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Sevierville board authorizes up to $37 million loan for electric system; adviser flags conflict
Summary
The Board of Mayor and Aldermen approved Resolution R2026-003 to borrow up to $37 million for refunding a 2023 electric bond and funding plant expansion; the city's financial adviser noted a potential conflict because a principal also administers the loan program.
The Sevierville Board of Mayor and Aldermen on April 20 approved Resolution R2026-003 authorizing the city to borrow funds in an aggregate principal amount not to exceed $37,000,000 through a Public Building Authority loan to refund the Series 2023 Electric System bond and to fund electric system plant expansion. Dustin Smith presented the resolution and the board voted unanimously to approve it.
Chris Bessler, with Cumberland Securities, outlined that the proceeds would be used both to refund the 2023 bond and to support planned plant expansion for the city's electric distribution system. Bessler also told the board that a conflict of interest exists because a principal in Cumberland Securities, the city’s financial adviser, is also acting as administrator of the PBA loan program, and he explained that disclosure to the board was being made before the vote.
The board approved the resolution on a motion by Vice Mayor Mitch Rader, seconded by Alderman Wayne Helton. The record shows a unanimous vote in favor. No public comment was recorded on the resolution during the meeting.
Next steps for the resolution include executing a loan agreement and related documents, and the resolution delegates authority for disposition of proceeds and collection of electric system revenues as described in the resolution text presented to the board.
