts. That is why they wanted a nice new stadium, not because it was too old. If I was a rugby fan I would be livid. I think the game is dull but even I know that Carisbrook was a big deal in the history of Rugby. But the ORFU couldn’t care less, they saw dollar signs and sold Rugby’s heritage. Sad.

  146. Anonymous

    @Ro, the same rules apply to Directors of incorporated societies as to companies. While the MEMBERS are shielded from losses, the DIRECTORS are not. Believe me, I have sat as Director of an Incorporated Society. From public statements, it appears that the Board are not well aware of this, nor the penalties for reckless trading or trading while insolvent.

  147. Lindsay

    I have not heard any more about the 2 million dollar BNZ loan and who is going to be left holding the can. If the DCC were guaranteeing the loan then surely the only way they could relieve themselves of that responsibility would be for the loan to be repaid – banks are funny like that.
    If they were still guaranteeing it when Carisbrook was sold, then you would have to ask, if the ORFU no longer possessed the security for the loan, why were they given any part of that 2 million dollars, knowing there was virtually no chance of ever seeing it again. The ORFU probably couldn’t believe their luck.

  148. Anonymous

    I’m not sure what was behind ODT reporter David Loughrey writing that story about ORFU been given ‘every chance’ but it is interesting he associated former chief executive officer Jim Harland with stadium councillor Syd Brown.

    http://www.odt.co.nz/sport/rugby/199627/rugby-orfu-was-given-every-chance

  149. Mike

    Lindsay – if I recall correctly the DCC said they would guarantee the loan so long as the ORFU were renting Carisbrook …..

    Now it could simply be that they forgot to do the paper work with the bank and they’re still the guarantor, or it could be that because the ORFU haven’t actually paid for renting Carisbrook the guarantee is in effect until they pay up, or alternately because they haven’t been paying up they, weren’t ‘renting’ and haven’t been guaranteed (these are the sorts of things lawyers get to argue, depends a lot on what was written in the contract).

    I’ve been saying for a while that there was going to be a rush for the door when the time came (and the little guys get trampled) – the DCC’s removing their guarantee of the ORFU’s loan (as they should have done some months ago after the last game at Carisbrook) would have put the BNZ in an uncomfortable position and they would likely call their loan. However a smart banker would have seen the writing on the wall and called the loan before the DCC’s guarantee ran out sticking the ratepayers with the debt.

    As always the facts are a secret – and it may yet make some lawyers quite rich.

  150. Lindsay

    I am sure if any guarantee was signed, the DCC would have examined it very carefully, and considered all possible outcomes, including the present one, to ensure the ratepayers were not exposed to any risk if things went bad.
    On the other hand, I was surprised to read two things the other day. Firstly, that the stadium is not a white elephant, merely in danger of becoming one, and secondly, that the difference between the two states relies on half a dozen fairly poorly attended ITM Cup games. I bet the council did anything it could to keep the rotting hulk of the ORFU afloat because as they have said themselves, the stadium needs a tenant.
    I suppose in this new era of transparency we could always just ask.

  151. Russell Garbutt

    There are well established methods for laundering money out of pokie funds which, I’m sure, those involved in professional rugby, are very well aware of. The people to deal to this are the Department of Internal Affairs and anyone that has any suspicions or evidence that such laundering or improper use of pokie funds would be well advised to contact the Department to voice their concerns. What I cannot believe is why people involved in amateur rugby have not been asking where all this pokie money has been going in Otago’s case. Clubs are struggling, the NZRU is pouring close on a million a year into what they say is community rugby, and yet the ORFU is getting absolute truckloads of money from pokie funds to run the business. Where has it all gone folks?

    Probably to the same place that the million that disappeared into this mysterious housing trust went.

  152. Hype O'Thermia

    Did anyone come up with the valuations – GV / QV – of those houses at the time they mysteriously “went” into that trust? Eight houses for $1 million … at what stage of the property market? Prices have dropped significantly from their high point which is why I wonder what the market was saying about value at that time.

