The Windsor P3 Set Up
In watching our Mayor over the years, one of his big failings is his inability to execute on a transaction in a timely fashion or even at all. If something goes wrong, he can be blamed.
He talks a good game. He looks into a matter, studies it to death and then has to have a report issued which stalls it off even more. Look at the Airport as a distribution centre as the most recent example.
The Airport as a transportation hub under this Mayor has been around since the Schwartz Report #1 at least with little action. Here are some excerpts from the Star story over the weekend:
- “The study will take four months to complete and will determine whether Windsor can become a viable air freight hub.
Francis, who has travelled to meetings and tours in Frankfurt over the past year to learn more about the sector, believes Windsor is an ideal site given the swath of vacant land at the airport, proximity to the U.S. and central location to several major cities.
‘What we have been doing the past year was investigate, research and develop partnerships that can develop the air cargo business in the Windsor-Essex region," Francis said…
If deemed worthy after the study's completion, the next steps would be to determine site selection on the airport lands, size of facilities and the investment required. A final phase would be design and construction.”
As far as the Arena goes, if it was not for Project Ice Track going to Tecumseh, who knows where it would be since the key Administration Report would have stalled off construction for at least another year.
The Tunnel deal… without arguing whether it would make sense or not… probably was going to be a flip of the entire Tunnel to some P3 source. Now, with the decline in traffic, the threat of another bridge, the failure to get Infrastructure Ontario money and the P3 meltdown it probably means that the deal cannot be done. If it can be done, the amount that the City would receive would be greatly reduced because it would have to be offered at a fire sale discount.
I am pointing out all this because I want you to understand that the great PLAN to bring in a pile of money into Windsor will probably go ahead, and without a significant taxpayer input, but the results will not be as good as was hoped for when the PLAN was first conceived.
It is just like Finance Minister Flaherty thinking of doing the same with federal assets to reduce the deficit when the best that can be obtained is distress pricing. Want to lease twinned bridges in Sarnia when traffic is falling? The problem is that there may not be many buyers now unlike before and the amounts being offered are significantly less.
It is hardly novel. Effectively, we are being set up to believe that the City is in dire financial straits. That may not be that far off the mark these days! Accordingly, just the way Detroit tried to do it with the Tunnel originally and now with the desire to raise $300 million, Eddie has a business model that he can use.
We will get supposedly a lot of money upfront through deals made by our Mayor. Of course, it will burn a hole in their pockets as he and Council squander it as they are praised for their financial genius by the sycophants and cheerleaders just before the election in 2010.
Windsor will dispose of assets probably by a long-term P3/AFP lease or structure so no assets are “sold” so Eddie can boast as was done by the Detroit Mayor or by securitizing revenues as Detroit wants to do now in one giant package to private investors. I have speculated before about the Tunnel, Enwin and WUC being on the block as part of the package. Throw in the airport too now since Councillor Halberstadt did not get an answer to his question about what role Lufthansa will play down the road.
Is it no wonder that the Star has NOT been running the Vancouver Sun horror stories about the P3 Macquarie deal for the Port Mann Bridge. The Sun is only its sister newspaper after all.
Oh well, Eddie is protected but not the taxpayers if this information is not out locally.
The story about the Tax Increase of .63% was nothing more than a trial balloon to soften us up for a tax increase that no one wants. What is the alternative? Now that amount is out the window it appears:
- “When budget talks started last week, Colucci projected city homeowners would be hit with a .63 tax rate increase.
It added up to a $16 hike for the average home valued at $150,000. Those typical homeowners paid $2,613 in 2008 taxes.
But those numbers have changed following numerous budget decisions over four meetings by council. There are no revised projections, Colucci said.
“There is no tally at this point,” he said. “I would just be speculating which is inappropriate at this time.”
That sounds scary to me.
Then we had the on-again off-again stories to make us cringe about cuts in services involving for example rats and snow clearing. I guess Council did not have the nerve to talk about getting rid of parks or crossing guards as they have done in the past. Will we hear more about reducing the number of aspirins at Huron Lodge?
Then the big Star headline and the story to make everyone worry about our finances:
- “Jobs could be cut in city budget
Halberstadt guessed that a couple of dozen jobs could be at stake based on discussions.
Colucci said more cuts might follow.
