West Buechel’s $10,000 Gate to Nowhere

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Without any formal approval from the City Council, Mayor Richards took it upon himself to fence in the West Buechel Community Center at an unknown total cost to the City. The electric keypad operated gate you can see in the photo on the right, with an electro-magnetic lock, easily cost the taxpayers more than $10,000 by itself.

The only thing this new fence and electric gate accomplishes is to keep cars out of the Community Center parking lot after hours and on weekends. It doesn’t keep people out.

The reasons for this boondoggle have never been explained to the public, or even discussed at any public meeting.  The City Council members have never gone on the record to indicate if they approve or disapprove this type of wasteful spending of taxpayer’s money. It makes the Community Center look like a FEMA internment camp. Gulag West Buechel.

In the past, the West Buechel City Council has approved annual City budgets that allocate hundreds of thousands of dollars in vague undefined “slush fund” categories and, like Pontius Pilate, washed their hands of it and pretended not to notice how the money was being spent. Only a few brave souls on the West Buechel City Council are willing to make a fuss.

The City’s slipshod budget process needs reform, the Mayor’s out of control spending needs to be reined in , and strict budget discipline should be enforced. West Buechel City Hall must answer to the people of West Buechel and the City Council must do its job. Somebody needs to raise a ruckus.

West Buechel: Grounds to remove a Mayor

IMG_0034-crop-GS-250pxWest Buechel’s Mayor, Rick Richards, may be removed from office by the City Council for “misconduct, incapacity, or willful neglect in the performance of the duties of his office,” upon a unanimous City Council vote. Council member Toby Clark and three other Council members  plan to proceed with the removal effort for the following five reasons:

1. Failure to account for public funds.

Bank records show the City had beginning account balances totaling $1,858,014 on July 1, 2015 and an ending balance of $1,0005,623 on June 30, 2016, for a deficit of $852,391. However, Mayor Richards FY 2015-16 Budget Report shows receipts of $1,628,362 and spending of $2,270,915, for that same period, with a deficit of only $642,553. The disparity between the bank records and Mayor Richards reports leaves $209,838 unaccounted for. Council member Clark pointed this out at the September City Council meeting, with Mayor Richards present, and there have been no clarifications or explanations offered.

2. Failure to produce an audit for FY 2014-2015.

The City is required to have its financial statements audited by independent CPAs or the State Auditor every year. The final audit report must be completed and presented to the City Council by February 1 of the following year, and published. The independent audit report for FY 2014-2015 was due February  1, 2016, eight months ago, but the audit process has not yet been started. By all reports, the Richards administration has not produced any financial statements for any CPA to audit, nor has Richards contracted with any CPA firm to do the job. These failures are subject matter in a lawsuit pending in Jefferson Circuit Court against Mayor Rick Richards and the City Clerk-Treasurer, Kim Richards, personally. That action was filed in March, 2016.

3. Over-budget spending.

Mayor Richards own annual Budget Report for FY 2015-16 shows over spending of $134,000 in Administrative, $194,000 in the Police Department and $63,000 in Code Enforcement. That is $391,000 over the combined $1,428,000 budgeted by the City Council for those three departments. Mayor Richards went 27.5% over budget in these areas and he never sought or obtained Council approval for this excess spending. There are some good reasons to suspect Mayor Richards’ annual budget report understated the amounts actually expended.  See item 1, above.

4. Unauthorized employee payroll.

Pay for City employees is set by Ordinance approved by the City Council. Richards has given extravagant pay raises to various City employees, including the friends he has hired, in excess of the existing employee pay scale. City payroll expenses have roughly doubled from January, 2015 to August, 2016.

5. Accepting additional unauthorized pay.

West Buechel’s Mayor is paid once a month, as established by City Ordinance. In January, 2015, Mayor Richards received two paychecks, for a total of thirteen paydays to him from the tax payers for calendar year 2015.

West Buechel – Majority of Council asks for Mayor’s removal

West Buechel, Ky. –  October 10, 2016

A dramatic turn in this troubled little town came today when four City Council members filed notice of a Special Council meeting for October 25, 2016, to conduct a public hearing to remove Mayor Rick Richards from office.  In general,  Mayor Richards has been charged with neglect of duty and other misconduct. Richards will be given a list of specific charges so that he may prepare to defend himself at the public hearing.