  153. Russell Garbutt

    You would have thought that if this Trust was really a vehicle for the ORFU then the assets of the Trust would be recognised somewhere in their Annual Accounts. Has anyone seen these audited accounts yet? They must have been presented to the various constituent members of the ORFU by now. The houses could be classed as lower in value than most.

    The other question I would be asking if I was a member of the ORFU is what other business was transacted using this Trust? Where is the million?

  154. Mike

    I suspect the million doesn’t really exist – there was more debt being hidden in the trust to make things look better than they really were – or maybe it was just the sherry fund

    But who knows? who even knows if it’s the only secret trust

  155. Russell Garbutt

    My picking is that there well may have been – and why are no serious questions being asked by ORFU members? Are they as useless as their Board? Here is a hint – find the costs of running the ORFU 10 years ago and then last year and ask if community rugby was better or worse off financially

  156. Anonymous

    The two hardliner rugby fans I’ve come into contact this week don’t want to see that side of the business. They don’t want to recognise ORFU has shafted clubs for years or is pulling a fast one on loyal creditors. They don’t want to know where the money went to or who spent it. They don’t care if pokie gambling benefits their sport. They just want their rugby. Both pulled that extreme card – “what about all the children?” Yes, they actually said “all”. It doesn’t matter to them this is the tip of the iceberg. That this two million dollars actually reflects on the whole group of stakeholders who committed Dunedin to $460m and forty years of debt. Once again choosing to ignore that their children and their children will be paying for their fun.

    I don’t consider rugby stakeholders in this town any different to the companions of Gavin Clifford Bennett. An auditor noted he broke a hundred million before alarm bells went off. People are saying things like “Wow, a million on female companions!”. But they’re missing the wider worry. Over $100m has vanished! And while he was living life to excess, so were others whether they be so-called friends or acquaintances. They too should be made accountable for feeding at the same trough but they won’t.

    Just like what happens in Dunedin.

    • Elizabeth

      BREAKING NEWS
      Read the theft continues at ORFU… what a sad bunch of morons.
      A full forensic investigation of ORFU is overdue.

      ORFU Board members are fully liable for all claims by the creditors. It’s that simple on the surface. Each Board member has personal assets (which I’m sure they want to keep out of the ORFU fray). For example, Mr Graham hired a helicopter for a family-society wedding in Wanaka recently, several reports from wedding goers have trickled back to Dunedin, stated in disgust. Does this tell us anything about his real estate business, or his rugby business. Pretentious git. Is Mr Edgar insolvent – like hell.

      ### ODT Online Fri, 2 Mar 2012
      ORFU gets another week
      The Otago Rugby Football Union’s board has delayed by one week the filing of an application to liquidate the union, pending the outcome of discussions around a possible recovery package. The application was due to be filed late this afternoon, but New Zealand Rugby Union (NZRU) Chief Executive Steve Tew said the ORFU board had agreed to defer the application to allow more time to work through the details of a possible recovery package.
      Read more

  157. amanda kennedy

    These Rugby fat cats are after our ratefunds. That is the bottom line. The council is dominated by stadium debt lovin’ boys, seven of them, read them: Multi chair of the DCC Cr Hudson, Councillor for Life Collins, Weatherall, Noone, Acklin, Bezett and of course Chair of Finance, Strategy and Development Cr Brown. They all have every reason to give to Big Boy rugby to cover up their own fiscal ineptitude, the rugby fat cats will put the hard word on these seven. Do you think Cull will stand strong against these seven buffoons out to protect their reputations at all costs?

  158. Anonymous

    @Amanda, the scale of the scandal to come may finally draw the attention of Government to the antics of the local Old Boys.

