Received from Bev Butler
Monday, 2 June 2014 4:10 p.m.
Message: During the presentation of my submission on the draft annual plan I was asked by Council to produce the figures to back up my claim that the stadium was costing approximately $20 million per annum. David Benson-Pope made a general statement questioning whether the claims in my submission were correct – though he didn’t elaborate when I asked him. I have followed up the Council’s request and the final figure is $21.337 million.
Please note there is a huge disparity between what the DCC has published in the Draft Annual Plan 2014/15 and what can be shown by the DCC’s own figures that are very difficult to find and interpret. The ratepayers should not continue to be kept in the dark – the real costs are more than double what is being published.
This has now been sent to the Mayor and Councillors.
From: Bev Butler
To: Sue Bidrose; Sandy Graham; Kate Wilson; Richard Thomson; Chris Staynes; John Bezett; Lee Vandervis; Hilary Calvert; Doug Hall; Andrew Whiley; Mike Lord; David Benson-Pope; Neville Peat; Andrew Noone; Jinty MacTavish; Dave Cull; Aaron Hawkins
Cc: Calvin Oaten
Subject: Stadium Cost $21.337 million per annum
Date: Fri, 30 May 2014 22:49:43 +1200
Friday 30 May 2014
Dear Mayor Cull and Councillors
Attached is a Word document prepared by Calvin Oaten outlining the annual stadium costs. The final figure of $21.337 million is based on figures sourced from and cross-referenced with DCC/DVML/DVL/DCHL documents.
Also attached is a spreadsheet, containing four spreadsheets, prepared by Bev Butler, showing the treatment of the $146.6 million portion of the stadium debt.
Explanatory Note for Calvin Oaten’s Word document:
I have expressly not mentioned nor quantified costs of what I would term ‘collateral’ effects of the Stadium Project. These of course are very real additional financial burdens to the citizens. These are: the realignment of SH88, the forgiving of considerable debt owed the city by the Otago Rugby Football Union, the costs of the purchase and sale of Carisbrook including the holding of same in the interim period. And of course, the ongoing operational losses of DVML’s operations. These particularly are proving to be a continual drag on the financial conscience of the ratepayer. It seems that if council cannot, or will not bite the bullet and raise the “pay to use” level to at least a break even figure then professional rugby is destined to have the last laugh at our expense. It is simply not fair.
I remain, without prejudice
Explanatory Notes for Bev Butler’s spreadsheets:
1. Sheets 1 & 2 titled “$117.541m” and “$29.059m” respectively outline the calculations for the two tranches of stadium debt outlined in the DVL six-monthly report, dated 31 December 2013. This report states that the $146.6m stadium debt has been divided into two tranches of $117.541m and $29.059m. The $117.541m is for a term of 17 years and the $29.059m is for a term of ten years with a weighted average of 6.05%pa. In the calculations I have assumed monthly compounding periods and assumed the first payment(s) were made between 30 June 2013 and 31 December 2013. If the compounding period is shorter then there would be a small reduction in the payments.
Note that in the DVL six-monthly report it states that a mortgage has been issued to pay for the two tranches. This is the first time this has been mentioned in the DVL reports so it is assumed that the mortgage was issued sometime between the last DVL Annual Report (YE 30 June 2013) and the DVL six-monthly report (31 December 2013). There is also mention of a GSA having been signed. I assume this is a General Security Agreement to secure the payment of the debt in the event of the stadium folding or the rental payments not being met. I acknowledge that I am unsure about this as I have no further information. Perhaps the Council staff could clarify this aspect.
2. Sheets 3 & 4 titled “$146.6m monthly” and “$146.6m weekly” respectively outline the calculations for the stadium debt had [regular repayments been made] from the time the stadium opened. It appears from the calculations and the DVL Annual Reports that this was not happening. If it was then the debt would have reduced to approximately $134 million. The DVL long term debt as of 31 December 2013 stands at $141.090m. So up until the mortgage was secured, it appears the debt repayments were for interest only on the bonds (and an average annual capital injection of $2m) which were issued to pay for the stadium land and other stadium debt.
Related Posts and Comments:
9.5.14 DCC Draft Annual Plan 2014/15 Submission by Bev Butler
23.5.14 Stadium | DCC DAP 2014/15 ● Benson-Pope asserts himself
Posted by Elizabeth Kerr