The Kentucky General Assembly, in 2014, created an entirely new classification system for Kentucky cities. The new laws were intended to eliminate a number of arbitrary distinctions between city governments that were created prior to the granting of home rule authority to cities.
The new classification system creates two classifications of cities based on the form of government. Cities of the first class have a mayor-alderman form of government. Cities of the home rule class have mayor-council, commission, or a city manager form of government.
There are a small number of statutes that still have distinctions based on population. Please consult the City Officials Legal Handbook for these specific distinctions.
Mayor-Council: The mayor-council plan incorporates a clear separation of powers between the executive branch (the mayor) and the legislative branch (the council). The city council may: enact ordinances; levy taxes: adopt a budget; and set compensation, in addition to other legislative duties. The mayor serves as the chief executive and administrative officer of the city and oversees the management of the city's daily affairs (See KRS 83A.130). He or she serves no legislative function and may only vote in order to break a tie, unless such a tie-breaking vote is prohibited by a specific statute. KRS 83A.130(5).
Commission: The commission plan consists of a mayor and four elected city commissioners who together comprise the city commission. The members of this commission share legislative, executive, and administrative authority in the city. Thus, the commission plan does not have the strict separation of powers of the mayor-council plan. The mayor acts as a voting member of the commission, with only limited responsibilities and authorities as mayor, such as presiding at commission meetings and executing contracts. Although the ultimate authority is vested in the city commission as a body, KRS 83A.140(6) requires that administrative functions of the city be separated into departments by ordinance. Each of these departments is placed under the supervision of one of the city commissioners, unless the commission has created the office of city administrative officer. The commission as a whole is free to override any action taken by a commissioner overseeing a department. If there is a city administrative officer, that person may be delegated the supervisory authority over the departments.
Manager: The city manager plan is similar to the commission plan in that it provides for a mayor and four commissioners who make up the board of commissioners. The distinction is that significant administrative powers are vested in the city manager, which is a position the board of commissioners must establish (See KRS 83A.150). The manager is appointed to serve an indefinite term by a majority vote of the board and is responsible for the supervision of all departments of city government and the conduct of city employees. As in the commission plan, the mayor is a fully functioning member of the board of commissioners with only a limited role as mayor.
More information on this topic can be found in the City Officials Legal Handbook.
The first step is to determine whether a vacancy exists. Specific causes of vacancies may include but are not limited to death, resignation, failure to qualify (or to remain qualified), conviction of crimes, acceptance of an incompatible office, or removal.
One of the most common causes of a vacancy is resignation of an elected officer. In order for a resignation to become effective, the member must submit a written notice specifying the date of his or her resignation to the legislative body. However, the resignation will not become effective until the occurrence of the next special or regularly scheduled council/commission meeting following the date of resignation specified in the written notice. Once the resignation is effective, it may not be withdrawn.
Once it has been determined that a vacancy in an elected city office exists, the Kentucky Constitution and statutes set forth the requirements and procedures for filling the vacancy. All vacancies in elected city offices are filled initially by appointment. Depending upon the time frame, a subsequent election may be required to fill the office for the remainder of the unexpired term.
If a vacancy occurs in the office of mayor, the legislative body must fill the vacancy by appointment within 30 days. Likewise, if a vacancy occurs in a legislative body office, the remaining members of the legislative body are required to fill the vacancy by a majority vote within 30 days. Under KRS 83A.040(5), as long as at least one member of the legislative body remains, the responsibility of filling vacancies resides with the legislative body. If more than one vacancy exists, the vacancies must be filled one at a time, so that each new appointee has the opportunity to act to fill the remaining vacancies.
If the legislative body fails to fill a vacancy within 30 days from the date on which it occurs, the power to fill the vacancy is affirmatively shifted to the Governor by operation of law in accordance with KRS 83A.040(6). If all seats on a city legislative body become vacant, the Governor is mandated to fill, by appointment, a sufficient number of seats to constitute a quorum. The remaining vacancies are then filled by the legislative body one at a time as mentioned above.
