The overall feel of the fiscal court was the city wanted the change so they could enact a restaurant tax within the city limits and the county did not want to be associated with any new tax creation.
The City of Leitchfield cannot enact a restaurant tax unless they have a tourism commission.
After hearing the first reading of the Ordinance Relating to the Establishment of a Tourism Convention Commission for Leitchfield, the council explained that the money generated by the 1% room transient tax and a possible restaurant tax would and could only legally be used for items that would generate tourism within the city. The money could not be deposited into the city’s general fund.
Councilman Steven Elder explained that he felt this was the fairest way to generate the needed revenue for new tourism attractions, such as parks and festivals, and not pass the expense onto City of Leitchfield residence only. He said, “This is a fair way to not tax our citizens fully for a project that others from other communities will use. And all we’re asking for is, if we build these parks and those people are allowed to continue to come into our city, and we want them to come into our city, but let’s make them pay for part of that. Let’s not put it all on you or me or any of the other residents that are here.” Elder said the same amount of money could be generated by upping the insurance premium tax or doubling the city property tax. The amount of suspected income generated was not given.
Councilman Elder’s comments were in response to Citizen Ann Huff’s complaint that a restaurant tax was unfair to those who eat out. She said her and her husband eat out everyday spending at least $20 per day. Elder calculated that they would pay approximately $150-$175 more per year with the restaurant tax. Huff said “I would rather see the whole city pay more taxes one time then I would every time you go out to eat and have it chipped away.” She also expressed concern that families would eat out less due to the higher costs and therefore hurting the restaurants.
Councilman Leon Shaw said, “Don’t you think the kids of the city and county would be hurt if we don’t have some kind of recreation for them in the future?”
Elder said, “Only 4th and 5th Class cities can have the restaurant tax. It’s setup that way because communities our size cannot promote ourselves very well with the limited budget a 6000 citizen city can do. So, the statutes were setup to enable us to promote ourselves to the rest of the world and the state to bring people into our community and spend dollars. And that’s my case for restaurants, that we’re going to take this money and do our best to bring more people here and the more people we bring here, the more people will go out and eat. I welcome anyone to check any other city that has done this and you will see that their revenues are continuing to increase.”
Mayor William Thomason said he hears constantly that the city does not provide enough activities for the youth and a restaurant tax is the fairest way to generate the revenue needed to add new features. The words splash park, walking trails, ballparks and festivals were kicked around during the discussion.
Councilman Billy Dallas said he didn’t feel the city was very well represented through the county’s tourism commission. He said the community will benefit young and old. The activities would not just be geared for children.
Mayor Thomason said the city’s tourism commission would have office space at the Centre on Main since the city owns 25% of the building.
No action was taken on a restaurant tax.
The ordinance is as follows:
An Ordinance Relating to the Establishment of a Tourism Convention Commission for Leitchfield, KY
Whereas, The Leitchfield City Council, after extensive study and review, determined that it is in the best interest of the city to establish a tourism and convention commission for the purpose of promoting and developing convention and tourist activities and facilities in the City of Leitchfield, KY;
Now, therefore, be it ordained by the City of Leitchfield, Kentucky as follows:
Section One: There is hereby established a Convention and Tourist Commission for Leitchfield, Kentucky pursuant to KRS 91A.350 for the purpose of promoting and eveloping convention activities and tourist activities and facilities in the said City.
Section Two: The official name of the body herein created shall be designated as “The City of Leitchfield Tourism and Convention Commission.”
Section Three: The members of the Commission herein established shall be appointed pursuant to KRS 91A.360 in the following manner:
- There shall be seven (7) members appointed by the Leitchfield City Mayor as follows:
(2). One (1) Commissioner shall be appointed from a list of three (3) or more names submitted by the local restaurant association or associations. If no formal local restaurant association or associations exist upon the establishment of the Commission or upon the expiration of the term of a Commissioner appointed pursuant to this section, the one (1) Commissioner shall be appointed by the Leitchfield City Mayor from persons residing within the city representing a local restaurant.
