Dunedin city assets facing tough times ahead

A rates freeze appears possible for Dunedin, with Mayor Aaron Hawkins publicly expressing support...
A rates freeze appears possible for Dunedin, with Mayor Aaron Hawkins publicly expressing support for the measure. Photo: ODT files
It's too early to speculate on the impact of the Covid-19 outbreak on Dunedin's finances, but most of the city's council-owned companies will need the wage subsidy.

Dunedin City Holdings Limited - the parent company for the city's assets including Aurora Energy's power network, Dunedin Airport and Forsyth Barr Stadium - had already forecasted a loss of $14 million before the Covid-19 outbreak.

Keith Cooper. Photo: ODT
Keith Cooper. Photo: ODT
The company was not expecting to pay any dividend to the council for the next three years as Aurora undertakes extensive and overdue maintenance of its network.

Dunedin City Holdings chair, Keith Cooper, said the Covid-19 outbreak and the lockdown had shifted expectations and results were obviously now likely to be worse.

"Our challenge now is we've got a four-week lockdown but that's not set in concrete and then we don't know what shape things are going to be looking like coming out of lockdown, whenever that may be," he said.

"One of the challenges we have is it's all very well doing forecasts but when do they start? And with what? So you could spend a lot of time on mythical forecasts.

"We're trying to get everything bedded in, settled down and then await getting a sense of the landscape in terms of timing of the lockdown coming out and then what's that landscape going to look like because it's very difficult to do any sort of budgets or estimates unless you know what the landscape's going to look like."

Forsyth Barr Stadium. Photo: ODT files
Forsyth Barr Stadium. Photo: ODT files
The outbreak might have serious ramifications for Forsyth Barr Stadium, with Super Rugby already gone and a July test match with Scotland and concerts in the balance due to international travel restrictions.

Cooper said most of the council-owned companies would need the wage subsidy, though further measures were also likely.

When asked about redundancies, he said nothing was off the table at present.

"All the companies will suffer some impacts to varying degrees, which is what we are trying to work through at the moment."

A rates freeze appeared possible at Dunedin City Council, with Mayor Aaron Hawkins publicly expressing support for the measure.

There were also arguments at the council about delaying major infrastructure spends.

In a statement, a spokesperson for Dunedin Venues - which manages Forsyth Barr Stadium - acknowledged the impact of the virus.

"As everyone is aware the country is dealing with a Covid-19 situation," the statement said.

"Unfortunately DVML has been significantly impacted by the outbreak of Covid-19, and, as a result of the government directive around mass gatherings, and events our usual commercial, business and community events cannot take place for the foreseeable future.

"We have had to review our operations as it is likely we will suffer the effects of the pandemic for some time. We are currently consulting with staff about our options and as to how this will affect them. At the conclusion of that process further information will be available."

 

Comments

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Maybe we could use the Stadium for other activities: CRICKET, ICE HOCKEY, BMX SUPERBIKES and MOTORBIKE & CAR RACING. OK so maybe not the latter but some different ones please?

Ok then, this is where spending money on vital infrastructure such as power grids takes precedence. Pity we don't have whatever the stadium has cost us over the years in terms of dividend subsidy, subvention payments and interest on loans to put in the pot but that's what happens when you don't plan for rainy days. At least now we will be spared bogus pronouncements from the stadium management about how much the thing has contributed to the local economy every time there is a concert or rugby match.

A very bogus stadium indeed. After twenty years of observing and believing that DCC, like all NZ local government, needed a strong contingency fund in extremely uncertain times (because of an unsustainable global culture) and, instead, seeing money borrowed and spending on things people here do not need and cannot afford, maybe I will at last see the need for financial caution at local government level become generally apparent. Central government will not be able to help us with taxpayers' dollars. All the regions will be suffering and the people who live in the various regions ARE the taxpayers. An awful 'cargo cult' mentality from past local government decision-makers. And also a lot of 'the kid in the lolly shop' attitude. Time now for some basic, common-sense financial prudence.

The other question that the ODT need to ask is should our Mayor be proceeding with nice to have projects with more borrowed money? This is not the time for the DCC to borrow money to spend on unnecessary projects like the George Street cycleway

Maybe the homeless could sleep in the stadium.

There are lots of empty hotel rooms available.
Let them eat cake.

DCC borrowing money is said to offer stimulus to our local economy and allowing the go ahead of non-essential projects. Conversely, we have a number of developments, including the hospital build, that will offer a huge amount of employment that will produce income to the local economy WITHOUT the need to borrow more money.
RAY's comment above would be a good example of changing income strategy for the stadium. Rugby and concerts aren't going to do too well for quite some time, so time to change the programme and ADAPT, just like we all will have to.
I find it hard to understand that these top paid Managers and the CEO complain that they can't make any plans because the future is so fluid.
Well Keith, maybe you could appoint someone like RAY here, with ideas and some drive, or, you could just close up shop, put your heads in the sand, and hope it all just goes away. Easy when it's not YOUR money invested. Where's the leadership? In the meantime, the ratepayer, as always, will just continue footing the bill for the 'Plastic Yurt' as it sits empty of activity. There are business's out there making plans for the 'fluid future' right now. You won't see them give up!

Maybe suitable for use by the Polytech or University? Food sciences? It is a rather large 'greenhouse' afterall. Think Saffron, Hemp, Goji Berries, Oyster Mushrooms.....folk out there will know the money makers. All that terracing!
I'm not a great advocate of electric cars, by hey, we have the technology base, we have the industrial base and some very clever busines's here in Dunedin. 'Buy NZ Made', now it seems we shall have a very large vacant building right on the waterfront, with a rail link right next door.....electric car manufacturing facility, right here in Dunedin!

Like your thinking. Maybe it WILL end up being economically viable after all.

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