When a vacancy occurs, both the county clerk and the Secretary of State must be notified immediately in writing.
This issue is discussed at length in the City Officials Legal Handbook.
Pursuant to KRS 61.252, no officer or city employee shall be interested in any contract with the city or city agency. However some contracts are allowable expressly by statute:
1. Contracts awarded before an employee was hired, or before an officer filed as a candidate for office or was appointed. However, this exception does not apply to contract renewals after hire, election, or appointment, unless the city complies with the requirements discussed in paragraph (3) below.
2. Contracts awarded after public notice and competitive bidding. However, the exception does not apply if the employee or officer was authorized to participate in establishing contract speculations, or awarding or managing the contract, speculations, or awarding or managing the contract, unless the city complies with the requirements discussed in paragraph (3) below.
3. Contracts made pursuant to the disclosure procedure required by KRS 61.252(1)(c):
a. The specific nature of the contract transaction and the nature of the employee’s or officer’s interest in the contract are disclosed at a public meeting of the governing body of the city or city agency;
b. A finding is made by the governing body of the city or city agency that the contract with the officer or employee is in the best interests of the public and the city or city agency because of price, supply, or other specific reasons; and
c. The disclosure and finding are made a part of the official record of the governing body of the city or city agency before the contract is executed.
See the City Officials Legal Handbook for a full discussion on this matter, including exceptions.
Section 156b of the Kentucky Constitution authorizes the General Assembly to grant broad home rule powers to cities, but does not require it. Fortunately, in 1980 the General Assembly did decide to grant broad home rule authority to all classes of cities through the adoption of KRS 82.082. Prior to the enactment of the home rule statute, cities had no inherent right of self-government and depended almost exclusively upon specific acts of the General Assembly to authorize various functions.
Now, under KRS 82.082, a city may exercise any power or perform any function that is:
1) Within the boundaries of the city;
2) In furtherance of a public purpose of the city; and
3) Not in conflict with a constitutional provision or statute.
For a full explanation of the home rule principal, please see the City Officials Legal Handbook.
It is mandatory that a city levy ad valorem (property) taxes on all property located within the city limits that is not specifically exempt from local taxation by the Kentucky Constitution or statutes.
KRS 132.027 does not allow a city to levy a tax rate that produces more revenue than would be accrued by using the compensating tax rate unless a public hearing is held on the matter. The compensating tax rate limit is designed to prevent cities from levying a real property tax rate that will produce more revenue than the previous year's rate produced (exclusive of revenue from new growth), unless the city follows certain statutory procedures. If the proposed tax rate exceeds the compensating tax rate, the city must comply with notice and hearing requirements found in KRS 132.027(2).
If the city proposes to levy a tax rate that exceeds the compensating tax rate by more than four percent, KRS 132.027(3)(b) requires the city to publish an advertisement detailing the real property tax increase in the county's largest newspaper. Additionally, the portion of the tax rate that produces revenue more than four percent above the revenue produced in the preceding year is subject to a possible recall vote under the provisions found in KRS 132.017.
The public hearing and recall procedures apply only to the real property tax rate and not the rate applicable to personal property.
For assistance in calculating the compensating tax rate, the city can contact the Department of Local Government at 800-346-5606 or the Kentucky League of Cities at 800-876-4552.
In addition, the City Officials Legal Handbook provides more detail on taxation matters.
KRS 134.420 gives each city a lien on the property assessed for taxes due the city for 11 years following the date when the taxes become delinquent. The lien includes all interest, penalties, fees, commissions, charges, costs, reasonable attorney's fees, and other expenses incurred by reason of the delinquency in payment of the tax bill or in the process of collecting it. The lien also has priority over all other liabilities of the property. Every city with a population less than 20,000 must file notice of delinquent tax liens with the county clerk pursuant to KRS 134.420(6). Tax liens may be enforced in a civil action.
