Wednesday, February 16, 2011

Ketchum worried about proposed URA reform

Bills would limit powers and require voter approval for incurring debt


By TREVON MILLIARD
Express Staff Writer

Express file photo Development of the River Run base of Bald Mountain could be a major source of income for the Ketchum URA.

Ketchum's Urban Renewal Agency, along with the approximately 20 other URAs across the state, faces a potential reduction in its powers. Talk of the Legislature's reforming state URA law has materialized into eight bills pending review by the House Local Government Committee today, Feb. 16.

"Almost all create limitations on what we can do," Ketchum URA Executive Director Gary Marks told the URA board at its Monday meeting. "One even seeks to repeal URAs."

The bills are currently at the very early stages in the House and must pass the House before moving on to the Senate for consideration.

URAs are the governing bodies for urban renewal districts, which are created in areas designated by the government as deteriorated or underdeveloped. The purpose of the district, as set out by state law, is to promote development by building infrastructure.

"This is the only tool in the city's toolbox to create growth," said Ketchum URA Chair and Mayor Randy Hall.

Property taxes provide the money for the infrastructure projects. The district—legally separate from the city government—doesn't increase property taxes, but takes a piece of the pie that would normally be distributed among the School District, county, city and other taxing districts. The district gets only the property taxes resulting from property value increases during the time of the URA, which is a maximum of 24 years.

Potential reforms include requiring voter approval for amending a URA's projects plan and incurring debt. Cities cannot take on debt without voter approval, but URAs can act without permission from its constituents, even though the URA would use property taxes to pay off the debt.

Ketchum's URA is a clear example of that situation. The URA, started in 2006, borrowed $5.56 million for projects. It will take about two decades to pay that off using URA revenue from property taxes.

Another bill would require an election for URA members, meaning a city council and mayor could no longer automatically elect themselves or others to the board. That would create a more defined separation of the city government and URA since the two entities are supposed to be independent.

"Board commissioners may not hold any other elective office," states House Bill No. 114.

The Ketchum URA board consists of all four City Council members and the mayor plus two community members.

Along those lines of avoiding conflicts of interest between the city and URA, it was suggested at Monday's board meeting that the URA hire a different attorney than the city's. Since 2006, the two entities have used the same attorney, giving rise to skepticism that the attorney cannot act in the best interest of the URA if it runs counter to that of the city—the attorney's main employer.

Mark Eshman, one of two newly appointed URA members—the only ones who are not city officials—made the suggestion.

"This is just to keep things as conflict-free as possible," he said.

URA member and Councilwoman Nina Jonas acknowledged that concern, but said she is worried about cost. Marks, whose primary job is Ketchum city administrator, said it's cheaper to just add the attorney's URA duties on top of his or her city duties instead of hiring another attorney to handle only the URA.

For that reason, the other URA members shrugged off Eshman's suggestion, claiming it could be done down the road when development in town brings in more revenue to the URA.

The URA reform bills can be seen at www.legislature.idaho.gov/legislation/2011/topicind.htm#U.

Trevon Milliard: tmilliard@mtexpress.com




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