Administrative oversight

by Richard Gleeson
Northern News Services

NNSL (May 21/97) - City hall's administrative oversight on the Tuaro Dairy lease allowed the company to convert a 1.6-hectare parcel of land into $95,000 in cash late last year.

Under the terms of a five-year lease negotiated in December 1995, Tuaro had the right to buy part or all of the 7.2-hectare parcel it is leasing from the city.

The agreement states Tuaro must be up to date in its lease payments to have the right to exercise the option.

At the time the deal was approved by council -- September, 1996 -- Tuaro was paying $1,750 each month, $2,000 less than was required in the agreement's payment schedule.

Around the time the deal was being discussed, dairy stakeholder and city finance director Joe Kronstal said the dairy was up to date on payments. Aldermen said the agreement was working, and the city was benefitting from what was once a desperate situation.

But instead of being up to date, the dairy was $8,000 behind on payments.

While the deal was being discussed by council, Kronstal said the $95,000 Tuaro would get by selling the land parcel to the Great Slave Animal Hospital would be applied to lease principle.

Though lease arrears have ballooned in the last three months, outstanding property taxes of $91,869 plus 1996 taxes of $9,805 were paid earlier this year, according to a staff report.

How it happened

Explaining the city's failure to collect full payments from Tuaro Dairy, city administrator Doug Lagore said:

"They (city hall staff) made an oversight for three months and then corrected it," said senior administrator Doug Lagore.

However, according to a staff report, the mistake wasn't detected for eight months.

Lagore said accounting manager Andrew World and his supervisor were responsible for monitoring lease payments from the dairy.

World left city hall for another job in the south last month, said a city hall staffer.

Asked who World's supervisor was, Lagore replied, "I'm not prepared to say who it is. It's not Mr. Kronstal, if that's what you're looking for."

World's supervisor at the time was Robert Charpentier, the city's financial services manager -- who works directly under Kronstal.

Both Lagore and the mayor maintained that, in spite of the error, Kronstal's involvement in the business has no impact on the city's dealings with Tuaro.