Tag Archives: Guy Hedderwick

DVML: Two directors gone before release of stadium review

Last week at DCC I was asked if I knew Rolfe and Brown had left DVML, I did not although I was aware of the advertising for new directors (see previous posts).
In the ODT story we’re privileged to see the misguided views of Ms Rolfe in lights (what an asset… not meaning the lights!) —hard being the token woman, brain cells would help. And Mr Brown why he can easily think of better boards to decorate, it’s very wise that he moves on.
Public release of the council’s stadium review is now past due. Of course, Dunedin City Holdings Ltd chairman Graham Crombie has diligently attempted to water down the report. A pale shadow by the time it hits the council table then goes public. The unpalatables. And Mr Hansen?

### ODT Online Wed, 12 Nov 2014
Confirmation DVML losing two directors
By Chris Morris
An outgoing director responsible for Dunedin’s Forsyth Barr Stadium says she is leaving with high hopes for the future of the venue.
Jen Rolfe, a Dunedin Venues Management Ltd board member, is one of two directors confirmed to have resigned, along with Peter Brown. The pair’s exit, to be signed off at a DVML board meeting next week, were confirmed yesterday in response to questions from the Otago Daily Times.
Read more

Related Posts and Comments:
8.10.14 Stadium: Liability Cull warns ratepayers could pay more to DVML
6.10.14 Stadium misses —like it would ever happen, Terry
4.10.14 DCHL & DVML: Call for directors
30.9.14 DCHL financial result
25.9.14 DVML on Otago Rugby and Rod
13.9.14 DVML and ORFU refuse to disclose 2012 Otago Rugby deal
10.9.14 Stadium: Behaviours at Suite 29 (intrepid tales)
18.6.14 Crowe Horwath Report (May 2014) – Review of DVML Expenses

For more information, enter the terms *dvml*, *terry davies*, *dchl*, *review* or *stadium* in the search box at right.

Posted by Elizabeth Kerr

7 Comments

Filed under Business, DCC, DCHL, DCTL, Democracy, DVL, DVML, Economics, Events, Highlanders, Hot air, Media, Name, New Zealand, NZRU, ORFU, People, Politics, Project management, Property, Site, Sport, Stadiums

DVML and the “Otago Rugby” deal (sponsorship and payments)

Is Terry Davies, chief executive of Dunedin Venues Management Ltd, telling porkies about the “Otago Rugby” deal signed in 2012 ???
(DVML/ORFU/NZRU)

Compare Mr Davies’ reply to Bev Butler today with information Whatifdunedin received from a source in mid-July 2014.

The reply to Question 1.(d) is interesting. Mr Davies states that none of the $3 million sponsorship was paid to ORFU but DVML does provide a staff member to assist ORFU with its sponsorship proposals. This is probably Paul Thompson. The other information from a source claims that DVML has to make up the difference to $1 million per year; this is paid to ORFU if less than $1 million in sponsorship is obtained. So the other staff member only spends one hour per week for six months each year?

Question 3. He says there’s no DVML company record of staff movements and NZ/overseas travel in approaching sponsors. Really? If true, that’s a large management failing which the DVML board is ultimately responsible for.

Why the discrepancies, Terry Davies ????

INFORMATION FROM SOURCE

Received mid-July [paraphrased]
Re the “Otago Rugby” contract – DVML did the Sponsorship but had to guarantee a certain amount. There was a heated exchange over this between Darren Burden (DVML chief executive) and one of his managers who said ‘we work for the ratepayers not rugby’. Burden was going to pay Otago the difference between what was raised and what DVML had to raise in the contract, despite Otago making a profit. The manager said DVML shouldn’t pay Otago, because they were deciding what was sponsorship and what was not.

[One day later]
The Otago Rugby deal is something like this:
DVML assist Otago Rugby with their sponsorship and the target is $1 million per year. DVML’s Paul Thompson was supposed to assist Otago Rugby. In the first two years, sponsorship didn’t reach the $1 million mark.
DVML still pays Otago Rugby to play at the stadium. Ask how much DVML have paid to Otago Rugby in the last two years to keep them afloat despite them making a profit.