The four Council members, Toby Clark, Clara Crawford, Loy Crawford and Joseph Mattingly, have long been dissatisfied with Richards’ management, hiring and firing practices, unauthorized employee pay, secrecy and over budget spending. The two other City Council members, Elizabeth Bierbaum and Janie Mosely, have been strong supporters of Mayor Richards in the past.

A City Council can remove a sitting Mayor only with a unanimous vote.

The regular monthly West Buechel City Council is tomorrow night, Tuesday, October 11at 6 PM.

 

 

West Buechel: The Great Tax Hoax of 2012

Before July, 2012, the residents and businesses of West Buechel, Kentucky paid 5% of all insurance premiums as a tax to the City.  Five percent is the same rate that Louisville Metro residents pay as an insurance premium tax.

In 2011, West Buechel’s General Fund bank balance had increased from $1.5 million on January 1, 2011 to $1.8 million on December 1, 2011.

With that excess of cash on hand notwithstanding, in late 2011 former West Buechel Mayor Sharon Fowler proposed doubling the insurance tax from 5% to 10%. According to the City’s audited Financial Statements for FY 2011-2012, West Buechel’s spending for the year was only slightly more than $1 Million. The City had nearly two whole years of operating expenses already in the bank when Mayor Fowler proposed her tax increase.

At its December, 2011 regular meeting, the West Buechel City Council rejected Fowler’s proposed tax increase. 13951787697_98cdaa72db_b

In January, 2012, Fowler unilaterally implemented her insurance tax increase anyway . . . by highly questionable means.

 

Background – Kentucky Local Government Insurance Premium tax

Local governments in Kentucky can impose a tax on insurance premiums. This tax is administered, in part, by Kentucky’s Insurance Commissioner. The Commissioner’s office communicates the different tax rates from the many different local governments to the several hundred insurance companies that write policies in Kentucky. The Commissioner also provides geo-location support to identify which policy holders are in what jurisdiction. The insurance companies are responsible for reporting and paying the taxes collected directly to the local governments on a quarterly basis. Kentucky law allows the insurance company to collect a small fee from their respective policy holders to cover the expense of collection.

The legislative body of each local government sets the tax rate for different types of insurance. In a city with the Mayor-Council form of government, the Insurance Premium Tax rate is set by a duly enacted ordinance. The tax rate can be changed by ordinance, and if timed properly, the new tax rate goes into effect on July 1, at the beginning of a new fiscal year.

If the City Council enacts an ordinance establishing this tax or changes the percentage rate of taxation, the City Clerk sends the Ordinance to the Kentucky Insurance Commissioner who then is responsible for communicating the new tax rate to each of the insurance companies.

From a local government’s point of view, it is easy money. With a mere stroke of the pen the checks start to arrive in the mail. Most tax payers don’t read or understand the fine print on their insurance policy declarations. People have become accustomed to regular increases in insurance premiums and a 5% increase in their monthly insurance payment would likely be blamed on the insurance company.

Most would not notice that the increase resulted because of their local city leaders raising taxes.

How did a tax increase rejected by West Buechel’s City Council go into effect anyway?

On January 16, 2012 a former West Buechel Clerk-Treasurer sent a fax to the Kentucky Insurance Commissioner’s office. That fax included a copy of a document she claimed was City Ordinance 162 dating from 1997. (see below)

The story was that Ordinance 167 increased the insurance tax to 10%, it was actually enacted in 1997, but the City had never put it into effect. Fifteen years later, in 2012 and one month after the City Council defeated the tax increase, the Fowler administration suddenly “found” this long lost Ordinance from the 20th Century.

What great good luck! Who would believe such a remarkable coincidence?

Apparently, nobody in a position of authority seriously questioned it. West Buechel’s City Council did not question it and Kentucky’s Insurance Commissioner did not question it. At a later City Council meeting, one West Buechel resident did ask about the tax increase and was given the story about the previously enacted but not implemented Ordinance from 1997.

But, the copy of the Ordinance faxed to the Insurance Commissioner has all the outward appearances of a blatant forgery.

