By Jim Young
A Crossville business is growing and in order to add an additional 20 office spaces for additional employees, Plateau Insurance has requested to borrow funds from the city's Urban Development Action Grant (UDAG) revolving loan fund to help pay for renovations.
Those economic development funds originally came from money received through a HUD grant back in 1984 and has been used for several industry and economic development programs since then. The money is loaned out and paid back to be used over and over again.
Plateau Insurance, also known as the Plateau Group, has been operating in Crossville since 1981, starting out with 10 employees and just serving the state of Tennessee. The company served just Tennessee for its first 25 years, but changes in regulations allowed them to expand to additional states.
The company moved to the building on North Main St. in 1986. With the acquisition of two other firms in 2011 and 2012, they have now outgrown their current building and have plans to convert space now used for storage to 20 additional office spaces as they continue to grow. The acquisitions of those two firms have made Plateau one of the largest credit insurance firms in the country.
Plateau's Executive Vice President Tom Williams reviewed the firm's history for the city council and shared that they now have 102 employees, with 39 added in the last 5 years, and they serve 49 states and several South Pacific area territories such as American Samoa. But the company also continues to work with local banks and firms including Highland Federal Savings and Loan, Dave Kirk, Cumberland County Bank and others.
Williams described Plateau as a wholesaler of insurance products including credit life, disability, property insurance, auto physical damage, vehicle service contracts and several ancillary products. Williams shared statistics showing that many of their employees have higher education, including 2- and 4-year college degrees, as well as attorneys, CPAs, programmers and actuaries. He added that one of his concerns has been the loss of local students who went to college and didn't return to the area because jobs in their area were not available.
“We're proud at Plateau,” explained Williams, “that we can create the kind of jobs that can bring our kids back here to work in a profession that they've been training in.”
He added that last year their payroll was about $4.5 million.
Williams also expressed pride in the fact that the company was rated “A-” with A. M. Best and that they are one of the only credit life firms rated that high. Williams added that the rating is necessary to work with many of the larger and regional lending institutions. In addition to meeting the requirements of the rating firm and working in so many areas, each with their own requirements of surplus and capital requirements, the firm has had to reinvest money back, leaving little to expand office space.
The company is requesting to borrow $200,000 from the city's revolving fund at 1 percent interest and that, combined with $125,000 of the company's funds, cover the total $325,000 expansion project.
Councilman Danny Wyatt made a motion to approve the loan, seconded by Councilman Jesse Kerley. Council members George Marlow and Pete Souza said they would like to see the loan at a 1.5 percent interest. According to finance director Fred Houston the money is currently earning much less at .14 percent.
Williams added that the company would pledge assets for the loan and would agree to allowing the city to call the loan in 2015 if the city had another prospect that could use the money.
Crossville Mayor J.H. Graham III said he felt that the city would be investing in the future by making the loan and Danny Wyatt added that the 20 new jobs would have a $500,000 to $650,000 impact on the local economy.
The motion was approved by the council unanimously.