City opens ‘phone bill’ to the public

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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