Page one and two of “Ordinance 162” were clearly produced on a laser printer typically used in West Buechel City Hall in 2012. Page three of the hoax document, with the 1997 dates and signatures was printed on a DOT MATRIX PRINTER. One document supposedly produced by two totally different types of printers.

It is amazing that such an implausible story would go unquestioned. It is doubly amazing that such an obviously faked document could go so long undetected.

When the State Auditor looked at selected West Buechel practices during a special audit conducted in 2015, attention was drawn to the 2012 tax increase. The Special Audit Report dated December 10, 2015, included this Finding and Recommendation:

Finding 14: In 2012, the former Mayor submitted a 1997 City ordinance to the Department of Insurance to increase the City’s insurance premium tax from 5 percent to 10 percent after the City Council voted down this proposed increase in 2011.

To facilitate an increase in the City’s insurance premium tax from five percent to 10 percent, the City’s former Mayor provided a 15-year old ordinance to the Department of Insurance (DOI) in January 2012. The December 6, 2011 City Council meeting minutes document the former Mayor’s motion to increase the insurance premium tax to 10 percent failed to be passed by the City Council. The meeting minutes do not document that the City Council was informed of a 1997 ordinance that raised the rate to 10 percent but was apparently never implemented. At a subsequent City Council meeting on February 7, 2012, it is documented in the City Council meeting minutes that a resident asked the former Mayor about the insurance premium tax increase. The minutes further document that the “[m]ayor stated we already had the ordinance in place so we proceeded with the ordinance.”

Recommendations: We recommend that the City work with DOI to further investigate this issue to ensure the legality of this tax increase and take whatever action, if any, is necessary to appropriately address. We further recommend the City Council review this issue to determine the desired City insurance premium tax rate to be established moving forward. This issue was referred to DOI to consider whether further investigation is warranted.

The Richards administration has not followed through with the Auditor’s recommendation.



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Kim Richards – Grounds for removal from office

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KRS 62.010(2) requires every individual who is elected to public office to take the necessary oath of office before undertaking the duties of that office. Those who are appointed to public office must take the oath within 30 days after receiving notice of appointment, as required in  KRS 62.010(3)

Mayor Rick Richards appointed Kimberly Richards to the office of City Clerk-Treasurer for West Buechel in January, 2015, and she began to perform the duties of that office immediately. However, Kim Richards did not take her oath of office until June 9, 2015, more than 30 days later. (See City Council meeting minutes for June 9, 2015 Council meeting below)

By waiting until June to take her oath of office, Ms. Richards violated the time requirements of KRS 62.01(3)

KRS 62.990(2)(b) provides that when the oath of office provisions of KRS 62.01(3) are violated, “his office shall be considered vacant, and he shall not be eligible for the same office for two (2) years.”

All that is now required to get Kim Richards out of West Buechel City Hall is the say-so of a Jefferson Circuit Court Judge.



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West Buechel: Fox serves “Show Cause” motion

On August 29, 2016 Jefferson Circuit Court granted the motion for Partial Summary Judgment of Plaintiff Thomas Fox in an Open Records suit against defendants Kim Richards and the City of West Buechel. The Court ordered the defendants to allow Fox to inspect certain specified public records, including bank account statements, checks and deposit slips among other City documents.

Mayor Rick Richards and City Clerk-Treasurer have failed to comply with the Circuit Court’s order.

Plaintiff Fox has served Defendants’ attorney with the following motion asking that Mayor Richards and Kim Richards be brought into Court to explain why they should not be held in contempt of Court.

KRS 61.991(2)(b) specifically provides:
“Any official of a public agency who fails to produce any record after entry of final judgment directing that such records shall be produced shall be guilty of contempt.”



West Buechel – Unauthorized Pay

Kentucky law requires the compensation of City employees and non-elected officials to be set by Ordinance.

“The legislative body of each city shall fix the compensation of city employees and nonelected city officers in accordance with a personnel and pay classification plan which shall be adopted by ordinance.”

KRS 83A.070(2)

West Buechel’s Code of Ordinances § 31.36(D) specifically addresses the compensation and conditions of employment for the City Clerk-Treasurer:

Compensation authorized to be paid the City Clerk-Treasurer for conditions of employment and services shall be fixed by the City Council by ordinance.”

