Thoughts and Opinions On Today's Important Issues

Tuesday, April 01, 2008

The Joint Tunnel Meeting

I need your assistance in this BLOG, dear readers. I figure that with all of you reading this and expressing to me your point of view, I am more likely to understand better what went on at the Joint Meeting of the Windsor Council and the Windsor Tunnel Commission.

You know the variation of the expression: More heads are better than one.

First though, I thought you might be interested in hearing what the Deputy Mayor of Detroit had to say about the Tunnel deal. Just click on the screen above and listen in.

He sure seemed to think that the deal was going to be concluded on or about the 25th of March. But we know now that this is not going to happen. Mr. Sutts stated that "the transaction should be complete within 60 days." He also seems to think that he is going to get $58 million from the City of Windsor to help Detroit's financial position.

If they do get the money, it will certainly help Kwame in his relations with the Detroit Council. If they don't, I would not like to be Eddie going over to one of the Windsor taxpayer-sponsored sports events in Detroit. I'm sure in that case that his welcome would not be very friendly.

The whole Kwame issue in Detroit must certainly cloud a lot of the Tunnel negotiations. The issues are very serious over there. Have lies been told? Has there been a perjury? Has information been kept from Council? Are there confidential agreements that Council did not know about? Did the Mayor not give enough information to his Council on the Tunnel deal for example? Is the Tunnel deal at a preliminary stage or is it about to be concluded?

It must be somewhat frustrating if one is not sure that the deal will even go through because Council is fighting with the Detroit Mayor. If you were a financier, would you really want to get involved in the middle of a mess? Perhaps you would in order to capitalize on the situation by getting a better deal than you would otherwise normally get.

But I don't want to talk about the deal with Detroit right now. I want to focus on what is going on with Windsor and the flipping of the Tunnel from the City to the Corporation which we shall call "Holdco."

Here's what I am going to do because I can't quite understand what is happening. I need your help, dear reader, to clarify all of this for me. I will set out the facts that I think are relevant and ask a bunch of questions afterwards that perhaps you might be able to answer. That would help me out a lot in my thinking.

  • June 11, 2007---City Council resolved the following:

    That Administration BE AUTHORIZED to incorporate a share capital corporation under the Business Corporation Act (Ontario) (“Holdco”) of which Windsor will be the sole shareholder; and

    That Council APPROVES the name of the corporation to be “Windsor-Detroit Tunnel Corporation”, or such similar name as may be available for use; and

  • September 17, 2007---Windsor-Detroit Tunnel Corporation incorporated

  • March 18, 2008---Detroit Council resolution against Kwame suggesting that the deal will not get done during their fiscal year and that it was at the preliminary stages.

  • March 18, 2008---Windsor Mayor Eddie Francis, chairman of the tunnel commission, said Tuesday that negotiations are continuing in the city's bid to gain control of the U.S. side of the tunnel, owned by Detroit.

    "Those discussions are coming close to a conclusion," he said.

  • March 25, 2008---Adams interview: "City of Windsor, I believe, is supposed to be moving today. We are simply waiting on the City of Windsor to take their vote before we actually present the final Tunnel documents."

  • March 26, 2008---"City council will be asked Thursday during a closed-door meeting to approve a new corporation for the Canadian side of the Detroit-Windsor tunnel, which is owned by the city.

    “What we will be dealing with is a recommendation from legal counsel to put the tunnel into a corporation to protect the taxpayer from any financial exposure that might occur from an act of terrorism or accident,” said Mayor Eddie Francis.

  • March 26, 2008---My email to Councillors to which I received only one reply:
    "Please explain to me why the meeting re the Tunnel has to go "in camera."

    This matter as described in the story---incorporating a company---has already been discussed in public as justification for the new Tunnel Corp. in the presence of Council's outside lawyer. It does not need to be discussed again.

    If there is something else on the agenda please let me know what it is so. The public should have the right if required to appear as delegates at a Special Council meeting!"

    THURSDAY, MARCH 27, 2008
    (immediately following Joint closed meeting at 3:00 p.m.)


