Journal-Times (Grayson, KY)

November 28, 2012

Special districts under the microscope

First of a series

By Keith Kappes - Publisher
Journal-Times

Nov. 28, 2012 —     citizenauditor.ky.gov

    That’s the new website announced recently by State Auditor Adam Edelen as part of his initiative to make the public more aware of the 1,268 special districts in Kentucky.

    He disclosed that state residents pay more than $1.5 billion each year in taxes and/or fees to special districts but many of those districts have little oversight, hold big cash reserves and don’t have required audits.

    The auditor said he intends to seek legislation in 2013 to improve oversight and accountability of special districts.

    Under Kentucky law, a special district may be established for any of 53 different purposes, including fire protection, water and sewer services, emergency medical services, airports, libraries and tourism.

    The website lists seven special districts in Carter County, three with local taxing authority and four without.

    Those that can and do levy taxes on property in the county are public health, cooperative extension service and ambulance service.

    The four non-taxing special districts are the soil and water conservation district, Northeast Community Action, Olive Hill Housing Authority and Rattlesnake Ridge Water District.

    Two of the non-taxing districts – the housing authority and the water district – did not provide the auditor’s office with all of the financial information requested before the website was launched.

    Chris Stamper, manager of the water district, said that utility is regulated by the Kentucky Public Service Commission, Kentucky Division of Water, Kentucky Department for Local Government, state and federal EPA and the U. S. Department of Agriculture’s Rural Development, the source of most of the water district’s loans and grants.

    He said the water district sent its most recent audit to the state auditor this week.

    “We were waiting to submit the most recent figures to make sure that the auditor’s website has current information on our finances,” Stamper said.

    Paul Hensley, director of the Olive Hill Housing Authority, said his agency did not respond to the state auditor’s survey because all public housing authorities are overseen by the U.S. Department of Housing and Urban Development (HUD).

    “HUD monitors everything we do and requires annual audits of our finances,” he added. “We have no taxing authority and receive no support from local government.”

    The authority operates Hydreco Village and Hydreco Apartments with 86 housing units.

    Several other housing authorities in East Kentucky were not listed among special districts in their respective counties on the auditor’s website.

    The state’s two largest housing agencies – Louisville and Lexington – were listed by name but – like Olive Hill – apparently submitted no financial data.

    Carter County’s two other non-taxing special districts – Northeast CAA and soil and water conservation – receive financial support from various sources.

    Northeast is funded with state and federal grants and is accountable to the various agencies that provide its funding, according to David Carroll, director.

    The soil and water conservation district receives annual funding from Carter Fiscal Court, Kentucky Division of Conservation and from other state and federal sources.

    Not listed in any category is the Grayson Tourism Commission which receives revenue from taxes on motel rooms within the city limits. That tax was imposed by Grayson City Council.

    None of Carter County’s local fire departments are listed because they do not have taxing authority.

    The Journal-Times will be examining special districts in Carter County in a series of articles starting next week with the Rattlesnake Ridge Water District.

    Keith Kappes can be reached at kkappes@journal-times.com or by telephone at 800-247-6142.