Media Release 7 September 2012
By Bev Butler
Fourteen month fight to expose CST Marketing Contract Fiasco
New DVML CEO Darren Burden Signatory – raises question is he really best person for the job?
It has taken fourteen months but Malcolm Farry, chairman of the Carisbrook Stadium Trust (CST), has finally released information to the Dunedin City Council (DCC) revealing further serious shortcomings in the competence of the CST and the last council. The release of these papers has been rigorously resisted by Malcolm Farry and he only agreed when it was made clear to him that under section 30 of the Ombudsmen Act he could be prosecuted for obstructing the release of official information.
The papers reveal the CST contracted an Auckland company, The Marketing Bureau Ltd (TMB) to raise private funds for the construction of the new rugby stadium. The CST agreed to pay:
● the Director/Manager and shareholder of TMB, Brian Meredith a $15,000 monthly retainer;
● another TMB employee a $5,000 monthly retainer;
● additional claims for “expenses” of approximately $5,000 per month;
● further claims of extra monthly work charged out at $350 per hour totalling an additional $5,000;
● a 2% commission on any private funding raised.
The amount paid out to The Marketing Bureau Ltd came close to half a million dollars.
However, the payments to The Marketing Bureau Ltd continued when the CST decided to terminate the contract thus opening up the CST to a termination payment of $222,187. This payment was approved by the CST Board and signed by Malcolm Farry, chairman, after legal advice for closing the deal was received from Farry and Co. Barristers and Solicitors.
The Marketing Bureau Ltd thus received a total of $652,809 and the question then arises just what have the DCC ratepayers received for this princely sum? It appears that “a few” reports were written suggesting uses for the new rugby stadium including papal visits, Royal Tours, major stock auctions, and Highland Tattoos as examples. Brian Meredith also reported that naming rights to the new stadium were worth “over $10m” when reality tells us all that Forsyth Barr not only paid a small fraction of this amount but only started making their first monthly payments in September 2011 after inferring in January 2009 that they had paid up front with a substantial amount.
But it is the failure of The Marketing Bureau Ltd in raising genuine private funding that reinforces the findings of the PricewaterhouseCoopers report. DCC ratepayers were consistently told that $45m would be raised by the private sector for construction. This simply didn’t happen, and as the PwC report confirmed, advance money for services is nothing other than advance revenue and just over half a million was used for private construction.
Ratepayers were consistently told that they would be liable for $91.4m for construction, but sadly for Dunedin’s sake this figure was woefully inaccurate with ratepayers being liable for $170m.
The Carisbrook Stadium Trust was acting as an agent for the DCC in this project and ratepayers were told that the Board and its Chair in particular, were “sweating over every dollar spent”. However, it seems that the CST entered into a contract which ended up costing over $650,000 for little or no benefit, and equally it seemed that the previous CEO of the DCC, Jim Harland, approved these payments to The Marketing Bureau Ltd while being party at all times to their outputs.
Read in conjunction with the full PwC report on stadium construction, these papers reveal a sorry level of business competence from the person that signed off the contract, newly announced CEO of DVML Darren Burden, the Board of the CST, the previous CEO of the DCC, Jim Harland and those City Councillors of the last Council who were determined not to ask any questions.
Further information available on request:
1. Letter from DCC cc to Ombudsman
2. TMB contract signed by Darren Burden
3. Invoice from Anderson Lloyd
4. Invoice from Farry & Co Barristers and solicitors
5. Letter relating to the settlement paid to TMB and associated invoice
6. Original LGOIMA Request
7. Settlement invoice
8. Invoices from the TMB signed by Malcolm Farry
9. Spreadsheet summary of TMB invoices
10. TMB report dated Dec 2007
1. DVML – Dunedin Venues Management Ltd
2. CST trustees are: Malcolm Farry (Chair), Eion Edgar, Kereyn Smith, Ron Anderson, Bill Baylis, Stewart Barnett, John Ward
TMB/CST contract which the CST board approved and Darren Burden signed (with no legal advice) leaving Dunedin ratepayers exposed to hefty payments. S042000033_1208221011000
(PDF, 647 KB)
Posted by Elizabeth Kerr