A 3.5-inch-thick stack of bound papers sits on the desk in front of Ketchum City Administrator Gary Marks.
The document details every single financial transaction of the city's Urban Renewal District since its creation in 2006 to take advantage of a state law allowing the district to receive increases in property tax rolls that occur through new development or inflation. The revenue then goes to support infrastructure improvement projects within the district, such as the creation of the Fourth Street Heritage Corridor.
The Urban Renewal Agency, made up of Ketchum City Council members and the mayor, has been at the receiving end of repeated criticism for years due to taking on $5.56 million in debt for three loans.
A $1 million loan came from former City Councilman Steve Shafran to help build the first two phases of the Fourth Street enhancement project. A $2 million loan came from the Idaho Housing and Finance Association for the purchase of property at the corner of Second Street and Washington Avenue. And a $2.56 million loan from Mountain West Bank facilitated the purchase of the Sun Valley Road building that now houses the Sun Valley-Ketchum Chamber & Visitors Bureau.
Several of last year's City Council and mayoral election candidates said the URA overextended and mismanaged the district, taking on debt that property-tax increases couldn't match.
Marks said the heaping financial statement proves just the opposite. That's because Marks had to make every dollar amount available to investing experts before selling $6.44 million in bonds to refinance the district's debt. Refinancing essentially swaps these three loans for one new loan through a bond sale. Anyone can buy the bonds, and anyone can see the 3.5-inch-thick financial history.
The easier the bonds sell, the more confidence investors have that the URA can pay back what it owes.
"We sold out the bonds in two hours, not two days," as is the norm for this amount, Marks said. "It feels good to have the financial world come in and back us up."
The sale was Aug. 5.
Even better, Marks said, the URA attained a 5.4 percent interest rate, lower than bond experts expected, making the first year's payment about $211,000 instead of the $230,000 predicted in the proposed 2010-11 budget. That equates to nearly $475,000 less in interest payments over the bond's 25-year term.
"Let it be noted that Ketchum's URA is not mismanaged," said Mayor and URA Chair Randy Hall at the Sept. 7 URA meeting.
About $454,000 in URA revenue is expected in the 2010-11 fiscal year from property taxes. It's estimated that this fiscal year will produce $505,000, an increase from the $460,000 in 2008-09 and the $265,000 in 2007-08.
Trevon Milliard: email@example.com