Thoughts and Opinions On Today's Important Issues

Friday, July 04, 2008

Why Kwame Used Eddie And Needed Barbara-Rose

Kwame for US Senator---it has to be a sure-thing!

It is clearly the modern remake of James Stewarts' movie "Mr. Smith Goes To Washington"

Make no mistake about it, the guy is a sheer genius. Or rather, the people behind him who dream up these schemes make him look like one. But heck, he chose and hired them! With their brains and his speaking ability that is capable of hypnotizing Councilwomen and attendees at functions such as the Mackinac conference, the guy is a shoo-in when a Senate opening appears!

We poor mortals have no idea what is really going on. We do see bits and pieces of it over time but they are isolated events that make it difficult for us to see the entire picture since it is so hard to put together. We can try and guess, and that is what I attempt to do in my BLOG to provide you with some insight, dear reader. Sometimes I'm right and sometimes I'm not.

However the fun is trying to figure it all out and put it together. Every so often, one gets a EUREKA moment when one can see everything clearly. All that one can do at that point is sit back and look at everything that has been done with admiration or perhaps contempt, depending on the situation.

It is a shame however the politicians have to act that way and cannot trust their electorate but I guess that's the way things are these days in modern politics. We are nothing but pawns in their political game to be used and abused as appropriate by the players.

With the Tunnel deal with Windsor, at the least, I trust that after his financial manoeuvrings are completed, Kwame will take pity on Windsor taxpayers and walk away from the transaction. After all, while he may still carry a grudge and he may still want to take out his Hendrix animosity on Eddie, why take down 200,000 Windsorites as well! Revenge may be sweet but heck, we Windsor taxpayers helped sponsor so many Detroit events to help him out!

Let me explain.

Why would Kwame borrow money from Windsor, $75M for the Tunnel deal, if the Detroit Council's attempt to borrow $78M in fiscal stabilization bonds was said by the Detroit Mayor to cause a "Moody's downgrade?"

I find that hard to understand. A borrowing is a borrowing is a borrowing isn't it.

Is there more behind this deal with Windsor than meets the eye? Does Kwame even care if it gets done? Or does it serve a useful purpose for him even if it never gets done.

After all, why should the Province loan money to a City for which Michigan for

  • "the fourth consecutive...withheld [revenue sharing money] from the city because of its lateness in completing its required annual audit..."

Remember that:

  • "The deal doesn't sell the tunnel outright, but gives the mayor 120 days to iron out details.

    Kilpatrick was so happy it passed he popped into the City Council meeting to hug Collins and kiss her ring."

Here are some clues as to what may be happening behind the scenes that made getting Council onside so crucial to Kwame. The Detroit Free Press gave me my first hint:

  • "Deputy Mayor Anthony Adams said the city would probably have to end the 2007-08 year with a deficit because the city needed approval Monday to book the $65 million from the sale in the 2007-08 fiscal year...

    Collins said she told the mayor she would change her vote now, but would vote against the final sale because she dislikes the new authority's ability to sell the tunnel, the loss of revenue from the tunnel and the loss of city control.

    "He said, 'I'll take what I can get now,' " she said."

Then I saw this in Crains Detroit:

  • "Two Detroit City Council members changed their minds Tuesday and voted "yes" on Mayor Kwame Kilpatrick's sales plan for the city’s half of the Detroit-Windsor Tunnel.

    Kilpatrick said the action allows Detroit to begin the new fiscal year with a balanced budget."

Without actually receiving one penny from Eddie, Detroit's deficit was wiped off the books! Ahhhh, isn't accounting wonderful! Kwame has a balanced budget as promised. Who cares if the Windsor money ever comes in. As far as Kwame is concerned, he just bought 4 months worth of time thanks to Barbara-Rose. That goes along with the year he received since June of last year even though no deal was ever done with Windsor. Why Eddie and his lawyer, Cliff Sutts, were his biggest allies as they restructured the deal how many times trying to get this deal done. Fortunately for Kwame, they never gave up or backed out of it.

Kwame did not need to hypnotize Eddie. He just played to Eddie's ego and Eddie's need to show he could do a sophisticated financial transaction.

Why does Kwame need 4 more months? Why was he happy he could take what he can get now?

It was this article in the Bond Buyer that gave it all away to me. There was a nice play on words in the sub-headline. Was that a Freudian slip using the word "bridge" not "tunnel" or did it really mean just an "interim" deal that actually may never happen. Here are some key excerpts:

  • It's Never Dull in Detroit
    In Switch, Council OKs Mayor's Bridge Sale

    Bond Buyer Wednesday, July 2, 2008

    By Caitlin Devitt

    ...After months of debate and three formal rejections, the City Council yesterday narrowly reversed its earlier decision and approved a measure that would advance Mayor Kwame Kilpatrick's plan to sell the city's half of the Detroit-Windsor Tunnel. The tunnel sale would generate a one-time cash payment to eliminate a $60 million deficit in the $3.04 billion budget for fiscal 2009 that began yesterday. The council's last-minute vote meant that the city was able to avoid layoffs of up to 1,300 city employees.