A. Collection by Sheriff - KRS 91A.070(1)
A city may elect, by ordinance, to have all city ad valorem taxes collected by the county sheriff. If the city elects this option, the sheriff will collect delinquent city taxes in the same manner used to collect delinquent county taxes in accordance with KRS 133.220, KRS 133.230, and KRS Chapter 134.
B. Collection by City - KRS 91A.070(2) and (3)
If a city elects to collect its own taxes, it must establish by ordinance the procedures for collection. It may use the following methods for the collection of delinquent taxes:
1. KRS 91A.070(3) gives the city a lien upon all real and personal property of a taxpayer for the amount of taxes due and for interest and penalties on delinquent taxes. The city may enforce such tax liens by action in the name of the city in circuit court. In the same action, the city may also obtain a personal judgment against the taxpayer for the overdue tax, penalties, interest and costs of the suit.
2. Any home rule class city or urban county government may utilize the “Mass Foreclosure Act.” It is a streamlined method whereby a city may enforce tax liens by bringing suit against a number of parcels of real estate in one action. KRS 92.810.
3. A city may join by interlocal agreement with the state and local school districts to create a land bank authority. If the city is unable to obtain the full value of delinquent taxes, plus interest, penalties and costs, at a tax lien foreclosure sale, then the land bank authority is deemed to have acquired the property for the full value of all taxes, interest, penalties and costs, and all delinquent taxes, etc. are extinguished. When the land bank authority later sells or otherwise disposes of the property under its land bank program, the city receives its prorated portion of back taxes, plus costs, from the sale of the property. KRS 65.350-65.375.
C. Publication of Delinquent Taxes
If it wishes, a city may publish a list of uncollected delinquent taxes by listing the names of the delinquent taxpayers and the amount due pursuant to KRS 424.330. The city is authorized to assess an additional fee equal to the prorated cost of publication per taxpayer to the amount of each tax claim published. If the city decides to publish a list of delinquent taxpayers, it must do so in accordance with KRS 424.130(1)(c) by publishing the list once a week for three consecutive weeks, or by publication of a one-half page advertisement providing notice that a list of uncollected delinquent taxes will be published in the following week, followed by publication of the list. The advertisement must include notice that the list is available for inspection at the business address of the city and on an internet website affiliated with the city.
The discussion regarding the collection of delinquent property taxes begins on page 401 of the City Officials Legal Handbook.
Each city is required to operate and expend funds under an annual budget that must be adopted by ordinance on or before the beginning of the fiscal year (July 1). If the city fails to adopt a budget prior to July 1, the city must continue to operate on the budget from the prior year until a new budget is adopted.
The executive authority of the city is responsible for preparing a budget proposal and submitting that proposal along with a budget message (see KRS 91A.030(7)) to the legislative body at least 30 days prior to the beginning of the new fiscal year. 10-ORD-103 states that the proposed budget that is submitted to the legislative body by the executive authority is subject to the Open Records Act.
The legislative body must adopt a budget ordinance appropriating monies for the fiscal year, which is July 1 – June 30. The legislative body need not adopt the budget in the form submitted by the executive authority. The legislative body has full authority to make any necessary changes.
Once the legislative body has completed the budget, it is adopted as any other ordinance is adopted, with a first and second reading, submission to the executive authority for veto or signature, and publication within 30 days of adoption.
At any time after the adoption of the budget, the legislative body may amend the budget by ordinance. This, however, is subject to the restriction that at no time may expenditures exceed revenues during any given fiscal year. The budget should be amended any time the legislative body elects to spend revenues in a manner different from the budget allocation.
As with the original budget, an ordinance amending the budget is adopted in the same manner as any other ordinance.
For more on budgeting, auditing, and reporting see the City Officials Legal Handbook.
KRS 83A.070 requires that the compensation of elected city officers be set by ordinance by the first Monday in May in the year that the officer is elected, and cannot be changed during the officer's term in office. Note that cost of living adjustments are not considered “compensation,” and thus may be given during the term of office. The Department for Local Government (DLG) annually releases the maximum compensation that may be paid to elected city officers based on the consumer price index.