[Two days later]
Not sure how it’s recorded in the DVML accounts, it was around $150k in the first year and similar in the second year. This is the difference between the $1 million DVML had to ensure ORFU got for sponsorship and what ORFU got. The deal lasts for three years. So this would be the last.

From: Bev Butler
To: Neville Frost [DVML]
CC: Kim Barnes [DVML]
Subject: LGOIMA Request: DVML Sponsorships
Date: Tue, 1 Apr 2014 08:57:35 +1300

Tuesday 1st April 2014

Dear Neville

It was reported in the ODT (22/03/14) that Mr Guy Hedderwick played an “integral” part in securing over $3 million in sponsorship for the stadium during the period ie Jan 2010 to Dec 2013.

I request:

1.
(a) How much of this $3 million figure has already been paid to DVML?
(b) Does DVML receive the full $3 million or does some other organisation receive some of this $3 million?
(c) How much of this $3 million is earmarked for the ORFU with payments already received or payments yet to be received?
(d) What percentage of the sponsorships secured by Mr Guy Hedderwick and/or other DVML staff does the ORFU receive?
(e) Is the ORFU making any financial contribution to Mr Hedderwick’s salary or expenses? If so, what percentage?

2.
(a) Did Mr Hedderwick’s salary package include commission on any sponsorship agreements he secured in his role as commercial director of DVML?
(b) What percentage commission did Mr Hedderwick receive for the $3 million sponsorship agreements secured as reported in the ODT (22/03/14)?
(c) Did the commission payments received by Mr Hedderwick exceed the salary range as stated in the DVML annual reports? If so, on what date was the DVML board informed of this?

3.
Thank you for your recent email containing the list of Mr Hedderwick’s DVML business trips. In this list the main reason for the majority of these trips was “meet with potential sponsors”. I request the names of the sponsors which Mr Hedderwick was successful at securing coupled with the name of the city where he met these potential sponsors. For your convenience, I have supplied a summary of these cities and the number of times he visited each city. Note I have included only the cities where it is stated the reason for the trip being “meet with potential sponsors”.

City (Number of trips)………Names of Sponsors
Christchurch (11 times)
Singapore (once)
Sydney (once)
Auckland (20 times)
Wellington (4 times)
New Plymouth (once)
Rotorua (once)

Please respond electronically. Thank you.

Yours sincerely

Bev Butler

————————————

From: Bev Butler
To: Terry Davies [DVML]
Subject: LGOIMA Request: DVML Sponsorships
Date: Tue, 17 Jun 2014 07:06:59 +1200

Dear Mr Davies

I understand the LGOIMA request I sent below was delayed due to the investigation by Crowe Horwath. Now that the Crowe Horwath report has been released and the report does not answer these questions would you please respond to my LGOIMA request.

Thank you.

Yours sincerely

Bev Butler

————————————

From: Bev Butler
Sent: Monday, 28 July 2014 2:51 p.m.
To: Terry Davies
Subject: FW: LGOIMA Request: DVML Sponsorships
Importance: High

Monday 28th July 2014

Dear Terry

The LGOIMA request below is still outstanding and has now breached the 20 day requirement under the provisions of LGOIMA.

I would appreciate a response to this request.

Thank you.

Yours sincerely

Bev Butler

————————————

From: Terry Davies [DVML]
To: Bev Butler
Subject: FW: LGOIMA Request: DVML Sponsorships
Date: Fri, 1 Aug 2014 02:56:12 +0000

Dear Bev

Further to your email dated 28 July and original request of 1 April, please find attached the response. A copy of the letter has been posted to you today.

Yours faithfully
Terry Davies

CEO [DVML]

B Butler 310714 (PDF, 82.8 KB)
Terry Davies letter 1.8.14 (2)

Crowe Horwath report cover (May 2014)

Crowe Horwath Report – Review of DVML Expenses (PDF, 363 KB)

Posted by Elizabeth Kerr

3 Comments

Filed under Business, Democracy, DVML, Economics, Highlanders, Name, New Zealand, NZRU, ORFU, People, Politics, Project management, Sport, Stadiums

Stadium costs $23.4144 million per annum

Received from Bev Butler
Thu, 26 Jun 2014 21:43:05 +1200

Cover note:
According to the latest DVL/DVML six monthly reports the debt is growing not reducing – that is a concern. The $146.6 million debt was passed over to DVL, many millions were poured into servicing the interest and capital repayments for this debt but even with that happening the combined short term/long term debt of DVML/DVL now stands at $157.6 million – $11 million more! The long term debt of $146.6 million has been reduced to $138.8 million but short term debt stands at $18.8 million. It is a major concern that the combined debt is growing not reducing – and this is during the stadium’s honeymoon period.

