Restaurant Tax tabled – for now

The expected second reading of a proposed restaurant tax was tabled Thursday night as the McCreary County Fiscal Court is seeking further clarification as to the legality of the County enacting an ordinance reserved only for cities.

Magistrate Jason Mann, who originally put forth a motion to draft the ordinance, called for the tabling after being unable to get confirmation from state government that McCreary would be eligible to enact the tax.

The issue comes from Kentucky Revised Statute 91A.400, which allows fourth or fifth class cities to implement a restaurant tax of up to three percent. Since McCreary County does not contain any incorporated city, the question was asked does the County have the legal authority to enact the tax?

County Attorney Conley Chaney researched the ordinance and prepared a memo for the Court offering his opinion that the tax would be “legal” for the county, since it is related to the Transient Tax already implemented in the County.

“Both the transient room tax and restaurant tax are created and authorized by the same subsection of KRS Chapter 91A relating to Tourism Commissions,” the memo read. “If our county is able to rely on KRS 67.800 in order to create and enforce the transient room tax, as the county has for many years, it is logical that the county may likewise use the same reliance to create and enforce the restaurant tax.”

“In my opinion, if you can do one, you can do the other,” Chaney said.

Chaney also cited KRS 67.800, which allows a fiscal court in a county with no incorporated areas to receive any “appropriate funds a city is eligible to receive,” and to use those funds to “perform proper and necessary governmental functions statutorily authorized or required involving the public interest of the citizens of the county.”

McCreary County Chamber of Commerce President Susie Thompson asked about wording in the proposed ordinance which stipulates the money is to be turned over to the Tourism/Economic Development Fund.

State law mandates all funding raised through the tax must be turned over to the county’s Tourism Commission. Judge Executive Doug Stephens stated the wording of the ordinance would have to be changed to comply with the law.

Chaney also noted citizens do have the opportunity to sue the Fiscal Court if the money raised through the tax is not spent correctly.

Even with the opinion of the County Attorney, the Fiscal Court still did not feel secure enough to move forward and is asking for further clarification before enacting the ordinance.

“I don’t feel secure enough –legally,” Mann said when calling to table discussion until a further date. “I want bold clearance from the state that says we can do it. I have had too many people speak against it.”

The vote to table was approved with Phillips casting the only dissenting vote.

The issue will surely come up again before the end of the year, as the ordinance contains language that it is expected to be in force by January 1, 2017.

In other Fiscal Court action:

The Fiscal Court received only one proposal for garbage service after amending the garbage ordinance last month to include plans for more enforcement on garbage pick up.

Scott Solid Waste, the current provider, was the lone bidder, but their proposal included a “menu” of pricing structures.

No action was taken on the proposal as it is to be forwarded to the Solid Waste Board to review the proposal prior to any vote.

Judge Executive Doug Stephens did say the County still has the right to negotiate with the company, and recommended a special session be called in the next few weeks to either approve the proposal or take action in another direction.

Bruce Carpenter, Executive Director with the Southeast Kentucky Industrial Authority, presented the Court a check for $37,167 – McCreary County’s share of the occupational tax receipts from the Southeast Kentucky Business Park for 2015-16.

The park, located in Corbin, is part of a 6-county collaboration (McCreary, Knox, Whitley, Bell, Clay and Laurel) to promote industry and business growth in the region. All six counties receive 15 percent of the revenue generated through the occupational tax collected from businesses at the park.

Magistrate Mann later asked to use the additional $10,000 received to help the Authority in marketing the site and region to other prospective businesses. Carpenter is asking the fiscal courts of all six counties represented in the business park to contribute $10,000 each to help support the marketing efforts.

Carpenter had previously asked the Fiscal Court for funding prior to the end of the fiscal year, but was informed at the time that there was no money in the budget to support such an endeavor.

However, with the presentation of the check, and the funding restricted to only economic development projects, Mann stated it would be the perfect opportunity to fulfill the request and re-invest the money with the idea of bigger gains in the future.

Magistrate Roger Phillips objected to the idea, noting it would be wise to wait until the end of the fiscal year to ensure that the money is not needed elsewhere.

Phillips was reminded that the funds could not be used to pay for items out of the General Fund, but he remained resolute that waiting would be the best option.

Phillips also stated his belief that Carpenter would place priority on marketing Corbin over McCreary County when speaking to prospective new companies.

Carpenter said his number one priority was placing business in the region, not Corbin, and if a company were suited for McCreary, he would not hesitate in trying to place it here.

The motion to re-invest the funding passed 3-2, with Magistrates Phillips and Perry voting against.

Sheriff Randy Waters presented the Court with a check for $5,197 in excess fees, but then asked the Court to pave the parking lot and sidewalk in front of the Sheriff’s Office.

The Sheriff noted the poor condition of the lot, and the need for a handicapped parking space. The Fiscal Court voted to contact Hinkle Contractors to complete the work up to the amount of the excess fees presented.

The Court approved beginning the process to remove Gary Clark Road from the County Road inventory, approved highest bids for surplus road department equipment, hiring a part time as needed paramedic and dispatcher, and appointed Tine Creekmore to the McCreary County Airport Advisory Board.

The next regular scheduled session of the McCreary County Fiscal Court will be on December 8.