The Ketchum City Council has a math problem it must solve before Oct. 1—expected general fund revenue for fiscal 2020 is $771,000 shy of potential spending.
The council met at the Knob Hill Inn last Thursday for its budget retreat and tried to craft a solution. Council members’ main means of solving the equation are subtractions from the spending side of the budget, because additional revenue is unlikely to help get to $771,000, Finance Director Grant Gager said Thursday.
The problem was exacerbated by the Ketchum Rural Fire Protection District board of commissioners’ decision to move their annual contract to the city of Sun Valley.
That left a fire truck-size hole in the upcoming budget. The contract was worth $327,000 to Ketchum’s general fund. Councilwoman Courtney Hamilton said she wanted to pursue getting some of that revenue back, either by charging for training or using the training facility on Ketchum-owned land on Lewis Street.
“At this point, it’s blood from a stone,” Mayor Neil Bradshaw said.
The city expects to take in $10.5 million in its general fund in fiscal 2020. The current level of general fund spending—which will change, because the city budget has to be balanced—is $11.27 million. In addition, the city expects to have $2.57 million available in local-option-tax revenue, though it has $2.51 million in expenditure requests for fiscal 2020, which will be funded from LOT revenue.
To balance the general fund, the council will consider cutting back the amounts provided to Mountain Rides and the Visit Sun Valley marketing organization. The city is providing $440,000 this year to Visit Sun Valley and $665,700 to Mountain Rides. Those organizations will make their budget presentations to the council on June 3.
Council members told Mountain Rides Community Development Director Kim MacPherson and Visit Sun Valley Executive Director Scott Fortner to expect to discuss the effect of $400,000 in funding for Visit Sun Valley and $600,000 for Mountain Rides.
Visit Sun Valley also receives money from a special “1 percent for air” local-option tax in Ketchum. That tax revenue is pooled with Sun Valley’s and Hailey’s and delivered to the Sun Valley Air Service Board for flights and marketing. Ketchum was budgeted to provide $2.06 million in that tax revenue to the Air Service Board in fiscal 2019. The Air Service Board budgeted $1.69 million for Visit Sun Valley.
Two sources of the spending-side problems are inflationary and policy changes. Increases in the city’s costs for health care, dental care, pension and a lease for a new fire truck add $204,612 in new spending.
Potential policy changes add $407,315 in new spending. That includes $146,000 for a 3 percent, across-the-board wage increase for employees, $79,411 to support the city’s pool of paid-on-call volunteers in the Ketchum Fire Department and $181,000 for materials and services increases in a number of city departments that include planning and building, facilities maintenance, police, fire, streets and recreation.
A third area of possible new spending includes $101,000 for the Ketchum Sustainability Advisory Committee and $6,500 for programs and initiatives under the auspices of the Sun Valley Institute.
Sun Valley Institute requested $1,500 for regional collaboration, which would help develop a business plan and hire former Blaine County Commissioner Larry Schoen as a consultant. The idea of an Office of Regional Collaboration stemmed from workshops the institute held on climate change planning in December and March. The institute also asked for $2,500 for a feasibility study to examine backup for critical power loads and $2,500 for food system needs and assets mapping.
The council decided to push the $101,000 on sustainability to future budget years, but agreed with the need to fund the inflationary and policy changes.
So what else had to be cut from the budget?
The council discussed doing a 10 percent, across-the-board cut from each city department and funding partner. The results will be discussed at future meetings; the mayor’s proposed budget is typically released at the end of June or early July and is adopted by August.
Council members spoke favorably of allowing up to two full-time firefighters out of 11 total to leave their jobs and not be replaced, which would save about $200,000. That would move the Fire Department to three three-person shifts. Council members said they expect some firefighters to be hired by the city of Sun Valley.
The council discussed culling $40,000 from the $160,000 requested by the Ketchum Innovation Center, and not funding a $20,000 increase to city-run events in Town Square sought by Bradshaw. The city currently spends $95,000 on those events.
Councilman Jim Slanetz said he wants to seek a reduction in the $132,000 the city spends on Wagon Days, which would affect the September 2020 event. That could be accomplished by cutting the after-parade music concert or by getting more sponsors to fill the gap, he said.
As a potential cut, City Administrator Suzanne Frick cited the $4,000-per-month lease that the city pays the Ketchum Urban Renewal Agency for using its Washington Avenue property as a parking lot.
All those measures only got the council partly to $771,000, though, so council members will have to consider further cutbacks once they evaluate the effects of a 10 percent, across-the-board trim.
“We’ll come back for another round,” Bradshaw said.