CityWest pulls plug on mobile serices; Telus opening in PR

General Forums Prince Rupert Forum
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[quote=“BTravenn”]

You could probably also say it is even less common for a city to “sell” its assets to a corporation, for which it becomes sole shareholder, to later write down a 20 million debt (corporation owed city) which came from the city selling it to the corporation (City sold to Corporation) which the city owns. But I digress :stuck_out_tongue:

[quote=“BTravenn”]
It is hard to know how that was reflected in Citywest’s financial statements because they no longer make that information available on their website.[/quote]

Yep, it is hard to fully quantify the writedown strategy as we have no real insider knowledge. We do not even know the full reasons. Could have been to acquire more finance or partnerships. But we do know the 20 million loan forgiveness/writedown came from money the city acquired by selling its assets to the corporation, for which it is sole owner. It wasn’t like the City lost 20 million dollars. In a simplistic way of describing it, we just cancelled debt we owed ourselves for the benefit of the corporation that we own. I see nothing that really raises alarm bells , although worthy of honest scrutiny. I made you aware in one of my posts that you can use the FOI act to request Citywest documents. Have you done this? I ask because you have expressed concern about it prior.

38

[quote=“MiG”]Hi Dex,

Citywest owed the City $20 million, and the City forgave the loan. Is that the gist of it? Can you put is slower than that, so I can understand better?

Also, can you explain to me, very slowly, because I don’t understand these things, how Citywest went from having a cellphone monopoly to exiting the market? I’d like it if you could explain how previous partnerships helped with this wonderful transformation. It would be great if you could also explain to me why property taxes went up this year after Citywest again announced it wasn’t paying a dividend. Please use small words.

I don’t understand any of this, you see, I’m just a caveman. I fell in some ice and was frozen for thousands of years, and was then thawed out by your scientists. Cellphones are a mystery to me. When I talk on my LTE Telus phone in Prince Rupert, I keep asking myself, “are there demons inside this magic box talking to me?”

Maybe you could explain Citywest’s “we asked around and nobody wants it” mobile strategy. I’ve never understood that. Maybe because I didn’t read it slowly enough.

The slower the explanations the better, thanks.

MiG[/quote]

I apologize if you took offence to my statement. Any insults, degradations, or personal attacks, was not intended.

39

The real outrage that tax payers should be expressing is how the city allowed what was once a crown jewel to become so devalued and uncompetitive. What kind of effective oversights does our city council have over the old boys club that sits as the directors and management of Citywest.

How is that we as taxpayers meekly accepted the counter petition used by the council of Mayor Pond, Councillors Kathy Bedard, Tony Briglio, Nelson Kinney, Paul Kennedy, Jack Rudolph, and Ken Cote when they incorporated the city department known as CityTel as a municipal corporation and purchased a cable company to expand through the Northwest. Did they not in fact expect CityWest would be unable to pay dividends when it took on major debt and expansion plans? How is it that we as taxpayers are no longer able to easily access the financial statements of a company that belongs to us?

Where is the Mayor and council’s leadership to salvage what is left of our investment and divest themselves of a business they obviously don’t understand and which they have proven incapable of governing? The history of CityWest from its inception to today is one of poor governance, poor management, lack of transparency, lack of accountability and declining financial returns for the taxpayer shareholders. It’s time that taxpayers demand full disclosure and for Council to deal with this white elephant before a receiver does.

As for the write down of the company’s assets. The real question to ask is how Kumar and Pond and the council of the day arrived at the valuation of the CityTel’s assets and Skeena Cable. Where are the appraisals, what were the qualifications of the firm’s or individuals that initially valued the Skeena Cable and City Tel assets. A write down of that magnitude coming so soon after the purchase may be due to an initial overvaluation of the acquired assets. Did we overpay for Skeena Cable and if so why?

Does anyone in this town still believe our broke city should own a company operating in a highly competitive industry that our politicians don’t have a clue about? Maybe we’d all be better off if we sold what’s left of CityWest and used the proceeds to pay down our debt or fix our city’s basic infrastructure.

40

[quote=“Dex”]
I apologize if you took offence to my statement. Any insults, degradations, or personal attacks, was not intended.[/quote]

Thanks for this statement.
A note to members.
It is always a good idea to carefully consider the consequences of a post prior to clicking on the submit button.

41

These pretzels are making me thirsty!

