MOUNT VERNON — Township trustees from Hilliar Township met with the Knox County Commissioners on Monday afternoon to discuss Otter Fork Road, a part of Otter Fork subdivision near Centerburg.
The trustees, Don McCracken, Roger Hall and Larry Hawkins came before the commissioners to seek help with the paving of Otter Fork Road.
The situation came about when one of the developers of the subdivision, Bebout Construction went bankrupt. Bebout Construction had been given a letter of credit to do the paving, which was to consist of a base coat for the road and a top course of asphalt to be done later after the bulk of the construction was completed in the subdivision.
Township Trustee Don McCracken explained the township’s problem with the road.
“For five years now there was supposed to be a top course put on (Otter Fork) road when it was accepted,” he said. “Of course that never happened as you know. We feel like we had a deal with Steve Jagger to put a tar and chip on it and that fell through. He said he didn’t have the money. We had (Knox County Prosecutor) John Thatcher investigate the matter and he said there wasn’t really anybody to sue. Not that we wanted to go that route anyway. So we are at a kind of a dead end and feel like we are a victim of circumstances here and that the road was accepted by the county commissioners’ office, then turned over to us for maintenance before it was completed per Regional Planning Commission instructions. We are asking for any help you can give us to get this thing accomplished.”
Commissioner Allen Stockberger gave the commissioners’ position on the matter and explained some of the circumstances behind the matter.
“The road had been accepted in the fall of that year (2005),” he said. “We’ve done this before. We do that so the residents of the township can enjoy township maintenance throughout the winter. We take either a bond, a letter of credit or money in escrow from the developer and hold that over the winter until the top course is completed over the course of the summer. We look to the township to monitor the situation because (they) are out there more than we are.
“In this case there was a letter of credit posted by the developer (through First-Knox National Bank) which was Bebout Construction and Steve Jagger. The letter of credit was for a little more than $22,000. This is one of those classic lines ‘it slipped through the cracks’ applies. I think we are all aware that the Bebout part of the partnership declared bankruptcy and that’s when the letter of credit should have kicked in. However, apparently we weren’t aware of it and the township didn’t bring it to our attention. Now that we have gone back to First-Knox, they are denying collecting on the letter of credit on the basis that they said no one can produce the original letter. We have copies of the letter of credit but no one seems to have the original letter of credit. They are not willing to honor the copy. To the best of my knowledge that’s what happened here.”
Stockberger said to get the letter of credit released it had to be done through RPC and the Board of Commissioners jointly.
“The letter of credit for Otter Fork was never released by anyone present,” Stockberger explained. “John Thatcher was the one who approached First-Knox about this situation.”
Thatcher, who was unable to attend the commissioner’s meeting, is legal counsel for the county.
“We accepted the road with the limitations that the letter of credit was on file,” Stockberger said. “This was in case something went wrong and the work was not completed as required.”
“I talked to John Thatcher last week and he told me he had talked to First-Knox,” said Commissioner Teresa Bemiller. “And they pretty much told him they didn’t have a record of anybody telling them to release it but they also didn’t have the original of the letter of credit. They believe the statute of limitations has run out on this.”
Because of the several complex issues involved in this matter, it was decided to try and have a meeting with Bebout Construction, Thatcher, the commissioners, the township trustees and a representative of First-Knox National Bank who had the authority to make decisions on this matter. No date has yet been set for this meeting.
