Op-Ed: It is Important that Ludlow Know How Youth Football Organization Spent City Money
As a member of the Ludlow City Council, one of the most important roles we play as a elected officials is being a good steward of the public money with which we are entrusted.
And with that responsibility comes tough decisions, including the City of Ludlow’s recent decision to stop donating funds to the Ludlow Youth Football (LYF) for fireworks at its summer festival.
While no one disputes that LYF’s mission is a laudable one, City Council has a duty to ensure that any funding we provide to this organization – or any other organization, for that manner - is done in a legal and transparent manner.
The LYF summer festival - which includes games, beer and food vendors, and a fireworks display – is fully controlled by LYF, including contracting with all vendors and collecting all revenues. The city receives no financial benefit from the festival.
In the past, the city donated funds for festival fireworks display. However, during a review of city expenditures last year, both the city administrator and our Certified Public Accountant questioned whether this donation was proper. After consulting with the city attorney, our city administrator recommended that the city discontinue this practice.
The legal issue, according to our attorney, is whether this donation is for a “public purpose.” Both the Kentucky Constitution and state statutes prohibit cities from donating money to private entities, including corporations and charitable organizations like LYF.
The city tried to work privately with LYF to obtain financial records to prove that city money was used for a public purpose. However, LYF refused to cooperate with the city, which caused our attorney to seek an injunction to require production of these documents.
In Kentucky, any entity that receives at least 25 percent of its funds from a local government is classified a “public agency” for purposes of the Kentucky Open Records Act. This provision was added to state law after the 2009 spending and salaries scandal at the Kentucky League of Cities, a nonprofit organization that receives funding from Kentucky cities.
The city has a good-faith belief that LYF received more than 25 percent of its funds from the city. Accordingly, the city made two formal requests to LYF under the open records law to provide pertinent financial records, which LYF failed to do.
LYF could have easily resolved this issue if it simply provided this documentation. Instead, these requests were met with vigorous denials and venomous personal attacks.
The city’s attorney then asked a court to compel LYF to provide these documents. It is our hope that this pending legal action will answer questions about the propriety of this donation and provide transparency about how LYF used these funds.
Even though LYF has held itself out as either tax-exempt or nonprofit organization, our attorney could not find that LYF is registered as such an organization with the Internal Revenue Service or that it has submitted mandatory filings required by the IRS.
If LYF is in fact a tax-exempt organization, then the organization must also maintain these records under IRS regulations. Furthermore, charities must provide certain financial documents to any organization or person who requests them, which LYF has not done in this case.
As elected officials, each member of City Council takes an oath of office to uphold the Kentucky Constitution. I take that oath seriously. That’s why it’s so important that we have clear understanding whether this money was spent in a way permitted under Kentucky law.
Ken Wynn is the mayor of the City of Ludlow and the owner of Wynner’s Cup coffee shop in downtown Ludlow