Lenoir City OKs consolidation wi

Lenoir City OKs consolidation with Martel
Jeremy Nash news-herald.net

Lenoir City Council has taken the first step toward moving forward with a consolidation between Lenoir City Utilities Board and Martel Utility District.

Councilman James Brandon and Councilwoman Jennifer Wampler motioned and seconded, respectively, to authorize the first reading for execution, delivery and performance of an agreement between the city and Martel for consolidation.

In a separate vote, motioned and seconded by Eddie Simpson and Jim Shields, respectively, the city moved forward with a first reading for an ordinance to establish a separate utility department called Martel Utility Department and form an advisory committee for the department.

Both votes passed 5-0. Councilman Bobby Johnson Sr. was absent.

“Now that city council went first, so to speak, Lenoir City Council, the Martel Utility District will now have to approve the agreement,” Shannon Littleton, LCUB general manager, said. “As soon as they approve the agreement then the (Oct.) 28th will be the date for the second reading. So everything’s got to be 100 percent ready by then.”

Martel Utility Board will meet at 4 p.m. Tuesday at its office.

Littleton said attorneys for both sides are still working through the consolidation agreement, but he wanted to move forward with the first reading to ensure the timetable stays on track.

“The consolidation agreement, it should have already been completed, although I think the lawyers are still dealing with it,” Littleton said. “That’s why we didn’t have it in front of us today, but I was told that the employee portions are going to be taken out and also the First Utility District sewer purchase is not going to be condition precedent for the agreement.”

Plans are to offer Martel distribution manager Larry Butler a formal job offer at LCUB and ask if Martel manager Gayle Matlock would like to serve as a consultant for a year.

“We’re taking the manager’s — probably giving her a 50 percent reduction in salary and she’s on an on-call basis. She’s going to have to work so many hours per week, but she’s on an on-call basis to assist us during this transition — only for a year though, it’s only for a year, and then she’s relieved of her duties,” he said. “Second employee’s not going to be an employee of the new department. He’ll have a job offer to come over the LCUB system.”

The ordinance notes council will appoint two members to the advisory committee for the Martel Water Department within 30 days of the consolidation date, each serving one term for 10 years. If a member leaves, the position will not be filled. Both positions will be paid per diem of $100 per meeting for a maximum of 12 each year. The committee will make recommendations to LCUB for items pertaining to water operations.

If approved for a second reading Oct. 28, the agreement would then go to Loudon County Mayor Rollen “Buddy” Bradshaw for a public necessity hearing at 6 p.m. Nov. 14 at the Lenoir City Municipal Building. A consolidation date would be Dec. 3, Littleton said.

The hearing with Bradshaw is still subject to change, Tony Aikens, Lenoir City mayor, said.

“It gets us to the first step,” Aikens said. “Short term and long term it’s a good deal for the Martel ratepayers because it’s going to stabilize their rates. Long term it’s a good deal for LCUB. Short term it’s not that great of a deal, but it gives Lenoir City Utilities a chance to grow their water and sewer department whereas we’re sort of locked in right now.”

Littleton told council the consolidation won’t be without expense.

“We are going to accept all responsibilities of Martel,” he said. “We’re going revenues and cash reserves. We’re also going to accept all their debts and responsibilities. So we have a wind-down plan that is going to have some negative cash to begin with and there will be an infusion of cash from our water department. I can tell you right now that number’s set to be $130,000. ... We will be paying the USDA (United State Department of Agriculture) loan off, paying some other responsibilities off from the utility district and when it becomes a department there will be $130,000 worth of debt is what we’re assuming at this point.”

A public hearing will be held at 5:30 p.m. Oct. 28 at city hall before council meets.

“It’s definitely a good deal for those folks up front,” Aikens said. “And regardless of what a few folks might say, the negative folks, Lenoir City Utilities was approached by Martel Utilities.”

In other news, Lenoir City Council:

• Approved a full-time position for Lenoir City Police Officer Jonathan Yates.

• Agreed to cancel the Nov. 11 meeting.