Saving Me Into Bankruptcy

You know how it is. Your spouse or significant other comes home after going to the mall with this expensive item that neither of you really needs and probably cannot really afford. He/she tells you that it was on sale. It is pointed out to you how much he/she saved you by this great shopping and what a terrific deal it is. You protest saying that you do not need the item no matter how much is saved since you don't have the money for it in the first place.

You cry out plaintively as you look at the pricetag, "Dear, you are saving me into bankruptcy!" as you are dismissed out of hand.

That is how I felt with the MFP settlement to be honest. We had a potential liability of over $300 million but settled by paying out amounts at "conventional" rates I believe rather than the "special" rate we thought we were getting in the first place. I think the extra costs were $68 million. [Of course, no one seems to be interested in looking at ways to reduce that amount as I have written before other than one Councillor.]

Wasn't it presented to us when the settlement papers were signed as how much we were saving rather than how much extra we were paying out?

Oh, you do not believe me do you.

Do you think I could really make up on my own that paying out extra money was a savings or that I would dare? Well be my guest and go to the Mayor's 2005 Report Card http://www.citywindsor.ca/DisplayAttach.asp?AttachID=3690 Take a look at Item #13 under Fiscal Discipline. What does it say---"MFP Settlement saves city $154M."

I had a similar thought when I read the story about Canderel yesterday and the two parties the City was negotiating with. I was confused by this comment:

"Mayor Eddie Francis said the lease rate would be comparable to others negotiated for tenants in the building. It's fair and reasonable, given market conditions," said Francis."

Hold on there. Does this mean that the only tenant in the building that ever paid "full price" for the rental was the City? Did the others get a big discount that we did not get. After all, the Mayor said "the lease rate would be comparable to others negotiated for tenants"

Remember I told you that the sub-lease rental was slashed to $10 per square foot because the City could not get anyone interested in subletting the space. (The Star reported the City was paying $18 per square foot plus about $15 in common fees for maintenance and taxes) Does that mean that others were paying $10 before since the $10 being negotiated now would be comparable to what others are paying?

And it may not even be $10. It could be less. City solicitor George Wilkki had said "the city is willing to look at "anything reasonable.... Any offer that would come in the door we would take to council and see what council wants to do with it."

So when the lease is made with these two parties (if it ever is made), we will not be told how much we will still have to pay until the main lease expires (being the difference between the $18 and the sub-lease rate). Nope, the Mayor's Report Card will show how much we have saved.

Finally, the bus terminal. You remember, it was supposed to be in place for the Super Bowl visitors. I hope we will see what the contract terms are (I would be surprised if we do....commercial confidentiality and all of that). I heard that Transit Windsor turned down a lease offer from Greyhound since it was a bad deal but was forced into one similar some time ago. I have no idea if this is the same deal being presented but the one I heard about was not something to write home about.

The Mayor's Report Card will tell us how much we are saving by receiving the Provincial $2 million grant but not how much it will cost us in the long-term.

Hmmmm I wonder why the taxes have not gone down even more with all of the money that the City is saving.