    I remember with some amusement now having a lecture from one of that ilk about a liability issue of some hundred dollars or so. Will be nice to see a few people served with writs for a few hundred thousand so that they can finally understand what responsibility really means.
    It may also encourage a few other local businesses to get the idea that accepting the lie “the money is ready it just has to be signed off and it will be in the bank” doesn’t have to be done any more. Wait for it to get to 90 days, then issue a statutory demand. Payment in full then has to occur within 15 days or a winding-up order gets issued.
    Few of these antics would be tolerated anywhere else. They should not be tolerated here.

  159. amanda kennedy

    If Cull gives one dollar to these individuals then he has a responsibility to bring proceedings against them for fiscal negligence; otherwise in a year’s time when they have racked up the debt, guess who they will come to for more handouts? The Dunedin ratepayer will be paying for these men to keep on living in the standard to which they have become accustomed. See how much people will want to support rugby if that happens!

  160. Anonymous

    Pie. Stadium Councillors. Eggs. Council Executive. Flour. Stakeholders. Toilet Paper. Otago Rugby Times. Kitty Litter. Sometimes my shopping gets distracted.

  161. Mike

    It had better not be from the club’s stocks they need them to be able to be sold to pay the bills

  162. Anonymous

    Look up the Uploaded Financial Statements for 2009 on societies.govt.nz
    See Note 15 “Going Concern”.
    The ORFU was effectively broke in April of 2010 when the additional $200K overdraft fell due and was technically insolvent in November 2009 with a negative equity of $750K.
    Both of those should have been red flags to a wide-awake board. Ron Palenski (where is he now?) was the Chairman at the time.

    • Elizabeth

      ORFU discussion begins at 6:16 minutes.

      ### radionz.co.nz Friday 2 March 2012
      Afternoons with Jim Mora
      16:10 The Panel with Islay McLeod and Richard Langston (part 1)
      The ORFU liquidation; Outrage over a recent an abortion ethics study. (30′17″)
      Audio | Download: Ogg Vorbis MP3 | Embed

      [Islay McLeod always makes me throw up.]

  163. Phil

    Funny, we were just talking about Ron this morning. For so many years he played on his status as ORFU chairman. Self appointed town bully. Now he seems to be missing in action.

    • Elizabeth

      31 December 2011, ODT describes Palenski as “a Dunedin writer”.
      http://www.odt.co.nz/lifestyle/magazine/192652/best-day-your-life-ron-palenski

      Paper Plus burble (my italics):
      “Biography – Ron Palenski is the author of many best-selling books and is widely regarded as one of New Zealand’s finest journalists […] Although known mainly for his work in the sports arena, Palenski is also acknowledged as one of this country’s finest popular historical writers.”
      http://www.paperplus.co.nz/author/Ron-Palenski?i=124126

      Channel 9, 24 June 2010 – 8:12pm
      Ron Palenski
      Rugby Historian Ron Palenski tells us about the history of our iconic rugby grounds, Carisbrook.
      http://www.ch9.co.nz/content/ron-palenski (video)

      • Elizabeth

        “We [the community] didn’t build the stadium not to play in it. The community all contributed to the stadium. I think it is very important we play there.” -Graham

        ### ODT Online Sat, 3 Mar 2012
        A long way to go: Graham
        By Steve Hepburn
        From no chance to a slim chance – Otago Rugby has lived to fight for another seven days. The union said yesterday it had delayed its decision to move into liquidation by a week, although chairman Wayne Graham said he was only 10% to 20% confident of success.

        “This organisation has had money chucked at it for decades and it has not solved the problem. So what we need to do is make sure we have a business model that is sustainable and gives confidence to the supporters that it is worth supporting.” -Graham

        Read more

        ****

        “I’m just surprised they didn’t have an updated position from month to month. We certainly did.” Hornbrook said he preferred to “get kicked around by the board” over his monthly reports than have the union end up in deep financial trouble.

