Wednesday, June 30, 2004

Ketchum weighs 2005 budget of $9.7 million

Mayor proposes using some reserves to balance expenses

---

By GREGORY FOLEY
Express Staff Writer

Ketchum Mayor Ed Simon this week presented a nearly $9.7 million budget for the 2004-2005 fiscal year, warning that cuts made to the spending plan might leave some residents and city staffers feeling slightly shortchanged.

In a special meeting of the Ketchum City Council Monday, June 28, Simon and City Administrator Ron LeBlanc delivered the hefty, three-pound document amid admonitions that the city’s anticipated expenses next fiscal year are expected to be greater than its foreseen revenues.

"It is a very tight and lean budget," Simon said. "It has been culled and scrutinized by the department heads but it will probably be culled some more."

In an ensuing discussion on the merits of the proposed plan—which will guide the city’s spending from October 2004 through September 2005—Council President Randy Hall sarcastically agreed that more cuts could come.

"It seems like we’ve got a lot of fun choices to make in the next month or so," Hall said.

Indeed, the recommended budget is tight, with more than $400,000 already cut from an original draft that called for more than $10 million in city spending.

LeBlanc and the city’s department heads in recent weeks have been forced to slash many requests from proposed departmental budgets.

The Street Department alone saw approximately $160,000 cut from its original spending plan issued in May.

The Police Department budget saw funds for a new motorcycle cut. Instead, the city plans to purchase four new mountain bikes for officers to use on patrol.

"The financial challenges facing the city of Ketchum have made this year particularly difficult," Simon noted in a June 23 letter to the City Council.

LeBlanc concurred Monday as he addressed the council.

"The city is taking in less money than we’re spending," he said. "Current revenue does not equal current expenses."

The proposed budget does include a standard 1.5 percent salary cost-of-living-adjustment for all city employees.

However, the mayor’s recommended plan calls for eliminating all so-called "step increases" built into the city’s employee compensation system.

The city’s General Fund, which covers all of its expenditures except those related to providing water and sewer services, is proposed to allocate approximately $7,930,000 in the 2004-2005 fiscal year. The figure is a less than 1 percent increase from the approximately $7,860,000 approved in the 2003-2004 General Fund.

The draft budget also proposes spending approximately $1.7 million to provide water and wastewater services. The water and wastewater divisions of the city’s Utilities Department operate budgets independently from the General Fund.

To balance the budget, LeBlanc said he was forced to use nearly $197,000 from the city’s projected cash reserve—or fund balance—of $1,178,000. The projected fund balance for the 2004-2005 fiscal year is approximately $981,000.

The city, however, is also faced with drawing $318,000 from its reserves to cover two major expenses incurred in previous fiscal years. LeBlanc said the city owes $165,000 for construction of the city’s bike path along Warm Springs Road and $153,000 to complete a matching payment owed for streetscape improvements made in 2001 along Sun Valley Road.

LeBlanc said portions of the city’s cash reserves have been applied toward balancing the budget in six of the last 10 years.

"I think that all Idaho cities are having a difficult budget year," LeBlanc said.

Despite the cuts, many popular services the city pays for through contracts with independent agencies are set to receive funding in 2004-2005. Ketchum Area Rapid Transit, the Peak Bus and the Blaine-Ketchum Housing Authority are all slated to receive substantial support from the city.

In addition, the budget calls for initiating a long-awaited capital-improvement plan. The City Council will be asked in the coming months to determine what projects should take priority and how they should be funded.

Although revenues continue to lag behind expenses, LeBlanc said the outlook for city finances is positive. Revenues from property taxes, local option taxes and franchise taxes—which combined make up 60 percent of the city’s income—are expected to rise by more than 5 percent in the 2004-2005 fiscal year.

The city is scheduled to continue its budget hearings on July 8, July 13, July 15 and July 19.

The Idaho Mountain Express is distributed free to residents and guests throughout the Sun Valley, Idaho resort area community. Subscribers to the Idaho Mountain Express will read these stories and others in this week's issue.