Are you satisfied with how CityWest performed against its original business plan?
This is an interesting question. To be perfectly honest, I have never been given the original business plan. I have only received updates and feedback on how the company is doing, in addition to their future plans, and this information has generally been shared during presentations to council. I have never seen the original business plan document. I understand that the end result was supposed to be a dividend of $2 million per year to the city, and in my time on council this has not occurred. I am not sure if council has ever received a $2 million dollar dividend. So the short answer is no, I am generally not satisfied with CityWest’s overall performance in light of the fact that the original plan was to provide an annual $2 million dollar dividend-that extra $1 million would go a long way towards improving our deficient roads, water and sewer utilities and other important services.
What is your stance on CityWest now that it appears unable to compete effectively with the major Telco’s and is rapidly becoming a major liability to the taxpayers of PR?
Thank you for asking the question. I have given this matter a fair bit of thought. In the end, there is no easy answer. Our town is very split on the issue, and this is because it is not a simple question. There are pros and cons that need to be considered and evaluated when deciding upon the fate of our company. The only certainty in my mind is that we need to carefully consider all city services and operations. This is even more true when we are faced with our current financial difficulties, an ever increasing infrastructure deficit that cannot continue to be put off every year, and given the fact that tax increases are not sustainable. A serious cost benefit analysis needs to be done with all of our city assets, to determine what is the best course of action for the future of our city.
Regarding the “pros” and “cons” one needs to consider the revenue generated for the city by CityWest per year ($1 million dollar dividend= 10% tax increase if it went away). There is also an argument to be made for the many good jobs it provides, especially in a time when good jobs are in short supply.
On the other hand, one must consider the huge amount of capital investment it would take to even catch up with the technology being used by other telco’s, let alone getting ahead of the curve. Technology infrastructure is an important component in a modern day economy, and we want to ensure that we have a solid technological infrastructure for business and industry investment that want to locate in Prince Rupert. We also have to consider that even though divesting ourselves of CityWest would give us money to spend on much needed city infrastructure, that might reduce our need to use debt financing, we would then have to increase taxes to cover the dividend shortfall, which the city counts on to provide services and helps limit tax increases.
As well, no matter how well intentioned one might be in trying to protect jobs for people in the event of another company buying CityWest, we all know that any purchaser would be looking at their own bottom line, and that job losses would be inevitable, as well as possible service cuts. The loss of these jobs in our local economy, which is still hurting, needs to be taken into account. All of these considerations only touch the surface of all the things that must be weighed and evaluated.
Another possibility to consider is whether there any other options when looking at the future of CityWest? Are there only two choices? Perhaps not. One potential option might be to look at the possibility of creating our own municipal or perhaps even regional electrical utility, using CityWest as the billing agent. Much of the management overhead and infrastructure already exists in CityWest and it is entirely possible that we may be able to utilize that existing infrastructure to provide an electrical utility service. Such projects have been successful in other areas of the province, especially in the Okanagan and the Kootenays. Various independent power projects have come to council over the last few years because they know the potential we have for wind and tidal power. Why not be the master of our own destiny for a change, and create an economic opportunity for ourselves, that has the potential to both save the city money and create a new source of revenue? In my mind that is the type of thinking we need to start embracing.
Is the answer to Citywest in diversification? It may be. But I do believe it is a question that needs and deserves an answer, one that I am committed to working with the people of Prince Rupert to determine. It deserves a thorough investigation and discussion so we can make an informed decision for the future of our community. It may not be the answer you were looking for, but hopefully it sheds some light on my thinking about CityWest and indeed how to approach municipal issues.
I know this has been asked before in jest, but in light of what you wrote about diversifying Citywest, Anna, can you answer the following:
Why doesn’t the City buy a KFC franchise and operate it? I hear that’s very profitable. We could also pay more than minimum wage as well.
If it’s ok for the City to be in business competing with private enterprise, why only in one sector? Why not expand to other sectors? A city-owned car wash? A city-owned building supplies operation?
Why not?
If it’s ok for the City to buy a cable company, surely it’s ok for the City to buy a KFC? I’m willing to bet I can get 1000 signatures asking for it, too.
I am new to posting on here but I would like to let everyone know that if you have any questions or concerns please don’t hesitate to contact me. I will try and answer the best that I can. I look forward to hearing from you.[/quote]
Welcome to HTMF Nelson. I have three questions.
