Whitesburg KY

Ward says fees on gas wells, mines could solve crisis

The Letcher County Fiscal Court took the first step toward a longterm solution to the county’s chronic defect at its March meeting when, by a vote of five to one, the court approved the first reading on an ordinance to place a $2,500 per year licensing fee on all businesses engaged in extracting nonrenewable resources in Letcher County.

The measure was originally discussed in November 2016 as a $1,000 per year license fee on the county’s 1,492 operating oil and gas wells, but Judge/Executive Jim Ward explained it was expanded after he received advice from the Kentucky Attorney General’s Office that the fees must be equitable and fairly applied so they included all businesses that extract non-renewable natural resources.

County Attorney Jamie Hatton conducted the first reading of the ordinance and Ward explained that the attorney general had stated that it is constitutional for the court to access the business licenses, but in order to be equitable it must cover all extractive businesses. He added that by increasing the fees to $2,500, it will not only address the county’s short term deficit of $1.3 million, it will provide it with sufficient funds to operate for several years to come without other tax increases.

Ward did not give an exact figure for the amount that would be raised annually by the license fees, but the original $1,000 fee that would only apply to gas and oil wells would have raised $1,490,000. The $2,500 fee is 2.5 times larger, and would apply to other extractive operations as well as gas and oil wells, so it should bring in around $4 million annually. Both Fifth District Magistrate Wayne Fleming and Second District Magistrate Terry Adams questioned placing the fees on coal mines. The vote to pass the first reading was five to one with Terry Adams voting no. Fleming explained that his yes vote was to advance the ordinance and that he would like look at the coal mine fees.

The ordinance will affect natural gas and oil wells whether producing or not, except for wells that have been capped or abandoned and reclaimed. It will also affect permitted underground and surface coal mines, quarries, sand mines, and clay pits. It defines non-renewable resources as clay, coal, coal bed methane, natural gas, oil, rock, sand, and any other substance considered a non-renewable resource by the scientific community.

In a related matter, the court voted four to two not to sell the Letcher County Recreational Center and passed several measures to address the short-term deficit, including increasing sanitation fees by $5 per month and declaring several properties as surplus and advertising them for sale. The court also voted to transfer control of the Senior Citizens program to the Kentucky River Area Development District (KRADD), which will save the county about $110,000 a year in operating costs. The Senior Citizens will still be able to use the space at the Rec Center and enjoy the same access to exercise equipment they do now, but KRADD will take over management of the program. Ward said it is the only way the program can continue and the vote to transfer it was unanimous.

The court voted unanimously to transfer two county-owned vans that had been used for Senior Citizens to KRADD. Ward said that transferring two others, which are leased for Senior Citizens through LKLP, may be more difficult, but that they will be made available to the program as well.

Sanitation fees will increase by $5 per month if the court approves the second reading of the rate increase ordinance at its next meeting. The vote was four to two with Terry Adams and Wayne Fleming voting no. Judge Ward told the court that the Sanitation Department had been almost breaking even, but that maintenance costs on equipment and fuel have created a $89,000 shortfall. Ward said the proposed fee increase will raise more than $400,000, and the surplus will be applied to other county programs after Sanitation costs are addressed. Ward has said several times at previous meetings that the trucks and other equipment are getting old, and starting to cost more to maintain than it would cost to buy new equipment.

Monthly sanitation rates will increase across the board by $5 per month, including business rates. Senior Citizens will still receive a $3 a month discount, and in response to a question from an audience member, Judge Ward said that if it is easier for customers to pay monthly it can be arranged. He said that customers can pay by credit card, through a quarterly electronic deduction from their checking account, by check, or with cash. Payment will be accepted in the Sanitation Office in the Letcher County Courthouse or by mail, and payments can also be made on-line. The court will conduct the second reading at the next meeting.

Ward said the only alternative to raising rates was to franchise trash collection. Several audience members said that attempts at collecting delinquent accounts should be stepped up. Ward said Letcher County Attorney Hatton already prepares as many as 100 delinquent account cases a week, but that Letcher District Court can’t handle all the cases at one time without being overwhelmed, so usually only about 20 cases a week are heard in court. Very few in the audience favored franchising sanitation, and most said that a franchise collector will not pick up garbage from customers with delinquent accounts, which means that the garbage will either be dumped illegally or go into streams and rivers. Several said that litter is still a big problem as well and that people from other counties cross county lines to dump illegally in Letcher County. One audience member suggested publishing the name of delinquent ratepayers in The Mountain Eagle.

The court voted to declare four pieces of county property surplus and advertise them for sale. The property declared surplus is: the Ermine Senior Citizens Center, the house beside the Domestic Violence Shelter on Bentley Street in Whitesburg, the Boone Fork Senior Citizens Center in Fleming, and the Kingdom Come School. The court voted not to sell the Oven Fork Senior Citizens Center after First District Magistrate Bobby Howard objected. Howard said that there are few county facilities for the Cumberland River side of Pine Mountain. Fleming and Terry Adams agreed with him and the vote to sell the Oven Fork Center failed in a three to three tie vote.

The motion to sell the Letcher County Recreation Center was introduced by Terry Adams. County Attorney Hatton told the court it is legally possible, but only if the terms of the bond issues that funded the center can be satisfied. The vote was four against the motion and two for, with Adams and Fleming voting to sell the center. Ward also told the court that since 2013, the number of county employees has been reduced from 191 to the present count of 104. Ward added that many of the employees are doing double duty and transfer between departments to fill in whenever necessary.

Ward also told an audience member that the agenda did not contain an occupational tax proposal that evening and that he would not introduce the matter in the future. He said the reason is that a three-man bloc consisting of Wayne Fleming, Terry Adams, and Bobby Howard had vowed not to vote for any further tax increases in Letcher County and it would be pointless to ask for one.

The court also voted unanimously to approve the Letcher County Jail’s budget for Fiscal Year 2017-2018. Jailer Don McCall told the court he had reduced the $1,110,232 budget by $84,000 over last year’s budget.

At the request of Jenkins resident Rick Damron, the court voted to remove the Brummet House at entrance of the Little Shepherd Amphitheater (LSAT) from the surplus property list. Damron said that a 2007 grant that had funded the construction of the stage and seating for the amphitheater had also been intended to purchase the property and that it should have been deeded to the Cumberland Mountain Arts Council at that time. Damron said that since the original grant, money has been scarce and the LSAT staff and volunteers have worked on a shoestring. But selling the house, which is located directly beside the access road to the park, could have a potentially devastating effect on the outdoor drama, he said.

Patricia Rogers told the court that she had asked for more transparency at one of the special called meetings, but wasn’t seeing many changes in that area. She said she has filed a freedom of information request for several financial documents but has yet to receive them.

The court also voted unanimously to name the following roads in honor of American military veterans: Low Gap Branch on Little Colley for Corporal J.B. Hall, United States Army; Red Star Road for Staff Sergeant Varge Halcomb, United States Army, and High Knob Drive at Millstone in honor of Sergeant Bobby D. Fisher, Rangers, 75th Infantry, United States Army, and Sergeant David E. Fischer, 240th Assault Helicopter Company, Vietnam, United States Army.

Bank balances for county agencies as of March 15:

General Fund $298,990.39

Road and Bridge Fund $836,632.33

Jail Fund $74,706.51

LGEA Fund $367,238.35

Senior Citizens Fund $71,270.43

Forestry Fund $19,592.84

Letcher County Public Courthouse Depreciation Reserve $49,302.45

Letcher County Public Courthouse Debt Service $64,028.94

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