In March 2003, when the Mayor was Peter Delanty, the Town of Cobourg purchased Northam Industrial park with a loan (mortgage). In March 2018, the full amount of $13,330,027 of this loan was repaid. Over the period to date, the revenue earned has contributed to the Town’s operating and Capital Budgets – details below. Each quarter, treasurer Ian Davey provides a report on the finances and the Q1 2022 report was provided at the CoW meeting on July 11. Included in that report was some financial information not usually provided: the total contribution from the Park to the Town’s finances. Some people have said that the Town should be run like a business and it’s clear that this is already true for the Northam Industrial Park.
Historical Data
- The loan was repaid entirely from the revenue generated by the park without the use of tax dollars.
- In the nineteen years of ownership $16,421,905 has been invested back into the infrastructure of the park
- $8,772,305 has been used to support Town of Cobourg operating and capital projects.
- These amounts are in addition to the repayment in full of the original mortgage in the amount of $13,330,027.
Balance Sheet as of March 31 2022 (Assets and Liabilities)
See Resources below
- The asset section is split between current assets of $6,573,046 and fixed or capital assets of $17,015,727. The bank balance includes an operating balance of $3,829,335 and a capital reserve fund of $2,500,000.
- The liabilities as of March 31, 2022 were $323,314 compared to $642,219 as at December 31, 2021.
- The book value of the equity in the park is $23,265,459 as of March 31, 2022. This value is based on historical accounting results during the period of ownership by the municipality and is not a reflection on the current fair market value for this property. [It’s probably worth a lot more]
Income Statement
- Revenue in 2021 and 2022 annual budget: $4.4M
- Expenses for 2021: $1.52M
- Expenses Budget for 2022: $1.68M
- Net Income for 2021 (after Amortization): $2.1M
- Net Income for 2022 (after Amortization): $2.0M
- Comment: Operating revenues for the first three months of 2022 are slightly ahead of expected budget at 25.36% of the total budgeted revenue for the year. Vacancies within the park continue to remain at low levels with no changes expected throughout the remainder of 2022. Operating and administrative expenses are also tracking within budget for the first three months of the year.
Impact on Cobourg’s 2022 budgets
The 2022 Town of Cobourg Operating and Capital budgets included the amounts of $1,385,300 and $166,764 respectively to be funded from Northam Industrial Park operations. The financial report indicates that this remains a realistic commitment. [$1.55M compared to $2.0M net income].
Resources
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So will our property Taxes go down or will wages go up ??
I was wondering how the likes of yourself would find something to gripe about.
You could say, while they haven’t gone down, perhaps they haven’t gone up as much as they could/would have.
One of the best decisions the Town has ever made!
Best Investment The Town of Cobourg Ever made! $13.330.27 (Paid Off)
Many More Tax Dollars, than the Feds. ever Gave Cobourg?
NOW, the property across from the Post Office below HooLee Gardens, THAT is ANOTHER STORY?
George Taylor
Innuendo should have no place in these blogs. Please explain what you mean by your statement refering to the property north of the Post Office, written in bold letters and found in the last paragraph of your post.
“Innuendo should have no place in these blogs”
You didn’t give that any value when you suggested on this blog that I am a wino.
Definition of innuendo
1
a
: an oblique allusion : HINT, INSINUATION
especially : a veiled or equivocal reflection on character or reputation
if you had PAID any ATTENTION too what i SAID!, I SAID that the Town buying the OLD DEPOT, for 13 Million was the BEST investment they EVER MADE.
now that being said, i guess being a Country Boy, it is NONE OF MY BUSINESS?
Geo.
George Taylor
Please reread my post which followed yours. I simply asked you to clarify your innuendo about the future of the site across from the Post Office. I’ve seen the detailed plan for this multi storey residential building and the way it compensates for otherwise lost public parking. I believe it will be an asset to the Downtown.
Looks like 13. thousand, should be 13 million. Proof read before you send.
SORRY! 13 million.
Infomed
For the sceptics who continually criticize how the finances of our Town are managed, one can add the creation of the regilated holding company Lakefront Utilities Inc and it’s non-regulted service company Lakefront Utiliy Services Inc (LUSI).
“regilated” and “non-regulted” Sounds like Biden vocabulary.
Wally
The letters “u” and “I” are next to eachother on the keyboard and with a dry macula in oth eyes I do make these kinds of typos. As always I appreciate your help in clearing up these mistakes.
Have you considered proof reading prior to posting?
Keith Oliver,
Holdco, LUI & LUSI….Really?
First off, the holding company is “Holdco” and it is unregulated as it has no operations and any revenue is passive. Holdco owns two subsidiaries, LUI and LUSI. Holdco is 99.99% owned by Cobourg with Cramahe as a minority shareholder. The Holdco group was created in 2000 in response to the Ontario government’s direction to deregulate the municipal utility commissions (specifically the electrical utilities).