    The vote also means that the council would likely abandon its original deficit-elimination plan - the sale of $78 million in fiscal stabilization bonds. The mayor had repeatedly said he would block that plan, which he said was responsible for the city's recent bond rating downgrade by Moody's Investors Service in the wake of the council's deficit borrowing plan...

    Officials also face a lawsuit filed by retired police and firefighters who have sued to stop the city from shifting $75 million out of their pension fund to shore up the city's budget...

    Despite the city's headaches, it has successfully returned to the bond market over the last few months with its first new-money and refunding issues since 2006. On Monday the city sold roughly $130 in tax anticipation notes to cover operating costs for the city as it ends its fiscal year. In late May the city sold $218 million in general obligation debt in what was its first new-money transaction since late 2006. About half of the bonds were insured by Assured Guaranty Corp.

    Yields on the insured, unlimited-tax GO bonds ranged from 1.9% with 5% coupon in 2009 to 4.93% with a 5% coupon in 2028. And at the end of April, the city began the process of restructuring roughly $800 million of insured variable-rate water and sewage revenue bonds in a transaction insured by Berkshire Hathaway Assurance Corp., marking the new insurer's first appearance insuring bonds in the primary market.

    But the months-long battle over how to eliminate the city's current $60 million deficit could be repeated in another bond proposal being pushed by Kilpatrick. Under the proposal, the city would issue roughly $360 million in casino-tax backed revenue bonds to finance an economic stimulus plan mayor says is crucial to revitalizing the city's economy.

    While officials said they wanted to go to market quickly when they first introduced the plan in early April, the inability to balance the budget became a stumbling block. The proposal is currently awaiting a hearing by City Council, where Cockrel has already criticized the plan as akin to putting $360 million on a credit card.

    Despite the criticism, the administration remains determined to move forward with the plan, spokesman James Canning said Monday. "We'll be glad to work with them," he said. "Utilizing a growing revenue source such as casino revenue to improve city facilities is a great plan and we want to move forward with it."

    One of the city's most immediate concerns as it begins a new fiscal year is the prospect of laying off up to 1,300 city employees to wipe out the current deficit. On Monday, when the city council rejected a measure that would allow the city to move forward with the sale of the tunnel, deputy mayor Anthony Adams told the council that the layoffs were now "inevitable."

    On Monday, as it closed out the fiscal year, the council voted 5 to 3 to reject the tunnel proposal, marking what seemed to be the end of a long push by Kilpatrick to accomplish the deal, which he first proposed in 2007, and which he reportedly touted to rating agency analysts as key to gaining stable financial ground. Under his plan, the city would sell its stake in the tunnel for $75 million to a new holding company, the Detroit Tunnel Authority. The transaction was expected to generate $65 million in a one-time cash windfall after insurance and other transaction costs.

    After the council vote, Adams told the council that the layoffs of up to 1,300 employees were now "inevitable." Perhaps to avoid the discouraging prospect of those layoffs, two council members yesterday decided to reverse their no votes and approve the measure, which allows the city to set up the tunnel authority. Kilpatrick still needs to win approval within the next 120 days from the council for the remaining financing and operational details of the deal, but the mayor heralded the reversal as a major victory for the city.

    "This tunnel agreement would be the final piece of the puzzle to put the city on stable financial footing and start moving forward," said Canning.

    The lateness of the vote means the city will likely carry a $60 million deficit until the tunnel transaction is completed, said city officials.

    The council is now unlikely to pursue its original counter-proposal to sell $78 million in fiscal stabilization bonds to plug the shortfall

    Kilpatrick blamed the Moody's downgrade on that plan, and said Fitch Ratings and Standard & Poor's were "waiting in the wings" to downgrade the city if the bonds were issued.

    In late May, Moody's cut its rating on Detroit's unlimited-tax general obligation debt to Baa3, the lowest investment-grade credit rating, and stripped the city's limited-tax GO debt of its investment-grade rating.

    Fitch rates the city BBB and maintains a negative outlook on the city's general obligation debt. Standard & Poor's maintains a BBB rating on the city's unlimited-tax debt and BBB-minus on the limited-tax bonds. The outlook is stable.

    Another key to balancing the 2009 budget - one approved by both the mayor and the City Council - was threatened last week by a new lawsuit filed by the city's retired police and firefighters. The lawsuit challenges the city's plan to transfer $75 million from the police and fire pension fund into the city's general funds.

    Kilpatrick proposed the idea in April, saying the city's police and fire pension funds are overfunded by $400 million. Under the agreement, the pension board said it would increase some of the benefits to active police and fire employees, but not for retirees, a decision that in part prompted the lawsuit...

    "It's going to be an interesting and exciting year in Detroit," said Ben Burns, director of the journalism program at Wayne State University journalism and former executive editor of the Detroit News.

