Stadium and its bill leave impression

Farmers are not average, especially when it comes to paying for the stadium, writes Mike Lord, Federated Farmers Otago provincial president

You'd have to agree, wouldn't you, that what ever you think of the toast rack, as far as stadiums go, it's pretty impressive. But when a farmer, and any ratepayer for that matter, reads the words "the average cost to the ratepayer" of our brand new facility they should take the figure that follows with a large dose of salt.

Immediately upon reading the article "Stadium debt shackles tighten on ratepayers" (ODT, 3.9.11), I made sure my cellphone was fully charged, because I knew once the article had been read and digested I would get more than a few calls from annoyed, more than average, farmers. If I was a betting man I would say that is not the end of the additional ratepayer costs.

Like other Dunedin ratepayers, my core concern was that as a city, we have been committed to a significant amount of debt. The relative population of Dunedin and the wider Otago area is small compared with other areas with public sector funded stadiums. The current interest costs for debt servicing are low, and will without doubt increase over time.

Speaking from a farmer's perspective, we have had the wool pulled over our eyes with a discussion of average costs before. Many of us had previously been told the average cost of the stadium would be $66. Last year I paid $479.31 to the stadium alone for my farm, and a further $57.45 to Dunedin Venues Management Ltd. That's hardly average.

The likely impact to the rates bill on my farm of the "average" $13 extra that was signalled in the article will actually be closer to $100. I am sure I will get an extra few litres of milk from the cows when the dulcet tones of Elton John filter out to the Taieri.

For others, particularly those in the commercial and industrial ratepayer groups, the effect on their rates bills will be greater. Why hasn't this been explained or more importantly reported on?

Averages aren't a good basis for decision making or reporting. It's like saying the average age of New Zealanders is 35. That may be true statistically, but that statistic alone does not tell you that the oldest is 108, and some of the youngest may have been born less than a minute ago.

It is worth pointing out that the amounts I quote above include the current reduction resulting from dividends from the city's commercial holdings. You can imagine my joy at reading that these dividends are seriously under threat. Those dividends are used to reduce the city's overall rates bill, that's yours and mine, not just restricted to covering the hidden costs of the stadium. Pressure on the council-owned company dividend stream means future rates increases, no doubt about that. But how much?

Aside from the stadium or not camps, to me, the whole debate represents a fundamental failure by the council to sufficiently explain or engage ratepayers bearing the cost, what the long-term real financial cost will be, the range of options available to us as a city to fund it and a breakdown of how those options look to each individual ratepayer, not an average one.

These funding and debt issues were present before the present council took office, but they now have the responsibility of establishing a plan to address these issues.

The Dunedin City Council has created an unnecessary level of complexity around the stadium and how it is to be funded. Try to get a clear explanation of where funding is coming from and you will likely hear the words commercially sensitive. If ratepayers are going to be the ones ultimately liable for the bill, that is a sensitivity that has to take precedence.

Council now needs to open the books, properly explain all of the factors at play, and lay out a range of options for ratepayers to consider in time for next year's long-term plan. This means an open, honest engagement over the extent of the debt and how to fund it, not a continuation of the "we think we have got it sorted, trust us" approach that has thrown up so many unpleasant surprises in the past.

I will admit I am one of those who had initial misgivings, but I have been open in my decision to get in behind the stadium now it's built. Those who have attended an event or game at the stadium will attest it is an asset that will serve the city and the Otago region well. It's an impressive facility, just like my rates bill.



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