WHAT does DCC’s handling of Carisbrook represent

Blogger Anthony Robins at The Standard offers his take on one of yesterday’s news items. We reproduce his comment in full – given local government transgressions that have defrauded Dunedin renters and ratepayers, multiple times over, connecting to professional rugby, property speculation and the old boys’ network. Be aware, challenge what is happening around you.

### thestandard.co.nz 12:08 pm, February 13th, 2013
Economic crime
By Anthony Robbins
Yes, the Nat’s economic policies are a crime against common sense and the vast majority of the people. But currently in the news is the other kind of economic crime – white collar crime – fraud and tax evasion. We have a new report on the impact [via TVNZ]:

Economic crime costs NZ billions each year, Govt reveals
White collar frauds and economic crime costs the country billions of dollars each year, government officials have concluded.

Minister for the Serious Fraud Office Anne Tolley said many Ministries had been working for two years on a Cost of Economic Crime report that was due to be presented to cabinet soon.

Tolley, speaking at the inaugural Economic Crime Action Network meeting in Auckland yesterday, said: “Economic crime can range from pro forma invoicing schemes that drain the resources of small businesses and charities, to Ponzi schemes, to fraudulent finance companies that destroy the retirement savings of a generation.”

She said the report was unable to generate a firm methodology to precisely calculate the annual cost, but officials had concluded the cost was “likely to be in the region of many billion of dollars per year.”

Billions. Per. Year. (Similar to previous estimates of $1 to $6 Billion.) And where does National put its energies? Into chasing the comparatively insignificant problem of welfare fraud ($22 Million in a typical year). Where does the court system put its priorities? They like to jail welfare fraudsters more often than the (150 times more damaging) tax dodgers.

Our priorities as a country are completely screwed. If we put as much energy into cracking down on economic crime as we did chasing welfare cheats – we could afford a proper welfare system. Link

[ends]

12.2.13 Stuff Economic crime costs NZ billions each year

DCC homepage portrait nightmares 6.1.13 (screenshot)

Posted by Elizabeth Kerr

58 Comments

Filed under Business, Economics, Media, Name, People, Politics, Project management, Property, Sport, Stadiums, Town planning, Urban design

58 responses to “WHAT does DCC’s handling of Carisbrook represent

  1. Anonymous

    There was an interesting anti-fraud article in the Otago Daily Times today but it seemed to be buried near the back, probably just a space-filler to this paper. Hasn’t made it online either. You see, it dealt with the huge disparity between seeking justice for small-time fraud and making a big show-and-tell of it but then little or no effort on chasing down the fat-cat, white-collar criminals – the people who cause massive and irreparable harm yet care none for their actions. This sums up much of what has been allowed to happen here. And is still being allowed.

  2. Mike

    So using the numbers in the ODT today, and including $200k of rent not paid by the ORFU I calculate the DCC lost $3.141m on the deal

    The ODT’s article’s math is a little confusing, largely because it includes paying back the ORFU’s loan, but not the creation of it

  3. Anonymous

    This is the first time I have seen in print that the $2 million loan was recouped. My understanding is that the ORFU had to be bailed out. What happened to the $2 million is dubious. I doubt that it got paid back.

  4. Mike

    As I understand it the $7m paid for Carisbrook was disbursed by the ORFU:
    – $2m DCC loan payback
    – $4m BNZ loan payback
    – $1m secret trust

    I’m pretty sure that paying back the loan was a condition of the sale.

    Of course since we lost more than $2m on the sale you could rightly argue that the loan wasn’t really paid back.

  5. Mike

    BTW: you can see this in the ORFU’s published accounts for that year, minus the mysterious $1m which was squirrelled away before it touched the ORFU’s books.

    Another thing that makes me wonder is the sale of the 8 houses for $692k – when was the last time lots houses, even crummy ones, sold for under $100k in Dunedin – someone made out there

    • ### ODT Online Thu, 14 Feb 2013
      Council costs not recouped
      By Chris Morris
      The Dunedin City Council will make a loss once Carisbrook is sold, and has been hit with another bill for holding costs from the old stadium approaching $1 million, it has been revealed. Sources yesterday said the council had signed a conditional agreement to sell the old sports stadium to building company Calder Stewart, in a complex deal said to be worth about $3.5 million.
      Read more
      http://www.odt.co.nz/news/dunedin/245690/council-costs-not-recouped

  6. Hype O'Thermia

    “Doer-uppers” and “suit handyman” in real estate language, were not selling below $100,000 at the time, were they? And from memory, these places were rented i.e. fit to live in.

  7. Hype O'Thermia

    With this amount of money-management skill the DCC will be lining up for food parcels soon.

  8. Russell Garbutt

    Isn’t it easy to find out who the owners of the houses are via the DCC site? Might find out some interesting commonalities.

  9. Russell Garbutt

    Just did a very quick search on some of the Burns St properties. Does G and C Dickson Ltd ring any bells? Seems that this company has a postal address in Broad Bay. Knowing that the [Property Holdings Charitable Trust] got a million from the DCC for these houses, wonder what went on afterwards?

    • Earlier comments re Burns St houses:

      Elizabeth
      Submitted on 2012/02/16 at 8:17 pm | In reply to Hype O’Thermia.

