Wednesday, May 16, 2007

Ketchum poised for change

Lawmakers take a look under the hood of the new Ketchum machine


By GREG STAHL
Express Staff Writer

Randy Hall Steve Shafran

First in a two-part series on changes being implemented at Ketchum City Hall.

Ketchum is a city in transition, a jurisdiction shifting into a new legislative landscape with more moving parts than it's ever had before.

There's a URA, a CDC, a DMP and TDRs, all set in the backdrop of the traditional city government: a City Council, Planning and Zoning Commission and associated staffs working on the everyday tasks inherent to a wealthy resort city in the throws of ongoing demographic evolution.

How all the cogs work together to move the machine forward is still being sorted out. Ketchum Mayor Randy Hall and Councilman Steve Shafran said last week, however, the city is poised to accomplish great things, and that has a lot to do with the new parts of the machine.

"All these little worlds are interconnected, but they are their own little worlds," Shafran said.

There has been confusion among city residents about how things are supposed to work. That confusion has included allegations about the city's financial health and concerns about construction of the new Fourth Street Heritage Corridor, which is arguably a coming-out project for the new, multifaceted Ketchum machine.

Nonetheless, Hall and Shafran said there is no conspiracy, and Ketchum's financial and political health are firm.

"My heart and conscience are clear," Shafran said. "We're not doing anything wrong. We have a communication challenge, an information and communication challenge, and we're going to meet that challenge."

There are two distinct and new parts of Ketchum's new identity: an Urban Renewal Agency and a Community Development Corporation. The URA is a money-making mechanism afforded to cities that designate 10 percent of their tax bases as part of urban renewal districts. The CDC is a private corporation comprised of volunteers working on collaborative downtown improvement projects.

In Ketchum, the 10 percent Urban Renewal District translates to 836 properties.

Inside the boundaries of that district, the city will receive money from increases in the tax rolls that occur through new development or inflation. The URA will expire in 25 years, but projections indicate the city could garner $20 million as its total gross earnings through the mechanism over that time period. When the URA expires, the property taxes will revert to Blaine County.

The goal is "to create a municipal environment that is competitive," Shafran said. "The URA's mission is to create the resort environment that makes it competitive in Ketchum's own way."

The URA has a board of directors, and that board is one and the same as the Ketchum City Council. There are no plans to change that formula.

The gist, however, remains. The URA is a new, temporary fundraising arm for the city, and it could fund underground parking, affordable housing and downtown improvements, among other projects.

"This is seed money," Hall said. "We're creating some of this necessary infrastructure, so that when we do get the hotels, what we're doing compliments them. And then our local option tax will go up" through improved tourism.

The URA has the ability to fund projects at the City Council or Community Development Corporation levels, but Shafran said he envisions the URA board—the City Council—holding the purse strings pretty tightly.

Hall and Shafran said money garnered through the URA is planned to be used much the same as money stored in the city's Capital Improvements Program fund. That fund, too, is something relatively new in Ketchum. In city budgets it used to be called a "land acquisition fund." Under Capital Improvements Fund definitions, it is more diverse and more conventional.

"Here's the city doing what it's always done," Shafran said. "Part of the city has been and will continue to be to use the Capital Improvements Program. It's a pre-existing cash-flow statement. A meaningful amount of money from the URA will be spent similarly to the CIP, by and large on municipal infrastructure."

The first URA disbursement will arrive in January 2008, but the amount to be disbursed is in question. Calculating that figure will be an additional layer of work for the county assessor, and both Hall and Shafran said the city is interested in obtaining a dollar figure for that first disbursement as soon as possible.

That said, the city has already borrowed against the money that it will earn through the URA. Last month the Ketchum City Council—and in its capacity as the URA—voted unanimously to spend $3.2 million to purchase the Mountain West Bank property at the corner of Sun Valley Road and East Avenue to prepare for construction of a town plaza on East Avenue between Fourth Street and Sun Valley Road.

The City Council and URA actions were interdependent actions. The council voted first to authorize the transfer of $640,000 to the URA as earnest money for the property acquisition, and conditioned the vote on the URA's approval of a resolution to finance the entire property.

The $640,000 constituted a 20 percent down payment.

Under direction from city leaders, the bank will loan another 30 percent of the financing in six months and the remaining 50 percent upon the project's completion, said City Administrator Ron LeBlanc.

The initial $640,000 should be repaid, however.

"I would anticipate, and I can't predict the future, that the URA will reimburse the affordable housing fund for that amount of money," LeBlanc said.

In the meantime, the city is patiently awaiting these funds that will come.

"As with anything new—and especially anything this complicated—it's going to take a while," Hall said. "But when the big check comes in, probably in year three, people aren't going to care anymore."

Next Wednesday: Digging under the surface of the Ketchum Community Development Corporation, what it is and what it could become.




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