Do Concoction Delays Mean Severe Windsor Financial Problems

Will the border road be finalized if Dave Cooke is our new Mayor or Bill Marra? Dave is moving back to Windsor. I'll talk more about that tomorrow but it may take a new Mayor for Windsor before a deal is done.

One of the definitions of delay is "act later than planned, scheduled, or required." It's a word I want to use as the theme of this BLOG.

The Blogmeister has to take full responsibility for the delay in any solution coming out of the MPP/Mayors' meeting the other day. It seems that the only thing that the parties agreed upon was to meet quarterly.

Accordingly since nothing else was resolved it appears that we have at least three more months before we will see a solution to the border Roads issue.

I am certain that you are wondering why I feel responsible. It should be clear. There is no way that the Mayor of Windsor can allow me to have credit for anything that is accomplished.

I suggested last week that there were various alternative ways that the Mayor could walk out of the meeting or even snub it. What does he do to spite me... he stays the full two hours!

When I said that Minister Bradley was coming down and that meant it was very likely that some kind of a deal would be arranged amongst the Mayors and the Province, the Mayor had to show me up again and stuck to his position on Manning Road so that nothing was possible.

Even when the Provincial Cabinet Ministers told him that the DRIC road will be completed by 2013, two years ahead of Manning Road, there was no way that the Mayor was going to agree to that. He was not going to give me the satisfaction of winning.

How did the Mayor get around the assurances of the Cabinet Ministers. He used the word "delay." Here's what he said in a media scrub:

• "Sandra: No. What was acknowledged today is that the timeframe being laid out means it will not overlap. That in fact it is quite public that the timing on Manning Road is looking toward 2015, and our plan is for the border route to be finished by 2013. That is the way it is. That is public and that was confirmed again today.
  
  Eddie: Let's not hold our breath. I don't think anybody whether at a the provincial, federal or local level, can give you any assurance with certainly as to when the timelines will be when these routes will be built. They were supposed to have DRIC done six, seven months ago, the final plan, and that was delayed."

I was interested that the Mayor in his comment suggested that there might be issues at the local level with respect to delays. I thought that there are big delays in Windsor on major projects and now I am very concerned.

Eddie's remark brought back to mind a matter that seems to been delayed for almost a year now: the Tunnel Plaza improvements. Wasn't it about a year or so ago that the Public Open House was postponed. Has it ever been rescheduled? If not, why not?

What's interesting about the project is that it is the only one that I can think of with respect to the border and the Border Infrastructure Fund in which the three levels of Government have actually agreed to do something, agreed on the cost split and actually capped the amount of the contribution of each party at $10 million each.

This Project also ties into the sale of the Detroit side of the Detroit/Windsor Tunnel for US $75 million. Nothing has happened on that project either it seems for quite some time. My recollection is that the deal was to have been completed back in June of 2007. It seems that that project has been delayed too. What are the reasons for that delay?

The last we were told at the end of November was:

• "The discussions are proceeding, the teams are meeting nearly every day and resolving many issues you would expect in a transaction of this nature," said Mayor Eddie Francis. "There are still some outstanding issues."

Can you imagine the legal fees incurred to date if they are working so hard.

Memory says that City Public Works General Manager Dev Tyagi told us that the Improvement project will not go forward for some time due to complex negotiations being undertaken amongst the three Governments and that we should not expect a resolution for quite some time.

Remember what I said at the time:

• "It appears now that the cost of the project is higher, although that number was not revealed. I would suspect that the number must be significantly higher than the $30 million, or else it would not have been discussed at Council. It was also not disclosed, why the costs had increased so dramatically but it is easy to speculate why.
  
  I'll bet that it will cost a lot of money to relocate businesses away from the existing streets around the Tunnel Plaza. Won't the City have to expropriate Burger King as an example? I'm sure that they will know how to negotiate a good deal."

Just the other day when I went past the Tunnel I noticed that the building across the street from the Tunnel entrance removed the sign saying that a laser clinic and pharmacy were opening soon. I wonder if those deals fell through because of the delays. Huge losses may now be incurred by those property owners because of delays that would increase the expropriation costs dramatically. That means the City takes a big hit because the City would have to pick up 1/3 of the increased costs. And we know what has happened to construction costs too in Windsor after big delays: cost increases in the range of 30%.

If I recall correctly as well, Council allowed two new corporations to be set up for the airport and for the Tunnel but I thought the one for the airport only had been set up and nothing had been done yet with respect to the Tunnel.

It was all very strange to me, all of this delay with respect to the Tunnel.

Then all of a sudden I had a sharp pain after reading Councillor Halberstadt's BLOG because the deal that the Mayor offered the University to bring the Engineering Complex downtown was so bizarre since money would not start flowing until 2010, around the time when the Mayor was leaving office. Why wouldn't the money come now rather than years from now. I assumed that the Mayor wanted the glory now but wanted his successor to worry about the money. That made me even more nervous.

