KACo's 'generosity' provided extra staff benefits, board pay

Board members, staff received dual retirement benefits

ralessi@herald-leader.comOctober 30, 2009 

Staff and board members of the Kentucky Association of Counties received benefits that might have been too generous, according to state Auditor Crit Luallen.

For example, KACo contributes 13.5 percent of each employee's salary toward their pensions in the County Employee Retirement System. In addition, KACo matches up to 6 percent of their salaries in the state-managed 401(k) plan. The extra contributions into the 401(k) plan cost more than $622,000 in three years, according to an audit released Thursday.

"The extra match is above what any public agencies would typically provide," the audit report said. "While the benefit to employees displays great generosity on the part of KACo, it does not meet the standards of using member and client funds in the most efficient manner possible."

KACo spent $1.74 million in the past three years in total retirement benefits for employees. In July, KACo had 45 full-time workers.

Auditors said such benefits are out of line with county associations across the country, which contribute to just one type of retirement fund for employees.

KACo's board members also have been well compensated over the last three years, paying themselves a total of $334,300 for attending meetings, the audit report found.

Each of the 34 county officials who serve on the overall KACo board of directors receives a $100 fee for each meeting attended.

In addition, each member of KACo's seven program boards is paid a $250 fee and travel costs to attend those meetings. Those programs include various insurance services and the financing program that helps counties pay for projects and equipment.

Because officials can be appointed to more than one program board, the audit found that more than half of the total in attendance fees — $174,600 — went to 12 people over the last three years. That averages $4,833 a person each year. The report didn't name the dozen.

The audit noted that similar county organizations in four other states reimburse board members only for travel and recommended that KACo do the same.

J. Michael Foster, the Christian County Attorney and current KACo president, who has led the organization's recent reform efforts, said he would be reluctant to eliminate the attendance fees because many officials drive more than three hours for each meeting.

"Given the fact that board members are having to give much of their time, particularly of late ... I'm concerned about eliminating compensation," he said. He said the board will review Luallen's recommendation.

Foster also said he's awaiting the results of the management review that he commissioned last month from former Madison County Attorney Robert "Bobby" Russell. Russell is expected to suggest ways to improve the organization's structure, including staff compensation and benefits. Foster said he hopes Russell's review will be complete by Dec. 1.

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