Journal-Times (Grayson, KY)

February 26, 2014

Olive Hill Council, mayor spar over utility profits

By Joe Lewis - Staff Writer
Journal-Times

Feb. 26, 2014 — Budget talks dominated the discussion at Tuesday night’s meeting of Olive Hill City Council.

Members of Council sparred with one another about how the utility agency’s profits from the past fiscal year should be spent.

At the beginning of the meeting, the city’s audit report was presented and it was revealed that the utility system posted a $102,000 profit during the past fiscal year.

Under state law, those funds can be transferred to the city’s general fund for unrestricted use.

Mayor Kenny Fankell then presented a budget amendment to transfer slightly more than $60,000 from the utility fund to the general fund in order to make up for budget cuts earlier in the year.

“We’ve had the worst winter in years and the street department is $8,000 in the hole. We need to put this money back from where we took it earlier,” said Fankell.

Council member Glenn Meade disagreed with that proposal, recommending the money be reinvested into the city’s aging electric infrastructure.

“If you keep pushing the limits of this system, you’re going to wind up having a catastrophe and the entire city will be without electricity,” said Meade. “We need to bring reliability to our utilities.”

Council member Randy Tackett also spoke in opposition of transferring the money from the utility company to the general fund.

“We set a budget and we have to stick to it. You can’t spend money that you don’t have” he said.

Tackett, Meade and Enoch Hicks voted against the budget amendment, while Matt Kiser, Allen Stapleton and Jerry Callihan voted in favor of it.

Fankell was unable to break the tie, however, because the budget amendment was presented as an emergency ordinance. Emergency measures require a two-thirds majority vote of the City Council in order to pass.

The mayor and Council spent nearly 90 minutes debating the matter.

Fankell warned that he would be forced to lay off an employee from the street department if money isn’t transferred into the general fund.

“How are you going to explain to a man who’s worked here for 15 years that he no longer has a job,” said city employee Justin Dixon.

“We were forced to cut the budget when we didn’t really want to. For once, Olive Hill has caught a break with this influx of money, but we can’t seem to get anything done with it,” said Council member Jerry Callihan. “Once again we have managed to turn something that should have been easy to figure out into a three-ring circus.”

Meade held firm to his position, however, warning that continued neglect of the utility infrastructure eventually would have disastrous consequences.

“In the end, I’ll be proven right,” he said.

Faced with the possibility of laying off an employee, it was Hicks who budged when the motion to approve the budget amendment was put forth a second time.

“I don’t want anyone to lose their job. I know what that’s like,” he said.

“Without our city workers, we wouldn’t even have a city,” said Callihan.

Late last week, however, Meade sent an email to Fankell calling the procedure into question.

“The budget ordinance passed last Tuesday night is null and void due to the fact that it was passed outside the emergency procedure outlined under KRS 83A.060(7) requiring that an emergency ordinance must set forth the general nature of the emergency,” said Meade in the email.

In response, Fankell called a special meeting on Monday night to conduct a second reading of the ordinance but that meeting failed to materialize due to lack of a quorum as Meade, Tackett and Hicks did not attend.

“City operations will continue as normal. I've received approval to transfer money from our municipal road aid proceeds in order to cover the shortfall in the street department,” said Fankell after the failed meeting attempt.

He would not give an exact dollar amount of the transfer, however.

No further meetings of Olive Hill City Council are scheduled until next month's regular meeting at 6 p.m. on Tuesday, March 18, at the Senior Community Center.

Joe Lewis can be reached at jlewis@journal-times.com or by telephone at 286-4201.