Elected officials from the city of Ketchum grappled to find common ground—and fund a number of precious projects—on Monday night, as the mayor and City Council struggled through a second reading of a fiscal 2020 budget.

The $24.9 million proposed plan allocates $10.6 million in the general fund to finance city operations and $10.4 million in restricted funds for specific purposes spelled out by the city’s local-option-tax ordinance. But losing a contract for services with the Ketchum Rural Fire District and impact fees assessed to devel-opers took a bite out of revenue that even a rising tax base can’t patch.

That leaves the council unable to meet budget requests for nonprofit groups that have come to depend on public funding—and, possibly, the Fire Department at its current staffing level.

According to Councilwoman Courtney Hamilton, that’s not likely to improve in the future.

“This is the new norm,” she said. “This is not an off year. We lost impact fees, the firefighting contract—that money is not coming back. Based on what I know, next year is not going to look any different.”

Funding for transportation, marketing, events, sustainability and a pair of firemen keyed Monday’s debate—which ended with a unanimous vote to approve a second reading of the budget, but no firm plan heading into the third and potentially final hearing. The budget requires three approved readings to take effect on Oct. 1.

Mayor Neil Bradshaw’s draft budget allocates $600,000 for Mountain Rides Transportation Authority and $400,000 for the Visit Sun Valley marketing organization, 10 percent and 9 percent below last year’s funding levels.

In July, the Mountain Rides board said any cut to funding would result in elimination of its after-midnight Blue Route during the summer through Ketchum and Sun Valley, a popular way home for high-season revelers.

Mountain Rides is largely funded by contributions from Ketchum, Sun Valley, Blaine County, Hailey and Bellevue, with the two northern towns bearing the brunt of the cost—and receiving most of the service. In fiscal 2020, Sun Valley is expected to pay $352,500, Blaine County $182,000, Hailey $82,000 and Bellevue $6,500 to cover the system’s expected $2.9 million in spending.

Councilwoman Amanda Breen expressed reluctance to cut either transportation or marketing, which she called “irresponsible” in the face of the services they provide, and the revenue they bring to the town. Her solution: Dip into reserves—at least paring the 17 percent emergency reserve typically held by the city in its general fund to 16.67 percent, which represents the true two months of operating expenses recommended by auditors.

That could free up between $33,000 and $35,000, estimated city Director of Finance and Internal Services Grant Gager. Paired with a fresh $25,000 refund returned from the city’s police contract with the Blaine County Sheriff’s Office, and the roughly $15,000 earmarked for a 2020 Wagon Days concert that the council seemed willing to cut, that could push funding close to past levels.

But Bradshaw resisted tapping any amount of the reserves, equating it to deficit spending—“the height of fiscal irresponsibility,” he said.

“Agree to disagree,” Breen said.

The city appears to be on track to tap into reserves regardless. Right now, Gager said he assumed that two firefighters on staff would phase out via attrition with the Ketchum Rural contract. (The city of Sun Valley has taken over the Ketchum Rural contract, for fire protection in rural parts of the northern county.) So far, no one has given that notice. Each one costs about $100,000 annually, Gager said, and they’d need to be paid out of reserves if they stay on.

Council President Michael David echoed Breen.

“We built Mountain Rides, we built Visit Sun Valley to the point where they are now,” David said. “To cut them back—rather than to cut into our reserves—to me that’s irresponsible. If this is not a rainy day, what is?”

Bradshaw’s concern, though, was that the economy has rarely been sunnier.

“We should be using this time to build reserves for the eventual downturn,” he said. “That’s best practice.”

Gager thinks it’s coming. He anticipates declining revenue for the next several years.

“I think we’re at the height of this economy,” he told the council. “History has shown that if a recession lasts two or three years, it will impact city services. Reserves peaked in 2008, and by 2012 the city was almost out of money. I think Councilor Hamilton is right—this is the new environment.”

Agencies that have come to depend on public coffers may need to manage it on their own, David and Hamilton both suggested, if the government retrenches to focus on its core functions.

A popular example: Visit Sun Valley, which received the most support from business owners, and County Commissioner Jacob Greenberg, during Monday’s public comment period.

“Everyone is telling us there’s a need, and I get that there’s a need [for marketing],” Hamilton said. “But if the need is that desperate, then our economy doesn’t work. The fact that, in this town, it’s the government’s role? Typically, businesses market themselves. And I know that they run really slim here, but it’s a lot to put on local government. We have so many other services to take care of.”

Despite his reluctance to trim funding, David agreed.

“We don’t have the money to do the basics,” he said. “I’m hitting the same potholes every time I drive. It’s incumbent on us to keep pushing these guys, because it’s obvious we don’t have the revenue.”

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