County proposing major changes to fire premium tax ordinance

May 15-- May 15--Tuesday's meeting of Pulaski County Fiscal Court was particularly lively as magistrates geared up for a new fiscal year with the first readings of the 2019-20 county budget as well as a new ordinance to replace the "fire premium" tax ordinance that is set to sunset on June 30.

As is customary with first readings, the votes pertain to advertising the proposed ordinances as public notices. It's possible that both could undergo changes before the court votes on second readings to finalize them.

The possibility is almost certain with the insurance premium ordinance (#310.7) as it became clear that not all magistrates were in agreement with what is being proposed. As the court reached the point in their agenda to where it could be discussed, District 1 Magistrate Jason Turpen moved that it be tabled.

"I think there are several versions going around," Turpen said, adding he felt the court should wait until they "get it the way they want."

The court split even on that vote -- with magistrates Jimmy Wheeldon (District 3) and Mark Ranshaw (District 4) joining Turpen against Mike Wilson (District 2) and Mike Strunk (District 5) wanting to go ahead. Though the "tabling" won, the court did end up hearing the first reading of the ordinance once County Treasurer Joan Isaacs expressed concern that the officials wouldn't have time to get a budget finalized before the July 1 start of the new fiscal year.

"It [Ordinance 310.7] can affect the budget," Isaacs said.

Ranshaw noted that the court could always do a budget amendment after July 1 in that event, but ultimately the magistrates agreed to advertise the reading of the new proposal. As a volunteer firefighter himself, he noted the cost it takes to equip firefighters.

"Just as long as we understand this is a work in progress," he said. "We are way off on an agreement...I just want to make sure it's fair to everybody concerned; there's just too many different versions out there."

As summarized by County Attorney Martin Hatfield, the version of the new fire premium ordinance which was given a first reading would keep the tax rate at 5.5 percent (with a minimum annual license fee of $5) but all collections would go into the county's General Fund with the Fire Sinking Fund being allocated a flat $2.5 million.

"The remainder of the funds collected remain in the General Fund to be used for emergency purposes as determined by Fiscal Court," Hatfield read.

Referencing Ranshaw's point about fairness, Judge-Executive Steve Kelley said that's what all the county officials want. "We're proud of our fire departments," he said. "Definitely as a court, I think we're committed to making sure we do have the best equipment for ... everybody who puts themselves on the line like that."

According to Isaacs, the current version of the proposed ordinance also does not include a sunset clause -- though she pointed out that any ordinance can be amended by fiscal court members.

The first insurance premium tax ordinance was passed in 1985, calling for insurance companies to pay a premium tax on policies sold in the county. The revenues were initially allocated solely for the county's Fire Protection Sinking Fund. In June 2009, however, a new ordinance split the revenues of the 5.5 percent tax -- with the Fire Fund keeping four percent and the county's General Fund getting 1.5 percent (or just over a quarter of the revenues).

At the time, county officials said the change was needed in order to balance the upcoming county budget and a "sunset clause" was included so that the ordinance would either lapse or have to be renewed in 2012. The ordinance was again renewed in May 2012 with a new sunset clause set for June 30, 2019.

The Pulaski County Fire Commission is funded through the Fire Fund, but its budget subject to approval from Fiscal Court. The FY 2019-20 county budget projects the insurance premium tax will generate $3.7 million. The commission's share has been allocated at $2.776 million in the county budget -- which doesn't exactly match the $2.5 million the proposed fire premium ordinance calls for.

In presenting the FY 2019-20 budget earlier in the meeting, which totals out at just over $32.127 million, Isaacs noted that the changes which had arisen in two budget workshops last month had been dealt with.

That included occupational tax allocations for the City of Ferguson and the Lake Cumberland Regional Airport.

Ferguson officials drafted a budget thinking their share of the county's occupational tax would be $102,000. However, the county allocated only $42,500 -- in part because of an insurance premium tax the city enacted last year which cut into county revenues. Magistrates agreed to increase the proposed allocation to $70,000.

In the case of the airport, the county had been dropping its subsidy over the last few years amid concerns over the airport board's budget requests and lack of help from the City of Somerset -- which co-owns the facility with the county. However with Somerset pledging $100,000 in their budget, the county increased its 2019-20 allocation from $80,000 to $100,000.

While the county has not increased the $27,000 allocated to the Pulaski County Alzheimer's Disease Respite Center (down from a high of $58,000 due to state cuts to the county's share of coal severance funds), the county and City of Somerset have joined forces to encourage public donations in an effort to raise $60,000 for the center.

Following the first reading, the budget will now be submitted to the Kentucky Department for Local Government for state approval. Once that happens, the scheduled second reading can be advertised.

"We do have a workable, sustainable budget," Isaacs said. "As I always say, there's not a whole lot of wiggle room but these days, no budget has a lot of wiggle room."

That said, the budget may be need further revisions given the uncertainty around Ordinance 310.7. Isaacs said the court could make any changes necessary before a second reading, so long as those changes don't affect the bottom line. "If it changes the bottom line of the budget, we have to start over," she said.

Isaacs added that she didn't expect a second reading of the budget ordinance to be ready before the June 11 meeting.

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