Stadium payment may rise

Grant McKenzie
Grant McKenzie
Dunedin ratepayers will be called on for the third year in a row to help balance Forsyth Barr Stadium's books.

City councillors will next week be asked to consider increasing the ratepayer contribution to the stadium by $715,000 a year, bringing the total the city's ratepayers pay towards the stadium each year to $9.840 million.

Council staff are proposing using savings the council made on interest payments this year to cover the extra $715,000 and to make a one-off payment of $2.271 million to the council-owned company that runs the stadium.

The use of the savings would mitigate a rates increase, but would also mean the savings could not be used to reduce the forecast rates rise of 3%.

The recommendations are made in a report to be discussed by councillors as part of the council's 2014-15 annual plan deliberations next week.

The $2.271 million one-off payment would repay loans Dunedin Venues Management Ltd (DVML) took out for seats, communications and advertising systems and pitch machinery.

Council chief financial officer Grant McKenzie said the council had budgeted to pay DVML $750,000 over each of the three years to repay the debt alone.

However, making the one earlier payment of $2.271 million would repay debt as it stood now ($1.771 million) and allow DVML to use the $500,000 in interest saved to cover its forecast operating loss for this financial year.

Even though the debt would be cleared, Mr McKenzie recommended the council continued to pay DVML the $725,000 payments until a major review of the stadium's financial and operating models was complete and a new long-term operating model was in place.

The scheduled $725,000 payment and the extra $715,000 in ratepayer contributions would cover DVML's forecast $1.440 million forecast loss for 2014-15.

Mr 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 council to reduce its overall debt level.''

Dunedin Mayor Dave Cull and council finance committee chairman Cr Richard Thomson last night said DVML's forecast loss of $1.4 million in 2014-15 came as no surprise and should not have to anyone, as council chief executive Dr Sue Bidrose had predicted it publicly several months ago, at the same time as she announced a major review of the stadium's financial and operating models.''

That was what the CE [Dr Bidrose] was talking about some months ago, when she said we can't go bailing them out every five minutes and we need models that we can manage in the longer term,'' Cr Thomson said.

''That's the review's purpose, but clearly we have an immediate situation we have to address while that review is taking place,'' Cr Thomson said.

It was ''entirely possible'' the review, due mid-year, would result in ratepayers having to pay even more to the stadium, he said, but it could also identify savings in some areas.

Mr Cull said it would be naive to think the review would mean the council would never have to pay out more money for the stadium, but it would identify options for new ways to operate it that could be more financially acceptable.

debbie.porteous@odt.co.nz

Summed up nicely

Bones McCoy has summed it up nicely. And as someone who has substantial experience of the stadium and DVML I am firmly one of the 'no's'. I think the stadium is magnificient in terms of the atmosphere but for an average 10,000 people at rugby matches (excluding internationals) it is an expensive edifice to stupidity and greed.

And Otago85 - "Season tickets and unofficial spokesman for all good things about Dunedin and Otago in Christchurch. And mummy and daddy pay rates. To which I thank them."

Season tickets. Good on you. I and my extended family are subsidising your season tickets to far greater extent than you are subsidising any of the true comunity assets that I and my family enjoy.

I also promote the positive things Dunedin has to offer. Unfortunately most of them have been hammered by the negative financial aspects of the stadium.

The debate never ends

As the anger and entrenched positions over the stadium continue, what events are actually coming up? Aerosmith were here in April 2013, which probably proves the stadium is not going to cut it as a concert venue any time soon. How about we look at what is actually coming up at the stadium and what will fill it in the coming years?
I can come up with two. Expect a good turn out for Highlanders v Crusaders 24 May and the All Black Test 14 June. Anyone have any updates on anything else of significance coming up in 2014? If not, how can the cost of having this huge investement sit empty the majority of the time be justified?
Please don't talk about car boot sales days or function rooms. This is a stadium and the main source of revenue will always be generated by filling the arena on a regular basis. All I ask is to see what events are planned, and what are the chances of mitigating the losses?
For those thinking we are the only ones with a loss making stadium think again. The Cake Tin, Eden Park, North Harbour Stadium, Mount Smart Stadium - all bleeding money.

