Whitesburg KY
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Court talks water; sheriff warns of layoff s

The Letcher County Fiscal Court discussed recent water shortages at its December meeting and Fifth District Magistrate Wayne Fleming asked why the Blackey Water Treatment plant had been closed. Judge/Executive Jim Ward explained that the plant has not been shut down, but a combination of maintenance issues and an injury to the plant operator had caused it to be taken off -line temporarily. However, Ward said the closing of the Blackey plant was not the reason for the water shortage and it had played no part in restoring service.

Judge Ward told the court that when the newly completed Knott County Interconnect (KCI) came online at the height of the water shortage, it pumped 1.5 million gallons of water into Letcher County lines in just three days, and it would have taken considerably longer than that just to get the Blackey Plant back on-line. In a discussion held at the February meeting of the Letcher County Water and Sewer District, Water Department Superintendent Tim Reed told the board that the maximum the Blackey Plant can produce when operating at peak performance is 100,000 gallons per eight-hour shift, but that because of a combination of maintenance issues and computer problems at the plant, it regularly produced just over 65,000 gallons per shift.

Second District Magistrate Archie Banks also pointed out that it costs between $2 to $3 more to treat 1,000 gallons of water at the Blackey Plant than it does to purchase the same amount of water from the City of Whitesburg or through the Knott County Interconnect from the Knott County Water District. Ward said the final negotiations with CSX Railroad had allowed for the completion of the KCI, and the interconnect will remove water supply as an issue to Letcher County.

Fleming also asked about ongoing issues of water supply in the Fleming-Neon Water District, which led to shortages for customers in Fleming-Neon, Haymond and McRoberts. Fleming said city’s current main water source is located too close to mining and gas drilling operations to be safe, and it is constantly in danger of being drained by blasting. Magistrate Banks said water projects that will begin sometime in 2011 will make the connection between county water sources and the Fleming- Neon District, but the projects will take time to complete. Once the county system is complete, every water line in the county will be interconnected and water can be supplied to any part of the county from available sources.

Banks said the most practical and reliable source for Fleming- Neon would be from the City of Jenkins, which has water lines extending as far as the old Cavalier Drive-in Theater just past Dunham, less than a mile from the terminus of Fleming-Neon’s lines serving Haymond. Banks said Jenkins is already connected to the Mountain Water District in Pike County to help with its water supply in the event of an emergency, so it has ample water to supply the Fleming-Neon system. Ward said he plans to have a meeting between county water officials and fiscal court members and their counterparts in Jenkins, Whitesburg, and Fleming-Neon as soon as newly elected officers take over in January to look for ways to address current needs, but added that it will be several years until the county system is fully interconnected.

The regular meeting of the Letcher County Water and Sewer District was rescheduled from last Thursday to Wednesday, December 22, at 6 p.m. in the Letcher County District Courtroom. Judge Ward said the recent water outages and other water problems and solutions will be discussed fully at that meeting.

Projected shortages in state funding, fees, and tax collections dominated other business as both County Court Clerk Winston Meade and Letcher County Sherriff Danny Webb submitted budgets based on estimates of reduced funds. Meade told the court his fees were down for 2010 and he expects them to be even lower in the coming year. Webb said he expects to have to make cutbacks, which might include layoffs, to compensate for lower collections. County Treasurer Phillip Hampton told the court it would be in no position to help either department with its shortfalls, predicting at least $600,000 less in coal severance funding for the next quarter on top of a budget that was already reduced to bare bones in order to cope with shortfalls in state funding and severance tax returns.

Meade told the court the amount set for deputies and clerks was the same as last year and that current projections are estimates until he has more solid figures after the first of the year. He said the budget figures for the County Court Clerk’s Office will be basically the same as last year, and that a projected $19,000 grant from the state library archives for microfi lming records is not included in the projected budget. Meade said fees were down around $1 million for the current year.

Webb also presented an estimated budget because of uncertainty about collections and lack of solid numbers from the state. Deputy LaShawna Frazier said the 2011 budget of $1,020,947 in estimated revenues against estimated expenditures of $1,020,408 leaves a $500 surplus, but the figures will not be exact until after January 1. The maximum amount for deputies and officers is roughly $567,069, with an estimated $110,000 administrative budget. Both the Sheriff ’s Department and County Court Clerk’s Office will present amended budgets when they have more solid numbers.

