Three new sources of revenue are helping Ketchum's budget, but some city departments are struggling to recruit and keep employees due to the high cost of living in the area, according to city officials.
City Administrator Ron LeBlanc, department heads and the City Council discussed this week portions of the preliminary city budget for fiscal year 2006.
The budget for fiscal year 2006 is recommended at just over $9,102,000. Last year's budget was $8,195,135.
"It's a level-of-service budget," LeBlanc said. "We're not doing anything exotic."
Half of the $1 million increase comes from an accounting practice in which fees collected are later transferred into appropriate categories.
The other half is due to escalating employee health care costs and salary increases, LeBlanc said.
The city took $252,000 from its cash reserves in order to balance the preliminary budget. That amount could be reduced depending on the sum given to the city by the county in its bi-annual payment, LeBlanc said.
"(Balancing the budget) comes down to two things: understanding finance and understanding personnel," LeBlanc said. "If we can master those two, we can master anything."
The budget includes a 2.5 percent cost of living increase for city employees, plus another 3 percent increase contingent upon successful evaluations.
Additional revenue generation is built into next year's budget through expanded development impact fees, a new solid-waste franchise fee and a $25 business license fee.
The Ketchum City Council this month voted to expand the categories for which the city can collect development impact fees.
Previously, only water and sewer were categories named in city ordinance. When the amended law goes into effect next month, it will allow fees to be collected for development impacts on streets, law enforcement, fire protection, and parks and recreation, in addition to water and sewer.
The city anticipates collecting an additional $330,000 annually from impact fees.
A new franchise negotiated with Clear Creek Disposal will bring in a projected $90,000.
Franchises with power, gas, cable and garbage companies are all at their maximum for franchise fees, LeBlanc said.
The new business fee will add just $28,000 to the city's coffers.
Property taxes continue to be the largest source of income for the city, amounting to $2,635,000, or 29 percent of the budget, LeBlanc said.
Barring a voter-approved levy, annexation or new growth, however, the city must cap its property tax rate at 3 percent, per Idaho law.
The fun factor helps contribute to the city's budget.
"Liquor sales have been a real big plus for us here in Ketchum," LeBlanc said.
Local option taxes amount to 22 percent of the budget, or $1,992,000.
More than $5.6 million is allocated for the city's Capital Improvement Program, which seeks to make improvements focusing on the downtown core.
During Monday's budget hearing, Ketchum Police Chief Cory Lyman told City Council members his department is down two officers, leaving department heads and other officers to fill in shifts.
"We're killing our guys," he said. "(Assistant Police Chief) Mike (McNeil) and I are working their shifts so they can go on vacation."
Officers are leaving for other jobs because of the cost of housing, Lyman said.
"Our pay is reasonably good for Idaho," he said. But, "we're losing officers who are taking significant pay cuts to go where they can afford to buy houses."
Lyman is looking to California and Washington for recruiting because those states have a cost of living comparable to the Wood River Valley.
"Those people had housing prices similar to here so it wasn't a big step," Lyman said.
During Tuesday's discussion with Utilities Manager Steve Hansen, the council agreed to put a $2.5 million bond on November's ballot to replace the Ketchum Spring Water System line in the city core.
Hansen also said he wants the city to raise water rates, increasing residential customers' bills between 3 and 7 percent, depending on usage.
"The more you use, the more you pay," LeBlanc said.
The last water-rate increase occurred in 2001.
Budget meetings, which are open to the public, are scheduled to resume Tuesday, July 19, at noon in City Hall.
