Wednesday, September 5, 2007

Downturn in sales tax concerns Ketchum

Fire forces delay in final budget adoption


By EXPRESS STAFF
Express Staff Writer

Faced with a projected $200,000 shortfall in the last month of the current fiscal year because of ailing local option tax collections, the Ketchum City Council is considering dipping into its $500,000 capital reserve fund to make up the difference.

Details on how the city would resolve its current financial pinch, as well as financial hurdles in the 2007-2008 fiscal year, were scheduled to hammered out at a meeting yesterday evening.

After the Castle Rock Fire slammed the local economy with a one-two punch of reduced visitors on smoke-filled streets and lost local tax revenues, the City Council last week held two days of discussions on an already adopted tentative budget.

"We're not going to recover economically until the resort opens Thanksgiving weekend," City Administrator Ron LeBlanc told the council Aug. 30 during a budget overview. During those two days of special council meetings, Aug. 30 and 31, as the fire was winding down, the council went over each city department's revenues and expenditures trying to make the numbers add up.

The Castle Rock Fire, which started from a lightening strike on Aug. 16, forced the city to get an extension deadline for sending its final budget to Blaine County. That deadline is now Sept. 17. The council was scheduled to have a public hearing on the budget at its regular meeting Tuesday night, Sept. 4.

Much of the early discussion dealt with revenues from the local option tax, a sales tax the city collects on good and services, and how predictions for this variable amount and other city revenues will impact the proposed general fund revenues for the 2007-2008 fiscal year. LeBlanc pointed out that the LOT is the only variable tax that factors in to city finances.

The property tax is set by law at a 3-percent increase annually.

"Our LOT revenues have not increased at all over five years," LeBlanc told the council.

The city brings in about $2 million a year. Also, the city would like to keep a 5 percent cushion in the general fund, which would equal roughly $500,000 of the overall $10 million budget.

"This is why we need to have a rainy-day fund," LeBlanc told the council. "It's raining out there. We need to spend less than we take in next year."

Council members agreed they would like to retain the 5 percent cushion.

"I would like to get to 5 percent," said councilman Ron Parsons.

"There is a $200,000 change in what we can do next year to get up to 5 percent," Councilman Steve Shafran said.

In other actions at the two special meetings, the council:

· Approved a resolution authorizing a cost-sharing agreement with the U.S. Forest Service after a state of local emergency was declared after the Castle Rock Fire began. The fire incident commander asked that a sole local entity, the city of Ketchum, enter into the agreement to simplify fire cost accounting. City Administrator Ron LeBlanc said outside the meeting that he thought the entire estimated local costs of $2.1 million for fighting the fire would be reimbursed by the Idaho Department of Homeland Security.




 Local Weather 
Search archives:


Copyright © 2019 Express Publishing Inc.   Terms of Use   Privacy Policy
All Rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Express Publishing Inc. is prohibited. 

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.