———

From: Bev Butler
To: Sue Bidrose; Sandy Graham; Kate Wilson; Richard Thomsom; 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; Grant McKenzie
Subject: Stadium $23.4144 million per annum
Date: Thu, 26 Jun 2014 21:43:05 +1200

Dear Mayor Cull and Councillors

As a result of further discussions and more information obtained through further searching Council documents Calvin Oaten and I have updated the annual stadium costs which now stand at $23.4144 million. (See attached word document). No changes have been made to the spreadsheet I sent earlier which I prepared.
There are some costs which have not been included due to the difficulty in quantifying them to the accuracy of which I would be comfortable.

This $23.4144 million figure does not include any payments which may have not been fully transparent through the Council books.
By this I mean that I understand there were approaches by Darren Burden, former CEO of DVML, to obtain payments for bills which DVML were unable to pay but which another Council Department had shown some willingness to transfer their surplus unspent funds from that Department to DVML. In that particular case, I understand the transfer did not happen. However, I have no access to information as to whether this had occurred on previous occasions through other departments.

█ Also attached are Terry Wilson’s calculations coming from a different angle but which come to $23.1 million per annum. (See attached spreadsheet prepared by Terry Wilson).

Yours sincerely
Bev Butler

Downloads:
FB Stadium=Annual Ratepayer Costs=V2 (PDF, 9.47 KB)
Stadium Costs $23.4144 million per annum (DOC, 30.5 KB)

Related Posts and Comments:
2.6.14 Stadium costs ballpark at $21.337 million pa, Butler & Oaten
23.5.14 Stadium | DCC DAP 2014/15 ● Benson-Pope asserts himself
9.5.14 DCC Draft Annual Plan 2014/15 Submission by Bev Butler

Posted by Elizabeth Kerr

15 Comments

Filed under Business, Carisbrook, DCC, DCHL, Democracy, DVL, DVML, Economics, Name, New Zealand, People, Politics, Project management, Property, Site, Sport, Stadiums

Stadium: DVML, mothballing, and ‘those TVs’ #LGOIMA

Received from Lee Vandervis
Tue, 24 Jun 6:20 p.m.

I am disappointed in the complete indifference of the local press regarding info I have sent them on the scandalous $1.3 million of new flatscreen TVs DVML bought when they already had 94 TVs and were already grossly unable to meet budgets. –Vandervis

—— Forwarded Message
From: Lee Vandervis
Date: Mon, 23 Jun 2014 12:23:54 +1200
To: Chris Morris [ODT], Debbie Porteous [ODT]
Cc: Nick Smith [ODT; Allied Press Ltd]
Conversation: stadium
Subject: Re: stadium

Hi Chris and Debbie,

My understanding is that mothballing the stadium is not being seriously considered, but that it should be to at least give us a sunk-costs base-line to recognise how much keeping the doors open is costing us.
The one-off cost of buying and paying the interest on the stadium is damaging enough with out the continuous massively subsidised ridiculous running costs.

It is a shame that DVML have been allowed to run as an out-of-control Council Trading Organisation for far too long, and that DCC failure to get DVML to operate responsibly as required by their Statement of Intent has encouraged profligate spending, such as buying $1.3 million of new flat screen TVs with fancy computer controls, when they already had 94 new flat screen TVs. [see attached DVML LGOIMA responses] Spending $1.2 million on unauthorized temporary seating, and buying an unauthorized specifically Council-denied growlight system [to keep the turf growing] are two other examples. Despite this the Mayor and other Councillors seem to be happy for years now to keep throwing millions at DVL/DVML.
I have often said that before we seriously consider closing the stadium doors we should strip DVL/DVML of their staff, directors and overheads, appoint a DCC in-house manager to run the stadium along Edgar Centre lines using volunteers including Rotary as was done with Carisbrook, fit a low-maintenance artificial turf to allow everyday use, and see how cheaply the stadium could really be run. Only then would we be in a position to decide whether keeping it open was possible long term.