What is your stance on CityWest now that it appears unable to compete effectively with the major Telco’s and is rapidly becoming a major liability to the taxpayers of PR?
As one of the original council that spun City Tel off to City West and embarked on a regional expansion without a referendum on the business plan, are you satisfied with how CityWest performed against its original business plan?
3.Would you support releasing the original five year plan now that it is a historical document so the citizens of PR could assess how successful this decision to become a regional telecom was?
BTW…I would love to see the other councillor who was part of that same council answer the same questions. That is if Kathy Bedard cares to make an appearance here.
Thank you[/quote]
What is your stance on CityWest now that it appears unable to compete effectively with the major Telco’s and is rapidly becoming a major liability to the taxpayers of PR?
Unfortunately, this is a difficult question to answer without answering what you are referencing, ie. Telus, Rogers or other. I would be more than happy to answer this and investigating further upon more information being provided.
As one of the original council that spun City Tel off to CityWest and embarked on a regional expansion without a referendum on the business plan, are you satisfied with how CityWest performed against its original business plan?
Yes and no. In hindsight, the original plan at the time seemed to be the only solution to ensure the viability of our locally owned telephone service considering the financial situation of the city of Prince Rupert. However, I have always been of the opinion that a major decision such as this needed more scrutiny by the taxpayer. Although councils are afforded the opportunity through the Alternative approval process, a referendum would have more likely dictated a much clearer picture as to what taxpayers really wanted.
It has become evident since the formation of the Corporation ; there are many unsettling issues such as : aging infrastructure, a shrinking economy, and an evolving competitive market, and a shortfall in transfer payments to the City. With that being said, however, I will work toward the taxpayers’ interest to find a satisfactory solution to this ongoing issue.
Would you support releasing the original five year plan now that it is a historical document so the citizens of PR could assess how successful this decision to become a regional telecom was?
Yes, as a taxpayer myself. I believe that City Hall needs to be more accountable and transparent. We are all owners/stakeholders of CityWest, and therefore we have a huge stake in the operation of the company.
CityWest is a joke…I am tired of literally funding jobs that are no longer providing this community with any sort of advantage as for a telecommunications is concerned…why is the entire tax base of PR being required to basically subsidize these jobs at CityWest, we are 100% being taken to the cleaners, we are paying outrageous prices for subpar service…time for this city to get their head OUT of their own ass in regards to CityWest!
I realize that it has been forever since I have been on this site, but I thought that I would weigh in on the discussions surrounding the saga of Citywest. I realize that this is an extremely sensitive topic, but personally, I think Ms. Ashley answered the questions put forward in the most honest and transparent answer she could.
As many of us we agree, Citywest comes with a great deal of baggage, but the decision was made to sever the relationship with City Hall several years ago. Was it the right decision, maybe not! Should we have sold it to one of our competitors; probably. I think the council of the day was more concerned with holding onto it only asset at a time it was facing potential bankruptcy.
I don’t believe that everyone is happy with lack of service, high cost of funk technology, but we should not forget that Citywest is a Corporation, and therefore, stands alone. It may not pay the dividends to the City that we were led to believe, but at least we are receiving something; and lets further not forget that the taxpayers are not on the hook for the wages or anything related to the company.
So, lets remember that each one of these candidates are putting their name, reputation and long hours to serve our community to the best of their ability, and many of them have our best interest at heart!
[quote=“AnnaA”]
… I understand that the end result was supposed to be a dividend of $2 million per year to the city, and in my time on council this has not occurred. I am not sure if council has ever received a $2 million dollar dividend. So the short answer is no, I am generally not satisfied with CityWest’s overall performance [/quote]
First, thanks for sharing your views about Citywest, a topic that others on council seem unwilling to comment on. It’s also good to read Mr Kinney’s endorsement of greater public discussion and information sharing about Citywest.
The possibility of losing $1 million in dividends and taxes having to be raised 10% to pay for it if Citywest is sold is a scary thought for sure, but does that really square with the facts?
Citywest’s disappointing financial performance is no secret. It paid no dividends in 2005 and 2006, $2 million in 2007, $1 million in 2008, and again in 2009, nothing in 2010, and the council directed the Citywest board to pay $1 million this year (which has presumably been done). Of course, pressure to pay dividends may be part of why it has trouble keeping up with technology, and keeping its customers happy.
That’s a total of $5 million in dividends over 7 years, a little over $700,000 a year. But the City’s investment in Citywest is valued in the 2010 audited financial statements at $36,487,801, after a $20 million write down on its value. That’s about a 1.9% return, which is not that great for a relatively high risk investment. There are risk-free GICs that can beat that, even in these times of low interest rates.
A managed portfolio of that size could likely do considerably better even if managed conservatively. That is what Edmonton did after it sold its telecom, leaving Citywest as the last municipal phone company in western Canada.
Selling Citywest is unlikely to result in a tax increase. If anything that would likely to generate more revenue than what the City has been getting from Citywest.
Another scenario is using funds from the sale of Citywest to retire debt and reduce the city’s debt servicing costs. The 2010 financials report total liabilities of $22,051,104. Yes, the City will have to borrow to pay for replacing aging infrastruture, but there is potential for retiring old debt and having cash to spare, either to invest or to reduce future borrowing requirements and debt servicing costs.
Maybe that’s what the issue comes down to in the end. Yes, a purchaser would look at its own bottom line, but isn’t that what the city council is supposed to be doing as the steward of public funds?
Are substantial public funds tied up in a business to keep people employed? That seems like a rather shakey basis for running what is supposed to be a for profit business. And why those jobs, rather than some others? That’s really a variation of MiG’s question.
As for idea of Citywest diversifying, maybe that is something that Citywest should do, but as a privately owned company with somebody else’s money at risk. It’s hard enough getting a text message delivered sometimes. I’m not sure many of us are that enthusiastic about depending on Citywest for something to happen when we switch on the lights or household applicances.
It’s not quite that straight forward and a business does not stand alone just because it is a corporation. Part of the baggage that Citywest comes with is that it owes the City $22,732,763 as of the end of 2010.
If the city hangs on to Citywest and it goes down the tubes because it can no longer keep up with emerging technology it takes about 40% of the City’s total net worth with it.
And that’s part of the problem. How much did the “we asked around and nobody wanted it” moment cost Citywest and the City? $20 million? How much more in taxes are we all paying because Citywest didn’t think anybody wanted texting or data services?
Are taxpayers willing to gamble such a large asset?
Are the board of directors of Citywest really qualified to call out Citywest management if they have another “we asked around and nobody wanted it” moment? Is the Mayor or Council willing or able to oversee the corporation? If not, it’s time to stop gambling.
You know who the real winners of the Citywest expansion are? The citizens of all those other towns now serviced by CItywest. Prince Rupert taxpayers are indirectly helping provide better service (and competition) to Terrace, Kitimat, Hazelton, etc. Meanwhile Terrace is running a surplus. Not raising taxes.
Citywest service is awesome in Terrace, BTW We all thank you very much.
Although, how would you, as a Prince Rupert taxpayer feel if the City of Prince Rupert bought the KFC franchise in Terrace? (I think I’m really hungry for fried chicken). Think that would be a good idea? Then why is it a good idea for the City of Prince Rupert to own a cable & internet operation in Terrace? Because they’re making money? Sure, but as has been pointed out, you’d make more money with just putting the investment in the bank. And then you wouldn’t have a municipal corporation competing with private enterprise.
What is your stance on CityWest now that it appears unable to compete effectively with the major Telco’s and is rapidly becoming a major liability to the taxpayers of PR?
As one of the original council that spun City Tel off to City West and embarked on a regional expansion without a referendum on the business plan, are you satisfied with how CityWest performed against its original business plan?
3.Would you support releasing the original five year plan now that it is a historical document so the citizens of PR could assess how successful this decision to become a regional telecom was?
BTW…I would love to see the other councillor who was part of that same council answer the same questions. That is if Kathy Bedard cares to make an appearance here.
Thank you
What is your stance on CityWest now that it appears unable to compete effectively with the major Telco’s and is rapidly becoming a major liability to the taxpayers of PR?
Unfortunately, this is a difficult question to answer without answering what you are referencing, ie. Telus, Rogers or other. I would be more than happy to answer this and investigating further upon more information being provided.
As one of the original council that spun City Tel off to CityWest and embarked on a regional expansion without a referendum on the business plan, are you satisfied with how CityWest performed against its original business plan?
Yes and no. In hindsight, the original plan at the time seemed to be the only solution to ensure the viability of our locally owned telephone service considering the financial situation of the city of Prince Rupert. However, I have always been of the opinion that a major decision such as this needed more scrutiny by the taxpayer. Although councils are afforded the opportunity through the Alternative approval process, a referendum would have more likely dictated a much clearer picture as to what taxpayers really wanted.
It has become evident since the formation of the Corporation ; there are many unsettling issues such as : aging infrastructure, a shrinking economy, and an evolving competitive market, and a shortfall in transfer payments to the City. With that being said, however, I will work toward the taxpayers’ interest to find a satisfactory solution to this ongoing issue.
Would you support releasing the original five year plan now that it is a historical document so the citizens of PR could assess how successful this decision to become a regional telecom was?
Yes, as a taxpayer myself. I believe that City Hall needs to be more accountable and transparent. We are all owners/stakeholders of CityWest, and therefore we have a huge stake in the operation of the company.[/quote]
What more information do you need? Was it not available the last 3 years?
[quote=“Council Watch”]I realize that it has been forever since I have been on this site, but I thought that I would weigh in on the discussions surrounding the saga of Citywest. I realize that this is an extremely sensitive topic, but personally, I think Ms. Ashley answered the questions put forward in the most honest and transparent answer she could.
As many of us we agree, Citywest comes with a great deal of baggage, but the decision was made to sever the relationship with City Hall several years ago. Was it the right decision, maybe not! Should we have sold it to one of our competitors; probably. I think the council of the day was more concerned with holding onto it only asset at a time it was facing potential bankruptcy.
I don’t believe that everyone is happy with lack of service, high cost of funk technology, but we should not forget that Citywest is a Corporation, and therefore, stands alone. It may not pay the dividends to the City that we were led to believe, but at least we are receiving something; and lets further not forget that the taxpayers are not on the hook for the wages or anything related to the company.
So, lets remember that each one of these candidates are putting their name, reputation and long hours to serve our community to the best of their ability, and many of them have our best interest at heart!
Thanks for listening[/quote]
Well of course PR taxpayers are not DIRECTLY on the hook for CityWest wages, but INDIRECTLY we 100% are because every single household/business in this town is FORCED to use CityWest services if we want landline/fax/cable or internet services, so the money we are being FORCED to pay for these subpar services, are in turn being used to pay for CityWest’s bloated staff.
Thanks to everyone for sharing their thoughts and comments regarding my answer to the questions posed by Speakuppr. There have been some very good points raised, all of which deserve due consideration. BTravenn’s point about leveraging monies made through divestiture, and using it to decrease our infrastructure deficit is an excellent one. Mig’s point regarding the philosophical question about whether municipalities should be involved in private enterprise is another good topic for discussion. The dissatisfaction of people with CityWest’s ability to provide the service our community expects, in all the various capacities, pointed out by bthedog, is also one that needs to be added to the mix. I don’t dispute any of these points. They are all valid.
We could probably debate the pros and the cons endlessly, which reinforces my point that a thorough cost benefit analysis needs to be done, and that the people of Prince Rupert deserve the opportunity to engage in some meaningful dialogue, something that has been absent from the beginning.
As I have stated before and have demonstrated on other topics, I want people to be informed and have an opportunity to be involved in the decision-making process. As decision makers, we need to have an open mind and consider all the relevant information; only then can an informed decision be made on the issue of CityWest and indeed on many other important issues for our community.
[quote=“AnnaA”]
We could probably debate the pros and the cons endlessly, which reinforces my point that a thorough cost benefit analysis needs to be done, and that the people of Prince Rupert deserve the opportunity to engage in some meaningful dialogue, something that has been absent from the beginning.
As I have stated before and have demonstrated on other topics, I want people to be informed and have an opportunity to be involved in the decision-making process. As decision makers, we need to have an open mind and consider all the relevant information; only then can an informed decision be made on the issue of CityWest and indeed on many other important issues for our community.[/quote]
Anna
Thank you kindly for not ducking the issue and for your thoughtful reply. As a taxpayer I ask no more of my elected officials that to be good stewards of the community assets and ensure that a rigorous cost benefit analysis be done when public monies are invested or at risk as is the case with our investment in CityWest. Your committment to transparency has been shown time and time again and you have continued to earn my vote.
As a councillor, I suggest that you ask for the original five year business plan and an analysis of how this company performed against the plan. I urge you to become as educated as possible about CityWest’s failed strategy so that you will be prepared to make the hard decisions that will be forced on council the longer they stick their head in the sand. In short, it’s time to recognize that our municipal telco which was a crown jewel has now become a white elephant.
[quote=“Speakuppr”]
As a councillor, I suggest that you ask for the original five year business plan and an analysis of how this company performed against the plan. I urge you to become as educated as possible about CityWest’s failed strategy so that you will be prepared to make the hard decisions that will be forced on council the longer they stick their head in the sand. In short, it’s time to recognize that our municipal telco which was a crown jewel has now become a white elephant.[/quote]
That’s one approach. Another is to do a cost-benefit analysis of the city divesting itself of its’ $36.5 million investment in Citywest (by selling or privatizing the business), and the potential for easing the tax burden on homeowners and private businesses by paying down existing debt and reducing the need for future borrowing by investing in much needed infrastructure.
Like Speakuppr I appreciate that you do not duck questions and you have my vote.
[quote=“Speakuppr”]
As a councillor, I suggest that you ask for the original five year business plan and an analysis of how this company performed against the plan. I urge you to become as educated as possible about CityWest’s failed strategy so that you will be prepared to make the hard decisions that will be forced on council the longer they stick their head in the sand. In short, it’s time to recognize that our municipal telco which was a crown jewel has now become a white elephant.[/quote]
That’s one approach. Another is to do a cost-benefit analysis of the city divesting itself of its’ $36.5 million investment in Citywest (by selling or privatizing the business), and the potential for easing the tax burden on homeowners and private businesses by paying down existing debt and reducing the need for future borrowing by investing in much needed infrastructure.
Like Speakuppr I appreciate that you do not duck questions and you have my vote.[/quote]
Thanks BTravenn for the addendum clarifiying what exactly a proper cost benefit analysis should include.
Certainly we need to examine what alternative uses we have for the capital we have tied up in this company. Regrettably, this means looking forward and making hard decisions; something which our city hall seems unable to do until circumstances force them into a corner where there is simply no choices left. The time to get best value for a company is generally when it is profitable.
[quote=“MiG”]I know this has been asked before in jest, but in light of what you wrote about diversifying Citywest, Anna, can you answer the following:
Why doesn’t the City buy a KFC franchise and operate it? I hear that’s very profitable. We could also pay more than minimum wage as well.
If it’s ok for the City to be in business competing with private enterprise, why only in one sector? Why not expand to other sectors? A city-owned car wash? A city-owned building supplies operation?
Why not?
If it’s ok for the City to buy a cable company, surely it’s ok for the City to buy a KFC? I’m willing to bet I can get 1000 signatures asking for it, too.[/quote]
Thanks Mig for pointing out the dangers associated with thinking the way out of the CityWest dilemna is to further expand into areas that the city has no expertise in and are adequeatly served by the private sector.
[quote=“NKinney”] What is your stance on CityWest now that it appears unable to compete effectively with the major Telco’s and is rapidly becoming a major liability to the taxpayers of PR?
Unfortunately, this is a difficult question to answer without answering what you are referencing, ie. Telus, Rogers or other. I would be more than happy to answer this and investigating further upon more information being provided.
As one of the original council that spun City Tel off to CityWest and embarked on a regional expansion without a referendum on the business plan, are you satisfied with how CityWest performed against its original business plan?
Yes and no. In hindsight, the original plan at the time seemed to be the only solution to ensure the viability of our locally owned telephone service considering the financial situation of the city of Prince Rupert. However, I have always been of the opinion that a major decision such as this needed more scrutiny by the taxpayer. Although councils are afforded the opportunity through the Alternative approval process, a referendum would have more likely dictated a much clearer picture as to what taxpayers really wanted.
It has become evident since the formation of the Corporation ; there are many unsettling issues such as : aging infrastructure, a shrinking economy, and an evolving competitive market, and a shortfall in transfer payments to the City. With that being said, however, I will work toward the taxpayers’ interest to find a satisfactory solution to this ongoing issue.
Would you support releasing the original five year plan now that it is a historical document so the citizens of PR could assess how successful this decision to become a regional telecom was?
Yes, as a taxpayer myself. I believe that City Hall needs to be more accountable and transparent. We are all owners/stakeholders of CityWest, and therefore we have a huge stake in the operation of the company.[/quote]
Hi Nelson,
First of all thank you for your response and your service to our community. To be specific about my first question, I was referencing industry trends to declining land line usage, the dramatic upswing in cellular usages and new technologies that permit video /cable services to be delivered wirelessly and of course the ability of CityWest to compete in product line up, reliability and quality of service against Rogers, Telus and Bell. The strategy of reataining it’s wired fanchise and retiring its cellular assets seems at odd with industry, technology and consumer trends and I’m still wondering how CityWest can hope to compete against Telus, Rogers and Bell when Citywest is only a reseller of wireless products and services.
Your response to the second question about the alternative approval process leads me to wonder whether council was split on taking the privatization of CityTel to a referendum or using the alternative approval process. Would you let us know whether you voted against the alternative approval process that was used to push this through without public scrutiny?
In addition to releasing the five year plan would you also support the publication of the financial statements for the CityWest subsidiaries as was once the company’s practice?
Thank you for your response and in fairness I will be posting the same questions on Skeena Institute so that other candidates have a similar opportunity to answer the public’s concerns about CityWest.
Hello everyone, Gabe McLean here. I have posted answers to all the questions I see on htmf at Skeena.org
You can contact me anytime you like , I am in the book.
Hello fellow Prince Rupertites. My name is Judy Carlick-Pearson and I am running for the 2011 Prince Rupert City Council. I am pleased to see all the interest and comments about the upcoming elections in November. This is my first time running for city council, however my education is in political science, criminology and philosophy. I am enthusiastic about running and more excited about all the changes that are going to be taking place in our little city. I would like to invite you to my websites and social media pages so you can get to know me. I would like to first of all say that I am very dedicated to Prince Rupert and other than leaving for my education I have lived her my whole life. Secondly, I have no hidden agendas and other than my campaign team, I have no affiliations to any groups. And last but not least, I am a hard worker, dedicated, authentic and genuine. I will be the voice that bridges the community members and council.
We are working on these sites daily and adding new information to them. The civicvote is having technical difficulties so you wont see the platform information on there until monday.
[quote=“Smurfette”]Looking over some of the names of would be councillors
Christopher Holmes, Farley Stewart, James Kirk, Conrad Lewis, Judy Carlick-Pearson, Rob Vallee, Jennifer Rice and Gabe Mclean join incumbents Nelson Kinney, Anna Ashley, Gina Garon and Joy Thorkelson[/quote]
I will have to get to know a bit about Holmes, Carlick-Pearson, and Rice - don’t know them.
Conrad Lewis - maybe, but I shudder to think what might become should Stewart, Kirk, or McLean be elected. Not the people I want representing or “running” my city. Hell, I wouldn’t want to be in a room alone with them - and I have spent time around all 3 of them.
As for the incumbents, it will depend on what I learn about the others. I am happy to see Payne doesn’t appear to be in the running, or Briglio trying again.[/quote]
Hello mossINmyTOES - Conrad Lewis here, thanks for the “maybe” (very cool). There is a very important job coming on the 19th, please join us at the forum at the PAC and definitely if you, or any other Rupertite see’s me downtown, feel free to stop me and lets talk. Forums such as this and other sites are great. I still like just stopping and answering a few questions here and there. I have stopped in 4 businesses already and spent about 30 - 45 min just talking about Rupert issues. I was so pleased, after our talks, to hear sentiments of support. Local businesses have made post election moves to meet with us already as well. I look forward to addressing contentious issues, but as all may very well know one must be diligent in researching and network with others in order to make a sound decision for us all. References to the right or left at the municipal level is interesting, people who know me, know I take representing a group of people very seriously. I am intrepid, yet at the same time I am very respectful of the needs and wishes of the group I represent. Take the time to read my profile on the Northern View and skeena.org, Brochures will be handed out and I will be around, and hopefully after the 19th I will be around as one of our beautiful Cities, Council member.
We all thank you very much.