In 2014 Cobourg residents paid $32.6 million for electricity, water and street lights, yet all details of the operations of Lakefront Utilities and associated companies are hidden from the residents and even the town’s Council.
Why does the Town of Cobourg Holdings Inc. (Holdco), a private company 99.9% owned by Cobourg taxpayers, that owns Lakefront Utilities not publish their financial statements? Mayor Brocanier has said that since Holdco is a private company, residents have no right to know the number of employees, how much they are paid, or any other details of a company that is 99.9% owned by Cobourg’s taxpayers. We believe that taxpayers, as owners, have a right to know this information.
As a private company, internal issues don’t need to be revealed to taxpayers:
- Cobourg’s 2015 hydro rate increases include covering a $737,547 shortfall as a result of internal mistakes.1
- Mistakenly over-billing an industrial customer for 4 years before refunding them over $1.4 million.2
- Settling a patent infringement lawsuit, No details on the legal costs, how much was paid out, and what happened to the lighting that was purchased.3
Taxpayers are paying more than they have to for electricity and water. Lakefront Utilities generates profits that the Town receives as a dividend. The Town puts the dividend into what is called a “Holdco Reserve” which has been used to fund projects such as the controversial purchase of the Park Theatre for $500,000 and providing the Art Gallery with a $50,000 grant. Instead of paying a dividend to fund questionable projects why not use Lakefront’s profits to reduce our high electricity and water rates?
1 Ontario Energy Board (OEB)
Lakefront Group 1 DVAs Final Audit Report 20141118 Page 4
2 Lakefront Utilities response to OEB
Lakefront IRRs Board Staff 20080129 Pages 89-90