Monthly Archives: March 2012

Rob Hamlin: The ORFU’s small creditors: If I was one of them…

This post received today from Rob Hamlin was first submitted to the Otago Daily Times for publication at The Analyst blog. The newspaper’s suggested edits are shown in italics.

The conduct of the ORFU over the last couple of years has left a legacy of some 180 small creditors owed some 680,000 dollars. These traders now face a difficult situation, which the recent activities of various well placed worthies have done little to alleviate. These traders now have to make simultaneous decisions on two major matters rather than one. They have to decide whether to pursue their debts. But they also have to make up their minds whether they will continue to trade with the undead but still insolvent ORFU ‘zombie’ organisation that these worthies have rescued from an imminent, thoroughly justifiable and necessary corporate execution and autopsy process. It is most unusual for an organisation of this size, in such an apparently ruinous financial state and with such a poor track record of settling its debts over such an extended period of time to survive a crisis such as this. The fact that this is not a private limited company, but is an incorporated society takes us into completely new and unknown territory.

By a mixture of vague promises and third party support, the ORFU appears to have extricated itself from around three quarters of its multi-million dollar debt on consistent terms of a cash return of zero cents on the dollar. In all cases, except possibly the bank, they also seem to have secured agreements that trade, and presumably credit will continue to be furnished to the ORFU on established or even enhanced terms by these creditor organisations.

A pattern has thus been established and it would be a reasonable presumption on the part of any of the remaining creditors that similar terms in both of these areas will be sought from them on a case by case basis when contact with the ORFU is established by each individual creditor, as the ORFU clearly desires. No general creditor meetings have been called. Only a rather cheeky request via the media appears to have been issued inviting these creditors to get in touch with the ORFU’s accountants individually – presumably if and when they feel that they need to.

Some commentators on the ODT website have noted that I am a specialist in food marketing, and have invited me to consider the supply and demand of pies within the rugby stadia of this town. The food industry is a brutal one, in which not getting paid is an ever present danger, and I therefore spend a good deal of my time teaching and advising on such matters. Their suggestion is therefore an excellent one, and I will discuss the first of these two issues – debt recovery from the ORFU, not from the point of view of an academic, but what the hypothetical owner of ‘The Pied Piemaker™’ Ltd (get it?) might do if they were owed some $12,000 by the ORFU. Continue reading

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Filed under Business, CST, DCC, Economics, Media, ORFU, People, Politics, Project management, Sport, Stadiums

DCC refuses to release DVML six-monthly report until “most suitable time and forum” is found

This is the kind of City Council we have.

This is the kind of company the City Council owns.

This is the kind of stadium the City Council has, running at a crippling loss.

These are the kind of losers running this city, deciding your ratepaying destiny care of the selfish pricks that administer Professional Rugby.

30.3.12 ODT: Stadium report release date deferred again
A report on the financial position of the Dunedin company running Forsyth Barr Stadium is being held for another month, with little explanation yesterday of why. It means the public will have to wait longer for possible insight about whether the stadium will pay for itself, or end up an annual drain on city finances.

WHAT KIND OF MOOD ARE WE IN
There’s never a good time for trying to fool the public.
Not around the LTP and Annual Plan process.

Posted by Elizabeth Kerr

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Filed under Architecture, DCC, DCHL, DVML, Economics, Events, ORFU, People, Politics, Project management, Property, Site, Sport, Stadiums

Dunedin City Council company sponsors Highlanders

RUGBY is core business for Dunedin City Council

The Council, via Delta, says “up you” if citizens don’t like it.

### ODT Online Thu, 29 Mar 2012
Delta partners Highlanders for 2012
By David Loughrey
Dunedin City Council-owned infrastructure specialist Delta Utility Services has expanded its rugby sponsorship, taking on the Highlanders rugby team for 2012. The company will be “executive partner” of the Highlanders, with the sponsorship including the Delta logo on the back of the team playing shorts, where it has been from the start of the season.

