Thoughts and Opinions On Today's Important Issues

Sunday, November 08, 2009

The Last Mayor Standing


Three young and attractive Mayors, all with great potential for the future, all elected around the same time: Kwame Kilpatrick in Detroit, David Miller in Toronto and our own Edgar (aka Eddie) Francis.

Kwame was sent to jail and now is in exile in Texas unless the Detroit Prosecutor lays more charges and gets another conviction. David Miller decided not to run for Mayor for another term after he failed to get results in his CUPE strike.

Is it now Edgar's turn for Fate to come down hard on him? Will the border file and the CUPE strike be the one-two punch that knocks him out?

This week might signal the beginning of the end of the career of Edgar. Will the Windsor Star continue to be able to hide that the Emperor wears no clothes, that the myth that has been created around Edgar has little basis in reality!

Will Edgar become the third of the could have beens?

THE UPCOMING WEEK

Two events this week may seal the Fate of our Mayor.

The first is the completely redesigned Tunnel "flip" to a City subsidiary that demonstrates starkly the poor business decision-making of the Mayor. His proposed Tunnel escapade with Detroit, which may well still be ongoing in his mind, could have cost the City dearly at a time when we needed to save every penny. It made no business or financial sense then and still does not.

The second is the CUPE strike report by Councillor Lewenza, who if the gossip is true, will demonstrate the failure of the Mayor's anti-CUPE effort to crush the Union. It will outline how much extra his failed campaign, which divided the City, and supported by certain hardliners on Council, cost taxpayers financially! It will demonstrate a complete lack of understanding of the role of a leader in a City hardpressed by the economic downturn.

Frankly, if Junior is able to accomplish his task, then my theory re the role of Governments in crushing their unions is supported again. Did we, in other words, have a labour negotiation or was it really something political and very different in nature with CUPE workers and Windsor citizens the pawns in the game?

HAS EDGAR BEEN CLIPPED

Listen to the Daryl Newcombe clip from Eh-News. Daryl has a unique ability to sum up complex issues in a minute or two news story to make it understandable to those who may not know the gory details. In this story about a traffic study to be undertaken in Michigan, contrary to what he wanted to do, Edgar effectively blows out of the water the DRIC argument that another Bridge is needed because of traffic volumes.


video



It is the few seconds clip of Edgar that is so fascinating to me because it says so much. He effectively has ackowledged that what Matty Moroun and Dan Stamper have been saying about traffic volumes is correct. He falls back as justification for spending billions the old chestnut of security and redundancy.

He is of course incorrect in what he says as I have pointed out before. To solve the problem, he need only have advocated for reverse customs as he did years ago. But then again, how could he offer up such a simple solution after his Brighton Beach sale for the outrageous sum he received. He would have had to undercut his newest and bestest friends, the Federal Conservatives and Transport Canada. And that would not be a smart thing to do.

In those few seconds on tape, he continued to give the Bridge Company reasons why the DRIC process is such a farce and further set out what his role is in his opposition to their plans. More importantly, he made a fool of himself as Head of the Windsor Tunnel Commission!

THE INHERENT CONFLICT OF INTEREST: EDGAR AS MAYOR AND AS TUNNEL HEAD

Here is the Mayor of Windsor praising the concept of a DRIC bridge. It is the same bridge, if built, that the DRIC consultants say would take away 25% of the Tunnel business. That is business that Edgar as Head of the Tunnel Commission must protect and try and keep!

But consider what he is saying: there is a need for a second bridge after 9/11. Why then is there not the need for a second Tunnel too after 9/11? After all, the Tunnel, not the Ambassador Bridge, has been called the "unique security risk" in this area. Don't we need redundancy at the Tunnel as well or in reality, is the answer that no one cares if it is around or not?

The Bridge Company has a "floating bridge" concept that would discourage any attacks on the Bridge. What are the Tunnel contingency plans? If there are some, I have never heard of them.

We know the shape that the Bridge is in because 2 Reports have been released to the public but I am still waiting to receive the latest Tunnel inspection report given that the age of the Tunnel is similar to that of the Bridge!

We know as well that Matty Moroun wants to spend several hundred million dollars to build his Enhancement Project bridge and to rehabilitate his old bridge. We know that the Tunnel is in last last third of its normal life expectancy.

