Phone is pooched today

Fair points about ownership models Mig, for sure. What I was addressing was those who say CityWest should be sold to a larger telecommunications company in order to keep up to date with technology while CityWest is slower to roll it out as an independent. If CityWest were to go to a coop model or small business or an owner-run model, I imagine a lot of the same complaints that are leveled against the company at the moment would continue to be in place as I don’t think the actual operation of CityWest would change that much.

In this case I would argue the City is not intervening in the economy, they’re dealing with the economy that already exists. As for buying into other businesses, I would argue there’s a difference between spending money to acquire something new and how you deal with something you already own. I certainly wouldn’t advocate the City go out and spend money on a business and pay that business’ employees, cover their benefits or cover that business’ overhead.

For instance, I wouldn’t go out and buy a product that was being discontinued, but if I already owned one that would be different. At the moment the City owns CityWest based on the history of the City- I’m sure if they didn’t they wouldn’t go out and buy a telecommunications company as it wouldn’t make sense. If they sell it to a bigger company I imagine a lot job losses. If CityWest went to a coop model or small business model the jobs would be there, the City would get a one-time infusion of cash but would lose a $1 million annual payment. If they kept CityWest then…

Just throwing it out there.

And totally loving the back and forth. Although to be clear, I don’t see my opinion changing and I’m not trying to change anyone else’s opinion.

If the City were to put the value of Citywest in the bank, it would get more than $1 million per year in interest. And that would be with a GIC. How do you account for when Citywest hasn’t given the City any money? What happened then? Ooops?

Sorry, but that’s exactly what they did. Unless your version of City history includes owning a cable company in Terrace and Kitimat.

If it’s a good idea for the City to buy a telecommunications company, then why is it a bad idea for the City to buy a chain of KFCs? Would you be in favour of the City buying a chain of newspapers?

Fair enough, the City did buy a phone company - for $40,000 back in 1910. But I would argue they didn’t buy a telecommunications company that had operations in Terrace and Kitimat, they already owned a telecommunications company that decided to expand into those markets.

As I said before though, I wouldn’t advocate the City buying any new business. I think buying something and already owning something are two different things.

Um, the City bought a cable company recently. Or were you not aware of that? The cable company that services Terrace, Kitimat and Hazelton. That’s how they “expanded.”

I’m disappointed you didn’t know that.

Well we don’t really know what Citywest employees are paid, now do we? Citywest does not disclose that information. That reporting ended when those jobs were transferred from the City to the company.

Of course a municipal company has essentially the same transparency obligations as the city that owns it, including about the details of salaries and benefits, but then an FOI would be required to get that information. Your affiliate in Burns Lake did some very good work to access information about secretive municipal companies. See Order F09-08 on the OIPC site.

I would add to the cogent arguments already made that about 40% of the City’s net worth is tied up in Citywest. Investing that in new infrastructure would create jobs, particularly if used to lever cost-shared federal/provincial funding, and make the place more attractive for business. Rupert is looking decidedly tired and run down.

Citywest isn’t an expanding company. It’s revenue has declined from $20,827,049 in 2007 to $20,106,195 in 2010. The decline is even greater if inflation is taken into account.

Yes, but the City is not a passive player in the local economy and there is no need to be captive to history. If buying a company to protect jobs would not make sense then keeping a company to protect jobs does not make any more sense.

The $1 million dividend, which by the way has not been paid every year, and is half of what was originally projected, translates into about a 5% annual tax savings. Keeping the dividend and rejecting a one-time cash infusion only makes sense if the working assumption is that the council will or can continue to defer overdue infrastructure replacement.

As your thorough articles on the police and fire facilities explained, those buildings are overdue for replacement or substantial upgrades. If the city does not do something the RCMP at least will correct the situation and send the city an invoice, which will have to be paid. Best estimate is that those two projects and some road upgrades will result in tax increases of about 17.5%. That would be just a start on infrastructure replacement. The referenda on those issues were cancelled, but the issues are not going away.

The benefit of a 5% tax saving resulting from the Citywest dividend is illusory if the City increases taxes several times that amount to catch up with infrastructure replacement.

[quote=“MiG”]Um, the City bought a cable company recently. Or were you not aware of that? The cable company that services Terrace, Kitimat and Hazelton. That’s how they “expanded.”

I’m disappointed you didn’t know that.[/quote]

Did the City of Prince Rupert buy that? Or did CityWest buy that? Need to separate the two a bit more I think.

So it’s not ok for the City to buy a company, but it’s ok for Citywest to do so? I think you’re stretching. The end reault is the same. Taxpayers didn’t own a cable company … then they did.