    Burns predicted that the swirling political scandals would ultimately not impact the city's economic development, which he said is moving forward on several fronts.

    "I think that Detroit's public image nationally tends to be bizarre even though what's going on in Detroit is usually similar to any big urban city on the Rust Bucket Riviera," Burns said. "It's that way because we have such interesting, eccentric people that get in office. At the same time, we have a lot of very solid citizens who are working to make Detroit a better place to live. Detroit will keep on trucking."

So here are the key points that I think you should understand in all of this:

  • the hope of a Tunnel deal was necessary to "balance" the Detroit budget and to eliminate Detroit's deficit

  • deal or no deal by June 30, the Mayor can claim a balanced budget since the 2 sides are working on a deal

  • without one penny coming in, the Mayor has been able to claim that the budget will be balanced for a year and now for another 120 days

  • this transaction was important for the bonding agencies to keep Detroit's rating up and interest costs down and since Kwame made promises to them

  • there was a need to kill the Council bonding proposal since not only would it increase the cost of borrowing for the City but also interfered with the proposal that the Mayor had to get financing

  • it looks now as if the Council proposal will be put on the back burner

  • the Mayor is out there borrowing money now, the first time since 2006, and is trying to flog during $360 million of bonds, a transaction that the Mayor wanted to have completed quickly

  • those bonds are backed by Casino revenues

  • they better hurry with those bonds since the Wall Street Journal reported that casinos are in big trouble in Vegas and elsewhere, including the one in Greektown that filed for Chapter 11 bankruptcy protection

  • I would expect that this bond deal will be completed within 120 days, the time period that Kwame received from Council

  • don't you find the number $75M from Windsor and $75M from the "overfunded" fire and police pension plan which will go into general revenues amazingly co-incidental

  • did Kwame ever need Windsor's money and were the pension funds his backup plan

  • the pension fund lawsuit only started on June 26

  • the plan re the fund was "approved by Mayor Kwame Kilpatrick, the City Council and the pension board for the police and fire retirement fund" so Council knew about $75M being available for general revenues even while they were supposedly struggling with the Tunnel deal

  • the issue is not whether the City is entitled to the money but whether the retirees are entitled to additional benefits

  • is Windsor money merely icing to Kwame's cake?

As you know, Michigan is attracting moviemakers with tax incentives. This Tunnel story is Hollywood in real life. What a script. What an ending. What a rush.

With Anthony Adams as the "bad cop " threatening 1300 layoffs and Kwame the "good cop" who kisses the ring of one of Detroit's Councillors as she changed her vote and that of a colleague to support him, Kwame saves the City of Detroit just as it seemed that it was all over. Hundreds of millions of dollars come pouring into the City to make it a success story without the City getting into an unreasonable debt situation. And he keeps the Tunnel too!

Why, I can just see the last scene in the movie. Here's how it goes as we see the Detroit Mayor picking up the phone:

  • "Hello, Northwest Airlines. This Kwame Kilpatrick. I'd like to book a flight to Washington, DC. To the US Senate, please. First class, of course, all the way!"

Thursday, July 03, 2008

Our Intergalactic Competition

If you truly believe that our competition is Mexico, China or India, then you are way behind the times.

That kind of thinking is passé and could cause us significant problems in our economic redevelopment of this region. That is why I am disappointed that members of the Windsor Essex Development Commission went to London, England for a trade show to try and drum up business for this region. They have missed the boat, or rather should I say the rocketship.

If you are a mover and shaker in town, then you know which book is the one that our Mayor is reading many times over to get a leg up over everybody else. My inside moles at the Windsor Library tell me that the book du jour that is being taken out by the cognoscenti in town is "The War of the Worlds" by H. G. Wells.

Here's the start of the first chapter so you will see what I mean:

    No one would have believed...that this world was being watched keenly and closely by intelligences greater than man's and yet as mortal as his own; that as men busied themselves about their various concerns they were scrutinised and studied, perhaps almost as narrowly as a man with a microscope might scrutinise the transient creatures that swarm and multiply in a drop of water. With infinite complacency men went to and fro over this globe about their little affairs, serene in their assurance of their empire over matter...At most terrestrial men fancied there might be other men upon Mars, perhaps inferior to themselves and ready to welcome a missionary enterprise. Yet across the gulf of space, intellects vast and cool and unsympathetic, regarded this earth with envious eyes, and slowly and surely drew their plans against us.

Of course, you are probably wondering what I am talking about. What can a so-called "fictional" book about Mars have to do with Windsor and economic development you might think. It should be obvious to you if you read the news.

Clearly, Wells was a man who was ahead of his time. He was not talking literally about war between Earthlings and Martians. Rather he was talking about economic competition between us. Competition for new markets is no longer just global, rather it is intergalactic and will be spread throughout the universe as life is found on other planets.

