Post by ferryfast admin on Jan 19, 2006 11:35:51 GMT -5
Future of lease with Toronto remains up in air
Gary Craig
Staff writer
Democrat & Chronicle
www.democratandchronicle.com/
(January 18, 2006) — Who knew what when?
That question has been fodder for media, politicos and talk show hosts ever since officials with the new City Hall administration announced last week that they had "discovered" a 14-year lease between the Toronto Port Authority and the Rochester Ferry Co. LLC.
At his news conference Tuesday, former Mayor William A. Johnson Jr. reiterated what officials with his administration and members of the ferry board said last week: The pact was no secret and was amply documented in public actions by the ferry board.
"One matter that has been widely, and erroneously, reported is a 'secret' lease with the Toronto Port Authority," Johnson said.
But, when it comes to the lease for Toronto terminal space, the most pressing question for the new City Hall administration is not who knew what when. Instead, the question is: Can the city get out from under this 14-year commitment?
And that question might not be answered for months to come. The contract remains in effect as long as the Rochester Ferry Co. exists. And the ferry company, which owns the Spirit of Ontario ferry, needs to stay in existence at least until the vessel is sold.
"They own the boat," Corporation Counsel Thomas Richards said of the Rochester Ferry Co. "They have the contracts. ... The city does not."
Under the 67-page lease contract, the city does not guarantee any outstanding debts with the Toronto Port Authority.
That leaves open the question of liability for any unpaid bills. Former City Corporation Counsel Linda Kingsley said last week that, under the contract, the city should not be responsible for any future years of payments once the ferry company is dissolved.
But current city officials aren't so sure, and say they plan to meet with Toronto Port Authority officials to determine the future of the lease agreement.
Ken Lundy, the engineering and operations chief for the Toronto Port Authority, said the ferry company is current on its payments. Under the contract, the company pays $62,500 (Canadian) each quarter — adding up to a $250,000 annual commitment.
"Nobody's in default in this deal," Lundy said. "They made their first quarterly payment. There's nothing in arrears."
'Nothing nefarious'
On June 13, the Rochester Ferry Co., or RFC, met, and one of the key issues under discussion was the lease agreement, minutes show. The lease was set to start June 28 and last 14 years, according to the minutes. The contract includes provisions for extensions after the 14 years, and even for the possibility of a second ferry operating between Rochester and Toronto.
"The City of Rochester, notwithstanding the expressed desires of the (Port Authority), is not guaranteeing the RFC's obligations, and bears no obligations in the event of a default by RFC," the minutes state.
City Councilman Benjamin Douglas, the president of the ferry board, said Tuesday the lease agreement was the best deal available at the time, and the previous ferry operator — CATS — operated under a similar lease.
"There is nothing nefarious about (the lease)," he said. "We don't gain anything by paying more than we have to. It's the lowest price we could negotiate, and we were continually trying to negotiate a price lower than that."
The lease also requires the ferry company to pay some utility and janitorial costs for operation of the Toronto terminal. The company paid a little more than 7 percent of the utility costs and paid janitorial costs based on the percentage of the terminal used by ferry management, Lundy said.
The contract also established a mediation and arbitration process to settle disputes, with Canadian courts serving as the ultimate arbiter. Neither city officials nor Port Authority officials will say whether they expect to use the formal process to negotiate a settlement.
City Council voted Tuesday night to spend $9.4 million to resolve outstanding ferry-associated costs, other than the debt to purchase the vessel. Under the legislation, $3.1 million is estimated to cover the cost of continuing or terminating ferry contracts, including those with Bay Ferries, the management company, and the Port Authority.
Discussions 'really limited'
On Tuesday, Johnson chafed at what he said was the perception created by the media, the Duffy administration and ferry company board member Karen Noble Hanson that the lease agreement was a secret.
Information about the lease agreement was available in the June 13 ferry board minutes and even on the city Web site, Johnson said. He noted that the Democrat and Chronicle had copies of those minutes, obtained through a Freedom of Information Law request, but had not reported on the lease until Duffy cited it last week when announcing that he planned to stop subsidizing the ferry. (The Democrat and Chronicle filed the FOIL request in August in an attempt to obtain ferry ridership numbers that the ferry company had refused to release.)
