My rates

What will the proposed stadium cost me?

Rating information for the DCC has been verified as correct by the DCC.

There are three issues to consider:

Impact on the Dunedin City Council’s (DCC) financial situation from taking out a loan of $91.4 mill
Impact on you personally through an increase in your DCC and Otago Regional Council (ORC) rates
Impact on the DCC finances from the likelihood of having to pay for a number of the exclusions not included in the proposed stadium budget (PDF, 364KB) (e.g. realignment of SH88) as well as cost overruns)

Funding models

The Dunedin City Council
A loan of $71.4 mill will be taken out by the Dunedin City Holdings Ltd (DCHL), the umbrella for the companies owned by the DCC, e.g. Delta and City Forest. The loan will be paid back over 20 years from dividends of $5 mill required from the DCHL companies each year. The original DCC contribution of $91.4 mill was reduced to $71.5 mill, when the Council decided on 17 March 08 to ‘find’ $20 mill from other non-council sources. You should be aware that the dividends to be used to pay back the loan are normally used to reduce your rates. How will the stadium funding mechanism impact on your ‘normal’ rates? This question has not been answered.

While the DCC has not yet decided if you will be paying a targeted or uniform rate, i.e. everybody pays the same, or whether you will be rated on your property’s Capital Value (CV), the latter is the Council’s preferred option.

» The DCC’s ‘Stadium Stance’ (PDF, 64KB), pp. 10-12 from the DCC’s Annual Plan 08/09.

The Otago Regional Council

The ORC will fully borrow $37.5 mill to be repaid over 15 years. Your ORC ’stadium rates’ will be used to service this loan, i.e. you will pay both interest, principal and repay $22.5 mill of the actual loan. The ORC-owned Port Otago Ltd will be required to produce ’special’ dividends of $5 mill for each of the years 2012, 2013 and 2014. How will this funding mechanism impact on the work of the ORC? We have not been told. However, the financial operations are explained in the ORC Long Term Council Community Plan:

» The Stadium Proposal–Awatea Street (PDF, 94KB), pp. 64-66 from the ORC’s Amendments to the 2006-16 Long Term Council Community Plan.

My ’stadium rates’

If you pay rates to the DCC

Ratepayers are being asked to pay the interests and principal on the loan the DCHL will take out, if the building of the proposed Awatea St stadium goes ahead. Your rates will vary depending upon the type of property you own (residential, non-residential or farmland) and its Capital Value (CV). As a ratepayer to the DCC, you would be rated both by the Dunedin City Council and the Otago Regional Council.

The Dunedin City Council’s Annual Plan 2008/09 section, ‘Stadium Stance,’ referred to above, includes the following chart of annual ’stadium rates’:

The lesser rates above under ‘Council Controlled Organisation (CCO) ownership’ relates to the savings made by tax not incurred by the Dunedin City Holdings Ltd (DCHL).

To the amounts above you have to add the ORC annual ’stadium rates’ for Dunedin City:

ORC rates for Dunedin City

For each category of DCC ratepayer, the rate in the dollar per capital value is as follows:

Residential 0.000228
Farmland 0.000205
Non-residential 0.000696

Your property’s rates can be worked out by a simple calculation based on these amounts

Examples of combined DDC and ORC rates on farmland:

Annual cost of DCC rates on Capital Value of $1 mill: $205.00 payable for 20 years = $4,100.00?
Annual cost of ORC rates on Capital Value of $2 mill: $72.15 payable for 15 years = $1,067.25
Total: $5,167.25 ($5.33 per week first 15 years, then $3.94 for 5 years)

‘Stadium rates’ on farmland of higher values can be worked out from this example, e.g.:

CV of $2 mill: DCC: $8,200 + ORC S2,164.50 mill = Total $10,364.50
($10.66 per week first 15 years, then $7.88 for 5 years)

If you are a ratepayer in the Central Otago, Clutha, Queenstown Lakes and Waitaki districts

The ORC has first made its rates calculations based on the number of rating units in each area, then amended these on the basis of distance to the proposed stadium as follows:

3.5% ‘discount’ to Central Otago District
3.5% ‘discount’ to Queenstown Lakes District
2% discount to Waitaki District
1% discount to Clutha District

Within each district, 50% of the amount needed to service the loan will be met by a targeted uniform rate (everybody pays the same) and 50% based on the capital value (CV) of individual properties.

Estimated annual ’stadium rates’ for properties in the Otago District Council areas will be as follows: