By Will Wright

Martin County Sheriff John Kirk took the stage without invitation at a fiscal court meeting Monday and railed about the budgetary strains afflicting his office.

Kirk paced back and forth, complaining he had not yet received a $75,000 payment from the fiscal court that should have been delivered in January. In addition, Kirk said his office is now required to pay for its own workers' compensation insurance, retirement, and social security benefits. Those obligations, along with unemployment insurance and fringe benefits, add an additional $99,000 to his annual expenditures.

As a result, Kirk announced Monday he has temporarily ceased all law enforcement services provided by his office. He also laid off the office bookkeeper and limited office hours to 8 a.m. through noon on weekdays.

On Kirk's personal Facebook page, he urged residents to "lock your doors, load your guns and get a biting, barking dog."

The issues plaguing the Martin County Sheriff's Office and the county's fiscal court are similarly felt by local governments throughout Eastern Kentucky, where sharp declines in coal severance taxes have forced county governments to make spending cuts and layoff workers.

Money provided to coal-producing counties in Eastern Kentucky by the state's Local Government Economic Assistance Fund, a primary source of coal severance tax dollars for local governments, dropped from $34 million in Fiscal Year 2012 to $6.7 million in Fiscal Year 2018.

In Knott County, the fiscal court approved a partial shutdown of county government last month, and officials in Pike County have already made layoffs and proposed a major rate increase for garbage pickup.

Martin County officials also blame declining revenue and coal severance dollars for the delayed sheriff's payment.

Meanwhile, Kirk said, his office is relying on faltering equipment as it struggles to make ends meet, and he soon expects to lose the one deputy he now employs.

"We made it because we run around with borrowed tires on our vehicles with the wires sticking out of them," Kirk told the fiscal court. "We made it because we ran around with plugs in our tires, which is illegal to plug an emergency vehicle tire. But if you have no money, you make tough decisions, don't you?"

County officials said they hope to pay the sheriff's office the $75,000 pledged, but could not say when that payment would be delivered.

Victor Slone, the sole remaining member of last year's fiscal court and the magistrate who bore the majority of Kirk's criticism, said county officials have continued to pledge $140,000 or more to the sheriff's office each year, even as the county's own revenue has declined by about half in the past eight years.

Kirk, at one point during his speech, pointed to Slone and said "that man right there is part of the problem."

The fiscal court this week approved a new sheriff's budget, which included the promise of a $140,000 subsidy from the fiscal court.

"I am very, very disappointed in what we have had to face as a court," said Martin County Judge-Executive Bill Davis. "Personally, I think there are a lot of better days ahead. It can't get much worse."

Kirk said he is concerned that residents will not have access to quick law enforcement response without his office. The responsibility now falls solely to Kentucky State Police, which sometimes has just one officer patrolling multiple counties in this mountainous corner of Eastern Kentucky, Kirk said.

William Petry, the public information officer for KSP Post 9, which covers Floyd, Johnson, Magoffin, Martin and Pike counties, said it puts a strain on state troopers if they can't rely on help from local law enforcement.

Still, Petry said, "We're going to respond as we always have."

Overstated revenues, layoffs in Pike County

Pike County's new administration, which took office in January, is claiming previous leaders drastically overstated projected revenue in budgets for the county's general fund and clerk's office.

Officials now project a $1 million to $1.2 million shortfall for the county's general fund by June 30, the end of this fiscal year.

That shortfall has led to layoffs of several part-time county employees, and will likely lead to rate increases for solid waste and other cuts to county operations.

Revenue for the clerk's office was also overstated for 2018 to the tune of nearly $650,000, according to Pike County Clerk Rhonda Taylor. (The clerk's office runs on a calendar year budget.)

"These are totally overstated," Taylor told the fiscal court in January when presenting the clerk's budget. "They are numbers that have been handed down from term, to term, to term, to term. You guys are facing a bigger challenge than you ever dreamed of."

Taylor, who was re-elected in November, told the fiscal court her office will likely have to implement pay cuts and close branch clerk offices throughout the county without help from the county's general fund.

"Our office is in trouble," Taylor said. "Our office is pretty much crippled right now without supplement money."

Last week, after a special fiscal court meeting at East Ridge High School, Pike County treasurer Frankie Stacey said the previous treasurer, Johnda Billiter, disregarded a recommendation by the Kentucky Department of Local Government to lower the level of projected revenue for the county budget.

Stacey also said Billiter formed the budget in a single day.

