So I just heard the Mayor saying that prince rupert could be Bankrupt in 18 months if nothing is to become of the pulp mill??
selling citywest might help…
Mayor - “Hmm, this might be a problem”
Cat - " Well Jock, you do make 10k more than that mayor from Terrace, maybe you should take a cut."
Mayor - “No, no, that’s not the answer.”
Cat - “Well, what about the 6 million or so more paid to city employees than those of Terrace?”
Mayor - "Huh, what? Uh, oh yeah, that. No, better not touch them either. "
Cat - “Well, what about the citizens. We have squeezed them like there’s no tomorrow, but I’ll bet if push comes to shove we could crank a little tighter and suck them dry.”
Mayer - " Now there is some thinking outside the box. Damn we make a good team."
Cat - “prrrrrrrr”
Start laying off City Workers. Isn’t that what happens when a company has to make cuts. What would happen if our city had to file for bankruptcy ?
The government would take over the city, restructucture but we would be a credit risk! I heard this happened to the city back in the early 50’s!!
How much did it cost the city to buy a cable company again? Anyone? Whose bright idea was that one?
How about the taxpayers of Prince Rupert buy a cable company so that the citizens of Terrace and Kitimat (and all those other places) have better internet? Because if there’s one mandate that the City of Prince Rupert has, it’s to provide great internet service to Terrace and Kitimat.
And to gamble tax dollars competing with Rogers and Telus, of course.
Rather disheartening when one Pulp Mill can kill a town twice. I call into question the economics education of our City Hall.
Too many hands on too many asses - patting this and rubbing that for far too long in this city. Sell CityWest, do whatever it takes to sell Watson Island, cut wages a little on city workers (especially city officials and those in City Hall)and suspend capital projects for 1-3 years. Cease funds providing to special interest groups and local groups in general. Build a park and call it a day.
I listened to the TK interview with His Worship. It sounds like the issue comes down to environmental risks and resulting remediation costs.
The City’s 5 year Financial Plan, which was amended in November 2012, shows that $1,218,000 in revenues from Watson Island for the year (from leasing commercial space for stuffing containers and so on) was anticipated to cover all expenses for maintenance, security and other upkeep. Other than legal fees, which probably comes out of a different budget, the City was not anticipating any net costs. The Plan does not project any revenues and expenses from 2013 on, no doubt because the City expected that the property would have been sold by now.
So the only costs that the Mayor could have been talking about would seem to be unanticipated costs from remediating spills and other environmental issues. Apparently there are ticking time bombs out there. Mention was made in the story of radioactive materials, but that just refers to a number of small sensors; it’s not like there is a reactor that is on the verge of meltdown with catastrophic consequences. Chemicals and leakage thereof would appear to be the main issues.
The Mayor said that the City lacks “clear title” and that poses a problem. But care needs to be taken around those issues. The Court gave the City clear title to the land, which would include the buildings and everything else ‘affixed’ to it. The Court said that Sun Wave could be awarded damages if it proves its’ case, but it is not getting title back. Sun Wave can appeal that, but if title transfers in the meantime there is a Torrens system in this province that guarantees registered title to land. The exceptions are very narrow and there is a fund to compensate former owners. There may not be much risk at all for the purchaser.
My bet would be that the biggest risk is environmental. When buying commercial / industrial property it’s pretty much standard to get an indemnity from the vendor for any remediation costs. The province can make a current owner pay, even if they did not cause the problem. A purchaser would want to pass those costs back to the vendor.
I could see those issues being a problem between the City and the purchaser when trying to conclude a sale, considering that there was a recent toxic spill and there appears to be risk of more problems.
Hindsight is 20/20, but I recall some discussion on this forum about the wisdom of the City laying off the PPWC tradesmen that Sun Wave had out there. From what I recall, they were let go literally the same day as the City took title and replaced with former management employees. The City successfully opposed PPWC’s certification before the BCLRB.
Fair enough, but maybe the union membership of the tradesmen and the fact that they were tradesmen might have been treated as separate issues. Perhaps it would have been a good idea to have some people out there who are experienced at twisting wrenchs, fixing things and generally keeping a place in good order.
Another 20/20 hindsight issue is that the Mayor has acknowledged that Sun Wave owns some ‘chattels’; all of the loose odds and ends that are not affixed to the land, that they bought from the liquidator rather than the receiver. The City’s position has been that Sun Wave could not recover it’s stuff unless it removed the toxic substances as well. In effect, Sun Wave was to vacate the premises and take the environmental risks with them.
The City took a rather hardball position in that regard, at one point even saying that the City should have final say over what Sun Wave owned. That precipitated one of the Court cases. Perhaps the fear was that the City would decide that Sun Wave owned the toxic sludge while the City owned everything that had any resale value.
