Bearden appointed to fill Alexander council vacancy; Attendance ordinance fails

In a four to three vote the Alexander city council appointed Andrea Bearden to fill the vacant seat in Ward-3. The vacancy was filled at the regular meeting held Monday, October 21.

The four aldermen voting for Bearden were aldermen Farren Wadley, Brad Scott, Juanita Wilson, and Samuel Gregory. Aldermen voting against were Ceola Bailey, Faye McKeon and  Lonny Chapman.

The Ward-3 seat became available when Alderman Dan Church resigned July 18. Church was elected in 2012 defeating incumbent Harvey Howard.

Bearden was sworn-in by Saline County Justice of the Peace J.R. Walters.

Bearden was the only individual to submit a resume for the open seat. The council decided at the September meeting to table the appointment for one month in hopes of getting more applications.

Under normal circumstances a four to three vote, with one absence, would count as a tied four to four vote. But, state law allows for counting only those positions that are not vacant to determine a majority vote.

Mayor Hobbs attempted to cast the deciding vote but had to be reminded of the law covering this situation. When a mayor does have to break a tie vote state law requires mayors who wish to vote to vote "yes."

No veto this time

Mayor Michelle Hobbs won't be vetoing this appointment. After Hobbs vetoed an appointment approved by the city council earlier this year, to fill a council vacancy, the state legislature made that type of a veto illegal.

State Senator Jeremy Hutchinson sponsored Senate Bill 1047, which amends Arkansas Code 14-44-104 adding a no veto clause. The law requires the city council of a city of the second class appoint someone to fill any vacancy on the city council.

The new addition to the law then states, "The election to fill the vacancy under subsection (a) of this section is not subject to veto by the mayor."

The "no veto" clause went into effect in August.

Attendance ordinance fails

In another vote, the council failed to pass the much-discussed ordinance that would fine elected officials for missing too many "regular" and "special" meetings. The ordinance failed seven to one with Bailey as the lone "Yes" vote.

Proposed changes to the ordinance, made at the regular September meeting, forced the vote on it to be tabled until the October meeting. Alderman McKeon suggested an absence would be excused providing the person notifies someone at city hall before closing time on the day of the meeting. No action by the council would be required approving the absence and no reason for the absence need be given, as provided in the original version. The ordinance also included fines after missing three or more unexcused absences "during any calendar year."

Alderman McKeon seem to have a change of heart on the matter since the September meeting. During the discussion prior to voting on the ordinance McKeon asked if there would be a future ordinance requiring alderman to "do their job."

The question of forcing aldermen to attend meetings came about after four aldermen stopped attending council meetings starting in February. The move came about, in-part, when during the regular January council meeting newly appointed Mayor Michelle Hobbs announced she would "veto" any action passed that was proposed by aldermen Juanita Wilson, Dan Church, Jack Shoemaker and Lonny Chapman.

With a vacant seat on the council the four "missed" some meetings to keep the council from having a quorum in an attempt to stop Hobbs from ramming through her choice to fill the vacancy. Since then Shoemaker has moved out of Alexander and Church has resigned from the council.

Dollar General store construction underway

Construction of the new Dollar General store in Alexander is well underway.
The store is being built along Arkansas 111 next to the post office.

Alexander meeting agenda slim, nothing new

The agenda for Monday night's Alexander City Council meeting is similar to last month's agenda. The only two major items on the agenda are the filling of the vacancies for Ward-3 alderman and treasurer. The meeting is Monday, October 21, 6pm at City Hall.

Another aspect which has not changed is the number of candidates to choose from for the two positions. No one has submitted a resume for treasurer and Andrea Bearden is still the only Ward-3 resident applying to fill the vacant seat.

The seat became available when Alderman Dan Church resigned July 18. Church was elected in 2012 defeating incumbent Harvey Howard.

According to her resume she is a Maintenance Technician for the Arkansas Department of Military at North Little Rock.

In her resume she states she has, "Management experience and exceptional people skills." She also says she, "Desires a challenging role as an Alexander City Council Member".

The City Council is already in violation of state law, which requires both vacancies be filled at the next regular meeting. The council decided at the September meeting to table the appointment to fill the vacant Ward-3 seat in hopes of getting more applications. The treasurer position has been vacant since March 18 when treasurer JoAn Churchill resigned. No applications have been received for that position.

Fire truck repossession not on agenda

While reports from Mayor Michelle Hobbs and City Attorney Carla Miller are on the agenda, what is blatantly absent is a discussion about the recently repossessed fire truck. The City of Alexander Fire Department's main truck was repossessed Wednesday, October 16.

It was collateral for a lease-purchase agreement the city entered into in 2007, combining several loans into one with a lower interest rate. The lease-purchase agreement was with First Government Leasing Co., owned by Paul Anthony Graver of Chicago.

Since then the lease-purchase agreement was sold by Graver to First State Bank in Oklahoma, which increased the interest rate to the city. Mayor Hobbs stopped making the monthly payments in March of this year claiming because the interest rate now exceeded the maximum allowed by the Arkansas Constitution the lease-purchase agreement was void.

