Wednesday, February 11, 2009

Ketchum revises budget forecast once again

Shortfall could impact possible police merger

With the recent release of local-option tax figures for December, Ketchum City Administrator Gary Marks has revised revenue projections for the second time in as many weeks, which could leave the city with a $600,000 budget shortfall.

Marks said on Tuesday that the approximately $184,000 in LOT revenue for December was the lowest it's been for that month since 1997. As a result, Marks revised the LOT revenue forecast for the remainder of the fiscal year, projecting a drop from $2.2 million, as originally anticipated during the budget process in September, to $1.7 million.

Local-option tax revenue comes from a 2 percent sales tax on lodging and by-the-glass liquor sales, and a 1 percent tax on retail sales and building materials, with the goal of offsetting the impacts of tourism on city services and infrastructure.

As well, Marks said the city is also looking at a decline in development revenues, including building permits and impact fees, which could likely come in at more than $300,000 less than initially budgeted.

With both of these decreases, Marks is now estimating a $950,000 drop in the city's revenue for fiscal 2009.

On the positive side, Marks said in an interview at the end of January that the city is on track to spend $350,000 less than planned, largely due to a number of vacancies in the Police Department, including former Chief Cory Lyman's position.

That still leaves the city looking at a $600,000 difference between planned expenditures and revenues, as opposed to the $250,000 shortfall Marks predicted two weeks ago before the LOT figures came out.

"We're looking at all options and trying to get a grip on what we see happening, which is a bottom that keeps dropping," Marks said. "We also want to try and minimize the impact on our citizens."

Mayor Randy Hall said city department heads have been asked to look at ways to cut spending by 1 to 3 percent. Marks said that would likely mean cutting back on a number of smaller-ticket items such as training and equipment replacement.

As well, Marks said the city has asked Blaine County Sheriff Walt Femling to revise his proposal for a contract for service in which his department would take over law enforcement responsibilities in the city.

"We asked (Femling) to take another stab at it," Marks said. "What he first proposed doesn't make economic sense right now."

Femling had presented a contract to the City Council during an executive session on Feb. 2. As executive sessions are closed to the press and public, the details of the proposal have yet to be made available. Hall said the discussions were held during an executive session because such a contract could affect city personnel and salaries.

"We have requested that Sheriff Walt Femling give us a little more detail and explore other possibilities before we take it public," Hall said. "Given the seriousness of this move, and given our desire to increase presence and policing within Ketchum, we need to have another set of options from the sheriff."

Femling is tentatively scheduled to present his proposal to the public at a City Council meeting on Feb. 23.

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