        ### ODT Online Sat, 3 Mar 2012
        Rugby: Former officials critical of union
        By Mark Price
        One of the Otago Rugby Football Union’s longest-serving former administrators says he was “amazed” at how slow the union’s board was to learn of its impending financial trouble. John Hornbrook served as the union’s chief executive from 1984 until 2003 and recalled the era when he was responsible for monthly reports to the board intended to identify potential problems early.
        Read more

        ****

        Asked if he preferred liquidation or a rescue package, Mr Cull said: “I would rather we got our money back. I think that’s what the ratepayers would expect. It’s a debt, and we would want our money back.”

        ### ODT Online Sat, 3 Mar 2012
        Cull welcomes ORFU news
        By Chris Morris
        Dunedin Mayor Dave Cull has welcomed news ratepayers and other creditors together owed $2.35 million by the Otago Rugby Football Union could yet get some of their money back. That followed yesterday’s announcement the ORFU was delaying planned liquidation proceedings by one week, while continuing to work on a rescue package […] Mr Cull told the Otago Daily Times any rescue package would require agreement from all creditors, including the council, which was owed $399,000 in unpaid rent and other costs for the use of Carisbrook by the union.
        Read more

        ****

        Rugby: We would like to hold our heads high – Diack
        “They have been running at a loss for so long and done nothing about it. That’s what I’m perturbed about. It was never mentioned that we were in dire straits.” -Tuppy Diack, former ORFU president (2005)

  164. Anonymous

    ‘Mr Cull told the Otago Daily Times any rescue package would require agreement from all creditors, including the council, which was owed $399,000 in unpaid rent and other costs for the use of Carisbrook by the union.’

    It’s not a bailout. It’s a rescue package.

    Our mayor has got the stakeholder stink on him:
    http://www.odt.co.nz/news/dunedin/199924/cull-welcomes-orfu-news

  165. Anonymous

    {Comment removed. Off topic. -Eds}

  166. Anonymous

    {Comment removed. Covered by What if? -Eds}

  167. amanda kennedy

    Yes. I noted Graham’s line …”I think it is very important that we play there [at the stadium]…”. Here we have the power the ORFU has over stadium councillors Hudson, Brown and mates in print. Nice and clear for the councillors to see, basically he is saying “… help us out old mate Hudson, or you have no reason to have built the stadium, you will look like a bunch of conmen who spent $200 million for nothing…and you don’t want that now do you?”. As long as Hudson’s cabal are on council the city is going to be at the beck and call of ORFU fiscal fools, sorry, I mean ‘business leaders’ as they are described in ODT speak.

  168. Anonymous

    Amanda, we should be regularly reminding constituents of the remaining DCC and ORC stadium councillors, now through to the next election.

    DUNEDIN CITY COUNCIL
    Current:
    – Bill Acklin
    – John Bezett
    – Syd Brown (Mosgiel Taieri)
    – Neil Collins
    – Paul Hudson
    – Andrew Noone (Waikouaiti Coast – Chalmers)
    – Colin Weatherall
    Previous:
    – Peter Chin (former mayor, voted out)
    – Michael Guest (voted out)
    – Richard Walls (voted out)
    Abstained on the stadium vote:
    – Fliss Butcher

    OTAGO REGIONAL COUNCIL
    Current:
    – Duncan Butcher (Dunstan)
    – Gretchen Robertson (Dunedin)
    – Doug Brown (Moeraki)
    – Sam Neill (Dunedin)
    – Louise Croot (Dunedin)
    – David Shepherd (Molyneux)
    – Stephen Woodhead (chairman, Molyneux)
    Previous:
    – Stephen Cairns (former chairman, didn’t stand for re-election)

    If Mayor Dave Cull goes soft on ORFU too then we should lump him in the same list.

    http://www.dunedin.govt.nz/your-council/councillors
    http://www.dunedin.govt.nz/your-council/wards2

  169. Russell Garbutt

    I didn’t hear the Newstalk interview today with Edgar, but apparently he said that the stadium income was “up to 20% rugby”.

