Angry residents tell council to keep Essex Power shares, clean up finances

John McDonald (left) addresses the public meeting at the Libro Centre April 8.

John McDonald (left) addresses the public meeting at the Libro Centre April 8.

By Ron Giofu

 

Amherstburg residents packed the community room at the Libro Centre last Tuesday night with the majority telling council to forget selling the shares in Essex Power.

Judging by an informal poll of the council members, many are leaning towards keeping the shares as four raised their hands when asked by one of the speakers who were wanting to keep the shares.

The $12 million offer from Entegrus was the focus of the meeting but many residents said if the town is needing to find ways to lower the tax rate, it should come from cuts in the 2014 budget.

Graham Hobbs was the resident who asked the question of council of who wanted to keep the shares. Hobbs also asked the question to the large crowd, with the bulk of the room raising their hands in favour of keeping the shares.

Hobbs said the amount the town generates from dividends is on the rise, publically quoting figures of -$173,000 in 2001 to $328,000 in 2012. His question to council of who wants to keep the shares saw Deputy Mayor Ron Sutherland and councillors Bart DiPasquale, Diane Pouget and Carolyn Davies raise their hands.

John McDonald suggested that, if the offer from Entegrus were to be accepted, the money should be used to replenish reserves and reduce the town’s debt. However, McDonald believed the town should get a second opinion on the issue in addition to the one offered by BDR North America president John McNeil.

“The offer could do us some good but I don’t think we’ve done our due diligence,” said McDonald.

Richard Malott said he has gathered over 1,100 signatures on both online and hard copy petitions from residents opposing selling the Essex Power shares. Malott wondered why Entegrus was willing to purchase the shares, adding the company would want to get their money back. He said there are properties in town that should be sold before the Essex Power shares were touched.

“Why do we want to sell something that makes us money?” Malott asked.

Ken Thrasher said the town has seen large growth in a number of areas and believed the town’s operations were a better place to start looking for money. He believed “administration continues on a path of reckless spending” and that the town needs to “cut where we can cut and slash where we can slash.”

Selling the Essex Power shares would be a “short-sighted answer to our problems,” Thrasher added.

“This is not the answer to the problems in this town at any price, even if it’s $40 million,” said Thrasher.

People are being led to believe the town is faced with a double-digit tax increase unless council votes to sell the Essex Power shares, said local resident Bob Bezaire. He said there is a third choice – “get your house in order and cut costs.”

Bezaire said Windsor reduced its debt while holding the line on taxes but noted that in Amherstburg, a motion to reduce departmental budgets by five per cent was shot down.

Bill Wark, the layperson on the Essex Power board of directors, believed the town should sit down with Essex Power executives and discuss what that company can do for Amherstburg and what the town can gain from Essex Power.

“We would not be here if the town had not been mismanaged over the last ten years,” asserted Holger Kretschmann.

Kretschmann said the town has spent too much on such things as office expenditures compared to surrounding municipalities and said there are other ways the town can cut its budget without selling Essex Power.

“It’s your job, your responsibility to turn this around,” Kretschmann told town council.

Gord Freeman believed there was no long-term strategy for the town’s reserves in the future. He wondered of the town sells its Essex Power shares, “what are we going to sell next? Our parks?”

Freeman added that the town has to cut its costs or face similar financial issues in the future.

Some speakers called for the resignation of Mayor Wayne Hurst while others questioned why the town built the very building they were standing in.

Jennifer Ledout said if that while $12 million “sounds amazing,” the shares are not something the town should be selling.

“Nothing else makes money,” she said. “There’s got to be something we can do instead of selling something that makes money for us.”

“Essex Power is not the cause of the debt and it will not be the solution the debt issues,” added Dave Cozens.

Cozens predicted the town would regret selling the shares and said the town needs to get out of its current financial predicament “without stealing from future generations.”

Stating his belief that Entegrus didn’t offer $12 million “out of the goodness of their hearts,” Cozens told town council “once you sell (the shares), you will never be able to get them back.”

Peter Wirag said he moved to Amherstburg ten years ago after retiring from Enwin. He suggested that if the town wants to make its 14 per cent worth more, more people and businesses need to come to town and draw more load. That wouldn’t happen with a ten per cent tax increase he said.

Pat Warden told council to keep fixed expenses and “get rid of the luxuries.” She said the town was being told to cut its budget.

“Be the leaders we want you to be,” she said.

The opinion not to sell the shares was not unanimous, though.

“I’m all for selling the shares for $12 million,” said Doug Duff.

Duff cited the town’s debt, currently estimated between $40-50 million, and believed the $12 million could make a difference.

“That $12 million is going to go a long way,” he said.

The Entegrus offer was a good one, he added, and encouraged the town not to “waste” the opportunity.

“It’s a utility stock. It’s not a growth stock,” said Duff. “They are giving you a high premium here.”

Following the meeting, Davies said she is a “public power girl” but she believed it was important to listen to all viewpoints. She said council was “digging down” and working to resolve the town’s financial issues.

“We are starting to get them in order,” said Davies.

Davies also believed that while people have a right to be concerned, there shouldn’t be a panic about the town’s financial situation.

“There’s a level of panic that shouldn’t be there,” she said. “Concern? Absolutely.”

Pouget said she was grateful for the amount of people that showed up and she got the message “loud and clear” that they don’t want them to do so. She said in light of the public response at the meeting, town council would be “foolish” to sell the shares.

Pouget added she was disappointed by the initial ten per cent budget increase that was proposed as she believed council didn’t give administration clear direction on how to cut costs.

Hurst said the issue will be further discussed in council meetings and will make a formal decision at the “appropriate time.” He said the poll of the council members was not an official vote and council will still have the opportunity to debate it.

McNeil made the same presentation he had made to town council the previous night, noting his company’s valuation of the town’s 14 per cent stake in Essex Power was $8 million. He said the offer was “an attractive opportunity for the town to move to the next stage.”

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