      Rates Accounts as at 16 February 2012 (previously, as at 14 July 2010):

      47 Burns St – Ratepayer: DCC City Property (same)
      51 Burns St, multi-unit residential – Ratepayer: DCC City Property E P H (same)
      55 Burns St – Ratepayer: DCC City Property (same)

      45 Burns St – Ratepayer: G and C Dickson Limited (DCC City Property)
      57 Burns St – Ratepayer: G and C Dickson Limited (DCC City Property)
      59 Burns St – Ratepayer: G and C Dickson Limited (DCC City Property)
      63 Burns St – Ratepayer: G and C Dickson Limited (DCC City Property)
      67 Burns St – Ratepayer: G and C Dickson Limited (DCC City Property)
      69 Burns St – Ratepayer: G and C Dickson Limited (DCC City Property)
      73 Burns St – Ratepayer: David Eagles and Marie Louise Campbell, of Wellington (same)
      Unit A, 55 Murrayfield St – Ratepayer: Bernice Lexie and David Webster, of Dunedin (same)
      Unit B, 55 Murrayfield St – Ratepayer: CBCT Foundation Trust, of Dunedin [see Caversham Baptist Church] (same)

      *******

      Elizabeth
      Submitted on 2010/07/14 at 11:28 pm | In reply to Russell Garbutt.

      Russell, further to your comments the online DCC Rates Book (linked to WebMaps) shows:

      DCC City Property is the Ratepayer for the houses at 45, 47, (51)*, 55, 57, 59, 63, 67 and 69 Burns St.

      *51 Burns St is multi-unit residential – Ratepayer stated as “DCC City Property E P H”.

      73 Burns St – Ratepayers: David Eagles and Marie Louise Campbell, of Wellington.

      Unit A, 55 Murrayfield St – Ratepayers: Bernice Lexie and David Webster, of Dunedin.

      Unit B, 55 Murrayfield St – Ratepayer: CBCT Foundation Trust, of Dunedin.

      The Rates Book gives land value and capital value for each property.

      • Further to Mike’s comment:

        G and C Dickson Limited – interesting incorporation date (see below).
        Rugger chap? Been a few Dickson’s involved with Otago rugby over the years…

        Google shows Greg Dickson attended Kings High School – 1979, 4wd class photo at Old Friends website (uploaded by Grant Baskett – funny that !)
        http://www.oldfriends.co.nz/InstitutionPhotoView.aspx?id=108743

        Greg Dickson, Deputy Chief Fire Officer – Portobello Volunteer Fire Brigade
        His business is listed at the brigade’s webpage.
        http://www.fire.org.nz/About-Us/All-Regions/Region-5/Pages/Portobello-Volunteer-Fire-Brigade.aspx

        Portobello Businesses (network) – listed as Asphalt & Cobblestone
        Greg Dickson – 478 0755 – 027 4356 389
        http://portobello.net.nz/business.html

        Greg Dickson, Asphalt & Cobblestone Services. Noted by architects Mason & Wales as a ‘contractor registered to quote for work’ – Leslie Groves Hospital redevelopment. Vehicle Entrance. 28 April 2011.
        [via http://www.lunds.co.nz/Uploads/1690/NTT2.pdf – no longer available online]

        His business is also referred to as Asphalt & Cobblestone Specialists.

        New Zealand Companies Office:

        G & C DICKSON LIMITED (3233569)

        Company number: 3233569
        Incorporation Date: 23 Dec 2010
        Company Status: Registered
        Entity type: NZ Limited Company
        Constitution filed: No
        AR filing month: September , last filed on 14 Sep 2012

        Company Addresses:
        Registered Office
        G S MCLAUCHLAN & CO, Level 1, 243 Princes Street, Dunedin, 9016, New Zealand

        Address for service
        G S MCLAUCHLAN & CO, Level 1, 243 Princes Street, Dunedin, 9016, New Zealand

        Directors Showing 2 of 2 directors

        Catherine Robyn DICKSON
        14 Waikana Street, Broad Bay, Dunedin, 9014 , New Zealand

        Gregory John DICKSON
        14 Waikana Street, Broad Bay, Dunedin, 9014 , New Zealand

  10. Mike

    You mean like:

    Registered Office
    G S MCLAUCHLAN & CO, Level 1, 243 Princes Street, Dunedin, 9016 , New Zealand

    ?

  11. Hype O'Thermia

    Aren’t welfare cheats and tax dodgers the same? Both are ripping off the honest taxpayers, only difference is the methods they use. And benefit cheats tend to be less sophisticated in their methods so are easier caught, or dobbed in by members of the community who easily understand what they see – beneficiary with a job, or live-in partner with a job, or ACC claimant “disabled” but working like a fit person. Tax dodging is not visible except when it’s someone doing cash jobs (generally these are at the lower end of the $$ scale too, like beneficiaries) so there’s less risk to the perps of being dobbed in.

  12. Russell Garbutt

    Seems to be an asphalt and cobblestone business that owns 6 houses in Burns Street. Same accountant as many of our dear friends. So, question to be asked is just where did the mysterious and shadowy trust vanish to with their million?

    • Million-dollar questions abound between DCC and ORFU. Wonder why.
      Syd ? Colin ?

      Cairns, ex ORC and ex Colliers ? (jumped out, why ?)

      Delta ? Cameron ?

      DCHL ? Hudson and mates ?

      McLauchlan ? Coburn ? Boult ?

      Stephens ?

      And much much more.

