Councillors spar over stadium debt

Mikenette- thanks for letting us know there will be even more going on at the stadium than the stadium's own web link indicates. I am not as young as I was, and wonder, rather than, as you suggest, travelling down to the stadium to discuss with people what events are going to happen there, whether there is some way one can find out online.

This is what alot of modern organisations do these days, what with the internet and so on. Is there a Twitter feed to give an up-to-the-minute breakdown of proposed events? Such communication could also prove a valuable public relations exercise. Thanks again Mikenette for the joyous news.

Bones:  Your breakdown looks to me like the old "it's just a latte" arguement for the stadium finances in the first place.

Also, you can drive as efficiently as you like but when fuel goes up in price the efficiency gains are used to offset just the fuel rise, not other household expenses.  Your plan would be fine if all other expenses stayed the same or went down.

That said, I do agree that the extra needs to be paid now and it should fall on ratepayers and the pain of that will reinforce to people the effects of stupid fiscal decisions that can be made so it doesn't happen again.  If the debt is extended then the problem of the debt isn't fixed, just hidden from view.

I've been "informed" or "educated" on what the stadium team is up against just to be operationally viable, let alone paying off the debt, and I can assure you that the reason there was a horse on the paddock is that the team need all the events they can get.

The language used is "Team Dunedin" where the citizens and groups that have a potential use (read Highlanders, Otago, and football) and those that benefit such as hotels, work together to get as many events and as much out of the stadium as possible. For example, Dunedin accomodation suppliers need to stop charging two nights in a weekend when people only need to stay on Friday so Friday and Saturday can be used at the stadium as consecutive nights. 

I attended a work do at the stadium and there was a lot of positive comment on the venue but we could have been in any large room at a number of existing venues or indeed the Carisbrook Lounge for that matter.  So, don't be surprised if more than rugby means more than sport as things like the farmer's market, car shows etc all end up there... for a fee of course.

Again, this is for operational revenue as far as I can see and not debt.   When people suggest that this venue will make a profit, well, they should include paying off the debt and also operational expenses as well as the $6m needed for maintenance. I assume the deferral of the debt for that will mean the deferal of the maintenance too.

Moana Pool etc aren't the only thing that can be sold. Delta should also be on the block. Why does the council need to own such an entity that competes with the private sector anyway?

You are spot on in terms of the short term pain for less over the long term; however, there is the risk that the council decides that once that short term rates hike is over, that the ratepayers can indeed afford to continue paying them.

So the old boys' promise of ratepayers paying "not a dollar over $89 million" has now blown out to $205 million - just in interest alone!

Spread amongst 43,000 ratepayers, that's nearly $5000 per house just in interest, on top of a similar amount for the $200m stadium.

No sarcasm intended.

There's lots more than that happening. I understand if you follow most of the bloggers on this site you wouldn't get a very positive picture painted.

Get down there...do a tour...converse. Become properly informed!

The 'short term fix' Dave Cull is really referring to is one where, for the meantime, ratepayers get off his back about rate rises and he gets to the election next year and be able to say that rates have been kept down . . . even though the debt spending has continued. The 'short term fix' is to help him. Not us. We need 'long term' action plans to reduce debt. Not short term fixes.

Aside from a select few constructive and positive comments from a councillor such as Jinty McTavish etc, the overwhelming majority of 'old boys' seem to have developed a 'they did it to us, we'll do it to them' attitude and focus. I can see a 'sweeping under the carpet' focus by the same 'old boys'; more than likely to deflect blame and accountability to make up for their lack of ability to deal with an issue that these 'old boys network' councillors imposed on the ratepayers of Dunedin and Otago.

Some quick and easy calculations show that the turnover from this concert would have been around $7 million, and the ratepayer subsidised the venue, sound system and other costs,

Let's hope there are no more big concerts (that looks unlikely at the moment) because we just can't afford it. We get the debt, they take the loot. 

I demand to know the ages of Crs Thompson, Wilson, Stevenson and Brown.  If Cr McTavish's age is pertinent, then so are theirs.

I presume your post was sarcastic? I followed the link. There are 2 games of soccer scheduled and 8 games of rugby. The soccer games are selling tickets for $13. They are not advertising the ticket prices for the rugby games. There is also a musical which is selling tickets for $75. That's all we've got right through till September! Not really surprising they can't pay the rates.

The All Whites have performed well recently and giving local support to soccer may be a good thing. Rugby tickets should be $200 to reflect a proper market rate. Even then it is questionable whether the Highlanders games will provide significant value. They'll just damage the pitch for Otago United. Its a community funded stadium so until we can organise cost-effective dismantling we may as well use it to support community events. Lastly, the muscial would surely be much better off at The Regent - proper seats, heating, acoustics and the right atmosphere.

I am not sure you picked the right link there Dave-up-the-hill. All events listed are either the expected boring Super rugby matches, soccer or a musical. None would be expected to pack the facility! This fiasco and the resultant financial crisis is appalling! Heads should roll and the present council replaced by a central government controlled board to sort this mess out quickly. We are deep in it and they can't seem to figure out how to get out of it!

