Ghost of mayor past continues to haunt City of Alexander

Sometimes an individual’s actions have repercussions long after they’re gone. While former Alexander Mayor Michelle Hobbs was only in office two years she seems to be the curse that keeps on giving.

In February the Alexander council approved the purchase of a new Bobcat Skid Steer with a front bucket and a rotating brush attachment. Out of three bids the Bobcat was priced at $67,810 but, it was not the low bid.

Since the city can’t pay the entire amount now the purchase will have to be financed. Street Department Superintendent David Durham explained to council members that while all three bidders offered financing the Bobcat dealer, Hugg and Hall, is the only one that has an interest-free four-year financing plan. Taking that into account buying the Bobcat is cheaper. Durham told council members the monthly payments will be divided two-thirds from the street department and one-third from the parks department.

When the dealer was processing the financing application the repossession of a city firetruck for non-payment of a loan was discovered. This is where former Mayor Michelle Hobbs comes into play.

Hobbs was mayor from the end of November 2012 to the last day of December 2014. In those two short years she managed to orchestrate several financial catastrophes, one of which is still in the process of being corrected.

In March, 2013 Alexander Mayor Michelle Hobbs, under the advice of then City Attorney Carla Miller and without receiving approval from the city council, stopped making the monthly payments on both the loan for the firetruck and a lease-purchase agreement citing that both were illegal under the Arkansas Constitution. Cities are limited to a maximum of five years when taking on interest-paying debt. The firetruck loan was seven years and the lease-purchase agreement was 14 years. There’s also a limit on interest rates.

The fire truck was subsequently repossessed later that year. That’s when city council members learned about the stopped payments. There was approximately $7,000 remaining on the firetruck loan.

A lawsuit was filed against the city that year. The legal battle continued after Paul Mitchell became mayor on January 1, 2015. In 2016 the city council decided to settled out-of-court by paying $27,000 for the firetruck and $103,000 of the nearly $500,000 owed on the lease-purchase agreement.

A special meeting of the Alexander City Council was held Thursday (March 21) evening. After explaining the situation council members approved a new version of the purchase.

In round numbers, Hugg and Hall have reduced the price of the Bobcat from $67, 810 to around $58,000. The city will give a down payment of $20,000 from the Parks and Recreation Fund. That covers the one-third payment agreed to at the previous meeting. Mayor Paul Mitchell has been given the authority to negotiate a loan with First Security of Bryant for around $38,000 plus interest.

In an E-mail this afternoon Mitchell said the bank has started the paper work on the loan approval. He won’t learn the interest rate until that is completed.