, Corbin, KY

Local News

June 11, 2013

Corbin, SMG settle Arena suit

First reading of new budget passed, some employees to get raise


By Jeff Noble / Staff Writer

The City of Corbin and SMG have reached an agreement in which both parties will get a money settlement, along with the city filing a motion to dismiss the lawsuit that was brought up last year by SMG over the operation of the Corbin Arena.

That announcement was made after the Corbin City Commission came out of Executive Session during their regular meeting Monday.

It came with a resolution to the commission, approving the settlement agreement and mutual release between the two parties, which was signed by Mayor Willard McBurney. The resolution also authorizes $72,771 to be used by SMG and the city from a bank account the city has with Hometown Bank of Corbin. That account, called the “City of Corbin The Arena at The David L. Williams SEKY AG Expo Center,” will allocate $65,000 of the money to SMG as a full and final settlement. The remaining $7,771 in the account will go as a full and final settlement to the city. Within five business days following the settlement between the two groups, the account will be closed and the money distributed to them.

Also, the resolution authorizes the signatures and cards on the city’s bank account to be changed to allow McBurney and City Collector Dorotha Weber as the signees. In addition, the resolution allows the two to make the money allocations from the account and close it after SMG and the city are paid.

Both the city and SMG will be responsible for their own attorneys’ fees, expenses and costs incurred in the management agreement, the lawsuit and settlement agreement. Also, both parties agreed to a covenant not to sue each other.

The resolution was unanimously passed by all commission members.

The settlement agreement comes after U.S. District Court in London was notified on May 21 that the City of Corbin and SMG had reached a settlement in the suit. District Judge Gregory F. Van Tatenhove ordered all proceedings to be cancelled, all pending motions denied as “moot,” that both parties file their agreed order of dismissal no later than 45 days after May 22 (the day he signed the order), and struck the matter from the court’s active docket.

The city was sued by SMC, based in suburban Philadelphia, Pa., last August. Citing a breach of contract, they asked the city to pay $127,641.66, plus punitive damages. The City of Corbin, which owns the Corbin Arena, signed a contract with SMC in May 2008, which court documents said the city agreed that SMC was to have the exclusive right to operate and manage the facility, which opened in March 2009. That agreement ended in October 2010. In March 2012, mediation between the city and SMC did happen, but according to court documents, wasn’t successful.

Earlier at the meeting, the first reading of the city’s budget for the 2013-14 fiscal year was given approval.

For resources available and total appropriations, the new budget lists $7,420,000 in the General Fund, $1,630,304 in the Arena Fund, $170,000 in the Municipal Aid Fund, and $73,250 in the LGEA (Local Government Economic Assistance) Fund from the state.

In General Fund appropriations, the Corbin Police Department gets the biggest chunk of the money, with an estimated $1,967,217 allocated. Public Works comes next with $1,781,900, followed by the Corbin Fire Department at $1,261,829, General Government getting $842,430, and Parks and Recreation finishing the top five at $519,500.

In addition to the $1,781,900 from the General Fund, Public Works also gets $170,000 from the Municipal Aid Fund and $32,000 from the LGEA Fund. Together, the three funding sources give Public Works a total of $1,983,900 in appropriations.  An additional $40,750 in LGEA Fund money also goes to General Government, making their appropriations total at $883,180. All $1,630,304 of the money available in the Arena Fund goes for salaries, expenses and operations of the facility.

Three more meetings on the new budget are set for this month. The city’s new fiscal year begins July 1.

All full-time Public Works and Corbin Recycling employees will get a small raise this year of 50 cents an hour. In his report, City Manager Marlon Sams said the Budget Committee agreed in the new budget to start out any new seasonal or part-time hires in Public Works and Corbin Recycling at $8 an hour. Sams added if they’re hired full-time, they would be raised to $8.75 an hour.

McBurney said the small raise came during a time when many other Kentucky cities are cutting staff and laying off employees.

“That’s all the city could afford, but we’re not laying off anyone,” he added.

Among other actions taken at the session, commissioners approved the second reading of an ordinance that would enact and adopt a supplement to the city’s code of ordinances was passed. It becomes law after legal publication. The yearly interlocal agreement between the City of Corbin, the City of Williamsburg and Whitley County for the Whitley County 911 Dispatch Center was also approved, as was the hiring of Dale Phipps and Roderick Crabtree from seasonal workers to full-time workers in the Public Works Department.

Bids for fuel were awarded to Fleet One, while bids for paving, stone, the city landfill and cell phone service were taken under advisement.

Mayor McBurney and Commission members also heard from a group of people living in the South Main Street/20th Street neighborhood in South Corbin. They complained of uncovered tires and mosquitoes from Quality Tire causing a fire hazard, as well as people from the Everlasting Arms Out Reach homeless shelter loitering and littering in the neighborhood.

“We need to have Frankfort come down and have the State Fire Marshall and the EPA contacted,” City Attorney Bob Hammons told commissioners in regards to the tire problem.

McBurney and Commissioners Suzie Razmus and Joe Shelton told the group the city would look into the homeless shelter allegations, asking the group to come back to the next regular commission meeting in July.

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