The Black Rod

The origin of the Usher of the Black Rod goes back to early fourteenth century England . Today, with no royal duties to perform, the Usher knocks on the doors of the House of Commons with the Black Rod at the start of Parliament to summon the members. The rod is a symbol for the authority of debate in the upper house. We of The Black Rod have since 2005, adopted the symbol to knock some sense and the right questions into the heads of Legislators, pundits, and other opinion makers.

Location: Winnipeg, Manitoba, Canada

We are citizen journalists in Winnipeg. When not breaking exclusive stories, we analyze news coverage by the mainstream media and highlight bias, ignorance, incompetence, flawed logic, missed angles and, where warranted, good work. We serve as the only overall news monitors in the province of Manitoba. We do the same with politicians (who require even more monitoring.) EMAIL:

Thursday, January 25, 2018

It's time to call the family to pay their last respects. Manitoba Hydro is done.

A perfect storm is hitting Manitoba Hydro. Insolvency is inevitable. 

Eight months ago we reported that Hydro was on its deathbed, based on the testimony of the utility's own witnesses at a hearing of the Manitoba Public Utilities Board.
Since then the patient's condition has deteriorated rapidly. It's time to call the family to pay their last respects. 

Last week the Bank of Canada announced that the years of low interest rates are officially over. The Bank raised the bank rate by one quarter of one percent. It was the third rate hike within a year.  It's just the start.

The Bank of Canada expects at least one and possibly two more rate hikes in 2018.  That will bring the bank rate to about half of where the Bank wants it to be.  You read that right---half.  The Bank of Canada wants the bank rate to steady out at 2.5 percent, the lower end of a range the Bank feels is right for a healthy economy.

Hydro lawyer Patti Ramage told the PUB last August that Manitoba Hydro "is today borrowing cash for interest annually on the debt being borrowed to build (Bipole III). It's a huge number. We're talking 150 million, 175 million."
 "... we are borrowing money to fund our core Basic operations. That is an unsustainable practice...".

 ".. interest expense will soon consume 70 odd percent of every domestic dollar. 70 percent of every domestic dollar is going to go to interest expense."

"It doesn't take much of an error on the interest rate forecast for that to move up to a hundred percent or more."

 "And we still have a business to run. We have to pay our operating costs, power purchases, water rentals, capital taxes, and by no means least of all, we have to replenish aging infrastructure."

She added: "... Manitoba Hydro has $12 billion to borrow over the next five (5) years. Extremely modest increases in borrowing costs against plan can quickly reduce Manitoba Hydro's income by fifty (50) to even a hundred million dollars per year."   

Doubling the bank rate is hardly an "extremely modest increase in borrowing costs."

Have you been outside lately?  Did you notice something missing? 

Hint: there's hardly any snow.

That's very, very bad news for Hydro.  The PUB was told last year that only two things were keeping Manitoba Hydro from insolvency. One was low interest rates (see above.) The other was high water levels which were bringing Hydro unexpected revenue. No snow, means no water, means no power to sell, means no bonus revenue.

But its worse. The last drought in Manitoba was 14 years ago. Weather cycles call for a drought roughly every 14 years. Uh oh.

Hey, you professional journalists:  Start asking Hydro what they've done with the $1.5- to $2 billion they squeezed out of rate payers following the last drought to be the contingency for the next drought.  

Have they already spent it to prop up their unsustainable NDP megaprojects? Is that why they're already saying they need even greater rate hikes in the event of an inevitable drought?

The world price for oil is climbing again, which is good news for Canada. The Canadian  dollar is a petrocurrency, so every increase in oil prices boosts the value of the Canadian dollar.  But Manitoba sells its hydropower in American dollars. So every rise in the value of Canadian money, means we earn less for our power from our American customers.

You may have read somewhere that the U.S. is about to become the world's biggest exporter of oil and natural gas.  The reason is fracking. You know, fracking, the process that Manitoba Hydro "experts" dismissed ten years ago as a fad that wouldn't affect the prices Hydro was going to get from the Yankee buyers of our green energy.

