Fireworks Over Football & Festivals at Contentious Ludlow Council Meeting
The fight continues in Ludlow, and this time it may be more contentious then ever.
At a special meeting of the Ludlow City Council on Thursday, Mayor Ken Wynn broke a 3-3 tie, deciding that the city would continue its legal effort to force Ludlow Youth Football to turn over its financial records.
Councilman Tom Amann had drafted a resolution that would see the city drop its injunction against LYF. For years, the City of Ludlow had donated a certain amount of money to LYF for the organization's annual fundraising fireworks festival. Late last year, the city determined that it no longer had the legal option to donate such funds and now formally questions whether LYF is a nonprofit recognized by the Internal Revenue Service. LYF hired attorney Phil Taliaferro who drafted a letter to Ludlow City Attorney Jeff Otis stating that since LYF was a nonprofit organization, it was not required to turn over the records. In that letter, Taliaferro also wrote that the records in question either were not in LYF's possession, or did not exist.
That appeared to have satisfied the city, but when LYF sought to have the city pay for its legal fees, the City of Ludlow determined that it would continue on with its injunction.
September 25, 2015: City, youth football organization fight over festivals
October 9, 2015: City festival officially canceled in Ludlow
December 12, 2015: Ludlow takes legal action to see how youth football organization spent money
January 15, 2016: Ludlow drops legal action against LYF
January 27, 2016: Fight between Ludlow, youth football may not be over yet, after all
On Thursday night, it was Otis' law partner Fred Johnson representing the city during the special meeting. Johnson advised the city not to drop the injunction, arguing that the city could find itself on the hook for $5,400 in attorney fees to LYF. “The right thing to do in this case is for Ludlow Youth Football to give us the fundraising records that we requested in writing twice, because we need them because our accountant says we need them,” Johnson said.
Johnson said that because the IRS does not recognize LYF as a tax-exempt organization, LYF is required to turn over financial records as subject to the Kentucky Open Records Act. “If you look at the IRS website, they don't exist as a tax-exempt organization in the eyes of the IRS. There appears to be no mandatory 990 form filed that we asked for in our letter twice and we still haven't got it,” Johnson said.
Amann, however, repeatedly said during the meeting that city council did not authorize filing the injunction against LYF and because of that, he asked his fellow members of council to vote to drop the injunction. He said he was confident that Ludlow Youth Football would not immediately pursue their counterclaim for attorney fees if the city dropped the case.
Johnson responded that by doing so, the city left each member of city council personally liable for future lawsuits. “What this resolution is asking council to do, is that we filed this lawsuit that we never should have filed and is frivolous, which it is not. That holds everyone on council personally liable for filing the lawsuit,” Johnson said.
Amann, also an attorney, said that he disagreed with that assessment 100 percent and that he would represent any council member free of charge if he or she is subject to a future lawsuit as a result of the injunction.
“I've spent 40 years practicing law and you are wrong,” Amann said. “I hope council doesn't get bullied by Mr. Johnson when he says that if we pass this resolution, we're going to get sued. Guess what, council? I will represent each and every one of you to the fullest without any money.”
Amann made a motion to strike the fifth paragraph in the resolution that he drafted and to change the word "expense" to "cost", to protect the city from having to pay the LYF attorney fees and only pay for court costs. That motion to amend the resolution was passed by council unanimously.
Amann then called the letter that Otis drafted requesting the records to appease the city accountant's request a “nasty letter”. Amann said that Otis had previously told council that the accountant did not ask for the financial information. Otis disputed saying that.
“If I had a city bullying me, I would say that you're only getting what you're entitled to, and you don't know all the laws. You think you do, but a nonprofit corporation is not necessarily a corporation that can accept donations that are tax write-offs. A nonprofit corporation is exactly that. They're providing equipment for the children, uniforms for the children, that's what a nonprofit is for. They don't have to have the 501(c)3 or 501(c)7 designations to be a non-profit,” Amann said.
Johnson asked whether Amann is a tax lawyer, which Amann denied. Amann then responded by calling Johnson an antagonistic person who should not be conducting meetings.
After further clarification of the amendment to the resolution previously made in the meeting, council members Josh Boone, Bill Whitely, and Tom Amann voted to dismiss the injunction, while Michelle Cartwright, Bill Mullins, and Dan Ashcraft voted against it.
By law, a tie is broken by Mayor Ken Wynn.
“Well apparently we've got a tie, so I have to break it, and I vote no,” Wynn said, opting to proceed with the injunction.
After the meeting, LYF representative Paula Graszus said that because of the ongoing legal battle and the associated costs, the youth organization has not yet been able to order the uniforms and equipment for the 2016 season. She said that these items need to be purchased a few months in advance in order to be ready by July when the season starts, and are at risk at the orders not arriving on time.
Written by Bryan Burke, associate editor
Photo: Ludlow Fireworks Festival in 2015 (by Brian Frey/RCN file)