Aug 212012

Newport top,
SeaPort Air middle,
Astoria, bottom
Courtesy photos

An attorney for the Port of Astoria sent a sharply worded letter to the Newport City Council denying that the port owes the city anything in connection with the final accounting of the two year SeaPort Air experiment with scheduled airline service to both Astoria and Newport.

Attorney James Bennet said Newport, as the lead financial agency for the SeaPort air service, closed out the books before it had properly accounted for expenses and revenues thereby leaving both itself and Astoria having to cover $75,000 in leftover expenses, expenses that should have been covered by federal or state grants. Or in the alternative, should have forced an earlier termination of SeaPort Air’s contract to stop the bleeding.

Bennett said the Port of Astoria entered into a consortium agreement with Newport on the premise that all costs were to be covered by Federal Department of Transportation (USDOT) and Oregon Department of Transportation (ODOT) grants. There was to be a running tabulation of costs that were to be paid by the city and the port but then quickly reimbursed by USDOT and ODOT. Bennett contends that Newport failed to properly bill the DOT agencies. Bennett said that was a big error on the part of Newport staff for which Astoria is under no obligation to cover. Bennett went on to say that Astoria, at the time, was in the process of submitting an invoice for air service costs that they had already paid. But because Newport had already terminated the project Astoria’s invoice was rejected. Bennett said it left Astoria stuck holding the bag for nearly $34,000.

After Newport discovered revenue shortfalls and sent the port a demand letter, an Astoria auditing team traveled to Newport to examine Newport’s books. Bennett said that Astoria quickly determined that Newport was not aware of just how fast the money was running out, until it was too late.

Bennett suggested the Port and Newport walk away from the dispute and waste no more attorneys fees on a defunct airline consortium.

Without debating the merits of Bennett’s letter, the city council, with little comment, voted to officially end the consortium with the Port of Astoria and to no longer pursue any further efforts to collect money from the Port of Astoria. One councilor was heard to say…”We’ve learned a lesson – time to move on.”

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