Friday, October 26, 2007

CityWest opens the lines for better communication




With competition on the way and the grumbling from the locals getting a little bit louder each week, CityWest the city’s communications provider has decided that the time has come for a little get together.

They plan on offering a chance for its shareholders (the public) to find out what’s happening with their investment and to see how things shape up on the financial statements.

After having missed a few opportunities to hold their required annual meeting, the Prince Rupert based telecommunications company, has set December 5th as the date for its first general meeting in a couple of years.

Among the possible topics of conversation at the 7 pm meeting at the Crest, will be the debt load of CityWest, after borrowing 23 million in 2005 for its purchase of Monarch Cablevision and another 6.9 million in 2006 for reasons which were not specified at the annoucement.

There are possibly some questions to be asked about management and consultancy fees associated with the company, fees which reached up to 600,000 dollars over the last few years.

And participants may wish to inquire as to why CityWest has been a little light the last few years, when it comes to the annual dividend payment to the city of Prince Rupert.

Mayor Herb Pond said the city has been encouraging the company to hold its annual information meeting, which considering the fact that it’s actually a legal requirement, was quite helpful of the city.

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City representatives will be on hand as well as CityWest officials at the December 5th meeting at the Crest.

The Daily News featured this new dedication to openness and transparency, as the front page story in Friday’s paper.

Perhaps they could make use of the night to circle a date on the calendar for next years meeting, just as a reminder in case they forget about the annual sessions of togetherness.

CityWest invites public to quiz its board, hear plans
By Leanne Ritchie
The Daily News
Friday, October 26, 2007
Pages one and three

CityWest will be holding its first public information meeting Wed., Dec. 5 at 7 p.m. at the Crest.
"We are going to give people an overview of what we have been up to. Our financial statements are posted on our website so they are all there but if there's any question about any of that, we will talk about that," said Rob Brown, general manager of CityWest.

CityWest was incorporated in the fall of 2005, taking it from a department of the city of Prince Rupert to an incorporated company, with the city as its sole shareholder.
Although the company has been incorporated for nearly two years, this will be the first time it has held a public session.

"We will give an overview of our operation ... our different sections, cell, fibre, telephone cable and leave it open to questions from the public," said Brown.

The company's shareholder, the city of Prince Rupert, as well as members of the board of directors, will also be in attendance.

CityWest has undergone rapid expansion since its incorporation, in anticipation of other companies, such as Rogers, entering the telecommunications market in the Northwest.
In 2005, the company borrowed $23.3 million to purchase Monarch Cable, and it now offers cable television services throughout the Northwest.

In 2006, CityWest installed a $6 million fibre link to Terrace along Highway 16 to enhance the company's services.

Prince Rupert Mayor Herb Pond said the city has been encouraging the company to hold its annual information meeting.

"There's a legal requirement to hold a annual general meeting that has to be fulfilled but there's also a need to ensure the public is informed at the appropriate level about what it's done and where it is going," said Pond.

According to the company's financials for 2006, in its first full year of operations, CityWest brought in $18.3 million in revenue from its operation and had $15.9 million in expenses. This left the company with a net income of $2.6 million.

CityWest brought in $17.6 million in cash receipts from customers and paid $10.4 million to suppliers and employees.

In 2005, the company borrowed $23.3 million from HSBC for the purchase of Monarch Cable Systems. The loan is expected to be repayed at an interest rate of 5.5 per cent per year for the first two years and then prime plus 0.25 per cent each year after that.

In 2006, CityWest borrowed another $6.9 million, bringing its total loan to $27.2 million. That year, CityWest's financial statement shows the company paying off $1.2 million in long-term debt and $1.4 million in interest.

In 2006, the company also paid a $1 million dividend to the city of Prince Rupert, half of its normal $2 million dividend.

The company's financial statements also note that in 2005, the city itself paid $280,000 in consulting fees related to the purchase of Monarch Cable Systems.

In addition, in 2005 and 2006, CityWest paid a total of $350,000 in management fees to the city of Prince Rupert.

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