Executive Summary:

Background:

In what would be considered normal times, the operation of the Windsor Detroit Tunnel (the “ Tunnel ” ) is considered to be self-sustaining. The Tunnel supports more that 2.1 million passenger and freight trips per year and generates more than $10.1 million in toll revenues annually. This revenue is available to pay for operations, maintenance and capital upgrades and improvements.

Due to the recent border restrictions implemented by both the Canadian and the US federal governments, Windsor Detroit Borderlink Limited ( “ WDBL ” ), The Corporation of the City of Windsor’s (the “City”) wholly owned corporation responsible for the Canadian operations of the Tunnel, as is the case with most toll facilities, has suffered both traffic and revenue declines of 86% and 33% respectively. Traffic declines have sharply reduced revenues and while traffic volumes have leveled off to reflect the permissible essential employees who are crossing the border, there is no certainty as to how long it will take for “normal” traffic levels to return.

Also impact ing the Tunnel’s revenues is the temporary closure of the Tunnel Duty Free Shop. During the closure, WDBL will not be receiving revenue which would otherwise be received as rent.

While the Tunnel forms part of the key infrastructure to maintain essential services, the revenue losses are not sustainable from a cash flow perspective.

WDBL is seeking to establish an open line of credit, to a maximum amount of five million dollars ($5,000,000) from the City, as its sole shareholder, to assist in meeting operations and if necessary capital expenditures as a result of the significant loss in toll revenues that WDBL has experienced and expects over the next 12 months.

At WDBL’s Board meeting held on June 17, 2020 WDBL management received approval to seek this open line of credit from the City. This request is now being presented to City Council for approval.

Discussion:

Members of City Administration have been working with WDBL to review its current cash flow projections and to develop a process for which the open line of credit will be used and accessed.