The company that stands accused of shorting the city by nearly $350,000 in rent for operations at Erie Basin Marina received a far different reception from city lawmakers Tuesday.
Common Council members urged Brand-On Services, which is owned by members of the Wolasz family and has operated the marina and Hatch restaurant since 2001, to meet with city officials and come to an agreement on what is owed.
And while Mayor Byron W. Brown and City Comptroller Mark J.F. Schroeder had referred the audit to county, state and federal authorities for possible criminal prosecution, several Council members declared that nothing in the audit suggested criminality.
Majority Leader Demone A. Smith said that the city was getting a “pretty good deal here” and that he would like the company and the city to go to arbitration.
“I think we’re getting a real good product at the marina; I really do,” Smith said. “There seems to be a dispute, some procedural errors that didn’t happen.”
Council President Richard A. Fontana said that the parties should agree to a number that makes sense for taxpayers but also that the city should seek proposals from potential new operators. “I don’t think there is anything criminal before us today,” he said.
In a nearly two-hour Finance Committee meeting, Council members listened to the arguments made by Brand-On Services, one of which was that maintenance performed by the company, and then deducted from its rent, was at the request of the city, and was detailed in correspondence with City Hall.
The maintenance needs at the marina can require immediate attention, and Council approval could take weeks, said Brand-On’s lawyer, Mark S. Carney.
Schroeder’s office, which performed the audit of operations from 2008 to 2012, contends that the amounts the company deducted from its rent weren’t legal because they were outside the bounds of the contract.
Only the Council can approve changes to Brand-On’s contract with the city, Assistant Corporation Counsel Alan P. Gerstman told lawmakers.
Several Council members noted that they never agreed to change the contract allowing for Brand-On to deduct payments for maintenance, but said that if Brand-On’s contentions are true, the current contract makes doing business at the marina impossible, and another figure must be reached.
In Brand-On’s response, delivered to the Council on Tuesday, the company agreed to pay the city $27,412.
Company officials said that they have been paying the city 10 cents per gallon of fuel sold, instead of 10 percent per gallon, since 2006, and thought that because it was discussed in a Council committee in 2009, and because they had an agreement with the public works commissioner at that time, that the matter was taken care of.
Carney also noted that after an audit of operations in 2007, the company was not billed for the difference between 10 cents per gallon and 10 percent per gallon.
The company buys fuel from a vendor and sells it to marina customers. The city receives an amount for every gallon sold, which is the subject of debate between the parties.
There are not 20,000 “missing” gallons of gas, as the audit states, according to the company. The difference is attributable to fuel used by the marina, or by city boats, or because of errors at the cash register, or because gallons were left in tanks at the end of a season, Carney said.
The City Comptroller’s Office stands by its invoice of $343,245 and expects the company to pay it, said Executive Assistant Patrick Curry. That amount includes $44,042 in rent due because of unreported sales, $82,923 in rent because the company paid the city 10 cents per gallon of fuel sold, instead of 10 percent, as well as 20,000 gallons of fuel unaccounted for, and $224,377 in unauthorized deductions in rent for maintenance the company performed, according to auditors. Auditors also found that the company had overpaid the city $8,096.
Though the office is not backing away from demanding the full amount, Curry said that it is also open to conversations with the company, and that a meeting has been scheduled for next week.
The Brown administration has said that it would issue requests for proposals for marina operations for the 2014 season, instead of renewing Brand-On’s lease for a final two years.
The company will seek the lease extension, but if the city goes through with the bidding process, it will be an active bidder, Carney said.
“I want my two years,” said Michael Wolasz Sr.
As part of their investigation into the marina’s operation, the City Comptroller’s Office also discovered what it considers irregularities in the time sheets for Michael Wolasz Sr., who was a superintendent in the city’s Water Department until last year.
The Water Department is overseen by the Department of Public Works, which also oversaw Brand-On’s contract to run the marina.
The time sheets for Michael Wolasz Sr. show hours and hours of overtime during some of the marina’s busiest days, and also show that Wolasz Sr. signed off on his own time sheets.
From Jan. 1, 2008, through 2011, Wolasz Sr. earned $97,465 in overtime pay from the city. He said that the nature of his work in the Water Department required him to be on-site and that he couldn’t leave his station. His family ran the marina when he was working for the city, he said.