  13. Robert Hamlin

    We will never know if the plan was simply to stick us with (yet another) fat cash transfer to the ORFU all along or whether there were more exotic (and expensive) plans for re-commissioning of the structure ‘as is’. It appears that the ground is being prepared to convince us it was Plan One, and that we didn’t lose any money anyway.

    However, if it was the latter, then three things may have derailed it. Constant pressure and visibility of Carisbrook’s unexplainable pristinity and continuing DCC ownership, an approaching election, and maybe, just maybe, a significant loss of goodwill towards such projects and their sponsors around the Council table as an outcome of recent legal activities and their outcomes – Now isn’t that a delicious thought?

    Meanwhile, the McPravdamatics become ever more surprising:

    “The council bought the ground – together with surrounding Burns St homes and land – for $7 million in 2009, but had since sold the homes and half the Burns St car park. That left the stadium, and the other half of the car park, still to be sold, and about $4 million of the original $7 million cost of the purchase still to be covered.” {ODT Link -Eds}

    Based on these figures, if they bought it for $7 million in 2009, then they have been paying interest on the site for over three years, which takes the cost up to around $8 million – minimum, plus (let’s be generous here) half a million in pristinity maintenance to give us a figure of $8.5 million. If there is only $4 million still to be paid as McPravda claim, then this means that they received $4.5 million for a small carpark site and a row of ten or so very rumpty (ruinous) rental houses – A remarkable performance. Mr Cairns and all the other real estate agents involved are to be congratulated.

    The previously hermetic DCC seems to be leaking like a sieve these days making the consistent transmission of the ‘davonomics’ message to the public a more challenging process. It is an indication that maybe people within this organisation who enjoy access to this information (and are presumably senior) have had enough of what’s going on.

    However, we return to the grass, that barometer of Carisbrook’s future. If CS have indeed bought this land for redevelopment, then they have NO reason to keep it pristine and playable, and neither does the DCC in the intervening period before the supposed sale goes through. So keep on watching that turf. If it still stays manicured, then we may still have a problem.

    The above was written yesterday, but could not be posted due to a computer glitch. Faced with figures and names popping up all over the nation yesterday, McPravda appear to have come up with a name and some numbers today. The number of $3.5 million is $500,000 more than the rest of the informed market is bidding – but one has to adjust expectations here.

    There is also a very pretty diagram explaining some of the mcpravdamatics involved in reducing the supposed loss from millions to $100,000 dollars if you look at it carefully, stand on your head and cross your eyes. I am sure that a final dose of davonomics will make that politically inconvenient residual disappear and a profit will be triumphantly be announced presently – a bit like the millions of ‘profit’ that the DCC recognised in its books last year by ‘selling’ the Foobar to DVML. Or the $25 million ‘profit’ that was recognised the previous year when they found some old books in the library.

    It appears that a lot of the discrepancy between this figure of $100,000 and the $2.1+ million that a normal calculation based on the mcpravdamatics diagram would end up with is the ‘recouping’ of $2 million from the ORFU, which appears as a separate comment. What clever chappies with the language they are – Just exactly what does ‘recouped’ mean in this context? I presume that they wish the public to apply their mental thesaurus to the term and equate it to ‘repaid’. If this is so, then why is this the first that we have heard of it?

    The $2 million owed by the ORFU to the DCC was a separate matter of long standing. Paying $7 million to the ORFU and then saying that the repayment of this unrelated ORFU debt from the proceeds takes the cost of Carisbrook down to $5 million is exactly the same as writing off this unrelated debt – and why should they do that? No, the DCC paid $7 million to the ORFU to Carisbrook, the fact that the ORFU (might have) used $2 million of this to pay off an unrelated outstanding debt to the DCC does not impinge upon the mathematics of this situation at all. It does (unsurprisingly) feature in the mcpravdamatics however.

    In the absence of further evidence that $2 million real dollars were actually recovered from the ORFU subsequent to this sale and independently for the proceeds from it, my mental thesaurus will equate ‘recouped’ in this context to ‘rubbish’.

  14. Mike

    Rob – the ORFU accounts for that year show them paying off their $2m loan (and the $4m BNZ loan) from the $6m they received from the Carisbrook sale – I think they truly did pay it.

    What’s missing in the ODT accounts is the original loan – just counting its repayment as $2m worth of income without also including it on the other side of the ledger is sloppy book keeping.

    On the outgoing side of the ledger should be:
    – $2m loan to ORFU
    – $7m purchase of Carisbrook
    – $860k debt servicing/upkeep
    – $200 ORFU rent that was never paid (was it higher, I’m guessing at this one)
    total $10.06m debt

    On the income side of the ledger we have:
    – $2m loan repayment
    – $3.5m sale of arisbrook
    – $292 sale of carpark
    – $697 sale of houses
    total $6.92 income

    That leaves the DCC down about $3.1m on the deal (with half the carpark still to sell).

  15. Russell Garbutt

    Mike, I believe that your quick balance sheet is absolutely right. The spin coming from the DCC and the lack of the right questions from the ODT allow a lot of wriggle room and misreprensentation of the facts.

    Almost unbelievable about the inconsistency between Avery and Clark, the lack of any fronting up by Stephens, and the sight of the stadium councillors such as Hudson, Brown etc all hiding under the nearest rock.

    In the meantime, in the grey, misty background are the real benefactors of this whole deal. The people who got paid off, the people that made the windfalls. And it seems not one accountable person to be found anywhere.

