Initially published in the Alliston Herald on February 20, 2009
In advance of my Jan. 30, 2009 column on the dreadful state of New Tecumseth's financial position, the Herald inquired of Mayor Mike MacEachern as to the amount of debt that was "still" owed in relation to the water pipeline. The mayor's response: $31.3 million. A subsequent column referred to the pipeline debt and suggested that the town is poised to walk away from the asset and instead hand it over to a designate of the province.
The mayor evidently did not like the assertion and a series of e-mail communications between he and I followed where he complained that my facts were wrong. In particular, he advised that $4.5 million of the $7.0 million loan (made by the town as its contribution towards the construction of the pipeline) has been repaid.
Now, as you might imagine, I take an assertion that a column is not factual quite seriously. In the circumstances, I invited the mayor to provide me with copies of the financial statements of the New Tecumseth Improvement Society (NTIS), the corporation that was set up for the benefit of New Tecumseth taxpayers and is the formal owner of the pipeline. I advised that if these financial statements confirmed the mayor's claim then I would be quite willing to correct any error.
I regarded this as a reasonable solution given my experience that accountants tend to be a rather diligent and responsible lot and are trained to accurately depict the financial affairs of a corporation at a particular point in time. If any portion of the debt owed by NTIS to the town has been repaid, the NTIS financial statements will absolutely reflect this fact.
The mayor replied to this request and advised that if I wanted the financials I should "get them" and that "...the information is available should you want it." Given that NTIS was set up for the benefit of the residents of our town this response made sense.
Unfortunately, my efforts to obtain the documents from town hall have been met with a stone wall. Notwithstanding the earlier invitation, the town now refuses to provide the financial statements on the basis that they are those of a private corporation.
Well, as you might imagine, refusing to provide relevant documents to a litigation lawyer (especially after being told they are available) is akin to placing a steak in front of a hungry dog. It sets off every warning bell imaginable. Open and transparent it is not!
Several sources have now confirmed that the $31.3 million pipeline debt referred to by the mayor in January 2009, consists of $21.3 million payable to the Ontario Clean Water Agency (OCWA) and $10 million payable to the Town of New Tecumseth (which is more than the $7.0 million identified in the initial column as the town's contribution). In fact, OCWA's portion of the debt ($21.3 million) is specifically referred to in its own financial statements.
I understand from town staff that the most recent financial statements available for NTIS are for 2007. How much do you want to bet that these statements reflect a liability of $10 million to the town? I'll give 100 to one odds to any takers.
If the assertion that $4.5 of the $7 million (which we now know to be $10 million, not $7 million) is no longer payable to the town, I suggest that such news will come as complete shock to NTIS and its accountants - professionals who are duty bound to accurately portray the financial position of NTIS. Indeed, if any part of the $10 million has been paid off, why do the mayor and town staff continue to refer to the total pipeline debt as being $31.3 million?
No matter what manner of internal accounting the town may use to claim some of the $10 million has been repaid, the proof is in the pudding of the NTIS financial statements - documents that the town now refuses to produce.
It's time for the town to end the vague mumbo jumbo and provide a full and complete explanation as to what's going on with the pipeline debt and the asset.
Openness and transparency need to prevail. If there is a plan to "walk" from our $10-million investment the taxpayers are entitled to know.