Webb also asked the court to approve a resolution allowing his department to accept a grant from the Department of Homeland Security for training and material acquisition including ammunition, Tasers, and other necessary equipment to train deputies for an “Active Shooter” defense program for Letcher County Schools. The program is designed to provide a trained and prepared response in the event someone fires shots in any of the schools in the county. The court members approved his request and, after telling Webb they could not be expected to make up any shortfalls, the court also approved a request to serve as fiscal agent for a Kentucky Association of Counties (KACO) loan to purchase five new cruisers for deputies.

Webb told the court his department currently has several cars which are so old they cost more in maintenance than the approximate $2,500-per-month loan payment for all five cruisers, and the terms would be similar to a loan agreement which purchased new cruisers several years ago. He said that by running the loan through KACO with lower interest rates, he would be able to purchase five new cruisers for about the same amount three cars had cost under the former loan arrangement. Webb said the loan will be paid off in one year and payments can be made from property forfeitures, although funding derived from forfeitures cannot be used for salaries or insurance costs.

Sheriff Webb warns
of officer layoff s

Webb said that revenues for his office are down to the point that it may be necessary to lay off personnel to make the costs of retirement and hazardous duty retirement, but added that the number of calls his office receives will probably increase because of a larger number of calls being referred to the sheriff ’s department from the Kentucky State Police. Frazier said she had spoken to representatives from the state retirement system about other options and had been told there are none. She said all but two of the personnel in the department are bonded and receive hazardous duty retirement under county and state guidelines.

The court voted unanimously to approve an ordinance that called for the approval of an “Interlocal Cooperation Agreement between the County of Letcher and other parties thereto regarding the Kentucky Association of Counties Interlocal Financing Corporation.” The action is proscribed under Kentucky Revised Statutes Sections 65.210 through Section 65.300. The agreement is designed to “provide a vehicle for economically funding or financing various governmental purposes of public agencies in the Commonwealth of Kentucky.” It states that the Kentucky Association of Counties has been or will be established under the agreement and the program will benefit the public safety, health and general welfare of the citizens of Letcher County. In this case, public agency refers to the county recreation center.

Taxes would rise
if building payments
couldn’t be met

The court approved a resolution to enter into a lease for financing for the county recreation center and for providing security for the lease by a vote of five to one, with Magistrate Fleming casting the lone no vote. The ordinance establishes a sinking fund and in the event the county cannot make its payments on the loan, it also levies a tax on county residents to pay the loan. A sinking fund will allow for separate allocations of funds to make payments on the county recreation center, which is currently under construction. This is a common accounting procedure for funding public projects and keeps the payment accounts separate from other accounts in county financial records. Similar arrangements are currently in place for financing renovations which were made to the Letcher County Courthouse earlier and are labeled “Letcher County Public Courthouse Corp. Funded Depreciation Reserve Account” and “Letcher County Public Courthouse Corp. Debt Service Account.”

Fleming’s objection came from the language in the lease that states that in the event the county cannot meet its payment obligations, a tax will have to be levied to make the payment. Fleming also objected during the August 2008 Fiscal Court meeting when he questioned the original lease agreement.

The language in the contract that Fleming found objectionable reads: “During the period the lease is outstanding, there shall be and there hereby is levied on all taxable property in the Lessee (Letcher County), in addition to other taxes, without limitation as to rate, a direct tax annually in an amount sufficient to pay the lease payments on the lease when it is due. It is being hereby found and determined that current tax rates are within all applicable limitations. Said tax shall be and is hereby ordered computed, certifi ed, levied, and extended upon the tax duplicate and collected by the same officers in the same manner and at the same time taxes for general purposes for each of said years are certified extended, and collected. Said taxes shall be placed before and in preference to all other items and for the full amount thereof; provided however, that in each year to the extent that the other taxes of the Lessee are available for the lease payments and are appropriated for such purpose, the amount of all the taxable property in the Lessee shall be reduced by the amount of such taxes so available and appropriated.”