Read what he wrote again. Just think of how complacent we North Americans became as we lost our manufacturing plants and jobs to countries in Asia as an example. Why I just read that the auto industry in Mexico may be bigger soon than Canada's! You have no choice but to agree with me that business people in other countries "slowly and surely drew their plans against us."

Oh I can hear you chuckling again. You just do not get it do you. Don't you remember. The future of our airport and our intermodal-hub is based on this fantastic deal that Eddie is working on with a startup company in Germany to send them onions for their European markets. We were told that onions that we can produce for pennies per bunch can be sold in Europe for almost four dollars. And with the Salmonella scare respecting tomatoes, think of the sales we can make with our pure and wholesome Leamington tomatoes as we flood the market:

  • "Green onions and the Windsor Airport are the keys to providing the city with "jobs, jobs, jobs," say the mysterious heads of a German aviation consultancy firm...

    For example, Michael said, a bundle of green onions that sells here for $0.69 at this time of the year in Windsor would sell in Germany for the equivalent of $3.60.

    "Now, if you look at the price difference, you'll immediately see there's a big opportunity to export spring onions to Europe. And at $3.60 consumer price, you can easily afford the transportation from Windsor anywhere to Europe."

Our future is secure and profitable. Or so I thought.

Did you read the story from ABC News that completely shocked me and suggested that we need to look at economic competition in a much different light. We need to rethink who our competition is and plan for it now if we are to be successful:

  • "Soil on Mars 'good for asparagus'
    NASA says the soil collected by the Phoenix Lander is similar to dirt found in backyards on Earth.

    There is still no answer to the old question of whether there has ever been life on Mars but apparently there could be vegetable life.

    NASA scientists say the soil they have collected from the northern polar regions of the red planet would be good for growing asparagus and turnips, but probably not strawberries.

    The Phoenix Mars Lander scooped up soil with its robotic arm and scientists say the sample is similar to dirt found in some backyards on Earth...

    "The sort of soil you have there is the type of soil you'd probably have in your backyard, you know, alkaline...

    "It would have been ideal soil to say, you know, grow asparagus in or beans or turnips or, you know, things like that.

    "But yeah, too high an acidity for strawberries say, or blueberries..."

    "But on Mars there are still some problems.

    "You don't have the liquid water, it's very cold so you're going to end up with the worst frost bite on your asparagus."

Hrrumph. Clearly NASA scientists know a lot about outer space but very little about big cash crops. Clearly, they have never heard about "ice wines," one of the profitable crops in this County. Can "ice asparagus" be far behind as a marketing gimmick from the Red Planet?

Our future is not as secure as we thought. It is clear that the Mayor will have to read Wells' book many times if he is to capture the vegetable market from our out of this world competitors. As our German friends told us, the key is the difference between cost price and consumer price. If the difference is high enough "you can easily afford the transportation from [Mars] anywhere to [Earth]."

Oh and the Martians will become very, very strong competitors. Their vegetables will do extremely well on Earth. As Wells told us also in his book:

  • "And speaking of the differences between the life on Mars and terrestrial life, I may allude here to the curious suggestions of the red weed.

    Apparently the vegetable kingdom in Mars, instead of having green for a dominant colour, is of a vivid blood-red tint. At any rate, the seeds which the Martians (intentionally or accidentally) brought with them gave rise in all cases to red-coloured growths. Only that known popularly as the red weed, however, gained any footing in competition with terrestrial forms. The red creeper was quite a transitory growth, and few people have seen it growing. For a time, however, the red weed grew with astonishing vigour and luxuriance. It spread up the sides of the pit... and its cactus-like branches formed a carmine fringe to the edges of our triangular window. And afterwards I found it broadcast throughout the country, and especially wherever there was a stream of water."

The red Martian asparagus will clearly command a premium price in the marketplace and yet it can be grown so cheaply it appears!

Don't listen to me or to H. G Wells. He was telling us our future as many of the leading science fiction writers have done with their books. What he suggested is now being substantiated by NASA.

If you choose NOT to listen, then I can only leave you with what Wells wanted as his epitaph:

  • "I told you so. You damned fools."

A BLOG To Read

As you may recall, one of the BLOGfather of Soul's readers started up his own BLOG, "Kdduck Talk."

People on both sides of the river need to read his BLOG "Can We Elect Real Representatives?"

This too may help Dalson Chen of the Star understand his own feelings of negativity!

For Most, Unknown Communications

Some interesting items that one can find buried in the City's Civic Corner/City Council Agendas website pages. Here are some from last week:







Wednesday, July 02, 2008

The Way To A Detroit Councilwoman's Vote... through her stomach.

The things some people will do over a meal. Threats of lay-offs for 1,300 City workers had little impact on her, but give her some soul food and...
  • "Mayor Kwame Kilpatrick persuaded City Councilwoman Barbara-Rose Collins to change her vote to reconsider a plan vital to the sale of the Detroit-Windsor Tunnel last night over soul food at Southern Fire.

