The Kansas State Bank of Manhattan is suing the city of Gould for not making payments on a fire truck and a breath analyzer which the bank was financing for the city.
The case is set for a hearing Jan. 3 in Star City before Circuit Judge Rob Wyatt.
The suit, filed Nov. 9, said the bank entered into a government obligation contract with Gould on Oct. 15, 2010, to finance a 1989 Hahn pumper tanker fire truck. The city was then obligated to pay the bank $9,687 per year, with one annual payment in March of each year, until the truck was paid off. The truck was listed as collateral to be seized in case the city defaulted on its loan.
The bank, which is represented by attorney Henry A. light of the Friday Eldredge & Clark law firm, notes that it has a direct lien on the truck and that the city “defaulted” by not making its March 2012 payment.
The bank suit said Gould Mayor Earnest Nash Jr. and Recorder-treasurer Pamela Gibson were notified by registered mail and by regular mail as recently as Oct. 15 that it was in default and had until Oct. 25 to make its payment or face legal action.
“Despite such demands, Gould has failed to cure the default under the fire truck contract and Kansas State has exercised its rights to declare all amounts due under the fire truck contract immediately due and payable,” the suit said.
As of Oct. 29, the city owed $39,424.57 “together with interest, costs and reasonable attorneys’ fees” on the fire truck.
Also, on April 8, 2011, Gould contracted with Kansas State to finance a new Intox C/IR Breath Analyzer machine and agreed to pay the bank $362.80 per month until the debt was retired. The machine was also listed as collateral and the bank claims the city has not made its monthly payment since March 2012.
Again, the city was notified in writing of its default but has not made any further payments. The city still owes $7,384.11 on the machine, plus interest, costs and attorneys’ fees. The bank is seeking judgment against Gould for the return of the truck and breath analyzer as well as their legal costs and fees.
On Nov. 20, the bank filed an Order to Show Cause in Lincoln County Circuit Court as to why they should not take possession of the truck and breath analyzer. The filing also warns that if the city fails to appear at the hearing, the court may issue an immediate order of delivery and have the sheriff of Lincoln County take possession of the truck and breath analyzer. It also warns of “civil and criminal penalties” if the properties are “willfully damaged, concealed or removed from the court’s jurisdiction or it the city refuses to release the property” to officers of the court.
Reached on Tuesday for comment, Nash said the city currently has no attorney but he believes the city will be able to retain the truck and breath machine. He said a representative from Kansas State Bank contacted him on Friday to say that he heard Gould will have a new city council in January and he is looking forward to having the city make its payment then.
“All is all, this situation could have been avoided if the present City Council would have come to City Council meetings and took care of the city’s business as they were sworn in to do,” Nash said. “This situation would not have arisen if the city knew where the city’s money is. We can’t pay it right now because we don’t know where the city’s money is. We don’t know if it’s in Simmons Bank or if it’s in a bank in Timbuktu. And by the current city treasurer saying she can’t get in her office and she can’t tell us where the money is, as far as I’m concerned, that’s a smokescreen because whatever bank the money is in, all she has to do is go that bank, get a copy of the statements and produce those bank statements to me and the City Council.”
Nash said two council members have not attended a council meeting in months and therefore no business can be conducted.
It’s in their hands, he said, “to prevent us from going to court.”
“I cannot prevent us from going to court. It’s also in Miss Gibson’s hands, because she has to come forward with information about all of the city’s money,” Nash said.
Reached on Tuesday, Gibson said she knew nothing about the suit. She also said she had information regarding the city’s bank accounts in writing to give Nash at the time of their last City Council meeting (which lacked a quorum) on Nov. 13 but Nash refused to accept it.
“He wouldn’t even let me read it because it wasn’t copies of the statements,” said Gibson. “I did not have the statements with me: I had written it all down.”