Crossville Chronicle, Crossville, TN

July 2, 2013

Souza asks attorney to step down

By Jim Young
Chronicle correspondent

— “Uh, no,” responded city attorney Ken Chadwell when asked by Councilman Pete Souza if he would consider withdrawing his service from the city.

This unexpected conversation came up under the discussion of Souza's agenda item discussing the hiring of a full time attorney for the city of Crossville during the special-called council meeting held July 25.

As the agenda item began, Souza requested that the police officer present for the meeting pass out envelopes to council members that had three pieces of paper inside, including a HUD 1 form dated Dec. 29, 2005, a copy of check from the city to Halstead Property Development in 2011 and a copy of corporation records from the state for Halstead Property Development that Souza seemed to think would lead to Chadwell's resignation and open the door to hiring a new attorney.

After additional questions from Souza and answers from Chadwell, the city attorney offered to explain the paperwork Souza had placed in front of the council and Souza agreed.

Chadwell said he and his partner, Joe Looney, formed the Halstead Property Development, LLC, in 2004 that was used to buy properties for private investment purposes. In 2005, the bank building came available and Chadwell and Looney thought about buying the building, signed a contract and continued researching the possibility of using it for their law offices and title company while renting out the rest of the building.

Chadwell said, “About part way through the due diligence, we decided we didn't really want to own the thing because it was going to cost too much to operate. But, we were obligated under a contract and we closed and bought this building. The building was owned by Halstead Property Development, LLC. There were two members of the LLC, me and my partner, Joe Looney, with 50 percent each.”

Chadwell told the council that around that same time, Johnny Reeves, local realtor, and attorney Jim Thompson approached them about buying the bank building.

“They really wanted it and had been in the hunt for the building the same time we were. We agreed to sell it to them,” explained Chadwell.

Chadwell summed up his explanation, “In Dec. 29, 2005, we sold the LLC to Jim Thompson and Johnny Reeves. Since that time, I've had no ownership interest in Halstead Property Development, period. And further, just so you'll know, when the city first started looking at buying this building, everybody and their dog, so to speak, knew that Joe and I had owned it at one time and they were curious about what we knew about it, what did we think about it and what we learned about it. I went and copied all (the information) we had and gave it to the city manager.”

Souza then moved forward with his discussion on a full time attorney. Estimates of the cost for a full-time attorney is $200,000, according to city staff estimates. Souza reported that in past years, the cost for a part-time city attorney has run from $124,000 to $160,000 for legal fees.

Souza stated, “I have contended that the city would be better off with a full-time attorney that could work on additional duties. That's my argument for a full time attorney.”

And with that, Souza moved to hire a full-time attorney and the motion was seconded by Councilman Jesse Kerley.

Councilman Danny Wyatt said that his only problem with the city attorney had to do with billing and the bills now are much more detailed, “and you can tell where everything went.”

Wyatt said while there have been some high years, the rest of the time the city attorney fees average around $100,000 per year. Wyatt concluded, “I'm going to support staying with Mr. Chadwell.”

Kerley said if the vote fails that he would like to have the city attorney investigate the cost of attorney fees of other cities the size of Crossville and see what they pay in attorney costs.

Kerley continued, “I think we're being taken advantage of. That's my personal opinion and something needs to change.”

Councilman George Marlow said he felt Chadwell was doing a very good job for the city and expressed concern about being in the middle of several lawsuits as the wrong time to bring in someone new.

A vote was taken on Souza's motion to hire a full-time attorney. It failed by a 2 to 3 vote with Souza and Kerley voting in favor and Wyatt, Marlow and Graham voting no.