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LCUB retains counsel to assist with industrial, Family Brands issues, inquiries

Lenoir City Utilities Board members weighed their legal options at the Board’s regularly scheduled meeting, Monday, Aug. 18.

LCUB, after much debate, and in a split vote, approved the hiring of legal counsel “to assist with industrial sewer rate issue and inquiries,” specifically, for the situation with Family Brands International.

Family Brands, the mother company of Elm Hill and Cades Cove, has paid around $8,000 per week to LCUB since January in water and wastewater rates, an 82- and 88-percent increase over last year’s rates, respectively.

This was after LCUB voted to raise rates in a new block rate system at the end of 2007, but had discussed rate increases of 30 to 40 percent, not more than 80 percent.

“I received several calls about the rates … things have been brought up about where the Utilities stands and where the City stands as far as the voting; several things have been indicated in the paper that we haven’t been able to make comments on,” said LCUB General Manager Fred Nelson.

Nelson added “personal accusations [were] made” about certain Board members.

News media have pointed out that Lenoir City Council and LCUB have the same membership except two LCUB members, appointed from Farragut and West Knoxville, Pat Beasley and Joel Garber.

Garber and Beasley were the Board members who motioned and seconded the commercial rate hike, and they were the two to motion and second hiring an attorney Aug. 18.

According to Shannon Littleton, LCUB assistant general manager and attorney, a document not yet released to the public, Private Act 205, defines LCUB as City Council plus two.

The 1970s document “says the Lenoir City Council is the Lenoir City Utilities Board … but time progressed, and we all know we added two additional members at a later point,” Littleton said.

“I just feel we have a need for a legal representative and if this comes up to the two entities [LCUB and Lenoir City], Shannon [Littleton] can not represent both,” Nelson said.

Nelson advocated hiring C. Coulter “Bud” Gilbert, an attorney from Kennerly, Montgomery and Finley, for an hourly rate of $200.

Tony Aikens, who voted against the rate hike, pointed out that Gilbert had represented other defendants against LCUB and Lenoir City in the past.

“It looks to me like it’d be a conflict for his firm to be representing the City or the Utilities Board since he’s represented others against us,” Aikens said.

Eddie Simpson, also a naysayer of the rate increases, asked why LCUB was rushing to hire an attorney instead of working with Family Brands.

“We could still be in negotiation. We could still be saying, ‘Companies, what can we do to fix this problem, or is there anything we can do?’” Simpson said.

“There hasn’t been any lawsuit filed … I think management should still be talking to these folks,” he added.

Vice Mayor Douglas “Buddy” Hines asked what would happen if Family Brands left LCUB’s territory. Elm Hill alone supplies four percent of the revenue for LCUB.

Nelson seemed to think it would not be a problem to lose four percent of total revenue “at what it’s costing us to get everything clean to go in.”

Nelson pointed out Family Brands’ violations, mostly centering on high [biochemical oxygen demand] outputs. These violations can raise fines as high as $1,000 per violation per day. According to Mike Blackburn, Family Brands currently has four violations.

Simpson asked to postpone the vote until after a workshop and further discussion, but the vote failed.

LCUB approved hiring Gilbert as attorney, with Simpson, Aikens and Hines dissenting.

In other business, the Board:

• Approved a resolution permitting LCUB to participate in the latest TML risk management pool’s “Safety Partners” loss control matching grant. LCUB hopes to use the grant to assist with the purchase of three multi-gas monitors for the gas, water and sewer departments.

• Approved bids for polyethylene water meter boxes and steel lids for fiscal year 2009.

• Approved the superintendent’s reports for June 2008.


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