Democrat and Chronicle coverage on Jan. 11 noted that ferry board members and City Council members said the lease was no secret to them, and was an expected expense to ensure the availability of the Toronto terminal.
Hanson, ferry executive committee member and secretary, said in a Jan. 12 Democrat and Chronicle story that, while she knew about the annual fees paid to the Port Authority, she never actually saw the 14-year contract and first learned of it from the Duffy administration weeks ago.
A review of the minutes of the June 13 meeting shows that Hanson, in fact, made the motion to approve the lease — and later signed the minutes of that meeting. Hanson said Tuesday that she participated in that meeting via conference call.
Hanson, who was criticized by Johnson Tuesday morning for her comments in the Democrat and Chronicle last week, said Tuesday afternoon that she doesn't recall whether she saw the actual lease contract, and regretted if her recollection was faulty about some of the specifics that were discussed.
Hanson, chief financial officer for the Episcopal Diocese of Rochester, told the Democrat and Chronicle last week — and reiterated Tuesday — that she had wanted staff to try to renegotiate the costs of the lease at a later time.
Regardless of "who knew what when," the major issue was the lack of time to address concerns about contracts because of the constant pressure to ensure the ferry operated, Hanson said.
"The opportunity to have real discussions about contracts was really limited," she said.
In the end, the contract — though portrayed by the Duffy administration officials as a surprise to them — had little to do with the decision to end ferry operations, Richards said.
"I wasn't that surprised" that there was such a lease, he said. "We bought the boat. We had to take it to Toronto to dock it.
"Let's suppose Toronto gives it to us for free," he said of the terminal. "It's not enough (to keep the ferry afloat financially)."
But Toronto's insistence on the lease costs proved something else, Richards said.
"It shows that nobody else was willing to put any money into this venture, that nobody else was willing to take the risk," he said.
GCRAIG@DemocratandChronicle.com
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Gary Craig
Staff writer
Democrat & Chronicle
www.democratandchronicle.com/
(January 18, 2006) — Who knew what when?
That question has been fodder for media, politicos and talk show hosts ever since officials with the new City Hall administration announced last week that they had "discovered" a 14-year lease between the Toronto Port Authority and the Rochester Ferry Co. LLC.
At his news conference Tuesday, former Mayor William A. Johnson Jr. reiterated what officials with his administration and members of the ferry board said last week: The pact was no secret and was amply documented in public actions by the ferry board.
"One matter that has been widely, and erroneously, reported is a 'secret' lease with the Toronto Port Authority," Johnson said.
But, when it comes to the lease for Toronto terminal space, the most pressing question for the new City Hall administration is not who knew what when. Instead, the question is: Can the city get out from under this 14-year commitment?
And that question might not be answered for months to come. The contract remains in effect as long as the Rochester Ferry Co. exists. And the ferry company, which owns the Spirit of Ontario ferry, needs to stay in existence at least until the vessel is sold.
"They own the boat," Corporation Counsel Thomas Richards said of the Rochester Ferry Co. "They have the contracts. ... The city does not."
Under the 67-page lease contract, the city does not guarantee any outstanding debts with the Toronto Port Authority.
That leaves open the question of liability for any unpaid bills. Former City Corporation Counsel Linda Kingsley said last week that, under the contract, the city should not be responsible for any future years of payments once the ferry company is dissolved.
But current city officials aren't so sure, and say they plan to meet with Toronto Port Authority officials to determine the future of the lease agreement.
Ken Lundy, the engineering and operations chief for the Toronto Port Authority, said the ferry company is current on its payments. Under the contract, the company pays $62,500 (Canadian) each quarter — adding up to a $250,000 annual commitment.
"Nobody's in default in this deal," Lundy said. "They made their first quarterly payment. There's nothing in arrears."
