From time to time I visit the Gote and today I noticed a learned discussion among the sea lawyers over there about various theories regarding liabilities and potential non-, mis-, or mal-feasance by CTSMC.
The irony is that the Gotes do not appear to have reviewed the agreement between the Commission and CTSMC that Jay posted a few weeks back on the Gote as a public service. That's the document that should form the basis of any questions about who's liable, if anyone.
The agreement shows clearly that the financial risk resides with the Commission, not with the management company. This became the case about five years ago when the Commission could find no one (including Lindsey Ashby and others) to take on the financial risk of such an operation and had little choice but to re-engage RGRPC.
That's why there is a management agreement instead of a lease agreement, so that financial risk no longer resides with the operator, but with the Commission. It's as fundamental as that, and is well understood by governmental bodies that review the funding and finances of the railroad, such as New Mexico's Legislative Finance Committee.
Basically the deal calls for CTSMC to promptly hand over all revenues (ticket sales, etc.) to the Commission and to submit all bills (including payroll) to the Commission, and the Commission, in turn, has to pay CTSMC promptly for these incurred expenses. There are various other provisions dealing with unforeseen expenses, budget overruns,and joint oversight. At bottom, the Commission has the power of the purse which includes the risk of the purse getting emptied.
As a consequence, to guard against this risk to the Commission there are rigorous financial control provisions requiring the Commission and CTSMC to agree upon strict operating budgets (e.g., Para's 4A, 4C, 5M, etc.) and for CTSMC to report on a
weekly basis all revenues and incurred expenses (Para. 6C), to provide the Commission with full funding and expense reports monthly (Para. 5R), and other reporting requirements.
If anything goes wrong, which seems to be what has happened in the last six months or so, under the provisions of the agreement both parties should have been fully aware of what was going on with the money since both are joined at the hip by this agreement. Yet, as shown on the video of the Commission meeting, until that meeting the two parties apparently were not aware that the operation was about $155,000 over budget for the first six months of the current fiscal year (a large number!). The inescapable question remains "how come"? (If there is any fault it may well lie with both parties).
One would hope that by this Wednesday's Commission meeting this question will have been addressed to the satisfacion of the two parties. Stay tuned.