I have sent original info re DVML’s profligate spending on newer TVs and their disposal of ‘old’ flat screens in separate emails.

Cheers,
Lee

—— End of Forwarded Message

****************************************

Email 1

—— Forwarded Message
From: Lee Vandervis
Date: Mon, 23 Jun 2014 12:12:59 +1200
To: Chris Morris [ODT], Debbie Porteous [ODT]
Cc: Nick Smith [Allied Press Ltd]
Conversation: LGOIMA response and new questions
Subject: FW: LGOIMA response and new questions

From: Kim Barnes [DVML]
Date: Wed, 4 Jun 2014 00:45:59 +0000
To: Lee Vandervis
Cc: Sandy Graham [DCC], Terry Davies [DVML], Sue Bidrose [DCC]
Subject: RE: LGOIMA response and new questions

Dear Councillor Vandervis

Please find attached the response to your request in relation to your LGOIMA request dated 9 May 2014. Attached also is a record of the payments made by staff and Directors for the purchases of the second hand televisions.

Kind regards
Kim

Kim Barnes
Marketing & Communications Manager [DVML]

Downloads:
Record of Payment (PDF 836 KB)
ClrVandervis030614 (PDF, 129 KB)

From: Lee Vandervis
Sent: Friday, 9 May 2014 2:47 p.m.
To: Kim Barnes [DVML]
Cc: Sandy Graham [DCC]; Terry Davies [DVML]; Sue Bidrose [DCC]
Subject: Re: LGOIMA response and new questions

Thank you Kim for Mr Davies responses to my questions.

Unfortunately some of my questions have not been answered.
Question 2 asks whether DVML realised at the time they bought the new Stadium TV software package that the existing 94 TVs were incompatible.
Can you please respond – yes or no – whether DVML realised they were buying a software package that was incompatible with the stadium existing 94 TVs?

Question 5 asks who was responsible for keeping the records referred to in “Unfortunately no record has been found of these actions or conversations”.
My ‘who’ question has not been answered – was it a management requirement lapse, or was it simply a staff member filing error, or some other subcontractor’s recording lapse?

Question 6 asks who was responsible for the damage causing seven TVs to be discarded? Does the “where no blame can be attributed” response mean that nobody was held responsible for the destruction of these seven TVs? Was any insurance claim made for the damaged TVs?

Question 7 requests copies of original paperwork confirming payments for stadium TVs supplied to DVML staff and directors. Thank you for supply copies of invoices, but it is proof of payment original paperwork that I have asked for. Can you please forward copies of this ‘confirming payment was made’ paperwork?

Your response also raises some additional questions which I wish to pose now as an additional LGOIMA request for information:
TV sale invoices variously describe TVs as “new” “second-hand” or just as “TV”.

Question A – are the “new” TVs so described actually new, and if so why are these new TVs being sold so cheaply? Are the sold ‘new’ TVs from the original 94, or from the subsequent 165 TVs? Are the second-hand TVs from the original 94 or subsequent 165 TVs or both? Of the TVs sold to staff/directors that are neither described as new or second-hand, which were new and which were second-hand?

Question B – why do the TV sale invoices vaguely refer to a generic TV type and not specify the actual TV unit by way of model number or serial number as is required in “a description of the goods” on a GST invoice?

Question C – What is the total number of TVs now in the stadium, and how many are from the original 94 TVs and how many are from the more recent purchase of 165 TVs?

Thank you for the information that you have provided so far as it has helped to clarify some aspects of the $1.3 million cost of the second full stadium TV system excluding the original stadium 94 TVs system.

Kind regards,
Cr. Lee Vandervis

—— End of Forwarded Message

****************************************

Email 2

—— Forwarded Message
From: Lee Vandervis
Date: Mon, 23 Jun 2014 12:12:07 +1200
To: Debbie Porteous [ODT], Chris Morris [ODT]
Conversation: LGOIMA response
Subject: FW: LGOIMA response

From: Kim Barnes [DVML]
Date: Tue, 29 Apr 2014 03:02:38 +0000
To: Lee Vandervis
Cc: Sandy Graham [DCC], Terry Davies [DVML], Sue Bidrose [DCC]
Subject: RE: LGOIMA response

Dear Councillor Vandervis

Please find attached the response in relation to your LGOIMA request dated 1 April 2014 along with copies of invoices as requested.

