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A decision to provide start-up capital for the company that will run the Forsyth Barr Stadium one year earlier than expected was behind the impost of $2.48 million approved for the company this week, Dunedin deputy mayor Syd Brown says.
And the oversight was not the responsibility of the Carisbrook Stadium Trust, but the Dunedin City Council, it emerged yesterday.
The sudden and seemingly unexpected financial hit has reignited fears the stadium and related ventures may result in just this sort of unexpected budget requirement in the future.
The funding requirement, for Dunedin Venues Management Ltd, which will run the stadium and other city-owned venues, shocked some Dunedin city councillors, and no doubt a fair share of the city's ratepayers, when it turned up in a report this week.
It prompted Cr Dave Cull to label advice the council had received from consultants "either misleading or incompetent", and the way staff found the necessary money from the city's holding company was described as "illegal" by Cr Teresa Stevenson.
It initially appeared the lack of a full budget for the company was an oversight that lay at the feet of the trust, but chairman Malcolm Farry yesterday said that was not the case.
"It was never the responsibility of the trust," he said.
The trust had been asked to plan and build the stadium, but not to run it once that was done.
Cr Brown yesterday said the council had realised it needed the right expertise to run the stadium once it was built, and had set up DVML to provide that.
"What we hadn't done was provide the start-up capital for DVML," he said.
The company was to have been put in place in 2011, but once the board had been established, and DVML chief executive David Davies hired, the advice it received was it needed to start earlier.
"You can't just crank up a stadium and start running it," Cr Brown said. "There's a lot of work to be done before that."
Council chief executive Jim Harland had realised seed funding was needed when putting together the budget for the next financial year, but the $600,000 set aside, and the $850,000 the trust had set aside for opening the stadium, was found to be "deficient".
On criticism of council staff for suggesting the money come from council companies, Cr Brown said DVML was a council company, and that decision was proper.
But he expected a return on the seed funding.
"We've resourced them. Now they need to perform."