On Nov. 8, Ketchum voters will decide if they want to fund wastewater plant upgrades to the facility the city shares with the Sun Valley Water and Sewer District, upgrades that could cost a combined $37 million.
The ballot will ask voters whether they want to approve issuing up to $14 million in revenue bonds. Based on a market interest rate of 4.16%, the city estimates it would pay about $10.8 million in interest in addition to the principal amount of $14 million.
“I could see a perception [within the community] that this is being done to handle future growth,” City Administrator Jade Riley said. “And the reality is, the majority of these improvements are age-related. We’ve got stuff that is 40 or 50 years old, and this is an opportunity to make an old asset more efficient.”
The city is proposing to fund its share of the projects primarily through revenue bonds, which must be approved by voters. In addition, the city plans to raise wastewater rates to help pay for its share of the improvement projects—but not nearly as much as it would have to if it didn’t have funding from a bond issue. The projected $37 million total will be split evenly between Ketchum and the Sun Valley Water and Sewer District.
Last month, Mayor Neil Bradshaw said that a revenue bond issue and increased fees would have “no impact on property taxes.”
Revenue bonds are a tool many municipalities use to raise funds for major capital projects. Unlike general obligation bonds—which are paid for using tax income—revenue bonds are funded by the entity’s revenue—in this case, sewer fees paid to the city.
“I think people think all kinds of bonds are similar,” Riley said. “What we really want to stress is that this is specifically funded from monthly sewer bills; it in no way or shape has anything to do with property taxes.”
At a city meeting earlier this year, Zions Bank advisor Michael Keith said the plan is to sell $6 million to $7 million of revenue bonds in fiscal year 2023, and the rest “as needed” at later dates.
In June, Brad Bjerke of Boise-based HDR engineering presented to the City Council a status report of the treatment plant. He stated that a facilities plan, which should be done every five years, hadn’t been done in a decade.
Bjerke provided a detailed script of what an upgrade process could look like between now and 2042. The planned updates to the facilities would result in a 15% reduction in energy usage, studies concluded.
City officials note in the ordinance seeking the bond issue that “with a non-debt approach, rates would need to be adjusted 60% in FY23, and 25% in FY24 and FY25,” while using a debt approach—like the bond—would allow the rates to be raised 7% in the coming fiscal year and 5% in subsequent years.
“We looked at how much we would have to raise the rates on a steady basis to come up with a net zero at the end, and that percentage is what we got,” Bjerke said at a City Council meeting in June .
He stressed that these costs are necessary, because, while the plant is working fine now, some of its technology will soon be obsolete.
“You have concrete basins that are over 50 years old, and a lot of other infrastructure in the 20- to 30-years-old range. A lot of this stuff needs upgrades,” he said.
The ballot measure needs a simple majority to pass. 
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(4) comments
Yet another huge failure of the 2x demoted city administrator Frick. She was informed this was coming and... ignored it? All the while running off most of the competent, knowledgeable experts and adding to her already six-figure salary (not to mention her housing allowance???) and that of the incompetents around her. And now the mayor and city council have moved her to yet another position within the city rather than terminate? It's unconscionable. What a disgrace.
They never looked at the option to build a new plant. Yet they won’t build affordable housong there to save the land for a plant expansion. Makes no sense. This is definitely for growth, as the Ketchum housing plan calls for potentially 4000 more people in Ketchum. Note that the mayor didn’t do this in his first term like he was supposed to. Guess who the city administrator who dropped the ball? She’s not full time on building a second Bluebird. And guess who gets the treated water for irrigation. SV, not Ketchum. And not the fish in the river. The whole thing stinks. There is no long term capital budgeting process in Ketchum. The only capital reserves are the money Idaho Powe gave us to bury power lines (that we never seem to bury.)
For all the bankers and finance types around here, including the Mayor, this town is a fiscal basket case.
$10.8 million of our rate funds going to pay bank interest because we in Ketchum we're not as prepared as Sun Valley. We need a new Mayor and Council.
This ain’t the half of it.
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