Ferry service resumed yesterday between Kelleys Island and the mainland as Marblehead and the Kelleys Island Ferry Boat Line tentatively settled a legal dispute over a controversial passenger departure fee.
The settlement, which Marblehead Village Council will consider at a special meeting at 6 tonight, calls for the boat line to make annual payments to the village for a certain period, Chuck Pawlukiewicz, an attorney for the company, said.
"There would be payments made from the Kelleys Island Ferry Boat Line to the village, but it wouldn't be a departure fee of any type,'' Mr. Pawlukiewicz said.
In addition, the settlement calls for the village and the boat line to apply jointly for grants to improve a jetty and a water intake valve at the company's dock in Marblehead, the attorney said.
The boat line sued Marblehead in November, alleging a departure fee approved by voters weeks earlier was unconstitutional.
The company asked Judge Paul Moon of Ottawa County Common Pleas Court for a preliminary injunction against the fee. The company began service for the season March 7 but stopped running March 10, a day after Judge Moon refused the injunction request.
Boat line vice president August Palladino had vowed to move service from Marblehead to Sandusky rather than pay the fee.
Mr. Pawlukiewicz said the settlement makes the lawsuit moot, but the agreement calls for Judge Moon to rule on the legality of the fee. He declined to disclose further details.
"The village has to have a meeting and vote on the proposal, and until then, it's not official,'' he said. But I'm confident they will approve it.''
Marblehead solicitor John Brikmanis declined to discuss the terms of the deal.
"It will resolve all the issues and go a long way toward a more cooperative existence between the ferry and the village,'' he said.
The settlement was reached after two days of mediation.
After an initial session Tuesday, Judge Moon moved the trial date for the suit from October, 2005, to March 26. The village agreed to suspend collection of the fee until the trial and the boat line agreed to resume service in the interim.
On Wednesday, the Public Utilities Commission of Ohio ordered the company to run its boats again and scheduled a pre-hearing conference April 1.
Matt Butler, a PUCO spokesman, said the agency responded to complaints from Kelleys Island residents about the shutdown. Under state law, a PUCO-regulated company providing "inadequate service'' can be fined up to $10,000 per violation, which could be per day or per trip, Mr. Butler said.
The PUCO spokesman said the resumption of service and the possible legal settlement won't necessarily end the agency's investigation.
"In the future, we don't want other service providers or utility companies to come in and use that kind of leverage, just so they can avoid paying a tax or a fee," he said.
Mr. Palladino, the boat line's vice president, questioned PUCO's action and said the boat line halted service because its employees weren't prepared to collect the fee.
"On our schedule, it says we're subject to change. It's subject to change at our notice at any time," he said. "That could be weather related ... There's no order from PUCO that we have to run and lose money."
He added: "We had to train employees, we had to put a system in place to collect it. It wasn't just a hardball situation.''
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