Lakefront Utilities Inc (LUI) is not a holding company and most of its revenue is regulated. It provides electrical distribution services to Cobourg and some nearby municipalities.
Lakefront Utilities Services Inc (LUSI) is an unregulated subsidiary of Holdco. It provides management and staffing to Holdco and LUI. It also operates Waterworks (Cobourg’s water supply) under contract to the Town. LUSI previously ran Cramahe’s municipal water system, but lost that contract.
Over the years the Holdco Group has participated in some notable business “failures”:
-Street Lights: Sylvania patent suit. Settlement amount undisclosed
-Water heater rental: No published financials. Business “sold”
-Lakefront Generation: $65K in startup funds. No published financials reporting of ongoing operations and performance. LG was “merged” into LUSI. No reporting of the final losses.
-LUI had to repay a large industrial customer about $1.4M including interest related to over-billing errors.
-Waterworks (the Town) had to repay a local small business $10K on behalf of water usage overbilling by LUSI
Continued in part 2
Part 2 Holdco, LUI, LUSI
In 2016, LUI applied to the OEB (Ontario Energy Board) to increase its rates. At the hearing, several intervenors including the CTA were successful in getting LUI’s requested rate increase reduced by about 28%
In 2021 LUI applied for a rate increase. Several intervenors including the CTA and the Northumberland Hills Hospital attended the hearing.
LUI’s “asks” included:
-a paper billing fee of $2 per month
-a $15 fee for each additional invoice copy requested by a customer
-a standby charge for customers (such as NHH and School boards) that used alternative (solar, co-gen) sources to supply most of their electrical power.
-the recovery of about $1.2M plus interest in unbilled electricity charges resulting from a LUI error. The plan was to bill customers for this “underbilling”, plus interest over a two year period.
Each of these “asks” was successfully challenged by the intervenors. All were withdrawn by LUI except for the underbilling. The intervenors proposed that LUI agree to recover the underbilling from customers, without interest, over a 5 year period. This was accepted by LUI and the OEB
Bryan
The point of my post was that the Town instead of a for-profit business remains in control of vital services. We’ve seen the result of private ownrship of vital services in the relationship between the substandard condition of long distance transmission lines by Pacific Gas and Electric and the California wild fires in 2019 (in which PGE pleaded guilty to 84 cases of involuntary man-slaughter).
Impossible to compare the results of private vrs public ownership of Cobourg’s services but I would rather have HOLDCO responsible to the community than a private enterprise responsible to share holders and/or other investors.
Keith,
It is your opinion then, based on no apparent facts, that Port Hope’s sale of their electrical utility (as well as Whitby, Ajax and Pickering) to Elexicon Energy (formerly Veridian) was a bad decision.
Also, you wrote “…I would rather have HOLDCO responsible to the community than a private enterprise responsible to share holders and/or other investors.,,,”
Why? How is that “better”?
Also, Holdco is just a holding company and not the service provider.
Keith, your post is somewhat unclear. If you are saying that LUI/LUSI/Holdco are Cobourg’s financial and management disasters that SHOULD be criticized, I agree!
To Bryan’s list of their misdeeds I would add the replacement of all water meters in Cobourg. Why replace thousands of meters with many years of remaining life? Oh, I understand, they had to be replaced to give a sweetheart deal to a favoured vendor with no consideration of alternatives, no tender and everything justified with a seriously flawed economic analysis.
Ken
What “sweetheart deal”? Were metes not replaced over a period of time so that they could be read by satilite instead of manually?
Keith,
The deal was that about 4,000 water meters were purchased for $2.3M on the basis that they were old and provided inaccurate (low) measurement of the water used resulting in lost revenue. Prior to the purchase, LUSI did not provide any analysis bases on the meters replaced to date that supported the claim that replacing the water meters would result in more revenue. Similarly, no analysis of usage/billing data from the “new” meters has been provided that demonstrates that the “old” meters significantly under measured water usage.
As to meter reading, the new smart meters are supposed to transmit usage data to a receiver network installed throughout Cobourg. Once again, there has been no analysis to show that this was cost effective
Satellite (not satilite), where did this idea come from?
In addition to Bryan’s comments on water meters:
I spent many hours documenting these issues and more and then presented a summary in a delegation to Cobourg Council. Clr. Darling (the one responsible) dismissed all concerns and convinced the others to approve the needless expenditure favoured by staff “subject matter experts”. Does anyone wonder why Cobourg’s taxes are high?
“…on the basis that they were old and provided inaccurate (low) measurement…” should be “… on the basis that the old meters provided inaccurate (low) measurement…”
Sorry for the failed proof read