Councillors spar over stadium debt

Jinty MacTavish
Jinty MacTavish
There were emotive arguments as Dunedin city councillors split into camps over the restructuring of Forsyth Barr Stadium debt repayments to a 40-year term yesterday.

The move was approved by Dunedin city councillors for inclusion in the 2012-13 pre-draft annual and long-term plan yesterday, alongside a push to restructure repayments in later years to more quickly reduce the debt.

That came after Cr Jinty MacTavish voiced strong opposition to the 40-year term, attacking the concept of "intergenerational equity" that underpinned many of the council's debt-financed projects.

She said repaying the council's roughly $140 million stadium debt over the longer period would mean a total interest bill of $205 million, saddling future generations with an unfair debt from the project.

That meant young people like her would be contributing to the repayment of stadium debt "until the end of their working lives".

Cr MacTavish (27) said she would be aged 67 by the time the debt was finally paid off.

"You can't send this message to our young people. You cannot expect young people to stay in this city if they are being waved a $205 million interest bill and being told they will be paying it off to the end of their working lives.

"It's unfortunate we have this debt, but we do, and this is the generation that needs to face up to it," she insisted.

Her views drew opposition from Cr Syd Brown, who said he had to "disagree entirely" with Cr MacTavish because it was only right the cost of long-term assets were spread out.

As evidence, he pointed to the financing of Moana Pool, which had also required loans paid back by ratepayers over time.

"As Cr MacTavish has been swimming at Moana Pool, she has been doing it at previous generations' cost.

"That's what intergenerational equity is all about ... now it's her generation's turn," Cr Brown said.

Cr Richard Thomson agreed, and reminded her other city assets - including the Municipal Chambers, in which the debate was taking place - had also been paid for in the same way.

"Cr MacTavish is sitting in a building now that she didn't have to pay for, but other generations did," Cr Thomson said.

The sparring came on the second morning of the council's pre-draft budget meetings, as councillors considered a staff report discussing whether additional funding should be provided to accelerate the stadium debt repayment.

The report had noted the debt was now scheduled to be repaid over 40 years, rather than the original 20-year term.

That surprised some councillors on Tuesday, including Cr Kate Wilson, but debate was delayed until yesterday.

Cr Syd Brown started yesterday's morning session by recommending councillors accept the 40-year debt repayment schedule "in the meantime", but also instruct council chief executive Paul Orders to report annually on ways repayments might be restructured to reduce the timeframe.

A planned debt-financed capital maintenance fund for the new stadium, totalling $6.359 million, was also to be delayed and reviewed in five years, and any surplus from the sale of Carisbrook used to further reduce stadium core debt.

It was also agreed the draft budget would mention two options for reducing the loan timetable, either by adding $1 million in annual rates-funded debt repayments, or the $1.9 million a year needed to reduce the loan term to 20 years again.

That would see the average ratepayer paying another $13 a year for the extra $1 million in debt repayments, or another $26 a year to reinstate the 20-year loan term.

Either option would put an end to earlier promises the stadium would cost the average ratepayer $66 a year, but were included in the resolutions - following arguments by Crs Teresa Stevenson, Thomson and MacTavish - to allow the public to make submissions on either one of those options as well.

Cr Brown's resolutions won enough support to be added to the draft plan, but only after Cr Stevenson demanded divisions - forcing each councillor to call out their vote individually - on votes relating to the 40-year term and Mr Orders' repayment restructuring work.

That showed Crs Stevenson, MacTavish, Paul Hudson and Kate Wilson opposed the 40-year term plan, while Crs MacTavish and Stevenson also voted against Mr Orders' restructuring work.

Cr MacTavish was the only councillor to vote against delaying the stadium's capital maintenance fund.

Cr Brown, speaking earlier, said the council would not be tied to the 40-year repayment structure indefinitely, and could make changes as some of the council's other financial pressures eased in later years.

However, it would mean ratepayers were not asked to pay more towards the stadium in the meantime.

Dunedin Mayor Dave Cull said he was "vehemently opposed" to repaying the debt over 40 years, because of the interest it would add to the bill, but would support it in the meantime to keep rates down.

"But I see it as a short-term fix," he said.

chris.morris@odt.co.nz

 

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