Aug. 10, 2012 —
During State Auditor Adam Edelen’s 70,000-mile campaign trek last year, he asked Kentucky voters what pressing issues they wanted him to address.
“They’d ask, ‘Who is the sanitation district and why did they charge me or raise the fee, or why did they build a new building?” Edelen says.
After looking into the matter, he became more aware of special districts and how they operate. Special districts are defined as any entity that has the ability to levy fees and/or taxes, such as library boards, fire departments and tourism commissions.
The Lexington-Bluegrass Airport Authority is a special district that caught the public’s attention due to an investigation by Edelen’s predecessor, Crit Luallen.
Former airport executive Michael Gobb pleaded guilty to conspiracy to commit theft by deception for his role in a 2004 Dallas strip club visit that cost the airport over $5,000.
The Lexington Herald-Leader reported in 2009 that Gobb and top airport officials spent $530,000 on meals, travel and entertainment between 2006 and 2008.
Edelen says no one knows how many special districts are in the state because there is no central authority to track the number or how much the districts collect and spend in taxes and fees.
“Based on the most optimistic projection of compliance, with most special districts being compliant and fewer taxpayer dollars flowing, $200 million is sloshing through the system that’s unaccounted for,” Edelen says.
He expects the number to be more like $1.5 billion.
Edelen can’t understand why no one in the country has tried to change the system.
He cites a County Statute Revision Commission study published in 1968, called “Special Districts”, which stated:
“Under the laws currently in force, the public has little opportunity to be fully informed about the possible results of the establishment of a particular district.”
There are between 1,300 and 1,800 special districts in Kentucky, according to Edelen.
They are governed by hundreds of different statutes and local ordinances. The Kentucky Department for Local Government tracks special districts but only knows of 14 different types.
Rowan County’s special districts include the Rowan County Board of Health, Rowan County Library Board and Morehead Tourism Commission.
It is unclear whether the Rowan County Sanitation District, Morehead-Rowan County- MSU Recycling Center or Rowan County Solid Waste Board are considered taxing or non-taxing districts.
The county’s largest rural water supplier, Rowan Water, Inc., is not listed in any category on the list the auditor’s office compiled for the newspaper.
Edelen has launched a massive effort to bring accountability to such districts.
He says he will propose legislation in 2013 to reform the governance and oversight of special districts, including requirements for published public notices, financial audits and open meetings.
“By the end of the year, there will be an online database,” he says. “Every citizen can track special districts in any county. The system will answer the four key questions: who is operating, where they’re operating, how much money flows through them and if they’re compliant with legal requirements.”
(Next: A closer look at special districts in Rowan County, starting with the Board of Health.)
Nicole Sturgill can be reached at nsturgill@themoreheadnews.com or by telephone at 784-4116.
Local News
Citizen questions led state auditor to special districts project
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