    If this is true then 80% of the income is supposed to come from non rugby activities. What in the hell were they thinking about? Did they really believe the Marketing Bureau Ltd reports about Dalai Lama visits?

    Time to pursue with vigour this latest assertion. What Edgar seems to be saying is that it doesn’t matter if there is no ITM cup at the stadium because the income was negligible. So what was the stadium built for again?

  170. Russell Garbutt

    The above list of stadium Councillors confirms that less than 20 people jammed this thing through. The above 18 plus Keith Ellwood from the CTO and Harland makes up the 20. There is another list of beneficiaries of course that comprise our dearly beloved Tartan Mafia.

  171. Russell Garbutt

    I believe that it was the ace sycophant Montgomery

  172. Anonymous

    Is there a CTO report identifying who made the decision to commit $7m to the stadium project? Keith Ellwood & Co and certainly Jim Harland need to be added to the above list.

    By the way, according to the Forsyth Barr Stadium page on Wikipedia the University of Otago contributed $10m to the total cost of the project. Did they? I thought the university backtracked on that instead deferring to ‘synergies’ but buying adjacent land for $10m.

    http://en.wikipedia.org/wiki/Forsyth_Barr_Stadium

    • Elizabeth

      The University of Otago cannot donate cash. You need to search previous comments, posts and media reports that mention the former VC’s statement about this.

  173. Russell Garbutt

    Chair of the CTO at the time was – fanfare and sounds of pissing into a bucket – cousin of Malcolm, John Farry

  174. Skylark

    The crowd at last night’s game was an outstanding 22,500. If, as an ODT Online poster asks, the majority had donated $20 to saving the ORFU then it would have covered a significant component of the debt. If 15,000 had contributed $5 it would have cleared the small creditors. Over the last week, some rugby fans have said they would pay $50 and two diehards I met were prepared to pay up to $200. Is anyone aware of any effort made to raise funding during the game? Or is ORFU just waiting for the inevitable “rescue package”?

  175. Anonymous

    Each member of the crowd would have had to stump up $100 in addition to their tickets to clear the entire debt. To clear the trade creditors would have been $10 additional for each crowd member. But that’s including The Zoo fans, who paid $12.50 for their tickets. And families. So it’s closer to $200 in additional contributions. And another $40 to cover the losses for the next year until (if) it turns around. Maybe ORFU should charge a $40 yearly membership fee before you can buy tickets. See where that gets them.

  176. Russell Garbutt

    Anyone notice that the ORFU is now becoming the ORU? The phoenix arising minus the small matter of paying off the creditors?

  177. Calvin Oaten

    Skylark, you seem to think it is just a matter of paying off the small creditors. There is the matter of the $400,000 to the DCC and of course, the small matter of over $2million to BNZ. $2.8m in all. All that notwithstanding, the problem is not as simple as that. There is the underlying dysfunctional culture which got them into this mess in the first place. So far, I have not seen a hint of contrition, nor any indication of a change of heart, just a ‘woe is me’ attitude, expecting the community to rally around. Sorry, but the ORFU has exhausted the peoples’ charity and can go and paddle their own canoe.

  178. Hype O'Thermia

    NatRad
    Scheduled interviews and reviews on Nine to Noon this week:

    MONDAY

    9-10am: Council debt: Larry Mitchell and Michael Reid

    Stopping the reading slide: Tom Nicholson

    • Elizabeth

      ### ODT Online Tue, 6 Mar 2012
      Rugby: Chance of ORFU avoiding liquidation still ‘slim’
      By Steve Hepburn
      Work is continuing on the bid to stave off liquidation for the Otago Rugby Football Union, but it appears any reprieve will go right down to the wire.

      The union had 180 local creditors with debts of $680,000 but Union change manager Jeremy Curragh said the union had not talked to creditors yesterday.

