Stadium: Jeff Dickie on costs

Received from Jeff Dickie
Wednesday, 7 May 2014 11:15 a.m.

Subject: my rejected odt response

DCC’s CEO Sue Bidrose’s response to my stadium costs queries (ODT 15.3.14) are very disturbing. However, I have some sympathy for her as I know from personal experience, former CEO Paul Orders had huge difficulty finding such figures, due to a DCC culture of obfuscation. He did however identify $42M that the audit missed. How much did the audit cost? Why was such a huge amount missed?

Even if we accept Bidrose’s figures of $146M stadium debt, and $9.15M annual cost, which I don’t, the figures don’t add up. Just the interest on $146M, at say 6%, is $8.76M pa. For capital repayment over the 18.5 years the annual figure will be about the same again. Say together $17M pa. Add to this the stadium rates rebate now subsidised by general ratepayers to over $1M pa. That’s $18M. Add to this several more million dollars pa for propping up DVML and you are well over $20M pa!

Remember there was no $45M Private Funding or $10M from Otago University as promised. Apart from the three contributors below, everything is debt funded.

The DCC’s own stadium cost figure is $266M. Deduct $37.5M from ORC, less $7M Otago Community Trust, less $15M from the Government. I make that $206.5M, not Bidrose’s $146M. Funding $206.5M at 6% costs $12.39M pa just for interest, without any capital repayment. Say $25M pa for interest and capital. Add to this the huge annual DVML cost and the scale of the deception becomes apparent.

In summary, my figures point to well over double the official annual cost and around $60M more in stadium debt. In my opinion, neither the mayor, the CEO, or anyone else in the DCC has a clue what the real figures are. Now that’s worrying!

Jeff Dickie
Woodhaugh

[ends]

ODT 15.3.14 Letter to the editor (page 34)ODT 15.3.14 (page 34) from previous post [click to enlarge]

Posted by Elizabeth Kerr

4 Comments

Filed under Architecture, Business, Construction, CST, DCC, DCHL, DCTL, Delta, Democracy, DVL, DVML, Economics, Highlanders, Media, Name, ORC, ORFU, People, Politics, Project management, Property, Site, Sport, Stadiums, Town planning, University of Otago, Urban design, What stadium

4 responses to “Stadium: Jeff Dickie on costs

  1. Jeff Dickie, Calvin Oaten, JimmyJones and other contributors have each found the total yearly cost of the stadium to ratepayers to be $20m or more – they arrive at this figure by individual calculations based on limited information available from the council’s consolidated accounts. Nonetheless it’s interesting that this same ‘price to bear’ was also calculated before the stadium was built, and which was debated at this website.

  2. Hype O'Thermia

    It’s all about the quality of chickens. It’s pure folly to skimp on that during the planning stage, and now we’re paying dearly.

    Dickie, Oaten and Jones wisely invested in organic free-range chickens from whose entrails to foretell the future Fubar finances. Not that it did us any good. Farry, Harland, Chin et al were fixated on their own fowl mess.

  3. Received from Maurice Prendergast
    Wednesday, 7 May 2014 1:11 p.m.

    [Opinion]

    Jeff Dickie’s exposé is a coherent exposure of the truth. Why can’t Sue Bidrose see it as clearly? But notwithstanding Jeff Dickie’s navigation of the facts, that bring us to the truth, there also needs to be factored in the ‘opportunity cost’ that is represented by the reprehensible theft from the ratepayers of $10M by the ORFU. Rather than spell it out in chapter and verse I attach a summary of that theft that I wrote some years ago. Why does nobody talk about such theft?

    Rgds ………. Maurice

    Behold the $10 million Rort

    In politics – as in war – the first casualty is often the truth.

    This is no better illustrated than by the astonishing revelation that we ratepayers will bail out an inept and blundering Rugby Union by settling their enormous debt in order that they may perpetuate their arrogant ways at the newfound albatross colony at Awatea St.

    This disclosure is the more astonishing when we consider that the CST (Carisbrook Stadium Trust) briefing to councillors in February 2007 at which the (Trust-initiated) Horwath HTL master plan (Carisbrook) was presented, elected members were saturated with unconditional pledges that the project would be completed for ‘not a penny more’ than $188M. Included in that grand master plan publication was a table that showed figures ‘line by line’ [of] how this magic could be performed; and (critically) that table included a credit of $3M from the sale of Carisbrook! When questioned how the proponents could claim the value of Carisbrook (when Carisbrook was owned by the ORFU) as a credit, we were told that ORFU would gift Carisbrook to the project in return for preferential tenancy rights at the new site.

    But “hold right there” said I and other dissenters, “the moment you adopt ORFU assets you will also adopt their liabilities”. Those liablities (to our knowledge) included an unpaid debt of $2M to the DCC along with some $4M to a trading bank – plus the demolition costs to prepare Carisbrook for redevelopement – a probable liability of around $7M. We (the dissidents) were quickly ‘rounded on’ by the shiny-arsed presenters and told (inter alia) that it came as no surprise that there would be pockets of ‘negative people’ – a minority that had a limited grasp of commerce and (implied) comments that the majority of the audience were sufficiently enlightened to embrace their proposal for the City’s salvation. This was the Trust’s modus operandi throughout this shabby exercise. Rather than admit to glaring errors/omissions, those raising the issues were confronted with hectoring and dismissive comments – the convenient reaction being to ‘label’ anyone who expressed doubt as being ‘negative’. For my part, I am unashamed of being negative to any perilous proposal – in much the same way that I am unashamed [of] being negative to a proposal that I drive on the righthand side of the road. Our very survival can depend on our being positively negative.

    But I digress – is it not curious that the ballpark figure of $7M that we the dissenters identified that day in February 2007 as being a major accounting deception, seems to be the same figure that is disclosed as the purchase/bailout of ORFU by the DCC? The suspicion that this figure has nothing to do with market value, but has in fact been tailored to fit ORFU’s liabilities, is heightened by the fact that at the February 2007 briefing, councillors (including I) were told the $3M sale of Carisbrook that was budgeted as a credit (that held their project cost at $188M) was based on a registered valuation. If we have any doubts as to whether the $7M price tag is tailored to fit the ORFU liabilities, please consider this: A property valued at $3M prior to the collapse of the property market, assumes a $7M value following the collapse. Yeah right! There are also fairies at the bottom of the garden and my arse is a fire truck.

    The final insult to us all is that a $3M credit which was an integral part of holding the project to $188M has apparently been removed/stolen from the project’s budget. Add to this loss, the $7M ratepayer bailout of ORFU’s liabilities and we the ratepayers have been rorted to the tune of $10M! It seems that the fox is guarding the hen house, the inmates are in charge of the asylum, and the race to the bottom is on. I rest my case!

    [ends]

  4. Hype O'Thermia

    Maurice Prendergast – the well-known negative person – writes re the “value” of Carisbrook, “is it not curious that the ballpark figure of $7M that we the dissenters identified that day in February 2007 as being a major accounting deception?”
    He would probably even be suspicious if an interview for a ridiculously overpaid Manager of Wagger-pagger-bagger Distribution resulted in the appointment of a favoured Son of the Tartan Mafia, the interview having gone something like this:
    “How tall are you?”
    “184cm, actually.”
    “PRECISELY the height we need, welcome aboard young fellow, here, would you like a DCC baseball cap instead of the alcopop one you’re wearing now? Fill in this form – would you like help with the writing part? – and we’ll make sure a clothing allowance is added to your humungous salary.”

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