Feed Them To The Lions!

26 Feb

I liked today’s editorial.  Throwing a few yes-men councillors to the lions sounds like the perfect use of Rugby Park, and we would even pay again for the honour of watching.

Unfortunately it was not until Friday arvo/evening when my epiphany hit of what I believe is a simple but achievable solution.  Now it is too late and SOST have made no real attempts to help themselves so they aren’t going to now that they have had a lifeline thrown to them.  I don’t think they would have anyway…but if it was their only option things would have been different.  I don’t see the other councils (or submitters to annual plans of Gore and SDC) offering to help fund it.  The stadium has been saved!!!!  All hail ICC (and let them pay).

I am ignoring the moral aspects of the situation because I believe that RS have caused this therefore they should be wound up.  Not my problem.  Let those who caused it and benefit sort it.  Fundraising, donations etc like every other club has to.  SOST was created to bail out RS.  Now we are saving them..I digress.

The issue is that SOST do not have enough income to fund the maintenance and operation of Rugby Park and service the loan payments.  They are effectively insolvent.   They currently have an income of $172K p.a.  $166K is from corporate boxes so we hope that would remain, it seems to have been reasonably constant in the past.  So how to increase the income on a regular basis?  My answer is the get the SOST to apply to the three councils to implement a Rugby Park Rate.  This is no different than how the Bluff Town Hall was done (except I would need it to be on agendas, in Annual Plans etc – openly and transparently).

SOST speak to each council in public and prior to annual plans going out (NOW!!!) and ask that the councils include a rate in their annual plans on ALL rateable properties in Southland.  I have checked, Gore has approx 6,500, SDC has 20,800, and ICC has 25,000 (a total of 52,300).  A set figure of $9.56 per rateable property will generate $500,000 (collected by councils and passed on to SOST).  They now have corporate box income and rating income.  We will call it $650,000 total (without putting any effort into sponsorship).  ICC should not have done anything (even consult) until SOST (not ICC) had tried this.

The outgoings of SOST are

expThe ‘administration’ cost includes the management contract they have with RS.

rsTo ensure the SOST are the true owners (and operators) of Rugby Park and they cut the ties between them and RS I feel they should not have RS manage the facility.  I think the Southland population would agree and have more confidence in the rate being effective and that there is no chance a bailout is needed in the future and that the facility is safe.  RS is not my concern in this.  They will lose $99K income by not managing the park but they will under this plan be able to be repaid by SOST.  If the current trustees don’t want the job then they can change the constitution to allow for trustees to be nominated or voted at public meetings or part of the Local Government elections (this is a way councils can help).

I am, of course, a layman but I don’t know why the facility would need anymore than a manager and a groundsman.  I wouldn’t think they would even need to be 40 hour a week jobs.  My layman’s thought is that the money usually spent on the management contract go toward employing their own staff.  Russell Thomas can still have a job but with a different employer.  I realise this doesn’t save any money but it cuts the ties between the two groups.

I am going to ignore ‘depreciation’ as such because unless the money is being put aside (in an account) for future maintenance it is not an actual expense.  A cheque is not written out to anyone.

For the purposes of doing the math, I will use the ICC lauded $290K p.a. figure to ‘run the stadium’.  Tracy Hicks lauded a similar figure.  My plan has the ‘administration cost’ which includes the wages as the same remember ($129k) meaning the following would apply

Income
Corporate boxes               $150,000
Ratepayer contrib            $500,000

Total income                      $650,000

Expenditure
Admin                               $129,000
‘Running Costs’                $290,000

Expenditure                    $419,000

Debt repayment and a maintenance fund will have $231,000 to share.  Everyone can be paid back including RS.  No deals for free office rental will apply.  RS will have to pay for offices BUT they don’t have to employ a groundskeeper because SOST will care for the grounds.  I am told that RS have a lease in place with ICC for Oreti Park (Sandy Point Domain rugby grounds) and the RS groundskeeper also looks after them.  I would have no problem with ICC mowing it and maintaining it for amateur rugby.  ICC mow Bluff Rugby Grounds don’t they?

Not factored in is the hirage fees they can generate.  With their future secure without hireage costs they can offer differing rates for the use of the facilities, i.e, not-for-profit groups rate, fundraising rate (e.g. free for Relay For Life type events) and another rate for professional events.

With public confidence returned to the operation and future of the facility I would hope more sponsorship opportunities are taken up by businesses also.

As a true community facility I would also hope that catering contracts and the like be equitably awarded.

Now I need a devil’s advocate or two.  I hope the councillors also consider this as a viable option because IT IS NOT TOO LATE!!!

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3 Responses to “Feed Them To The Lions!”

  1. Kylie February 28, 2015 at 11:17 am #

    Where are my devil’s advocates? I have had one positive feedback…..I’d appreciate more feedback…nothing evolves without outside influence (including ideas)

    • Realist February 28, 2015 at 8:48 pm #

      the logic seems ok, but the reality is that the admin is too high, it needs cut big time, as does the grounds.

      If they got the income from Councils they’d clear debt quicker and reduce interest as well.

      The corporate box income has actually dipped recently so i wouldn’t rely on all of it unless some pretty good extra use pushed up demand.

      • Kylie March 1, 2015 at 10:52 am #

        Imagine the reality under ICC ownership and the admin costs. It will get sucked into the Invercargill Venue and Events Management and we will never know the real costs again. The corporate boxes could be gifted to film producers under ICC rule. The cloak of secrecy will mean it will be yet another tool for council to grease the wheels of some other deal. I have NO faith in the proposed operation. The admin costs are what is being lauded so it is all I can use. This to me was about equity across Southland and cutting ties with RS so there is more public confidence. That increase in public confidence would hopefully increase use/increase income/increase sponsorship.
        I have suggested (privately) that the Statement of Proposal for the rate should include a statement that the councils pay it early so the trust can get onto paying off debt early. Pacific Dawn seems to be the only interest (16%) and according to 2013 finances it only had $100K left.

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