The Municipality of Chatham-Kent is finally closing the door on the unused and oftentimes controversial WDC Rail.
During Monday night's meeting, council received a report detailing the $119,252 that the municipality lost by owning the railway.
Back in 2006, the municipality made a binding agreement to purchase the 26.2-mile track for $4 million from CSX Transportation. Chatham-Kent staff were directed to create a numbered company to own the railway and it was officially purchased in 2013.
Councillor Michael Bondy, who has been outspoken in the past about the municipality selling the railway, said that the original purchase was done with good intentions.
"Well, the initial idea was that if we had some investors, some overseas investors, they would require a rail line to build, like factories, manufacturing, all of which didn't happen. So that was the initial idea. Also, there were a couple of local customers that were using the rail line, some agricultural people and they wanted to keep it," explained Bondy.
However, efforts to find an operator for the track were unsuccessful and it has been non-functional ever since. The track, which runs from Wallaceburg through Dresden to Chatham, was incurring $60,000 in annual expenditures despite the fact that it saw no rail traffic.
On December 9, 2019, council unanimously voted in favour of moving forward with the proposed sale of the rail line, which closed on December 30, 2019. The purchaser of the railway was only identified as a numbered company and no further information was provided regarding their intentions.
The sale of WDC Rail’s assets has generated a gain on the sale of property of $736,703, which goes toward the operating expenses of the municipality since the time of purchase. With net expenses totalling $855,955 since the time of purchase, the overall loss to the municipality of owning WDC Rail is $119,252.
The two largest expenses WDC Rail has accumulated since the time of municipal ownership are interest on the municipal loan and property taxes, both of which were paid to the municipality.
Bondy said although it's unfortunate to lose any money, the $119,252 loss is far less than he was expecting to see.
"That's a good part of this story is, we could have taken a real bath on this. And again, every cent of it is tax money, it's property tax money. You know, to just have it wasted and blown like that obviously is a terrible thing... it's not okay to lose $120,000 on anything, but it could have been worse," he said. "I think that's important that people know that this could have been much worse. It's bad, but it's not as bad as it certainly could have been."
Bondy said he hopes that the WDC saga is a lesson for the municipality and council to be more careful in the future when it comes to making investments.
"We made a big investment of millions of millions of dollars before there was anything concrete," he said. "There were no signed documents, there were no agreements, there were just ideas and maybes and we think this might be a good idea. So I would think before we make these kinds of big investments, we should have concrete, legal plans, not maybes or hypotheticals or that would be a good idea. So we sort of put the cart before the horse and we paid for it."
The overall loss to the Municipality of Chatham-Kent for owning WDC Rail will be funded by the WDC Rail reserve, which was set up in 2013 as a contingency pending the desired sale of WDC Rail. The WDC Rail Reserve will now be closed and the remaining reserve balance of $930,748 will be transferred to the Railway Crossing Reserve to fund any potential railway crossing improvements along the former WDC Rail or other railway corridors.
"It's been a long 10 years or so," said Bondy. "But finally, we made the right decision, which was a motion I made years ago to sell it, which passed. We finally have sold it and now it's gone."