Compensation to be paid to all appointed (nonelected) city officers must be set forth in an ordinance, whether it is a sophisticated “personnel and pay classification plan” ordinance or the annual budget ordinance. Pursuant to KRS 83A.080, appointed (nonelected) city officers include the city clerk, city manager, city administrator, chief of police, fire chief (other than a volunteer fire chief), and any other appointed office as established by the city via ordinance. The compensation of appointed city officers is not subject to the same limits on changing compensation during a “term in office” that apply to elected officers. Therefore, compensation of appointed officers may be changed at any time by amending the appropriate ordinance.
For a copy of DLG’s current maximum compensation limits, please contact the KLC Department for Municipal Law and Training at 800-876-4552.
Compensation issues are fully discussed in the City Officials Legal Handbook.
The Kentucky Constitution and legislative enactments establish specific prohibitions against holding incompatible offices simultaneously.
As it relates to city offices and employment, Section 165 of the Kentucky Constitution contains two prohibitions:
1) No person may be an officer or employee of a city and at the same time be a state officer, deputy state officer or member of the General Assembly; and
2) No person may fill more than one municipal office at the same time, whether in the same or different cities.
KRS 61.080 reiterates the above constitutional prohibitions, but goes further in that KRS 61.080(3) prohibits a person from holding a city office and a county office at the same time. Additional incompatibilities are listed in KRS 61.080.
In addition to incompatibilities specifically listed in the Constitution and statutes, certain positions can also be incompatible at common law, if the duties of both positions cannot be performed at the same time with the necessary degree of impartiality and honesty. For example, a city council member should not also serve as a member of the planning commission, because the council has oversight of planning commission decisions.
The City Officials Legal Handbook discusses what constitutes an “office” in addition to other points of interest regarding the compatibility of offices.
When drug testing city employees, a city must be aware of the legal obstacles that a public employer faces, as there are many situations in which drug testing will not be allowed. Nevertheless, there are instances when a public employer may require drug testing that has been upheld by the courts. Drug testing may be appropriate in the following situations:
1. Pre-employment testing performed on applicants for employment but only after a conditional offer of employment has been made;
2. Random testing performed on federally regulated employees (i.e., CDL drivers, gas pipeline workers, FAA), and other safety sensitive employees (i.e., police, fire fighters, dispatchers);
3. Reasonable suspicion testing pursuant to city policy;
4. Post-accident testing for certain workplace accidents; or
5. Return-to-duty testing for a person who has completed a substance abuse program and is requesting a return to his or her job.
Because of the complexity of and various legal restrictions and concerns involved with the topics listed above, a city should have a well-written, thorough drug testing policy in place and work closely with its city attorney to develop and implement this policy. For examples of drug testing policies, you can contact the KLC Department for Municipal Law and Training at 800-876-4552.
The City Officials Legal Handbook addresses this topic as well as other employment concerns.
OAG 78-619 says that where a quorum is present, those members who abstain from voting are counted with the majority vote, either “for” or “against” a measure. This "counts with the majority" rule was originally set forth in Pierson-Trapp Co. v. Knippenberg, 387 S.W.2d 587, 1965.
According to KRS 81A.410, any home rule city may extend its boundaries to include any area which:
1. Is adjacent or contiguous to the boundaries of the city at the time annexation proceedings are initiated;
2. Is suitable for development for urban purposes without unreasonable delay because of population density, commercial, industrial, or governmental use of land, or subdivision of land;
3. Does not include any territory that is already within the jurisdiction of another incorporated city, or another county; and
4. Is not part of an agricultural district formed pursuant to KRS 262.850(10).
If the above preliminary requirements are met, the following steps, pursuant to KRS 81A.420 and KRS 81A.425, must be followed in order for the city to annex the unincorporated territory:
1. The legislative body must enact an ordinance stating its intention to annex. Such ordinance must contain an accurate description of the territory to be annexed along with a declaration of the desirability of annexation.