    Collins said the mayor begged her to reconsider and she did, casting one of the five votes needed Tuesday to create an authority that could oversee the sale of the tunnel. She also persuaded Councilwoman Martha Reeves to switch her vote from Monday to favor of the authority.

    "He could sell ice to an Eskimo," Collins said of the mayor. "He can just hypnotize you when you talk to him."

Councilwoman Martha Reeves also changed her vote. The Mayor did not have to eat, or even sing, with her:

  • "Reeves... said today she switched because Collins asked her to change her vote."

That's all it took to get her to change her mind and her vote. I wonder if Kwame had the Vandellas standing by if needed.

If this was not bad enough, here is what several Councillors claimed when the issue of supporting the final deal came up:

  • "But Collins said the sale likely would not happen because she will not vote for it and believes the majority of council feels the same way
  • Collins said she intends to vote against the actual tunnel sale because she dislikes the ability of the new authority’s ability to sell the tunnel, lost revenues from the tunnel and the lost of city control.
  • "Reeves, Council President Ken Cockrel Jr. and Councilwoman Sheila Cockrel – who all voted yes today – said they were not necessarily going to vote yes on the final sale."

HUH....does this make sense? Is this how responsible Legislators act? If they have done their due diligence and voted yes today, then they understand what the deal is all about. Why wouldn't they vote yes on the final transaction. In my opinion, they are making a mockery of the legislative process and fools of themselves!

Until now, I had a great deal of respect for the manner in which Detroit Council was looking at this potential deal. They seemed to be asking the right questions. They seemed to be undertaking due diligence of the transaction. They seemed not to be intimidated by the Mayor’s threats of layoffs and put a contingency plan in place in case the deal fell through.

However, it seems that when push came to shove, Council effectively ignored every other vote that they had taken for reasons that seem unclear. The only answer that seems to be given is hypnosis by the Mayor and a request from one Councillor to another to screw her constituents and to vote for the first step of what the Mayor wants to do.

It is no wonder that voters have little respect for politicians and why politicians have such a poor reputation.

I don't want you to think that Councilwoman Collins is the only one for which I have lost respect. There are several others whose actions I don't understand as I stated above. Here are some comments made by other Councillors yet they voted in favour of what the Mayor wanted to do:

Sheila Cockrel

  • In committee, she voted against the Tunnel deal:

    Cockrel countered to reporters in Detroit following Friday's meeting: "I don't think playing chicken with people's jobs or livelihood is a good thing for any set of politicians to do."

  • She said trust issues around Kilpatrick following the text message scandal is one factor of why she is leery of the tunnel deal.

  • She didn't think it was responsible for the administration to put this in the 2008-09 budget "when it wasn't ready. It's voodoo budgeting."

  • "it was, in my opinion, malfeasance to put the deal in a budget when you knew you didn't have it done."

  • "She also called the deal "reprehensible."

  • "But Councilwoman Sheila Cockrel said she remains opposed to the sale because Windsor has not yet secured the $75 million from Ontario. She questioned the seriousness of the layoff threat.

    "I think there's a desperation that characterizes this administration right now."

Martha Reeves:

  • "I'm representing the people who call me and the consensus of the people who are calling me, they're saying 'Absolutely not' to the selling of the tunnel," Reeves said.

Oh well, I am just a poor Windsor taxpayer who cannot understand high finance. Here are some more details about the transaction that the Free Press reported:

  • "Under the deal, Detroit and Windsor would turn over their halves of the tunnel to separate authorities. Windsor would obtain a $75 million loan from the Ontario government and then route the $65 million to Detroit. The rest would go for insurance and transaction costs.

    The $700,000 in annual revenues Detroit receives from the tunnel would be used to repay the loan."

I thought that I had seen that the loan would be paid off within 40 to 50 years. The only way that this will happen at $700,000 per year is if Kwame comes over and hypnotizes Premier Dalton McGinty, Minister of Finance Dwight Duncan and Minister of Energy and Infrastructure George Smitherman too. Soul food anyone.

Tuesday, July 01, 2008

It's Official: Tunnel Deal Sucks For Windsor

Given everything that is going on in Detroit these days, one has to say, if the Detroit News is to be believed, that Councilwoman Barbara-Rose Collins is a very brave person. According to the paper,

  • "Councilwoman Barbara-Rose Collins told her colleagues hours after the vote that she planned to move that they revote today."

I wonder what their Procedural Bylaw says about Reconsideration votes.

Can you imagine what would happen if a Councillor in Detroit changed his/her vote. That would be a pretty risky business these days with all the headlines in that city.

You have to hand it to our Mayor.

No matter how bad this deal is for the City of Windsor, he just won't give up. He has to do this deal regardless. After all, we've sunk in well over $1 million so far in taxpayer money for fees so how can he walk away from it and look silly. That would not look good on the resume of an entrepreneur!

Poor Mr. Sutts. Never mind just him. Take pity on his law partners. After all Mr. Sutts has said in the past:

  • "I've said all along from square one I will not recommend a deal to the city of Windsor that did not make business sense," he said. "My intention has not changed.

