Jonathon Liedtke – OurWindsor.Ca – July 31, 2013
With the Detroit-Windsor Tunnel filing for bankruptcy in an effort to reorganize its debt, many Windsorites have been questioning whether or not The City of Windsor should make an offer to purchase the asset.
Mayor Francis publicly restated an interest in purchasing the tunnel to members of the media last week.
“The City of Windsor’s position has always been that if there was ever a time or an opportunity that the asset would be sold to a private investor that we would be interested in playing a role in terms of having those discussions,” said Francis.
Francis was in talks in 2008, with then Detroit Mayor Kwame Kilpatrick, to purchase the tunnel in an effort to keep it from falling into private hands. That deal eventually fell through due to opposition from members of Detroit City Council.
While the CEO of American Roads, the parent company of the tunnel’s operator, has stated that tolls would not increase as a result of the bankruptcy filing, many have questioned whether or not they eventually would increase as cross-border traffic through the tunnel has been steadily declining.
Todd Langlois, the former Auditor General of The City of Windsor, explained that the decision to purchase the asset wouldn’t be a “straight yes or no answer” and that it would need to be based on facts and assumptions because “due diligence is necessary to build a proper business case.”
“There are a lot of unanswered questions, unknowns, uncertainty & issues to be considered prior to even thinking about whether a purchase is the right answer if an opportunity arises,” said Langlois. “Proper due diligence is essential including a proper financial analysis – can Windsor afford it? Is it self-sustainable? What will the impact be on traffic/tolls once the new bridge is built?”
Langlois explained that other factors needed to be brought into consideration as well, namely; declining traffic, determining what the payback period would be, how the purchase would be financed, whether Federal or Provincial assistance was available, maintenance and infrastructure costs, labour agreements, prior commitments or contingencies, etc.
Langlois explained that the main responsibility of an Auditor General in this purchase most likely would have been to “request a copy of the documents prepared by management that would have assisted them in their decision making process.”
“This may include copies of a risk assessment, business case, impact study, and any other available documents,” said Langlois who noted that assessing the purchase after the fact is generally too late as “the money is left on the table so to speak! For significant [spending], it is best to be proactively involved prior to purchase.”
OurWindsor.ca asked Langlois whether or not an outsourced internal audit function would be as independent as any generic municipal Auditor General’s office, and he resoundingly answered no.
“An AG is governed by municipal law and the law is designed to provide complete independence. An outsourced Internal Audit function is merely performing consulting work,” said Langlois. “They report and are controlled by the very function they are auditing – the only form of independence they may have would come in the form of adhering to the Institute of Internal Auditors (IIA); however, this is a self-regulated organization, not law.”
Brian Masse, the MP for Windsor-West, explained in an exclusive interview with ourWindsor.ca that there was a need for a meeting of all levels of government to get to the table to examine the situation.
“I’m grateful that [Windsor] does have its portion of the tunnel and it gives a base point for operating in a responsible, effective manner for the public,” said Masse who explained that many questions remained unanswered about the potential purchase.
“We would probably be more successful with public ownership of the Detroit side in some capacity, whether it be the Americans or Canadians, [because] it’s going to have a different agenda than a revenue operating agenda either for a private equity firm or a P3 or some business vs. that of being a public crossing for the enhancement of travel, trade, goods and people between our communities,” he said.
Jonathon Liedtke is the Features & Opinion Editor for the University of Windsor Lance Campus/Community Newspaper and a reporter for ourWindsor.ca. As a founding member and current Co-Chair of the Mayor’s Youth Advisory Committee, he is committed to representing, connecting, engaging with and advocating for local youth. He is also a member of Windsor’s “Punk with Horns” band The Nefidovs, and as such, is committed to enhancing and sustaining the arts community.