Interestingly, "excluding the initial $48 million in construction, the Port Authority [of New York] notes $536,600,000 of cumulative capital investment as of December 31, 2005" has been spent on the Holland Tunnel. How much has Windsor spent so far and how much will we have to spend on the Tunnel?

What we do NOT know is what Edgar's plans for the Tunnel are and from where the money will come to rehabilitate it given its declining financial position and its nearing end of life expectancy!

A sale one day to the Feds is becoming more and more the only saving solution don't you think, or rather a P3 front deal so the Americans won't get too upset!

THE TUNNEL FLIP

Let's now deal with the Tunnel flip. It should be obvious by now that Edgar's US$75M deal with Detroit would have been a horrific mistake and Cliff Sutts might have been called on his "guarantee" that he gave to Windsorites:
  • "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. That there will be no need to go to the well of the city to support this transaction.”

Why even Edgar told us in effect that the deal stunk since it was so over-priced:

  • "Mayor Eddie Francis questioned how Detroit arrived at a $100-million price tag for control of the U.S. side of the tunnel.

    Windsor has gone through an "exhaustive process" to arrive last year at a $75-million value, he said.

    "That was the number we were prepared to pay back then, but economic conditions have changed considerably and are very different than five or six months ago."

The chart I posted the other day showed that the Tunnel traffic has tanked by over 50% since 1999 and probably will be down substantially from last year as well. Edgar in the Eh-Channel clip above confirms that traffic is a major issue.

How can traffic improve with a DRIC bridge possibility, a new Enhancement Project Bridge, a possible water taxi/ferry service, a cable car, and who knows what else. Wait until Ohio gets their Casinos opened

THE REVISED TUNNEL FLIP

The sign of surrender is the deal now being rewritten for the Tunnel flip. The deal was originally a sale for cash for over $100M including assumption of liabilities. Of course, the subsidiary did not have the money to pay out that sum so a promissory note would be issued for the outstanding amount and interest would be charged until the note was paid off. In the end, City taxpayers would have seen real money for this deal.

By the way, that $100M+ was based on a PWC valuation report of fair market value that has never been seen by the public.

Now the deal changed. Instead of money, lucky us, we get shares in the Tunnel Company worth $100M or so and dividends from the profits made. Of course, Tunnel dividends do not exist now because revenues are so low so in effect, we get nothing.

Here is how Administration justifies this radical shift.

It is all BS.

Of course it is greater flexibility for the new Company. But not for Taxpayers!

The reality is that the new Corporation could not pay interest and principal on the promissory note since it would not have the cash because of poor traffic numbers. It could likely go broke very soon after the deal was completed! Now that would not be a good deal would it.

Nor would it impress Detroit if Edgar still wants to do a deal!

Now, with shares, no money ever has to be paid to the City unless a dividend is ever declared. And if by chance traffic picks up and the Tunnel is sold at a huge profit, that money remains in that Corporation and does NOT go to taxpayers unless a dividend is declared or the Corporation is wound up. Hardly a good deal for us.

Ahhh, but the City will show an asset of $100M in shares so that would be good for us right. Except is that the real value of the shares?

If Edgar is correct and, in this case he is, the Tunnel must be worth much less today than it was when the FMV was determined. On the day of the sale, City taxpayers should probably expect to see a capital loss of millions of dollars!

I found it interesting that nothing was posted publicly about the Net Book Value calculations. I guess that number is to be kept a big secret from us as long as possible:


It is no wonder that Infrastrucutre Ontario offered so little money as a loan to the City!

But of course that is not all. We have completely lost control of the Tunnel as a City asset. Just like at the airport, keep things hidden inside a private Company. And if anyone dares want to know what is going on, boot them out:
  • "Windsor Mayor Eddie Francis kicked a Star reporter out of a Windsor Airport board meeting held in council chambers Tuesday afternoon, insisting that the meetings are and ought to be closed to the public.

    The reporter walked into the public chambers at City Hall shortly after the meeting began about 2 p.m. A host of people who aren’t on the board of YQG — the corporate entity that controls the publicly-owned Windsor Airport — were in attendance."

