Audit: Marina Operator Owes $350K in Rent
Buffalo, NY (WBEN) The city's fiscal watchdog says the operator of the Erie Basin Marina owes Buffalo nearly $350,000 in rent.
Comptroller Mark Schroeder says Brand-On Services underpaid the city in each of the past five years for its lease of the Erie Basin Marina and Hatch Restaurant. “We will not rest until the taxpayers of Buffalo get back the money that they are owed,” said Schroeder. “We also recommend that the city terminate the contract with Brand-On Services and look for other firms to operate the marina and restaurant. The Department of Public Works commissioner agrees with this recommendation, and is preparing Requests for Proposals for these services.”
While the audit only covers the past five years, Brand-On Services has been operating the Erie Basin Marina, including the Hatch Restaurant, since 2001. Its contract with the city requires it to pay Buffalo a percentage of fuel sales, revenue from the restaurant and marina.
“More than 20,000 gallons of gas is completely unaccounted for,” said Schroeder. Brand-On’s fuel supplier informed Schroeder that it supplied the company 383,173 gallons of gas over the five-year audit period. Brand-On reported to the city that it only sold 362,484 gallons during that time. “The taxpayers of Buffalo deserve to know what happened to those 20,000 gallons of gas.” In addition to the missing gas, Schroeder says Brand-On has been underpaying the city on the gas it did report. The contract stipulates that Brand-On pay the city 10 percent of gas sales. Brand-On has been paying the city 10 cents per gallon, roughly a quarter of what it should been paying. Between underpaying on the gas it did report, and not paying anything on the 20,000 gallons that are unaccounted for, Brand-On owes the city $82,923.
The remainder of the $343,245 owed to the city comes from unauthorized deductions in rent and underreporting of sales from the store, restaurant, and slip rentals, claims Schroeder. “In the past two years, the city has borrowed nearly $2 million dollars in capital funds to invest in the Erie Basin Marina and Hatch restaurant,” said Schroeder. “I want to ensure that the taxpayers are getting their money’s worth for these investments, because right now, they clearly are getting ripped off.”
Brand-On Services is also the operator of the City Hall cafeteria, the Clinton’s Dish concession stand at Canalside, and First Buffalo River Marina on the Buffalo River, which is owned by the New York Power Authority. “Needless to say, we are currently looking into this vendor’s operation of the cafeteria. The department of Public Works has also issued a Request for Proposals for a new operator of the cafeteria,” said Schroeder. “We have also alerted the folks at Canalside and the New York Power Authority of our findings.”.