Niota, Tenn., Temporarily Closes City Services as Insurance Expires

April 22, 2013

Much of the city of Niota, in Tennessee, is shut down, including its police and fire departments, after the city’s liability insurance expired at midnight on April 18.

The Daily Post-Athenian reports the Tennessee Municipal League declined to renew the city’s policy after Niota commissioners refused to cooperate with its investigation into harassment claims by employees. The city has so far been unable to secure other insurance.

The closure includes any service that requires a city-owned vehicle or equipment. The city park, playground and basketball court also are closed to the public.

Finance Commissioner Tabathia Gates told the paper the city likely will not be able to afford private liability insurance. In a previous meeting, City Attorney Will Estes told commissioners that “the city will likely go bankrupt if it loses its liability insurance.”

At a special meeting on April 18, Commissioner Richard Rutledge blamed the league for the city’s troubles.

Rutledge said he does not know the specifics of what he and Commissioner Leesa Corum are accused, saying the municipal league “came here accusing me” even though “I haven’t heard the first complaint from the first citizen.”

Rutledge denied his own responsibility and Corum’s for Niota’s problems, saying, “In reality, we’re not the ones costing the city. We just tell (the employees) to get to work. That’s the problem. Some of them don’t want to get to work.”

In a letter addressed to Mayor Lois Preece dated March 6, municipal league Underwriting Director Jon Calvin warned that the city could lose its insurance.

Calvin said a review of Niota’s claims activity revealed “a pattern of actions aimed at city employees by city representatives that is severely outside the standards required to accept liability for these actions.”

Calvin also said the actions “appear to be deliberate and malicious in intent, violate acceptable standards in handling employment situations, are adversely affecting employees of the city and are generating a frequency of complaints and claims that have the potential for a high dollar level of severity as well.”

Calvin says Rutledge and Corum have refused to speak with league investigators or return their calls.

The commissioners were sent at least three certified letters reminding them of their obligation to cooperate with investigators and warning them that that failure to do so could void their coverage. Rutledge said on April 18 he hasn’t seen those letters because “I didn’t pick them up.”

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