10-21-1940 Special Meeting
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CITY OF. CLERMONT
Minutes of a special meeting of the city
council held at the City Hall Monday, October 21,
at 3:00 p. m.
President O. H. Keene called t:re meeting to
order with Councilmen Roy Lassiter,F. B. Roe, and
R. M. Stackhouse present. Mayor Brmvn, City Attorney
Westbrook were also present.
~~r. Westbrook had prepared a staterrent show-
ing the cost of rofunding and explained why the
Council would nave to take definite action in regard
to enforcement of the pavi~g liens.
A motion was made by Mr. St.ackhouse that
all paving liens must be paid by December 31, 1940,
with a 25% payment to be taken advantage to that
time. The motion was seconded by Mr. Roe and when
put to a vote, the motion carried.
A motion was made by Mr. Stackhouse that the
City Attorney be instructed to bri~g foreclosure
sui ts on pa ving liens after Jarmary 1, 1941. ' The
motion was seconded by Mr. Roe and wren put to a
vote, the motion carried.
A motion was made by Mr. Roe that the City
Attorney and City Clerk make arrangements for the
annual'election to be held December 10, 1940. The
motion was seconded by Mr. Stackhouse and when put
to a vote, the motion carried.
Mayor Brovm made a report on the police situ-
ation suggesting a full time night policeman be put
on and that Mr. Anderson be in charge of streets,
water, parks, and builillng and health inspector
with deuuty police powers for emergencies.
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Councilman Albert Johnson came in about 3:30
p. m.
After discussion by the Council and explanation
of A. B. Dean that he could not take over ~ll night
work, Mr. Lassiter made a motion that the Council
go into an executive session. The motion was
seconded by Mr. Johnson and when:put to a vote, the
motion carried.
After the executive session, Mr. Lassiter mrle
a motion that H. S. Cleaver be appointed Marshal
to be on duty all night, Mr. Dean to be relieved
as soon as Cleaver can take charge and Mr. Dean to
be pa~d to November 1, 1940. Mayor Brovrn is to
regulate Cloavor's work as to ~ours and duties.
The Council agreed thpt Mr. Stackhouse shou1d have
control of street work until January 1, 1941; and
that Mr. Roe should get 500 feet of hoso and sprinklers.
Mr. ROe was also authorized to fix the ban~ stand
and shelters in Kehlor Park. The motion was seconded
by Mr. Stackhouse and when put to a vote, carried.
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.Oct'ober 21, 1940
To the Mayor and
~, City Council of the
~-...:.-. Ci ty of Clermont:
The writer desires to call your attention to conditions in
the City in connection with its new financial set-uJ?, following
the completion of the 'exchange of approximatelY 93% of all of its
former outstanding bonds. The remaining 7% of the old debt will
be very slow in coming in, probably some will drift in each year
and it is likely that .some will never show up. That makes no
difference to the City, as int~rest on the~ntire issue of Re-
funding Bonds must be deposited in the Bank each year, and as,
if, and when the remaining bonds are presented, they will be
exchanged, and, all back interest paid.
This feature of the Refunding may be regarded as completed,
and the result of tax collections for 1939 was sufficient to
indicate that it is successful, and that our future relations
with bondholders, with efficient business operation of the City,
should cause no trouble. "
. However,. there is another part of the Refund1ng that is
going to cause serious~trouble unless prompt and diligent action
is taken by the Co~cil. The'bondea d~bt of the City is not its '
only debt. There 'is,: s.tll1 remf?iningtneexpense. Of Re;f'unding, .
which the City 'under ,its contract mus'j:;'Pla.Y.' " . ". ". '
The. total cost', of Refunding the old debteof the City, which
debt amounted to about $1,200,000.00,w~th amounts paid and amounts
yet to be paid is as follows:' '
Total Fee Paid Yet Unpaid
Leedy, Wheeler & Co.
