Wellness Center issue gets lots of talk, no resolve at call meeting of fiscal court

Posted July 30, 2014 at 1:52 pm

Magistrates hear that facility also behind in SKRECC payments

Another meeting was held by Clinton Fiscal Court last Tuesday afternoon, July 22 to specifically discuss the Wellness Center.

The call meeting saw all court members present, as well as county attorney Michael Rains, Albany businessman Weldon Haddix and some members of the Wellness Center Board, including the center’s director Charlotte Dick.

The first speaker, however, was Benny Garland of South Kentucky RECC who had apparently been asked to address the court and others present about a low-interest loan program the cooperative offers to businesses and non-profit organizations for community and economic development.

South Kentucky RECC offers the revolving loan funds through USDA, with the RECC Board of Directors having the final say as to whether or not to grant a loan.

Garland explained the criteria and loan process, saying an entity could borrow up to $50,000 to $500,000 over 10 years for such things as construction and/or equipment or lesser amounts for other projects over lesser time periods at zero percent interest and a one percent administrative fee.

The first step in the process of attempting to borrow through the loan program would be sending a Letter of Intent to file an application, which he estimated would take about two to three months. Also, any loans made would have to have collateral of some sort, such as a Certificate of Deposit or letter of credit from a bank.

Following the presentation about the co-op’s loan program and noting the Wellness Center would be an eligible entity to apply because of its non-profit status, judge/executive Lyle Huff asked Garland if loan funds could be used to pay off debt. “…Loans cannot refinance debt,” Garland said.

Dick then asked Garland if the Wellness Center borrowed money to use as operating expense, and then repay the loan through those operations, would they be eligible. Garland said yes, but the loan would still have to be collareralized, such as with a CD or credit letter from a bank.

Judge Huff then made several comments, first stating he felt the city owned 50 percent of the facility and again presented a letter from Bobby Russell, General Counsel for the Kentucky Department of Local Government dated April 22, a letter in which both the city (Mayor) and county (Judge/Executive) had received.

That correspondence, which has already been published previously in its entirety, basically notes that should the Wellness Center fail to operate under specifications of the $1 million CDBG (Community Development Block Grant) agreement through June 8, 2016, the city and county would be equally responsible for repayment of the grant.

The letter in part reads that, “As set forth in that Agreement, the City and County are obligated to ensure operation of the Wellness Center until June 8, 2016. Failure to do so would require the City and County to repay the $1,000,000 grant to DLG.”

“…These provisions require Clinton County and the City of Albany to ensure the operations and continued eligibility of the Wellness center until five years from the date of project close-out.”

According to Russell, should the facility be unable to operate through the June 2016 date, the options would be to provide additional funding necessary to continue operations; operate the center under an alternative arrangement (as long as grant requirements are met) or close the Center and repay the $1 million, with the latter being an option no one wants to see.

Judge Huff then said, “there’s nothing to discuss until the city accepts 50 percent ownership.”

Albany Mayor Nicky Smith and the city, while recognizing the city would be responsible for half of the one million dollar grant if the facility ceased to operate, contend that when the facility was constructed, the deed was issued in the county’s name only and that because they (city) do not have ownership of the building or property itself, they are not responsible for the upkeep or debt owed.

At last week’s meeting, County Attorney Rains said he felt the city and county were equally responsible for the debt until 2016, noting the city’s name was still on the grant application.

Judge Huff also suggested the court may want to consider taking the question of ownership and responsibility to the local circuit court and ask a judge to decide on that aspect of the issue.

Huff further told those present that under state law, a county-judge is obligated to leave at least 35 percent of the fiscal year budget intact at the end of the calendar year, or half-way into the new budget year at the end of December.

Garland also said near the end of the short 15-minute meeting that he understood the situation, but that the Wellness Center was about $11,000 in arrears on their electric bill and, due to obligations to South Kentucky RECC members, they couldn’t allow that to continue.

Judge Huff also told both the Wellness Center members present, as well as Haddix, who is owed over $60,000 in past propane supplied to the center, that he felt for both sides, also telling Haddix he understood if he (Haddix) needed to proceed (with legal options).

Haddix, through his attorney David Choate, has filed a lien against the Wellness Center for the indebtedness and has also stated they may have to take the issue to court if nothing is worked out.

No further comments were made by either court members or those in attendance and the meeting, with no action of any kind being taken, was adjourned.

The next regular meeting of Clinton Fiscal Court is scheduled for August 21.