DCC councillors, no idea annual cost of owning, operating FB Stadium

Updated 2013/10/08 at 10:47 am.

Platitudes — and much more, including seriously remiss untruths about the ‘value’ of councillor contributions — flew at yesterday’s city council meeting. Dunedin City Council members farewelled five long-serving councillors at their final meeting: Neil Collins, Syd Brown,
Bill Acklin, Fliss Butcher and Colin Weatherall.

Councillors said Cr Brown was a fair-minded and trusted member, a consistently hard worker who made a ”very substantial” contribution, especially on financial issues and as a strong advocate for Mosgiel, in his 15 years on council. ”He is a wise old owl. When he speaks, I listen and know we all do,” Cr Collins said.

Read more at ODT Online.

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Comment received.

JimmyJones
Submitted on 2013/10/07 at 6:31 pm

The average DCC councillor still has no idea of the annual cost of owning and operating the FB Stadium. They have been misled by the way the annual reports are arranged and they get confused because there are two stadium companies with similar names, as well as an interest cost to the DCC for the loan to buy the shares to buy the stadium.

Jim Harland, Paul Orders and their staff have been asked many times to disclose the total financial impact of the stadium. Mr Orders eventually promised to do this at an annual plan public meeting, but it hasn’t happened.

The annual reports of the stadium companies (DVL & DVML) to be approved today by our hapless councillors, have enough info to calculate a good estimate of the total cost.

These figures are from the annual reports page 6 (DVL) and page 9 (DVML). Remember that in these reports the term “subvention payment” means “subsidy” and has the effect of disguising the size of the companies’ losses. The city’s renters and ratepayers end up paying for both the disclosed losses and the subsidies so we need to add them together to get the total impact.

Total Stadium Impact:
Item:___Disclosed Loss_____Subsidy_______Total Loss
DVL:______$4.8 million______$7.3 million_______$12.1 million
DVML:_____$1.0 million______$0.6 million_______$1.5 million
Cost of interest on debt for DVL shares:________$5.1 million
Cost of rates subsidy for DVML (approx):_______$2.0 million
Total Ratepayer Impact (approx):_______$20.7 million

The DCC held stadium debt is $78 million and I have chosen the interest rate to be 6.5%. There might be some other costs that I haven’t thought of. The actual interest rates paid by DVL seems unrealistically low to me at 5.87%. Most DCC projects are charged 7.00%, so DVL’s low interest rate could amount to a secret subsidy of $1.6 million.

Anyway, $20.7 million per year is a lot of money and citizens and councillors need to know what is going on. We have heard DCC mayors and councillors promise financial transparency, but it seems that some of them have wanted to keep this figure quiet.

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Posted by Elizabeth Kerr

*Image: odt.co.nz – departing city councillors who brought you the stadium, one way or the other . . .