March 26, 2014 — Olive Hill Mayor Kenny Fankell has ordered the transfer of all utility profits to the city’s general fund.
The transfer is discussed in a March 18 e-mail exchange between City Clerk Angela Owens and Council member Glenn Meade that was obtained by the Journal-Times.
“The mayor asked that I inform you that the utility check in the amount of $102,807 has been cut and signed to transfer funds over to the general fund based upon legal counsel’s advice,” Owens said in the e-mail.
When asked for comment, Fankell referred all questions regarding utility profit transfers to the city’s legal counsel, Derrick Willis.
“I’ve not seen any e-mail about funds being transferred but I did prepare a written legal opinion about this issue at the request of the Council and the mayor,” said Willis.
In that opinion, Willis references KRS 96.200, the statute regarding use of utility profits.
That statute gives City Council the power to enact specific ordinances regulating the use of utility profits but Olive Hill currently does not have such an ordinance on its books.
The statute, however, also contains language regulating the dispensing of utility profits in the absence of an ordinance.
“Until such an ordinance is enacted, any surplus earnings shall be paid into the city treasury, to be expended for the general purposes of government in the city,” reads the statute.
Willis asserts in his opinion that this language implies a mandatory transfer of utility profits to the general fund since the city doesn’t have an ordinance otherwise regulating the funds.
“It is my opinion that the City shall transfer these sums to the general treasury and the Council should then discuss an ordinance setting forth how those funds will be disbursed,” he said.
In a separate opinion, Willis also advised the mayor and Council as to whether or not Council would need to approve the transfer itself.