Wednesday, January 23, 2019

City council gets audit report showing occupational-tax windfall, discusses several other topics in long meeting

By Korrie Harris, Akhira Umar and Kristi Fitzgerald
University of Kentucky School of Journalism and Media

Midway collected much more occupational tax than it budgeted in the last fiscal year, improving its finances substantially, according to an audit report the City Council heard Tuesday evening.

Mayor Grayson Vandegrift hands Deputy Clerk Sonya Conner the $1,000 check
that former council member Johnny Wilson, standing at left, had just given the
city to help with restoration of the two African American cemeteries in the city.
The council also heard about a joint "town hall" meeting of local governments and restoration of African American cemeteries; discussed the future of the old wastewater treatment plant; endorsed a proposed two-day water competition for dogs at the dog park; and discussed other topics in a long meeting.

Audit report: Thanks mainly to new industries and businesses, Midway collected $662,524 in occupational taxes on payrolls and net profits in the fiscal year that ended June 30, well over the $500,000 the mayor and council had budgeted. They budget conservatively; this year's estimate was $550,000. In 2016-17 the budget was $400,000; in 2015-16 it was $275,000.

In 2017-18, the city took in $265,758 more in 2017-18 than it spent, according to the audit. The occupational-tax windfalls have allowed the council to reduce property taxes 25 percent thanks to the influx of occupational taxes.

The audit noted three "significant deficiencies" in the city's financial procedures, all of which were essentially dismissed by Jason Strange, a certified public accountant for Stiles, Carter and Associates in Elizabethtown, who presented the report.

In one case, five credit card transactions didn’t include source documents such as receipts. In another, the city clerk-treasurer was paid a week's sick leave in advance. “It was not any sort of malfeasance from what we understand,” Strange said. All city expenses are public records and can be accessed by filing an open-records request.

The other deficiency involved insufficient "segregation of duties over receipts, disbursements and reconciliations." For example, "The clerk-treasurer accepts cash receipts and also records the amounts . . . has check-signing authority and performs bank reconciliations without review."

Last year's audit noted some of the same items. "They're very common with what we see in small governments and small cities," Strange said. "Most folks live with this because the costs outweigh the benefit to add a layer of folks to deal with this."

Multi-government meeting: Mayor Grayson Vandegrift announced that the councils of Midway and Versailles will hold a "Woodford Town Hall" with the county Fiscal Court form 5:30 to 7 p.m. Thursday, Feb. 7, at the Kentucky Community and Technical College System office in Versailles.

Vandegrift said the event is meant to “engage the public in what the governments are here to do for them.” He said each one will give five minutes of introductory information, followed by an open forum for citizens to make comments and ask questions. If the town hall is successful, it could lead to more like it, the mayor said.

“I think this can be a really exciting thing,” he said. “I don’t think this has ever been done in Woodford County, or if has, it’s been a long time.” Vandegrift had pushed for a joint meeting of the governments, but the idea was quashed by the fiscal court, which is now under the leadership of County Judge-Executive James Kay.

UPDATE, Jan. 30: The town hall, called "We Are Woodford," will include state Rep. Joe Graviss.

African American cemeteries: Former council member Johnny Wilson, appearing in the opening "Citizen's Comments" segment of the meeting, proposed that the city set aside money to repair and replace headstones at the two African American cemeteries, Sons and Daughters and St. Rose.

Wilson reported that 71 of the 303 headstones need resetting, repair or replacement. He suggested that volunteers could do the repairs. Saying he was speaking "from the heart," Wilson have Vandegrift a check for $1,000, which he said represented the $450 in pay he got as a council member filling an unexpired term, plus $550.

Vandegrift said the check would be earmarked for the intended purpose. "I appreciate all your research on this," he told Wilson. "It's very meticulous." The council and the audience gave Wilson a round of applause.

Old wastewater plant: Retired Kentucky State University professor Steve Mims has leased the property from the city for several years to raise fish. He pays around $50 a month in rent and gets treated water from the current plant at no cost.

Midway paid off the debt for the sewer plant last year, which Vandegrift said changed the situation. "In my opinion, it is not worth the city being the landlord," he said. He suggested the council declare the property to be surplus and seek bids for it, which would allow Mims to buy it. “You don’t have to go with the highest bidder,” he said. “You can go with the bid that fits the property best."

The council then held a 10-minute executive session with City Attorney Phil Moloney to discuss "future acqusition or sale of real property when publicity would be likely to affect the value," a stated exception to the state Open Meetings Act. No further action was taken.

Including the executive session, the council meeting lasted an hour and 47 minutes, one of the longest in some time.

Dog event: The council endorsed the Midway Business Association's proposed “Dock Dogs” competition, which would be held at the dog park on a summer weekend -- if the MBA works out arrangements with the commercial vendor who does the events, in which dogs jump off a dock into a large pool, among other things.

The city Parks Board had approved the idea, but didn't have authority over questions about water, vendors and permits, said new Council Member John Holloway, a board member and Walter Bradley Park's unpaid manager.

The council discussed the cost and source of water, necessary permits, liability insurance, parking and other questions with MBA representatives Justin Werner and Steve Morgan. They predicted that the event would draw 2,000 to 3,000 people, with competing dogs coming from other states as well as Kentucky. DockDogs is a “premier canine aquatics competition,” its website says. 

Council roundtable: At the end of each meeting, council members are offered chances in turn to bring up other matters.

New Council Member Logan Nance requested an update on the Midway Child Care Task Force and a look into online payment of water-sewer bills.

Vandegrift said get would get the council an update on the task force. He said online credit card payments would carry a 4 percent surcharge, which has made him hesitant about residents' reactions, but "I'm all for it . . . if you all feel a hunger out there for it." He endorsed Nance's suggestion for a survey of city residents about the idea.

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