Windsor As Detroit's Bank

I absolutely refuse to get all upset over this story.

It is so obscene, so ridiculous and so stupid that I cannot believe that anyone is serious. It has to be a joke. No one could actually support something like this from Windsor's perspective. Right Mr. Sutts!

The Detroit Free Press stated at first:

• "A big part of the deficit stems from Kilpatrick’s failed attempt to sell Detroit’s half of the Detroit-Windsor Tunnel to raise $65 million, a proposal Cockrel said is dead. Cockrel said he has spoken with Windsor Mayor Eddie Francis about a modified proposal where the two cities would enter into a joint management agreement."

Then the story changed with this addition:

• “A big part of the deficit stems from Kilpatrick’s failed attempt to sell Detroit’s half of the Detroit-Windsor Tunnel to raise $65 million, a proposal Cockrel said is dead. Cockrel said he has spoken with Windsor Mayor Eddie Francis about a modified proposal where the two cities would enter into a joint management agreement.
  
  Harris [Cockrel’s chief financial officer] said Cockrel has made him his point person on a new tunnel deal with Windsor. Instead of selling Detroit’s half of the tunnel, the Cockrel administration is exploring the idea of selling the rights to the tunnel fare revenue that the city receives -- $700,000 annually -- to Windsor in exchange for a lump-sum payout, the exact amount of which is unknown, Harris said. The City of Detroit would retain ownership of its side of the tunnel, Harris said.”

Then it changed again:

• “Kilpatrick had planned to patch about $65 million of that hole with a deal to lease out Detroit’s stake in the Windsor Tunnel, but that plan never got done. Cockrel, who voted against the tunnel deal as City Council President, confirmed Wednesday that it clearly won’t get done in time to fix last year’s budget."

Very peculiar don’t you think. There may be other changes but I can’t keep up with the Free Press.

And then to top it all off, the Detroit News had a completely different story:

• “Harris said he is recommending Cockrel freeze all non-essential hiring to save cash. And he said he'll try to restructure the deal to sell the city's share of the Detroit-Windsor Tunnel to make it a win for the city, in order to help reduce the deficit even more.”

Obviously there is conversation going on between the two Mayors. Why? Wasn't this all on hold here? Who give the word to permit it to go forward again?

There is a worldwide financial meltdown going on. The major banks and financial houses have to be saved by the Governments around the world. Loans even to some of the best customers are drying up. Why else is the US Federal Reserve Bank taking the drastic steps that they are taking to prevent a complete financial collapse.

Now it is being proposed that Windsor should effectively give the money to Detroit by buying a revenue stream of a declining asset! Is somebody mad? Windsor is not in the lending or factoring business is it. We are not a bank.

If we do want to get into lending or purchasing asset business, I can think of better risks to be blunt than a City like Detroit where its new financial boss states:

• “The city's deficit could range from $100 million to $150 million, the city's new chief financial officer Joe Harris said today.
  
  "The best case is $100 million," Harris said. "I really don't know."

Is Harris trying to bring back the old deal? The new Detroit Mayor had said:

• “Cockrel said he is interested in reopening talks on a deal with Windsor on the Detroit-Windsor Tunnel. But he doesn't want to sell the city's half. Instead, he wants to work out a joint management agreement that could net the city revenue over the long term…”

Perhaps the word “restructure” in the News story means a totally different way of looking at the Tunnel deal.

The way Free Press story talked about the transaction it seems that we would buy a revenue stream. What good is that when the amount is fixed for a dozen years at $700,000 and after that who knows if the Tunnel will still be in business if the DRIC bridge is built.

That should not work for Eddie because Detroit could still sell the Tunnel to a private party who could cement up the Tunnel. Buying the revenue stream does not keep the Tunnel in "Public Hands" as Eddie claims is his interest.

It is a great deal for Detroit because there cannot be a default. We would be buying a revenue stream, whatever that amount is, with no repayment of the amounts given to Detroit. They sell revenues and we buy them. PERIOD! Windsor taxpayers bear all the risks. There are companies that do that...let Detroit go to them for money and not to the City of Windsor who can use the money for our own taxpayer purposes.

Why this desire to help out Detroit? Why this fixation on a Tunnel deal? I don't get it!

Or are we now in the money speculation game as a new business venture? I don't even know if the City is legally able to do this and frankly I'm not going to check right now and see unless someone is serious and wants to do this transaction.

However, dear reader, do not worry. Something is going on. The legal fees that Windsor has to pay for the Tunnel deal are just starting up again. The clock has started to run and the cross-border trips are going to take place.

Am I worried? You bet I am. If this is the kind of deal that people are talking about in this kind of a financial environment then the Ontario Government better start considering whether or not they should take over the operation of this City. I hope the fellow at Standard & Poor's doesn't get a heart attack when he reads the story as well.

However, the real reason I am very upset about all of this is what Gord Henderson signalled in his recent column:

• "Instead of plummeting from $230 million in 2002 to $158 million this year, Windsor's debt would be nearing $300 million, with punishing interest rates crippling the city's capacity to respond, including investing in labour-intensive capital projects."

Investing.... taxpayer money... deals like this ... Councillors...HHHHEEEELLLLPPPP!!!!

One more question finally. Where is Infrastructure Ontario in all of this? On hold still too?