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LETTER: Businessman urges council to pursue Hydro One deal 'with vigor'

Entrepreneur makes business case for deal, saying pact will keep taxes down, create well-paying jobs and drive local economy
2018-04-18 orillia power.jpg

OrilliaMatters has received the following letter to the editor from Orillia businessman Jim Dykes who urges Mayor Steve Clarke and City Council to vigorously pursue potential deal with Hydro One:

Letter to Mayor and Council (with a cc to Orillia Matters)

While I am no expert on this subject, I have done my homework to fully try and understand the plan going forward and offer you my opinions.

First of all, let me say I am a huge supporter of this Mayor and Council, including those councillors who do not support this initiative – Intelligent and INFORMED debate is very necessary - that is when democracy is at its finest! Your track record is nothing short of incredible in terms of moving our city forward, planning for the future, undertaking 10+ major initiatives in your short tenure, all the while putting this city in the best financial position we have probably ever seen! We have cash in the bank (lots) and even after some potential short term borrowing to come to fund these initiatives our city will be back in a cash flow surplus by 2020 – Congratulations and thank you. I sincerely hope you will run in the next election.

Here is how I see this deal for Orillia today and for tomorrow. I am looking at this from a business point of view, a tax payers point of view and from a father’s point of view – a father that wishes there would have been opportunities for his children to live work and play here funded by well - paying jobs. There is no doubt in my mind that this is the single biggest opportunity this community has ever had!

This, while complicated on some fronts, it is quite simple, too. We get to sell a huge industrial park at fair market value and generate huge tax revenues for the city (keeping our taxes down!). We get to basically trade $36 million of a relatively high-risk investment (we are currently on the hook to replace aging infrastructure and fund the new capital costs of our growing city). In return we get $36 million in cash that the city has committed to invest (not spend) with the investment proceeds benefiting Orillia residents in perpetuity (keeping our taxes down).  Best of all we get to keep the jewel – our generating company! Trading an investment with risk for one that has no risk is business 101 for me!

The other side is that Orillia gets a $200-$300-million-dollar injection into our community while Hydro 1 builds a massive development, staffs it with many hundreds of people earning wages way beyond our current community average AND starts paying all taxes – no special treatments (that are not offered to all) – just paying their fair share. (Keeping our taxes down).

All of these employees need to buy houses, cars, groceries, restaurant meals … you get the picture. (Driving our local economy). Lots of incremental property taxes, too. (Keeping our taxes down). These huge economic development benefits are dependent on Orillia selling its distribution utility to Hydro One. Hydro One has a policy to only invest in new infrastructure in communities where it owns the electric distribution facility. Despite a misinformation campaign underway in our community, the infrastructure investment is 100% dependent on the distribution deal!

My understanding is that our distribution rate, which is about 20% of the total hydro bill, will NOT go up for 10 years but will in fact actually go down – nice negotiating! This will nicely mitigate any increases in year 11 as we will have missed all the distribution rate increases the rest of Ontario will pay for the next 10 years as well!

Georgian College and Lakehead University already have programs that are training our youth to be able to take advantage of these job opportunities – we can keep them here or let them join mine and so many of my friends’ children to trek down the highway!

This is just my understanding of the top line of what this opportunity represents. The opportunity for those in related businesses, suppliers to the industry etc. will bring more companies to Orillia, creating more jobs. (keeping taxes down)

In summary I encourage you to pursue this opportunity with vigor. To lose this opportunity would be a huge disservice to our citizens today and all future generations.

I know that the usual naysayers attended council on (April 23) as I was there. By and large this is the same group that rallies against all things that will move our city forward. There were a lot of things said that night that I feel were misleading with regard to the total picture. Their views are as valid as mine and, as I said earlier, informed debate is a very good thing. I did not see a lot of balance in their presentations and I would sincerely hope that this mayor and council does not think they represent the majority of the citizens of Orillia who dare to dream of a better tomorrow.

Jim Dykes