The “personnel and pay classification plan” required by KRS 83A.070(2), in general, including the compensation for the City Clerk-Treasurer, is contained in the City’s Personnel Policy and Procedures Handbook which has been adopted by Ordinance, by reference.

West Buechel Code § 37.01 ADOPTION BY REFERENCE.
(A) The policies and procedures, compensation plan and classification plan of the city is hereby adopted by reference as if fully set out herein.
(B) All employees now employed, and those employed in the future, shall be furnished a copy of the policies and shall attest in writing to the Mayor and Council that they have received the policies examined it and understand the contents herein. Employees shall also certify that they have had an opportunity to ask questions concerning same.
(C) A full and complete copy of the policies is on file in the Office of City Clerk-Treasurer.

West Buechel’s Personnel Policy and Procedures Handbook, as it existed and was readily available in print on January 1, 2015, when Rick Richards took office as Mayor, set the maximum hourly pay for City Clerk-Treasurer at $24.34.

kim-3-350pxIn January, 2015, Kim Richards undertook the duties of City Clerk-Treasurer at $26.00 per hour.  For calendar year 2015, Kim Richards was paid in excess of $60,000.

In 2016, Mayor Rick Richards unilaterally increased Kim Richards’ hourly pay to $28.00. Through July 9, 2016, Kim Richards had already received pay from the City in excess of $55,000.

The amount of pay received by Kim Richards in excess of $24.34 per hour has never been authorized by West Buechel’s City Council.

West Buechel: Dark Money – Part II

Through an Open Records request of City Council member Toby Clark, we have obtained several West Buechel bank account statements showing the balances on June 30, 2015, at the start of the 2015-16 Fiscal Year, and also for June 30, 2016 at the end of the year.

These bank account statements show cash on hand declined by $843,986.00 during that twelve month period.

Mayor Richards’ Budget Report for the 2015-2016 Fiscal Year shows a deficit of only $642,553.00.

The $201,433.00 discrepancy between the bank records and Mayor Richards’ Budget Report has yet to be explained. When the issue was raised at a recent City Council meeting, Rick Richards’ ex-wife and City Clark-Treasurer was overheard to say, “Oh, it’s only a bookkeeping error.”

 



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Center for Investigative Reporting sues University of Louisville Foundation

From the KCIR web site: Why We Are Suing The University Of Louisville Foundation by: Brendan McCarthy

“The Kentucky Center for Investigative Reporting filed a lawsuit Thursday against the University of Louisville Foundation, the latest step in a long public records fight.

“For seven months, our newsroom has sought the release of ethics and disclosure forms, as well as payroll and financial documents, from the university’s nonprofit fundraising organization.

“Throughout this long process, the Foundation has resisted or ignored our records requests, delayed and fought to block our access to these public records.

“We are filing this lawsuit because information about the finances and administration of a public university and its fundraising unit is in the public’s interest. Courts have repeatedly it made clear: the Foundation is a public agency and part of U of L.

“It is our journalistic mission to push for transparency in state institutions and government. It is our job to promote the public’s right to know what is going on behind closed doors.

“Kentuckians deserve to know more about the 46-year-old nonprofit that manages the school’s roughly $730 million endowment. This same public agency has taken out a $38 million loan from the university it’s set up to support. Meanwhile, trustees have complained about a “culture of secrecy” at the Foundation. Answers about who runs the nonprofit, and how, are few and far between. . . . (READ MORE AND VIEW COURT DOCUMENTS HERE)

West Buechel: Dark Money – Part I

In a bold and unprecedented move, West Buechel’s beleaguered Mayor, Rick Richards, clearly signals the world that he can spend public funds any way he sees fit, without answering to anyone. With the assistance of his long time associate and business partner, City Clerk-Treasurer Kim Richards, a check for $10,350 was issued and cashed this August.

Rick and Kim Richards refuse to disclose to whom the money was paid and for what public purpose it was expended.

Our Open Records request for a copy of the check, along with all documentation supporting the spending, resulted in the receipt of a redacted check image, with the name of the payee and the purpose of the payment blacked out. We also received a written statement from Ms. Richards that “the City is not in possession  of any supporting documentation.

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We plan to submit this issue to the Kentucky Attorney General’s Office for an Open Records decision, based upon our opinion that all expenditures of public funds are open to public inspection under Kentucky law.

The public has a right to know.