Stadium debt reduction to be considered

The Dunedin City Council is to consider using savings to repay more debt associated with the Forsyth Barr Stadium.

The council will next week consider approving a one-off payment of $2.271 million to help balance the Forsyth Barr Stadium accounts. Of that, $1.77 million would be used to repay DVML debt, and the balance would fund a cash shortfall.

The payment would be funded from DCC savings made in the current financial year.

DCC Group Chief Financial Officer Grant McKenzie said: "A one-off payment to reduce debt further would be good for all parties, and would clearly respond to community demand for the DCC to reduce its overall debt level."

In a report to be discussed as part of the Council's Annual Plan deliberations next week, staff say the payment would enable Dunedin Venues Management Limited (DVML), which operates the Stadium, to balance its budget for 2014/15 while a comprehensive review of Stadium management and operations is completed.

The Stadium has been operating for more than two years and has been unable to meet its budget. The draft DVML budgets for the 2014/15 year and onwards forecast annual losses.

The report also recommends increasing the annual ratepayer contribution to the Stadium by $715,000 annually from 2014/15, but this is an interim solution.

That funding would come from rates.

In January 2014, the Council endorsed Chief Executive Officer Dr Sue Bidrose's proposal to carry out a comprehensive review of the Stadium's management and operating model.

The review is being carried out in conjunction with parent company Dunedin City Holdings Limited and the DVML Board. It will be completed after the 2014/15 Annual Plan budget decisions have been made.

"An interim funding decision is required by the Council to allow the Stadium to meet its financial obligations in the coming financial year," Mr McKenzie says.

"The ongoing budget for DVML will depend on the outcome of the review."

Directors responsible

Trev: you're correct the directors are responsible for the debts that they create, in this case the lack of simple business nous that lets them run a business that continually loses money and think that this is "sound business practice" as required by law.

The same law requires the directors to make sure that DVML "exhibit a sense of social ... responsibility by having regard to the interests of the community in which it operates" - I don't think that DVML cares one whit about those on fixed incomes who's rates bill increases year after year after year to pay for bailing them out.

Stadium/DVML director accountability

Te Jackle: The directors did the approval. Ask them if you can find them. A singularly unaccountable bunch who are eager to add directorships (and fees) to their cv's but remain faceless when asked to stand up and speak up about how stadium debt should be cut over the next 5-10-15 years. Always excuses - never positive action !

With my money

Mr Me: trouble is that they're not paying down the stadium debt here are they. All they are doing here is paying the bills for things that DVML spent money on last year that rugby ticket money didn't cover, they are paying for your fun with my money.

We will build it they will come...but they still haven't.

There is a reality here, we could not afford this stadium to begin with and yet it went ahead. Yes progress is good, who says it isn't? However, if it incurs debt the city and ratepayers can't afford where is the progress? There is a slide into a quagmire of stagnation brought about by overblown infrastructure costs. If the supporters of the stadium stand back and catalogue the benefit we have from the stadium how much actual revenue is being generated for the ratepayers?

You might think I am negative about the city but I love Dunedin and want it to thrive. How can that happen when developments of white elephants overtake the possibility of improving the vista and condition of Dunedin and some building? Could the money have gone, for instance, to addressing the old Post Office in the Exchange - the Council could have easily purchased that and made it pay in some way too but chose a Stadium that appears to have limited value to us and even more limited actual earning capability.

You say the potential is there but it is potential unfulfilled after years of trying. While I am stuck paying this off with other ratepayers that know another rate hike is on the way I think of the sea wall, the sewerage and drainage problems, public transport issues, road issues ...! Oh sorry, should I be concentrating on the fact we can have a couple of international rugby games and some national ones?

Gotcha, of course that is so much more important than housing for the elderly, housing for disadvantaged, night shelters, low income insulation...because these people can go to a game and be kept warm and dry and fed. My bad, wasn't seeing the whole picture.

Am I reading this correctly?

The $1.77m being touted as paying down DVML debt is actually to pay for an additional loan that DVML has taken out to purchase seats and other AV equipment, it is not actually being used to pay any of the principal that was spent to build the thing, didn't a very similar situation occur last year when they decided to put in a lift, toilets and renovate some office space then couldn't pay for it?

This organisation is just continuing to spend others money with absolutely no accountability and continue to ask for top-ups.

Who approved this additional spending?

