For the week of October 15 - 21, 2003

Councilman issues plan to end Ketchum deficit

Charlat says city can achieve
$1 million surplus

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"When you come right down to it, there is no budget problem."

— MAURICE CHARLAT, Ketchum councilman

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By GREGORY FOLEY
Express Staff Writer

With the city of Ketchum facing an approximately $527,000 budget shortfall this fiscal year, a member of the City Council has proposed a plan to balance the budget and eventually establish an approximately $1 million monetary reserve.

The proposal, however, is highly reliant on the city successfully revamping its healthcare coverage plan for city employees.

Addressing the Ketchum City Council and Mayor Ed Simon on Monday, Oct. 6, Councilman Maurice Charlat presented a two-page budget management plan that predicts the city by the end of the 2003-2004 fiscal year can establish a $980,000 cash surplus.

"I think that we’ve got a lot more positive view than what we thought we had when we were putting this (budget) together," Charlat said in an interview Tuesday, Oct. 14.

At issue is the much-debated 2003-2004 Ketchum city budget, which was adopted by the City Council on Sept. 2. The approved budget includes $7,868,458 in expenditures through the city’s general fund.

The city’s current fiscal year began on Oct. 1 and will end on Sept. 30, 2004.

In the 2003-2004 budget, general fund expenses exceed revenues by approximately $527,000. To balance the general fund, City Council members agreed to essentially subtract the balance from the city’s cash reserves, leaving the city’s estimated cash "fund balance" for the fiscal year at approximately $500,000.

In his plan, Charlat suggests that the city during the course of the fiscal year can significantly increase its revenues and decrease its overall expenses. The adjusted revenues and expenses could bring the city’s revenue shortfall down to approximately $145,000 by the end of the fiscal year, he noted.

The city could increase its revenues by 2 percent, Charlat projects, by:

·  Accounting for a planned increase in city fees. Charlat said the city will likely raise certain fees to gain a "significant" increase in annual revenues.

·  Including in financial projections potential city revenues associated with an "upsurge" in building projects that are planned in Ketchum.

·  Introducing into the budget figures a 1.4 percent inflation factor, a practice he said is standard in many businesses.

In addition, Charlat’s plan predicts that city expenses could be cut by 3 percent this fiscal year. "The reduction in spending can only be accomplished by the city department heads, whose task it will be to capture an annual savings of $236,053," the plan notes. "This will require a reduction in spending of one quarter of one percentage point per month less than the approved budget."

If the 2 percent increase in revenues and the 3 percent decrease in spending can be realized, the city would still face a budget deficit of nearly $145,000, Charlat said.

However, he added that a plan being pursued by the city to drastically reduce its expenses for employee healthcare coverage will make up the difference and could eventually provide approximately $500,000 extra to be put into the city’s reserves.

The approved budget calls for spending approximately $1.1 million over the next 12 months to pay for healthcare packages for city employees and elected officials.

Combined with the approximately $500,000 existing reserve, the newly realized savings could ultimately afford the city a roughly $1 million monetary surplus, Charlat said.

"When you come right down to it, there is no budget problem," Charlat said. "I think we’re looking at a more than $1 million surplus."

Ron LeBlanc, Ketchum city administrator, said Tuesday the city has proposed that department heads work to reduce their expenses.

At the same time, LeBlanc said the city will not likely adjust the figures in its approved budget. "We’ll keep an eye on things and we can make adjustments through the year," he said.

LeBlanc added that city local option tax revenues—which have been down the last two years—have recently shown signs of improvement and could boost city revenues.

LeBlanc said the city will likely achieve "a sizable reduction" in healthcare costs if a new insurance plan is approved and implemented. He noted that a special committee reviewing the matter is expected to recommend a change in the city’s health plan by the end of the calendar year.

 

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