First State Bank filed a lawsuit suing Alexander and First Government Leasing, claiming the bank was defrauded into thinking it would acquire a mortgage and lease-purchase agreement for improvements to an Alexander fire station that it says were never started.

It's been reported Graver has bought back the lease-purchase agreement from First State Bank to end the lawsuit. The fire truck was then repossessed by Graver.

Alexander facing suit from Oklahoma bank

According to the Arkansas Democrat-Gazette the City of Alexander is being sued by an Oklahoma bank after the bank bought a loan from two Illinois leasing agents. 

In the October 8 article the lawsuit claims the First State Bank in Oklahoma, "was defrauded into thinking it would acquire a mortgage and lease-purchase agreement for improvements to an Alexander fire station that it says were never started."

Gill Ragon Owen, a Little Rock attorney, filed the lawsuit for the bank in Pulaski County Circuit Court last week.

The allegations stem from a 2007 lease-purchase agreement between Alexander and First Government Leasing Co., owned by Paul Anthony Graver of Chicago. In 2007 city officials wanted to combine several loans into a single loan to have one payment and a lower interest rate, saving the city money.

According to the Democrat-Gazette article the agreement between First Government Leasing Co. and First State Bank in Oklahoma, "stated that proceeds from refinancing a loan for the Fire and Police departments would be used to improve a fire station." However, "according to the bank’s complaint, the money was used to pay off debts on police vehicles and purchase a firetruck."

The Democrat-Gazette article goes on to quote court documents which claim, "the city took out a mortgage on the fire-station loan in First Government’s name. In May 2012, Lance Dominique of Chicago sent an offer letter to First State Bank to sell the lease-purchase agreement to the bank. The bank paid Graver $393,910.55 for the agreement."

The article continues;
Graver executed an assignment document giving the bank undivided interest in and to the lease-purchase agreement, but according to the bank’s complaint, neither the mortgage nor the purchase agreement were assigned to the bank as agreed upon.

The bank also found out that in 1992, Graver admitted to facilitating the purchase or sale of securities by means of “manipulative, deceptive, and other fraudulent devices” and that he consented to be barred from association with any broker, dealer or municipal securities dealer thereafter, according to the lawsuit.
Alexander still owes 100 payments of $4,970.83 each on the loan, but it quit paying First State Bank in March and has refused to pay since then because the city maintains that the lease-purchase agreement violates the Arkansas Constitution and is therefore void, according to the complaint.

The state's audit of Alexander's 2007 budget year shows the city entered into a 14-year loan in violation of the five year maximum. At the time the city entered into the loan agreement the state's Constitution had recently been changed to allow governmental bodies to take on debt but with a five-year maximum on all loans. Later, city officials learned the interest rate had been increased to above the state's legal maximum.

The Democrat-Gazette article continues;
“Graver has a pattern and practice of defrauding Arkansas cities and counties by enticing them to issue invalid lease purchase agreements,” according to the bank’s lawsuit.

“Graver intentionally structured the lease purchase agreement in a way that violates Arkansas law, and Graver and Dominique intentionally offered to sell and sold the lease purchase agreement to First State Bank as a duly authorized, valid and binding obligation of Alexander … when in fact Graver and Dominique knew the lease purchase agreement in no way complied with Arkansas law … contained numerous misrepresentations and omitted information necessary to make the representations that were made not misleading.”

According to a document accompanying the complaint, Graver and Dominique offered to sell First State Bank a number of other lease-purchase agreements from all over the country, including three in Arkansas in Caney township, Reed, and Saline County.

Article 16 of the Arkansas Constitution bars cities from lending credit for any purpose and issuing any interest-bearing evidences of indebtedness. Three amendments allow cities to incur debt, but Alexander’s lease agreement didn’t comply with any of them. First State Bank maintains that Graver and Dominique failed to disclose that when selling the agreement.

“If they had, First State Bank would never have acquired the lease purchase agreement,” according to the lawsuit. “The failure to disclose that the obligation was not valid makes the representation that the interest would be tax exempt misleading.”

The offer also didn’t disclose that the agreement included a nonappropriation clause that allowed Alexander to terminate the obligation in any year it failed to appropriate enough money to make payments, according to the complaint. First State Bank offered to sell the lease-purchase agreement back to Graver and Dominique for the amount it originally paid, minus payments it received from Alexander and plus $5,000 in attorney costs but hasn’t gotten a reply.

The bank is asking for a judgment on the validity of Graver’s assignment of the lease-purchase agreement to the bank, the validity of the agreement itself and at least $381,174.27 in relief from Graver and Dominique. From Alexander, the bank seeks the amount totaling the full payments required under the agreement plus attorney fees and costs.

Alexander Mayor Michelle Hobbs refused to speak to a reporter through an assistant Monday. City Attorney Carla Miller refused to comment on the lawsuit.