The clause means that the county has sufficient revenue, including tax revenue at this time to make the lease payments without making any adjustment to or raising county tax rates. However, in the 2008 meeting Fleming raised the possibility that if the county were to lose the severance taxes it receives annually, taxes would have to be raised in order to service the debt. The tax money goes into a sinking fund, where it is set aside for debt reduction. At that time, Fleming said the possibility of higher taxes was too much of a risk.

“I’ve been told that if for some reason if we don’t get our coal severance money, if it’s wiped out, then we would have to raise taxes to pay for this,” said Fleming in the August 2008 meeting.

County Attorney Bolling agreed that the ordinance did indeed say that. However, Bolling said the language was fairly standard in a loan agreement of that nature and was much like a similar agreement the court had signed when it obtained financing to renovate the courthouse.

“It’s like the Courthouse Fund,” said Bolling. “You have to put a certain amount in the sinking fund. In the event the court ran out of money then you would have to raise taxes.”

Before Fleming cast his vote, Judge Ward agreed that the language in the original agreement had not changed but said that by re-entering into the agreement, the county would save just under one percent on its total loan package. He said the language is standard and would only come into effect in the event the county defaulted on the loan.

In an unrelated financial matter, while giving the monthly fi- nancial report, County Treasurer Phillip Hampton asked the court to establish a new account for payments on road equipment titled “Debt Service Account: Equipment.” Hampton said the request to establish the account had come from the auditors who conducted the last audit. The account doesn’t change anything but is just for the convenience of auditors when auditing county expenditures.

Severance receipts
will be down significantly,
county treasurer warns

Hampton also repeated his earlier warning that revenues from severance taxes are down. He said the October severance tax deficit had been $209,000 and October was a pretty good indicator of the remainder of the quarterly payment, so the reduction would probably total over $600,000.

“It could be down more,” said Hampton. “We could be facing some lean times.”

Hampton added that expenditures during the recent water emergency coupled with overtime and other costs related to the recent snows have placed an unusually high financial burden on the county for December. He said the overall financial picture is still good and the county’s finances are sound, however, and estimated that 60 percent of the budget will be spent by January 1. Hampton said that figure is slightly lower than the usual 65 percent spent by January 1.

Country Attorney Harold Bolling also offered an opinion as to whether the county is legally able to pay to have vehicles used by constables painted. Bolling said that while he found no specifi c case law involving the matter, which was part of a request made by Third District Constable Roland Craft, the court could issue a finding that it is in the public interest to have constables in vehicles clearly identified as public safety vehicles and that clearly marked cars could serve as a deterrent to crime.

Lawyers for gas
and coal companies
slow demolition plans

Blighted and Deteriorated Property Committee Chairman Jim Scott also asked the court what is keeping houses from being demolished when the property owners have signed letters allowing for their demolition. County Attorney Bolling said the hold up does not come from his office but is caused by lawyers from the various coal and gas companies that have volunteered to donate their time and equipment to the county. He said the attorneys want to be sure that their clients will not face liabilities by removing the properties and the matter takes time. Judge Ward agreed and said that in any event, very little could be done in the recent bad weather.

“This is a coal company issue,” said Bolling. “The documents haven’t come to me. The coal companies want an agreement from the landowners saying they won’t be sued.”

Salt or not?

Magistrate Fleming also asked Judge Ward about the possibility of using salt to de-ice county roads. He said that while county road workers have done an excellent job of scraping and cleaning roads during the bad weather, some roads are situated so they don’t receive any sunlight and are very difficult to scrape. Fleming said that to his recollection, the county hasn’t used salt on county roads in the last 19 years.

Judge Ward replied that salt does a good deal of damage to roads and that it isn’t effective at temperatures below 20 degrees F. Magistrate Banks pointed to the road going across Bottom Fork as a place that doesn’t see enough sunshine to thaw and said the extreme grade makes it difficult to work. Fleming moved that the county purchase salt to use on county roads and the court voted five to one in favor of his motion with Ward casting the lone no vote. The court voted unanimously to advertise for annual bids on goods used on a regular basis such as fuel, asphalt, and gravel.

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