    "In all of these negotiations everything I've done is with that in mind."

  • "We will be extraordinarily cautious so costs of the acquisition will be self-supporting of the project itself. That there will be no need to go to the well of the city to support this transaction."

  • "But Sutts and Francis said Tuesday they are being careful not to complete any tunnel deal that could prove costly in the years to come."

Mr. Sutts, and his partners, may regret what Mr. Sutts said in his CKLW comment above. There is startling new information which I am about to reveal that will require him, I would have thought, to tell the Mayor to stop this foolishness.

According to the Detroit News, the key financial analyst on the Detroit side has made the following comments:

  • "Council members spent considerable time debating the tunnel authority proposal that would have set a 120-day timetable to negotiate a deal with Windsor, which was waiting to see whether Detroit would secure a deal before seeking its own financing from Ontario.

    Adams and other administration officials emphasized that a tunnel deal wasn't guaranteed if the authority was created because a supermajority of the mayor and council's seven appointees would have to support such a move.

    Some council members even disregarded their own fiscal analyst Irv Corley's more favorable opinion of exploring the sale of the tunnel, in which he concurs that the level of toll traffic will diminish in the future.

    Corley said he believed the administration's independent analysis that the loan would be paid off sooner than first expected and surmised that this "could be a good time to take advantage" and maximize profits."

In other words, it is a great deal for Detroit since

  • "the level of toll traffic will diminish in the future"

Moreover, this is a great time for Detroit

  • "to take advantage and maximize profits"

If traffic goes down, who is at risk... Windsor. Who gets the maximum profits...Detroit. Who is at a financial disadvantage... Windsor. Who now has all of the risks... you got it, this side of the river.

You will have to excuse me but I still don't get it on the Detroit side. Why would they continually talk about a loan with Windsor which they have to pay back when it appears that Alinda would give them $70 million and 20% of net revenues.

So many questions. So few answers. And don't worry, we will never learn the complete story without another Municipal Freedom of Information application. According to Mr. Sutts:

  • "Sutts pointed to a confidentiality agreement surrounding the negotiations which restricts his comments on the $75-million figure."

Based on what Mr. Sutts said in the past, and what has now been finally disclosed in Detroit, is it time that he and the Mayor stopped trying!

One more thought in all of this. Why wouldn't Detroit and Windsor try and INCREASE the value of the Tunnel first before doing a deal! Why treat it as a declining asset?

Or is there a hidden agenda? Is Windsor outsmarting Detroit and taking advantage of its financial weakness? Is it really Windsor's plan to try and sucker Detroit and then increase traffic and the Tunnel value? Maybe then the Tunnel Plaza Improvement project will move forward.

What boggles my mind, and what distinguishes politicians from real business people, is that the Mayors and Councils on both sides of the river have not yet figured out that the problem is not who owns the Tunnel but the problem is not having Tunnel business. Their objective should be ensuring that traffic flows properly across the border so that tourists and business people are encouraged to use the Tunnel.

Instead of this foolish competition with the Bridge Company for a vehicle, the objective of the border crossing operators should be to fight Governments to ensure that the border users are not delayed so that there is no impression that people will be stuck in traffic for hours.

Their objective ought to be increasing the number of people who want across the border thereby increasing the traffic and then they can fight as to who gets which vehicle. They need to get the traffic volumes back up to where they were about a decade ago. Then they ought to talk deals.

Until the politicians can figure that out, our border crossings, including the Ambassador Bridge, are doomed to a continued reduction in traffic and a reduction in the value of the Tunnel as an asset. More importantly, unless this is a Win-Win for both sides, regional co-operation is dead.

Do Not Adjust Your Set, Sound Problems Are Permanent

In case you’re wondering, there is nothing wrong with your TV set nor is there anything wrong with the feed from Cogeco Cable when broadcasting from City Council Chambers.

I’m told that there have been some changes to the sound system in the Chambers that have been made. I don’t know exactly what it is called but there is something similar to a Chairman’s priority button that the Mayor now has on his microphone it seems. This is one description I have seen of such a sound system button:
  • “When pressed, the priority button causes all currently active delegate microphones to be temporarily or permanently muted, allowing the chairman to take control of the meeting.”

Once the Mayor turns on his microphone, then you cannot hear what a Councillor or a Delegation has to say. Therefore, if Eddie is quick on the trigger and is about to say something, even though he does not say anything, then the person speaking is cut off and cannot be heard. (Eddie had lots of Points of Clarification tonight so that is why so many people were silenced)

If the Mayor forgets to turn off his microphone, then you hear nothing also.

After awhile, it became quite annoying. But then again, no one should be surprised. After all, who wants to hear what the Councillors have to say. And delegations, why they are merely to be tolerated.

Now you know even without any formal Resolution that the Mayor is truly the “Voice of Council.”

