PRESTONSBURG – City officials are still reviewing an amended ordinance of the tourism commission after it was presented for first reading during Monday’s city council meeting.
The ordinance which was read during this week’s council meeting addressed the tourism commission and made several small changes in wording to the long standing document which established the organization in 1988. Most notably in the area related to personnel and collection and management of taxes.
According to the ordinance furnished to Times Staff after the council meeting a change was made under the subsection of “powers and duties,” stating that the commission “may employ such personnel upon recommendation of up to three candidates subject to the final approval of the Mayor. The Mayor shall have the only authority to discharge such personnel.”
This wording was eerily similar to a 2003 ordinance passed by Mayor Jerry Fannin which attempted to take control of the tourism commission.
Following an appeal to the Kentucky State Auditors of the 2003 ordinance, the matter was investigated and a report was released condemning the city’s overreach in its attempt to control the commission.
In the report, then State Auditor Edward B. Hatchett Jr. noted that, “an ordinance adopted by the City provides the Mayor with more authority over the Commission than is authorized…”
In his findings and recommendations, the state auditor noted that “KRS 91A.360(4) states that the Commission may employ personnel and make contracts necessary to carry out the purpose of (the commission);” and further wrote that, “state law only grants authority to mayors to appoint and remove commissioners of the Commission.”
However, on Wednesday, Stapleton told Times Staff that the change to the “powers and duties” subsection had been a mistake, and would need to be changed.
“If you got a copy of the new one it’s wrong. I had about four laying on my desk, and I sent her (the city clerk) the wrong one. Nothing else will be on it but that right there (tax collection).”
The tax collection portion to which Mayor Stapleton refers is the portion of the amended ordinance which designated the city treasurer to be in charge of collecting and maintaining the commission’s funds in the future. According to the current ordinance, collection and management of tax revenue is carried out by the commission’s own appointed treasurer.
On Wednesday Stapleton listed his reasons for the change in rules.
“The first reason is: We’re the levying body and there’s issues that comes up with taxes, and we need to know people’s complete tax situation,” said Stapleton. “And if it’s over there, we sometimes don’t know it.”
Stapleton says that the second reason for the move is to relieve the commission of some administrative work, and “free them up” to focus on promoting tourism.
“I’m not taking control of their money, only thing were doing is taking their taxes, and putting it in their restricted account. We’re not going to be controlling their money in no shape, form, or fashion.”
The move would be a return to the original rules established in 1988, when it was in fact the city treasurer who collected and controlled the commission’s finances.
The tourism commission collects the taxes directly now, and according to Tourism Director Fred James; it is within the power of the commission to determine by what means the commission will collect their taxes; including negotiating with a third party collection group to collect them for the commission if they were so inclined. Currently commission representative Jeremiah Parsons acts as the treasurer and taxes are mailed directly to the commission.
Tourism funds are then distributed as follows: 33 percent to the park’s commission, 34 percent to the Mountain Arts Center, and 33 percent to the tourism commission itself.
According to James, control of the tax revenue has been a source of tension before with the city.
“Yes we have had problems. Originally these funds were placed in the city treasury, then transferred to the tourism account. Then the mayor fired the director and took the checkbook, and began depositing the tax receipts in a city account.”
The report also noted issues of timeliness of deposits being made to the commission.
James says that following the Hatchett audit, language was put into the ordinance taking control or access to tourism funds completely out of the city’s control. “These funds are the tourism funds,” says James.
According to the report issued by Hatchett, when a commission is established, the mayor of the city is responsible for appointing commissioners, and then the commissioners, and not the mayor, are responsible for carrying out the duties of the commission.
Still, Mayor Stapleton stated emphatically that this is not an attempt to control the commission’s funds, but merely an opportunity for the city to gain better tax oversight.
Because the ordinance presented Monday was “wrong,” another first reading may be necessary over an amended ordinance before the council can proceed with a second reading. Also, because the commission currently controls the collections and management of its taxes, there is a question of whether or not the city can make such a change on its own through ordinance, without the approval of the commission.
Times Staff sought a response from the commission with regard to the ordinance, but were unable to get comment. Calls to Jim Ousley, chairman of the tourism commission, were not immediately returned.
Reach Jackson Latta at (606) 886-8506