Tom and Christian tell us where the deal's at

The city of Sault Ste. Marie appears to be exercising caution in the drafting of an agreement between City Hall and the company taking over operation of the passenger train to Hearst.



Yesterday, Railmark president and CEO B. Allen Brown said the unsigned agreement was the cause of a delay in service which resulted in the first two Algoma Star passenger runs after his May 1 takeover to be missed.

A third scheduled train did leave Thursday morning with a single passenger on board and Brown told SooToday Saturday's trip is to run as scheduled.



Mayor Christian Provenzano said the city is not to blame for any delay in service.

“I can tell you one-hundred percent, unequivocally, in my mind that the city is not at all responsible for any delay in the execution of any of these agreements,” said Provenzano by phone this morning.

The city is waiting on Railmark, which was also selected by CN to take over the Agawa Canyon Tour Train, to provide documentation before moving forward, Provenzano said.



“My understanding was Railmark had a number of conditions to meet and information it had to provide that they have not yet satisfied. That was the cause of the agreements not being completed,” he said.



The agreement in question was brought as a request by Sault Ste. Marie Economic Development Corporation (EDC) to the April 13, 2015 city council meeting, and council agreed to it in principal.

Final approval and a by-law were to be presented to council at the April 27 council meeting.

“That seemed like a reasonable and doable timeframe. Between the decision by council on the 13th and the 27th it became clear that was not a feasible date,” said Tom Dodds, Economic Development Corp. CEO and a key member of the ACR Passenger Service Stakeholders Working Group.

Dodds said the process is still moving along, with face-to-face meetings scheduled today with Railmark.

“We’re working through a process that will hopefully get the preconditions we need for the signing of that agreement squared away, so we’re continuing to move along that track as best we can,” Dodds said.



The working group’s report to council last month says CN selected Railmark to run both the passenger line and tour train from among three competing bids in the fall, after which members of the local working group began pressing the Ministry of Transportation for funding.

The working group has said a “thorough analysis of (Railmark’s) bid” happened prior to final negotiations with CN taking place in January and due diligence was undertaken on CN’s part before it signed a deal with Railmark as a third-party operator in March.

City council passed two resolutions in support of the working group's efforts to secure federal funding for Railmark - once in January and again in March - but the inclusion of the city as broker for $5.3-million of federal funds bound for Railmark was a last-minute decision, Provenzano said.

“The city never asked to be the funders. We get a letter from the Ministry (of Transportation) at the eleventh hour saying ‘We’ll give you this money if the city takes it.’ I made it very clear at council that I didn’t want the city exposed to any liability or risk. If it was going to be exposed to liability or risk I wanted to understand what the nature of that was and make sure it was minimized,” Provenzano said.



Dodds said that although CN has done its due diligence on Railmark, the city is now doing the same.

“Because the city is taking on the responsibility of managing the funds, we want to make sure the ultimate recipient (Railmark) is capable of doing the work and has the financial resources to do so,” Dodds said.

As of this morning, the agreement is not on the agenda for Monday's scheduled council meeting.

“There’s nothing to bring to council at this point, so how is the city responsible for any delay in that respect?” Provenzano asked rhetorically.

Dodds said he expects to present an agreement during the May 25 city council meeting.

Previous SooToday coverage of this story:

Unsigned city agreement caused train delay, says Railmark

(PHOTO: Workers prepare for the first running of the Algoma Star Passenger Train on May 7, 2015. Kenneth Armstrong/SooToday)