By BILL MARDIS, Editor Emeritus
Somerset — An evolving plan by Somerset Mayor Eddie Girdler to establish a city-county industrial development authority to replace the existing Somerset-Pulaski County Development Foundation is creating shock waves from the courthouse to the business community.
The key to successful operation of an industrial authority or foundation is money. The money currently comes from a countywide 1 percent occupational tax that feeds the existing development foundation with about $1.2 million a year.
The mayor admits the city carries a big stick. If the county rejects the option to participate, Somerset could set up its own industrial development authority and enact an occupational levy that could gut the county’s revenue from the tax. There is no doubt the mayor has given it some thought. He said he has asked the city attorney to advise him on how the city could enact a payroll tax.
“She hasn’t reported to me yet,” said Girdler.
The mayor says he thinks the existing foundation has lost its focus. Instead of focusing on economic development the mayor believes the foundation is wasting both time and money trying to attract manufacturing plants when few if any prospects are available during these difficult economic times.
“We have great people, but we lack organization; we lack vision,” said Girdler. In his opinion the existing development foundation has been doing the same things for 30 years and it needs to change. The mayor suggested promotional efforts for small businesses, high-tech jobs and the tourism and service industries.
“Based on my research, I don’t think many new industrial (manufacturing) facilities will be built here,” the mayor noted. He suggested it doesn’t make economic sense to spend a million dollars a year investing in land (industrial sites) and end up every couple of years with a factory hiring 150 people.
The Somerset mayor also wants to bring the Somerset-Pulaski Convention and Visitors Bureau under the umbrella of his proposed city-county industrial authority. The bureau is funded by a 3 percent transient tax enacted by Pulaski Fiscal Court.
“The city has no input into the tourist commission (bureau). I don’t feel welcome there,” Girdler commented. He nodded his head when it was mentioned that the executive director of the bureau is Carolyn Mounce, sister of former Mayor JP Wiles who was unseated by Girdler two years ago.
Girdler is no stranger to industrial development. He headed the local industrial foundation for about a year some two decades ago. Girdler suddenly resigned, called a news conference and blasted certain local businesses for being selfish and hampering industrial recruitment. Later, he was executive director of Somerset Housing Authority for years before retiring and successfully seeking the mayor’s office.
The Somerset mayor apparently has washed his hands of the existing development foundation. He didn’t attend the last meeting of the group and has indicated he may resign his position on the board of directors. However, the board, as of Thursday, has not received an official notice of his resignation. Carrol Estes recently resigned as executive director of the foundation. He has been unavailable for comment.
“I’m going to give the county an option to jointly establish a new industrial authority that would be centered on economic development,” Girdler told the Commonwealth Journal. “The (existing) industrial foundation has no power. It’s just an agency to spend money. They’ve done a good job but their time has passed. It’s not functional; it’s not growth oriented. The board members are great; structure is the problem. My objections would be completely satisfied by the county and city going together with the new authority.”
Laura Ross, legal services counselor for the Kentucky League of Cities, says a city of the third class (Somerset) in a county of 30,000 or more (Pulaski) can enact an occupational tax and employees who work in the city may deduct the city tax from the county’s levy. In other words, if the city were to enact a half-cent occupational tax, workers inside the city limits would pay a half cent to the city and a half cent to the county. If the city enacted a 1 cent occupational tax, the entire amount collected from those employed in Somerset would go to the city.
The general consensus is that 70 percent of the $8.6 million received annually from the county’s 1 percent occupation tax comes from employees working in the city. If Somerset were to take a major part of the revenue, the county’s cupboard would soon be bare.
“If they (Somerset) take the occupational tax, we’re done,” conceded Pulaski County Judge-Executive Barty Bullock. “It would be devastating. We might as well close the doors and go home.”
Bullock said he and Girdler have been to several meetings together recently, but that Girdler has not talked with him about the proposed industrial authority. The judge-executive said he is willing to talk with the mayor about the proposal, but agreed that the county has little clout in the matter.
“My main focus is what is best for ALL the people of Pulaski County,” said Bullock. “I want to work with all five cities in the county. I think it is most important to work with businesses already established here,” he added.
Girdler has in hand a copy of state law empowering the city or county to form an industrial development authority. KRS 154.50, Section 316 says any governmental unit by act of its legislative body may establish a nonprofit industrial development authority to be composed of not less than six and not more than eight members.
Girdler says he envisions a six-member authority with three members appointed by the city and three appointed by the county. The existing development foundation is composed of 13 businessmen headed by Don Bloomer, president of Citizens National Bank.
“I want to put the county in a leadership role,” said Girdler. “I don’t want to take the occupational tax ... I want the county to continue to collect the tax.”
But it’s easy to see an undercurrent of opposition to Girdler’s plan; a move some see as the city taking over industrial recruitment. There is a long history of a gulf between the city and county but recent years have seen more cooperation.
“I feel it’s a shame an individual with a private agenda tries to destroy the success we’ve been able to generate,” Bloomer commented. He said the foundation is made up of 13 of the city’s leading business people who are volunteers. He said the board members represent wide segments of the community and have wide contacts to work with representatives of industries that might be interested in this community.
“The board does not have a private agenda,” said Bloomer. He said they meet with local manufacturing plants and offer assistance and their work is bearing fruit. Some of the local industries and talking about expanding, he added.
“I don’t see why anybody would want to muddy the water,” Bloomer concluded. He said if Girdler does resign the board likely would appoint a member of Somerset City Council to serve in his place.
Some county officials have expressed concerns about the fate of the 9-1-1 Communications Center and ambulance service if the city were to grab a major portion of the occupational tax.
Girdler said he is fully aware of the importance of these emergency services. He stressed the need for new facilities, particularly for EMS.
During the last fiscal year, 9-1-1 and EMS each got more than $1.1 million from the occupational tax. The money comes off the top before the remainder is allocated on percentage and per capita formulas. Somerset got $1.45 million, an amount based on population.
“The city of Somerset has the capacity to lead us into the future,” said Girdler. “Without a strong city, we don’t prosper. We’ve all be led to assume there is a partnership between the city and county when none exists. We need to develop a true partnership with the county,” he concluded.
