Wednesday, June 5, 2013

Ketchum URA in ?good financial shape?

Agency has up to $125K it could spend or save

Express Staff Writer

    Ketchum Urban Renewal Agency Executive Director Gary Marks on Monday gave a budget overview to the agency’s board of commissioners, saying that the organization has successfully set aside two years’ worth of debt-payment reserves.
     In addition, the agency will have about $92,000 more of useable cash in its fiscal year 2013-14 budget, as it won’t have to set aside money for debt reserves, Marks said.
    Marks said in an interview after the meeting that brokerage firms that market bonds such as those issued by the URA require bond issuers to hold at least two years’ worth of reserves to pay their debt. He said the firms began requiring such reserves following the economic recession to increase the confidence of potential bond purchasers in their investment.
    Marks said the commissioners could choose to spend even more than the $92,000, should they dip into reserves. He said he’d be comfortable with them spending up to $100,000 to $125,000 on a project in fiscal 2013-14, which starts Oct. 1. He said they could also save it for a larger project in the future. The URA has not decided whether it will spend or save the money.
    “You can see we’re there,” Marks said, referring to two $479,000 debt-reserve funds that the city has been contributing to for the past three years.

The URA currently owes about $6,440,000 to bondholders.

    URA Secretary and Treasurer Sandy Cady said after the meeting that the first of the two funds is held by the URA and is invested in the Idaho State Treasurer’s Office Local Government Investment Pool. She said the second fund is held in escrow by U.S. Bank.
    The URA currently owes about $6,440,000 to bondholders at an average interest rate of 5.37 percent and an average bond life of 16.3 years, according to Cady. She said the so-called URA Refunding bond consolidated the URA’s debt in 2010. The debt comes from a $1 million loan from former City Councilman Steve Shafran, a $2 million loan from the Idaho Housing and Finance Association and a $2.56 million loan from Mountain West Bank to jump-start several URA projects.
    URA Commissioner Jim Slanetz asked if the agency earned interest on the money in the debt-reserve funds. Marks said yes, but not much. The URA earns 0.1817 percent from the Local Government Investment Pool fund, according to Cady.
    “I think we’re in good financial shape,” said URA Chairman Mark Eshman. “That’s good news.”
Brennan Rego:

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