by Richard Gleeson
Northern News Services

NNSL (June 11/97) - Hopes of making a go of a dairy in the North are hard to give up, but a change is needed if such a business is to survive, says the farmer providing milk to Tuaro Dairy.

Edmonton farmer Neil Meyers called a meeting of Tuaro creditors -- the city being the largest -- last Thursday to persuade them changes are needed if the dairy is to survive.

The city's finance department says the dairy is currently $50,344 arrears on its lease payments.

Since it was revealed last month that the city under-billed Tuaro for seven months last year, the dairy has made one lease payment of $6,750.

When the under-billing was revealed, councillors reacted with frustration, recognizing that since the company is partly owned by city finance director Joe Kronstal, the error contributed to any perception a conflict of interest that may exist.

"It's kind of a judgment decision to say 'I'm in bad shape, I could go broke at any moment,'" said Meyers. "But when I see their condition -- they're insolvent. Period. End of story."

Under his contract with the dairy, Meyers can take over the operation if Tuaro defaults on milk payments to him.

He said the dairy was not in default, but its financial woes, lack of marketing and mismanagement has held up plans to increase milk production.

Meyers said the dairy owes him roughly $11,000 for other work he has done for it. He has hired a lawyer to collect the money. He wants the creditors to organize and ask Tuaro's board of directors to step down and put the company in receivership.

But there was no consensus reached among the creditors at the meeting, he said. At least one creditor still believes an injection of cash will get the business over the hump.

Meyers maintained management, not money, is the problem.

A recent application to the Aurora Fund for financing from the Aurora Fund was turned down, said Meyers.

Alderman Bob Brooks said the city has asked for an audit of Tuaro's account, as well as others in arrears. "Administration will be bringing forth a policy of how it, as well as other accounts, will be monitored in the future."

Brooks said he believed the audit was going to be done by a private firm.

"Based on that information we'll also bring forward recommendations on how we want to deal with this.

"We'll be looking at how much is owed, why it hasn't been collected, and what the plans are for collecting."

The matter is on the agenda for Tuesday's 1:15 p.m. meeting of the financial legislative and administrative committee.