Special Reports

KLC to cities: Worried? Halt dues

Leaders of the Kentucky League of Cities say elected officials with concerns about how the group does business should withhold membership payments until they're satisfied the non-profit is spending taxpayer money wisely.

The pronouncement came Friday after the Lexington Herald-Leader reported that the Henderson City Commission voted unanimously this week to suspend its membership in the League until the League strengthens policies on spending and travel.

"We certainly understand Henderson's reasoning," Mayfield Mayor Arthur Byrn and Jackson Mayor Mike Miller said in a written statement. The two serve on the League's executive and insurance services boards.

"In fact, we would suggest that other Kentucky cities consider holding their 2010 dues until they are completely comfortable with how we address our internal operations," they said.

In June, the Herald-Leader reported that the top three League executives have charged more than $300,000 for travel, meals and other expenses since 2006. Sylvia Lovely, the League's executive director, has seen her salary grow by 25.5 percent since 2006, to more than $315,000 a year.

Henderson pays $7,142 a year in dues to the League. It has paid its dues for 2009 but voted 5-0 Tuesday night to suspend payment of its dues for 2010, City Manager Russell Sights said.

The Western Kentucky city wants to see policy changes and a copy of an audit of the League by State Auditor Crit Luallen before deciding whether to begin paying its dues again, Sights said. Luallen has said her audit won't be completed for several months.

Henderson City Commissioner Jim White said Friday that he made the proposal to suspend payments after reading about the League's expenses in the newspaper. White said if the League board tightens its policies and proves that it is a responsible steward of taxpayer money, the city might restore its membership.

"There have been several expenses that were noted in news reports that were at best questionable and some that were disturbing," White said.

The Henderson City Commission also will send the League a letter outlining its concerns, Sights said.

Earlier this month, Owensboro Mayor Ron Payne proposed severing ties to the League but changed his mind after being contacted by League officials. Owensboro will wait to see whether the executive board makes good on its promise to change League expense and oversight policies before deciding whether to continue membership in the non-profit organization.

The League said Friday that it does not know of any other city that has severed its membership with the organization.

The League receives money from cities in the form of dues and as payments for its insurance, financial and legal services.

League officials have taken some steps to rein in spending, including no longer paying travel costs for spouses of League staff and suspending the use of executive staff credit cards. The group also no longer hosts meals at Azur, a Lexington restaurant that Lovely's husband co-owns.

The League is developing official policies regarding travel, use of credit cards, conflicts of interest and compensation procedures. According to statements from Miller and Byrn, they hope to present those proposals to the executive boards for approval by the end of August.

"It is important that our members know that we have heard very clearly the concerns they've expressed," the statement said.

The League had operated under the premise that it was a private business, but during the last several weeks "we have realized that the paradigm has shifted — that we do, indeed, need to provide more public accountability and transparency," the statement reads.

Reach Beth Musgrave at (859) 231-3205 or 1-800-967-6397, Ext. 3205.

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