But i will play along.

You would be ok with Citywest buying a local newspaper chain? Or running a news website?

I’m not going to go back to the early 1900’s but how about to 2008, the year of the 20 million dollar forgiveness.

See city financial statement below, scroll down to page 34.(While heading there, Ignore the stuff about Sunwave, much as it should be an election issue it will only sidetrack us in this case, go back to it at a later date if you wish) … Agenda.pdf

The City record for May of 2009 with the City’s financial statements

In the Telephone Capital Fund statements is an item called Loan forgiveness of 20 million dollars.

Zap that debt is gone, nice kind of gift to the company, though unless the banks are particularly forgiving,he he he, I jest, that debt had to be paid by someone, any ideas who anyone, Bueller, Bueller?

The answer of course is that it while forgiven to CityWest there was still 20 million out there somewhere, someone standing by for their payments, money that the taxpayers I imagine were somehow to cover.

I’m no great shakes at accounting, but it seems that the new and improved CityWest was given a 20 million reset, not a bad business plan but how many of our 2 million, declining to 1 million dividends will we need in the years to come to make up that 20 million dollar gap.

Dividends are supposed to be a reward for investment, but if you need to make up a twenty million dollar forgiveness, it’s not really a dividend, it’s more like just a downpayment on past goodwill.

So lets move to the brave new world ahead, technology for improvement requires capital, what’s to say that another debt will have to be forgiven for that.

If the company is owned by private industry or a co-op as goes the one suggestion, or employee owned for that matter then they would make that decision and suffer the consequences of those decisions, as it is now, the Company through its shareholders (that’s us the taxpayers) have to take such haircuts.

No one asked us back in 2008 if we thought it was ok to offer that debt forgiveness, is there going to be a more transparent option for us in the future?

The thing is we get hung on dividends and jobs and al that but the financials seem built of a financial picture that doesn’t seem to stand on its own strengths.

I wonder if any of the candidates that attended the CityWest information session wondered about any of that.


Did the City of Prince Rupert buy that? Or did CityWest buy that? Need to separate the two a bit more I think.[/quote]

No, that was all orchestrated by the City, and there wasn’t any separation other than on paper. It’s not like the City created Citywest and then the latter on its own initiative, operating autonomously, bought a cable company at some later date. The City was not just a passive shareholder. It was active throughout.

The creation of Citywest as a holding company, the transfer of City Tel’s landline and cell operations from the City to two Citywest subsidiary companies, and the creation of three other subsidiary companies, two to purchase Monarch’s cable businesses here and in Terrace-Kitimat, and another to own the fibre link, all happened through a series related transactions in July-August 2005.

It was a package deal, financed through a shareholder loan from the City, HSBC financing, and financing through the Municipal Finance Authority.

As a follow up to BTravenn’s remembrances of the plan of action on CityWest, something helpful from Victor Kumar who was instrumental back in the day on the purchase plan of the cable assets in question here.

From the Rossland Telegraph:

“Prince Rupert, while I was there, was practically broke. They were in debt and spent their taxes that were then not collectable so it caused a lot of changes. Before I left, I acquired them a big cable company and consolidated it into a utility company that runs telephone and cable company and internet from Houston BC to Prince Rupert. That gave them a substantial revenue other than property taxes. We have to look at revenues from other sources. It’s nice to have a legacy of other revenues to be left.”

Full article for those looking to the past to see the present can be found here:

So, how’s that plan working out, things any different today than when Mr. Kumar intervened in the local economy through the phone company?

Are we gaining “substantial revenue” less 20 million in forgiveness I guess.

Ok, so how we got to where we are has been established, but the fact remains right now the City has a telecommunications company. It doesn’t change my opinion on what should be done with it. So getting a bit back on track with the original opinion, the question becomes what should be done going forward and how should the City proceed?

My original opinion was that selling CityWest to a larger company doesn’t sound like a good plan because the loss of jobs. Best guess is CityWest would be sold for at least $20 million, which is money only the big players could really come up with. CityWest could pay to break ties from the City, but what would be the advantage to them? A small business model wouldn’t necessarily result in the infrastructure upgrades people want in terms of technology. So my thought is keeping the status quo is the way to go.

Would love to hear what others think should be done with CityWest, how much a reasonable price for sale would be or other ideas/solutions the City could/should pursue. We can’t change what has been done in the past, and I think the best way to move forward is an important conversation, given the election is underway and a new council is coming…

[quote=“S_Thomas”] … So getting a bit back on track with the original opinion, the question becomes what should be done going forward and how should the City proceed?