    (1) Windsor-Detroit Tunnel Rollover to Windsor-Detroit Tunnel Corporation

  • March 28, 2008---"Francis said Thursday’s meeting was held behind closed doors because the city was receiving legal advice about its negotiations with Detroit."

Here are my questions that I'm hoping you can help me answer:

  1. If Council, in a public meeting in which outside counsel was in attendance, authorized the incorporation of Holdco in June, 2007 and the company was incorporated in September 2007, then why did the Mayor in March 2008 claim that the meeting was "to approve a new corporation. " The Corporation was already in existence and no approval was needed at all. Interestingly, the members of the Board are the Windsor Tunnel Commissioners
  2. The Mayor had told me in the past that he had a photographic memory. Were the negatives so cloudy such that he forgot about the incorporation in September or was he subject of the infamous City Hall amnesia disease? I am terribly disappointed that no one on his staff or in Administration or the outside law firm picked up on this error and allowed him to make a correction before the Meeting
  3. Why was it necessary for the meeting to be held in camera, if previously it was held in public before and on television too with delegations attending, even if some of them opposed what the Mayor wanted to do
  4. Why did the reason for the meeting change from approving Holdco to “receiving legal advice about its negotiations with Detroit”
  5. Where was the notice publicizing the Joint meeting, and in particular, where was the Agenda publicized. If it was not publicized, why not
  6. If the meeting was to discuss legal advice about negotiations with Detroit, then why did the public agenda deal with the “Windsor-Detroit Tunnel Rollover to Windsor-Detroit Tunnel Corporation”
  7. Why didn’t any of the Councillors provide me with this information
  8. Did the Councillors know what the purpose of the meeting was and did they receive an agenda in advance and full documentation so they could ask intelligent questions
  9. If the materials were not distributed in advance, then how does one justify doing a major transaction involving over $100 million in such a small amount of time? Are the Councillors that experienced that they can make a decision so quickly
  10. Since presumably the rollover has been approved, does this mean that members of the public have no opportunity to appear as delegations before Council to discuss this matter
  11. Why didn’t the Mayor and/or Councillors advise the media of what was taking place so that the Public could be aware and perhaps decide to appear as delegations
  12. What issues were “concluded.” And which ones are still outstanding
  13. Have the various comments with respect to terrorism increased the risks to the Tunnel and lowered significantly its value if some transaction with respect to the entire tunnel is to be concluded subsequently? Has the value of the Detroit side been decreased by these comments
  14. Has the City received a written opinion from its outside counsel that, in fact, the City and taxpayers have been protected by the incorporation of Holdco against any possible claim for damages? Has Council considered the risks of such items as under capitalization, incorporation merely for the purposes of protection of assets, City employees working for the Tunnel and the City providing assistance to the Tunnel under a Services Agreement, nonfunctioning in fact of Corporate directors through control by the City and other factors that the courts look at when deciding whether they should pierce the corporate veil
  15. Have Mr. Sutts and his partners given us a written assurance that, as he said
    “emphasized the deal will not be completed until he is fully assured local taxpayers will not be hurt.

    "We will be extraordinarily cautious so costs of the acquisition will be self-supporting of the project itself," he said. "That there will be no need to go to the well of the city to support this transaction."
  16. Considering that the City has to guarantee to the Bank of Nova Scotia Holdco’s payment of amounts owing under a Letter of Credit, how can it be said that the City may not have to go to the well.

I’m sure dear reader that you can think of other things to ask about based on the facts that I have presented but these are a few items that cause me a great deal of concern. I would be very appreciative if you could write and explain to me what this all means.

My quick, initial thought was that it almost seems as if information was being given out to ensure that members of the public would not know what is going on and therefore not attend at the meeting and not appear at delegations to speak with respect to the rollover. Remember, the information about the meeting did not come out from the Mayor and Council originally but rather from Councillor Halberstadt via his BLOG.

However, I am probably completely wrong and need you to point out what the explanation really is and why I am mistaken.

I thought I would ask Local Authority Services Ltd to help me out as well since their services are free and they can get a lot more information than I can. That's the Company hired to do meeting investigations!