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Commission debates $5,000 right-of-way letter-of-credit rule and whether cashier's checks are acceptable
Summary
Commissioners reviewed the county’s $5,000 annual letter-of-credit requirement for work in the right-of-way, discussed problems with letters issued by out-of-state banks, and agreed isolated exceptions (certified/cashier’s checks deposited in county trustee accounts) can be used while staff tightens policy language.
Staff explained the county’s existing practice of requiring a $5,000 letter of credit from contractors or utilities working in the right-of-way so funds are available to repair any road damage. The $5,000 instrument is intended to be annual for smaller right-of-way work, while larger development letters of credit have different renewal schedules.
Staff said utilities and out-of-state companies sometimes cannot get a local letter-of-credit branch and prefer to provide a cashier’s check; commissioners discussed the risk that a distant bank’s letter of credit may not be enforceable locally. One staff member described a procedural compromise used in the past: accept a certified/cashier’s check, deposit it with the county trustee, and draw on those funds if repairs are required.
Commissioners directed staff to tighten the letter-of-credit and check-acceptance language so funds are accessible locally (for example, require a local branch or clause allowing presentation in Tennessee) and to allow isolated exceptions where a certified check is deposited into a county account. They noted Middle Tennessee Electric has previously used a check deposited in trust as a practical solution.
No formal policy ordinance was adopted at the meeting; the board approved the superintendent’s report (which included discussion of letters of credit) and asked staff to return with a revised proposed form or policy language.