Delta has a corporate suite at the Forsyth Barr Stadium, has had jersey sponsorship of the Otago rugby team, and has sponsored Otago junior rugby. A spokesman said the company was in discussions with the ORFU for the future of that sponsorship, following the union’s near liquidation.

Read more

Posted by Elizabeth Kerr

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Filed under Business, DCC, DCHL, DVML, Economics, Events, ORFU, People, Politics, Project management, Site, Sport, Stadiums

ORFU position

### ODT Online Fri, 23 Mar 2012
Opinion: Blog: The Analyst
ORFU bailout – the big sausage and mug wash-up
By Rob Hamlin
As the last sausage sizzles itself into silence, it is now possible to examine the merits, if any, of the ORFU rescue extravaganza. As soon as the ORFU started extending its own life just over two weeks ago, it was pretty easy to see that there was about as much chance of the ORFU actually falling off the back of the gravy train as there was of Kate Winslet falling off the back of the Titanic only thirty minutes into the film.

The ORFU’s fiscal position has not been significantly changed by this rescue. It is still insolvent. It still owes more than $680,000 to small creditors. Its ongoing annual deficit to this point is in excess of $600,000, and the only savings that have been identified (maybe) are less than $300,000 in players’ wages. A return to positive cash flow can thus not reasonably be even expected, let alone guaranteed without some major and as yet unannounced development.

Read more
{The ODT link is no longer available. We are seeking advice. -Eds 3.4.12}

Posted by Elizabeth Kerr

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

DScene reflects on DCC’s unholy mess

### D Scene 21 Mar 2012
Butler lifts lid on ‘deception’ (page 2)
By Wilma McCorkindale
Stadium opponent Bev Butler has handed confidential project papers to council commissioned auditors in her bid for a major inquiry into Dunedin’s stadium project. Butler has passed previously withheld information to a PricewaterhouseCoopers forensic auditing team reviewing variances in stadium completion costs identified by the Dunedin City Council (DCC) earlier this month.
{continues} #bookmark

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Fury over bail-out of ORFU (page 3)
By Mike Houlahan
The Otago Rugby Football Union ‘‘desperately’’ needed to be put in to liquidation so it could be properly audited, Cr Lee Vandervis says. Vandervis was one of five Dunedin City councillors who voted against approving a bail-out of the cash-strapped ORFU in an extraordinary council meeting last Wednesday. […] The DCC’S decision came after a marathon night meeting and sparked immediate outcry. Council offices were flooded with angry calls and emails, and D Scene understands councillors who voted in favour have received abusive messages.
{continues} #bookmark

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We’re rugby-mad but not in a good way (page 7)
By Mike Houlahan – Editor
As the Otago Rugby Football Union faced liquidation, a lot of rhetoric was heard about a ‘‘proud rugby province’’ and the depth of feeling Otago had for the game. Otago, people said, could not be left in the lurch. Otago rugby administrators got caught up in the spirit. ORFU president Wayne Graham – a man who had looked aghast on February 27 when revealing the union’s plight – seemed stunned last Wednesday when interviewed on Campbell Live at 7pm. He thought the rescue package Dunedin City Council was weighing up at that moment was so good that they would sign the deal in half an hour, and seemed perplexed they were still thinking about it.
{continues} #bookmark

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Opinion (page 8)
The truth, the whole truth . . .
By Bev Butler
It is expected that every large project undertaken by a council will require extensive consultation with all ratepayers but the crucial element missing from consultation in this case [the stadium] was the requirement to adhere to the principles of good faith – openness and transparency – during the consultative process. It was that failure by the DCC to truly listen and act to placate the genuine concerns held by so many that draws the inevitable conclusion that the DCC totally failed to act in accordance with the Local Government Act 2002.
{continues} #bookmark