'Nothing nefarious'
On June 13, the Rochester Ferry Co., or RFC, met, and one of the key issues under discussion was the lease agreement, minutes show. The lease was set to start June 28 and last 14 years, according to the minutes. The contract includes provisions for extensions after the 14 years, and even for the possibility of a second ferry operating between Rochester and Toronto.
"The City of Rochester, notwithstanding the expressed desires of the (Port Authority), is not guaranteeing the RFC's obligations, and bears no obligations in the event of a default by RFC," the minutes state.
City Councilman Benjamin Douglas, the president of the ferry board, said Tuesday the lease agreement was the best deal available at the time, and the previous ferry operator — CATS — operated under a similar lease.
"There is nothing nefarious about (the lease)," he said. "We don't gain anything by paying more than we have to. It's the lowest price we could negotiate, and we were continually trying to negotiate a price lower than that."
The lease also requires the ferry company to pay some utility and janitorial costs for operation of the Toronto terminal. The company paid a little more than 7 percent of the utility costs and paid janitorial costs based on the percentage of the terminal used by ferry management, Lundy said.
The contract also established a mediation and arbitration process to settle disputes, with Canadian courts serving as the ultimate arbiter. Neither city officials nor Port Authority officials will say whether they expect to use the formal process to negotiate a settlement.
City Council voted Tuesday night to spend $9.4 million to resolve outstanding ferry-associated costs, other than the debt to purchase the vessel. Under the legislation, $3.1 million is estimated to cover the cost of continuing or terminating ferry contracts, including those with Bay Ferries, the management company, and the Port Authority.
Discussions 'really limited'
On Tuesday, Johnson chafed at what he said was the perception created by the media, the Duffy administration and ferry company board member Karen Noble Hanson that the lease agreement was a secret.
Information about the lease agreement was available in the June 13 ferry board minutes and even on the city Web site, Johnson said. He noted that the Democrat and Chronicle had copies of those minutes, obtained through a Freedom of Information Law request, but had not reported on the lease until Duffy cited it last week when announcing that he planned to stop subsidizing the ferry. (The Democrat and Chronicle filed the FOIL request in August in an attempt to obtain ferry ridership numbers that the ferry company had refused to release.)
Democrat and Chronicle coverage on Jan. 11 noted that ferry board members and City Council members said the lease was no secret to them, and was an expected expense to ensure the availability of the Toronto terminal.
Hanson, ferry executive committee member and secretary, said in a Jan. 12 Democrat and Chronicle story that, while she knew about the annual fees paid to the Port Authority, she never actually saw the 14-year contract and first learned of it from the Duffy administration weeks ago.
A review of the minutes of the June 13 meeting shows that Hanson, in fact, made the motion to approve the lease — and later signed the minutes of that meeting. Hanson said Tuesday that she participated in that meeting via conference call.
Hanson, who was criticized by Johnson Tuesday morning for her comments in the Democrat and Chronicle last week, said Tuesday afternoon that she doesn't recall whether she saw the actual lease contract, and regretted if her recollection was faulty about some of the specifics that were discussed.
Hanson, chief financial officer for the Episcopal Diocese of Rochester, told the Democrat and Chronicle last week — and reiterated Tuesday — that she had wanted staff to try to renegotiate the costs of the lease at a later time.
Regardless of "who knew what when," the major issue was the lack of time to address concerns about contracts because of the constant pressure to ensure the ferry operated, Hanson said.
"The opportunity to have real discussions about contracts was really limited," she said.
In the end, the contract — though portrayed by the Duffy administration officials as a surprise to them — had little to do with the decision to end ferry operations, Richards said.
"I wasn't that surprised" that there was such a lease, he said. "We bought the boat. We had to take it to Toronto to dock it.
"Let's suppose Toronto gives it to us for free," he said of the terminal. "It's not enough (to keep the ferry afloat financially)."
But Toronto's insistence on the lease costs proved something else, Richards said.
"It shows that nobody else was willing to put any money into this venture, that nobody else was willing to take the risk," he said.
GCRAIG@DemocratandChronicle.com
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