Is The Tunnel Headed To Financial Disaster

It's a good thing for taxpayers that Councillor Gignac was Acting Mayor last night at Council. A lot more was revealed than would have been permitted if Eddie was in the Chair. He may regret being in France so long.

We are starting to learn slowly but surely the mess that the Tunnel is in. You remember, what Councillor Brister has known about for over a year and mentioned to Gord Henderson but refused to tell his constituents about.

We are now getting an inkling why Councillor Lewenza said that next year's budget may see an increase in taxes or a reduction in services compared with this year's "election budget." We know that over $6 million more will have to come out of the pockets of taxpayers because of the Tunnel mess!

I truly could not believe what I was hearing last night at Council. The shocking news was NOT reported in the Windsor Star so far. The City's "cash cow" has become a "cash drain" on City finances. The consequences are a serious financial problem for taxpayers since taxes may have to be increased next year and a blow to the grand ambitions of the Mayor

I never picked up a hint of the problem before, especially not at the Joint Councils meeting where everything was pictured in such a glowing fashion. It was definitely not mentioned in the mid-summer discussions between the cities about a Windsor-Detroit deal.

In a very brief exchange between Councillor Halberstadt and the City's Treasurer, Onorio Colucci, that I watched last night on TV during the discussion on approving the City's Accounts, I learned in horror that:

1. the City will NOT get the $3.4M capital dividend that it received in the past from the Tunnel's revenues PLUS
2. the $3.2M operating dividend that the City received in the past from the Tunnel's revenues is at risk (I learned subsequently that it appears the operating dividend may disappear in 2007) PLUS
3. due to the "pay-as-you-go" financial approach the Windsor Tunnel Commission may have to borrow money from the City's capital reserve fund to pay the $12-14M for the ongoing costs for the Tunnel Ventilation building that have sky-rocketed! That sum will not be paid back for years. (Of course the City will be so thrilled that it generates interest income from its non-arm's length subsidiary)

Pooooooof...almost $6.6 million dollars gone that taxpayers will have to make up PLUS interest on a City loan AND a depletion of the reserve fund that is not strong in the first place for a City our size! Is this the financial strength of Windsor that the Mayor and Council have been bragging about? This was their pride and joy. If so, we are in more trouble than I thought.

It would have been interesting if the Mayor was there as Chair of the Council meeting to see if he would have tried to cut off the Councillor as this financial disaster was being disclosed for the first time. After all, to whom can the "Teflon"Mayor pass the blame now since he is the Chair of WTC. It sticks to him this time around! He made the financial decisions that failed in attracting revenues and volumes.

Over the past few weeks I have posted on the increasing problems at the Tunnel: its "unique" security risk, its failure to meet US Customs requirements, its sharply decreasing volume numbers, its failure to raise tolls in a timely manner, its waste of $30 million for a Tunnel Plaza parking lot. Never in my wildest imagination did I conceive that the Tunnel may be heading for financial disaster, or worse!

I have no idea how the Tunnel finances got this way. Oh we will hear the excuses about SARS, the Canadian dollar, terrorists, passports and all of that. Why then has the Bridge survived and successsfully competed against the Tunnel even though the Tunnel's fare into Detroit was substantially lower. And after the toll was increased by Eddie in July, the Tunnel took a huge hit in numbers.

It's not my job to figure why the Tunnel is a mess either. Just look at what happened with my MFOIA when I asked Tunnel questions. That's the job of the WTC Board especially its Councillor members Brister, Cassivi and Valentinis. They should be demanding answers immediately. They should be demanding an audit immediately to explain how the Tunnel finances deteriorated so quickly. If Council can get so upset and spend $65,000 for KPMG to do an operational audit at the Windsor Library Board where there were few problems, then Councillors better get off their collective rear ends and do something at the Tunnel.

In the end, only one person must take responsibility for the Tunnel fiasco. The Mayor. His head ought to be on the chopping block. Instead of keeping his eye on the ball and watching the day-to-day operations of theTunnel, he dreamed BIG. He had visions of being a big border operator and pulling off the financial coup of the season in Windsor. It was not for him to look after mere details such as pricing and profits and losses. Nope, it was much more exciting being an entrepreneur with no risk since he was playing with Taxpayers' money.

The WTC Board now has the responsibility to determine if Eddie should keep his job or be asked to resign immediately or be fired!

Eddie's grand ambition, his Tunnel PLAN. Who would want to finance the Tunnel now? Financially it is a disaster, it faces huge capital expenses, it has security problems. Do you really think that Detroit would want Eddie as a partner now? A month ago, there were discussions of a $6.6M dividend. A mere month later, it is almost all gone.

Transportation is not good for the Mayor. The Border was first. Imagine if the $300 Million goes because of lack of City action. Then we had the bus terminal fiasco with a deal that makes no sense. Now the Tunnel. Hmmm I wonder if the City-owned airport is next!

We are just scratching the surface of this and other financial problems in Windsor. When will a Councillor have the guts to spill the beans on Enwin!

There is more to come at the Tunnel I am sure.

Life is peculiar. The more the saga of the Tunnel continues, the more that Detroit's Deputy Mayor, Anthony Adams, is looking like the smartest man around respecting the Tunnel. Too bad no one wanted to listen to him!