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[quote=“Dex”]

Yep, it is hard to fully quantify the writedown strategy as we have no real insider knowledge. We do not even know the full reasons. Could have been to acquire more finance or partnerships. But we do know the 20 million loan forgiveness/writedown came from money the city acquired by selling its assets to the corporation, for which it is sole owner. It wasn’t like the City lost 20 million dollars. In a simplistic way of describing it, we just cancelled debt we owed ourselves for the benefit of the corporation that we own. I see nothing that really raises alarm bells , although worthy of honest scrutiny.[/quote]

The history of Citywest should raise alarm bells. They initially planned to pay $2 million a year in dividends, then revised that to $1 million, then to $500,000, then they stopped paying dividends, and in some years made loan repayments. This year they could not even manage to do that.

That’s a pretty sad track record for a $28,995,763 investment. But some people are evidently okay with that. The council really should look at their options, but that is unlikely to happen.

As for the $20 million write down on the debt in 2008, Speakuppr has an interesting point. Asset value is based on the lesser of market value or cost. The auditor may have concluded that Citywest’s investment in Monarch / Skeena Cable was not worth book value so the loan was written down because the City would be unlikely to recover the full amount if that part of the business was sold off.

In 2008 Citywest shut down the analogue cell system. The equipment value would have been part of what Citytel transferred to Citywest. Equipment depreciates and can become obsolete. The company lost asset value and for that reason as well the original loan amount would no longer represent a realistic estimate of what Citywest was worth. Perhaps value would have been maintained if Citywest had invested its mobile profits in GSM rather than opting for CDMA.

[quote=“Dex”]
I made you aware in one of my posts that you can use the FOI act to request Citywest documents. Have you done this? I ask because you have expressed concern about it prior.[/quote]

You made anyone who cared to read the thread aware of Citywest’s FOI obligations and I agreed with you and provided further information < City West is subject to the Freedom of Information Act >.

An FOI to Citywest to get financial statements should not be necessary. The corporate articles clearly require that every year the company will present its’ financials to the council in an open meeting.

“11.3 Disclosure of Financial Statements
For so long as the City of Prince Rupert, British Columbia, is a shareholder of the Company, the Company will present at an open meeting of the municipal council of the City of Prince Rupert the financial statements of the Company presented to the annual general meeting of the Company and the report of the auditor on those financial statements within 120 days of the Company’s fiscal year end.”

43

Have any City West Cellular customers gone to see about this Telus thing? Any input?

44

I did today. Got my new phone and got a great rate on a 2 year contract. Im happy .

45

Good to hear. I understand we get to port our numbers…so are we free to use that number later if we go elsewhere with our business?

46

Good to know. I will be exploring my options yet again this summer. Does anyone know if Telus has good coverage?

47

I’ve been with Telus for 6 years now great coverage everywhere I’ve been around town. Even get decent coverage at my place out in the sticks.

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I love Telus. I switched when I moved to Terrace, but I get just as good of coverage here, if not better.

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Thanks jesus and bubbasteve735. I will certainly give Telus a look in the summer when my 3 year contract with Rogers is up. :smile:

50

Just one more voice and one more option.
I have been extremely pleased with the Telus coverage in Rupert since I moved from Rogers in May this year…even though I am not officially a direct Telus customer.
Telus owns Koodo (which offers generally lower cost options including pay as you go and no contract options - sorta like the relationship between Bell and Fido) and its’ service is on the Telus system.
I have been extremely pleased with Koodo. When transitioning from my previous carrier they talked me through the process, saved me money by ‘talking me down’ from the more expensive plan that I had selected, and responded honestly to questions. Moreover, updates on usage are easy to read for the non-techie and easy to access using their app.
Koodo’s customer service ratings are consistently high…so anyone thinking of making a change might want to check them out.
Just another option available - and honestly, isn’t it nice to have more options?

51

I would call sight and sound in Terrace they deal with KODO … Kodo uses the Telus network should there

be no problem… possibly may have to use a port ed number but that’s no problem

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Walmart also sells Koodo Phones

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Does anyone remember when this whole City West thing went public or the city became the main shareholder , that this company was supposed to produce the city a 2 million dollar dividend a year ? That ranks right up there with the bridge we were promised lol !!

54

Telus brought in its own employee who works out of the CityWest office selling their cell phones. I’m also curious if this will translate to more Telus workers here or if they’ll contract with CityWest. Anyone?

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[quote=“Soggy”]
Telus brought in its own employee who works out of the CityWest office selling their cell phones. I’m also curious if this will translate to more Telus workers here or if they’ll contract with CityWest. Anyone?[/quote]

That’s interesting. Perhaps Telus prefers to be represented in the local market by their own unionized employees rather than Citywest’s.

56

There will be an actual storefront, called Andres, that will be selling phones. City west has nothing to do with it anymore. And no jobs are being contracted out.