February 20, 2005

Taxpayers Betrayed

The contents of the recently published MFP Leasing Report compiled by KPMG, and its astonishing revelations can only be described as disturbing, devastating and disgraceful. It is the ultimate indictment for the blatant mismanagement that was the hallmark of three previous councils and administrations. During those prosperous years the city’s infrastructure deteriorated, debt ballooned in excess of $200 million and taxes increased.

It became increasingly obvious that all was not well when taxpayers were required to pay the Bank Of Hongkong $500,000. This sum represented the taxpayers’ obligation in connection with a virtually secret guarantee for a bank loan to some tennis buffs, to build an indoor tennis facility in Jackson Park. No due diligence was ever applied to this guarantee and quite predictably the group went out of business. Taxpayers were left holding the empty half a million dollar bag. It was a clear precursor of things to come and good reason for the alarm bells to have rung, loud and clear.

Taxpayers looking for the cause of massive debt and escalating taxes were not provided with any meaningful explanation. Consequently, 2600 outraged Taxpayers signed a petition to the Provincial Legislature requesting a forensic audit of the city’s books. The petition was presented to council for their endorsement on the 12th August 2002. Councillor Zuk, sight unseen, stated that she did not believe there were, in fact, 2600 signatures. The council without discussion voted unanimously to deny their support. This was the adversarial climate in city hall that excluded taxpayers from any meaningful participation in local government.

The pigeons have now come home to roost. On page 4 of the KPMG report we find that the lease agreements that were examined, (50 leases remain) will, if sustained, have a detrimental economic impact on the city’s (Taxpayers) finances of $16,450,862.00. Turning to the Regional Landfill Agreement, Page 90 of the report, KPMG states that if the present Lease payment schedule is confirmed there appears to be a further detrimental impact on the city’s (Taxpayers) finances amounting to $226,054,814. Thus, the existing minimum total of negative taxpayer exposure is:

$242,505,676.00

Not included in the above is the continuing $1,500,000 annual waste of tax dollars that is an ongoing Candarel expense involving two empty floors and parking garage subsidy. Too many questions involving the Candarel development remain unanswered. Despite a taxpayer’s request, the final documents relating to that scandal have never been released. There is a gap in the documentation between the signed agreement for a building of 23 floors and the final drastically reduced version. Bearing in mind that the costs were never reduced accordingly, taxpayers are entitled to the full details of this massive scandal.

With all that has transpired it is essential for taxpayers to be given the facts and the identification of the personalities concerned in this litany of negligence. Toronto taxpayers have been a given a judicial enquiry into a smaller but identical business relationship with MFP. Windsor Taxpayers have much more at stake and deserve equal satisfaction.

On behalf of the 2600 petition signatories in particular and the rest of this city’s taxpayers, I call for City Council to initiate an arms length forensic audit of this city’s finances and records for the period commencing with the land acquisition and development of the Candarel mini-high-rise. Nothing less will suffice. Justice needs to be seen to be done.

Al Nelman