With energy, enthusiasm, and vision, the Union County Farmers Market, a 501(c)(3) nonprofit, applied for a Tennessee CARES Act Grant with a very limited window of opportunity.
The vision was for Union County farmers to be able to sell their end-of-season produce as a food product that was produced in a commercial kitchen.
The kitchen could also be used as a business incubator for beginning bakeries, for chef-catered dinners, and for consumer science education projects for 4H and UT Extension Union County. The grant would provide a sustainable, positive, long term economic impact for Union County.
The application was approved. On October 4, the farmers market received the letter aof Approval for $191,265. But the letter also clarified that the grant was a reimbursement grant, and the farmers market would need to cover the cost of the commercial kitchen and then be reimbursed.
Furthermore, the money had to be encumbered by October 31. Without the available funds to cover the grant, the Union County Farmers Market Board shared the issue with Mayor Bailey, who called the special County Commission meeting on October 20 to discuss a resolution.
In the meantime, Mayor Bailey asked Attorney David Myers to develop the paperwork just in case County Commission was willing to resolve the oversight.
As the meeting opened, Mayor Bailey shared the backstory of the farmers market dilemma. He also noted that from his discussion with the auditor, a three-step plan, including a Resolution, a Memorandum of Understanding (MOU) and a Promissory Note, would be necessary to resolve the oversight.
Bailey explained that the lease in the MOU would give the farmers market use and oversight of the maintenance, rental and responsibility of the commercial kitchen for four years to provide continuity across the terms of the current mayor and the next mayor until 2024.
As for any nonprofit, the finances could be audited by the county and a ledger of expenditures would need to be filed with the mayor's office. Also, the insurance would need a hold harmless clause and the certificate filed with the mayor's office. Union County would cover the utilities.
With this information in mind, the commission began the discussion.
County Commission (CC): Can you purchase the equipment and meet the deadline?
Farmers Market (FM): Yes, two vendors have already been contacted reqarding costs.
CC: What is a commercial kitchen? How is it different than a kitchen for concessions?
FM: The commercial kitchen could only be used by a trained person like a chef, professional caterer, consumer science agent or other trained personnel. It should not be used for a concession stand since the equipment is very expensive and even highly technical. A stove costs $50,000.
CC: Will you carry liability insurance and insure the equipment and do you have an inventory of equipment?
FM: Yes, insurance will be carried. But we have not purchased the equipment so we do not have an inventory.
Attorney Myers: The loan would be an unsecured loan since the equipment has not been purchased.
CC: What will be the fees?
FM: The fee structure will be modeled after another commercial kitchen in a nearby county. There will be a usage fee and an hourly rate. But the fee structure has not been established yet.
CC: What is your balance sheet?
CC: Has commission ever loaned money to a non-profit before
Attorney Myers: Not to my knowledge
CC: Can commission do this loan?
Mayor: According to the auditor, commission can.
CC: What if the Farmers Market defaults?
Attorney Myers: If there is a suit, the loser pays the attorney fees.
CC: When does everything have to be installed and receipts submitted?
FM: All equipment is to be purchased, installed, and reports submitted to the state by December 31, 2020.
CC: What if something gets back ordered?
FM: The state will honor a signed contract that includes a commitment for delivery. Cody Haynes, who is a Union County resident, is here to address delivery. Mr. Haynes assured timely delivery, but indicated another contractor would do the delivery.
CC: Will Mr. Haynes store the equipment until the building is complete?
FM: Yes.
CC: When do you expect the reimbursement?
FM: January or February of 2021.
CC: Will the building have power to support this equipment? Is any of the equipment gas powered?
Commissioner Danny Cooke: The building can be wired or connected for gas depending on the need and the grant covers that additional cost.
Commissioner Cooke also stated that the kitchen is 16 ft. X 24 ft. and the classroom is 18 ft. x 24 ft.
With the discussion completed, Mayor Bailey called for a motion and the commission approved the Resolution to loan the money to the Farmers Market.
The term of the lease was reduced to three years and the Memorandum of Understanding passed. The Promissory Note was also approved. Commissioner Debra Keck stated her support but refrained from voting due to being secretary for the Union County Farmers Market.
Just before the meeting ended, Commissioner Larry Lay advised the farmers market to share its intentions regarding a grant or anything else that involves county government before making the application so as to avoid this situation in the future.
Commissioner England and Mayor Bailey remarked on the benefits for all citizens when “we work together to solve issues.”