      Read more

  179. Anonymous

    Tuesday. It’s the new Friday.

  180. Lindsay

    I have been thinking about the BNZ loan to the ORFU. I have read the info which a couple of people here directed me to, and understand now that the DCC were only guaranteening the interest not the principal, but I have been left with the following questions.
    Firstly, what possible reason would they have for offering any guarantee, other than it being a handout in another name? What did that say about the viability of the ORFU at the time, who requested that be in place and wouldn’t that be all the more reason to make sure the rent didn’t get behind especially as I read somewhere that the rent was supposed to pay the interest on the money borrowed to purchase Carisbrook.
    Secondly, I don’t know much about commercial lending arrangements, but what kind of bank loan does not have some sort of security? If it was the ground, would they still have been able to sell it to the DCC, and if so, is it possible tht BNZ could still have some claim over Carisbrook?

  181. Phil

    When the Construction Contracts Act came in to play, it was primarily to protect the small contractors who stood to lose a greater percentage of their business should the client not pay than the main contractor would. If the DCC had decided to stop paying for the construction of the stadium, Hawkins would have walked away relatively unscathed. They had maybe 20% of their resources tied up in the stadium. The painter, by contrast, while significantly smaller, may have had 100% of his resources tied up in the project. The effect of non payment would be catastrophic for the painter. He loses everything.

    The same principle should be applied with repect to the ORFU. First up, everyone should get paid. No question about that. But, in the event that doesn’t happen, I think that the DCC should stand back and let those contractors who had a greater risk, move to the front. As much as it pains me to say it, DCC can carry a $400k loss. The bank can carry their loss also. The caterers, on the other hand, need their money to pay wages. If the DCC truly does care about their community, they should be making sure that any action they take in this matter does not have a negative impact on other residents in the community.

    • Elizabeth

      ### ODT Online Thu, 8 Mar 2012
      Rugby: Speight’s pledges to stick by Otago
      By David Loughrey and Steve Hepburn
      With one day to go until the fate of the Otago Rugby Football Union is decided, there is no clear indication what will happen to the union. All parties had gone to ground yesterday and were not commenting on what action the union would take tomorrow. […] Meanwhile, major sponsor Speight’s will continue its support for rugby in Otago, whether with the ORFU or another body that takes its place.
      Read more

      • Elizabeth

        ### ch9.co.nz March 7, 2012 – 6:50pm
        Would you dip into your own pocket to help out Otago Rugby?
        Although talks with stakeholders helped to provide a stay of execution for one week, the future of the Otago Rugby Football Union is still up in the air. The 9 Local News Word on the Street team hit South Dunedin today, to ask if you would dip into your own pocket to help out Otago Rugby.
        Video

        ****

        ### ch9.co.nz March 7, 2012 – 6:52pm
        Two days until the deadline
        With two days until the deadline for the Otago Rugby Football Union it appears the fate of the union is still firmly up in the air. Neither the NZRU, ORFU, nor the DCC wanted to venture a comment before the deadline imposed by the ORFU board.
        Video

  182. Anonymous

    Not one cent, Mayor Cull. Not one cent.

  183. Russell Garbutt

    I also read the much more revealing Stuff story and totally agree with Anonymous – if one more cent of good money is thrown at this immoral dungheap labelled pro rugby from our pockets then I suspect that those that approved it will be off the Council faster than they believe possible.

  184. amanda kennedy

    “… the council has a strong vested interest’ in keeping the ORFU at the stadium. Sure it does. If the ORFU leave then all the business ‘leaders’ who supported the stadium joke will have a lot of egg on their faces. And they will not be able to be ‘business leaders anymore’. That must not happen. Obviously. We must continue to believe these individuals are the Ones Who Know All or the Great and the Good. Not the fiscal buffoons they really are. Many are not fooled, Mayor Cull.