2. After the first reading of the "intent to annex" ordinance, notice of the proposed annexation must be first-class mailed to each property owner within the area to be annexed no later than 14 days prior to the meeting at which the "intent to annex" ordinance will be read for the second time. The notice must include the time, date, and location of the meeting and a copy of the proposed "intent to annex" ordinance.
3. After the second reading and passage of the "intent to annex" ordinance, the ordinance must be published, along with a notice indicating the right of resident voters and property owners within the area to be annexed to petition in opposition to the annexation within 60 days. To trigger a vote, the petition in opposition must contain the names of 50% of the resident voters or owners of real property in the identified area. The city must re-publish the notice between 7 and 21 days before the expiration of the 60-day period pursuant to KRS 424.130.
4. If a petition is presented to the county clerk and certified as sufficient by the second Tuesday in August preceding a regular election, the question of annexation shall be put to a vote by the residents of the area to be annexed at the regular election. Otherwise, the city will have to wait until the next regular election to put this question on the ballot.
• The proposed annexation fails if 55% or more of those voting oppose the annexation. If less than 55% of those voting are in opposition, the area will become part of the city.
• If a city's annexation effort is defeated by the voters, it may not again attempt annexation of the same area for five years.
5. If no petition is presented to the city clerk during the 60-day period following the publication of the "intent to annex" ordinance or if the proposed annexation is approved by resident voters, the legislative body of the annexing city shall enact a second ordinance formally annexing the territory to the city.
6. KRS 81A.470 requires that within 60 days following publication of the second ordinance, the city must file with the county clerk and the Secretary of State a certified copy of the ordinance, as well as an accurate map and a metes and bounds description of the newly annexed area. The city must also provide the county clerk with a list of the properties within the annexed territory, including the name and address of each property owner. No city which has annexed unincorporated territory or accepted transfer of incorporated territory may levy any tax upon the residents or property within the annexed or transferred area until the city has complied with the above provisions. This is of the utmost importance, because no city wants to find out years later that the filing requirements were not met and the city must now refund taxes paid by people who were never formally annexed into the city.
Per KRS 81A.412, a city may annex any area that meets the requirements of KRS 81A.410 if each of the landowners in the area to be annexed gives prior written consent to the annexation. In this event, the city may enact a single ordinance annexing the land described in the ordinance without enacting the initial "intent to annex" ordinance or complying with the notice requirements of KRS 81A.425. The annexation is final upon publication of the ordinance.
More information on annexation procedures can be obtained from the City Officials Legal Handbook. Sample ordinances can be obtained by contacting the KLC Department for Municipal Law and Training at 800-876-4552.
Unless a city otherwise designates, KRS 424.260 requires cities making a contract, lease, or other agreement for the purchase of materials, supplies, equipment, or nonprofessional services exceeding $20,000 to first advertise for bids pursuant to KRS 424.130. The city need only advertise once, but may advertise two or more times provided that at least one advertisement occurs between 7 and 21 days before the close of bidding. The advertisement must include a description of what is to be bid, the time and place for receipt of bids, and any special terms of the sale. The statute does include some exceptions to the bidding requirements, including contracts made during a certified emergency as well as those that are for the purchase of perishable goods and professional services.
As an alternative to KRS 424.260, a city may elect by ordinance to adopt the provisions of the Local Government Model Procurement Code, KRS 45A.343 - 45A.460. If this code is adopted, all purchases made by the city must conform to its provisions (unless the code is adopted only as a condition for the receipt of grant money for specific purchases). The Model Procurement Code is similar to KRS 424.260 in that it requires invitations for bids to be advertised for contracts and purchases exceeding $20,000, with some exceptions. However, the Model Procurement Code differs from KRS 424.260 by requiring notice by newspaper publication or an Internet post at least seven days before the date set for the opening of bids. The notice must include the time and place where bids will be opened and where specifications may be obtained. The bids must be opened publicly in an announced location and the contract awarded to either the lowest bidder or the bidder submitting the lowest evaluated bid price. KRS 45A.365.
