Tag Archives: Depreciation

Russell Garbutt: DCC, stadium failings

Comment received.

Russell Garbutt
Submitted on November 26, 2013 at 9:31 am

I submitted this to the ODT as an Opinion Piece following their editorial, but I have been told that it has not been selected for publication. Up to you to judge why.

“The ODT Editorial of Friday, 22nd November, 2013 headed “Stadium’s hard act to follow” is another stage in what has turned out to be a sorry chapter in Dunedin’s history.

Many residents of Dunedin were dismayed and astonished that the decision to build the new rugby stadium proceeded despite wide-spread protests and well-researched submissions detailing the experiences of other city’s decisions to build stadia which invariably had led to construction cost blow-outs, below budgeted incomes and over budgeted expenditures. As it turns out, these submitters have been proved right time and time again. What is patently obvious to all of those that have read the various reports into this project including the Larsen Report and the PWC report, the project was predicated upon counting future income as private construction costs, and assuming income levels and costs that would have resulted in an actual profit from Year one of operation.

The reality is a great deal different.

The DCC, and the ratepayers of the City, have been forced, through a complex set of financial arrangements, to provide substantial financial support by way of a payment of $7.25m per year to enable the debt to be paid off faster, a payment of $750,000 per year for “promotion of the stadium for community events”, a payment of $725,000 for other stadium debt round seats and pitch machinery, another annual $400,000 to subsidise or attract large events, and ongoing additional costs for financial advice and the like. All this on top of the huge costs for construction and the associated debt which is a very large component of the $12,000 debt owed by each and every ratepayer to the DCC.
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“On the eastern coast of New Zealand lies a world-first architectural icon – where 30,000 excited fans are drawn together to watch the action, be entertained, and celebrate. Welcome to Forsyth Barr Stadium at University Plaza: New Zealand’s newest, largest and most versatile indoor events arena.”
Forsyth Barr Stadium, Facebook 22 July 2011 at 17:06

Posted by Elizabeth Kerr

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

DCC Annual Plan, arise the told-you-so’s

Blame attaches to the decision to fund the Stadium for creating the pressure on council finances.

### ODT Online Sat, 23 Jan 2010
Deferrals could have high cost
By Chris Morris
The Dunedin City Council faces a double whammy of lost revenue and community anger – at least from some sectors – if it defers some or all of a list of major capital projects in an effort to save money. The proposal to consider staging or deferring work on planned upgrades of the Regent Theatre, Otago Settlers Museum and the Town Hall/Dunedin Centre was raised by deputy mayor Syd Brown during Thursday’s council pre-draft annual plan meeting.
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### ODT Online Sat, 23 Jan 2010
Deferring depreciation saving for council
By David Loughrey and Chris Morris
The Dunedin City Council has managed to wring some money from its budgets using a method it has been using for some time – deferring its spending on depreciation. Since 1992, councils have been required by Audit New Zealand to list all assets on their books and set aside depreciation; an amount to maintain them and pay for their eventual replacement.
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Other stories:
Cuts likely to hit libraries
Road decision long way off
On the trail of Lovelock
Last chance for Lovelock Ave opponents

Post by Elizabeth Kerr

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Filed under Architecture, Economics, Politics, Project management, Stadiums, Urban design

Predicted Dunedin rates rise…

### ODT Online Sat, 16 Jan 2010
Rate rise of 7.3% projected
By David Loughrey
Dunedin ratepayers look set to pay an extra 7.3% in rates for the next financial year, along with increased fees and charges for activities ranging from building a house to burying the dead. This year’s draft budget shows the city’s rates bill will rise by 61.3% in the next 10 years, 35.7% of which is the result of inflation.

“Beyond regular, annual inflation effects, the two main reasons for the increases in rates are the increasing debt servicing costs associated with the capital expenditure programme, and the 5% per annum increases in the funding of water and wastewater depreciation.”
-Jim Harland, chief executive

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ODT Online Sat, 16 Jan 2010
Operating costs will jump $1.4 million
By Chris Morris and David Loughrey
With the big decisions made, and the borrowing under way, the Dunedin City Council now has to find a way to manage its debt-heavy budget for the next year and beyond. Annual plan meetings begin next week, and the result will determine just how much the city dips into ratepayers’ pockets to pay for water and wastewater, the Forsyth Barr Stadium, the Town Hall upgrade and many other projects. Dunedin City Council reporters David Loughrey and Chris Morris examine the issues.
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Related stories:
Cost of dying, other services may rise
Council housing rents set to rise in order to cover increased costs

Post by Elizabeth Kerr

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Filed under Economics, Media, Politics, Project management, Stadiums