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EDP affirms its status as special-purpose governmental agency

The Danville-Boyle County Economic Development Partnership is legally a “special-purpose governmental agency,” according to a law firm the EDP paid to answer questions about its legal status.

Stoll Keenon Ogden PLLC told the EDP in a four-page memo that the public-private partnership is subject to Kentucky’s Open Meetings and Open Records acts.

The Department of Local Government determined the EDP to be a special-purpose governmental agency (SPGE) in 2014.

“The DLG’s letter may be based on an overly-broad reading of (state law),” according to the memo. “… Based on (a different court ruling), we believe the DLG was incorrect in its conclusion that the partnership is (an SPGE). Nonetheless, the partnership has a written opinion from the DLG that it is a SPGE.

“Moreover, the partnership has treated itself as a SPGE, at least since receiving the DLG’s letter. Under the circumstances, if the partnership does not want to be classified as a SPGE, it should submit a request to the DLG to reconsider its opinion.”

The EDP board was quick to vote Wednesday, based on the memo, to affirm that it is an SPGE and that it abides by Kentucky open meetings and records laws.

“I think we’ve addressed this to death,” Boyle County Judge-Executive Harold McKinney said in making the motion that was approved unanimously.

EDP Chair Ben Nelson said the purpose of hiring the law firm for $1,500 was to figure out “are we fish or fowl?” — the EDP wanted to “put to bed” internal disputes over what rules and regulations it is subject to.

The EDP hired Stoll Keenon Ogden after a contentious meeting in May, when EDP board members were asked to approve a fundraising bonus for former Chief Operating Officer Hal Goode.

Multiple representatives from the EDP’s public partners, including Boyle County Fiscal Court and the City of Danville, said they were strongly opposed to the bonus and believed it was wrong, perhaps even illegal or unconstitutional. The board voted 9-5 to calculate how much Goode’s bonus would be, with many public partners voting no. Goode subsequently withdrew his bonus request, but the EDP still sought to resolve bigger questions about its status.

“That is evidence to me of our need as a partnership to get some independent legal counsel that can help us resolve these kinds of administrative questions that we seem to get tangled up in,” Nelson said in June. “… We need to go find somebody that’s totally neutral so that when we have these internal disagreements as to what our protocol is … we can go say, ‘Hey, can you give me an opinion?’”

EDP board member Marty Gibson said Thursday Stoll Keenon Ogden was not specifically asked for an opinion on pay incentives for EDP employees. Nelson said his understanding is the EDP’s status as an SPGE means there are “limitations to compensation like bonuses. But I stand to be corrected as I am not knowledgeable enough to know the legislative source of that understanding.”

Gibson said he agrees with Nelson’s opinion of the limitations on bonuses.

Danville City Manager Ron Scott he is not an attorney, but “Kentucky cities apparently universally comply” with the state Constitution and state law by only paying employees what is set by ordinance for them to be paid.

“Earlier … I offered the opinion that governmental bodies were prohibited from granting ‘bonuses,’” Scott said. “My somewhat altered view is that apparently these provisions complicate but perhaps do not necessarily strictly prohibit the payment of a bonus.

“… in conclusion, my view is that it’s not appropriate to discuss bonuses for employees of special-purpose governmental entities … as it’s contrary to what’s being done statewide for cities/counties’ employees. It’s far easier to evaluate employee performance and grant raises … if there are funds appropriated/approved for this purpose.”