  16. Robert Hamlin

    I’m happy with that Mike. You’ve just done a clearer job than me. The drawdown and repayment just have to appear on both sides of the ledger as you have done, but McPravda have not – They forgot to include the drawdown bit in their mcpravdamatics for some reason… Plus maybe an extra $500,000 loss if others’ figures on what’s been paid by CS prove to be more accurate than McPravda’s.

    $3.5 seems very high. The conditions of sale that we have yet to find out about may well reduce its actual value in some way – eg option for DCC subsidised resale to local pro-rugby affiliated charitable trust for 10c. The balance of the purchase price plus ten percent to be paid by DCC – Or – Onsale of buildings and site to DVML for $4.5 million – Or – Leaseback of site and buildings to DVML for a period on very favourable terms. See my earlier comments about the turf – it’s still worth watching…

  17. From the ODT:
    ‘suggestions the council stood to lose ”millions” in the deal – a claim Mr Avery described as ”unfortunate”’.
    Avery does not deny the “millions” loss : it is just ”unfortunate” that the national media have seen through the Council spin.

  18. Mike

    To deliberately include the ORFU loan in the way that the ODT is an admission that the loan had been written off prior to the Carisbrook sale – if that’s true then we would have only lost $2m rather than the current $3m if we had left Carisbrook alone.

    I’m still very leery about this supposed charitable trust that supposedly received the $1m – I cannot find it or its accounts on the Charities Commission’s website, I don’t believe a registered charity of that name actually exists – someone received that money – my guess is still that someone bought the properties for the ORFU (I can’t find the purchases in past ORFU accounts), let them rent them out (the ORFU’s names were on tenants’ leases) and I suspect someone still had a mortgage on them somewhere that had to be paid off – the DCC must have written them a direct cheque as only $6m of the $7m actually touched the ORFU’s audited books – I wonder if we can get the cheque stubs under the OIA.

  19. Russell Garbutt

    Mike, this mysterious trust was clearly under the control of the ORFU in that the whole $7m deal was negotiated in one package. It wasn’t until it was noticed that only $6m of the purchase appeared in the ORFU books that it was finally admitted that there were two DCC payments made – and it was publicly stated that $1m went to the [Property Holdings Charitable Trust].

    But the ORFU are no strangers to a whole range of shadowy trusts or entities. We know of places like Roseburn, Murrayfield, Otago First XV and others. How many people believe that this whole mess was conducted in an open, transparent and honest way? I know what I feel.

    What is absolutely clear is that the ORFU were in charge of those properties. What is equally clear is that the City paid $1m to acquire these houses and now has sold them with almost a third of a million dollar loss. What was the basis of the settlement to the ORFU for a million? Was it a shonky valuation? Or was the subsequent sale of the houses not conducted in the open market? The question that should be being answered by the appropriate people including Athol Stephens, Jim Harland, Peter Chin and the rest of the stadium cabal, should be how come the ratepayers are taking a bath on both the Burns St properties and the Carisbrook ground? Listen to the silence.

    • Does the name ‘Property Holdings Charitable Trust’* make it ‘charitable’ in accounting terms ? Or was it just a ‘property trust’ ? (which doesn’t have to be registered with the Charities Commission)

      Wonder who the tenants paid their bonds to ? (see Tenancy Bond, DBH)

  20. Mike

    I kind of assumed that one coundn’t name something “charitable” unless it was actually a charity, maybe not …. a quick search shows one for-profit Ltd company with “charitable trust” in its name …. but nothing on any of the registries ….

  21. Russell Garbutt

    Mike, I think a lot of people have found out that the name of anything has nothing whatsoever to do with the activities of the entity. Look at the Centre for Excellence in Amateur Sport for example. I have it on excellent authority that this rather grandiose name was dreamed up by a group of professional rugby staff with the intent to confuse and divert attention away from the fact that it was nothing other than a backdoor entry into the ORFU. So the [Property Holdings Charitable Trust] had only one word in it that was probably truthful. Property. But then again it was charitable of the DCC to give them $1m for something that they made a third of a million dollar loss on, and who on earth can trust anyone in this business?

  22. Mike

    Wading thru the Charities Commision the hard way I find:
    Otago Amateur Rugby Charitable Trust Incorporated (Laurie Mains, Eion Edgar, Marc Ellis, ….) – never a financial return filed but possibly created too late to be the $1m beneficiary.

  23. Mike

    Yes but I suspect that there never was an entity by that name [Property Holdings Charitable Trust] – if anything it’s designed to avoid searching since the search engines at the Companies Office/Charities Commission wont accept ‘trust’ or ‘property’ as a search term because they are too general.

  24. Russell Garbutt

    So, who in the DCC wrote out the cheque for the houses or arranged payment? Seems a reasonable question to ask seeing it was our money!

  25. Anonymous

    Letters were sent out a while back thanking individuals for contributing to the ORFU. These were ‘signed’ off by Eion Edgar himself. I imagine some blind fools even frame and hang them. But nobody seems intent on following up. Like the above, where did all that money go?

  26. Russell Garbutt

    Interesting in that a post on this subject submitted to the ODT early this morning was posted about 9.10pm this evening and immediately appeared at the bottom of page 2 of on-line comments. How does this happen? For the record the post read as follows:

    “It is a matter of record that the ORFU one way or another controlled the ground, the carpark and the houses in Burns Street. The total price the DCC paid for the package was $7m and of this, $1m went to a trust called the [Property Holdings Charitable Trust]. This trust seems therefore to have received $1m for the houses and then the DCC subsequently sold them for $692k or a loss of $308,000. Readers will recall that despite a lot of questions being asked at the time, no-one within the ORFU could tell anyone about this trust. Maybe it is time for someone within the DCC to tell us just who received this third of a million windfall?”