Register to read D Scene online at
http://fairfaxmedia.newspaperdirect.com/

Posted by Elizabeth Kerr

9 Comments

Filed under Architecture, Business, Construction, CST, DCC, DCHL, DVL, DVML, Economics, ORFU, People, Politics, Project management, Property, Site, Sport, Stadiums, STS, Town planning, Urban design

Christ Church, Cathedral Square

### ODT Monday 19 March 2012
Precedents exist for rebuilding cathedral
By Peter Entwisle – Art Beat
OPINION Reactions to the damage to Christchurch’s Anglican cathedral say much about some individuals and potentially more about ourselves as a nation. It’s partly an arts issue but also more than that.
Built between 1864 and 1904 to the design of the British architect George Gilbert Scott – supervised and modified by New Zealand’s Benjamin Mountfort – it may not be the very finest Victorian church in the country. But it is still a notable artistic success.

Christ Church, Cathedral Square (learn more)

Canterbury was a specifically Anglican settlement. The cathedral signifies that but because of its size and prominence now also represents the city and the province. In New Zealand only the First Church of Otago has a comparable symbolism. If the Christchurch cathedral is lost we’ll be down to only one in a nation unusually lacking in enduring, built, symbols. What would we do if the Treaty House burnt down?
The Christchurch cathedral had been earthquake-damaged before the shocks which started in September 2010. After the February 22, 2011, event Earthquake Minister Gerry Brownlee, no friend of heritage, included it on a short list of buildings which should be restored or rebuilt. An overseas donor stumped up $4 million. Further earthquakes did more damage.
The Anglican Bishop of Christchurch, Victoria Matthews, was ambivalent about the old building from the start. She wondered aloud if a new cathedral should be constructed somewhere else? Recently she announced the old building will be ‘deconstructed’ – she means ‘dismantled’ – to a height of 2-3 metres, and not rebuilt.
She said building a replica would face the Diocese with a $100 million shortfall while a new building incorporating some of the old would leave it up to $50 million out of pocket. Other people have different figures. The Mayor, Bob Parker, acknowledging the wider public interest, offered to take the building into public ownership to provide a broader funding base.
The Bishop refused, now insisting the site must remain in Anglican hands. She also declined to reveal the information on which her decision was based.

How do people handle these things elsewhere?

In England the 14th-century cathedral at Coventry was badly damaged by air raids on May 14, 1940. Later the ruins were stabilised and became part of a new complex designed by Sir Basil Spence and opened in 1962 to critical acclaim.

Coventry Cathedral

In Dresden in Germany the Baroque cathedral (1726-1743) was almost entirely destroyed in an Allied bombing attack on the February 14, 1945. Later a replica was built, incorporating a few surviving fragments and consecrated in 2005, also to great acclaim. (Images show the few original stones as darker, evocative amongst the lighter new.)

Incorporating a few surving fragments…Dresden’s Frauenkirche

These were responses to man-made disasters but what about earthquake-damaged buildings?

The Basilica of St Francis of Assisi in Italy was hurt by numerous earthquakes in the centuries after construction began in 1228. But never so badly as by two which struck on the September 26, 1997. Several people died in the second, members of a party inspecting the wreckage caused by the first. (This was memorably captured by Italian television and endlessly repeated.) The large complex was closed for two years, restored and strengthened. Now it hosts worshippers and visitors again.

Basilica of St Francis of Assisi

Similarly, the church of San Francisco in Santiago in Chile had been regularly quake damaged and restored since construction began on an elaborate replacement of an earlier church in 1558. But a particularly severe quake caused great destruction on March 3, 1985. It was restored again and now houses a museum as well as being a place of worship – and a UNESCO World Heritage Site.