Billiter resigned in June 2018 after failing to deposit $1 million of checks paid to the county over a six month period.

At about the same time, Pike County lost its credit rating, making it nearly impossible for the county to borrow money, according to an assistant auditing professor at UK.

Billiter could not be reached for comment for this story.

Like many Eastern Kentucky counties, Pike County has seen a dramatic decline over the past five years in coal severance money. In fiscal year 2018, the county received $1.02 million from the Local Government Economic Assistance Fund, which returns a portion of state-collected mineral severance taxes to local governments. That's down 82 percent from the $5.6 million it received in fiscal year 2012.

The overly optimistic budgets have made things even more challenging, said Pike County Judge-Executive Ray Jones.

"There was not a lot of thought put into the budget," Jones said. "I do think the people of the county need to realize when they see some of these numbers from prior budgets, that they're not accurate."

Former Pike County Deputy Judge-Executive Herbie Deskins said he was not involved in the budget-making process last year, but said he believed the prior administration left a surplus of money for Jones and the new fiscal court.

Deskins said the county also received a total of about $500,000 soon after Jones took office from the Pike County Airport Board and the 911 Board. Neither of those payments were included in the county's projected revenue, Deskins said.

Jones and other county officials said prior administrations also failed to plan for a revenue shortfall for the solid waste department, and for a required expansion of the county's landfill.

Residents will likely see a solid waste rate increase in the coming months or weeks, though Jones said he will wait for an outside firm to complete a rate study before implementing any increase.

The county increased solid waste rates in 2017 from $15.50 a month to $17.50, according to the Appalachian News Express. Last month, the fiscal court discussed raising those bills to $25 for most customers, the newspaper reported.

A previous study of the landfill estimated that it had just seven years before it filled up, with no county money set aside to expand it.

During a presentation last week, Thomas Ramsey, the principal of Geosyntec Consultants, said officials could seek a new permit that would allow the county to build on top the old landfill, adding about 50 years of life.

That's "great news" for the long-term health of solid waste in Pike County, said county commissioner Brian Booth.

Still, the solid waste department will require an additional $5 million over the next five years to replace aging equipment and to maintain its current operations.

Raising rates would be the only way to find that revenue other than "gutting" the road department or laying off county employees in the maintenance garage and other public service departments, Jones said.

"The options we have here are few and far between," Jones said. "There's been a lot of abuse of the taxpayers in this county."

Knott County's partial government shutdown continues

Last month, just days before President Donald Trump signed a bill to end the longest partial government shutdown in U.S. history, officials in Knott County approved a partial government shutdown of their own.

Knott County's partial shutdown is ongoing, and allows the county's road department to respond only to emergencies. The fiscal court also canceled health insurance for all county employees and elected officials.

Judge-Executive Jeff Dobson also told the fiscal court on Jan. 22 that the county will make cuts to a program that delivers food to senior citizens in need. Former Knott County Judge-Executive Zachary Weinberg said the program delivered about 100 meals a day to seniors citizens.

Teresa Huff, director of the Knott County Senior Citizens Center, directed questions about the cuts to Dobson, who did not respond to multiple requests for comment for this story.

During the fiscal court meeting, Dobson said the cutbacks were the only alternative to implementing new taxes to cope with the county's declining revenue.

The county's return from the Local Government Economic Assistance Fund fell from about $4 million in 2012 to just under $550,000 in 2018.

Earlier this week, Knott County Treasurer Kevin Jacobs said the cutbacks have no clear end in sight.

"The fiscal court has to decide when they want to implement a tax," Jacobs said. "That either has to be the way it is, or there has to be (other) additional revenue."

Jacobs said Knott's financial woes came to a head when the state reassessed the value of its unmined minerals in December 2016.

That reassessment meant Knott County could tax land owners who had unmined coal on their property far less than in previous years. During the 2016-17 fiscal year, the county was forced to shave $1.5 million off its budget, according to a WKYT report.

To deal with that shortfall, Jacobs said the county implemented an insurance tax, but that tax expired at the end of 2018.

"Now we're faced with the shortfall of all that money," Jacobs said.

Weinberg disputed the need for a partial shutdown, saying the county should have received in January one last installment from the insurance tax totaling $250,000, and another state payment for the road department totaling $350,000.

"It doesn't need to happen right now," Weinberg said. "There's plenty enough money to make it through this fiscal year."

Still, Weinberg said the dramatic decline in coal severance makes the county's financial situation "tight no matter when or what."

(c)2019 the Lexington Herald-Leader (Lexington, Ky.)