NICHOLASVILLE — The Jessamine County Fire District did not comply with state law in its handling of tax money from a subdistrict that serves the northwestern corner of the county, according to a review conducted by the state auditor's office.
In a Dec. 22 letter released Monday, the auditor's office confirmed what residents of the North Subdistrict have long alleged: Taxes they 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, had contended it had followed the law.
To comply with the law, "funds should not be commingled between the district and subdistrict accounts, and subdistrict funds should not be spent on shared facilities or services," Brian Lykins, executive director of the office of technology and special audits wrote to Gary Sorrell, chairman of the Jessamine County Fire District.
Sorrell said Monday he had not seen the letter, "but I knew it was coming."
As for keeping separate accounts for the district and subdistrict, Sorrell said, "We've tried to keep everything separated, and I kind of believe we have."
Bob Traynor, a county resident who had urged the auditor's office to look into the matter, said the review "sums up the history of many years where the fire district hasn't acted appropriately to account for those subdistrict funds to meet the intent of the law."
"Now it's out in the open, and now it needs to be dealt with," said Traynor, president of the Windhaven Homeowners Association. "Hopefully, going forward, we can find a rightful way to account for the past and provide accountability for the future."
The auditor's office examined Jessamine County Fire District records from July 1, 2006, through Aug. 31, 2009, after receiving complaints from residents in northwestern Jessamine. The auditor's office conducted not an audit but a "review," which is limited in scope compared to a full audit. The review was limited to whether the district had complied with the law.
No criminal activity was found in the auditor's review of the fire district, and nothing will be forwarded to a prosecutor, said Terry Sebastian, spokesman for the auditor's office. The fire district faces no penalty for its non-compliance.
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 property value in addition to the 5 cents per $100 of property value 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.
In its review of records, the auditor's office found instances in which subdistrict revenues were spent on equipment routinely shared by the entire district. For example, subdistrict funds were used to pay $809,000 for a new ladder truck at the main county fire station in Nicholasville.
Because subdistrict funds were used to buy the truck, it should be regularly maintained in the subdistrict and used only for the subdistrict, Lykins wrote.
Sorrell said the ladder truck was moved to the Bellerive station off U.S. 68 a month or two ago. "We had to tear a wall down because the truck was too big to fit in the station," Sorrell said.
The auditor's office also found that separate budgets and financial statements were not maintained for subdistrict funds.
Although the fire district has created a separate subdistrict checking and savings account, some vehicle and insurance expenditures were not separated for the subdistrict. In fiscal year 2009, the subdistrict paid an insurance premium of $1,162 for a fire truck that was used for the county as a whole.
"We recommend that JCFD maintain complete and separate accounting of district funds and subdistrict funds," Lykins wrote.
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 possibility of eliminating the subdistrict tax will be the topic of a fire district board of trustees meeting scheduled for 7 p.m. Jan. 4 at Southland Christian Church. The idea of eliminating the subdistrict tax arose in August during a public meeting.
Meanwhile, Sorrell's term on the fire district board expired on Monday, and Jessamine County Judge-Executive Neal Cassity said he intends to appoint a replacement for Sorrell at Tuesday's fiscal court meeting.
Cassity would not identify the replacement. Cassity said Sorrell "has done a good job," but he also said the northern part of the county "needs to have a little bit more representation on there."
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 members of the board elect officers such as chairman.
Sorrell has been a member of the fire board for 30 years and has been chairman for five years.