Auditor general slams city’s deal with BIXI
June 23, 2011 by admin
Filed under Cash Advances
Updated: Mon Jun. 20 2011 10:45:02 PM
ctvmontreal.ca
MONTREAL Montreal auditor general Jacques Bergeron finally released his report Monday on the Public Bike System Company, or BIXI, and it painted the entire arrangement as one rife with procedural and legal irregularities.
Bergerons report states that from its infancy in 2007, the fast-tracked implementation of the BIXI program was poorly planned, with no feasibility studies, no market research, no cost-benefit analysis, little risk analysis of any kind.
After the city with the blessing of the Ministry of Municipal Affairs approved last month to give BIXI a $37 million loan and acting as guarantor for another $71 million in loans, the city runs the risk losing a significant chunk of that investment.
The general purpose of this report was to ensure that the BIXI project had been managed and controlled in a thorough manner, Bergerons report concludes. However, we found that several basic rules of management were neglected or circumvented. Moreover, the citys passivity coupled with the loose actions of the SCSM (Stationnement de Montreal) and PBSC boards of directors raise several questions in many respects.
The significant amounts of money involved, the need to protect the citys corporate image, the potential losses to eventually be assumed by it, its involvement in the financing of both companies and the risks it entails, added to the questionable accounting treatments, the weaknesses found with regard to control and the lack of transparency, are all factors that require corrective measures be taken as soon as possible.
Furthermore, the decision to have Stationnement de Montreal the citys parking authority, or SCSM manage BIXI also resided in a legal grey area that both the city and the executive management of SCSM.
The choice to constitute the PBSC, made on Sept. 6, 2007, was a way of doing indirectly what the city and the SCSM could not do directly, Bergerons report states. It should also be noted that the October 2007 decision summary, drafted by the city SITE Direction des transports, made no reference to the creation of such an organization.
In light of what was stated in this section, we conclude that project stakeholders (ie, management, members of the Board of the SCSM, city officers, and Executive Committee) were informed of the legal difficulties related to the implementation of the public self-serve bicycle system.
Stationnement de Montreal announced shortly after the release of Bergerons report that it plans on complying with all its recommendations, that several changes to the parking authoritys governance had already been made since current Chairman of the Board Remi Racine took over in 2010, and that its financial link to BIXI has now ended with all the cash advances repaid.
As BIXI is now a totally independent organization, the management team of Stationnement de Montreal intends to concentrate entirely on accomplishing its mission, Racine said in a statement.
The payments of those cash advances were thanks largely to the loan BIXI received from the city, a loan Bergerons report states was granted at a rate of 2 per cent, one that is far below market value and which, in Bergerons estimation, is essentially a subsidy.
It did not take long for the opposition parties at city hall to jump on the report and Mayor Gerald Tremblays administration.
The real objective of Mr. Tremblay by launching his project in 2008 and 2009 was that the bicycles be on the street before the election of 2009, said Projet Montreal Leader Richard Bergeron. That was the only objective. It will cost what it will cost. We will do it in any way to be sure that the bicycles will be on the street, because I want to win my election of 2009. And he succeeded. Mr. Tremblay succeeded. He was re-elected. Congratulations, Mr. Tremblay.
Vision Montreal Leader Louise Harel sang much the same tune, suggesting council was misled when it was asked to vote last month on the loans.
Under false representations, the municipal council was asked to vote on an agreement to finance the deficit-ridden operations of the Public Bike System Company for $37 million, she said in a statement. Vision Montreal is calling on the management of BIXI and the city of Montreals director of finance to answer the questions of the citys elected officials so that we can really know the costs of BIXI in Montreal. If BIXI needs to become a municipal service like any other, it is essential that we know all the ins and outs of running such a service.
The citys executive committee member in charge of transport, Michel Bissonnette, said the city has amended an article requiring a call for tenders on all accounts above $100,000 and have them approved by the executive committee, a amendment that would have kicked in for the BIXI deal were it in place at the time.
However, PBSC chief executive Roger Plamondon made no apologies and assured that should ongoing contract negotiations with New York, Los Angeles and San Francisco bear fruit Montrealers would be off the hook financially.
Comments are now closed for this story
Mr John.
This whole thing was horse pi– and vinager from the start !!!
I am not surprised at all about the costs and false representations from the original $1000.00 per bike and now the actually $3000.00 per bike and the list goes on. Somebody or bodies at the top has skimmed a hell of a lot off the top.
We are being done in again and as Bill Brownstein said in his interview at noon…It will all be swepted under the table.
How true he is in that statement.
These results of abuse of the public funds for private profit is just another reason that so many who have a chance do cash business under the table.The only way they can get at least some back of the hard earned tax dollars that this of legalized form of stealing takes from us.
MontrealRon
To Morgan FirstMickey Idiots dont run Montreal I said this first time we heard about the bixi bailout, legal crooks and criminals run this city and province. Idiots can `t get anything going. Tremblay lied to get in as mayor, and he and his team have not stop. everything they do according to tremblay, is for the good of the city. There is no cat watching the rats, if the auditor general Jacques Bergeron can `t stop tremblay and his lying S%^T well then what. It `s a joke and until tremblay and his team and all his people are gone, this will not stop. lets face it a 100 million is nothing compared to what we don`t know is reall gone.
