The City Council for the City of Crossville met in special session on Monday, October 24, 2011, at Crossville City Hall.

 

Roll Call.

Present: Mayor J. H. Graham, III, Mayor Pro-Tem Danny R. Wyatt, Councilman Earl Dean, Councilman George Marlow, Councilman Boyd Wyatt, Sr.  Others present were City Manager Bruce Wyatt, Assistant City Manager Mike Turner, City Attorney Kenneth Chadwell, City Clerk Sally Oglesby, Robert Safdie, Fred Houston, Heather Mullinix, Karli Threet, Tony Perry, David Beaty, Clark Annis, Darlene Barnwell, Joe Miller, Chris South, Khrista Wyatt, and Billy Martin.

 

 

            Mayor J. H. Graham, III was present and presiding.  He called the meeting to order at 2:00 p.m.

 

 

ITEM #1 – CONSENT AGENDA

 

            A motion was made by Councilman Danny Wyatt, seconded by Councilmen Earl Dean and George Marlow, that all items on the consent agenda be approved as follows:

a)    3rd Reading of Ordinance amending Section 2 of Ordinance No. 1318

b)    3rd Reading of Ordinance adding § 11-807 to the Crossville Municipal Code prohibiting smoking on the grounds of a hospital

Vote: Motion carried by unanimous roll call vote (summary: Yes = 5).  Yes: Councilman Boyd Wyatt, Sr., Councilman Earl Dean, Councilman George Marlow, Mayor J. H. Graham, III, Mayor Pro-Tem Danny R. Wyatt.

 

 

ITEM #3 – MATTERS RELATIVE TO A SIDEWALK AT THE INTERSECTION OF HAYES & MAIN STREETS

 

            Cumberland Medical Center requested a sidewalk to run parallel to their property on Hayes Street from Main Street to the parking lot entrance of the Physician Medical Group.  The estimated cost is $27,262.  Joe Miller reported that this is the only new sidewalk on the list except for the Safe Routes to Sidewalks grant project.  With the work at the amphitheater being completed, city crews can begin construction immediately.

 

            A motion was made by Councilman Boyd Wyatt, seconded by Mayor J. H. Graham, III, that approval be given for construction of a sidewalk on Hayes Street.  Vote: Motion carried by unanimous roll call vote (summary: Yes = 5).  Yes: Councilman Boyd Wyatt, Sr., Councilman Earl Dean, Councilman George Marlow, Mayor J. H. Graham, III, Mayor Pro-Tem Danny R. Wyatt.

 

 

ITEM #4 – MATTERS RELATIVE TO SPEED LIMIT DECREASE ON VILLAGE LANE (OFF GENESIS ROAD)

 

            A recommendation was received from Police Chief David Beaty to reduce the speed limit on Village Lane to 20 mph.

 

            A motion was made by Councilman Danny Wyatt, seconded by Councilman George Marlow, that the ordinance reducing the speed limit on Village Lane be passed on first reading.  Vote: Motion carried by unanimous roll call vote (summary: Yes = 5).  Yes: Councilman Boyd Wyatt, Sr., Councilman Earl Dean, Councilman George Marlow, Mayor J. H. Graham, III, Mayor Pro-Tem Danny R. Wyatt.

 

 

ITEM #2 – MATTERS RELATIVE TO BEKZON, LLC LOAN REQUEST

 

            Finance Director Fred Houston stated that he had reviewed the financial information and was in concurrence with the opinions and thoughts of the City Manager.  City Attorney Kenneth Chadwell provided a proposed resolution for consideration to approve a loan of $300,000 from the UDAG funds.  It was pointed out that the stockholders must be U.S. citizens or it would be an impediment to any possible loan. 

 

            Following a review of the submitted documents, City Manager Bruce Wyatt recommended approval of the loan with the following contingencies:

1.    Cash and CD’s transferred to Regions bank in Crossville;

2.    City Attorney confirm that the purchase agreement is complete and official;

3.    Personal financial statement signed by Alf Mauritzon and wife;

4.    Personal guarantee by Alf Mauritzon and wife;

5.    Life insurance policy for the principal amount of $300,000;

6.    City pay a shared portion of any invoices with the company paying the remainder; or

7.    In lieu of some of the above recommendations, a pledge of $150,000 in CD’s as collateral.

 

Mayor Pro-Tem Danny Wyatt stated that he would like to see $100,000 pledged to the City for 6 months.  However, Mayor Graham stated that he believed that the pledges in the letter dated October 17 (attached and made a part of these minutes) might be all the company would be willing to do.  The City Attorney stated that the City Manager’s contingencies could all be addressed in the resolution.  However, #6 has not been discussed in conversations with the company.  They have addressed #7 and do not believe they would agree to it.

 

Councilman Boyd Wyatt commented that he was weighing the need to be careful with taxpayer funds, but also wanting jobs to be created and questioned the City Attorney as to the viability of their personal guarantee.  The City Attorney responded that he was comfortable with the $300,000 and the inventory as a bottom line, but he would also want the proper legal and financial documents, as discussed.

 

Councilman George Marlow remarked that he would like to work with them and bring the jobs to the City as long as there was sufficient collateral.  Mr. Chadwell pointed out the Council would need to weigh the risks.  He believes that the value of the collateral looks adequate; however, the problem can be in collecting on it.

 

Mayor Graham pointed out that the company has an obligation for meeting payroll until the receivables come in, plus provide the cash match for the CDBG grant.  They have also agreed to put all assets in the LLC, which has been formed as a Delaware corporation.  The investments are estimated at $8,000,000-$10,000,000.  A job fair has been scheduled for Friday.

 

Councilman Dean stated that he was comfortable that the City Attorney had put together a reasonable plan that would protect the City as much as possible and voiced his support.

 

Mayor Graham suggested that the resolution require BekZon to purchase the equipment and submit invoices for review and reimbursement by the City.  He also asked that the resolution include the City’s agreement to join with Cumberland County in paying half of the rent on the incubator for one year, which would be $20,000.  The County will be paying $20,000 with Roane State paying the utilities.

 

Mayor Pro-Tem Danny Wyatt stated that he needed more pledged securities before he could approve release of taxpayers’ money.

 

Mayor Graham informed the Council that the statistician from the University of Tennessee believes jobs worth $4,000,000 per year in payroll would generate $173,500 in sales tax per year plus the roll-over effect of the money changing hands and helping other businesses.

 

            A motion was made by Mayor J. H. Graham, III, seconded by Councilman Earl Dean, that approval be given for the motion for resolution to approve a loan in the amount of $300,000 from the United States Department of Agriculture Grant revolving fund from the City of Crossville, to BekZon, LLC, a Delaware Limited Liability Company, with the revisions as discussed.  Vote: Motion passed (summary: Yes = 4, No = 1, Abstain = 0).  Yes: Councilman Boyd Wyatt, Sr., Councilman Earl Dean, Councilman George Marlow, Mayor J. H. Graham, III.  No: Mayor Pro-Tem Danny R. Wyatt.

 

 

            With no further business, the meeting was adjourned at 2:45 p.m.