Fiscal Court Discusses Community Action's Request For County To Cosign For Part of $500K Loan

Ten-County Organization Asking Counties To Cosign For Portions According To Population

Darren Doyle, story:
Judge Executive Wil Cannon read proposed resolution EC19-28 to the fiscal court today that requested that Edmonson County government cosign a portion of a loan from a state financial institution totaling $500,000 for Community Action of Southern Kentucky, a non-profit organization that provides various services to a regional ten-county area, including Edmonson County.

Cannon, who serves as Vice Chairman on CA's Board of Directors, said the organization is in financial trouble after poor management and bad budgeting over a number of years.

During the meeting, Cannon said a former CEO, who he didn't name in open court, in his opinion, was to blame for the financial problems facing the organization due to poor decision making. He said the organization needed an influx of capital to continue, and that the county was being asked to cosign for 4% of the total amount, which is $20,000. 

While Cannon was in favor of the local effort made by the Edmonson County office of CASOKY, he noted that the county did not have any reserve funds in the event that they would have to be on the hook for the cosigned amount.

Cannon also said that Treasurer Tammi Willhite requested a financial statement from CASOKY for their last quarter, which was presented to magistrates today. Cannon reported the statement showed a $119,000 loss in one quarter alone.

The Edmonson Voice contacted to the Chairperson of the CASOKY Board, local resident Vickie Walker, to ask about the loan request and if she could expound on the financial problems facing the organization. She said she wasn't aware of a request being made for local government to cosign a loan; however, she said she knew measures would have to be taken in order to keep the organization's programs running. She also said the financial strain of the organization was due to "bad work ethic" and "bad decisions" from the former director, who she did not name.

During the meeting, Cannon said each of the ten counties were being asked to cosign an amount according to the county's population and programs that serve those individual counties. Warren County, for example, was being asked for a much higher cosigned amount of 43%, or $215,000. CASOKY provides public transportation in Warren County, known as "GO BG Transit."

County Attorney Greg Vincent asked if CASOKY had put a clear plan in place to pay back the loan and if so, if they had provided that plan to the judge executive's office. Cannon said they had not provided any such plan. 

After more discussion, Magistrate Edd Rich asked the court to table the motion until more research could be done regarding payback of the loan and specific requirements from the fiscal court. The motion for the tabling passed.

​We also spoke with Judge Cannon after the meeting for more information about the loan and asked what he knew about the financial problems.

"In 2014, Community Action hired a new director with a financial background who was supposed to help with some financial issues the organization was having, but instead of them getting better, they only got worse," he said. 

Melissa Weaver was hired as CASOKY's executive director in December 2014 and remained in the role until she was replaced in 2018 by current director, Dr. Donald Butler.

"I'll give credit to Dr. Butler for the job he's done in keeping things going after the mess they got into," Cannon said. "He's been a miracle worker but I don't think this loan alone is going to solve their long term problems."

Cannon said if the county agrees to cosign the loan he didn't think the organization would default on the loan and put the county on the hook; however, it was still a risk for a poor county, even though multiple programs were provided to Edmonson County residents.

We contacted local coordinator for Edmonson County Community Action Regina Vessels and asked her to discuss the local CASOKY programs available to Edmonson County residents. She listed the following:

• Low-Income Home Energy Assistance Program (LIHEAP) that provides heating assistance to eligible households. While this program is not funded by CASOKY, they administer the program. 
• Feeding America Commodity Program: Serves 300 people in the county--once per month any county resident can receive a box of food containing meat, cheese, and vegetable products. Proof of income is not required but must show photo ID. The program is funded by Feeding America but administered by CASOKY.
• Senior Center: located in the Edmonson County Public Library, provides meals, activities, and some transportation to seniors ages 60 and over
• Head Start: provides educational daycare to 20 children, ages 3 and 4--a preschool environment that provides early educational development. Must provide income documentation.
• Foster Grandparent Program: allows seniors ages 55 and over to mentor children at Head Start and special needs children. Grandparents are paid.
• Kentucky Health Benefits Exchange: helps find insurance options based on income--Part of Obamacare initiative

Cannon said he personally would be in favor of the cosign this one time simply to help Edmonson County programs. He also said the board was to blame for the issues the organization faces.

"The board is at fault for hiring the new director in 2014, and I'm also blaming myself because I was part of that board," he said. "I was a new Judge Executive and I was learning. There were complaints being brought to the board but I was told the complaints came from a disgruntled former employee. This is just my opinion, but nothing was done when it should have been, but again, I put the blame on myself as well."

The issue is supposed to be discussed again at the next fiscal court meeting.