New ORC Headquarters : The Next Battle

In an Opinion piece in the ODT, Otago Regional Councillor Doug Brown raises questions over the Council's new harbour front office project. This will be the next ratepayers battle, after the Stadium debate is decided, one way or the other, in the coming days.
Doug puts forward these issues:

• Lack of consultation
• The large increase in cost
• The requirement of funds for other projects

The funds for the new building may come from Port Otago dividends, but it is not true to say that this spending does not affect rates. The dividends could just as easily be used to cover other spending which is ratepayer funded.

We do not need a palace for bureaucrats and politicians.

Reponse From Rodney Hide

I have had a response from Minister of Local Government, Rodney Hide to my email opposing Government funding for the Stadium.
It includes this : "We have deliberately set a very high threshold for publicly funded infrastructure projects. We will not commit public funds to projects that do not make an enduring contribution to the economy and our national productivity".
Rodney cannot be suggesting that the Stadium would pass this test, can he?
It almost implies that the Government is going to refuse to contribute to the Stadium.

Dunedin Politicians Debate Online

It is good to see two Dunedin politicians joining the online debate.

Richard Walls on the ODT site discusses Carisbrook crowds.

Sacked Otago District Health Board Chairman, Richard Thomson argues his case on Kiwiblog. He he has come out strongly as a Labour man and he has admitted that this is one of the reasons that he was appointed. The Government is entitled to appoint someone in whom they have confidence. The way Thomson has acted in the last few weeks shows that he could not have the confidence of a National Government.

National Business Review Gives Stadium Figures

Today's National Business Review has an article on the Stadium with information that I have not seen published elsewhere. Unfortunately, it is not on-line, but here is a portion:

Athol Stephens said that the effect on forecast dividends to the Council remained the same as forecast in March last year - a reduction of $5 million.
This was achieved because while the amount of debt taken on by the council-owned companies to help fund the project had increased from $92.3 million to $108.8 million, the 2% cut in interest (from 9% to 7%) would make a "material difference" to their ability to service it.
Mainly because of the reduction in interest rates, the average residential property in Dunedin would pay no more than the originally anticipated $66 a year in general rates to fund the stadium, Mr Stephens said.

By my calculations:
$92.3 million borrowed for 20 years at 9% means about $10 million a year payment.
$108.8 million borrowed for 20 years at 7% also means about $10 million a year payment.

Because interest rates have dropped, the Council can borrow the increased amount required while still making the same $10 million a year payment on the loan (includes interest and capital repayment).

Note that $5 million of the $10 million is coming from rates, the other $5 million comes from Dunedin City Holdings Ltd. Without the Stadium, the dividend to the Council could be increased by $5 million rather than being reduced by $5 million, and rates decreased by $66 a year rather increased by $66 a year. The effective of this Stadium loan is that rates will be $132 a year more than they would have been without the Stadium.

By the way, why is that the National Business Review's Dunedin correspondent, Mark Pearl, consistently providing better analysis of Dunedin issues than is found in the Otago Daily Times.

Cost Cuts Keep Auckland Rates Rise At 2%

I hope that this does give Peter Chin and the Dunedin City Council an idea.

Mr Banks said cost-cutting extended to a freeze on staff wage and salary increases, and a demand for council consultants, contractors and suppliers to "sharpen their pencils" if they wanted to keep the council's custom.

Bernard Darton on Stadium

Ex-Dunedinite Bernard Darton writes on the Stadium.

When politicians suggest these grandiose schemes, I always think of Sapurmurat Niyazov, the recently dead president of Turkmenistan. He wrote his own sequel to the Koran, renamed months of the year after himself, and erected an enormous gold statue of himself in the centre of Ashgabat, the country’s capital. The statue slowly rotated during the day so that the sun always shone on his face. And it cost less than a new rugby stadium.

I hope that doesn't give Peter Chin, or Malcolm Farry, an idea.

Roger Kerr on Stadium

At last, the proposed new Dunedin Stadium is getting national attention.
This time it is Roger Kerr writing an article, suggesting that it should not be built without a referendum.
He may be a bit late: the Otago Regional Council today supported contributing to the Stadium, subject to the Government also chipping in.