The Dryden Observer

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City opens ‘phone bill’ to the public

Chris Marchand

Chris Marchand served as editor of the Dryden Observer from August 2009 to April 2018.

By Jon Thompson

The DMTS and Dryden Mobility charges are roaming in and this week, Dryden opened its $29-million phone bill to the public.

The draft documents reveal Bell Alliant purchased the landline services of DMTS for $4.3 million. The sale closed on Jan. 1, 2013, by which time Dryden profited $338,537.

The accrued loss on Dryden Mobility, which was sold to TBayTel for $4 million, amounts to $12,379,063.

Under the impression that Dryden Mobility’s fortunes could turn around, the municipality financed half a decade of millions in annual losses through its line of credit as the company bled the city’s reserves. When the dust settles, creditor debt alone will cost $10 million. It will be repaid through annual payments of $1.4 million for seven years beginning in 2014-2015, which will have to be recovered from the city’s budget.

“It’s obvious that the accumulated deficits of Dryden Mobility are not something we’re ever going to make back by providing a surplus. Our municipal budget is meant to be balanced including all operating expenses,” said city manager Joe van Koeverden.

In 2007, the city was offered $15 million to sell Dryden Mobility but instead invested $25 million in a gamble that has become the lion’s share of a debt nearly equivalent to nearly two years of running the entire city.

Dryden Mobility accumulated a deficit of $8,345,641 in 2012 alone, nearly double the $4,536,809 it sunk in 2011 for a total deficit of $20,724,704. Van Koeverden estimates that deficit will take a quarter of a century to pay down.

The post-closing costs of Dryden Mobility and DMTS alone will cost the city $3,320,510 in 2013, which will be included in the 2013-2014 budget.

Van Koeverden pointed out inexpertise at the political and technological levels perpetrated a “calamity of errors” as the city invested in a product that never could have been profitable in a market of this size. Moreover, he said, both council and administration were warned.

“There wasn’t proper management oversight from this office, to be honest. There was a strong voice in council, which kept telling people this would work. Council continually moved ahead and operated behind closed doors thinking this would eventually turn a corner even though they were provided with reports that said otherwise.”

 

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