By Tiffany Green
The Cullman Times
CULLMAN — In a special called meeting Tuesday evening, Colony’s town council made a decision to start making payments with the loan the town has with Compass Bank.
“We will pay $500 a month on the $27,000 loan,” Mayor Morris Fitts said Wednesday afternoon. “We can work a plan out, it’s hard but we are trying.”
The council also decided they will keep the two loans separate and not combine them as recommended by Compass Bank.
The town will now have to wait and see if the bank is willing to agree to their payment plan.
Fitts said he will now contact town attorney, Lucien Blankenship and ask him to contact Compass Bank’s attorney’s.
“We will let the lawyer go through it and contact the bank,” Fitts said. “We hope we can work out a plan. We will work on paying the other fees also.”
The lawsuit stems from the bank freezing the town’s accounts after the town failed to pay on a loan for more than a year.
“They (Compass Bank) took funds, some of which were restricted to operate the town business. There is a section in the Code that prevents levy’s from being placed on a town,” Blankenship said in an earlier interview.
A section of the Code of Alabama 1975 deals with the legality of banks taking municipal funds.
“This does not dispute the debt, however the lawsuit was filed to protect city assets and protect the town government.
“They (Compass Bank) took municipal funds and a section of the Code states it is unlawful to levy on towns property,” Blankenship said.
Fitts said they have not made any payments on a loan which is in the amount of $27,857.82.
The town has another Compass loan for $79,000 for which they have been paying $750 per month.
The council will have their regular meeting Monday, April 5 at 6 p.m. at the town hall.
* Tiffany Green can be reached by e-mail at tgreen@cullmantimes.com or by telephone at 734-2131, ext. 220.