Kind regards
Kim

Kim Barnes
Marketing & Communications Manager [DVML]

Downloads:
Staff purchase invoices (PDF, 615 KB)
ClrVandervis290414 (PDF, 101 KB)

From: Lee Vandervis
Sent: Tuesday, 1 April 2014 10:17 p.m.
To: Kim Barnes [DVML]
Cc: Sandy Graham [DCC]; Terry Davies [DVML]; Sue Bidrose [DCC]
Subject: Re: LGOIMA response

Dear Kim,

Thank you for finally providing me with a response. 8 weeks for this response is unacceptable however and the excuse given that “the request is for a large quantity of official information or necessitates a search through a large quantity of information” is not credible.

The answers you have provided raise further questions as follow, to which I expect answers within a normal LGOIMA timeframe:

1 – Who decided to buy the first 94 stadium TVs and on what advice?
2 – Did DVML realise at the time they bought the new stadium TV software package that these 94 TVs were incompatible?
3 – What “increased revenue” has resulted from purchasing the newer 165 TVs and stadium TV software package?
4 – What has been the total cost of the stadium TV software package, the 165 TVs and associated installation costs? Please itemize.
5 – Who at the stadium was responsible for keeping the records referred to in “Unfortunately no record has been found of these actions or conversations”?
6 – 7 of the 94 TVs have been “Discarded due to being damaged”. Under what circumstances have so many TVs been damaged and who has been held responsible?
7 – Please forward copies of original paperwork confirming payments for stadium TVs by staff members, and payments by DVML Chair Sir John Hansen and DVML Director Peter Stubbs.

Kind regards,
Cr. Lee Vandervis

On 1/04/14 5:48 PM, “Kim Barnes” wrote:
Dear Councillor Vandervis

Please find attached the response in relation to your LGOIMA request dated 5 February 2014 along with a copy of the release being forwarded to the ODT.

Kind regards
Kim

Kim Barnes
Marketing & Communications Manager [DVML]

—— End of Forwarded Message
{See also correspondence via posts made on 3 April 2014. -Eds}

Related Posts and Comments:
18.6.14 Crowe Horwath Report (May 2014) – Review of DVML Expenses
14.6.14 NZRU ‘hustles’ towns and cities to build stadiums
12.6.14 Fairfax Media [not ODT] initiative on Local Bodies
9.6.14 DVML: Crowe Horwath audit report (Hedderwick)
3.6.14 DCC unit under investigation
2.6.14 Stadium costs ballpark at $21.337 million pa, Butler & Oaten
█ 3.4.14 DVML: Lost in transaction II (flatscreen TVs)
█ 3.4.14 DVML: Lost in transaction (flatscreen TVs)

Posted by Elizabeth Kerr

[Punctuation in the string of correspondence lightly edited and highlighting added; all email addresses removed. -Eds]

32 Comments

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

Crowe Horwath Report (May 2014) – Review of DVML Expenses

Dunedin City Council released the following report through the LGOIMA process, in reply to Bev Butler who lodged an information request.

The report by independent auditors Crowe Horwath investigates the work expenses of DVML’s ex Commercial Manager, then part-time contractor Guy Hedderwick.

Crowe Horwath report cover (May 2014)

Download: Crowe Horwath Report – Review of DVML Expenses (PDF, 363 KB)

NOTE: The report is not the result of a forensic audit, which should now take place to provide clarification for Mr Hedderwick and his manager.

QUESTION: Why is Dunedin City Council not seeking requirement for a forensic audit?

