The primary conflict, though, is between a condition in the agreement, which was drafted by then-City Attorney Vince Pennington, allowing the city to revoke any portion of their funding “at any time for any reason,” and the EDP’s memorandum of agreement, which says the city agrees to disperse funds approved in the budget for the whole year.
Hunstad said he was troubled by the possibility of having to meet large financial obligations to agencies given uncertain economic conditions.
“In essence, it could become an entitlement that would supercede health and safety,” said Hunstad.
EDP President and Chief Executive Officer Jody Lassiter said Thursday he was not comfortable with the broad license the agreement would give the city for withholding funds. While he acknowledged a hardship could always arise preventing the city from paying the EDP or any other publicly-funded organization, Lassiter said he would like to see a less subjective agreement which specifically states money in the budget will be paid out unless there is a catastrophic circumstance.
In an interview Tuesday, Scott, who was joined by Hunstad, referred to a section of the Kentucky League of Cities handbook for city officials to follow when appropriating local government funds to private entities.
The handbook cites case law on donations to private entities that obligate a city to consider whether the city receives benefit from the appropriation; control the organization or how the organization spends city funds; and determine whether the expenditure primarily benefits the public at-large and not the private group. If those criteria are met, Scott said the question of whether the activity the group undertakes is something the city wants to be involved with.
“This is not an attack on any group,” Scott said. “It is our duty as public servants to make sure money is spent appropriately.”
Both Lassiter and Scott were in agreement the differences can likely be worked out, but the clock is ticking.
Lassiter said the EDP considers the city’s official approval of the funding to be when the final budget is approved, which should happen Monday.
The other major sticking point is how much say the city, which is itself a member of the EDP, has in how the money should be spent.
Commissioner Gail Louis first raised questions during the budget process about the amount of funding that goes directly to marketing and business recruitment. According to a May 30 email sent by Lassiter to city officials and obtained by The Advocate-Messenger, the issue came up again during a May 23 meeting, during which Scott and Hunstad asked Lassiter what amount earmarked specifically for business development and marketing would be acceptable.
Although the amount of money in the EDP’s budget line item for business development has been increased to about $40,000, Hunstad said the relatively large amount of the public funding that goes to salaries and other expenses makes it difficult to gauge the public benefit.
“We don’t want to try and tell them how to spend every nickel they have, but in a time when the community needs jobs, you would hope they would be tailoring their budget and activities to maximize [job recruitment],” said Hunstad, who added he approved of Lassiter’s job performance during his time in Danville.
