City of Niota, Tenn., shutting down. Again.

City of Niota, Tenn., shutting down. Again.

June 19th, 2013 by Tyler Jett in Local - Breaking News

The Niota, Tenn., city office building is slowly shutting down now that the town has no municipal insurance.

Photo by Staff File Photo /Times Free Press.

The city of Niota is now a shell of its former self.

The city's liability insurance expired Tuesday, and the Tennessee Municipal League Pool informed Niota's leaders that it will no longer offer rates to the city. The risk is too great, the TML said. People have filed too many claims against Niota.

Without the insurance, Mayor Lois Preece said, most departments of the city cannot function. The parks are closed. The library is closed. The street department has been laid off.

The sewer department has been contracted out, Preece said, and the garbage department might be, too. The police department is closed. The McMinn Countywide Fire Department will take over the Niota Volunteer Fire Department.

In all, Preece said, six employees were fired Tuesday.

"They knew it was coming," she said. "I try to be very upfront with my employees."

Niota shut down once before this year. The city's liability insurance expired April 19, and many city departments stopped functioning. But three days later Niota leaders reached an agreement with the TML for a 60-day extension. Those 60 days ended Tuesday, and TML declined to renew.


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If city leaders would cooperate with investigations into claims against Niota, the TML would consider giving the city insurance again.

"We do not see the long-term results needed to alleviate the exposure to the members of the Pool as a whole that would be needed to offer further extension of coverage," TML Pool Director of Underwriting Jon Calvin said in a letter.

In April, the TML indicated that it would not renew the insurance plan for the city because Commissioners Richard Rutledge and Leesa Corum refused to participate in an investigation. A former employee had accused both of harassment.

Two months later, the problems appear to be much deeper than just one incident.

"Niota just needs to handle their affairs and their business correctly," said Allen Carter, an employee of Athens Insurance who negotiated with TML on behalf of Niota. "But right now, there's just not that option."

On Tuesday, Rutledge said the loss of insurance is not simply because of him and Corum.

"If I felt in any way that it was my problem, I would step down," he said.

Contact Tyler Jett at or 423-757-6476.