Attorneys agree on State School sale-purchase papers

By Alton Porter

Attorneys for the City of Crockett and Crockett Independent School District (CISD) have reviewed the sale and purchase agreement for the former Crockett State School property and officials are looking forward to closing the transaction, possibly at a joint meeting less than two weeks from now, Monday, Jan. 8, 2018.

That's according to City Administrator John Angerstein, who gave city leaders an update on the progress of negotiations between city and school district officials on the pending sale-purchase of the state school property at a special city council meeting Friday, Dec. 22.

Several weeks ago, CISD Superintendent Terry Myers offered, on behalf of the school district, to purchase the state school property from the city for $650,000 and the school district's $61,000 transportation facility.

However, the sale-purchase transaction was stalled to allow the city time to purchase insurance on the state school property and the entities the opportunity to complete title searches on that property and the school district's transportation facility, which are being exchanged in the transaction.

The purpose of the searches is to give the city and the school district the opportunity locate documentation that ensures the titles and deeds they are passing on the properties are free and clear of encumbrances.

The city council members were hoping to consider and possibly approve action to authorize the purchase and sale agreement, and Mayor Joni Clonts and City Secretary Mitzi Thompson had placed the matter on the meeting's agenda.

However, the city had not received final paperwork from the school district, so city officials had to table action on the matter.

Mayor Pro Tem Mike Marsh, councilmember for Precinct 5, offered the motion to table the item, Precinct 3 Councilmember Ernest Jackson seconded the motion and it carried on a 3-to-0 vote, with Precinct 4 Councilmember Rita Rodriguez voting along with them. Councilmembers Butch Calvert (Precinct 1) and Darrell Jones (Precinct 2) were absent.

Explaining why the matter was placed on the agenda and opening discussion on it, Angerstein said, "(W)e put this in here as a placeholder, just in case the (sale-purchase) documents would be provided in time (to be acted on). We don't want to be the reason for any holdup on that.

"I did speak with Mr. Myers a couple of days ago and he confirmed that they would not have the title search and the survey complete on the transportation (facility) and bus barn. With that being said, he spoke with both of them (attorneys for the city and school district).

"They have ... intents of moving forward on the 8th (of January), which, more than likely, will be our next council meeting. It's the first Monday after New Year's.... So hopefully, by the 8th, he said that he would have survey title search complete.

"And both of our attorneys have already reviewed the sale and purchase agreements and the proposed deed and have agreed on and completed that document. They're going to forward it to us for us to have on hand."

Angerstein added, "They have already put it on their agenda to meet with us as a joint meeting at our council meeting on the 8th (to possibly close the deal). We hope that all things will come together.... (For now,) I request that this item be tabled."

In answer to a question from Marsh, Angerstein said, in their sale and purchase agreement, school district officials would not agree to a request by the city to be reimbursed by the district for insurance expenses or any funds the city has expended on the state school property since Dec. 18.

"That means basically, we don't incur expenditures," said Angerstein. "If we have to incur some expenditures, I will advise council. But, as of the 18th, our maintenance—the facility maintenance man out there—was let go. We're not incurring utility fees. Oncor (Electric Delivery Company, L.L.C.) said that if they need to turn the electricity off, they will advise us ahead of time.

"Currently, we have no need for electricity out there, but the school district does have some food in the freezers already.

"That was us trying to help them out.... We're not using it for storage. But, once again, I made no guarantee that electricity would be maintained. So, if we do receive notice it has to be turned off, we'll let them (school district officials) know, and they can either turn it back on or move their food out of the freezer.

"I just made it clear with Mr. Myers that we can't take any responsibility for anything out there. That we'll be good neighbors if they need to store something, but we can't take any responsibility if the electricity goes off or anything like that. We're not paying the utility fees.

In answer to another question from Marsh, Angerstein confirmed the only expense the city now has associated with the state school property is the cost of property insurance coverage, which he highly recommended the city keeps to protect its assets until after the sale-purchase transaction closes.

"He (Myers) reached out to me and questioned council's intent on not paying anything after the 18th," Angerstein said. "So, I let him know once again, we're not going to incur utility fees and maintenance, for sure. The only thing we have to keep is the insurance, but we're not going to incur any additional expenses. Or, we have no intentions on it. I will let you know if we do run into something.

"So, hopefully, the 8th is going to be the closing.

In other business, the councilmembers voted 3 to 0 to pass a motion made by Jackson—seconded by Rodriguez—approving a resolution that allows the city to contract with Branch Banking & Trust Co. (BB&T), to finance up to $778,000 in guaranteed energy savings equipment at an interest rate not to exceed 2.88 percent. The financing term is not to exceed 15 years from closing.

The equipment is to be used to help the city reduce its energy consumption through a project the councilmembers recently voted to enter with Johnson Controls, Inc., in accordance with a proposal approved Nov. 10 to improve energy efficiency.

Angerstein said, "The reason to try to put this (the resolution) for today's (Friday, Dec. 22) special, called meeting was due to the Tax Reform Bill that has now passed from our (U.S.) House (of Representatives) and Senate (and signed into law by President Donald Trump). Interest rates are on the rise.

"And after Friday, they (BB&T) will not guarantee this interest rate. And in fact, they said that very likely by this time next week, it would be half a percent to one percent higher. ... It was in our best interest to have this meeting and close on it. As soon as this meeting finishes and we sign the documents, we'll fax them or email them off. And then, overnight the documents to them. And they said they would honor the interest rate."

Angerstein told the Courier, "Between our air conditioners and our lighting in all of our buildings and outside our buildings, we spend close to $500,000 a year (for electricity). So, any percentage of a change on that pays back just in energy consumption. Using less energy means we pay less for it. So, we will pay ourselves back in less than 15 years for that contract.

"What it costs to upgrade it all, we will get that money back in the first year. So, the action by the council today was to go ahead and move forward and approve that financing so we can purchase the equipment."

In other action, the councilmembers:
• Passed, on a 3-to-0 vote, a motion offered by Marsh—seconded by Rodriguez—authorizing Angerstein to purchase for $78,578.61 from Crockett's Collins Tractor and Equipment, a New Holland tractor/loader backhoe; and
• Voted 3 to 0 to pass a motion made by Rodriguez—seconded by Jackson—to approve having a slogan that reads "Crockett A Place to Call Home" painted on the east elevated water storage tank near Wal-Mart and a catchphrase that states "Crockett Home of the Bulldogs" painted on the southwest elevated water storage tank near Crockett Independent School District and the state school properties to promote positive images of the city.