Maybe it would have been best, though, to let Sun Wave collect together their chattels and clear out, never to be seen again, rather than seeing who would blink first and ending up in a multi-year legal battle that has to make any prospective purchaser more than a little nervous, while in the meantime legal costs are mounting.
Sun Wave is not in the environmental cleanup business. Actually, they do not seem to have been in any real business. The City doubted at the beginning of the Court battle that Sun Wave had enough money to pay their lawyers. The City has been proved wrong in that regard, but perhaps a more realistic assessment would have been that there was little likelihood that Sun Wave would or could clean up all of the environmental hazards. Even if the City wins outright on those issues (which I doubt) it may end up with a dry judgment.
Maybe the toxic sludge issues should have been taken off the table, so that the City would have one less Court case to contend with. And rather than expecting Sun Wave to clean the place up, which was not going to happen anyway, perhaps it would have been more productive for the City to have gone after the Province for help in that regard.
I know that NDPers and Liberals generally hate each other, but maybe those feelings should be set aside for the moment. Both parties have taken the high road on pulp mill clean up issues. The last NDP government set up a fund and the current government has spent money out of that fund, including on Watson Island. Rather than trying to make a legal case that Sun Wave should remove the toxic sludge that it purchased from New Skeena, that was left over from Old Skeena, perhaps the City would have been better off to have made a political case to the government of the day.
At the last (public) meeting the council talked about sending a letter saying that the City wants jurisdiction over fisheries to be transferred from Canada to BC. As a by the way, that would require a constitutional amendment, which means approval by Parliament and seven out of ten provincial legislatures, including Ontario or Quebec < northcoastreview.blogspot.ca/201 … illor.html >. That’s not going to happen anytime soon and perhaps it should not happen at all.
Maybe our civic leaders’ time would be better spent talking about writing letters to the two main parties saying that the City and its’ beleagured taxpayers and disheartened citizens could to with some help at Watson Island, to clean up the place, so that it can be sold, be returned to tax base, and once again contribute to the economic development of the Province.
They city might not be in this predicament if they didn’t provide tax exemptions to new industrial developments…
So whats it going to be Boom or Doom as my Lady would call it ? Another fine mess from city council .
honestly very happy to be moving as of end of May/ Early June. I love the beauty of the city and many of it’s people but very tired of it. City Hall should close a day a week, we won’t miss it and City Tel should of been sold off years ago.
Here’s a link to the TK interview where His Honour projected that in 13 months Prince Rupert could be bankrupt. No solutions or actions are proposed.
bcove.me/zp7d3ytl
North Coast Review offers some thoughts about what our Mayor may be hoping to achieve as a messenger of impending doom.
northcoastreview.blogspot.ca/201 … n-now.html
Perhaps some more conventional civic messaging by the Mayor might be in order, such as making a formal proposal with a cost-benefit analysis as to what could be achieved if the Province provides some support for an environmental clean-up at Watson Island.
And here is a link to a Black Press story yesterday about the possibility of City Hall being shut down an additional day a week to address a projected half million dollar budget shortfall.
thenorthernview.com/news/201255941.html
Councillor Thorkelson says that closing City Hall another day a week cannot happen because that would be “catastrophic” for City staff and that anyone with more than a year until retirement would leave to take jobs elsewhere. Where they would go is not clear, given the job situation here. That aside, does the council think that vacancies for four day a week jobs at City Hall would go unfilled or that those working there now are the only ones who are suitably qualified?
Perhaps the council should focus on the needs of the City as a whole rather than on job protection for some. The same applies to jobs at Citywest.
This is Prince Rumour, but apparently a contributing factor to the deficit crisis is that Citywest’s dividend to the City was only half a million dollars, well below the million that was expected. Citywest no long publishes its’ financial statements on its’ web site, by the way, so it is hard to know what is going on there.
The council seems to be really stuck, incapable of taking any clear actions. They talk about keeping “our body and soul together for another couple of years before next year does come” and “this may be another year where we hold on and try to get by”. But what exactly is it that they are waiting for in a year or two that cancels out the need to make some tough decisions now?
Perhaps this is also why they tend to act more like a lobby group than a local government, focusing on ‘big’ issues where the City has no real say like who should have jurisdiction over fish or should own RTI. Maybe they should focus on issues that they actually control like lobbying the Province for funds and asking whether the investment in Citywest has outlived its’ purposes, truth be told.
Think back to the “we asked around and nobody wanted it” moment for Citywest. That was their digital mobile cellular strategy. They didn’t think anybody really wanted texting or data services on their phones.
Fast forward 5 years later, and Citywest has pretty much surrendered on the cellular front. How much did that mistake cost the city? I don’t know, I can’t figure out how much the ‘write down’ of Citywest cellular assets was, etc. Anyway, that’s a perfect example of the city gambling with tax dollars on the open marketplace, and losing. The person who decided that Prince Rupert citizens really didn’t want texting and data on their phones is responsible for millions in lost revenue to Citywest, in my opinion.