My original opinion was that selling CityWest to a larger company doesn’t sound like a good plan because the loss of jobs. Best guess is CityWest would be sold for at least $20 million, which is money only the big players could really come up with. … So my thought is keeping the status quo is the way to go.

Would love to hear what others think should be done with CityWest … [/quote]

The status quo does not just include jobs at Citywest. A huge civic infrastructure deficit is also part of the status quo. It’s a problem that is not going away. Fail to address that issue and the City risks being unable to deliver essential services reliably, while patch-ups of aging infrastructure continue to be a major expense.

The outgoing council did not come to terms with the infrastructure deficit. That was a serious shortcoming. Towards the end of their term they came up with 17.5% of potential tax increases just to catch up with some of what needs replacing. Then they acknowledged that they had not done enough homework or consultation to take that proposal to the electors.

The new council needs to give high priority to infrastructure replacement. Costs need to be assessed and plans need to be discussed as to how that work will be paid for. Lobbying and applying for federal and provincial funding is only a partial solution. The City lost out on funding because it had not identified matching funds. Stockwell Day politely said as much when he came here to hand out some modest stimulus funding.

When the new council has a handle on costs, it needs to look at all possibilities as to how to pay for the city’s share. It’s not good enough to uncritically assume that the only solution is to raise taxes, which is the approach that the current council took. That’s not fair to taxpayers. The council needs to look at the potential for generating revenue from other sources, including by selling off the City’s substantial investment in Citywest.

The incumbent councillors especially need to demonstrate some humility on these issues rather than pretending that they have everything figured out. Their fiscal track record, after all, isn’t that impressive. This City has high taxes relative to other small cities.

The council should commission an independent analysis that lays out options as to how the infrastructure deficit can be paid for. Everything should be on the table, including Citywest. Those options should be discussed with the citizens through a public consultation process, which is something else this council has not been very good at.

There is a lot of opportunity here for candidates to come up some new ideas and fresh approaches.

Sure, Citywest is maybe worth $20 million today. Was it was worth $40 million a few years ago?

That would have been the time to sell, before the “we asked around and nobody wants digital cellular services” moment.

Maybe you don’t think it’s time to sell now, at $20 million. We’ll wait until it’s worth $10 million?

Has the City has already “forgiven” a $20 million loan? Really? How much in assets did Citywest ‘write off’ because of the cellular gong-show?

They haven’t always provided the $1 million dividend either. I doubt they’ll be able to continue to do so with declining revenue.

If someone actually told you that Citywest is “expanding” then you should be weary of any other ‘speaking points’ they may have provided you. As has been pointed out, Citywest has declining revenue. Not sure if their workforce is “expanding” or not, though.

What’s really ironic, and almost funny, is the self-proclaimed ‘right-wingers’ and ‘pro-business’ folks who are so adamant in defending the City’s ownership of Citywest. Conservatives defending Socialism! The same people who would privatize other government-owned corporations seem to think that Prince Rupert’s ownership of a telecommunications company should never be questioned.

Personally, I wouldn’t mind Citywest being owned by the City if there were some accountability. In a private corporation, whoever was responsible for Citywest’s miserable failure in the cellular market would have been fired.

What happened at Citywest?

Does City Council even know that Citywest has declining revenue, and has essentially lost the cellular market? Probably not, because if they’re being fed the same kinds of talking points as some others have received, then Citywest is actually “expanding.”

We’ve always been at war with Eastasia. I wouldn’t be surprised if Citywest rounded up all the current Council candidates and had them sit through a “re-education” session just in case.

I think quoting Orwell is the left-wing version of Godwin’s Law.


I think quoting Orwell is the left-wing version of Godwin’s Law.[/quote]

Oh I don’t know, there’s an awful lot of Animal Farm in the way things work around here.

[quote=“mcsash”]My god damned city west cell phone is pooched AGAIN…30min delays on the delivery of texts and no calling ability.
Am I expierincing this on my own or is anyone else having issues?

now my freaking HD channels are poooched also…WTF>>>[/quote]

I have a Rogers phone mainly because my son has a Rogers phone in Victoria and we share a family long distance plan.

Tonight he texted me asking me to answer my phone. I received the text but there had been no call. I texted him back telling him that and then dialed him. He received my text but “the cellular customer blah blah blah”. He used his cell to call my landline. I called his cell using my landline. No problems. Using my cell, I called his girlfriend’s Bell phone. No problems. Just a problem between two Rogers phones.

This is not the first time that he has told me that I have not been answering my phone.

Just sayin’ … um=twitter. Regulator to rule on unlimited Internet plans from smaller telecom providers