Just so you know, I am not going to get into the shameful debate on the 400 building that took place at Council tonight. The playing with numbers was quite amusing trying to show that a $6 million overage really wasn’t a $6 million overage. Unfortunately, no one brought forward what was said previously:

Back in February of 2006, the Star reported:

  • "Councillors approved a report by an independent consultant who found the building was constructed under budget and filled an important need by bringing several city departments under one roof. "Overall, the assessment was that it was done well" and it met the objectives of the city, said John Skorobohacz, the city's chief administrative officer...

    Skorobohacz said the project came in under budget and the city will have an extra $1 million, based on projected revenues and operating expenses.

The contractor wrote a Letter to the Editor in which he said:

  • "After much speculation, allegations and innuendoes, it is vindicating to read in The Star report of Feb. 7 that the municipal building at 400 City Hall Square was constructed under budget. Not that we, the design builder, had any doubts about the conclusions now reached by Coun. Fulvio Valentinis, the independent consultant and the city's chief administrative officer."

All of these smart people in the past said that there were no cost overruns but now we find that there may be problems. I'm troubled by that. I wonder why the Councillors were not.

Never fear though. Just wait until the audit comes out. That should clear up everything. To the satisfaction of the Mayor and Councillors anyway

Monday, June 30, 2008

Welcome To Our Phone Booth

If you have not read it yet, then you should read Dalson Chen's column in the Star today: "It's time to think positive."

Imagine that...negativity going mainstream and by someone as young as Dalson. Now that is a shocker!

It must be that he has just accepted a job at a newspaper out West for him to dare write what he did. The Editor who approved it must also be looking for a new position. Both of them will need re-education clearly if they are to remain in Windsor.

Welcome to the world of many of the Bloggers in Windsor, Dalson. As he wrote and is something that I completely understand:
  • "This is the 151st edition of my column. I've been writing in this space a little more than three years now.

    And something has changed since I started. I've become the sort of person who immediately thinks the worse of things. Especially when those things concern Windsor."

I have written over 1,800 BLOGs so think about how I feel! I sent him a note this morning trying to explain what I think are the reasons for his despair and what must be done to overcome it. I have written several BLOGS like this on this subject so I know exactly where he's coming from.

You might be interested in reading this part of the script from the movie "Network" that I sent him. It seems to fit:

  • "I don't have to tell you things are bad.

    Everybody knows things are bad. It's a depression. Everybody's out of work or scared of losing their job. The dollar buys a nickel's worth, banks are going bust, shopkeepers keep a gun under the counter. Punks are running wild in the street and there's nobody anywhere who seems to know what to do, and there's no end to it. We know the air is unfit to breathe and our food is unfit to eat, and we sit watching our TV's while some local newscaster tells us that today we had fifteen homicides and sixty-three violent crimes, as if that's the way it's supposed to be.

    We know things are bad - worse than bad. They're crazy. It's like everything everywhere is going crazy, so we don't go out anymore. We sit in the house, and slowly the world we are living in is getting smaller, and all we say is: 'Please, at least leave us alone in our living rooms. Let me have my toaster and my TV and my steel-belted radials and I won't say anything. Just leave us alone.'

    Well, I'm not gonna leave you alone. I want you to get MAD! I don't want you to protest. I don't want you to riot - I don't want you to write to your congressman because I wouldn't know what to tell you to write. I don't know what to do about the depression and the inflation and the Russians and the crime in the street.

    All I know is that first you've got to get mad. (shouting) You've got to say, 'I'm a human being, god-dammit! My life has value!'

    So I want you to get up now. I want all of you to get up out of your chairs. I want you to get up right now and go to the window. Open it, and stick your head out, and yell, 'I'm as mad as hell, and I'm not going to take this anymore!' I want you to get up right now, sit up, go to your windows, open them and stick your head out and yell - 'I'm as mad as hell and I'm not going to take this anymore!'

    Things have got to change. But first, you've gotta get mad!...You've got to say, 'I'm as mad as hell, and I'm not going to take this anymore!' Then we'll figure out what to do about the depression and the inflation and the oil crisis.

    But first get up out of your chairs, open the window, stick your head out, and yell, and say it: 'I'm as mad as hell, and I'm not going to take this anymore!"

Frankly, his "negative" column is one of the most "positive" events that could have happened. He has taken the first step and a brave one too given his job. He has gotten out of his chair. He is as mad as hell and he has just told everyone that he is not going to take it anymore! It's another start.

Welcome to the phone booth, Dalson. Our door is always open to you and others who feel as you do!

The Tunnel Deal Has New Wrinkles

Can this Tunnel deal get any more confused than it is now.

Another new wrinkle, although we had heard about it before from one of the Detroit City Councillors, makes the deal subject to another contingency.
  • "Before the deal would be completed, Congress would have to sign off on it as well as the U.S. State Department given that the tunnel goes into another country."

