League of Cities reduces expenses, drops think tank

lblackford@herald-leader.comFebruary 7, 2011 

The new director of the Kentucky League of Cities has dissolved the group's costly think tank, one of a series of changes to reduce the League's expenses and make it more responsive to member cities after a spending scandal in 2009.

Jonathan Steiner, who started at the League on Nov. 1, said the NewCities Institute's two remaining employees would be absorbed by the League and focused on enhancing the League's member services, helping them with comprehensive plans and other projects. The director of NewCities, Tom Prather, is no longer at the League.

NewCities was created by former KLC director Sylvia Lovely, who saw it as a way to foster civic engagement. However, in a scathing audit of the group, State Auditor Crit Luallen said the League had spent $7.2 million over eight years to prop up the group, which had only "vague" documentation on what was actually accomplished.

"We want to refocus NewCities' programs and bring them in-house under our development programs," Steiner said. "We're taking a more hands-on approach and offering those services at a lower cost."

Steiner would not comment on the circumstances under which Prather left, calling it a personnel issue. Lovely stepped down under pressure in January 2010 after 22 years at the organization.

The League will help The Partnership for Successful Schools, which joined NewCities in 2008, to find a new home in the next few months.

"It's great work, but it doesn't fit in our mission," Steiner said of the group, formed by business leaders in 1991 to encourage business and education partnerships.

In addition to the New Cities savings, Steiner estimates the League could save as much as $700,000 in salaries and benefits by not replacing certain personnel, such as Prather or KLC deputy director Neil Hackworth, who made nearly $250,000 and retired at the end of 2010. Steiner himself makes $225,000, compared with Lovely's package of salary and benefits of $331,00.

Steiner said he is also looking to find cost savings in the League's reinsurance program, which is a final protection to member cities. The League has about $6 million in reinsurance contracts, which have not been bid widely in a number of years. Steiner said that looking to a broader market could save as much as 10 percent.

Some of the changes at KLC were in place before Steiner joined the group. The League limited employee credit cards and travel, and ended spousal travel and cars. Other changes were made by the legislature, which demanded that all KLC expenses be published online.

Steiner said he uses the online site Open Door at www.klc.org/opendoor.asp.

"I can't see every check that goes out of here," he said. "I look at the Web site and look at things just to see where our money is being spent."

Steiner is also bringing in two national consultants to examine the League's entire program in municipal services and insurance.

"We want to find more efficiencies, to see what's working and what's not," he said.

As for the League's past troubles, he divides municipal leagues into two groups: Those that have been scrutinized by outside groups and those that will be.

He traces that to the 1980s, when private insurance companies dropped municipalities, and leagues went into the insurance business.

"Now the leagues and pools are running multi million dollar insurance services," he said. "Naturally they will draw attention. People said we need to make sure what they're doing is right and that they're using taxpayer money in the best interest of taxpayers and cities."

He said that learning about Kentucky is like "drinking out of a firehose," and he expects to learn even more on Wednesday, which has been proclaimed City Day. Between 300 and 400 city officials are expected to converge on Frankfort.

Winchester Mayor Ed Burtner, who serves on the League's executive board, said Steiner has made a good impression with city officials around the state.

"He's providing some strong leadership and making decisions that need to be made," Burtner said. "We still have some work to do, but I think it's heading in a positive direction."

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