Get real, DCC

Oh yeah. A one off payment to FSB Stadium to help them with their little money problems. Get real. This is not a one off.

I think there is delusion going on here. The DCC, despite the new broom, is entrapped.  

Good work DCC

Congratulations DCC on paying down any surplus funds to the Stadium debt. Any clever person with a mortgage would do the same i.e. you pay less interest in the longer term. I see the old Mikestk, Stevesome69 and Bev are still sitting in their rocking chairs crying into their hankies that the Stadium has cost the city alot of money. I always expected a world class facility like this to cost plenty with lots of overruns. Speak to anyone who builds a house and they will tell you about cost overruns, it's no different. Well done on the DCC for building it and I hope you can increase usage more and more over the coming years and months. Also keep cutting unnecessary expenses from the city so we can keep paying down debt - Love it and Well done! To those against FBS, come on it's built you will never close it.

The only solution

Fitz: the problem of course is not that the stadium isn't going away - it's that the financial disaster that it causes is not going away, it just gets worse and worse every year, a million last year, two this year, all when we were told that it would make a small operating profit.

I don't really have a problem with there being a Stadium in Dunedin - once you fix the problems it's caused to City's finances so that our rates go back to the levels they were before it was built, rather they continuing to rise at rates higher than inflation driving people in fixed incomes from their homes, then I'll be happy.

The only solution I can see that comes close to that is to get the rugby people to raise the $50m they promised to raise to build it (but welched on), and raise ticket prices to cover DVML's losses.

So when are you and the stadium supporters actually going to get behind it and help pay for it? Look at how the Regent Theatre supporters raise money every year to fund it, that's how a responsible civic organisation behaves, you would do well to emulate them, rather than rifling my wallet every year to pay for your fun.

Our stadium

Funny isn't it? I was wondering how long it would take MikeStk and Stevesone57 to rush into print. What a pity that these two regular contributors to the wailing wall never have anything positive to say about this great city. Get over it, the stadium is not going to go away and many of us greatly value the benefits it brings to our community.

Who is Forsyth Barr?

FB this, FB that, out of towners might think Forsyth Barr owns the place.

Go nowhere

Why don't you lot simply change the slogan of Dunedin to "Closed for Business"

This is all you have to complain about, it's built so move on. Take a good long look at yourselves, your town is full of deadbeat rundown buildings

But no . . . . that's somebody else's fault to blame. Do nothing, go nowhere.

 

 

Debt

Stevesone57 - it's there in black and white 1.77mil to pay DVML debt the rest to fund the shortfall ie the debt will be further decreased by 1.77mil. That's 1.77 mil they will no longer pay compound interest on.

Therefore they are actually paying for a cash shortfall of .501m .

However I agree with about contracting out for events, local use could be run by a small liason team within the dcc .

I would also point out the paydown for debt and cash shortfall is for DVML debt which is mostly but not totally comprised solely of stadium related debt and cost. It is in fact all the venues and loss makers DVML manages.

Now they worry about debt levels?

Why weren't they worried about debt levels before? We said we couldn't afford it and they said it will pay for itself. How? Is the Stadium going to start buying Lotto tickets? When, when, when will it be consistently used and bringing in revenue? If this was the private sector heads would roll and why aren't they rolling when it comes to ratepayer gouging? From the start this was a huge white elephant and those that wanted progress said wait and see. I am still waiting...I am not seeing.

Bailing out DVML

The $1.77 million to bail out DVML is not paying off debt, it is for propping up a failed organisation which will continue to bleed rate payer funds. I remind everyone that the last major concert was Aerosmoth Anzac weekend 2013. In the meantime the stadium bleeds huge chunks of rate payer contributions.

The booking of events should be tendered out to a private company, get rid of DVML otherwise next year we will be throwing away another $1.77 million to prop up the non performing DVML. One wonders what events we will lose now Invercargill has its stadium up and running.

Business as usual I guess

So the city wants to dip into our pockets yet again to fund the rugby stadium - and they're going to fund all the losses from the profligate spending at DVML, also outlined by Bev Butler at today's council meeting,  using money gleaned by cutting council services - is anyone surprised? Of course not.

Of course, despite the headline, this will not reduce the stadium debt, just make sure it doesn't get any bigger.

Come on, the Dunedin ratepayers have suffered enough on the altar of rugby,  it's way past time the people who most benefit from the existence of the rugby stadium started paying their way in the world rather than sponging off of the rest of us.

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