Minutes of Adjourned Meeting

August 6, 2009





Mayor Thomas F. Jones called the adjourned Meeting to order on August 6, 2009 at 7:30 pm. The pledge of Allegiance was recited. Present on roll call were Gary Wise, Harold Ellinger, Pat Timmons, Robert Ostendorf, Gary Law, William Dees and Gene Cailey. Absent was Marilyn Sisson.



Recognition of Guests and Visitors



Robert Erb, CEO of Schutt Sports will address the Council



Business:



City Administrator, Andy Ritchie, spoke regarding the proposal from Schutt and information from Bank of America, the bank who possesses the 1st lien.



Mr. Erb outlined reasons Schutt wants to remain in Litchfield

-wants to streamline facilities in Illinois, too many facilities to process product

-1st choice is Litchfield but if forced, they will go elsewhere.

-will provide 100 new jobs to Litchfield. They are at 180 jobs now

-Seasonal work will be provided for part of year.

-He will make every effort to move the reconditioning business to Litchfield also



In exchange he wants the City to:

-give Schutt a 90,000 sf addition (5.3 million)

-Schutt will also make large investment in new facility

Per Erb, liquidation of the company is slim so the investment should be safe. If the agreement is signed they can be building within a week, which will create spending and jobs in the area. Mr. Erb advised they are out of time………….this is their offer.



Alderman Wise expressed concern about jobs provided, wanted confirmation that they will be provided. Mr. Erb assured him they would

Alderman Cailey wants to get the jobs and move forward

Alderman Dees had some financial questions. The President of the Bank & Trust, Kent Redfern, spoke of the options in financing and explained the lien positions. The Bank of America has 1st lien holder position and will get 1st take of assets if liquidation or bankruptcy occurs. The forms of financing available to the City to help would be a direct loan which is more risk, or bonds which we would match cash flow from Sales Tax Revenue in 10 years. Alderman Ostendorf commented that he could not recommend the proposal now as all the information has not been presented to the Council. City Attorney Hantla recommends we get an opinion from the law firm in Chicago which was hired to represent the City before making a decision. Mr. Erb advised that he had no control over the credit agreement and we need to bring this issue to an end.



Mayor Jones asked for a breakdown of expenses. Schutt will also be paying 1 million or more to move facilities to Litchfield. He also asked for an explanation of jobs and seasonal employees. There will be a 3 year commitment for Schutt to stay and in that 3 years the debt will be paid back 100% in jobs, sales, etc.



Mayor Jones asked for a head nod as to if the city of Litchfield wishes to pursue this agreement with Schutt Sports. There were 7 head nods from the alderman.

The agreement will need to be approved and signed before August 31, 2009 and the finance agreement ready also.



Alderman Dees made a motion to adjourn the meeting, seconded by Alderman Ellinger, meeting adjourned at 8:47 pm.



Attest: Approved:











Denise M. Lueker Thomas F. Jones

City Clerk Mayor