The recommendations will be tabled publicly in the full 2009 budget document next month after the city completes its capital budget discussions. Then council will stage public hearings before this year’s budget is completed.
“It’s not an easy thing, but I think the writing has been on the wall for certain areas of the corporation,” said Halberstadt of job cutbacks.
“I’m sure we will hear from the unions and the public before the final decision is made.”
Colucci would not provide layoff numbers or targeted departments, “but certainly it is a substantial number,” he said.”
“All attempts will be made to do it through attrition. Unfortunately, there is a real balancing act for council between keeping a levy increase to the lowest level and maintaining services.”
Expect the Star to be running a number of stories for example about the differences between the private sector and the public sector and the manner in which employees are handled. We will read about all of the contracts involving teachers and university professors as an example where people are outraged at the amounts of their increases compared to the hits that the auto workers will take. Anne Jarvis has started already.
Of course, our Council will be congratulated for holding the line on their salary increases, forgetting about the split in the Directors and Boards fees that increases the amount that the Councillors take home. After all, there are no more free lunches with our Council Members. Except if you include wiener schnitzels in Frankfurt.
Do not worry too much about the legal fees in the Tunnel deal. They will be justified as a “learning experience” for the massive distribution of City assets that we will see very soon. We needed that $2M or so spent after all as practice for the P3 negotiations at the Airport for the Blue Sky perishable goods distribution centre or for what really will go there that we have not yet been told about.
It really was not all that difficult to guess. Eddie figured out a way to hold the line on taxes, reduce our deficit and give us canals and museums and a new Downtown and sponsor more sports events and so on. It is a re-election certainty for him
I never really understood at first why Standard and Poor’s gave this City such a good credit rating given all our problems. Remember, they are more concerned about investors and not taxpayers when they do their reports. Their function is to report on City finances so that investors will have an idea about whether or not they will get their money back and what the risks are.
Take a look at my BLOG “November 27, 2007, Non-Windsor Residents Forbidden To Read This BLOG” and see what I speculated:
- “I have a theory, oh yes I do.
You see the S&P analyst really didn't have to worry about Windsor. He is more interested in protecting investors and not taxpayers. So if everything looks good for investors, he's doing his job. If things are not good for taxpayers, well as the Mayor said, we can always move.
Want to know what I think... the Mayor has told S&P all about the P3 deals that he may do. As I have written before, they include the Tunnel, Enwin, WUC. Perhaps the new DRIC bridge plays a role too somehow along with the DRTP rail tunnel and maybe even the arena. It could include the airport too.
Infrastructure is sexy and profitable. Eddie could lease assets for up to 99 years (hey, we're still the owner), get a huge upfront payment, pay off debt, build all kinds of ego monuments and still have money left in the bank. Why, he would be our hero right now and long gone from Windsor as Mayor, when the chickens came home to roost...
Just taking a look at Chicago, since that City's Mayor is a hero of our Mayor. They received $1.8 billion when they leased their toll road, a sum considerably greater than they ever expected to receive. That kind of money has to brighten the eyes of any Mayor in any city."
So when you read all of the Budget woe stories do not despair. Understand they we are being used as pawns again. Understand that the P3 deals are waiting. Be upset that taxpayers will not get as much as we should have but for the Mayor’s delay. Expect that the P3 operators will make huge sums of money at our expense since they are buying assets at distress prices. Do NOT expect that taxpayers will learn about all of the negatives about P3 deals either because that could upset you when you see what we will lose.
Expect all of this before the next election too. All this money coming in to make us happy and let the future look after itself. What a PLAN!
The real beauty. Did you notice that the contract with Lufthansa was “sole source.” There was no need for a Tender or a Request for Proposal. I would not be surprised if our P3 deals are structured the same way too. Who needs messy tendering. Remember the arena!
And in case you still do not believe me... take a look at the Purchasing Bylaw that was changed right after Eddie Francis became Mayor.
- "Sole Source" means the purchase of a good and/or service where there is only one available supplier of that good and/or service that meets the needs or requirements of the City of Windsor.
SOLE SOURCE PURCHASE
32. (1) A Sole Source purchase may be used for the purchasing of goods and/or services for Contracts of any Contract value, in the following circumstances:
(i) Where a public/private partnership exists.
See what I mean!
posted by JoeBlog at 12:01 a.m.
<< Home