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
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.