Whitesburg KY

Layoffs, furloughs of county workers to take place soon

Letcher Judge/Executive Jim Ward is being left to proceed on his own in taking actions necessary to bring the county’s budget into balance by June 30.

In a three-to-three vote at its April meeting Monday, the court denied Judge Ward’s request to authorize actions necessary to bring the county’s budget into balance, which he said would probably include layoffs and the consolidation of county departments.

“It’s not a good situation,” Ward said Tuesday after spending several hours trying to determine the proper mix of layoffs and furloughs that will affect all county employees, both salaried and hourly. “Every employee will be affected to some degree.”

Ward introduced the topic of budgeting at Monday night’s meeting by repeating a statement made several months ago by representatives of the Kentucky Department of Local Government that Letcher County doesn’t have a spending problem, but has a revenue problem, or more appropriately, a problem with the lack of revenue. Ward told the magistrates they had two issues to address, the first insuring that the county does not end the fiscal year on June 30 with a deficit balance, or “in the red.” The second issue is to see that the court has sufficient funds to allow the county to operate between the beginning of the 2017-18 Fiscal Year on July 1 and November 2017, when revenue from county property taxes begins to come in.

Ward told the court members they already had refused to pass what he called their best opportunity to address the projected $1.3 million deficit they now face when they voted down the second reading of an ordinance to place a $2,500 per year licensing fee on all businesses engaged in extracting nonrenewable resources in Letcher County at a special called meeting April 12. At that meeting, following an executive session requested by County Attorney Jamie Hatton, the issue failed in a three-to-three vote, with Judge Ward, Fifth District Magistrate Wayne Fleming, and Third District Magistrate Woody Holbrook voting in favor of the ordinance and Fourth District Magistrate Keith Adams, Second District Magistrate Terry Adams, and First District Magistrate Bobby Howard voting against it, even though Howard and Keith Adams had voted in favor of advancing the first reading. Several magistrates said they felt the measure was not legal, but Ward replied that there was no official legal ruling to that effect.

Ward said that at the present time, most county departments are running deficits and that brings the total operating deficit to between $455,000 and $477,000. He said the General Fund has a positive balance of $242,500, the Road Fund has a positive balance of $500,000, the Jail Fund has a negative balance of $103,369, and the Local Government Economic Assistance Fund has a negative balance of $110,608. He added that the county can no longer borrow from the Road and Bridge Fund, because it is apparent that the loans cannot be repaid by the looming end of the fiscal year.

Ward said the county might get some coal severance or other revenue from the state, but it is uncertain and will probably be too little too late even if it does. He added that the county has been operating on a $1.2 million carryover from last year, but in reality, it is about gone and will not be sufficient to allow the county to end the fiscal year in the black. He said in the best-case scenario, the county will have about $200,000 to operate on from the beginning of the fiscal year on July 1 and the time when tax receipts start coming in around the end of the calendar year.

Following his address on the current state of county finances, Judge Ward asked the court to give him the necessary authority to balance the budget and to do what needs to be done to keep the county in the black. Magistrate Wayne Fleming told Ward that as county judge/executive, he already has the authority to hire and fire and asked why he can’t do what needs to be done on his own. Ward said he will probably have to lay off some county employees and combine some departments, and when he does that, he will have to come to the court for its approval. He said he will probably shut down the Letcher County Rangers, and will also have to furlough salary personnel as well as implement layoffs in county departments.

“I think you already have the authority to do it,” said Fleming.

“We have to do something now,” replied Ward. “We have two months and we have to be in the black.”

In response to a question about implementing a county occupational tax, Ward said the time frame is very narrow and there is no ordinance prepared at this time for an occupational tax. Such a tax would have to be done as an ordinance and would require two readings, at separate meetings. The vote on Ward’s approval request ended in a three-tothree tie, which meant the motion failed. Ward then said he would have to go ahead and do what needs to be done anyway and Fleming said, “You can do that.”

“And you will say you don’t want to lay people off,” replied Ward.

“The law says you can do it,” said Fleming. “We have to OK it.”

Judge Ward said once again it would be much better if the court members would cooperate with him. “We’ve talked about this but we still don’t have anything accomplished. Our employees will get hurt, but I’ll do what has to be done.”

“You have the authority to run this county,” said Fleming.

The fiscal court is the governing body of Letcher County; its chief responsibility being the appropriation of county funds and the construction, operation, and maintenance of county buildings, roads, and other property.

Ward said Tuesday was one of his toughest days yet as the county’s chief executive officer. He said the next few days will be even harder when it “comes to telling at least 15 or 20 people” they will be out of a job for at least three to six months.

“I know their families; I know their children,” Ward said. “This is going to be one of the hardest things I have ever done.”

Ward said that county employees who are paid hourly earn between $15 and $7.50 per hour, with the average pay between $9 and $11 plus insurance benefits.

“For the ones who don’t get laid off, you cut four days a month out of their check and they can’t survive,” he said.

County Treasurer Phillip Hampton spent time explaining the county’s financial picture during Monday’s meeting. Hampton said that since revenue has dropped so dramatically from coal severance taxes, the shortfall will take the entire $1.2 million carryover for operational expenses and asked that the court approve two budget amendments, Five and Six. Budget Amendment Five was a transfer of $147,725.50 from the remainder of the carryover into operational expenses. Budget Amendment Six called for transfers of $247,589 from reimbursements made by the state and $172,479 from the Transportation Cabinet for the Road Fund, making a total transfer of $420,068.

Hampton added that even though the county workforce has already been reduced from almost 200 to 104 employees, and other costs have been cut such as consolidating the Senior Citizens, it hasn’t raised revenue, but just reduced costs. He added that expenses have grown as they usually do, including insurance costs, power bills, fuel bills and others which rise on a regular basis. Along with that, the county’s revenue has dropped dramatically as well. Judge Ward said whatever funds left from carryover are almost gone. The monthly financial report does not include monthly bills totaling $540,006.88 which could not be paid until they were approved at Monday evening’s meeting.

Bank balances for county agencies as of April 12:

•General Fund $407,073.91

• Road and Bridge Fund $748,063.78

• Jail Fund $80,798.46

• LGEA Fund $255,510.98

• Senior Citizens Fund $62,387.63

• Forestry Fund $19,651.47

• Letcher County Public Courthouse Depreciation Reserve $51,863.97

• Letcher County Public Courthouse Debt Service $64,042.53

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