    • Elizabeth

      ### ODT Online Fri, 9 Mar 2012
      ORFU – We need another week
      The debt-ridden Otago Rugby Football Union will miss today’s second deadline to make an announcement on its future – giving itself another week to try and stay alive. The ORFU was due to announce whether it would go into liquidation last Friday but asked for more time.

      The New Zealand Rugby Union (NZRU), Dunedin City Council, Dunedin Venues Management Ltd, the New Zealand Rugby Players Association and the Bank of New Zealand have spent the past week working through the details of the recovery package, the NZRU said in a statement.

      Read more

      ****

      [old news]
      ### ODT Online Fri, 9 Mar 2012
      ORFU: A waiting game still
      By Hayden Meikle
      Liquidation? Or living to fight another day? If no news means good news, nervous creditors and dispirited Otago rugby fans might be in optimistic moods today. All remains quiet on the Otago Rugby Football Union crisis front as the second self-imposed deadline to decide whether to go into liquidation with $2.35 million of debt approaches. There are plenty of whispers – including a theory the ORFU may be able to wriggle out of its $1.2 million bank debt – but facts remain in short supply.
      Read more

  185. Calvin Oaten

    We need another week! Read: Dave Cull and Paul Orders’ arms are just above the waistband, need another week to get them up to and above the shoulder blades before they scream “ENOUGH!” we give in, we will forgive the $400,000 and do a deal on free access to, and use of the stadium. Then the BNZ will extend its accommodation, leaving the small remaining creditors out in the cold. Face it, there has to be some collateral damage. The main thing is to save the noble game of rugby.

    • Elizabeth

      Calvin. We still need the forensic audit of ORFU because there are clearly criminal proceedings that should happen where illegal use of charitable funds for professional rugby, and an element of money laundering, seems to have been apparent. It’s called ORFU cooking its books before NEXT WEEK.

  186. Calvin Oaten

    A “forensic audit?” Don’t be daft. It will never happen. Turkeys never vote for an early Xmas.

  187. Peter

    A very very bad look if the DCC ‘forgave’ the ORFU its debt of $400k to the ratepayers. That money has to be paid back or else the ORFU will accrue yet more debt to the ratepayers. Accountability will then be further demanded of the present council and the questions will keep coming as a result.

  188. MichaelA

    The following appeared in stuff.co.nz this morning:

    “It’s understood, that after intensive lobbying, the Dunedin City Council is considering writing off $400,000 in debt owed in rentals for use of the Carisbrook rugby ground.”

    How come I see no mention of this important little paragraph in the ODT? Perhaps the ODT dare conduct an investigation and find out who/when/why/how etc. Your audience would love to know.

    http://www.stuff.co.nz/sport/rugby/provincial/6547500/Otago-rugby-buys-more-time-for-rescue

    • Elizabeth

      Did ORFU not pass on to amateur rugby the charities grants funded by gaming machines?

      ### ODT Online Wed, 21 Mar 2012
      Rugby: Highlanders First XV competition likely to go ahead
      By Steve Hepburn
      The Highlanders First XV competition is set to go ahead although doubts remain over its funding, while secondary school rugby in lower grades may have a new look to it. The future of the First XV competition had looked in doubt after the financial troubles of the Otago Rugby Football Union, and an inability to access the $80,000 needed to run the 12-team competition.
      Read more

      • Elizabeth

        Due to bad internet connection – wirehunt has emailed reply to my comment.

        Did ORFU not pass on to amateur rugby the charities grants funded by gaming machines?
        I don’t think so, not by the amount of fundraising that goes on at the boy’s smaller club.

        And “The Highlanders First XV competition is set to go ahead although doubts remain over its funding, while secondary school rugby in lower grades may have a new look to it.” doesn’t makes sense. It’s ORFU or whatever they are called, or did that get changed somewhere along the line.

        All the boy wants to do is play rugby but somehow that has gotten too hard, must be all the fingers in the pie.