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County’s financial picture is growing bleak, court is told

County is short on funds; jail’s meal deal is off

The Letcher County Fiscal Court was warned of hard financial times to come at the July meeting, and bad news from the county jail and county fire departments didn’t help to brighten the picture.

County Treasurer D.J. Frazier delivered the annual financial statement to the court this week, and said that the county began the fiscal year with $158,876.60 less than its carryover from last year in the Road Department and that it did not get the expected state funding. The yearending cash balance of $379,000 will have to account for $207,437.85 in current bills. Frazier added that she has no idea when they will get the County Road Aid funding from the state, or how much it will be.

Also, although the Letcher County Recreation Center has reopened, Judge/Executive Terry Adams said that usage is way down, probably because of the COVID-19 virus. He said the facility is as sanitary as it can be made to be, but other than in the early morning and later in the afternoon, there aren’t many customers, and it doesn’t make sense to run it at times when no one is present. Adams said he is talking to the director, Jeremiah Johnston, and others to determine the best times to open the center and when the doors can be closed to save on utilities.

County Attorney Jamie Hatton reminded the court that the loan agreement with the Kentucky Association of Counties to fund the construction of the center contains a clause to the effect that if the court is unable to service the debt, the county will have initiate a special tax to address it. The same clause is in most of the loan agreements the county has for infrastructure, because infrastructure cannot be repossessed and the tax will guarantee the repayment of the loan.

Volunteer fire departments are also feeling a financial pinch. Bill Meade, chief of the Kingscreek Fire Department, and Tony Fugate, of the Mayking Volunteer Fire Department, told the court that the COVID 19 shutdowns have prevented fire departments from conducting their regular fundraising activities like Bingo and other group activities, but added that these fundraising methods are uncertain at best.

Meade told the court that a regular source of revenue will probably be the only way to ensure enough funding for the county’s volunteer fire departments to stay open. He said the $6,000 payment that will be made to all the county departments this week will barely pay insurance costs and for some it will not be sufficient for that.

Another scheduled payment of $5,000 is dependent on mineral tax receipts, and although Frazier said that the money will probably be there, it is uncertain until it is allocated by the state. Frazier emphasized the importance of the fire departments coming to the courthouse and signing their contracts so they can receive their funding as soon as possible.

Meade suggested two possible sources of revenue for the fire departments to the court. One would be an add-on to monthly electrical bills that would be earmarked for fire departments, and another would be a direct tax. Hatton said he has experienced enough of the anguish people on fixed incomes have from high utility bills, and he would favor a slight addition to property taxes. He said that while that may be unpopular, it would be a small amount and much less painful than higher utility bills for senior citizens. He said fire departments have been chronically underfunded, but no court in recent memory had been willing to adopt a “fire tax” or raise taxes to fund the departments.

Meade said that whatever the remedy, unless the fire departments have a source of revenue, several are on the verge of closing. He emphasized that the volunteer nature of the departments will not change and that the money will not go to individual members, but to pay for insurance, utilities, maintenance, and equipment.

Fugate used “turnout gear” as an example. Turnout gear is the protective clothing firefighters use to protect them from fires and toxic elements in fires. This includes breathing apparatus. He said a new set costs about $3,000. The gear will last with good treatment, but putting out fires and cleaning up toxic spills and methamphetamine labs are hardly ideal conditions, and exposure to chemicals used in methamphetamine production will damage it beyond repair. He said it’s not right to ask firefighters to do dangerous work with substandard or worn out equipment.

Judge Adams told the men that he will discuss possibilities with Hatton and Frazier and the court will try to come up with a way to fund the departments to keep them open.

In other business, Letcher County Jailer Burt Slone told the court that CANE Kitchen of Whitesburg will not be able to fulfill its obligation because of a scarcity of locally produced foodstuffs. CANE was awarded the bid to feed inmates at the jail in last month’s meeting after a long bidding process.

After hearing that, the court voted unanimously to offer the contract to Kellwell, a Beattyville-based group that specializes in institutional feeding. Slone said the jail has enough food on hand to provide meals to inmates for a week or so and Judge Adams said the county has a stove from one of the senior citizens centers that may be usable to prepare meals at the jail.

The court also voted unanimously to accept the Jail Policy and Procedures for the year. Slone said the policy and procedures are unchanged from 2019.

County Attorney Hatton told the court that during negotiations with CANE Kitchen, it became apparent that the amount of locally produced food was not going to be sufficient to provide the jail with the amount of food it needs. There were also problems with staffing and a contract had not been signed with CANE.

One of the more attractive features of the CANE bid had been that CANE would cook the meals at its site in Whitesburg and deliver them to the jail. This would keep the county from having to replace or repair several pieces of equipment in the jail kitchen.

First District Magistrate Jack Banks recalled Kellwell’s offer to replace or repair the jail equipment and pay for it by adding a small amount to the cost per meal until it was paid for. Slone said that the ice machine at the jail is working now and will not have to be replaced.

Although feeding inmates is costly, it is not the only source of financial problems. At the court’s June meeting, Frazier expressed her ongoing concern about the continued deficits in the jail’s accounts. She told the court that since July 2019, the court has transferred $750,000 from the Local Government Economic Assistance Fund into the Jail Fund. That amount is roughly twice that which has been transferred to the jail in recent years. Frazier said she understands that the jail is a necessary part of the county government, but added that the court needs to find a way to stop the continuing drain before the LGEA Fund comes up empty.

Frazier and Judge Adams agreed that the county has no choice but to keep the jail open and that sending inmates to regional jails would be at least as expensive as operating the county jail. But Frazier said that the LGEA Fund, which contains state funds, is not inexhaustible, and funds other agencies as well. Beside the jail, LGEA pays power bills for county buildings, and funds the Recreational Center, the Recreation Department, including parks, playground and ballfields, and the dog warden. Adams said the LGEA affects the county across the board and the fund’s financial health is vital.

Frazier said the jail had received some funds from the state in June that had not been anticipated. These included jail bed allotment checks and payment for state prisoners. State prisoners are prisoners who have already been convicted of state crimes and are either awaiting sentencing or placement in a state facility. The state pays for the prisoners’ care and they are a significant source of income for local jails. However, during his jail report, Slone said the jail is already overcrowded and Adams said that makes it unlikely that they will get many state prisoners.

In other business, the court voted unanimously to nominate Whitesburg resident Libby Honeycutt to serve as a trustee on the Board of Directors of the Harry M. Caudill Memorial Library Board.

The court also voted to declare several pieces of equipment as surplus. Judge Adams said the vehicles and equipment have been stripped and picked over so often that they are basically bare metal now. The court also approved Adams’s request to attend an equipment and vehicle auction in Abingdon, Va., in hope of purchasing two used 3/4-ton trucks for county use and a smaller one for the dog warden.

The court voted unanimously to add Petty Officer John W. Caudill, U.S. Navy, and Specialist 4 Billy D. Back, U.S. Army, to the Memorial Board in Blackey. The court also voted to place the names of Private Lonnie Dale Ison, U.S. Army, and Sergeant Solomon H. Halcomb, U.S. Army at Hampton Hollow in Whitesburg.

Bank balance recap for county agencies as of June 30, 2020

General Fund $856,702.60

Road Fund $ 379,797.95

Jail Fund $32,710.74

LGEA (Local Government Economic Assistance) Fund $704,685.23

Forest Fire Fund $ 229.37

Total of all funds $1,990,344.09

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