Now ask yourself, how much risk should the City be exposing its assets to? Who is to say that Citywest won’t make another boneheaded decision like that and lose all its cable customers, or its landline customers? What happens if Telus or Rogers turn up the heat a bit? Prince Rupert is out many more millions of dollars.
Is this what you want your tax dollars to be used for? Who decided it was a good idea for the City to buy a cable company in the first place?
What I find ironic is how many so-called right-wing conservatives support the City owning Citywest, and support the City competing with private enterprise. Socialism is ok, as long as prominent BC Liberals are involved, I guess.
[quote=“MiG”]
What I find ironic is how many so-called right-wing conservatives support the City owning Citywest, and support the City competing with private enterprise. Socialism is ok, as long as prominent BC Liberals are involved, I guess.[/quote]
Do you mean politicians or posters on this forum?
The City of Prince Rupert has received 9 million dollars in CityWest dividend income from the 2007-2011 budget. This exceeds “Total Taxes And Grants In Leiu” collected which came under 6.5 million for the same time period. Seems to be a cash cow and a handy asset for the city.
A bit of both. Including the Northern View, some BC Liberal friends of mine, etc.
How much did it cost to buy the cable company? How much did the “nobody wants it” cellular strategy cost them?
9 million over 5 or 6 years sounds great, but if it cost Prince Rupert 50 million to get it, then it doesn’t seem so great.
So, serious questions - how much did Prince Rupert pay for the cable company? Not, sure, someone correct me, but it was a loan to Citywest that the City forgave. And how much did the ‘write-down’ of Citywest cellular assets cost?
You are a good guy, Dex, and I often agree with you, but on this issue your numbers are totally out of whack. We’ll start at the beginning in 2006. The following information comes from the City’s audited financial statements, which are available on their web site.
From 2006 to 2011 Citywest paid $4,300,000 in dividends and management fees to the City (see Note 1). During the same period the City collected $95,088,360 in taxes and grants in lieu (see Note 2).
In 2006 the City’s investment in Citywest was valued at $46,379,323. By 2011 that had declined to $28,036,763.
What is even more concerning is that Citywest does not appear to be consistently profitable. Commencing in 2009 new audit rules were introduced under which public sector organizations must declare the financial results of any wholly owned businesses, whether revenue was received from the business or not. Since then, Citywest’s profit/loss appears on the City’s annual financial statement.
The City’s financial statements show that in 2009 Citywest had a $3,914,133 loss; in 2010 a $3,945,000 loss (adjusted) and in 2011 a $1,370,000 profit. In other words, during the period 2009-2011 Citywest experienced an accumulated loss of $6,489,133.
Unfortunately Citywest no longer publishes its annual financial statements online, so it is near impossible to know what is going on. And for reasons best known to the Mayor and councillors they prefer not to discuss Citywest’s finances in public, other than making vague statements that their own audited financial statements do not support.
Citywest is not a “cash cow” or a “handy asset” for the City. The evidence suggests that it is no longer a significant contributor to the City’s finances and that it is a business that is in decline.
Note 1: [2006] $1,000,000 + [2007] $1,060,000 + [2008] $1,060,000 + [2009] $1,060,000 + [2010] $60,000 + [2011] $60,000. There was a $1,000,000 loan repayment in 2011 but that was not income to the City. Except in 2006 Citywest has paid the City an annual $60,000 ‘management fee’. This information is most clearly presented in the auditor’s Notes to the statements. The 2006 Notes indicate that the City was expecting dividends of $2,000,000 a year.
Note 2: [2006] $13,944,114 + [2007] $16,003,826 + [2008] $15,695,430 + [2009] $17,030,317 + [2010] $15,902,000 + [2011] $16,512,673.
Thanks for the numbers, BTravenn.
Unfortunately, at this point, I doubt any larger competitor would want to buy Citywest. They can acquire Citywest’s customers cheaper, either by direct competition, or by just waiting until the City is bankrupt and forced to sell at pennies on the dollar.
Is that partly because of the forgiven loan for $20 million? If so, where was the referendum on that one? I guess it was the same with the referendum on spending millions to buy a cable company in the first place. How much did that cost the City?
Neither the buying of the cable company, nor forgiving the loan were ever really debated, were they?
How many of us think they’d be more profitable if they’d just STOP telling their customers the problems with using the CityWest service is because the customer’s equipment is the problem, and never their own?
I stayed here through all the economically shit times, and am raising my family in Rupert. I keep imagining this city again like it was in the '80’s but that vision is almost gone. Looks like a bunch of old boys club pricks controlling enterprise with their ass patting and complimentary hand holding which is bringing this city to it’s knees again and again.