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After several months of probing into unchecked government in Kentucky, the State Auditor’s office on Wednesday released its promised report and a database on special taxing districts, which showed a lot of money being collected and several conflicts of how those districts are monitored in Shelby County and elsewhere.
“Oversight just isn’t what it used to be,” State Auditor Adam Edelen said in a press conference Thursday. “Until yesterday no one could answer the questions about how many special districts we have, where they are and whether or not they’re compliant.”
Edelen’s report shows that the 1,268 documented special districts across the state spend about $2.7 billion and have at least $1.4 billion in cash reserves.
“That two-point-seven-billion is more than what the state spends on SEEK [Support Education Excellence in Kentucky] funding, which is the backbone of our education funding,” he said. “And the one-point-four-billion is twice what our one hundred an seventy-four schools districts have available in their rainy day funds.”
Special districts, whether a taxing district or a district with the ability to impose fees, are required to submit their budgets to the fiscal courts of the counties in which they operate. Fiscal court then sends that budget on to the state Department of Local Government.
The special districts are also required to file a description with the county clerk’s office, and districts with the ability to impose a tax are required to file a financial report each year.
Audits are required yearly for those spending $750,000 or more and every four years for those spending less.
Edelen’s report states that in 117 of 120 counties, the special districts, both taxing and fee relegated, pulled in more money than went to the county governments. That was true in Shelby County, but the numbers do not exactly add up.
The state report lists 15 special districts in Shelby County, which pulled in a little less than $9.85 million. According the 2011 County Distribution of Tax for 2011, the county received more than $2.8 million, and the school district received about $18.6 million.
The same tax report lists 18 special taxing districts, but the county tax report will not list the fee-based special districts. Missing from the state’s report are five fire districts and the Meadowbrook Sewer district.
The state does include fee-based water districts, West Shelby, North Shelby and U.S. 60, which is a part of North Shelby.
Even when you remove the fee-based special districts, Shelby County’s special taxing districts collected $6.08 million. However, that number is still more than twice what the county received in tax dollars.
The water companies received almost $3.8 million revenues, but it’s the carryover that causes pause. The report says North Shelby Water Company will carry over more than $11 million at the end of the year. But the report does not clarify for what reasons that money is being held or whether capital projects and expansion are being planned.
Edelen is calling for closer monitoring of how that money is spent by answering to taxpayers. Many special districts’ boards are appointed by fiscal courts but are not required to answer to anyone.
The report and the coinciding searchable database can be found at http://apps.auditor.ky.gov/public/theregistry/cai.html. Edelen said one of his goals with this report is to “centralize” the information, and some incorrect information on Shelby County is a prime example:
In a conference call with journalists, Edelen said that tourism commissions, largely operated by local governments, aren’t part of the database but should be subject to more direct scrutiny and oversight.
He also said say there are some “glitches” in the online database and that the list is a living document. The database, in which Edelen is requesting help from the public and watchdog groups like newspapers to keep current, will be refreshed on Dec. 4.