Bones: I did - in fact I proposed a 5 year plan that also involved holding Mr Farry's nose to the grindstone to get him to come good on his private fundraising promise, and a rates increase for the bars, restaurants and hotels who are the only people making any money from the stadium.

We could be paying $200 average each for 5 years ($1000) rather than $66 for 40 years  ($2640). That would raise $50m and pay off half of the outstanding stadium principle. It would be hard for a few years but we'd all end up spending a lot less.

At the moment what we're really looking at is a face saving exercise on the part of the counclilors - they voted to build the stadium, even though they were warned up front the economics didn't make any sense, and now they don't want to raise rates and suffer the resulting electoral consequences in next year's election - so instead of raising rates to pay for their mistakes they are going to stick us with 40 years of paying them off - we'll all have to pay an extra $1320 on average each so that the council can avoid taking responsibility for their actions.

One has to only go to the stadium events listing at

http://www.forsythbarrstadium.co.nz/events/upcoming-events

to see the stadium is not only about rugby or indeed not just about only sport. 

I'm now not sure exactly when I read this, but I think Mike, a couple of weeks back, was espousing a rates increase of something like (A) $26 p.a. for each ratepayer, to repay the debt in 20 years or, (B) around $100 p.a. per ratepayer for it to be paid off in 10 years. I’m a ratepayer, from down on the Peninsula, who’s happy to see an increase in my rates of 50 cents per week to cover the first option (Fifty cents per week???... anybody keen to suggest they’d notice that?).

And as for option (B) - I’ll call it $2 each week - if I simply alter my driving habits slightly to save 1 litre of fuel each week (one litre! That’s all it would take. In fact, at today’s prices, I need to save less than 1 litre of fuel each week) I’ve covered that increase as well.

With the fall of rugby as a popular sport for kids to play, it is unlikely the next generation will even want your stadium. 

As a younger (Jinty's age) ratepayer, I can assure you, I see no need for that expensive toastrack. [abridged]

Moana Pool does not operate at a profit, nor do the council chambers.

Art galleries, swimming pools, libraries are reliant on our rates, otherwise the entry fees would be prohibitive.

In fact of all these entities the Forsyth Barr Stadium complex is the more likely to turn a profit. Get down there, do a tour and find out about the myriad activities and events being hosted. 

At a Chinese wedding all the relatives file past the newly married couple. Older relatives give the new couple an envelope with some money, the new couple give their younger relatives an envelope with some money. They're passing on wealth - not debt.

Previous generations in Dunedin have passed on much wealth. I don't know the full financial history so correct me if I'm wrong - I don't think that we're paying back loans used to construct the botanic gardens, our civic centres, museum, art galleries etc. Moana Pool is a good facility but it should not have been funded by debt. New generations should be able to work on the projects they're interested in - to create wealth to pass on to the next generation. New generations should not be enslaved into paying the debts of past generations. Please pass on wealth - not debt.

At the same time we were promised a GMP on the stadium and a specific cost on our rates bill. Who guaranteed this? This mess can't be swept under the carpet. There needs to be a full enquiry and audit into this debacle.

To compare council chambers (commercial property) or Moana Pool (a functional business) to the stadium is quite misleading. Unlike the stadium both have actual value and could easily be sold and will retain much of that value over the long term. The stadium, on the other hand, could not be operated profitably if it was given away and like all stadiums has quite a short lifespan.

Typical Baby Boomer ('the ME! generation') greed, wanting everything now and not caring about the long term cost.  Good on Jinty (typical of her far more far-sighted and generous Gen Y) in thinking in how hard it is going to be to clear up their mess.

Go girl.

I don't have too much of a problem with the concept of 'intergenerational debt' as such, but repaying a loan of this size over 40 years is ridiculous. I would be laughed out of the bank if I applied for a 40-year mortgage. Basic economic and accounting principles tell us that the first thing you do is pay down your debt as quickly as possible, not extend it it to the point you end up paying 50% more interest than principle. Fully behind Cr McTavish on this one. 

Spreading the payoff period of stadium debt will just hide the cost of this project from ratepayers even more (you don't see it on the rates breakdown online now) and that could cause the council and the ratepayers to forget this debt mistake and push forward with more projects.

If the debt is in the face of the ratepayers then people would hopefully think twice about pushing for more council spending.

The decision to extend the load period is political in that the councillors do not want to be reminded at election time that the mythical "get over it, it's just a latte a week, my dear" addition to rates has been exceeded.

If the cost of the project debt repayments has to go up then so be it, and if the council wants to hold rates increases down then they need to cut spending elsewhere.

How can paying for the stadium for an extra 20 years be "a short term fix"? Mr Cull's plan involves the ratepayers paying twice as much for the stadium (the same yearly amount for twice as long) as we were previously stuck with.

Does Mr Cull not remember when he was the champion of the ratepayers, speaking out against the stadium because of the cost to the ratepayers, now he's proposing that the cost double and won't even allow ratepayers to speak about the issue - what is he afraid of? That someone might have a better idea? Or that the council might be called on the BS that this really is.

This  is yet another example of the baby boomers getting what they want but not being responsible enough to pay for it themselves and sticking it to future generations.