Bixi’s finances remain obscure

BY ANDY RIGA, THE GAZETTE SEPTEMBER 26, 2013

Source: MontrealGazette

Mark Dolynskyj rents a Bixi bike at a stand on Ste-Catherine St. Wednesday. Bixi's 2012 financial statements have not yet been made public. Photograph by: PHIL CARPENTER, THE GAZETTE, The Gazette

Mark Dolynskyj rents a Bixi bike at a stand on Ste-Catherine St. Wednesday. Bixi’s 2012 financial statements have not yet been made public.
Photograph by: PHIL CARPENTER, THE GAZETTE, The Gazette

Montreal’s auditor general needs at least several more weeks to analyze documents related to the finances of cash-strapped Bixi.

And it could take even longer if city of Montreal auditor general Jacques Bergeron requires more documentation from Bixi, Gilles Corriveau, a spokesperson for Bergeron, said in an interview.

Bergeron has been stymied until recently by delays in obtaining required financial documents from Bixi. Until his work is complete, Bixi’s 2012 financial statements won’t be made public, leaving taxpayers in the dark.

This week, Montreal said Bixi is $42 million in debt, running a deficit of $6.5 million and owed $5 million from cities that bought the system.

Bixi’s 2012 financial results were originally expected to be published early this year.

Alex Norris, a Projet Montréal city councillor, deplored the latest delay, noting “transparency and accountability have been a problem at Bixi from the start.”

He said “it makes no sense at all that an entity surviving on public financing can’t produce its annual financial statements this late into the following year.

“We’ve been promised them over and over again and now we hear that we’re still not going to be getting them – likely not before” the Nov. 3 election.

“This is just wrong. It’s time to shake up senior management at Bixi. We need a new team running Bixi.”

On Monday, the city made public a letter from the city auditor general in which he expressed “serious doubts about Bixi’s ability to continue operations.” That caused alarm among city councillors and Bixi users and sparked speculation Bixi was on the brink of bankruptcy. The city dismissed those concerns. In an email sent to employees this week, Bixi’s interim chief executive said that, “for reasons of priorities and the need for further analysis,” Bixi “will not publish its 2012 results and financial statements.”

In an interview, Philibert said that he was only referring to the short term when he said they will not be published.

He said they will in fact be made public once the auditor general completes his analysis.

“We are co-operating fully with his office to provide all the necessary information,” Philibert said. Bixi’s board “cannot approve the financial statements until the verification has been completed and the statements can be accompanied by the auditor general’s report,” he added.

In the email to employees, Philibert said the expected sale of Bixi’s international operations isn’t going to happen anytime soon.

Separating “the two parts of the company remains, in more or less the long term, a goal to attain,” Philibert wrote.

“Although this process is now suspended, no change in strategy or management is envisaged, and the sales process will eventually be restarted.”

The city, which controls Bixi, disclosed this week that an expected sale of the international part of the business – which sells bike-sharing systems to cities around the world – fell through in June.

Philibert also said it’s still too early to say whether Bixi will eventually “belong to the city of Montreal or to a public or semi-public entity.”

In his email, Philibert said Bixi has hired a restructuring expert, Dominic Devaux, to guide it through current difficulties.

He said Bixi’s cash-flow problems are temporary and will be resolved “in the coming weeks.”

Bixi is a victim of its own success, Philibert said.

“Actions taken to repatriate expertise related to technological tools and applications, as well as large deliveries concentrated in a short period, have affected our liquidity,” he wrote.

The financial problems will “have no impact on this Bixi season (in Montreal),” Philibert wrote.

ariga@montrealgazette.com

Twitter: andyriga

Facebook: AndyRigaMontreal

© Copyright (c) The Montreal Gazette