Stadium: Liability Cull warns ratepayers could pay more to DVML

Dave Cull 1.1### ODT Online Wed, 8 Oct 2014
Ratepayers ‘inevitably’ pay losses
By Chris Morris
Dunedin Mayor Dave Cull says the future funding model for Forsyth Barr Stadium will be more transparent to put an end to a “money-go-round” draining the council’s coffers. But it was still too soon to say whether ratepayers would end up carrying more of the cost, before the public release of the review’s findings next month, he said. Mr Cull was commenting after appearing to suggest, in the council’s latest newsletter, that a funding increase could be possible for Dunedin Venues Management Ltd.
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FYI Dunedin 22 (October 2014) 1Mayor’s Desk 03 Oct 2014
The Council has started planning for the 2015 budget. Next year is also a Long Term Plan (LTP) year. The LTP is a 10 year plan that is refreshed every three years. In addition, the Government has imposed new and urgent requirements on councils around certain important policies. The three work streams are interconnected so there is a huge amount to consider and decide on. The extra work wouldn’t be so demanding if the 2015 budget weren’t already challenging.
While the Council has a financial strategy limiting rates increases to 3%, we face reducing dividend streams from our Council companies, probable higher requirements to get the Forsyth Barr Stadium on to a sustainable footing, greater government regulatory requirements and on going Council reviews. These place considerable demands on resources.
We also need to continue to implement our key strategies. For instance, the Economic Development Strategy aimed at job and business creation, the cycleway network addressing safety and transport options, debt reduction and heritage building enhancement. Our strategic framework is the interconnected road map to the future of our city. Without it Dunedin goes backwards. So savings will be made, tough choices taken and development momentum maintained at the same time. The 2015 budget will be a delicate balancing act.
Contact DCC on 03 477 4000. DCC Link

FYI Issue 22 October 2014 (PDF, 458.3 KB)

Back issues of FYI Dunedin

Comment by Calvin Oaten
Submitted on 2014/10/05 at 12:39 pm

“FYI DUNEDIN” The latest FYI landed in my letterbox on Friday. Reading from the ‘Mayor’s Desk’ I was taken by Dave’s verbose message. The Council has started planning for the budget. “The work would be demanding if the 2015 budget weren’t already challenging.”

He says: “While the Council has a financial strategy limiting rates increases to 3%, we are facing reducing dividend streams from our Council companies, probable higher requirements to get the Forsyth Barr Stadium on to a sustainable [there’s that word] footing, greater government regulatory requirements and on going Council reviews. These place considerable demands on resources….”

Does he read that stuff? Indeed, did ‘HE’ write it or some muppet in the PR department? A real ‘Churchillian’ rally to the flag entreaty. Nowhere does he address the solution to the main points of the strategies. Are there any real solutions? I don’t know. But I will make some guesses. As I see it, three things are possible.

First, and ideally, there is a massive rush of blood to the head and Dave and all councillors do the right thing and call a halt on all plans, projects and lock the cheque book in the top drawer till future finances allow it to come out again. ‘Fugetaboutit’ it is not in his genome to know anything about prudence.

Second, there will be a massive shift in the rates quotient, on the plea of: ‘jeez’ times have got really tough, and the business cycle has turned against DCHL’s enterprises and the dividend stream is going to be much less than expected. So, it’s shoulders to the wheel and all must do their bit for the good of the city. We must not let it go backwards. Not a hint of reducing the department’s demands and dreams.

Third, a massive change of plan on the debt reduction front. It currently sits north of ($610 million) and we know that the city entered into a ‘multi note facility’ up to but not exceeding ($850 million). So there is around $240 million of freeboard available. Just a silent, unobtrusive drift upwards could be justified, again to tide us over till better times return.

Realistically, there is not one major programme which could not be deferred till the ship is brought back into balance. “Without it Dunedin goes backwards.” News for you Dave, Dunedin is going backwards now! and all your nonsense is accelerating the process.

“STOP!” You already are stuck with the one big “Tar Baby”, in the FB Stadium. If you think you can get that onto a ‘sustainable’ (that word again) footing without pouring vast additional capital into it then you are dreaming. Patronage is the proof in the pudding. It never has reached anything like a feasible level, and is actually in decline at the principal activity, rugby. It is being intravenously dripped to the maximum by around $8 million pa by Aurora now, and we are served notice that this could be in jeopardy due to DCHL’s situation. You have already upped the ratepayers’ input to $2m pa to supposedly shorten the payback period. The rent to DVL is heavily subsidised due to DVML’s inability to generate enough to pay out of revenue. If you look at the DVL reports it is treading water furiously. It has reduced its stadium debt from $146.6 million over four years to $138.586 million, and at the same time brought forward a ($13.656m) deficit. To me that looks like $5.642m backwards. That is notwithstanding capital call ups of the $2 million from the shareholder for the attempt to shorten the loan period. The directors of DVL have comfort in the knowledge that when DVL was established it was capitalised on the basis of 245,000,000 $1 shares, of which to date only 79,688,931 have been called and fully paid up. So you can see that 165,311,069 shares are still available to be called. Dave, you just don’t seem to realise the predicament which the ratepayers (shareholders) are in. That you believe that the FB Stadium can ever crawl out of the financial swamp is tantamount to your understanding of the position.