Today, the price they pay for hydroelectric power is linked to the price of natural gas which, thanks to fracking, is near all-time lows. 

So,  reading the patient's chart:  

* interest rates up, Hydro's costs way up
* precipitation extremely low, a drought more than likely, sales evaporate, revenue disappears
* the exchange rate rising, profit margin squeezing daily
* fracking boom, hydroelectric sales only at bargain basement prices

And that's without saying a word about rising costs.

On Monday, Manitoba Hydro finally confessed that the cost of the unnecessary Keeyask generating station could climb to $9.9 billion, although they still pretend to believe they can deliver the megaproject at a cost of more than $1 billion less.  Ha ha ha. Injecting levity into a grave situation is not always a good thing.

A company hired by the PUB to review Hydro's runaway dam building projects predicts that at the rate construction is going the Keeyask station will be a year late and will cost $10.5 billion. 

Here's how they arrived at that conclusion: they looked at the amount of work done already at Keeyask and compared it to the amount of work that should be completed on a project of this size at this stage of construction. 

They determined that the contractor is way behind where he should be.  

Unless he can somehow catch up, the project won't be finished for at least a year later than it is scheduled to be ready and costs will keep escalating. They estimate the final cost will be $4 billion more than Hydro's initial claim that the project would cost $6.2 billion (not $6.5 billion as the Winnipeg Free Press reported incorrectly).  Page 23.

We reported Hydro's confession eight months ago that it doesn't have the money to pay for Bipole III, or for Keeyask, and they will need a billion dollars more in revenue within 5 years just to cover the annual borrowing costs of these megaprojects. That's a billion dollars every year more than they raise now.

And that was  determined before the interest rate increases--past, present and future---and the pending drought and the  escalating cost of construction.

The next sound you hear will be the squeal of flatlining as credit rating agencies pull the plug.


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Friday, January 12, 2018

Winnipeg Mayor Brian Bowman - from Bold to Scold

What a start to the new year---Winnipeg's pipsqueak Mayor gets bitch-slapped in public by the Winnipeg police department.  You don't see that every day.

When Brian Bowman rebuked the police service this week  for loaning the police helicopter to a movie company (at a full cost-recovery price) for a short scene he demonstrated his limited grasp of how the city works. 
Just as his city hall colleague Councillor I'M-MARTY-MORANTZ-AND-I'M-A-LAWYER learned to his chagrin two years ago, the police department reports to the police commission, not the mayor or city council.  Morantz had tried to browbeat a senior police official at a committee meeting, but was quickly informed by the police chief of the way things run and the next day ate crow for breakfast, lunch and supper.

Bowman was delivered a hefty helping of his own on Monday when the police responded to his lecture about extending police resources to Hollywood directors. 

"This is what any large city would do if you're trying to attract the film industry here, and we have been very successful, from my understanding, in doing that for a long time...It's simply beyond me why this is an issue," police spokesman Const. Rob Carver told  reporters, according to the CBC.

For the record, the helicopter was flown to La Salle, Manitoba, for a scene in the movie 'The Parts You Lose' being shot there. That's a whopping 20 miles (32 kilometres) past Winnipeg city limits. The helicopter flies at up to 380 kilometres an hour and could respond to any call for service in the city in 5 minutes.

Why the mayor decided to stick his nose where it doesn't belong is a mystery, but an even bigger question is: what happened to Bold Brian, the man who ran for mayor four years ago?

You remember him, don't you?  He was going to be the "cool" mayor.The guy who loved heavy metal bands, who dodged bullets in a bus hijacking in Mexico, who was going to transform Winnipeg into a city of the future with rapid transit extending into every corner of the metropolis and wi-fi on every speedy bus to link everyone to the universe.  How cool is that?

Three years later, he's the scold, the stickler for rules even if he's wrong, the drudge who's only success as a mayor is raising taxes, frontage fees, water rates, bus fares, and speeding tickets. Remember how he was the candidate for mayor who promised lower taxes than SpeNDP candidate Judy Wasylycia-Leis?  You've got to laugh to keep from crying.

