Tuaro got $2,000 break on monthly payments, but has fallen behind a further $50,000
* City council directs Mayor Dave Lovell to pressure the territorial government into giving money to Tuaro
* Instead of foreclosing on Tuaro, which then owed $300,000 in back taxes, city strikes new five-year lease agreement.
* Council approves deal, not provided for in lease agreement, to allow Tuaro to sell 1.6-hectare parcel of land for $95,000, to be applied to outstanding principle owed.
by Richard Gleeson
NNSL (May 21/97) - A business partly owned by city finance director Joe Kronstal is once again behind in lease payments to the city, this time by $50,000.
Just over two years ago the city agreed to bail out the dairy, which was behind in payments to the city by more than $275,000.
According to a five-year lease agreement signed in 1995, monthly payments to the city from Tuaro were to rise from $1,750 a month to $3,750 a month in June 1996. On December 1, 1996, payments were scheduled to go up to $6, 756 until November 1, 2000.
But the dairy continued to pay only $1,750 a month until January 1997, when the city noticed the $2,000 monthly discrepancy.
Mayor Dave Lovell has confirmed Tuaro Dairy made its last lease payment March 31.
Asked about the failure to pay the agreed amount and the lack of payments since March, Dairy part owner Joe Kronstal, who is also the city finance director, declined to comment. He referred all enquiries to one of the dairy's shareholders, former alderman Ben McDonald.
A founding partner of Tuaro Dairy and a major shareholder, Kronstal also refused to discuss his current role in the company.
The lease agreement was the second time the city helped prop up Tuaro in hopes of collecting back taxes.
"My guess is the way to handle it now is to give them about a month to come up with a payment schedule, and if they can't, shut 'em down," said Lovell.
"The reason this is going before committee is we're going to deal with this 100 per cent publicly. It's a public matter and there's no coverup."
The matter comes before the financial, legislative and administrative committee at 1:15 p.m. today at city hall.
Tuaro has paid just under $100,000 in current and owed taxes since the lease deal was struck.