    Can anyone see any reason for the delay and the placing of the post down the lists?

    {Now at page 3, perhaps they held it back for editorial clearance but here is the link http://www.odt.co.nz/news/dunedin/245690/council-costs-not-recouped#comment-39514 -Eds}

    {17.2.13 Update
    We note ODT names the private trust paid $1 million by DCC as the “Property Holdings Charitable Trust”. http://www.odt.co.nz/news/dunedin/197941/missing-1-million-paid-property-trust }

  27. Mike

    I think that sometimes if they hold off on publishing things it still gets inserted in the order it was originally posted – which keeps continuity in the threads even if it does mean that no-one reads what you wrote.

    I’ve written two posts to that thread today pointing out that the true cost is about $3m, neither have been published.

  28. Anonymous

    The demolition and extraction of materials will probably net the purchaser a profit over and above their $3 million straight off.

    Remember, the corporate box is modular and can be stripped down and reassembled. It would be beyond the pale for DCC to purchase it for University Oval. Maybe it will go to Edgar’s Queenstown Centre?

    Steelwork, concrete crushed, copper wiring. Sale of memorabilia? If done right, there’s several millions right there.

    Conversion to industrial use? 5 decent sized industrial buildings at $2M each? Could you fit in a rail siding? Probably. There’s your logistics centre without having to work through Phil Page’s vertical contortions.

    • Anonymous, that’s scary information from the ratepayers’ point of view, how many times have they been done like a dog’s dinner by DCC and ORFU, over Carisbrook – due to corrupt and fraudulent handling of the asset, its value and ownership. To clear up the crap and get the books open, maybe what we need is an interim injunction against Carisbrook’s sale.

  29. Mike

    Sigh – today’s ODT still has the wrong number – why? because they’ve neglected to include the $860 (or ‘close to a million’ they said) cost of debt servicing for the loan on Carisbrook that they made such a big deal about revealing just yesterday.

    The also also neglect to add in the losses caused by the ORFU not paying their promised rent for their use of the grounds

    • Comment received by email.

      Robert Hamlin
      Friday, 15 February 2013 7:55 a.m.

      From today’s McPravda:

      STADIUM LOSS MAY BLOW OUT BY TWO MILLION

      “Dunedin Mayor Dave Cull is refusing to rule out adding another $2 million to the Dunedin City Council’s bill for losses from the sale of Carisbrook. That was the value of a council loan to the Otago Rugby Football Union more than a decade ago, and subsequently repaid when the council bought Carisbrook and surrounding properties from the union in 2009.”

      And so the admissions come – like teeth jerked out of a reluctant patient’s head, and the mcpravdamatics slowly converges with the basic numbery stuff that I was taught at primary school. Fun isn’t it? So where shall we apply the pliers today?

      • http://www.odt.co.nz/news/dunedin/245810/stadium-loss-may-blow-out-2m

        Last paragraphs of the news item:

        Mr Avery said yesterday the facts behind the loan arrangements were ”quite plain”, but also refused to be drawn on whether the true loss faced by the council from buying and selling Carisbrook was $2.1 million.

        However, it was ”quite possible” the council could have had its $2 million loan repaid, without further borrowing to buy Carisbrook, if the ORFU had sold directly to a private buyer, he said.

        ”How people then view that $2 million [loan to ORFU] is where different parties will diverge.

        ”It’s up to people to draw their own conclusions,” he said. [ends]

  30. Hype O'Thermia

    All along it’s been up to people to draw their own conclusions, then be criticised for not having their facts right. Clever. We have all the fun of working out equations with no values for x, y, z and most of the alphabet, and no honest information about the relationships between x and y, a and z. Ample grounds for criticising: isn’t that nice for those who HAVE the numbers and keep them in the echo-chamber under their hats.
    “Trust us, we want to be elected again.”

  31. Calvin Oaten

    Oh dear, more of the brown stuff on the fan. It is a numbing thing for those people to so continuously be caught out by their own delusions.

    Talking about delusions, on Feb 7th I had published a piece in the ODT pointing out some of the frailties of the stadium financing. Concurrently, Richard Thomson’s response on behalf of council was published. This was subsequently posted on the ODT website, but strangely, not mine. A wide ranging bunch of comments followed.

    I immediately responded and today was told by Philip Somerville that it would not be published, as it was just a case of ‘I said, you said’ sort of thing.

    So, for what is worth: “Here’s to you Richard Thomson, and your Maths”

    Cr Richard Thomson in response to my assessments of the true operating costs of the Stadium to the ratepayers, followed through with a counter to each item.

    Firstly, he agrees in principle to the total of $9.125 million as compiled by the folk in the ODT.

    Richard goes on to say that my argument that the decision by council to purchase shares in DVML for an amount of $3.381m is a cost to the ratepayer is incorrect. He says “sorry Calvin, but the council paid this money several years ago. Converting it to shares has no cash flow impact (which is what ratepayers fund).”

