A rocky relationship is developing between the municipality and the federal Department of Fisheries and Oceans over needed repairs to the harbour breakwall as a result of a major storm in September of last year.
On September 29, 2017, a large storm front passed through the municipality resulting in downed trees, road closures, and an extended power outage. The storm also produced a significant storm surge causing damage to the harbour breakwall.
In addition to damage to the breakwall, the storm also caused damage to municipal infrastructure that resulted in roughly $18,000 worth of dock repairs, and an insurance claim for damage to a vessel at a cost to the municipality of $5,200.
The harbour area including the breakwall is a federal asset for which the municipality pays an annual fee under a lease agreement with the Department of Fisheries and Oceans (DFO).
“Based on the lease provisions, the Municipality is required to pay $500 or 20% of gross dockage revenue annually. For 2017, the total lease payment was $47,000. The Municipality applies for grants to offset capital project costs when scheduled and approved. In 2017 the DFO approved a grant of approximately $35,600,” council was told in a staff report at their March 12 meeting.
According to the lease agreement, repairs such as those required for the breakwall are to be funded by the DFO, however the initial response to the municipality has been that Meaford covers part of the cost.
“Section 8 of the lease agreement speaks specifically to Repair and Maintenance requirements,” Meaford Treasurer Darcy Chapman told council in his report. “In particular the lease agreement states: Nothing in this provision shall obligate the Agent to be responsible to effect repairs of any major or structural kind but, in the event that such repairs are needed, it shall be the responsibility of the Agent to provide notice to the Minister of the need for major or structural repairs, and to take whatever steps are appropriate to deal with continued use of the premises while such repairs are pending. When such repairs are warranted, the parties hereto shall consider, and together decide how and when to effect such repairs.”
In spite of the provision in the lease agreement, Chapman told council that the DFO is requiring Meaford to cover half the cost of the repairs which are estimated to be between $65,000 to $75,000.
“The agent, being the Municipality, notified the DFO of the damage. Municipal staff also contacted local firms to obtain pricing to repair the breakwall. Based on this, staff feel as though the Municipality has met or exceeded its obligation under the agreement,” Chapman told council in his report. “Based on discussions with DFO staff during the aforementioned two conference calls, it is the DFO’s requirement that the Municipality cost share on a 50-50 basis for all required repair works up to $80,000. Any costs above this threshold would not be funded by the DFO and the Municipality would be solely responsible to pay.”
The current lease agreement between the municipality and the DFO was signed in March of 2016, and it is in effect until June 30, 2021.
Chapman told council that the DFO recognizes that their own internal policies and procedures conflict with the wording of the lease agreement with the municipality, however they aren't willing to fully fund the repairs, and Chapman has suggested that the mayor engage with the DFO in order to come to a resolution.
“Given the agreement specifically states that “nothing in this provision shall obligate the Agent to be responsible to effect repairs of any major or structural kind”, staff pressured DFO representatives to reconsider this approach,” Chapman told council. “Staff were advised that the DFO will not fund repairs above $40,000. This is an internal process which they recognize does not coincide with the provisions of the lease agreement between the parties, however they are unwilling to reconsider as this may set a precedent with other federally owned harbours under similar lease agreements.”
During discussion with council, Chapman compared the situation to any standard rental agreement.
“I'm going to put it in layman's terms so that anybody can understand this,” Chapman told council. “Our facility at 390 Sykes (a municipally-owned building with a commercial tenant and the OPP detachment), if the roof was leaking on that facility, as the owner the tenant would call us and expect us to fix that roof, and they would expect for us to pay 100 percent of the cost of that roof. The DFO's stance is that they want us to pay as the leasee, 50 percent of the cost of that roof, and that's where the hold-up is.”
Members of council agreed that the DFO is in breach of the contract with the municipality, and they supported the recommendation that “the Mayor to write to the Minister of Fisheries and Oceans regarding the required capital repairs to the Harbour infrastructure and the Ministry’s ongoing breach of contract.”
“We have no obligation, they don't want to spend the money, I say pour the heat,” suggested Councillor Mike Poetker.
Mayor Barb Clumpus told council that she planned to contact MP Larry Miller to discuss the issue, and she would prepare a letter to the DFO.
“I totally agree, we need to reach out to our MP, Mr. Miller, and to go down that road,” Councillor Shirley Keaveney told council. “I'm also concerned about the potential and possibility for another storm and the damage that could cause again to the wall, and to the boats and the docks, it could be catastrophic if this goes on too much longer.”