Sun Valley targets KART cuts, marketing increases

A special meeting of the Sun Valley City Council convened on Wednesday to discuss the budget philosophy for fiscal year 1998-99.

Since tourism is the primary moneymaker, many of the year-round expenses are associated with services aimed at maintaining Sun Valley’s attraction for visitors. Expenses such as Ketchum Area Rapid Transit, KART, and resort marketing are paramount.

KART is funded in a 60/40 split between the cities of Ketchum and Sun Valley with Ketchum paying the larger portion. Negotiations on KART funding amounts are slated to begin next month between the two cities.

Council members expressed concern over the expense of the KART service. The cost of the program is going up while ridership is on the decline, and federal funding has been eliminated due to budget cutbacks at the national level. The council discussed reducing service during slack. A precise definition of "slack periods," the financially slow time between tourist seasons, will be determined.

Elkhorn Resort also has a stake in the KART debate. KART brings in a portion of the resort’s customer base, and Elkhorn does not want to see its visitors going elsewhere.

Marketing was another issue of debate Wednesday evening. Sun Valley has one of the smallest budgets for advertising of any ski resort in the country. If the city wants to stay competitive in the business of tourism, more money needs to be devoted to exposure on a larger scale.

Revenues for the city are generated by two methods primarily, the Local Option Tax or LOT and property taxes. The LOT is unique in that it is a special tax designed for resort communities that are greatly impacted by tourism. The LOT is collected in the form of a sales tax. Items and services purchased in Sun Valley and Ketchum have a two percent sales tax over and above the state and federal sales tax.

The budget for 1998-99 is expected to hit approximately $2.5 million, slightly less than the ’97 budget. The city is not facing a budget crisis presently, but costs are rising across the board. The council must determine whether or not LOT and property taxes will sustain the city’s expenditures or whether alternative measures need be implemented, such as a bond issue.

Long-range capital expenditures, which include improvements to streetscapes, roads and parks, are items the council reviewed in attempting to form a five-year plan on the city’s goals and commitments.