Friday, January 15, 2010

City of Ketchum wasnít, isnít broke

So the question must be asked, is reacting responsibly and well to an economic falloff an indication

Gary Marks is the Ketchum city administrator.


I read Van Gordon Sauter's essay, "One town, One headache", with great interest. Unfortunately, I found myself disappointed on one point. The essay perpetrates—albeit I believe not maliciously—the untrue thesis that the city of Ketchum has—as Mr. Sauter put it—"less money than a pre-nugget David Ketchum."

Throughout the "One town, One community" saga of early 2009, the rumor mill convinced itself of the fallacious premise that the city of Ketchum had no money. Therefore—it was reasoned—Ketchum wanted to merge with Sun Valley in an effort to help itself to Sun Valley's money.

It is true that as we watched the "One town, One community" drama play out, our local economy—along with the nation's—was experiencing the initial fall-off of our current and ongoing economic dilemma. Back then, city officials recognized that key revenue sources were—like the economy—seeing noticeable declines from expected levels. Of course, the reasonable and prudent reaction to such disappointing news was to cut spending proportionate to the loss of revenue. And, of course, that is what Ketchum did. The city's independent auditor, Dennis Brown, later commented in his November, 2009 city audit report that, "The (city's budget) reductions were designed to offset projected revenue losses and increase the fund balance. The resulting $912,701 increase in the combined fund balance demonstrates that the city's proactive efforts to protect and strengthen its financial position have been effective. The accomplishment is due to the commitment and determination of the City Council and staff to make difficult budget decisions during a time of significant economic distress."

So the question must be asked, is reacting responsibly and well to an economic falloff an indication that you are broke? Is adding $912,701 to the city's bottom line akin to "a pre-nugget David Ketchum"? Not hardly.

The city began the FY08-09 budget year with liquidity equal to four times what it needed to pay its bills. And, due to its quick action to protect and strengthen its financial position, the city ended the same year with a ratio equal to eight times its outstanding bills. Yet, the rumor mill did what rumor mills often do. It manufactured a myth that Ketchum had "less money than a pre-nugget David Ketchum" and sold it as fact.

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