So, I wonder just how many good folk will be taken in by your ‘glib’ summary as outlined in the FYI bulletin? My guess, not many.

Posted by Elizabeth Kerr

28 Comments

Filed under Business, DCC, Democracy, DVL, DVML, Economics, Hot air, Media, Name, New Zealand, People, Politics, Project management, Property, Site, Sport, Stadiums, What stadium

28 responses to “Stadium: Liability Cull warns ratepayers could pay more to DVML

  1. Mike

    Why does the mayor have a financial strategy to keep rates rises to 3% when the Reserve Bank says true inflation has been under 2% for the past few years – where in the long term plans is the planned purpose for this 1% year on year compounding rates increases?

  2. Why does Dave Cull always point to the ratepayers to support the Stadium’s shortfalls? Why, just for a change, can’t he have the “balls” to put the charge where it rightfully lies? Rugby is the culprit. It is the biggest user but doesn’t go anywhere near paying its quota for use. Pretty simple really. Call their bluff, assess the breakeven point and say that’s it. Pay or else. I’ve said it before, put it on them and the NZRFU will be forced to make the decision, does it want the ‘Test’, Super 15, and the ITM Cup to feature south of the Waitaki. If so then pay, if not go away and the Stadium could be closed, closing down DVML and DVL, leaving the DCC with the sunk costs to deal with. At least that would be a known fixed cost, and who knows there could be parties (including rugby) who could come forward offering deals. Unlikely I know, but possible. All the poor suffering ratepayers need is some relief. Not likely with the current crop of Mayor and Councillor wimps.

  3. Jacob

    “Ultimately, the debt is the ratepayers debt”
    Wasn’t Dave part of the original council that told us that the stadium wouldn’t cost the ratepayers a cent?
    Funny how the ratepayers now have to carry all the debt.
    Time for Dave and those that sold us this bullshit story in the first place, to roll up their tent and move on. They have done enough damage here already. Anything that they have to add to this massive debt problem is surely not for them to decide. It was their arrogance that got us into this situation in the first place. Things can only get worse with their meddling.
    Before we start to clean up the debt, we need to rid ourselves of those who created this debt.

  4. Elizabeth

    Calvin, Mike – we already know how much DVML is paying Otago Rugby for each game played at the stadium – it includes the shortfall in sponsorship that DVML has failed to raise for Otago Rugby as part of the ‘DCC bailout’ deal signed (by Cull) in 2012, and which covered three years only; the deal is up for renewal or whatever this year. It is DVML’s Paul Thompson who has failed to raise all the Rugby sponsorship required. We gained this information from a DVML insider earlier this year (see previous posts).

    https://dunedinstadium.wordpress.com/2014/09/13/dvml-and-orfu-refuse-to-disclose-2012-otago-rugby-deal/

    https://dunedinstadium.wordpress.com/2014/08/01/dvml-and-the-otago-rugby-deal-sponsorship-and-payments/

    • Mike

      But the ORFU is making a profit where it used to lose money, like a $2-3m difference, without raising ticket prices – how is that happening? Just what is in the secret agreement between DVML and the ORFU?

      And the $5m in luxury box sales that were supposed to go directly to DVL to pay for the $55m loan they took out when the private fundraising never showed up, that no longer shows up on DVL’s or DVML’s books where is that money going?

      oh

      • Elizabeth

        Mike, everyone involved is refusing to say – and we go back to why on certain levels David Davies and even Guy Hedderwick were hounded out of town. All sorts of levels to the honour amongst thieves at DVML/DCC.

        We’re not done yet with the unearthing – and if the Stadium Review is without doubt another Otago Rugby deal with DCC/DVML then I doubt there is anywhere to hide – and maybe that’s why Terence Davies is saying Otago Rugby is a waste of time….

        CULL HAS TO GO, AND SHOULD BE PUSHED….. or public stocks at Octagon for him in his bloody ermine.

        I notice that in commenting after Brockville Battler Syd Adie’s recent passing Daaave Cull made it his occasion and mission to compare Syd’s method of political campaigning to the vitriole he as mayor receives from others. Well, Mr Cull is a possum in my headlights. Know what vermin is, what consort STUPIDLY with Professional Rugby using ratepayers’ hard-earned assets as his personal ego-Trading Bank. Daaave and our fricking cheque books.

