It's been years since local leaders felt optimistic going into budget-planning season. But this year, as Ketchum looks to fiscal 2013, officials are seeing reason for hope.
"I'm very excited about the upcoming fiscal year's budget," said Mayor Randy Hall. "I'm as excited as I've ever been going into a budget year."
Hall and City Administrator Gary Marks presented an overview of the city's fiscal health to the City Council on Monday and asked for input about budget objectives before a proposed budget is presented this summer.
Proposed objectives are to:
- Maintain overall spending levels at or near fiscal 2012 levels.
- Maintain the general fund balance at or above 17 percent of operating revenues.
- Develop a transition plan relative to Utilities Manager Steve Hansen's retirement.
- Appropriate $100,000 from the general fund for a "walkability project" being spearheaded by the Ketchum Community Development Corp.
- Develop a cost-of-living adjustment for city staff.
Most council members agreed with the first two objectives but wanted more information on the others before offering their support.
Hall said he wanted to see a budget from the Community Development Corp. regarding how it would spend the funds. Likely targets for the walkability project are signs and sidewalks.
Although "walkability" was called out as a potential goal, city officials will have to prioritize many other expenditures with a much smaller budget than they had five years ago.
General fund revenue collections for fiscal 2013 are projected to be just shy of $5 million, or about $130,000 more than the current fiscal year. That's way down from $9,535,778 just before the recession in fiscal 2008, though that year included categories that have since been spun off as separate funds. Those funds are parks and recreation, fire, ambulance and streets.
Contributing to the general fund are property taxes, which make up the lion's share, planning and development revenues, such as building permit fees, and miscellaneous revenues.
Planning and development revenues have plummeted in the past five years, falling from nearly $1 million in 2008 to a projected $155,000 for fiscal 2013. Construction values between 2008 and 2011 fell from almost $53 million to just over $16 million.
General fund expenditures nearly reached $10 million in 2008. The projected number for 2013 is $5,249,000, or $7,134,000 if the spun-off departments once encompassed by the general fund are included.
The city separated those departments a few years ago for a couple of reasons, Marks said in an interview. First, they have revenue sources that, per state statute, must be spent on certain things. By keeping the money separate from the general fund, the city can ensure it is not spent elsewhere.
"It's a matter of demonstrating fiscal responsibility both [in regard] to the statute and to our public, that we're using public dollars the way they're supposed to be used," he said. "It's a matter of accountability and transparency."
Additionally, he said, those departments' managers don't feel compelled to spend all the appropriated money by the end of the fiscal year.
"We're trying to break the 'use it or lose it' mentality," he said.
Those fund balances can roll over into future years, encouraging savings for necessary, larger expenditures.
"It incentivizes managers to make wise decisions about resources," Marks said.
Hall said that despite the economic downturn, the city has increased its general fund balance by reining in spending. At the end of fiscal 2008, the fund balance was $360,923. At the beginning of fiscal 2012, the balance was $1,523,006.
"The fact that we've been able to raise our fund balance by 422 percent is not insignificant," he said.
The projected balance for the end of fiscal 2013 is $986,524.
Savings were achieved, Marks said, by outsourcing services such as police, dispatch and building permits.
In February 2009 the city enacted a budget correction, Marks said, in which it reduced spending in all departments.
"We also had some layoffs," he said.
Ketchum's population declined by more than 10 percent between 2000 and 2010. The number of city employees has declined similarly.
"We're continually working on ways to create efficiencies," Hall said.
The city also projects higher local-option tax revenues during the next fiscal year.
City staff and the mayor will draft the proposed budget to present to the council in August. Marks said the council can make changes at any time in the process.
The public will have several opportunities to comment as well, he said.
Rebecca Meany: email@example.com