Joel
SQ who is currently investigating the city of Montreal, will just add this to the list of questionable activities being investigated, and maybe we will see handcuffs on Mr. Tremlay soon.
Chris
Happy to see the two comments about the Berger Blanc. The protests in front of our out-to-lunch Mayors office continue – although the media seems to care less. I think we need to start protesting him still being in office and constantly messing up and wasting our money! Maybe that will encourage an honest and intelligent person to run in the next election.
Apparently these stupid bikes cost $3,000 each. Between invitro, Bixis and low cost daycare I bet the money belonging to the majority of us is not being used for the things we consider priorities. If someone wants kids, more power to you but why are WE paying for it! And buy your own bike – not too expensive at Canadian Tire! Tremblay – fix what needs fixing for a change (roads, bridges, low cost housing, animal shelter problem) and let people take responsibility for their own personal needs!
Roger Morris
Montreal is becoming a laughing stock fromconstruction corruptio to city corruption now BIXI!
why did the wait for to submit report, this should have been public before lending the millions in a bailout. like our automobile plate says Je me souvein!
Chris
Youve heard of the Boston Tea Party. I wonder what owuld happen if all of the Bixi Bikes were to be tossed into the St-Lawrence? It already feels like my money has wound up there.
Jaycee
@corrupt..I think he did mean cooks as in too many cooks in the kitchen spoil the broth…
Morgan
@firstMickey..When you have only idiots to choose from on a ballot,what are Montreals to do?? You cant vote for someone who isnt running. All the people who would make great mayors, know the problems involved and dont run..
NEXT!
$100 million for 5000 bikes: i.e $20,000 per bike. Corruption achieved. NEXT!
Rodger Brulotte
Hi everyone, I love Montreal and my province and mostly my Country of Canada. I like to ride my bike, but not in the streets. Only in bike paths in parcs. That is safer as several of my own friends and fans have told me they will run me over or any Bixi out there. Now i hear its a complete disaster, millions lost, business losing so much money downtown, as no more parking, just nasty irresponsible Bixi bikers breaking the law. Its a lose lose lose situation. What is happening to our great city? Bixis and Hijabs!
Jay
The subsidies to Bixi are nothing compared to the subsidies to cars.
The federal government gives subsidies to huge oil companies for tar sands exploration, to keep gas cheap to run your car.
The federal government bailed out GM and Chrysler.
The provincial government subsidizes car ownership by spending billions creating and maintaining a network of roads and bridges.
At the local level, cities provide free parking, on public land, for people to store their privately owned cars.
City zoning requires developers to create car parking on new developments, increasing the cost for everyone, whether they have a car or not.
Our taxpayer funded health system pays for those that get sick or die from pollution emitted by cars.
If youre against your tax money going towards Bixi, I assume you oppose the above too?
SB
Good job to the Montreal auditor general Jacques Bergeron for the report!
Corrupt!
@ gene- I think you made a typo- I believe what you wanted to say was CROOKS not cooks!
gene
i would be surprised if anything in montreal went as promised.too many cooks make a mess.the taxes payers pays again.
Aaron
Why should the Goverment provide $37 million if it was poorly planned, with no feasibility studies, no market research, no cost-benefit analysis, little risk analysis of any kind. For what 3 months out of the year. Instead using this money for better transportaion and fixing our roads!! If you go into business without having any sucess and it fails your loss. Tax payers should not have to eat the price because someone had a pipe dream..
Absent
I never imagined Montreal politics to resemble American… yet here it is.
rmsbl4
Here we go a day late and another $71M short, gone out the barn door before it was locked.
Davis
Mayor Tremblay is starting to resemble a very bad little boy who lies about pooping his pants when the stink permeates city hall. Enough of giving the taxpayers the shaft with these scammy little ventures like Bixi when priorities such as a replacement for notorious Berger Blanc animal pound is in order. I dont recall bicycling to be a priority or a real people issue so why is the Mayor perpetuating this hooey-pewey???
Ella-Max
But Mayor Tremblay says there is loads of taxpayers money to fund bankrupt BIXI bikes by giving them loads amounting to over 100 million bucks BUT no money to build a NON-PROFIT ANIMAL SHELTER (costing around 5 million) in Montreal while the city has a contract with the slaughter-house Auschwitz for cats/dogs/animals BERGER BLANC!
Meanwhile 50,000 reported cats/dogs are dumped on the streets of Montreal yearly to fend for themselves. And thats just the reported number..until of course Berger Blanc comes wheeling into town with their death van to drag poor Kitty and Fido off to be cruelly murdered because the city cares more about Tremblays friendship with BIXI bike guy.
firstMickey
What else is new with regards to a Montreal mayor? Wont Montreal forever being paying for the Big OWE? Is it not just par for the course and Montrealers just love their mayors and just love being taxed up the yinyang forever for the brilliant ideas of the mayors who are elected by the citizens of Montreal? Until voters start thinking with their heads and demanding more quality from their mayors, we all pay the big debts for the big ideas of mayors of Montreal.
marty
not a surprise my province is corrupt ! wowwwwww…….
Personal loans are available for any purpose and with our instant personal loan process there will generally never be a
