FRANKFORT — Legislation aimed at improving the accountability of the Kentucky Association of Counties and Kentucky League of Cities drew unanimous support from a House panel Wednesday, despite reservations expressed by some KLC board members.
Testimony at the House Local Government Committee hearing also exposed a continuing philosophical split among leaders of the KLC board about how much oversight they think is necessary.
KLC board member and Lexington Mayor Jim Newberry briefly testified that he was "very supportive" of the legislation, House Bill 325, based on recommendations from state Auditor Crit Luallen. Her office's reviews of the two organizations last year found millions of dollars in excessive spending.
Among other things, the bill would make both organizations — which provide lobbying, insurance and financing services to local governments — subject to state open records and open meetings laws.
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But Bowling Green Mayor Elaine Nogay Walker, KLC's first vice president, was less enthusiastic. The organization was "not opposed to the legislation as a whole," she said, but some board members were "disappointed" that the bill didn't allow them to hold legislative strategy sessions in private.
"The failure of the bill to include an exemption for discussions related to our legislative strategies ... likely will have a direct and detrimental impact on the city governments the League represents," Walker said, speaking on behalf of KLC President Mike Miller. That would put cities at a disadvantage with other groups that lobby the General Assembly, she said.
Lawmakers, however, didn't buy that argument.
Rep. Arnold Simpson, D-Covington, sponsor of the bill, said he immediately balked when KLC representatives asked him to include an open meetings exemption for their sessions on lobbying, especially because city governments discuss their priorities in public meetings.
"I don't like strategies and plans concocted in private," he said. "When in doubt, I think we all should side on the side of transparency."
Rep. Richard Henderson, D-Jeffersonville, said such legislative strategy sessions should be open so representatives from KLC's 353 member cities can be kept up to speed. And he said the groups need to go "above and beyond" to repair damaged reputations.
"You have to gain our trust back," he told Walker.
Simpson said he incorporated some of the League's and KACo's concerns in a revised draft of the bill, which the panel approved 18-0 Wednesday.
That version allows the two organizations to hold special or emergency meetings via teleconference, which is different from the state's open meetings law, Luallen said. The groups, however, must notify the public about such meetings and have a central location for people to watch, the bill says.
It also exempts proprietary information, such as insurance rates, from the open records law.
Other provisions of the bill require the organizations to have codes of ethics and make available to the state auditor the working papers of outside auditing firms. Luallen found lax oversight by the board led to excessive spending by the groups' top officials.
Officials from KACo attended the meeting but didn't testify. KACo executive director Denny Nunnelley said the organization is backing the bill and doesn't take issue with the provision that would open legislative strategy meetings. In fact, Nunnelley previously invited the Herald-Leader to attend such meetings.
One lawmaker said the recent move by KACo's board to select Nunnelley, the long-time deputy executive director, as its new chief changed his mind about the bill.
Rep. Adam Koenig, R-Erlanger, said he initially preferred that the two groups "clean their own houses."
"I was disappointed that ...when given the opportunity to change the culture and do something outside of the box and hire someone from outside of the organization, that didn't happen," he said. "That tells me we don't have much of a choice."
Nunnelley and KACo President Rick Smith declined to comment on Koenig's remarks, although Smith said Nunnelley performed well as interim director since September, when Bob Arnold was forced to resign.
The oversight bill now heads to the House floor. Similar legislation has passed the Senate, although that bill, sponsored by Sen. Damon Thayer, R-Georgetown, has some different provisions, including a requirement for the groups to post their budgets and expenses online.
Walker said that while KLC isn't wild about the House's bill, the board prefers it to the Senate version, which she said could cost the organization $400,000 a year in technology and personnel expenses.