Hmmmm I can just see the Americans ceding control of the Tunnel to Canadians. Will they wonder if Eddie and/or the Province are really fronting for the Feds. Tie that in with a possible P3 controlled by the Government of Canada over the DRIC bridge, since Michigan doesn't have the money to build it nor the legislation that permits P3's, and Canada is in total control of one of the key border crossings in North America, Windsor/Detroit.

With possible shared border management in Fort Erie still around, the time will come when Buffalo will not permit expansion of the Peace Bridge Plaza and the same in Port Huron. Then Canada will control all of the key border crossings in central North America. And one wonders why the NAFTA agreement is so fundamental for Canada!

In Canada, as I have said before, the change in ownership is subject to the provisions of the International Bridges and Tunnels Act. Who knows when the Regualations under the Act will be completed or what they will contain.

There seems to be as well a disagreement between the two Mayors as to whether the Tunnel is a public utility or not. In Windsor, the Mayor considers it one as I have written before. In Detroit however:

  • "A public vote isn't required on the sale of the Detroit-Windsor Tunnel because it isn't considered a utility, according to Detroit Mayor Kwame Kilpatrick."

I wonder when Detroit Council will be able to take a vote on the Tunnel deal since their Municipal Building will be closed for at least a week because of a fire. Their latest new scandal involving the FBI and certain Councillors just makes this deal even messier since so much money is involved. Now the Detroit Mayor gets his chance to do a bit of talking about people who live in glass houses!

It comes down to this in the fight betwen the Mayor and Council in Detroit:

  • "Even if council agrees to create the authority, the text messaging scandal swirling around the mayor causes "trust" issues for Cockrel in signing off on a deal, she said.

    "This is a situation where I have asked for this mayor's resignation, I have voted to begin forfeiture proceedings, I have voted to send this matter to the governor," she said.

But here's what makes the least amount of sense to me. The Detroit News in an Editorial slammed the deal with Windsor. The Editorial pointed out that Detroit had received a better offer from Alinda:

  • "Detroit has had better offers. Earlier this year, American Roads offered to extend its leasing agreement, proposing to give Detroit $70 million and 20 percent of net revenue over 70 years."

Why then would Detroit ever consider a $75 million LOAN from Windsor, money that has to be paid back when Alinda's offer did not require repayment and gave them a share of net revenue over the next 70 years. Windsor offered them nothing more.

It is so obvious that the Windsor deal makes no sense in comparison with the other one so that one has to ask the question why would Detroit even consider it. Perhaps there is a term in the agreement that does not allow Detroit to look at another offer until such time as the Windsor deal is ended but then why would Kwame fight so hard supposedly to try to convince Council to enter into the transaction with Windsor? Is he just trying to demonstrate good faith so that Windsor cannot sue him?

The big question all the way along is how could the Province of Ontario even consider spending $75 million or more on this transaction which in effect helps out a foreign jurisdiction rather than a municipality in the Province of Ontario. I did not know that we had money to burn in this Province.

One further little point. The Detroit News Editorial states:

  • "American Roads nets an average of about $5 million annually on the tunnel after annual maintenance costs of about $250,000."

Doesn't that suggest that there is a nice profit to be made by taking over the Detroit side? It does except for the following points:

  • if Windsor ran the Tunnel, wouldn't the toll on the US side have to be decreased by a dollar per vehicle so that the two tolls are comparable. That would reduce substantially the income on the US side
  • Windsor predicts that its net income for 2008 is about $3.4 million, substantially less than what the US side is earning
  • capital maintenance on the Canadian side in 2008 is estimated to be $1.3 million, more than $1 million more than the US side
  • Tunnel volumes are consistently going downward as is its market share
  • the border crossing itself has lost substantial volumes with no sign that tourism and business is increasing in the near term
  • do not forget that if the DRIC bridge is built, the estimate is that the Tunnel would lose 25% of its business to that crossing.

I almost forgot. The Windsor Tunnel Corporation has to pay $5 million a year in interest to the City of Windsor on its promissory note. With of all of this wheeling and dealing, revenue has to be found to pay the interest costs on the $75 million loan borrowed to finance the Detroit deal as well! That takes up so much of Detroit's $5M net revenue that one wonders why Windsor would want to take the risk to enter into this transaction in the first place.

Let's not even consider that the Tunnel is almost 100 years old and could need extensive repairs in the future. One needs only to take a look at the Tunnel Ventilation Building cost to know how that could get out of control. And if the Tunnel Plaza Improvement Project has been deferred for years with the costs increasing and the City unable to contribute even its $10 million share at this time, this entire transaction becomes even more puzzling.

If this is such a good transaction, then why all the secrecy? Why are Detroit Councillors asking questions but Windsor Councillors are so silent? Why would the City of Detroit deal with Windsor if the Alinda deal is clearly so much better? Why do Windsor Councillors/Tunnel Commissioners allow themselves to be treated with contempt when their questions have been outstanding and not answered for about a year. Who is there to protect the Taxpayers of Windsor?

The question I have is what is this transaction really all about! This plum deal is turning into a prune!