Dryden to sell off phone company

The financially beleaguered city of Drydenwill split up and sell off its phone company in an effort to pay down its massive deficit.

City manager Joe van Koeverden said TBaytel made an offer to purchase the mobility portion of the Dryden Municipal Telephone System (DMTS) and council approved the deal,in principle, Wednesday night.

"We've received an offer to take over the mobility customers from us, and a lot of the mobility assets," van Koeverden said.

"We will be walking through that approval process in the next two weeks."

He noted Bell Aliant will purchase the landline service worth $4.5 million from DMTS.

Neither TBaytel nor Dryden officials said they will disclose how much the Thunder Bay-based phone company would pay for the Dryden cellular service. TBaytelCEO Don Campbell said the deal would give customers in Dryden access to coverage, equipment and features they have not had access to up to now. A public meeting about the sale will be held on Sept. 27, with Dryden city council expected to give final approval to the offers in early October.

'The perfect storm'

The move will help the city as it grapples with a crippling $16 million deficit.

Van Koeverden called the situation "the perfect storm" as the amount of property taxes the pulp mill pays keeps going down and the city keeps losing money on the phone company.

Van Koeverden said there's no choice now but to make cuts.

"Seventy per cent of [the] municipal budget is almost fixed with regulations and services [we] must provide," he said.

"So the last 30 per cent of the municipal budget is mainly soft services [like arenas and parks] that [we] have the option of running."

City officials have approached the Ministry of Municipal Affairs for advice a move that Minister Kathleen Wynne said will involve some "very frank conversations between the [municipality] and the folks at the Ministry about how [it] can best deliver services."

Selling the phone company is a positive step, Dryden Mayor Craig Nuttall said.

"We have to do this ourselves," he said. "We certainly can't raise taxes anymore. We just raised taxes 10 per cent we're looking at getting our house in order."

Attracting new industry a challenge

In Ontario, municipalities cannot run a deficit.

Drydens deficit was racked up over the past four years. The city was debt-free at one point, when the mill was fully operational and hadnt experienced major job losses.

Van Koeverden said the major challenge has been trying to attract new industry. But he noted there is very little opportunity for economic growth in the north and that new industry doesn't always work out.

"There's not a lot of smokestacks available for communities," he said.

"There's maybe one or two people coming to the north looking for wood supply and looking to build within those communities. The problem is we haven't been able to replace our industrial base."