More information on this topic can be found in the City Officials Legal Handbook.
KRS 91A.080 authorizes cities to impose an insurance premium tax to be effective on July 1 each year, on a prospective basis only.
The tax will not be effective unless the city sends the Commissioner of Insurance a copy of the ordinance and any amendments at least 100 days before the proposed effective date.
The Commissioner of Insurance is required to notify each insurance company engaged in the business of insurance in the Commonwealth of those cities that have imposed the tax and the current tax rate. This notification is to be sent 85 days prior to the July 1 effective date.
The license fee or tax imposed on any insurance company with respect to life insurance policies may be based on first-year premiums actually collected in each calendar quarter, upon the lives of persons residing within the city. The license tax imposed on insurance companies with respect to any type of policy other than a life insurance policy must be based on a percentage of the premiums actually collected in each calendar quarter on risks located within the city, less all premiums returned to policyholders.
The tax is due 30 days after the end of each calendar quarter. Insurance companies subject to the tax are required to file annually by March 31 a breakdown of all collections for six specified lines of insurance with the city. License fees not timely paid bear interest at the tax interest rate as defined in KRS 131.010(6). The local government may also impose a 10% penalty on a fee or tax not paid within 30 days of its due date.
Insurance companies that pay the tax are required to credit city insurance premium taxes against the same taxes levied by the county. The credit requirement applies to all county taxes levied for the first time after July 13, 1990.
The collection and administration of the local insurance premium tax was significantly amended in the 2008 General Assembly. The law requires insurance companies subject to the tax to accurately locate risks to the appropriate taxing jurisdiction and imposes new penalties on insurance companies for failure to comply with the law. In dealing with disputes regarding the insurance premium tax, KRS 91A.0804 provides the sole and exclusive remedy for cities, insurance companies and policyholders. The law limits refund requests to a two year statute of limitations and requires any insurance company requesting a refund to provide policy-specific information to the city in its request.
For a full discussion of insurance premium taxes, including circumstances in which the tax may not be imposed, see the City Officials Legal Handbook. In addition, a model ordinance may be obtained by contacting the KLC Department for Municipal Law and Training at 800-876-4552.
Tax increment financing is a financing and development tool that permits local governments to capture future increases in property and other taxes generated by new development within a specified development area. The captured value of the increase in tax revenues is used to attract private development or to finance public improvements for economic development projects.
A tax increment is the difference between the amount of occupational and property tax generated before creation of a development area and the amount of tax revenue generated after creation of a development area. Taxing districts continue to receive the base tax amount while tax increments are used to fund the public costs of development. In other words, growth is used to pay for growth.
TIF is primarily used to help a local government jumpstart improvements in declining or underperforming urban areas where development would not otherwise occur.
The “but for” test is often used to describe TIF-funded projects. "But for" the TIF-funded public improvements, development would not occur.
A local development area can be established for 30 years. At the end of the term, all new tax revenues belong to the usual taxing districts.
Examples of public costs that can be funded by tax increment financing include the following:
Many states have successfully used tax increment financing to promote redevelopment through public/private partnerships. Kentucky’s tax increment financing statutes, KRS 65.7041 – 65.7083 and 154.30-010 - 154.30-090, establish guidelines for creation of development areas eligible for both local and state tax increments.
The discussion regarding TIF is located in the City Officials Legal Handbook.
Your city has the option of holding work sessions as regularly scheduled meetings. An ordinance setting the date and time of the regular work session meeting can increase public awareness and reduce time and costs associated with calling special meetings. Contact the KLC Department for Municipal Law and Training for a model ordinance.
If a work session is not established as a regular work session meeting in ordinance, treat work sessions as a special meeting. The city will have to follow all rules related to notice and the Open Meetings Act. The Open Meetings Act requires that all meetings where a quorum of the public agency is present and where any city business is discussed must be open to the public, even if no decisions are made. You can find detailed information about the legal requirements for conducting meetings in the City Officials Legal Handbook.
