LAWRENCEBURG, IN (FOX19) - The mayor of Lawrenceburg responded to a FOX19 NOW investigation into his city's $16 million tax payer-funded loan portfolio, telling the audience at a council meeting last week that he "was not going to share than plan with anyone outside of this county."
The "plan" was questioned in our March 1 loan investigation. We wanted to know when the city planned to execute an order from council in December to foreclose on multiple borrowers who were supposed to have paid loans off years before.
Neither Mollaun nor city attorney Del Weldon could detail their plans to get those tax dollars back during a Feb. 22 interview with us at city hall.
Mayor Kelly Mollaun's latest statements came after a FOX19 NOW investigation uncovered nearly $16 million in tax payer-backed loans, lent out to private businesses, were in default. Some of those loans were supposed to have been repaid more than four years ago.
The city called a closed-door meeting last Thursday, a little more than a week after our investigation aired. The city's online council meeting records show this was the first executive session the new city administration's held since taking office in January.
The meeting was with all of council and two attorneys. The city attorney, when contacted Friday to identify the two attorneys, replied to FOX19 in an email, "Because it was an Executive Session, I am not permitted to disclose who was there or what was discussed. Sorry," Weldon wrote.
In a radio interview with Eagle 99.3, the country radio station located in Lawrenceburg, Mollaun told host Bubba Bo he'd make an announcement about the city's "plan for recovery" of the loaned tax dollars during a March 21 council meeting.
The catch: that plan would only collect 25 percent of the outstanding loans, Mollaun said during the radio interview.
Read our complete investigation into the city's loans here.
'WHY ARE WE TAKING VOTES'
"Why are we taking votes if you're just going to stop the ones you're going to act on?"
That was Councilman Aaron Cook's question to Mayor Kelly Mollaun during the March 7 council meeting after the two held a back-and-forth over the loans we investigated in a March 1 report. Cook was on council in December when council voted to foreclose on nearly every loan.
In December, council heard from the Gerner and Kearns law firm—a firm the city paid $80,000 in 2015—to offer recommendations on what to do with the loans. The firm told council it should foreclose on most of the loans. Council voted in December to send foreclosure notices, then ordered city staffers to follow through with that litigation.
As of this report, the city has not filed a single foreclosure. The reason: city attorney Del Weldon told FOX19 last month that he'd made the call to stop the letters so the city could "review" the work the law firm did in 2015.
Cook took time in open session on March 7 to question Mollaun about why council's December order was not carried out.
"That's not his (Weldon) decision," Cook told Mollaun. Mollaun then told Cook it wasn't Weldon who made the call to ignore council's December 2015 vote, but that he made the decision not to send foreclosure letters.
"I did," Mollaun told Cook. "But, that's not your vote to do that," Cook responded. "I wanted to make sure we were going to take the right course of action because we're ultimately going to be held accountable for it," Mollaun said.
"So, why are we taking votes if you're just going to just stop the ones you're not going to act on," Cook asked Mollaun, "I haven't stopped anything that you guys have voted on," Mollaun replied.
"The collection of loans that we voted on in December, which it wasn't—the vote happened in December, but it was eight months of progress," Cook said.
Critics of the December vote said the outgoing council acted at the last minute to force a fix on the loans before their terms expired Dec. 31. But, Cook argued nothing was rushed because the city had spent months on finding a resolution long before the December vote.
City spending records show the first of the $80,000 payments to Gerner and Kearns started in June of 2015.
"Now, eight months, tens of thousands of dollars down the drain because someone says 'I'm not going to do it,'" Cook said, before being interrupted by a "That's not true," from Mollaun.
"I don't see why I'm coming here if you're going to stop what you don't like and do a new plan," Cook said.
"That's not the case at all Aaron," Mollaun said, "You're trying to twist this a little bit."
Both men were interrupted by the city attorney who said, "I'm going to stop this now because this is not the proper forum," Weldon said.
Mollaun told the public during the March 7 meeting, the city's acted—not because of the FOX19 investigation—but because the loan issue was a top priority for the new city administration, "Under no circumstance do I want anybody to leave this room or to think that somebody's outside influence caused us to make a decision," Mollaun said from his council chair.
Council meets next on March 21 where an announcement is expected on the city's plans to recoup the tax dollars it lent starting in 2006.