More On High Finance
Just as an aside, I am getting a real complex. My email was tagged by the City's system as "MAYBE SPAM" which suggests to people to delete it without opening it. And then, a City Hall insider told me that when he/she clicks on my BLOGlink in his/her Blackberry, an Error pops up saying that my BLOGsite is not authorized! I guess the City's computer system does not like anyone who may not be a cheerleader.
I am having some real difficulty figuring out the math. Eddie's speech recently said:
- "Our municipal debt had grown too far, too fast. It was projected to be $276 million dollars by the end of this year...Thanks to our debt reduction plan, the debt is now only projected to be $161 million dollars at the end of this year."
The Mayor then went on to say:
- "And by 2010, our plan will result in dividends of approximately $40 million dollars. Then another $40 million in each and every one of the following years."
Frankly, I am not familiar with the term "placeholder" but does it mean we add in another $22 million for the reservoir or is that already contemplated in our debtload?
I wish that I also understood what was going on at Enwin. I wanted to review their financials but their latest online is the one for 2004. It seems that its year end is December 30, yet its 2004 annual report was not delivered to Council until August, 2005. (The latest City financial statements posted are 2004 as well)
We do know that the problems were so severe that Councillors increased their salaries dramatically attending meetings there but we do not know what that was all about. Why the secrecy? The Mayor's language "We’ve focused on helping ENWIN to get back on track" really scares me becasue I do not know what it means. Why isn't the Windsor Star taking investigative action to find out what is going on there? Don't they want to win any newspaper prizes for this?
In the Mayor's State of the City Speech, he said that "Over the past two and a half years, ENWIN’s debt has been reduced by $43 million dollars." But then I read that the scary comment in the Enwin Report: "The high degree of replacement of existing capital relative to new customer growth translates into a reliance on existing customers to "carry the load" of system replacement costs." Oh and that is a $50 million capital spending program in case you wondered.
Debt reduction is very commendable but how was that done? In 2004 for instance, the debt was shown to be $128.6 million. It was as high as $158 million only a few years before. However when you read in the Report "The high degree of debt leverage, as measured in the level of debt to equity of the Windsor Canada Utilities Group, continues to be a concern to management," then taxpayers should be concerned.
What's the point of all of this? It just seems to me that I do not have a good grasp of where this City is financially. Here it is mid-2006 and the financial material posted is year-end 2004. We told about huge savings off of "projected" amounts. Our taxes are cut to the bone yet we can fund millions of unexpected expenses. What looks like a loan is "bridge financing." Somehow we have the cash flow to finance an $80 million monument. Our debt is going down yet we have major amounts that are to be added on.
If any of my readers can explain this stuff to me, I'll buy you a coffee at Tim Hortons. After all, that's where the big financial deals are done in Windsor.
- From: Colucci, Onorio
Sent: Tuesday, June 13, 2006 1:31 PM
Subject: RE: [MAYBE SPAM] City finances question
Mr Arditti, due to workload issues I am only now getting to your e-mail. Please see responses below.
Sent: June 9, 2006 10:32 AM
To: Colucci, Onorio
Subject: [MAYBE SPAM] City finances question
I would appreciate if you could provide the following information:
Will a debenture will be issued for the Lou Romano Treatment Plant? Will you please provide me with the amount of the debenture. When will this debenture be shown in the Financial Statement of the City [I understand the amount to be $42 million in a debenture to be issued either late this year or early next year. [Colucci, Onorio] The projected amount at this time is $42 million. If it is issued in 2006 it will be shown on the 2006 statements, if it is issued in early 2007 it will be shown on the 2007 financial statements.]
If no debenture will be issued, how will the amount be financed. [Colucci, Onorio] There is no other financing method currently being contemplated.
How much will be required for the Windsor Utilities Commission to finance a new reservoir. Will a debenture be issued to pay for this? If not, how will it be financed? [I understand the amount to be $20-million ] [Colucci, Onorio] Currently we have a placeholder of $22 million debenture issue in the plan for this matter.
By 2007 and by 2010, what will the long-term debt be projected to be? [I understand the amounts to be 2007--$217 million, 2010--$191 million [Colucci, Onorio] these amounts are indeed our current projections ]
I intend to post this information on Monday and would appreciate confirmation of the numbers.