Mayor Sandy Brown Responds to ‘Secretly Sell a Railroad’ Column (September 29) | bloginfo(‘name’); ?> | So Good News
October 6, 2022 · 0 comments
By Sandy Brown
A recent article by local resident Neil Orford presented inaccuracies. The sale of some of the real estate assets of the Orangeville Railway Development Corporation (ORDC) needs further investigation.
In 1995, the Canadian Pacific Railway announced that the 55 km rail line would be abandoned. It was declared surplus and unprofitable by HLR. The Orangeville Town Council felt that purchasing the rail line would continue to support local businesses and attract new industries that could use the rail line.
In the mid-2000s, The Highland Group – proponents of the Mega Quarry in Melancton secured a conditional purchase and sale agreement with the City of Orangeville to purchase the rail line for approximately $8,000,000. During the Due Diligence Period – Highland Group paid the property taxes to the City of Caledon and the Cities of Brampton and Mississauga. This negotiation saved the Orangeville taxpayer more than $1,000,000. Fortunately, Mega Quarry died and so did the conditional deal with The Highland Group.
The 2021 financial statements of publicly owned ORDC were recently presented to the board (Council for the City of Orangeville) where the accumulated losses since the acquisition were pegged at $9,200,000. This loss was paid for by the taxpayers of the City of Orangeville over the past 21 years. The loss would have been in excess of $10,000,000 without The Highland Group’s interim agreement.
The recipients of this $9,200,000 of taxpayer money were 6 multi-billion dollar multinational corporations – four in Orangeville and two in Brampton. Orangeville taxpayers paid approximately $450,000 per year to subsidize the transportation costs of these companies.
During my election campaign in 2018 – I made it abundantly clear that this issue needed to be addressed. Meetings were held in 2019 with the Orangeville Brampton Railway Access Group – the six users of the rail line. We asked them to cover the property taxes and relieve the taxpayers of this ongoing burden. They declined, saying they could not afford to cover these additional costs.
At the end of 2019, CAO Ed Brennan and I met with Mr. Paul Kalia, President of E. Hofmann Plastics. During our meeting I asked Mr. Kalia why his company did not use the railway line to bring in raw materials? His response was “we did a cost analysis and it’s cheaper for us to bring the goods to Guelph by rail – and then load them to Orangeville – than to use your rail line.” For me it was a seminal moment. The moment I realized that the economics of the rail line didn’t work—even for the manufacturers who used it.
On 15 July 2019, a council proposal was made, asking staff to explore the potential of selling the rail line. The proposal was unanimously supported in an open board meeting.
In mid-2020 – one of the members of OBRAG announced that they would no longer use the railway line to carry goods. This placed a further financial burden on the remaining 5 OBRAG members. In December 2020, OBRAG submitted a UNILATERAL termination letter to the City of Orangeville and rail operator GIO – stating that they would no longer use the rail line from December 2021.
In his letter, Mr. Orford made the following allegations
“That the railway line provided an important industrial transport link for 5 companies”. The truth is – they unilaterally decided that trucking was a better option
“That the Credit Valley Explorer and Santa Train were ‘very successful.’ They were heavily subsidized. Private business operators abandoned them when they lost money.
“That ORDC did not hold open public meetings”. That is correct. However, all significant matters were reported through the shareholder (city council) at its ordinary council meetings. The motion to explore the sale was brought to open council on July 15, 2019. By approving the motion, the City Council announced that the collective hemorrhaging of $9,000,000+ of taxpayer dollars was coming to an end.
Mr. Orford suggests we “open the books.” Citizens elected councilors to represent them – including as directors of the ORDC. The losses each year, for 21 years, were captured and reported in the city’s annual budget – in open council. Sales of real estate assets are by their nature private, until a conditional sale agreement becomes firm. There were several properties involved – the City of Mississauga, the City of Brampton, the Town of Caledon and the Region of Peel all purchased part of the Orangeville Brampton Railway – south of the Town of Orangeville boundary.
Mr. Orford suggests “disband the ORDC.” There are legal and statutory reasons why the ORDC must remain intact for the foreseeable future. There are still real estate assets within the city limits owned by ORDC.
Mr Orford suggests “earmarking some of that money – for a full transport study”. Let me refer to the “Metrolinx – 2041 Regional Transportation Plan” which is available online. Nowhere in this study is Orangeville mentioned, except for a potential express bus on Hwy 10. Transportation studies are being undertaken where needed. Currently, the GO bus to Brampton from Orangeville is at less than 50 percent capacity. Commuter train lines are created where there are hundreds of thousands – or – millions of people. OBRY is a Class 2 railway line that can support trains traveling no more than 25 km per hour. There is no reason to consider upgrading this rail line for commuter traffic – not now, and I doubt it, within the next 50 years.
Mr. Orford suggests “earmarking a section for the Orangeville-Shelburne rail trail.” In 2021 I chaired the Dufferin County Infrastructure and Environmental Committee. We authorized an expenditure of $800,000 to improve this rail trail. The citizens of Orangeville contributed significantly to this improvement of infrastructure in Dufferin County – through the payment of property taxes to Dufferin County.
Mr. Orford stated that this council had no vision and no plan for the Orangeville Railway. It is absolutely right. We identified it as an unreasonable financial burden on the taxpayer – and we fixed it. There is no prospect for this rail corridor to carry commuter passengers. If a new transportation technology or population density dictates that provincial and federal governments will invest billions in commuter rail for this area – the corridor remains in government hands.
This $32,000,0000 is a blessing. An economic downturn that puts the city of Orangeville in very good financial shape. I watched the mayoral and vice-mayor debate on Rogers Cable 63 – and many of the registered alderman election platforms this week. There were some good ideas.
Use $9,200,000 in earned taxpayer dollars to freeze taxes over the next 4 years
Invest $9,200,000 in earned taxpayer dollars and use earned income to offset taxes each year at budget time – protect capital
A few candidates suggested holding public meetings to discuss the $32,000,000.
The point is that citizens elect councilors to make budget decisions. The council that I chaired was not tasked with squandering. I’m pretty sure the next council will consider the best use of that money – reducing debt, increasing reserves, expediting infrastructure repairs or improvements, supporting new recreational facilities, supporting affordable housing initiatives – all will be discussed with necessary input from the city. employees and the public.
The sale of the Orangeville Railway was completely transparent and announced in open council
meetings. The financial reporting of the Orangeville Railway Development Corporation may be
followed in the city’s budgets for the past 21 years – completely transparent. Property
The negotiations were held in private, until the conditions were cleared – which is the nature of any real
real estate transaction in Ontario, commercial or residential.
The burden on Orangeville taxpayers has been lessened by the transition to the OPP and
sale of railway assets. I am sure the focus of the next council will be on the business of
Corporation of the Town of Orangeville and maintain a strong financial position for many years to come.