    Excuse me, but whether it was there years ago or just yesterday, it is still a contribution. The fact that it has underwritten an increase in paid up capital of DVML is irrelevant. Actually, it could be argued that by increasing the paid up capital from $200,000 to $3.581m will show up as Equity on the DVML balance sheet. That could well be used to underwrite future borrowings of up to $3.5m.

    Next up is the matter of the rate relief subsidy. This, I contend is because the land occupied by the Stadium’s rated value is $1.8m, but only $134,000 is being charged.
    A subsidy of $1.66m. Richard contends that I am correct in claiming that it would have generated $1.8m were it rated as a normal commercial activity, but that if the stadium was not there then neither would the $1.66m. True, but the $1.8m would be.

    Then there is the matter of $1.050m which was to be credited as rate revenue for the new Town Hall complex, then to be diverted to DVML as a fee for carrying out management duties. Definitely a ratepayers’ contribution. Strangely, Richard omits to mention this.

    Richard then says: “Calvin goes on to argue that the losses of DVL (the entity owning the stadium) are large and likely to be ongoing.” He says that this is not so. “DVL’s losses are contributed to substantially by ‘depreciation’.” For non accountants, he says this is an allowance that companies make for the reduction in value of their plant over time.

    I am well aware of that, but would point out that if one looked at DVL’s Statement of income Y/E 30/6/12, it shows Revenue of just $3.672m offset by expenses of $16.051. Of these, depreciation accounts for $7.655m whilst interest consumes $8.381m, a total deficit of ($12.379m). This in turn is offset by a subvention receipt (subsidy DCHL) $7.292m which reduces the deficit to ($5.087m). A tax recovery of $775,000 brings the deficit to ($4.312m). Then there is the ubiquitous Interest rate swap hedges losses during the period of ($8.579m) making a total comprehensive loss of ($12.891m).

    I know it is claimed that these special losses are not real but are reported to satisfy the accounting standards requirements. Mark my words, but if the timing is right on maturity, these losses, or more, will come to account, very much so.

    Richard states that DVL’s role is to own the stadium, collect rent, and use the DCHL dividend of $5.25m, plus the additional DCC contribution of $7.725m and the Private Funding (which is underwritten by DCC) to service the mortgage on the stadium.

    Richard dismisses the ORFU debt written off and the holding costs of Carisbrook as having nothing to do with the stadium. I think the readers can decide on that. He then poses the question: “What would happen if we closed it?” DVML collects revenue (around $9m) and pays its fixed costs including the rent ($4m) out of this. It is the rent which allows DVL to pay off the loans (with other ratepayer assistance outlined above).

    If you close it down, you do not remove any of the costs in DVL. They still have the loans and interest to pay but they would not have the $4m rent from DVML. We would be able to remove council funding of DVML ($750,000) for the community usage/subsidy and the events fund ($400,000).” So, let’s look at that.

    DVML’s accounts shows revenue as not ‘around $9m’, but rather just $6.395m, offset by expenses of $3.862m plus depreciation $176,000, Directors fees $88,000, salaries and wages of $1.959m and interest $310,000. A deficit of ($302,000) Then there is rent paid to DVL at ($3.667m) subvention $782,000 tax ($27,000) for a total comprehensive loss of (3.214m). So how then can that equate with Richard’s claims.

    Next, Richard says, adding all the pluses and minuses we are now about $3.3m worse off per annum before any net operating costs of putting Carisbrook back into operation.That’s roughly 3% additional rates. But why any costs of putting Carisbrook back into operation? Where does it say in the DCC constitution that the city and its ratepayers are obliged to fund and operate facilities for the sport of rugby? Indeed, the right move would be to sell Carisbrook back to the ORFU at a fair value (nothing like what was paid) and leave them to it. It is after all, a professional business model that rugby purports to operate under, so why should they not attend to their own funding?

    Finally, Richard omits to mention the inherent risk of DCHL not being able to meet the requirement of paying a dividend to the DCC of $10.450m plus $5.25m to DVL for debt reduction. Bearing in mind that in this current 2012/13 Plan these monies are budget dependent, but DCHL has to earn in this same year those monies. Even yet, we don’t know their chances, because DCHL has yet to publish its half yearly results to 31/12/12. That would at least give us a guide. But now the new Plan for next year is predicated on a repeat performance as indeed it is out to 2022/23. That, to my way of thinking is the Achilles Heel of the whole financial position. In conclusion I would leave the citizens to make their own conclusions to this conundrum and return Richard’s advice to me, and suggest he, at least do the maths.

  32. Hype O'Thermia

    Thanks to all those who have kept all scraps of factual information and bring them out regularly to remind us all. I notice more and more people are putting what’s known into the jigsaw puzzle. Each time an undeniable piece of the puzzle is assembled a few more admissions are dragged out of our honest, transparent, elected representatives and even our unelected employees sometimes.

  33. Maurice Prendergast

    For anyone with residual thoughts that the $7M that we the ratepayers paid those shabby cretins for Carisbrook was based on some kind of genuine valuation – forget it.

    Take a look at the 24/06/09 edition of the DScene – pages 7 and 13. Under the caption ‘Harland’s Price Admission’ where Harland admits that the ORFU debts were taken into account when sale/purchase price was being considered.

    Wouldn’t it be lovely if we could all do that – we currently are marketing a property with a registered value of $500K. But we’ve got a bit of debt that we’re struggling with, so I’m off to see Dave Cull and his enlightened entourage to see if they can help us out.