(3). One (1) Commissioner shall be appointed from a list of three (3) or more names submitted by the Chamber of Commerce.
(4). Two (2) Commissioners shall be appointed by the Leitchfield City Mayor.
Section Four: The Commissioners shall be appointed for terms for three (3) years, provided, that in making the initial appointments, the Leitchfield City Mayor shall appoint two (2) Commissioners for a term of three (3) years, two (2) Commissioners for a term of two (2) years and three (3) Commissioners for a term of one (1) year. There shall be no limitation on the number of terms to which a Commissioner is reappointed. Subsequent appointments shall be for a term of three (3) years.
In the event a vacancy shall occur on the Commission, the replacement shall be appointed as prescribed above for the remaining terms of the Commissioner who created the vacancy.
Section Five: The Commission shall meet at least monthly and have special meetings which may be called by the chairman or any two commissioners upon the giving of five (5) days advance oral or written notice. The Commission shall elect a Chairman and Treasurer at its first meeting following its establishment and annually on its first meeting in July or each subsequent year. The Commission shall further elect a Vice-Chairman to preside over meetings in the absence of the chairman. Action may be taken by a majority vote of the Commissioners at any properly convened meeting at which a quorum is present. The Commission shall have the powers specified by the Kentucky Revised Statutes and my employ such personnel as may be reasonably necessary to accomplish the purposes of the Commission consistent with the provisions of local ordinances.
Section Six: Pursuant to KRS 91A.390, the Commission shall annually submit to the Leitchfield City Council a request for funds for the operations of the Commission. To provide funds for the operation of the Commission, there is imposed a transient room tax of one (1%) percent on the rent of every occupancy of a suite, room or rooms, charged by all persons, companies, corporations, or other like or similar persons, groups, or organizations doing business as motor courts, motels, hotels, inns, or like or similar accommodations businesses. The transient room tax shall not apply to the rental or leasing of an apartment supplied by an individual or business that regularly holds itself out as exclusively providing apartments. Apartment means a room or set of rooms, fitted especially with a kitchen and usually leased as a swelling for a minimum period of thirty (30) days or more.
Section Seven: The transient room tax shall be collected by the operators of the businesses described in Section Six and be paid over to the City of Leitchfield and the said City is authorized to take all appropriate actions to provide for the collection and enforcement of these taxes. As required by KRS 91A.390 (1), The proceeds of this tax shall be paid on a monthly basis. Each collecting agent shall file a return in duplicate on a form which is provided for such purpose. The failure to properly fill out and return said reporting form and the taxes shall be subject to such civil and criminal penalties as are available in the Kentucky Revised Statutes for failure to make required disposition of property as provided by the Kentucky Revised Statutes and this Ordinance. In addition, the failure to pay said taxes within the required time set out above, a penalty of six (6) percent shall be added to the amount due.
Section Eight: All tax monies received by the City of Leitchfield from the collection of the one (1%) percent transient room taxes shall be immediately disbursed to the Leitchfield Tourism and Convention Commission to be used for the purpose of promoting and developing convention and tourist activities and facilities.
Section Nine: All moneys collected from the transient room tax and any restaurant tax which may be hereinafter imposed, shall be maintained in an account separate and unique from all other funds and revenues collected and shall be considered tax revenue for the purposes of KRS 68.100 and KRS 92.330.
Section Ten: The treasurer and any other officer of the Commission writing checks and/or handling funds shall be bonded in an amount commensurate with the largest amount of money on hand in any given year. The Commission shall make an itemized quarterly finance report to the Leitchfield City council showing the expenses and income for each month and shall further present copies of its annual budget to said governmental entities.
Section Eleven: Pursuant to KRS 91A.390 (5), the books of the Commission and its account as established pursuant to Section Nine thereof shall be audited annually by an independent auditor who shall make a report to the Commission, to the associations submitted lists of names from which Commission members are selected, to the Leitchfield City Mayor, to the State Auditor of Public Accounts and to the Leitchfield City Council.