Restaurant owned by Summerside mayor and son owes city utility $40K for electric bill, says CAO

A business jointly owned by Summerside Mayor Basil Stewart and his son, Major, owes the city's electric utility more than $40,000, CBC News has confirmed. 

The Stewarts' company, Stewart Foods, owns Dixie Lee, a fried chicken franchise in downtown Summerside.

The company has been locked in a two-and-a-half year battle with the city over its outstanding electric bill. 

Rob Philpott, CAO with the city of Summerside, says the restaurant owes more than $40,000 in outstanding electric charges and another $1,300 in water and sewer charges. 

"It has been a challenging account. We have had a lot of issues in trying to get the company to commit to sticking to a particular payment schedule," Philpott said. 

"I think given the developments over the last few days and with city council's involvement in bringing this to the forefront I think it certainly helped make for what we hope is a more timely resolution of the issue."

'City council took immediate action'

Philpott initially wouldn't do an interview, but said he changed his mind after hearing from several city councillors with concerns about the situation.

He said these issues are usually handled by staff, not council. But he said council did become aware last week of the issue through conversations with some members of the community.

"We do respect the privacy of all who do business with the municipality and we tried to address this particular account as we do all accounts in a very discreet and confidential manner. Our city council, however, late last week did hear some concerns in the community about this company's arrears and city council took immediate action."

The immediate action was for council to instruct Philpott to put a repayment plan in place.

Major Stewart said he feels defeated after his two-and-a-half year battle with the city.

He said there was a dispute over his electricity bill shortly after his restaurant opened in the fall of 2017. He said he dug in his heels and refused to pay.

'Other businesses were not held responsible'

However, he said city staff have made it clear they're not going to reverse their decision, so now he's agreed to pay the outstanding bill.

Stewart said his father has not been involved in the daily operation of the business or the discussions on the outstanding bill. 

"I have been very upfront all along saying that I don't want any special favours, I just want a straight answer on whether they made a mistake or not," said Stewart, apologizing that the issue has gone on so long. 

"I've committed to paying it. We've agreed to disagree," said Stewart.

"You can't fight city hall."

Stewart said it will have an impact on his business, especially in a year when COVID-19 has already affected the bottom line. He said he was hoping to hire more staff as the economy reopens but that is now in question. 

"I think this is a difficult market to do business in in the best of times, in this industry in particular." 

'I stay out of it'

Philpott acknowledges mistakes were made. He said the city under billed the restaurant $5,200 soon after it opened.

The city then went back and tried to recoup that amount.

That, said Philpott, is what started the dispute.

"But there's been an outstanding balance that has built up over two years in relation to services that have been consumed but not paid for," said Philpott.  

Basil Stewart told CBC News he is not involved in the daily operation of the business. He acknowledged there was a dispute over the bill but that an agreement has been reached.

"I stay out of it, I made sure I'm not in a conflict at all," the mayor said, referring all other questions to his son, Major.

'From time to time the mayor is made aware'

Philpott said discussions over the unpaid bills have been primarily with Major Stewart.

"From time to time the mayor is made aware by the city of where things stand but primarily our discussions have been with the other shareholder," said Philpott.

"The fact that it was a business in which the mayor was a shareholder was also a very significant concern and city council gave direction that certain steps had to be taken to ensure that this issue was addressed in a timely manner."     

When asked why this has gone on so long, Philpott said the company was warned more than once that it could be disconnected if a payment was not received. He said the company did make make some small payments, but the outstanding balance remained.

The city has about $1.8 million in unpaid electricity bills, about 25 per cent of which is past 30 days due.

Philpott said an agreement has now been reached with Stewart Foods to pay the bill.

Stewart Foods has until mid-October to pay the outstanding amount.

"The city will be holding them to that commitment. Any deviation from the commitment obviously will mean a disconnection in power which is the same as what we would do with any other business or resident that would be in arrears."  

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