Developer's request to have penalty waived denied

Tammy Cheek News Herald

Developer Mark Matlock is expected to pay a 10 percent interest/penalty on a past due account with Lenoir City Utilities Board (LCUB) for infrastructure work on projects for his company, Construction Design & Management (CD & M) Developers.

Monday, Lenoir City Utilities Board, in a four-to-three vote, stood by LCUB General Manager Fred Nelson on his assessment of the situation.


A number of circumstances including schedules, conflicts and an application for Tax Increment Financing over a 12-month period resulted in apparent confusion over an unpaid balance, amounting to more than $118,000. Nelson referred to a letter in which Matlock asked if he could pay half. 


Nelson said he would agree to those terms if the second half, about $62,972, would be paid by March 3, 2008. He explained if the second half wasn't paid, a 10 percent penalty would be assessed and LCUB would not provide services for any CD & M projects.


The total currently owed includes $61,412.82, the amount of the second half of the initial costs plus ten percent added on, $19,244 owed to the sewer department, and $6,774 owed to the water department for a total bill of $87,430.82 owed to LCUB.


Matlock said he intends to pay the money owed; however, he deferred payment while working on a request for Tax Increment Financing (TIF) funds. 


Board member Bobby Johnson Sr. spoke in favor of Nelson, while Board member Tony Aikens argued for relieving Matlock of the ten percent penalty. "I feel like this is a management decision. I don't feel like it needs to come to this board," Johnson said. "Fred's the manager. He's in charge, and this is exactly the total. What he's got out here is right, then that's what he's made a decision on and has to be done." Johnson said he has worked in collections and the amount should be paid in full. "In fact, I'll entertain a motion that it doesn't come before the board," he added. However, he later amended the motion to not waive the penalty. Board member Douglas "Buddy" Hines seconded that motion. "I'm just concerned because you told him one thing and then he was in discussions about something else and the assistant manager told him something else and I can see where he may be confused, and I just hate to come back and penalize somebody for that, and I can see where you would want the board to make a decision," Aikens said. "I just don't think we're being fair to him. I mean he was told two different things."


Mayor Matt Brookshire noted there is not really a policy in place for a situation such as this. Nelson agreed and said there is just a policy of penalties on customers' utility bill, which is 5 percent. "I just believe developers and people are having a hard time, and you said it best, mayor, there is no policy right now currently in place," Aikens said. "And, I just hate to see someone come up and penalize somebody 10 percent when they are down, and that's what we're doing. There was some miscommunications and no policy in place, and here we are charging $5,500 when he's done all sorts of improvement to the east section of town, as well as (Highway) 321, and the times that we're in ... I just can't see that."


Nevertheless, the board voted not to waive the penalty. While Board members Gene Hamby, Johnson, Garber and Hines voted in favor of the motion, Aikens and fellow board members, Eddie Simpson and Joel Garber voted against