    Now the private Tunnel Corporation can do with the Tunnel as they want and without Council's permission.

THE CUPE TRUTH FINALLY COMES OUT

How ironic, it will be Edgar's former buddy and strongest supporter on Council, Ken Lewenza Jr., who will effectively run Edgar out of town after his Ward 4 Councillors' session with Bill Marra on Tuesday.

It will be interesting to see if the Star even covers the Ward 4 session and, if a reporter is there, what will be reported. I do expect the good juicy parts to be ignored, especially any part criticizing how the Mayor acted. We cannot have people thinking that the Mayor did a crummy job on the strike now can we. It would be so embarrassing to the Star and their writers.

From what I am hearing, Junior has a plan to deal with that eventuality, to work around the Star and to go directly to the public if necessary.

In Toronto, the media at least explained the strike results to the public, unlike Windsor where the Mayor and hardliners have been glorified:
  • "At the outset of this labour dispute Miller served notice that he was determined to end a costly and outdated "sick bank" system giving workers cash for up to 130 unused sick days on retirement. Yesterday he declared victory and repeatedly claimed that the tentative agreements reached Monday had "eliminated" the sick bank provision...

    Pressed on this matter yesterday, Miller finally conceded it is more accurate to say the sick bank is being phased out rather than eliminated now. In truth, it is being phased out in slow motion. While that is a step forward, some Torontonians may see it as scant reward for enduring a strike that lasted almost six weeks, especially after Miller made progress on this issue a defining measure of his success."

That is the truth that has been hidden from Windsorites by the Messenger. What has been portrayed as a massive victory is not. It was horrific from a taxpayer perspective.

We have seen an inkling of why the strike failed from the Minutes released BLOG October 01, 2009 "What the Strike Minutes Show" http://windsorcityon.blogspot.com/2009/09/what-strike-minutes-show.html However, what Junior will contribute I hope is a detailed explanation of what went on behind the scene so we can understand the Minutes better and have disclosed some background facts of which we are not aware to put everything in a proper context.

If you watched the Face-To-Face interview with Junior the other day, John Fairley did it again. Junior will attack the handling of the strike by Council and the Mayor in particular since Edgar put himself front and centre.

  • "Council in camera Minute June 18, 2009

    Moved by Councillor Jones, seconded by Councillor Brister,

    THAT no member of Council or Administration, other than Mayor Francis and/or Helga Reidel, are to comment on, or do anything pertaining to, labour negotiations."

Edgar cannot hide now. He will have to take the responsibility and the blame exactly as it was thrust on him by the former CAO after the "near riot."

Accordingly, I expect that Junior will talk about, as he did in the interview:

  • the poor labour/management relations under the Mayor

  • missed opportunities and why

  • How CUPE won contrary to popular belief

  • the huge cost to taxpayers, costs that did not need to happen

  • the lack of understanding by the hardliners how bad the final deal was

  • Adminstration's seeming failure to take strong action to advise Council on how poorly their bargaining position was for reasons unknown

  • alternatives that both sides could have lived with

  • how the WUC settlement could have provided a precedent early on

  • how the Star fanned the flames that gave rise to serious divisons in the Community

  • the loss to businesses that are still ongoing

  • how the public was misled with exaggerated monetary numbers

  • the PRB story

  • why arbitration could have worked

  • and much more.

I am sure that the sycophant are waiting in the wings for Junior with their defences already prepared but it won't work if the Star story reports fairly. People will finally understand what really happened during the strike.

The big losers will be the hardliners and especially the Mayor. His well-tailored reputation will suffer. As the Toronto Star said about David Miller, the Windsor Star Editorial writers should say about our Mayor when the truth comes out but of course they dare not:

  • "Times of crisis can build political reputations – or shatter them – depending on how well a leader rises to the challenge. As mayor, David Miller has confronted no crisis greater than the strike by 30,000 Toronto municipal workers, now in its 39th day. If not shattered, his reputation as an effective leader is certainly cracked."

I am sure that contributed to Miller not running.

Next week will be a very interesting one in Windsor. Given the cool weather, if the Mayor is wearing his newly tailored clothes, he might be very chilly standing out in the cold.