Fiscal Agents 16,000~.oO 2,OOO.Oq 14,000.00
Judge Allen E. Walker'
Special Master in )~
Bankruptcy suit. 1,750.00
(fee ordered paid by Court) 1,~00.00 :.,350.0.0
Henry L. Jollay,Specia1
Attorney for Ci.ty, who
handled Bankruptcy Suit
in Fedie ral Court. ,
(fee ordered paid by Court) 2,103.20
T.C. Cork, Special Attorney
for City, who handled Bond
Validation Suit, including
appeal to Supreme Court
(fee ordered paid by Court) 500.00
. Cost of printing new bonds
and notes 303.75
900.00
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1,203.20 ~
348.35
151.65 ~t-
303.75
none
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Cost of Validation of borids-
fee required by law to be paid
Clerk Circuit Court 478.75
478.75
. none
Fee of' Citizens Bank of Cler-
mont as Exchange'Agent,
handling expense for the
, actual exchange 450.00,'
325.00
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125.00 ~-
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Advance'depositon
'costs in Barikruptcy
Suit, required by law
Other Court. costs and.
advertising required by law,
~ Total
a60.00
100.0~'
none
105.31
105.31
none
$ 21,791.01$ 5,961.16
$ 15,829.85 .
From the above it will be seen that there is ye:t to be paid'
the sum of $15,829.85, all of which, .with the exception of part
.of balance due to Leedy, Wheeler and Co. .is now past due.
All of the above items 'that have been paid, and those re-
maining, to be paid" have not been paid"nor will be payable frC?m
general tax funds" but from a special fund realized from the .
collection of 5% cash on the delinquent taxes and street paving
assessments.
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, ' Here is where the rub':COin~B..e.S:;l.nce July 1st the, City has
only collected 'about $200~00. Thlshas been'due to the scattering
of reports about the City to the -effect that the City was not.
going to push the collection of pavi~g a,sses~ments ,tm t ',we _.,had
30 yea.r~to pay the boild:s ~ that we 1nJ.ght hever need t,9 c.'011e,.ct the
assessments', 'et,c. al1'of;-wh1ch h~s tended 'to create an unfa:vorable
~si tuation. The' situation is that such reports have':rea.ched some
of the creditors of the City and it has been brought very forcibly,
to my attention that the City is not ,complying with the 'Decree of
the Federal Court, nor is it in compliance with the eon'tract of
the City with Leedy, Wheeler & Co. each of which contain the, very
importan,t words "the City shall promptly and diligently enforce
the collection of. all delinquent taxes and paving assessments. II
The paving assessments have nothing to do, at presen.t, with'
the new, Refunding Bonds. The cash collected, af:ter the payment .
of the Refunding expense, goes to,pay off the Delinquent Tax Notes
at 10 cents'onthe do1larjafter these are r~tired:, then the
balance collected goes to the Siriking Fund to' retire the, new bonds,
thus' redu cing the tax levy made for that purpose.. For example , .
if we had $5,000.00 to 5.{?are in the sinking fund right now we
could bU. 7. in more than :jplO ,'000.09 in new bo.nds, reducing the tax'
levy by ~200.00 yearly for the next 27 years.
The plan of settlement of paving liens has been effective
since July 1, 1939, so that after December 31sta.period of'18
months will have elapsed, during which time the .City has 'taken
no action. This is considerably more, than would be considered
a: reasonable time by '.any Court. ' It would be unfortU.tlate, par-
ticularly in view of the success of the Refunding plan on other
issues, to have the City again subjected to mandamus suits"
contempt proceedings and other legal troubles, when it can and
should be avoided. Another thing, a great many property ,owners
have paid their proper dues, so to speak, and many who ha va paid
are not so ~b1e to ,do so as some who have not., There a.re always
those who want a free ride and who never pay taxes until forced
to do,so.
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There are two things to do. First, a definit,e announce-
ment that all paving liens, extensions and compromises must
definitely end on December 31st. Second, the bringing of some
foreclosure suits, enough to convince our cr~ditors,andthe
Federal Court that we are trying ,in good fa.ith to carry out
our obligations.
The duty rests on the Council. , I am prepared to do my
duty as City Attorney, and am prepared with the. first foreclosure
suit to be filed about December 1st, and a second one about a
month later.
Respectfully submitted"
GEO. F. WESTBROOK
City Attorney