By Patricia A. Scheyer
NKyTribune reporter
Florence Mayor Julie Aubuchon delivered a budget address this week, heralding the final approach of the new $57,828,663 budget, but also highlighting the difficulties that go with being one of the final approve or disapprove decision makers on a budget for a city the size of Florence. She also promised a full accounting of a federal investigation and audit underway about ‘revenue diversions’ discovered in 2025.
“I want our residents to know that delivering a balanced budget is of paramount importance to not only me as Mayor but also to City Council,” Mayor Aubuchon said. “Our residents deserve nothing less.”
City Administrator Joshua Hunt starts the city’s budget process early in the year, and when they start hammering out the details, council members come to a budget workshop, all in the name of transparency and to make sure that everyone is on the same page as to what is going into the budget.
While each department has a baseline budget that they are asked to keep within, each year there are additional items that have to be approved, such as vehicles for fire and police or extra personnel.
“As Florence continues to develop, we are seeing increased demands across all departments,” Aubuchon said. “For this upcoming Fiscal Year, total General fund revenues are projected to grow at a healthy 2.4 percent rate next year despite additional projected property tax cuts, and an insurance premium tax rate reduction which will go into effect next fiscal year.”
Florence keeps track of their finances, and the most recent review confirms that their financial position is excellent.
However, despite the excellent financial condition, the city has faced a significant challenge as the city discovered a revenue diversion. The definition of revenue diversion is ‘the illegal or unauthorized redirection of funds from their intended purpose to another.’ It can appear as an entity who siphons designated funds for unauthorized uses, or it can be embezzlement.
“This diversion of general fund revenue from a defined revenue source within our budgets was identified in 2025, lasted for over three years and began before my time as mayor,” Aubuchon stated. “This crime remains under federal investigation, and I am committed to ensuring justice is served and accountability is not avoided by any parties involved. Financial misconduct is a painful situation, and is all too familiar for longtime Florence residents. For myself and my staff, it has reinforced the need for strengthened oversight, enhanced accountability, and more robust internal controls across the organization.”
As the problem came to light, more investigation resulted in remedial methods called operational investments which were put in place, investments in structural, procedural, staffing, and technology improvements that are designed to strengthen financial controls and improve transparency while assuring confidence in the minds of the residents that the city has a better system of control in place for financial operations.
“While these investments carry a cost, the cost of inaction would be significantly greater,” Aubuchon said.
With the federal investigation temporarily limiting certain audit and investigative materials, the city did obtain enough financial information to evaluate the prior year trends so the new budget could be constructed and prepared for the upcoming fiscal year. The city took the advice of outside professionals to ensure that all future budgets will be built on a stronger and more accountable foundation.
Mayor Aubuchon said that since becoming mayor she has always focused on the goals of providing for public safety, maintaining infrastructure, stimulating economic development, providing a high quality of life for residents, and keeping taxes low. This year she has added another priority, to safeguard revenue streams and provide transparency into the use of taxpayer dollars.
“Early this year I instructed Finance Director, Jason Collins, to engage an outside auditing firm to conduct an Internal Controls audit and Risk Assessment,” Aubuchon stated. “Once I learned of the internal control breakdowns that had been going on for many years which allowed the revenue diversion to take place, I found it critical to allow an independent third party to confirm procedural, staffing, governance and oversight gaps identified by my staff. Moreover, I sought to validate our proposed solutions to ensure that these control failures are fully addressed, and cannot occur again.”
In the spring she authorized a Louisville-based auditing team from Dean Dorton Public Accounting to conduct a controls audit and risk assessment of the Finance Administration and Human Resource departments, and they returned preliminary findings and observations, adding the quote that they “observed an organization with good intent and a strong commitment to serving the community”. They also said that “many of the observations share common themes, including limited segregation of duties, reliance on a small number of key individuals, informal or undocumented processes, and gaps in consistent monitoring and oversight.”
The key takeaway from the Dean Dorton firm was that “the observations in this report reflect an organization that continues to meet operational demands through the experience, dedication, and judgement of its staff and management, while formal controls, documentation and oversight mechanisms have not fully evolved at the same pace as the city’s growth and complexity.”
Aubuchon promised to release a full and comprehensive report on the FBI investigation once it is completed. In the meantime, the city will operate on the recommendations and findings of the Dean Dorton report in order to keep pace with the growing city.
“The final point I would like to make is that with the help of our external auditors, the Finance Department has proposed three important structural changes which will better align our departments and funds to shifting budgetary needs,” Aubuchon explained.
“First, we plan to separate our IT budget from the larger Administrative budget. This change enables tighter technology-spend tracking and increases overall accountability on a 2.6 million dollar IT budget. Second, we are creating a Rentals Fund to account for the business-type activities at the city’s park shelters, Nature Park event center and Gathering House. And finally, the creation of an Opioid Abatement Fund will house national and state settlement dollars received from Opioid manufacturers and distributors. Once this special revenue fund is set up in July, we plan to utilize third party administrators to allocate these settlement dollars to Florence residents who are going through opioid treatment and remediation programs in our community. With over 1 million settlement dollars received to date, the city can make a big difference in our residents’ lives who are struggling with drug addiction and recovery.”
She ended the report reiterating the good news that the city’s projected revenues for the General Fund are up 2.4 percent, and the city is doing well overall.
The budget will have a first and second reading at the next few meetings to be fully operational before the July 1 deadline.