Richmond mayor called out in KLC scandal

Local News

June 9, 2009

Ronica Shannon The Richmond Register Tue Jun 09, 2009, 08:42 AM EDT

Richmond Mayor Connie Lawson, Kentucky League of Cities (KLC) president, recently was called upon by Lexington Mayor Jim Newberry to uphold better oversight of the organization after an open records request revealed thousands in questionable spending.

A story in Sunday’s Lexington Hearld-Leader exposed alleged extravagant spending by the KLC’s Executive Director Sylvia Lovely, along with other executive members including William Hamilton, KLC’s director of insurance services and Neil Hackworth, the group’s deputy director.

Despite the story’s recent publication, Newberry’s letter to Lawson is dated May 27 and lists his many concerns.

“Given the importance of public accountability, I have become concerned about several policy matters related to the operations of the Kentucky League of Cities,” Newberry wrote. “Specifically, I have learned that: The league pays for the travel of spouses to various states and national events; the league provides Sylvia Lovely (and perhaps others) with a luxury car as a part of her compensation; the league has done extensive business with Azur, a restaurant owned in part by Sylvia, and with her husband’s law firm; the compensation paid to league employees has not been disclosed to the members of the executive committee, the league’s governing board and the salaries paid to some league employees are excessive when compared to the salaries of the cities it serves. The salaries paid to several league employees greatly exceed those paid to virtually every municipal employee and elected city official in the state.”

“I feel these issues need to be addressed by the executive committee in an expedient manner,” Newberry wrote. “I am sure you agree that, as mayors entrusted with public funds, we are accountable to the public for every dollar spent.”

Lawson, who has served as KLC president since October, said the league would be having its regularly scheduled meeting on Friday, June 19 at the KLC headquarters in Lexington.

The league most likely will meet in executive session to go over the questionable expenditures, she said.

“I think some very good changes can and will come as a result of this,” Lawson said.

The Richmond City Commission has taken loans from the KLC for projects in the past, and most recently borrowed money through the organization to build a new fire and police station.

“It was financed through the KLC,” Lawson said. “They have the lowest interest rate, and we shopped around.”

Lawson said she was not aware of the questionable spending and that it was something that had gone on (within the KLC) for years.

The KLC reviews its budget once a year, and it does not detail “day-to-day” expenditures, Lawson said.

“The league is an association of government entities, and they are governed by a board of elected officials who have a (presumptive) responsibility to ensure the appropriate use of public funds,” said state auditor Crit Luallen. “Their expenditures should be transparent and reasonable in nature, and those expenditures should be tied to quantifiable benefits to the public.”

However, Luallen should play a larger role in auditing the “day-to-day” spending, Lawson suggested.

“I think the state should do more before the fact rather than after the fact,” Lawson said.

The state auditor’s office should do more to teach boards of all types better ways to keep track of spending and managing receipts, she said.

“I am on so many boards and we never check things like credit cards and salaries,” Lawson said.

The KLC is a membership organization of more than 380 Kentucky cities with headquarters in Lexington and Frankfort. The organization provides legislative advocacy, legal, financial, policy development, technology, training and online training services.

The league is supported at least in part by dues, insurance premiums and loan payments from cities across Kentucky.

Ronica Shannon can be reached at rshannon@richmondregister.com or 624-6608.

KLC accused of extravagant spending

Material obtained by the Herald-Leader through an open records request was reviewed and showed three of the league’s executives spent more than $300,000 since 2006 on different expenses including meals and trips abroad.

The newspaper found Kentucky League of Cities Executive Director Sylvia Lovely’s compensation package, for example, had been boosted by 25.5 percent to $315,000 since 2006. Lovely also drives a BMW SUV, which the league pays for.

Deputy Director Neil Hackworth has a total compensation package of $246,994 and William Hamilton, director of insurance services, receives $225,520. All three also have cars and fuel paid for by the league.

Some of the spending in question included an $8,100 trip to Dublin, Ireland, that Lovely and her husband took with Greater Louisville Inc., the city’s chamber of commerce and economic development agency.

According to expense records, at least $19,000 was spent for the travel of league members and their spouses; almost $21,000 was spent at Lexington’s Azur restaurant (owned by Bernard Lovely, Sylvia’s husband) over a three-year period; and approximately $2,300 was spent for Lovely and her husband to attend Barack Obama’s inauguration ceremony.

Lovely says she believes the league is serving cities well.

“I think we stay in touch with those cities,” Lovely said. “If I could, I’d be in every one of them because my heart is breaking for them for what they’re going through. Our travel brings back so much more. If I could explain it to them, I would.”

— Ronica Shannon

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