They're persistent and consistent

G'day Otago85. Bones chiming in to the conversation, here. As you seem to be a newbie into this forum, I'm glad to see you joining in on this ongoing saga/debate/posturing about the FBS, and throwing your two pennies worth into the mix.

Without getting into the nitty-gritty, I'll just say that I'm siding with you on this... and you'll find that certain posters are fairly and squarely sitting on the other side of the ledger. Nothing we say will change their minds, so I wouldn't waste your energy trying to hard. By all means throw your thoughts onto the forum, but just accept that opinions and beliefs about this topic are very, very well entrenched. (And to be fair about that last point, 'entrenched' from both sides if the fence. The 'pros' appear to be as steadfast in their thoughts about this, as the 'nos'.)

Cheers! 

Send in the clowns

Season tickets and unofficial spokesman for all good things about Dunedin and Otago in Christchurch. And mummy and daddy pay rates. To which I thank them.

Donation

You're more than welcome to express your view here otago85.

Pity you don't live here, so don't contribute to the stadium in any way. You could however send us a donation as you feel so strongly about supporting for our white elephant. Put your money where your mouth is so to speak.

Its all we really need from all you supporters to make it pay. Keep us posted. 

 

Thank you

Yeah I appreciate your gesture and thanks.  I hope that Christchurch doesn't build one otherwise your worse fears will come true.

The thing is is that the stadium is here and pulling it down is not an option. The council that agreed to build it did get re-elected in 2010. Tell me are you really happy with the Chinese Garden!
Waste on a smaller scale. Still, it's been 5 years - what do you want to achieve, as from where I stand it's way too late and you're bringing down your city. [Abridged]

Not paying for your fun

otago85: Move on? Not while we're still being forced to pay for it, and not while we still haven't been given a choice in the matter.

Remember we were never given a chance to make a choice as to whether we should build the rugby stadium. Thousands marched against it in the streets, the Town Hall was filled up to the gods with people protesting it, and the council went ahead without holding a referendum. Why? Because rugby. It's not our rugby stadium - we didn't choose it. It was forced on us by the local rugby community, but we're stuck with the debt, despite all their promises: that it would be entirely privately funded, to give us Carisbrook, to raise $50m in funding. All were broken - in fact we're stuck with paying $112m debt more than they said we would (as I explained below) plus the interest on all that debt.

And still no one has had been polite enough to even ask us if we want to pay for a rugby stadium. It was just assumed by the the rugby community that we should buy them one, a really expensive one, then they forced it on us, and now they want us to subsidise their yearly rugby tickets because they are too cheap to pay for them themselves. They even want us to subsidise your rugby tickets if you come down from Christchurch - because I guess so long as there's cash in my wallet rugby thinks it deserves to have some of it.

So Mr Otago, I'll move on when you and your rugby mates stop raiding my wallet to pay for your fun.

That's the risk

Otago85 says, re the Fubar Stadium, "It's built, so move on."  

With its steady losses plus the cost of servicing and repaying the loan it helps to drive rates rises up well beyond cost of living increases - and don't forget about the miniscule income increases for people on already low incomes.  Then there are the necessary repairs and maintenance of Dunedin's infrastructure, and add to that the nice-to-haves and "build it and they will come" (same idea as the stadium was launched with) cycle lanes irrespective of how few cyclists are visible to the naked eye.  Other "hidden" fees rise steadily - tip fees for instance, excused this time because of the "improvement" in having an automatic system installed instead of employing sensible humans to check carloads being taken to the landfill.  

All in all we risk Dunedin being too expensive to attract new people to buy here. It's not as if there are many job opportunities to bring them here.  And people on fixed incomes may find that in order to have a roof over their heads plus food on the table they are forced to "move on".  Ah yes, the stadium is indeed an asset!  Aren't we lucky to have it so people who do not live here can attend an event held in it, once in a blue moon.

Poisoned chalice

Yawn. No surprises here. This Council is having to deal with the fallout from the previous one. Of course we have to keep paying for the Stadium. It will continue to bleed out while there is little demand for it. [Abridged]

And your point is?

