Jessamine County

State auditor looks at Jessamine Fire District funds

NICHOLASVILLE — The state auditor's office is checking to see whether the Jessamine County Fire District complied with state law in its handling of tax money from a subdistrict that serves the northwestern corner of the county.

Residents of the North Subdistrict allege that taxes they have paid solely for fire-safety improvements in their area have been used for the county as a whole. The county fire district, which administers the subdistrict, contends that it has followed the law.

The issue has boiled to the point that some residents are calling for the repeal of the subdistrict tax or dissolution of the subdistrict. State Rep. Bob Damron, D-Nicholasville, has prefiled a bill that would create the mechanism to dissolve a fire subdistrict.

In 1995, residents successfully petitioned Jessamine Fiscal Court to create the North Jessamine Subdistrict of the county fire district. Residents in Windhaven, Equestrian Estates, Clays Mill Crossing and other northwestern Jessamine subdivisions pay 4.8 cents per $100 of real property in addition to the 5 cents per $100 of real property levied on all Jessamine taxpayers for fire protection.

State law says the extra revenue should be spent "solely on improving fire protection facilities and services in the subdistrict," and should not be used on facilities or services shared by the entire fire district.

Bob Traynor, president of the Windhaven Homeowners Association, says the county fire district has spent North Subdistrict tax revenue on trucks and equipment used outside the subdistrict.

"They took the North district tax together with the general tax and provided improved fire protection for the county as a whole, and not for the North district, and that's a subversion of the law," Traynor said.

Bill Moore, attorney for the Jessamine County Fire District, said subdistrict funds "are kept in separate accounts. They're completely separate."

But independent audits of the Jessamine County Fire District indicate that has not always been so. Audits in 2004, 2005 and 2006 said the segregation of North Subdistrict revenues from the countywide revenues is needed "to ensure that North revenues are spent on North improvements and expenses."

The fire district's accounting practices have improved since 2007, Traynor said, but his review of financial documents obtained through Open Records requests leads him to believe that there is still not a proper segregation of capital expenses, such as the Station 6 firehouse off U.S. 68.

Traynor said he submitted hundreds of pages of fire district financial documents to the auditor's office a few months ago for their review.

Moore said the county fire district has also provided paper and electronic records to the auditor's office "so they can see how any penny of money from the northern district has been spent. The fire district is cooperating completely with them and showing them everything that was spent, and we'll see if they're in agreement with our position or if they take a different position."

Terry Sebastian, spokesman for the state auditor's office, would say only that "Our office is currently working with the fire district to address this issue."

The Jessamine County Fire District had total General Fund revenues of $1.2 million in its estimated budget for 2008-09 and $1.1 million in revenues carried over from the previous year, according to a budget on file in the county clerk's office.

The fire district is an independent taxing district run by a seven-member board of trustees. Two are elected by the public, two are elected by firefighters, and three are appointed by the Jessamine County judge-executive.

The possibility of repealing the subdistrict tax arose during an Aug. 12 meeting of residents with Damron, Jessamine County Judge-Executive Neal Cassity and Fiscal Court Magistrate Terry Meckstroth.

Damron has prefiled a bill for the 2010 legislature that would allow a fire subdistrict to be dissolved. Residents would first have to get 60 percent of the property owners who live within the subdistrict boundaries to sign a petition seeking dissolution. Then, once the county clerk has certified the petition, the fiscal court would hold a hearing and decide to approve or reject dissolution.

Many subdistrict residents don't like several elements of the bill. For example, they say the 60 percent threshold is too high, although 72 percent of property owners signed the petition in 1995 to create the subdistrict. Residents also say the bill needs provisions to recover "any improper allocation of funds" to speed debt reduction.

A similar bill that Damron sponsored this year did not pass.

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