    The market probably won’t pay more than $500K, but that won’t deal sufficiently to our debt issue, so I reckon – based on precedents – the DCC will probably pay us around $750K.

    Why do I mock Dave Cull thus? Because he and his fellow travellers from the Greater Deception Party must have been part of this! We need to know how they voted.

    We all need to dig to find the resolution that breathed life into this rort, how the voting was recorded, and find the resolution that gave licence to $1M of the settlement being paid to that Trust and whose names are sealed in ink on the supporting documentation. I think that (at last) we’re starting to circle the wagon!

  34. Russell Garbutt

    Harland is but one of the people that need to be held accountable. A consistent presence throughout has been that of Athol Stephens as well, who, as Chief Financial Officer of the DCC, remained in his post defending what was seen by many at the time, and more now, as nothing other than deceitful and cynical plundering of the ratepayer’s assets to feather the nests of rapacious, greedy and pretentious strutting peacocks who started to really believe in their own invincibility.

    But let us not forget how these little twerps gained their golden eggs. They managed it because the few gathered round the Council tables of both the DCC and the ORC were a deadly mix of incompetence and complicity in the grand deception.

    We can easily identify those Councillors who are just lazy, incompetent and more than brain dead. We can equally identify those that are lurking in the shadows, ensuring that they remain able to carry out their own agendas. Those are the ones that need to be held to account first of all. The rest will follow.

  35. Calvin Oaten

    To me the most interesting aspect of today’s announcement is the ‘feigned’ innocence of both Mayor Dave Cull and the ‘acting’ CEO Tony Avery. This is nothing more than an insult to the citizens. First, everything possible is discussed in ‘non public’, and in defiance of all belief, they can’t even explain the correct location of $2 million of citizens’ treasure. The sheer incompetence, or criminal trickery is mind boggling.

    We have this ‘commercial sensitivity’ thing which bars any council member from talking publicly about the matter. No doubt but we live in a ‘fascist’ town run by absolute fools. It seems that the city is about to give Carisbrook away under terms which no-one on the vendors’ side of the table understands. That it compounds the stadium debt is a given, and to add insult to injury, it confirms that the ORFU will be a malignant cancer eating at the citizens’ treasure in perpetuity.

    Face it, there isn’t even a contract to lease between DVML and the ORFU. Even if there was, it would not be honoured. We only have to look at the ORFU’s track record to see that there is no ‘honour’ there. Besides, there is no chance in ‘hell’ of there being sufficient revenue generated. And that is a known fact. With DVML just appointing another couple of ‘managers’ to aid and assist the running of the newly developed Town Hall/Conference Centre, we can see just how this will grow and grow. Ask Dave Cull about it and all you will get is stunned gibberish.

    But just watch while the lies and backsliding starts as the electioneering gets underway. Cull will undertake to maintain the ‘steady as she goes’ administration which has kept the city in such fine heart during his reign. He will reiterate his pledge towards open government with maximum transparency, again as previously promised. Any mention of his performance on the stage of the Town Hall STS protest meeting, when he resoundingly condemned the stadium project will be carefully expunged from all propaganda. Yes, we now know exactly where both he and his ‘Greater Dunedin’ people stand. They will do anything but face the truth of their “Greater Deception’ manifesto.

    When his ‘sidekick’, deputy Staynes promotes the idea of levying the hospitality industry to subsidise the enormous loss making stadium you know just how bent and corrupt they all are. Just what gives them their ‘jollies’ is one of the world’s great mysteries. Will they get re-elected? Probably, unless there is an all out effort to dismiss them as the bumbling incompetents that they are.

  36. Walrus

    Who was the Chair of the ORFU , when they received the $2 million loan from the council to build the new railway end stand?

  37. Russell Garbutt

    Hmmm – its about a decade ago that they got the loan – the repayments were of interest only and my understanding is that the rate was very favourable to – guess who? The ratepayers? The ORFU? Bearing in mind as well that the loan was secured over an over-valued and non-realisable asset. In other words unsecured. Makes you wonder why the BNZ hierarchy approved their loan of over $4m. Says a lot for their loan policies.

    • Russell, re BNZ… it also says a lot about how the commercial bankers in this town work, ‘favourable to ORFU’ means more business their way (BNZ’s) from the ‘private sector individuals’ going about their daily business. And should the boys decide they’ll take all their business accounts to another commercial bank to get better terms (by hijacking!), then BNZ is fried… As happens, note the turnover of young commercial bankers in Dunedin across the last twenty years – feted then dropped. Nasty. Highly fluid.

  38. Calvin Oaten

    Chair of the ORFU? Check out when Malcolm Farry was in it, or perhaps Colin Weatherall. Could be interesting.

  39. Anonymous

    I find it curious that an accounts manager can extend tens of thousands in advertising to the ORFU. Think a certain media outlet in Dunedin who has since acquired their name prominently on said edifice. Also interesting that a bank can extend millions for a rugby organisation. Do these individuals follow due process when signing away this sort of risk for rugby? Or is it just a matter of Eion directing his executive assistant to ring up and demand it. If I found out my employee was giving credit to a bunch of rugby bludgers a mighty kick up the arse would be the least action taken.

  40. Martin Legge

    NZRU conducted their own investigation and audit of the ORFU following its demise. The NZRU produced a report on its findings but as you would expect they had little knowledge of the ORFU activities in respect of the Gambling Act. As we now all know, the DIA have shown a complete reluctance to get involved in ORFU matters.