It's built, so move on.  

 

 

 

 

 

Maybe you missed this

otago85: since you don't live here I guess you didn't notice the enormous cost overruns ($250m rather than the promised $188m) the stadium has cost. Or perhaps you missed the failure of the local rugby community to raise the $50m in private fundraising that was promised as a condition of the stadium being built? Or maybe it just slipped by that the stadium that Mr Farry's CST promised would make almost $200k a year has been losing $2m+ every year, largely because the rugby stadium's major customer is not paying enough to cover the costs of putting on their games.

And of course when you add all that up and stick the Dunedin ratepayers, and their children, with these costs just so that you can "partake in festivities" you might understand why people are still waiting for resolution of the financial disaster that is the Forsyth Barr stadium.

Settle

Settle! Let's not get ahead of ourselves.  

Doubtful

otago85: Rolling over and falling in behind that is. Nice you wish to come down though, anything to get away from "shakesville" for a while I guess.

How about you do us both a favour and take it, and its associated debt, home with you?

Still can't let it go

You motley lot still can't let it go. Still banging on about my Stadium. Get a life and move on, nothing to see here folks! 

I wil be down in June again for the Test match and will partake in local festivities. By then hopefully you all would have sharpened up your act and fallen in behind.

If not I will then convince Christchurch to build their own; then you'll miss me.

Official gobbledegook

"The use of savings would mitigate a rate increase, but would also mean the savings could not be used to reduce the forecast rates rise of 3%".

Mayor Cull, city councillors, Sue Bidrose and senior DCC management, how green do we think we are?

So we once again hand over our hard earned income to offset the appalling financial drain the stadium places on us. And you sugar coat it by saying it will reduce the interest payed on poorly monitored borrowing. And this will save us money in the long term. Fair enough.

However, this ratepayer largesse will be clawed back by the DCC not reducing an expected 3% overall rate rise.

Give with one hand and take with the other.

 

Forsyth Barr Stadium's books

Debbie

I see that the new 'House of Pain' is still with us.

Why not sell the thing - I am sure that there are very interested buyers.

If not let it go bankrupt and then we shall see its real value.

PS How much does Forsyth Barr contribute for its name?

Cheers, John

Stadium debt transparency

I have just received a rates demand from the DCC - the proportion of those rates that will be funding the stadium is nowhere to be seen.  In fairness to the ratepayer I think that the amount each ratepayer is contributing to the stadium should be shown as a separate item on the bill. 

Debt

I could be wrong, but is there a scheme to add double glazing, solar and extras to your house, and pay it via your rates?

How many people are going to take this up with a rates rise hanging over everyone's head?

Add to that a increase in payment to the stadium.

I personally can't afford to add extra to what we pay now.

Also the increase in mortgage payments, where will it end?

I'm on the fence with the stadium, but I'm starting to lean a certain way everytime I see it empty.

What a lot of spin

Surely the rugby god has had enough of this
compulsory worship.  Are there no others
in our community more deserving of DCC/ratepayer support?

Interest rate

Saving 500k on interest paying back a 3 year mortgage of 1.7 million? That works out at an interest rate of 17%pa. What did they do, put it on their credit card? Although to be fair, if I was lending money to an insolvent business with no prospect of ever turning a profit I would want a much higher return than 17%. 

Council luxury debt

To this Council

Stop spending half a mill tiling the center of town, building cycleways, stop spending on anything but council core functions. Pay down your council debt to rugby cronyism.

Is it to hard for this council to understand that the money has already been spent, that it is broke?

Maybe its well past time local body politicians became far more accountable for financial disasters with continuing effects such as the staduim.

The council ignored reasoned opposition before building this monument to rugby. Many ratepayers continue to be totally sickened by a total lack of accountablity, out of control costs now continually being forced upon them.

When are we going see this council require rugby and its supporters face the cost realities for the continued use of this stadium and pay their way?

Where is the clear effective legislation needed to control luxury overspending by local bodies who throw reason and financial common sense to the wind?

 

 

 

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