Yaniz questions Outer Mole costs

BY PRU SOWERS

KONK LIFE STAFF WRITER

Despite a consultant’s report stating that Key West receives an annual profit of $129,000 leasing the Outer Mole from the U.S. Navy and reusing it for cruise ships, City Commissioner Tony Yaniz isn’t buying it.

Yaniz said he is suspicious that the recent report done by Arcadis U.S., a Maitland, Fla., environmental consulting company, overturns earlier estimates by a former city official that the city was losing $100,000 annually by leasing the pier from the Navy and renting it to cruise ship operators docking in Key West. Indeed, the Outer Mole operations showed a $10,000 direct loss to the city in fiscal 2013 and a projected $54,000 direct loss in fiscal 2014.

Cruise ships currently pay a $10.63 per passenger disembarkation fee to the city, which covers security fees and transportation off the Navy property into Key West via Conch Tour Trains.

As directed by city commissioners, Arcadis was hired for approximately $14,000 to look at the indirect costs associated with operating the Outer Mole, such as administrative expenses incurred in departments tangentially involved in Outer Mole municipal operations, such the city clerk and city manager’s offices. Looking at both the direct and indirect costs of the various city municipal departments involved in the Mole operations would give commissioners a better idea of the true cost.

Yaniz said he was told earlier this year by former Assistant City Manager Mark Finnegan that the indirect costs for the Mole ran between $100,000 and $150,000 a year. However, the Arcadis study found that the indirect costs in FY 2015 will be just under $51,000, leaving the city a surplus of $128,904 annually both this fiscal year and the next.

“The results of the cost analysis indicate that the City’s FY 2013-14 and projected FY 2014-15 costs of operating the Outer Mole are in line with the revenue generated from cruise ship operations, even when indirect costs are considered,” the report, which was finalized on Aug. 1, said.

But Yaniz was skeptical, saying he has spoken to Police Chief Donie Lee and officials in the city’s code compliance and engineering departments who said they were not asked to provide information to Arcadis.

“I find it a little disingenuous that we went from a gentleman we have an extreme amount of trust with, Mr. [Mark] Finnegan, telling us we were losing money and you coming back here two months later and telling us we’re making $100,000,” Yaniz told Port and Marine Services Director Doug Bradshaw at a July 21 budget workshop. “Are you standing by this?”

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