Church of San Francisco in Santiago

What should happen in Christchurch? In each of the cases mentioned, the church, often with the help of a wider community, endeavoured to keep part of the old while restoring or building anew. Where destruction was most complete – Dresden – a faithful replica was built, incorporating the sadly few remnants, in what might be described as a typically Teutonic exercise of vigorous communal will.
We are not faced with anything so challenging. But obviously some of us are daunted or perhaps just unwilling.
The old false dichotomy of whether we should value people or buildings has been paraded again. It’s a fallacy because, if you care about people you should care for the things they care about – and they care a lot about buildings which are symbols. This is not ‘reverence for bricks and mortar’ but reverence for the things they mean.
Christchurch cathedral is not only a place of worship. It already was a symbol of Canterbury. Rebuilt, keeping and evoking as much of the old as possible, funded by and useful to the wider community, it would symbolise national endurance. “Look”, it would say, “We are human and vulnerable. But we recover and overcome adversity.”
What price do you put on that?

• Peter Entwisle is a Dunedin curator, historian and writer.

The article was published in the Otago Daily Times on 19 March 2012.

Posted by Elizabeth Kerr

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Filed under #eqnz, Architecture, Construction, Design, Economics, Geography, Heritage, Inspiration, People, Politics, Project management, Property, Site, Town planning, Urban design

Local government reform

### stuff.co.nz Last updated 09:24 19/03/2012
Local government reform to be announced
By Danya Levy
The Government is expected to announce details of its local government reforms today which aim to reduce rates increases and curb council debt. Prime Minister John Key said this morning the Government believed the 7 per cent average rates increase since 2003 was too much for the community to shoulder. “We accept there are lots of arguments around infrastructure deficit and the cost of bitumen but overall we want to see that number lower,” he told Newstalk ZB.
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### scoop.co.nz Monday, 19 March 2012, 10:50 am
Government must give ratepayers greater protection
Press Release: NoMoreRates.Com
[Statement from David Thornton]
Government must give ratepayers greater protection from free-spending councils. Ratepayers around the country are looking for some solid changes to local councils when the Government makes its promised announcements on local government reform later today. While controls on rates and debt are the main issues there is also the question of limiting those council activities which lead to high debt and ever-increasing rates. This could need inserting new clauses in the Local Government Act clearly defining the services and facilities which councils can and cannot be involved in.
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Ms Sage hasn’t quite got it right, see Dunedin City Council’s unmanaged debt.

### scoop.co.nz Monday, 19 March 2012, 12:00 pm
Local Govt Reforms Driven By Ideology, Not Good Governance
Press Release: Green Party
A manufactured crisis is being used as an excuse to drive ideological changes to local government, the Green Party says. “Central government proposals to cap rates, limit council spending, and force amalgamations would further undermine local democracy,” Green Party local government spokesperson Eugenie Sage said. “The key challenges local authorities face are a backlog of infrastructure investment where populations are growing and their reliance on rates as their major funding source.”
Read more

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### scoop.co.nz Monday, 19 March 2012, 10:50 am
Government must give ratepayers greater protection
Press Release: NoMoreRates.Com
[Statement from David Thornton]
Government must give ratepayers greater protection from free-spending councils. Ratepayers around the country are looking for some solid changes to local councils when the Government makes its promised announcements on local government reform later today. While controls on rates and debt are the main issues there is also the question of limiting those council activities which lead to high debt and ever-increasing rates. This could need inserting new clauses in the Local Government Act clearly defining the services and facilities which councils can and cannot be involved in.
Read more

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### radionz.co.nz Updated at 6:15 am today
News
Cabinet to consider local government reforms
The Cabinet is to consider a range of proposals aimed at controlling growing costs in the local government sector. Local Government Minister Nick Smith has said his main concern is council spending and the financial burden of rates on households and businesses.
Read more

Related Posts:
12.3.12 DCC debt
7.3.12 D Scene: Call for full inquiry into stadium project
27.2.12 Bringing DCC councillors, staff, related entities and individuals to account
21.2.12 Kaipara this time
3.2.12 Local government
17.1.12 DCC living beyond its means [all spending and debt not declared]
4.7.11 Local government finances
16.6.11 “Dunedin” – we introduce Transparency International UK

Posted by Elizabeth Kerr

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Filed under DCC, Economics, Geography, People, Politics