    To assist them with their risk analysis, the NZRU engaged Cascade Consulting Ltd, a private Wellington company owned by Alistair and Tania Skeene, ex DIA, both well connected in the industry but who themselves also administrate a number of pokie trusts, have rugby connections, and are in regular contact with DIA. They are industry advocates and likely to be neither independent or objective. The NZRU supplied both their own audit report and the report completed by Cascade Consulting about the Gambling Act risks the ORFU faced.

    The reports were supplied to DIA without any confidentiality conditions; and NZRU offered DIA the opportunity to ask any questions or access any further documents gathered from their investigation.

    The OIA disclosure documents received to date suggest DIA did not take up the offer and raise any concerns with NZRU or ORFU; but I remind readers about the correspondence between DIA manager Kevin Finnegan to TTCF General Manager, Warwick Hodder, where DIA suggested “We need to make these complaints go away” shortly after Jeremy Curragh revealed that pokie grants had been used to pay creditors.

    I’m advised that the NZRU report contains evidence of wrongdoing to the extent that it was necessary for the DIA to interview the ORFU Board. Exactly when that took place and between who I’m yet to find out.

    Despite the public and media interest in this case, the DIA continue to refuse to release the NZRU or Cascade Consulting reports citing legal grounds “that it may inhibit obtaining information from these organisations in the future”.

    What a sick and twisted position from a Government department, given the fact that thousands of Dunedin ratepayers were forced to bail out the ORFU. Surely the ratepayers have the right to total transparency, so they can make up their own minds about how their rates are spent and whether the DIA is worth paying their taxes for.

  41. Calvin Oaten

    Martin; all additional incriminating evidence. One point however. The Dunedin ratepayers were not forced to bail out the ORFU. Their excellent, community minded overseers of the citizens’ treasure, our elected mayor and councillors took it upon themselves, without any consultation whatsoever, to forgive the ORFU over $480,000 of current liabilities to Council, thus avoiding liquidation of the ORFU.

    Further, when our ever sagacious mayor went on National Radio and made some injudicious remarks about the ORFU, two of its stalwarts, Messrs Mains and Graham sued him for defamation to the tune of $500,000 each. This was settled (behind closed doors) with our mayor agreeing to meet all of the appellants’ costs with no mention at all of a settlement amount. Plus a public letter of apology. That letter was the most ‘groveling’, ‘demeaning’ capitulation one could imagine, and that was from our mayor! It says a lot about the calibre of persons within the rugby hierarchy, and the ethics of our mayor.

  42. Anonymous

    ELECTIONS 2013:
    Dave for “No Transparency, No Accountability” Cull

    However, he would not question the valuation obtained by the council at the time, saying markets and buyers could change. He would not commit to reviewing the process either. ”Council made a decision at the time. It bought the property. There’s no point in rehashing it if you can’t change it. ”A valuation is not a promise.”

    There is, of course, many points of concern in today’s Oddity, particularly the $60,000 that stands out like a sore thumb – yet another one on the multi-limbed monster to accommodate all of the other sore thumbs – but it would seem the paper has made more of an effort on this one.

    I hope it is one of those small deceptions that finally unwraps their massive public corruption.

  43. Anonymous

    ### ODT Online Sat, 16 Feb 2013
    Carisbrook costs up another $310,000
    By Chris Morris
    More payments by the Dunedin City Council totalling more than $300,000 have been linked to the sale of Carisbrook as costs from the deal continue to rise. The revelations came as Dunedin Mayor Dave Cull yesterday moved to dampen speculation over the sale by confirming building company Calder Stewart had offered to buy the old stadium for $3.3 million, excluding GST. The conditional offer was still to be confirmed, but Mr Cull sought Calder Stewart’s permission yesterday to release the extra details after days of media questions and headlines. However, the Otago Daily Times has also learnt the council faced extra costs associated with the deal, totalling about $310,000.
    Read more

  44. Mike

    Notice that the $3.5m from the Carisbrook sale quietly went down to $3.3m also.

    • Yes. The figure leaked was $3 million. I dare say the numbers will change again as more pressure is applied. I’m waiting for the day DCC says it will pay $3 million to Calder Stewart ~!!! That’s the sort of slippage our council is capable of. The circus continues.

      http://www.odt.co.nz/news/dunedin/245966/carisbrook-costs-another-310000
      [excerpts]

      ● The council had also earned slightly more than previously thought from selling eight houses in Burns St, also bought with Carisbrook, with figures yesterday showing they had been resold for $740,000, Mr Cull said.

      ● The revised figure included sales commission and was up slightly from the $692,000 previously reported by the council.

      ● If the sums are added together, the council could be more than $4 million out of pocket, but Mr Cull would not predict the final size of the loss yesterday.

      ● Neither did the figures include four years of council costs accrued while owning the stadium, ranging from loan interest costs to electricity and rates, and together totalling $860,000.

      ● On top of that was the $480,000 in rent and other costs owed by the ORFU to the council and Dunedin Venues Management Ltd, but wiped as part of the union’s bail-out last year. There could be more money involved, too, as the ODT was told the deal with Calder Stewart included council involvement in its redevelopment, for an unspecified industrial use.

      Details could not be confirmed yesterday and Mr Cull would not comment, citing commercial sensitivity.

      It’s a little too late for “commercial sensitivity” when you’re looking down the barrel of a Judge.

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