### 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.
Mayor’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