Commonwealth Journal

November 15, 2012

Auditor: Library taxing districts are models for others

By CHRIS HARRIS, CJ Staff Writer
Commonwealth Journal

Somerset —  

Though the tax supporting Pulaski County’s own library system is currently embroiled in controversy, one state official has suggested that it could be part of a model for other special taxing districts to follow.
On Wednesday, the Kentucky State Auditor’s office released a report compiling information on almost 1,270 special districts throughout the Commonwealth. They’ve combined to collect $1.5 billion in taxes and fees, as well as another $1 billion in grants, corporate sponsorships, and fundraising.
"The problem is we have an enormous layer of government that has been allowed to operate in a way that isn't directly accountable to the public," Edelen said at a news conference in Frankfort Wednesday to announce the release of the database and a report.
And while that might sound similar to the complaints of local petitioners here in Pulaski County seeking to dissolve the library board over ever-rising tax rates, Edelen — a Democrat and former chief of staff for Gov. Steve Beshear — actually considers the state’s library boards to be an example of “best practices” in the way they operate.
“We’re trying to get a feel for how many (special taxing districts) there are in Kentucky, who’s complying (with the law) and who’s not,” said Edelen. “We’ve actually held libraries up ... because they have accountabilities built into the system.”
Edelen couldn’t speak directly to Pulaski County’s own library board, but did say that those like it had to have its members go through training in areas like financial obligations and ethics, “policies for effective board governance that we’d like to see in all districts.”
He added, “Then they have to files their budgets and financial information annually with the Kentucky Department of Libraries and Archives in Frankfort.” He added that library boards are aided by “a very strong network,” in particular the assistance of the Kentucky Library Association.
Elaine Wilson, a four-and-a-half-year member of the Pulaski County Library Board, attested to her participation in these “best practices,” as well as that of her fellow board members.
“We’re required to go through training,” she said. “One of the people who generally sits in on board meetings is the regional librarian. She’s provided training in the last year. We also have other training opportunities. ... We participate in a lot of things to keep knowledgeable about what we need to do. We make sure we’re doing everything by the book.”
Wilson added that she and Library Director Charlotte Keeney actually visited with Edelen in a meeting in Russell County recently in discussing special taxing districts and the requirements made of them.
“Filing (information with the Department of Libraries and Archives) is routine,” she said. “We couldn’t do without the expertise and legal opinion that we get from up there (and the Library Association). You have a lot of people up there who deal with a lot of different libraries. Having their expertise helps us.”
According to Edelen’s special district survey — the information is available on the website — budgeted revenues for Pulaski’s library system in the last fiscal year total $2,111,276, while actual revenues are listed at $2,234,790. They did run $10,926 over budget in receipts. However, actual expenditures totaled only $2,281,430, while budgeted appropriations were $2,542,581. The Pulaski Library system had $4,000 in non-tax revenue, and a total carry-over from one fiscal year to the next of $306,572. 
Edelen said it's a "scandal" that Kentucky has never before been able to provide an accurate count of the districts and whether they are compliant with state laws. But he added that the "vast majority are honest stewards of the tax dollars they spend."
The report found that about 40 percent of the special districts required to submit budgets in fiscal year 2011 did not, and just 55 percent of districts with revenues or expenditures exceeding $750,000 had a required annual audit performed. Edelen said the lack of audits amounts to $461 million in revenue that had no oversight.
The report, "Ghost Government: A Report on Special Districts in Kentucky," also found that Jefferson County leads the state in special districts with 33, followed by Floyd County with 24; Marshall with 23; Henderson, 22; and Boyd, 20. Fayette County, the state's second most populous county behind Jefferson, had just nine special districts by the report's count.
The report recommends creating an online centralized registry for special districts and establishing education and ethics training for special district board members and staff.
The Associated Press contributed to this story