        • Hype O'Thermia

          Dave Cull compared “Syd’s method of political campaigning to the vitriole he as mayor receives from others”. Yes? Wonder why….
          Syd was widely and sincerely respected as a man of integrity.

  5. Elizabeth, you’re absolutely right. But that brings it back to the question, why is DVML’s function to dig up sponsorship for ORFU /NZRFU games? DVML’s job is to supply the venue in good order and condition for matches booked by the respective unions for the agreed fee. End of story.

  6. Peter

    The plan seems to be that the stadium financial sinkhole will be made more transparent, there will be a recognition that it will never be a goer, the stadium will receive more money to prop it up, this will be called making it more sustainable… and therefore nothing will change.
    Basically we are being urged to suck it up. Hence the talk about inevitability.

  7. Whippet

    Sounds like they are for the 300th time, redrawing the line in the sand.

  8. Hype O'Thermia

    My comment on the oddity online was abridged. It’s interesting to see what gets taken out and where the sensitive spots are from time to time. For anyone else who derives wry amusement…. two strange little excisions, strange sensitivities.

    Chain conversion
    I was one of thousands impressed by Dave Cull’s speech at the anti-stadium rally in the Town Hall. He spoke eloquently, clearly pointing out the flaws in the scheme. Wouldn’t he be the perfect mayor to replace Peter Chin. stadium supporter, and what’s more he had a policy of transparency, no more of those back-room hush-hush mates’ favours deals. Lee Vandervis was even more outright in his condemnation of what he depicted as a financially ruinous stadium, but his blunt factual manner was, I thought, too unvarnished for the public to accept, so I voted for Cull. But that was before the election. The mayoral chain had a strange effect.
    {[**** All the Town Hall opinion was overturned in favour of “making the stadium work” although pre-chain it had been unworkable, he said so and gave reasons pre-chain.***]}

    Now ‘Dave Cull says: ”probable higher requirements to get the Forsyth Barr Stadium on to a sustainable footing.” ‘ Sustainable is the trendy word now. Once upon a time it had a meaning but now, like awesome (a.k.a. oarsome) and whatever, it gets chucked around as verbal confetti. If Mayor Cull means that by sustainable “ratepayers can keep on being rated and charged extra for services year after year” I suppose he’s correct, after all it’s what has been happening so far, and by that kind of reasoning it works.
    He also says ‘the future funding model for Forsyth Barr Stadium will be more transparent to put an end to a ”money-go-round” draining the council’s coffers.’ And ‘ “What I’m pointing out is whatever is required to service that debt, that DVML can’t earn, will inevitably come from the ratepayer. It has so far, and will into the future, because it’s the ratepayers’ debt.” ‘
    So the money-go-round – shuffling ratepayers’ money through various accounts to pay for the stadium and pay for the occasional event to come and perform in it – $350,000 someone mentioned for Rod Stewart, can that be correct? – won’t be what drains the council’s coffers.
    Hurrah! We won’t be stony broke any more, right? Well don’t break out the chocky bikkies just yet. There’s no suggestion of how the stadium is to be paid for, just that the money won’t be filtered through so many initials, DVML, DVL, DV-howsyerfather,
    {[*** EIBF (Events Incentivising and Bribery Fund),***]}
    AATHC (All-Around-The-Houses Committee, and TAMPS (Transparent As Mud Policy Strategists). Don’t expect your rates increases to come back to anything like the percentage rise in your income. A sub-committee is being convened at this moment to consider hiring consultants on the best site, and whether there should be a second site in South Dunedin, for a punch booth. Ours is a caring council, it cares about providing necessities. Thus punch booths for ratepayers to get extra holes in their belts, in preparation for extra tightening.

    http://www.odt.co.nz/news/dunedin/318717/ratepayers-inevitably-pay-losses#comment-63296

    {Link added. -Eds}

  9. Elizabeth

    ### ODT Online Tue, 9 Oct 2014
    Don’t blame us: mayors
    By Chris Morris
    Southern leaders have responded with a mixture of sympathy and scorn to deputy prime minister Bill English’s claim councils are fuelling poverty in New Zealand. Mr English, speaking on Tuesday, suggested council planning policies were restricting the availability of land, driving up house prices and “causing poverty”.
    Read more

  10. Jimmy, when you or anyone else comment about ‘Climate Change’ in a critical manner you are in direct contravention of the UN’s IPCC’s moral mandate. News media, governments, local bodies and ‘greenies’ are so imbued with the concept that they cannot brook adverse comment. It is all around ‘Agenda 21’.

