Chris Schnurr
Carol Kosowan LL.B., B.A. (Law), B.A. (Policy)
I have received several emails from readers regarding the Detroit-Windsor Tunnel deal that I wish I could answer – but now considering Councillors had yet another in-camera meeting on Thursday to discuss the details – they should be able to fully divulge all the information since, as lead negotiator Cliff Sutts stated on April 18th that negotiations were, “virtually complete.”
Councillors should now be able to fully answer any questions pertaining to this deal and you, dear reader, will realise this after reading this blog, if you haven’t already. I expect Councillor Dilkens to be leading the charge since it was he who introduced the motion at council calling for greater openness and transparency of city boards and committees.
The Windsor Star reported on Friday, July 11:
“The distractions of Detroit’s council have left the situation so uncertain. Windsor’s council does not want to proceed and incur further (legal) expense unless Detroit clarifies its position,” lawyer Cliff Sutts, lead negotiator for Windsor, said after a two-hour special council meeting on Thursday.
This was echoed in both the Detroit Free Press and the Detroit News on Saturday.
But then curiously, I read this morning on Councillor Halberstadt’s blog that Councillor Halberstadt, “was the lone Councillor to vote against the in camera resolution last Thursday to keep the $75-million loan deal on the table in the lapsed negotiations with the City of Detroit to secure the American side of the Detroit-Windsor Tunnel in public hands. ”
How can this be?
Our million dollar man, Cliff Sutts said council did not want to proceed and according to the Detroit News on Saturday, “Windsor told the Ontario government Friday to put its loan application for the $75 million on hold, said the city’s lead negotiator, Cliff Sutts.”
What exactly is going on?
Why was a vote to keep the $75-million loan deal on the table behind closed doors, particularly when this involves Infrastructure Ontario money – a program funded by Ontario residents designed to assist municipalities in their infrastructure needs such as roads, sewers and watermains or municipal corporations providing such services.
What reasons were given to justify a closed-door vote on a potentially significant underwriting by residents?
It’s important to note here the only public meetings on this side of the border regarding the tunnel deal was the formation of a municipal corporation over one year ago and the legal arrangements earlier this year – though there is a new question as to whether or not those arrangements are still valid because according to the Windsor Star on May 21, 2008, “But a potential deal has since substantially changed, according to documents viewed by The Star at Detroit city hall.”
It is also important to note that changes to the Municipal Act (section 238) require municipalities to publicly advertise in-camera meetings, to identify the types of issues to be addressed and to record minutes. Our own meetings investigator recommended this change as well.
According to July 12th Detroit News:
But some Detroit council members are reluctant to sell, saying they haven’t received answers about lingering financing questions, including the interest rate on the loan. Councilwoman Barbara-Rose Collins, who switched her vote to create the Detroit authority after Kilpatrick wooed her over soul food, has said she still doesn’t like the sale.
Councilwoman Sheila Cockrel said she would review the letter, but remains wary until she can see hard numbers.
“I do not think you make good public policy decisions that are nonreversible based on letters of intent,” Cockrel said.
How much interest, if any, is the City of Windsor charging Detroit for this “deal?” We know the Province could charge around 5% to the City. Furthermore, what about Detroit’s ability to pay?
As well, what is the status of the loan request to Infrastructure Ontario? The Windsor Star reported on April 18th that applications take ”about two months to process.” And a resident informed me on June 2nd that Anthony Pizans from Infrastructure Ontario confirmed in May that an application had been received from the city. Surely, Infrastructure Ontario has reached a decision by now?
Another issue that could determine whether or not that this is in fact a good deal for the city, is the business case study. Councillors have surely been presented this since they voted in favour of keeping the loan deal “on the table.” What are revenue projections; traffic projections, capital needs and estimated costs of the tunnel over the next 40 years? The terms of an Infrastructure Ontario Loan are up to 40 years.
The next obvious question is how will Detroit pay the interest, principal and any additional interest charged, if any, in 40 years? It has been reported in the US media that Detroit will use its $700,000 a year in revenue from the tunnel to repay the loan.
Well, $700,000 a year $65-million does not make. In fact, to repay the loan plus interest, at least $3.7 million per year would have to be paid based upon annual payments over 40 years for a total cost to Detroit of over $150-million dollars – and you and I could be on the hook for that.
That’s of lot of potential watermains, roads or sewers.
Considering residents were walloped with an 86% increase in combined watermain/sewer rates – with more to come – this question begs to be answered.
Considering that a good chunk of our Capital Works budget is going towards EC ROW rehabilitation over the next few years this question begs to be answered.
If $75-million can be borrowed to fund this transaction with dubious justifications, why was this option not utilized to offset some of the financial pain to struggling businesses and residents in these times of rising unemployment and business foreclosures?
And where is the Windsor Star editorial board or Gord Henderson demanding answers to these questions as they did with former Mayor Mike Hurst on his financial wheelings and dealings?
Finally, what happens if Infrastructure Ontario denies the loan application, as they should, in my opinion? Are we legally on the hook to Detroit, particularly if they approve a letter of intent?
Councillors, you clearly now have the answers. It’s time to share the information with residents.
Residents will not tolerate any more secret negotiations.
If it’s such a great deal for Windsor, share the great news in special public meeting – we certainly need some.
Filed under: Uncategorized
great set of facts, Chris. It shows how little the public has been told so far, and that this whole deal makes NO SENSE at all given the facts that are available to the public.
Our mayor and council need to let us know what they perceive to be any kind of good reason for this deal to go through.
Maybe we need the RCMP investigations branch called in.
With all the secrecy and movement of assets towards a private
corporation, this amount of money exchange just begs to be investigated. Also they are going to pick people for the new corporation, not elect them.
Maybe that is what Sutts is so afraid of being sued for. The money still has to be accounted for and with different numbers being thrown around it seems the public hasn’t been kept in the light of things. There’s an lot of misdirection going on. Sorry, unintended mistakes.(politically correct assumption)
It’s quite ironic Ms. Pupatello and Dwight have kept quiet on this deal. You would think that if it was a century deal that they would be in negotiations.
The automakers didn’t get that much and they were having major photo ops.
An old, savvy businessman that I have known for years stated to me long ago that if a deal is really, really good there will be leaks to the public about it that no one can contain.
If a deal is on shaky ground and not god for most it is usually wrapped in a suit of armour and no on will give any answers. This businessman is very well respected and has done very good for himself throughout his long life. Do you believe him or do you as a reader continue to believe what city hall is shovelling? I know where I would place my bets.
It takes a lot of time for city council to get into their ballet toe shoes, so that they will be better able to toe the line in Eddie’s “The Voice,” dance of esplaining “The Deal of the Century,” to us. It will just be so choreographed, it will put the musical “A Chorus LIne” to shame. I heard that Eddie has called in a voice coach and singing teacher to instruct council in how to sing his and the deal’s praises, much like the wailing chorus in a Greek tragedy.
There must be something not quite illegal going on but not quite right, if Sutts doesn’t want to be sued, in my thinking. If you are thinking of consequences of your actions at that level, then what might be going on might not be that kosher to my thinking. It is curious that a lawyer or any lawyer would think out loud like that.