2011-04-09 / Top News

Northern Ferry Gets Franchise; Shepler’s Asked To Comply

By Karen Gould

Northern Ferry Company, a combined operation of Arnold Transit and Star Line, was granted a two-year franchise Wednesday evening, April 6, and Shepler’s Mackinac Island Ferry was given until 4 p.m. Friday, April 8, to conform to the city’s application process. Specifically, Shepler’s was told to acknowledge in writing that its application will be based on the same terms as Northern Ferry, that it be made on the city application form instead of a letter, and that the company remove an addendum to its rate schedule that doesn’t conform to the schedule stipulated by the city.

Mackinac Island City Council not only extended the deadline from Monday, April 4, to apply for a franchise, it allowed that Shepler’s agreement to the franchise terms would not prevent him from continuing his legal battles in federal district court or before the Michigan Public Service Commission.

“It has come to our attention that in Mr. [Bill] Shepler’s letter attached to his application there were statements in there basically trying to rewrite the application,” said Mayor Margaret Doud.

Chris Shepler was given several opportunities to say the company would remove the amendments to the city provisions to allow the city to grant the franchise, but he did not agree to do so.

“Can you comply with the terms of the 2011 franchise?” Alderman Sam Barnwell asked Mr. Shepler.

“Can we comply with the 2011, the franchise that was OK’d by this council?” asked Mr. Shepler.

“The franchise you submitted an application for and that we’re looking to award today,” Mr. Barnwell said.

“Based on what the cover letter said and based on the addendum, yes,” answered Mr. Shepler.

“No, I’m saying based on our franchise as we wrote it. Can you comply?” Mr. Barnwell asked again.

Again, Mr. Shepler replied, “Based on the cover letter and the addendum…”

Alderman Mike Hart sought further clarification.

“If we offer you a franchise as it was established and presented, debated, written out, and finally voted on, and consistently applied to everyone who applies, you’re saying you cannot abide by that?”

Mr. Shepler reiterated his previous response.

City attorney Tom Evashevski told the council that the city’s application had been amended by Shepler’s cover letter and states the company “intends to” comply with the city’s ordinance, but does not say it will.

“There have been so many twists of words in this saga and those are the kind of things we can’t tolerate,” Mr. Evashevski said. “We approved the [application] form and it’s got to stay that way.”

Mr. Barnwell said the schedule submitted by Shepler’s was not consistent with what is posted on the company’s Web site. Mr. Shepler said the schedule on the Web site would be altered.

More than 35 residents attended the meeting.

“The cover letter that accompanied the application from Shepler’s contained a number of matters that just without question altered our application form and the letter does say that the application should consider all the contents of this letter as a part of the application,” said Mr. Evashevski. “So, the application form has been altered… If you want to grant it,” he said to council members, “you make clear that you’re not accepting the terms of the cover letter to amend the application.”

Mr. Evashevski also said an addendum at the end of the company’s fare schedule provided five new sliding scales with rates ranging from $22 a ticket to free travel, which conflicts with the city’s approved rates and schedules.

Alderman Armin Porter asked Mr. Evashevski for direction that would allow the city to offer an equal franchise to all ferry companies based on the city-approved documents that include the Ferryboat Ordinance, application, franchise, and rates and schedules.

Mr. Evashevski said the city had three options: Approve the application as submitted, deny the application, or grant the application under stipulations provided by city attorney Mike Cavanaugh, who did not attend the meeting, which was subsequently unanimously adopted by the council.

The resolution read:

“That the city approve the application for a franchise for the period of 2011 to 2013 filed by Shepler’s Inc. with the following exceptions:

1) Shepler’s submitted its application for a ferry boat franchise with a cover letter dated April 4, 2011, addressed to Karen Lennard, city clerk, and signed by William Shepler and the regarding line of that letter is, ‘Application for Non-exclusive 2011 and 2012 Seasons Ferry Boat Franchise.’ The approval of the application for a franchise does not include the April 4, 2011, letter and the city does not accept or agree to the terms of the letter. However, neither Shepler’s Inc. by submitting the application for a franchise or accepting a franchise, nor the city by approving the application and issuing a franchise to Shepler’s Inc., is waiving its respective rights, claims or remedies, including those asserted in the United State District Court for the Western District of Michigan, Southern Division, in Case No, 1:10-cv-968 and in Michigan Public Service Commission Case No T-1862 and U-01862.

The rate schedule is as presented except for the addendum to fare schedule, which is not approved.”

Mr. Hart asked for assurances from Mr. Evashevski that Mr. Cavanaugh’s proposed motion would protect the city from further legal action.

The application for the franchise was due to the city Monday, April 4. Both Northern Ferry and Shepler met the deadline and filed the documents with City Clerk Karen Lennard.

Mr. Evashevski said he believed the language provided by Mr. Cavanaugh satisfied Mr. Hart’s concerns.

“I can tell you there hasn’t been a lot of time,” he said. “We’ve only had it [the letter] about a couple hours to look at… He’s saying that if they will apply on the form that we sent them and only on that form and they will eliminate that addendum on the price schedule, everything else seems to comply with our ordinance.”

Council set Friday, April 8, as a deadline for Shepler’s to comply in writing, extending the city’s original April 4 deadline for applications. Council said a federal hearing on Shepler’s suit against the city and Arnold Transit is scheduled for next week, so it wanted to resolve the franchise by Friday.

On Tuesday, April 12, U.S. District Judge Janet Neff is scheduled to hear Shepler’s request for a restraining order that would prohibit the city from implementing its Ferryboat Ordinance. Arguments will be heard in Grand Rapids.

Council approved Northern Ferry Company for a franchise, Mr. Evashevski saying the application was identical to Shepler’s application except it did not have a cover letter, addendum to its rate schedule, or any alteration to the application.

Northern Ferry attorney Erik Stone asked the council to solicit verbal agreements on the spot from his client, Jim Wynn, and Mr. Shepler, but received only a thank-you from the council.

The public offered no other comment.

Council went into closed session to discuss litigation on the boat cases. Mr. Cavanaugh participated by telephone, and no action was taken following the 38- minute session.

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