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Extra Funds Proposed for Stadium Debt Repayment

Extra Funds Proposed for Stadium Debt Repayment

Dunedin (Friday, 9 May 2014) – The Dunedin City Council will consider using savings to repay more debt associated with the Forsyth Barr Stadium.

The Council will next week consider approving a one-off payment of $2.271 million to help balance the Forsyth Barr Stadium accounts. Of that, $1.77 million would be used to repay DVML debt, with the balance to fund a cash shortfall. The payment would be funded from DCC savings made in the current financial year.

DCC Group Chief Financial Officer Grant McKenzie says, “A one-off payment to reduce debt further would be good for all parties and would clearly respond to community demand for the DCC to reduce its overall debt level.”

In a report to be discussed as part of the Council’s Annual Plan deliberations next week, staff say the payment would enable Dunedin Venues Management Limited (DVML), which operates the Stadium, to balance its budget for 2014/15 while a comprehensive review of Stadium management and operations is completed.

The Stadium has been operating for more than two years and during that time it has been unable to meet its budget. The draft DVML budgets for the 2014/15 year and onwards forecast annual losses.

The report also recommends increasing the annual ratepayer contribution to the Stadium by an extra $715,000 annually from 2014/15, but this is an interim solution. That funding would come from rates.

In January 2014, the Council endorsed Chief Executive Officer Dr Sue Bidrose’s proposal to carry out a comprehensive review of the Stadium’s management and operating model. The review is being carried out in conjunction with parent company Dunedin City Holdings Limited and the DVML Board. It will be completed mid-year, which will be after the 2014/15 Annual Plan budget decisions have been made.

Mr McKenzie says, “An interim funding decision is required by the Council to allow the Stadium to meet its financial obligations in the coming financial year. The ongoing budget for DVML will depend on the outcome of the review.”

Report link: http://www.dunedin.govt.nz/__data/assets/pdf_file/0014/424202/ma_council_r_Stadium_2014_05_13.pdf

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