Wednesday, September 10, 2008

Ketchum adjusts housing fund

In-lieu money to be kept in-house

Express Staff Writer

In a unanimous vote on Tuesday, Sept. 2, the Ketchum City Council put in place a resolution that keeps in-lieu housing fees collected in the city in a city-managed bank account.

That is in fact a switch.

The resolution states the city has determined that a new policy is needed "so the city of Ketchum has more control on where and how the money is being spent."

In-lieu housing funds are created when a developer opts to pay for rather than build deed-restricted housing. The account is running at a balance of just less than $500,000.

"The resolution was basically defunct because it described a way of doing business that we stopped in 2005," said Councilman Larry Helzel. "The new resolution just puts us in conformity with current practice."

Previously, the money was deposited in an account managed by the Blaine County Housing Authority, but Ketchum has not been doing that for several years.

Helzel said a portion of funds originated in Ketchum was used to defray operating expenses of the housing authority in 2005.

"The authority borrowed money from the Ketchum trust," Helzel said. "They paid interest on it. Now at the end of this fiscal year it's going to be paid back."

Moreover, Helzel said it was curious to discover that the unanticipated loan had been recorded in ledgers, but without a note.

"Usually people don't engage in commercial indebtedness without a note," he said. "We're just delighted to have all of this squared up."

Helzel said the new resolution actually expands the city's ability to put in-lieu housing fees to work for community housing. Permitted expenses, for example, now include "buy-downs" under which Ketchum could allocate funds to the Blaine County Housing Authority as down payments on homes to be resold or rented at less than market rates.

"I don't want to give the impression that Ketchum is taking a step back," Helzel said. "I think the new ordinance is much more descriptive on giving us a more dynamic platform on what we can do with this money."

Ketchum had collected more than the $500,000 in the in-lieu account. The city has loaned $717,914 from the fund to the Ketchum Urban Renewal Agency to purchase property at the corners of First Street and Washington Avenue and at Sun Valley Road and East Avenue.

Additionally, the account was used to pay for an architect to examine three city-owned sites and their suitability for workforce housing, Helzel said. He said the study is "very useful" for developing the city's housing plan in the next three years.

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