With Bowman looking ahead at running for re-election in 2018, the question is how does he rate as a mayor?  To be fair, we're going to look for the answer from the only man who knows---Brian Bowman.

Anyone running for office delivers a barrage of promises for what he or she is going to do if elected, then hopes voters forget most of what was promised. In the case of Brian Bowman, one solemn pledge stands out, and its that alone that delivers the measure of the mayor.

"I'll go as far as I have to, to restore Winnipeggers' trust and faith in city hall," Bowman told the CBC and other news outlets in year-end 2014 interviews. 

His predecessor Sam Katz's final years in office were characterized by scandal---rigged bids on multi-million dollar construction projects, preferential treatment for an investor of the mayor's baseball team, a suspicious purchase of a million dollar house for cash by the mayor from an officer that that investor's business, damning audits, ending with an RCMP investigation into allegations of kickbacks for a sweetheart deal on the construction of a new headquarters for the Winnipeg Police Service.

Winnipeggers were shell-shocked by the time of Bowman's election and welcomed his promise for clean government.  How's he done?

Uh oh.

Bowman's third year in office ended with city hall under a cloud of controversy that's engulfed city councillors, the mayor, the city's CAO, various city administrators (now gone), and a prominent developer. Sound familiar?

It stemmed from a plan to extend a road in Charleswood (called the Sterling Lyon Parkway).  The extension would mean expropriation of 96 homes. The homeowners were surpised to find out about the plan for their properties because public consultations held by the city never mentioned it. Sound familiar?

Of course it does. This is the same city scam that's been run for years. Take the Disraeli Freeway replacement in Sam Katz's day.  

Phony public consultations led neighbouring residents to think they had a choice of one of three options for a new bridge. They were surprised to learn the city actually planned to build a fourth bridge design, costing more than residents approved,  which had been planned for years but had never been made public. 

City officials used the same template in Charleswood under Brian Bowman. 
-  Phony public consultations. 
-  Three options. 
-  A fourth planned all along chosen to go ahead. 

Only they hit a snag. They came up against people who had money. Who could hire lawyers and researchers and planners of their own. And the scheme fell apart in the bright light of day, but not before uncovering documentation suggesting that their own councillor knew about option four but didn't tell them. Councillor Marty Moranz plans to call for a city audit of the project, that's now on hold.

Internal emails also disclosed that the mayor at one point intervened personally to stop the road extension project (temporarily) for an undisclosed reason.  Did his intervention have anything to do with his mother, who lives in the area and who attended at least one public hearing?  You've got to admire a man who loves his mother.

Anything else? There's the Parking Authority which keeps getting caught gouging drivers. Most recently they planned to ticket Saturday parkers who thought the stickers that read "2 hours complimentary parking on Saturday" meant 2 hours free parking.  Oh, no, said the Parking Authority. It obviously meant pay for two hours and get two hours additional for free. What's the matter with people? Can't they understand plain English? 

There's the North End sewage-treatment plant that continues to hemmorhage money.  In 2016 it was estimated to cost almost $800 million. We wish. The current estimate is $1.4 billion and only God knows when it will be completed. Apparently everybody we've hired so far doesn't know what they're doing. Bowman is unperturbed. 

What's a billion? Bold, that's what.

The RCMP investigation into the construction of the Winnipeg Police headquarters has entered its third year.  It has expanded to include construction of the Canada Post Mail Processing Plant near the airport, which was built by the same company involved in the police HQ project.

And remember how Winnipeg wound up building a firehall on land it didn't own on Taylor Avenue in River Heights?  A bylaw passed in 2014 called for expropriation of the land. The city was to receive recommendations early in 2015 on what to pay. 

The city clerk's website says the matter is still "active", which means the city still owns a firehall built on land it doesn't own, three years after Bowman was elected.

Do voters have more trust in city hall than they did before the last mayoral election?


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