  11. Hype O'Thermia

    Jimmy, it’s people like you who are responsible for climate change. Don’t you know that every time a Dunedin person rides a bicycle for 2km the effects of at least one coal-fired power station in China are reduced by 18.3%. Thank goodness for censorship, critical thinking is the last thing we need if St Kilda is not to suddenly vanish beneath the briny.

  12. Mick

    In looking at the article that Jimmy refers to I can see why he and others were blocked. This is now common practice throughout the world in the MSM in respect to dissenting voices.

    These two views from Patman and Davis seem to me to be typical of the hubristic ‘we know best’ academic socialistic, especially when they pontificate in these terms:

    “First, scientists could – and should – insert themselves more frequently into the diplomatic process and national debates that directly influence governments. Scientists are widely respected in many societies, and they should not flinch from sharing their expertise on issues such as climate change with both officials and the broader public alike.

    Second, it is high time the United Nations – the chief custodian of the international interest – was reformed to ensure the organisation could be a more effective forum for bringing diplomacy and science together to address global problems that can only be solved on a multilateral basis.”

    They should take their chances in influencing and interacting with the political processes as everyone else does.

    As to the second point, we have a very good working example of this sort of unelected authoritarian solution to the sort of government they seem to want for the U.N. in Europe today, where the national sovereignty of each state is being overridden by unelected bureaucrats.

  13. Elizabeth

    Bullshit artist writing on the stadyum in today’s chip paper. Overcome by the administration and solicitations of T. Davies and the new council chief executive. Fortunately, I recently overheard a group of middle-aged people at a local café giving a rundown on the mixed merits of the BS artist. Naturally, I pricked my ears up on words used like ego, dubious ideas of self worth and sexist old school…. and paternalistic leaning. Balanced by well-meaning. I noted the conversational rhyme and sniggered.
    This after one of the gent’s visits south.

  14. In today’s ODT:
    “A year after charging $12 a ticket at the venue last year, admission will be free this season after Southern United gained a community funding grant through the Dunedin City Council”.
    http://www.odt.co.nz/sport/football/320886/football-southern-utd-offers-free-admission-season
    Surely $12 is little enough to contribute to the costs of the Stadium compared to the gym or the movies, and a fraction of the price of an Arts event.

    • Hype O'Thermia

      Don’t complain, Alistair. It’s Our Stadium Culture and as Culture is bloody near sacred. We don’t charge people to use the Fubar Stadium because we need the numbers to prove what a great asset it is for the city.
      Next year complaining may not be too iconoclastic, so keep watching for the appropriate moment. That’ll be the day the DCC announces it will pay people to attend rugby, concerts, events – anything! – at the Fubar. Their speech-bubbles of illusory success prove increasingly difficult to keep afloat on their sea of debt.

      • Elizabeth

        Pay us?

        Hype, at that rate Mr Farry will be able to move back to Dunedin and parade the streets again as saviour of the people and their sporting and entertainment future.

        Oh wait.

  15. Talking about paying to attend, does anyone remember back during the stadium construction that it was decided, I think by the Elite Sports Academy, that it would be a great idea to build facilities close to the stadium for elite sportspeople to inhabit. That’s it, the single story building attached to the north side of the stadium. Looking through the windows it seems to be a glorified Gymnasium with associated facilities.

    Anyway it was agreed by council that this should be built. It was to cost $10m and was to be funded by the DCC. That is over and above the stadium costs. It was also agreed that the ESA would service that debt at a cost of about $850,000pa. The capital of $10m is in the never never world of DCC debt.

    Shortly after I saw where a report was put before council recommending that the DCC should make an annual donation to the ESA of $850,000pa. This was discussed, voted on and agreed. A perfect contra for the ESA.

    Now it seems from observations that the biggest users of these facilities are the Highlanders and ITM rugby teams. Who else, I have no idea.

    What the latest state of the arrangement is I don’t know, but I am waiting to see if this project will feature in the Sue Bidrose report on the Stadium, if and when it ever sees the light of day.

  16. Russell Garbutt

    Calvin, I well remember this sequence of events. The Academy of Sport (South Island) and its successor are supposed to be servicing carded amateur athletes, but the reality is that professional sport rules the roost. The DCC have provided an enormous range of facilities built and refurbished on public grounds for the exclusive use of professional rugby. Just look on Logan Park. If the construction, DCC donations and subsidies, and users of this facility are not part of the report then they should be.

  17. Elizabeth

    LOSER FREAKSHOW TERENCE DAVIES USED CAR SALESMAN SELLS WOMEN’S UNDERWEAR

    And we, Dunedin Ratepayers and Renters keep paying +$20 MILLION per annum in stadium losses, year in year out, while Daaave Liability Cull keeps SPENDING UP ON PET PROJECTS

    ODT: Going into bat for stadium with aplomb

    Only the local rag could contrive such a disgusting profile – such that the Smiths like women’s underwear as much as the arsehole Davies.

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