There is no statutory requirement that citizens be allowed to speak at any meeting other than public hearings. The only requirement is that they are allowed to listen. If citizens are allowed to speak, your city can impose guidelines for participation, including when or how long guests can speak. Ground rules can be set for meetings to follow parliamentary procedures.
Please contact the KLC Department for Municipal Law and Training at 1-800-876-4552 for more information on work sessions, special meetings, regular meetings or public meetings.
The general requirement that all public meetings shall be open to the public does not apply to certain categories of meetings. KRS 61.810 exempts 13 categories of meetings from the Open Meetings Act:
1. Deliberations for decisions of the Kentucky Parole Board;
2. Deliberations on the future acquisition or sale of real property by a public agency, but only when publicity would be likely to affect the value of a specific piece of property to be acquired for public use or sold by a public agency;
3. Discussions of proposed or pending litigation against or on behalf of the public agency;
4. Grand and petit jury sessions;
5. Collective bargaining negotiations between public employers and their employees or their representatives;
6. Discussions or hearings which might lead to the appointment, discipline, or dismissal of an individual employee, member, or student without restricting that employee's, member's, or student's right to a public hearing if requested. This exception shall not be interpreted to permit discussion of general personnel matters in secret;
7. Discussions between a public agency and a representative of a business entity and discussions concerning a specific proposal, if open discussions would jeopardize the siting, retention, expansion, or upgrading of the business;
8. State and local cabinet meetings and executive cabinet meetings;
9. Committees of the General Assembly other than standing committees;
10. Deliberations of judicial or quasi-judicial bodies regarding individual adjudications or appointments, at which neither the person involved, his representatives, nor any other individual not a member of the agency's governing body or staff is present, but not including any meetings of planning commissions, zoning commissions, or boards of adjustment;
11. Meetings which federal or state law specifically require to be conducted in privacy;
12. Meetings which the Constitution provides shall be held in secret; and
13. That portion of a meeting devoted to a discussion of a specific public record exempted from disclosure under KRS 61.878(1)(m). However, that portion of any public agency meeting shall not be closed to a member of the Kentucky General Assembly.
If an exception to the Open Meetings Act applies, the public agency may go into closed (executive) session to conduct the meeting as long as it follows the required procedure in KRS 61.815. The agency must:
1. Give notice in an open meeting of the general nature of the business to be discussed in the closed session, the reason for conducting the closed session, and the specific provision of KRS 61.810 authorizing the closed session;
2. Make a motion to go into closed session and the motion must be approved by a majority vote conducted in open session;
3. Take no final action in the executive session. The agency must reconvene in an open meeting and take its final action in that setting; and
4. Refrain from discussing any subject other than what was publicly announced prior to convening the closed session.
When it is necessary for a public agency to satisfy the above requirements, the minutes of the open meeting should clearly reflect the requirements were met.
For a complete discussion of the Open Records/Open Meetings requirements, please see the City Officials Legal Handbook.
Because cities generate the majority of their revenue through the imposition of taxes and fees upon their citizens, the expenditure of city funds must be for the common good and not for the benefit of a select few. Sections 171 and 179 of the Kentucky Constitution and KRS 82.082 require public funds to be spent in furtherance of a public purpose.
To determine whether an appropriation or expenditure is for a public purpose, consider the following three factors:
1. First, evaluate whether the city may independently engage in the activity that it is funding. If the city may not engage in the activity in question, it is likely that the city could not donate funds to another organization to perform that activity.
2. Next, look to whether the city has any control over either how the money is spent or the organization itself. If the city has no control over how the money is spent, there is a likelihood the appropriation will be invalid.
3. Finally, determine whether the expenditure is primarily benefiting the public at-large rather than an individual or private business. OAG 00-2.
The above questions should be answered before a city appropriates any public funds to a private entity. If a donation is made, the city should enter into a written agreement addressing how any funds are to be spent and what benefit the city will receive in return for the donation.
For a complete discussion of public purpose spending that expands on the factors set forth above, see OAG 99-5 and the City Officials Legal Handbook.