Three years after a Franklin County judge dismissed the case, Fort Wright had its day in front of the Kentucky Supreme Court.

Thursday, justices heard oral arguments in City of Fort Wright v. Board of Trustees of the Kentucky Retirement Systems (KRS). City officials accused the KRS board of improper investments and sought restitution. In 2018, Judge Thomas Wingate dismissed the case and Mayor Dave Hatter vowed to appeal the decision.

At the time, the KRS board also oversaw the County Employees Retirement System (CERS) because the systems were combined. Pension costs for Fort Wright and other cities had steadily increased for years, and many questioned whether local governments paid more to benefit KRS because that system had a greater unfunded liability.

Since the 2018 dismissal, the General Assembly passed House Bill 484 in 2020 to #FreeCERS. That Kentucky League of Cities (KLC) initiative established independent governance of both CERS and KRS within one administrative structure known as the Kentucky Public Pensions Authority (KPPA). In July, CERS approved its first CEO and general counsel following separation.

Thursday’s arguments focused on whether statutes allow the types of investments made by the board. Justices quizzed counsel for both Fort Wright and KRS on topics such as lists of approved investments and hedge funds.

Justice Laurance VanMeter questioned the applicability of Kentucky Revised Statute 386.020. Both sides argued why their side’s interpretation of authorized investments of trust funds was key to deciding this case.

Justices will now consider the matter. The Court provided no timeline for a ruling.