Related Post and Comments:
9.6.14 DVML: Crowe Horwath audit report (Hedderwick)
22.3.14 DVML, Money for jam…..fig jam’ [see links provided]
4.3.14 Bev Butler: Guy Hedderwick’s departure package (LGOIMA)

Posted by Elizabeth Kerr

6 Comments

Filed under Business, DCC, Democracy, DVML, Economics, Highlanders, Media, Name, New Zealand, ORFU, People, Politics, Project management, Site, Sport, Stadiums

DVML: Crowe Horwath audit report (Hedderwick)

Updated post 17.6.14

Crowe Horwath Report – Review of DVML Expenses (PDF, 363 KB)

Dunedin City Council has released a report recently completed by independent auditors Crowe Horwath, into the work expenses of DVML’s ex Commercial Manager then part-time contractor Guy Hedderwick. ODT reporter Chris Morris is covering the story.

[Received]

Readers of this site will recall the efforts that campaigner Bev Butler went through to track down the expenditure incurred by Guy Hedderwick while he was the Commercial Manager for Dunedin Venues Management Ltd (DVML).

After much effort through the LGOIMA process Ms Butler was told that Mr Hedderwick had run up bills of nearly $80,000 during 51 work-related trips since 2010.  

Readers will also recall the reaction by Neville Frost, DVML’s Finance Manager (ODT 22.3.14), who labelled Ms Butler’s claims of this expenditure as “completely inaccurate and ill-informed” while accusing her of “disgraceful” conduct and that she was “lacking in personal integrity”.  

Readers should now be fully informed that the figure of nearly $80,000 was indeed incorrect. The figure arrived at in the report compiled by Crowe Horwath is $144,879 – the amount released by Mr Frost in response to Ms Butler’s LGOIMA request has nearly doubled.

Readers should also be informed that the report found there was almost $4,000 spent by Mr Hedderwick with no evidence of what it was spent on; and a total of over $34,000 with no evidence of any approval.  

City ratepayers now need real answers to some basic questions.

1. Why, when Neville Frost was required to provide accurate information under an LGOIMA request on Guy Hedderwick’s expenditure, did he provide information that was inaccurate and misleading? Readers should not need to be reminded that when Steve Prescott, Manager of Aquatic Facilities at the DCC, did just this recently he resigned.  

2. Now that the full extent of Guy Hedderwick’s spending has been revealed by the Crowe Horwath report, can DVML still maintain as Neville Frost did in his press release, that it was “frugal”?  

3. What is DVML doing to obtain refunds from Guy Hedderwick on those sums incurred where there was no approval, or where there was no evidence of what the expenditure was for? For expenditure where there was no approval, is Neville Frost or Darren Burden at fault for lack of oversight and lack of management, and if so, should they be also responsible for repayment?  

4. What benefit to DVML and the ratepayers occurred from this $144,879 expenditure? Guy Hedderwick seems to have had carte blanche to travel at his own whim and it appears that DVML can’t point to any general or particular benefit from any of it.  

5. What accountability will be enforced by DCC, on behalf of the ratepayers, on the actions of Guy Hedderwick, for Neville Frost’s failure to both financially control this expenditure and to mislead and misinform both Bev Butler as the LGOIMA requestee and the general public by the content of his press release, and on the Board for its failures to contain costs?  

6. A full, comprehensive and public apology must be obtained from Neville Frost for his disgraceful and inaccurate statements made in his press release of March 22, 2014.

Note: Thanks to Bev Butler and Russell Garbutt for these statements.

Related Posts and Comments:
22.3.14 DVML, Money for jam…..fig jam’ [see links provided]
4.3.14 Bev Butler: Guy Hedderwick’s departure package (LGOIMA)

Posted by Elizabeth Kerr

59 Comments

Filed under Business, DCC, Democracy, DVML, Economics, Events, Hot air, Name, New Zealand, ORFU, People, Politics, Project management, Sport, Stadiums, Tourism

Stadium costs ballpark at $21.337 million pa, Butler & Oaten

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.

Regards
Bev

————————————

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.

Yours sincerely
Bev Butler

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
Calvin Oaten

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.

[ends]

Downloads:
Stadium Costs $21.337 million per annum (DOC, 30.2 KB)
Stadium debt calculations FINAL (XLS, 59.3 KB)

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

56 Comments

Filed under Business, Carisbrook, DCC, DCHL, Democracy, DVL, DVML, Economics, Name, New Zealand, ORFU, People, Politics, Project management, Property, Site, Sport, Stadiums