Kerney: City insurance broker’s tax forms ‘current’

Sept. 05--GLASGOW -- In January, Glasgow Councilman Jake Dickinson said he didn't like that the insurance broker the city uses did not have a business license nor was it paying the city's occupational tax.

He said at that time that he had raised the issue two years prior, and he believed the company had obtained a business license to operate here but still hadn't filed any tax documents.

Dickinson proposed a resolution, which was later unanimously passed, that the city would not do business with any company more than six months delinquent on its tax returns. He raised the question again at a recent meeting, asking for the city attorney to check on whether the company was compliant, and when he asked about it at last week's council meeting, City Attorney Rich Alexander and Mayor Dick Doty told him it was their understanding the company in question was in compliance with the tax ordinance.

As it turned out, however, there was -- and still is -- a considerable question as to whether the Louisville-based company, which has no physical location in Glasgow and which handles the Glasgow account out of its Bowling Green office, falls under the city ordinance that requires filing tax documents and paying when appropriate, said Brandon Kerney, the city's occupational tax administrator.

Kelly Hagan, vice president of operations for employee benefits at AssuredPartners NL, said in January that the company had been the city's broker since May 2013.

"I think we all question, including the folks at the City of Glasgow in the occupational tax department, whether this is a tax we need to actually pay," Hagan told the Glasgow Daily Times by phone Jan. 11. "It's my understanding that it's a gray area, and in fact, I think you could argue whether a taxable relationship actually exists. ... We don't even know that there will be a tax obligation. We anticipate it will be some minimal percentage, possibly zero, but we've been asked to do it, and we're complying."

Back in January, Kerney confirmed the company had paid for its business license, and it agreed to file the tax documents necessary to even determine whether it would have a tax liability to pay and then pay if anything is owed.

The company has worked with the city to accomplish resolving the issue, Kerney told the Glasgow Daily Times on Friday.

"They were genuinely interested in making us happy, so we were fine with working with them," he said.

Kerney made a point to be clear that, just like with other tax returns, not everyone who files has to pay, but privacy rules kept him from being able to say whether the company actually owed anything.

"It's not necessarily a 'pay' thing as much as a 'file' thing," he said to clarify the lingo.

When the questions first arose, he said the city started by asking for returns for 2015, and at least one extension was granted, but those were filed in February.

Once AssuredPartners determined it was willing to file the documents even though it's still questionable that they have to, the city later went ahead and asked for -- but never had to demand -- returns for 2013 and 2014 to cover the entire time the company has been the broker for the city, Kerney said. No timeline for receipt of those was actually set. Those returns were received Thursday, he said, which he felt was within a reasonable amount of time, as they were requested after the fact.

Also in the interim of all this, their tax director had changed, he said. He and company representatives had been in contact over the past few weeks, so it's not like they were ignoring him, Kerney said.

For the 2016 tax year, for which the company has requested and been granted an extension to Oct. 15, Kerney said, adding that it is not uncommon for businesses to get extensions when requested and plenty have been.

So, as far as he is concerned, the account is current.

When that extension was acknowledged at the Aug. 28 council meeting, Dickinson wanted to know why the city was still doing business with the company, and Doty said, essentially, that other companies receive extensions so he didn't know why that one should be treated any differently.

Dickinson's company used to handle the insurance brokering for the city for "a number of years," Dickinson said in January, and he was considered the agent of record, though the coverage itself was through companies like Anthem. That had been seven or eight years ago, he said.

The city later changed brokers, initially to one that still had partial local connections and then to another and then landed with Neace Lukens. The "NL" portion of the current broker's name comes from AssuredPartners' 2011 acquisition of Neace Lukens.

To be clear, Dickinson said in January, "I have no interest whatsoever in getting it back. I'm retired and stress-free, but I don't think it's fair that we do business with an out-of-town agency that won't pay its taxes when we've got agents right here in town that are capable of handling it and do pay their taxes."

He added that even it he were interested, it would be a conflict of interest for him to bid on the city's insurance now, while he's on the council.

Dickinson said in January he doesn't have anything against the company that brokers the insurance now -- AssuredPartners NL -- but "I don't want that company to have it; I want it local."

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