Where is the money going?
Stadium Southland’s annual ratepayer funding is yet again in the spotlight, but what is the extra money needed for? Logan Savory reports.
The Stadium Southland funding debate resembles a boomerang. Each year the Southland Indoor Leisure Centre Charitable Trust, which owns the stadium, lobs a funding request the way of the Invercargill City Council asking for an increase.
It has a $400,000 agreement locked in with the council but wants that figure to be increased to $700,000 annually.
For the past two years, councillors have granted one-off $300,000 increases, instead of committing to a permanent jump to $700,000.
Not surprisingly after 12 months that same funding request has returned to the council table.
The Trust board’s position remains the same.
They say they are budgeting for a cash deficit for the next three years and need the increase to ensure that the venue can remain at its current standard.
Stadium officials have pointed to areas such as decreasing opening hours and putting some maintenance work on hold if in fact, the money needed was unable to be found.
So just what has brought about the need for additional money for the stadium at Surrey Park?
Before the stadium was rebuilt in 2014 – after it collapsed under snow – the funding model allowed for about $300,000 each year to go into reserves to cover any costs that might arise.
However, stadium trustees say they are now operating from year to year with little reserves.
The cost has grown to maintain the standard of an $11 million venue which was built in 2000, compared to an estimated $80m complex they now have.
Invercargill City Councillor Ian Pottinger felt the stadium officials were right by factoring in maintenance.
‘‘If you just fund operating costs it is going to come around and bite you. So this is what the money is for, it makes so much sense,’’ Pottinger said.
However, council’s acting director of finance Dave Foster would like to see more detail around where that added $300,000 was going and when it would be spent.
He says they needed more information to make informed decisions.
Foster also added that other options could be looked at. It might be that the council contributes $900,000 after three years to help with maintenance, instead of handing over $300,000 each year.
It would mean that money could remain in the council’s own coffers and earn interest before it
was needed by the stadium trust.
Southland Indoor Leisure Centre Charitable Trust chairman Alan Dennis was surprised that Foster did not feel all the information had been provided and more detail was needed.
‘‘There are no secrets. They have had all that information in spades,’’ Dennis said
He said the Trust had laid out an 18-year maintenance plan, which aligned with the request that the council’s contribution sit at $700,000 annually.
It included forecasting $100,000 for work needed on the velodrome roof, and another $100,000 spend in 2022 to re-carpet the velodrome and the offices in the venue.
‘‘The reason we need to replace the carpet is because it’s being used, that has to be a good thing,’’ Dennis said.
They also have earmarked $182,300 to refurbish the
‘‘If you just fund operating costs it is going to come around and bite you. So this is what the money is for, it makes so much sense.’’ Ian Pottinger
Invercargill City Councillor
velodrome cycling track for the year 2020/2021.
Dennis pointed to an independent review that the stadium trust commissioned in 2017 which he said highlighted the stadium was run efficiently, in terms of costs.
The findings indicated staffing levels at Stadium Southland were lower than similar venues throughout New Zealand.
Outside of the money the stadium generates through hire income and other revenue streams, Dennis said the Trust needed to pull together about $1.3m annually to cover the shortfall in the operating costs of the stadium.
That $1.3m figure is close to be covered through the following contributors; ILT Foundation ($400,000) Invercargill Licensing Trust ($150,000), Invercargill City
Council ($400,000), Community Trust South ($250,000), and Southland District Council ($75,000).
However, those figures do not allow for any money to be put towards maintenance, which was why the Trust has asked the council to increase its annual funding to $700,000 on an ongoing basis.
In comparison to other council funded facilities, Dennis believed the $700,000 price tag was more than reasonable.
‘‘The fact 12,000 people use it every week makes it arguably our best asset.’’
‘‘The library is a great service for those that use it, and I’m one of them, but in the big picture every city Invercargill’s size has an indoor stadium. And as much as anyone we are a city that needs one.’’
The council’s long-term plan points to the library and its archives being funded $4.3m annually, Splash Palace is funded at $2.4m per year, council theatres at $1.2m, and the Southland Museum and Art Gallery gets $972k of city council ratepayer money each year.
At $700k the stadium would sit fifth in the queue, although there is point of difference, the council does not own the stadium, where it does own the likes of the library, Civic Theatre, and Splash Palace.
Various councillors over the years have raised questions why so much financial responsibility should fall on the council when it was not the owners of the building.
However, Dennis believed Stadium Southland’s ownership is a moot point.
‘‘I’m on the board that theoretically owns [Stadium Southland], but we can’t sell it. All we can do is manage it efficiently and if we don’t it reverts to the city. The city owns it.’’
Southland Indoor Leisure Centre Charitable Trust financial controller Mel Montgomery will speak to councillors about the stadium finances at the Invercargill City Council’s next full council meeting today.