Councillor Halberstadt said the following:

• "On January 25, at an in camera meeting, Mayor Eddie Francis received approval from City Council, in an 8-2 vote, to concoct a business case to offer free city land, $25-million in cash, plus expropriation costs..."

I thought that the use of the word "concoct" was a strange one and then the warning flags went up when the words "expropriation costs" were used given our Canderel experience. Doesn't that suggest to you that there was no desire to have a real deal with the University because of money issues. In other words pretend that you want to do something but don't actually do it. How else to explain as well that the City had at least six months to put together a concrete package for the University but did not do so even at the 11th hour, 59th minute and 59 second when the Board was to make a decision as to location.

As the Councillor went on, my sharp pain started hurting even more:

• "As one of the two Councillors who opposed the resolution, it offends me that it is now taken for granted that Council gave the green light on the $40-million package.
  
  In fact, all the Council majority did was to give the mayor permission to develop a business plan. Once that came back, I would certainly presume that it would be vetted in full public view, including details of the obvious hit to the property tax base, the city’s financial plan and the much-acclaimed debt-reduction policy."

I did not like the expression "obvious hit" and was almost doubled over in agony after the Councillor said:

• "I am wary about the latest scheme being cooked up by Mayor Francis, St. Clair College President John Strasser and Star columnist Gord Henderson. It seems these three have assumed that City Council has already committed some $35-$40 million worth of property taxes and free city land to St. Clair for whatever project is concocted.
  
  The Musketeers should not forget that City Council is the ultimate decision-maker in these cases. And any business case needs to be fully vetted in public with those who pay the bills."

Oh my...I groaned so loudly that I felt like calling 311, errr, 211, errr 911 after I read "latest scheme being cooked up by...The Musketeers."

Here is what concerns me. As you may recall, the Tunnel improvement was one of the first items that the Mayor signed with the Senior Levels on the Phase I agreement of the "Let’s Get Windsor-Essex Moving Strategy." It was signed back in March, 2004. It must therefore have been a very key matter for the Mayor since he is also the Chair of the Windsor Tunnel Commission. In effect, he was getting a competitive gift of $20 million for him to improve the Tunnel's operations and he could have used that money with respect to his operation of the combined Tunnel if he was ever able to raise the money to do that deal with Detroit.

Concocting a University deal in which the money is not supposed to flow until 2010 suggests strongly to me that the City has no money to do any deal now. It may well be in a very precarious financial position. Which Councillor would be prepared to risk public outrage given our sad economy to finance another THINK BIG mayoral scheme.

The Tunnel Improvement deal has fallen apart with respect to the other two levels of Government because the costs have increased, in an amount in that we do not know, and nothing yet has been renegotiated. The Tunnel deal with Detroit is in limbo, probably because no one is prepared to pay the outrageous amount that the Mayor wants in order to salvage the transaction. The City could never have done it on its own and needed the Feds originally as their money source. We can assume that the Feds have backed out by now since the deal is not completed after they saw the Tunnel revenues and market share drop dramatically. No other party seems to have stepped in yet either.

Do the delays in these projects mean that there are severe financial problems in this City that may mean even more problems for for citizens of Windsor? Here is an example of where we may get hammered and it is out of our control. Remember when OMERS had huge write-offs and municipalities across Ontario had to pay so much extra as pension contributions. Well here is what has happened after the stock market meltdown:

• "Canadian pension plans are taking a hit during the current market turmoil but, since they tend to be long term investments, time is on their side, say investment analysts...
  
  Last week, RBC Dexia released a report that showed Canadian pension plans returned just 1.5 per cent on their investments on average last year after a punishing fourth quarter.
  
  Hurt by the high Canadian dollar's impact on foreign investments, pension funds lost half a per cent in the quarter ended Dec. 31...
  
  John Pierce is vice-president of corporate communications for the giant OMERS pension plan, which has assets in public markets.
  
  "We'll feel an impact" because of that, he said. But OMERS has a long term plan to reduce its exposure to the volatility of the public markets."

Something is very suspicious. How can we do a University deal and offer money if we cannot complete deals that have been floundering for years now due to lack of money? In my opinion, Councillor Halberstadt and his colleagues need to do some significant investigating into the state of the City's finances. These so-called "delays" may be signalling that there are significant problems that we have not yet been told about. And frankly, I'm not interested in learning about them after 2010.

What makes me sweat even more is that what could be happening now is so eerily familiar with the 86% WUC increase ie no increases for two years until we were hammered. Was that politics... we may never know since the whitewash audit never examined that.

And if that is not bad enough, the thought that President Strasser of St. Clair College is talking to the Mayor should make all of us very nervous. We have already seen the giveaway of the Cleary plus $3 million of cash to St. Clair to accomplish the goal of ensuring that there is no competition to the Casino. Now with three failed attempts to do anything with the the Western Super Anchor site, the Mayor may be prepared to do anything and to promise anything, especially after he leaves office, to pretend that he is done something in that area. I dread to think what he may "concoct" this time around.

Where is that City Auditor General when you need one?