ISSUE #34: The Ketchum Council is Using Fire Consolidation to Raise Your Taxes

Isn't Fire Consolidation Supposed to Save Us Money? Also, P&Z Scores a Win! And, Will There Be A Recall?

THANK YOU TO OUR FIREFIGHTERS 🧯

The Wapiti Fire has burned some structures and threatens many more in Custer County, including the City of Stanley.

Our WRV firefighters have answered the call, as they always do. We are blessed to have such a dedicated and well-trained group of men and women to protect us, our property, and our surroundings.

Some of these friends and neighbors are sleeping in their fire trucks. It is cold up there at night.

The Stanley Volunteer Fire Department is an all-volunteer force (no one pays them to risk their lives). They are hosting hundreds of firefighters from across the West to manage this fire. They could use our support. Can you make a donation?

Here’s the link: https://www.gofundme.com/f/support-stanley-fire-and-stanley-ambulance-volunteers

The P&Z Commission Scores A Win For Ketchum’s Commercial Core

Character is how you behave when no one is watching.  There was almost no one in the room on August 27 when our P&Z Commission denied a conditional use permit for a luxury rental company to lease a one-story building in the commercial zone.  That showed some character.  

The prior group would have rubber-stamped it like they rubber-stamped the rest of Ketchum’s handover to the short-term rental industry.  Commissioner Matt McGraw spoke eloquently on behalf of the community and the zoning code when he said that this was not a “permitted use” in the commercial core and that we need buildings like this to provide essential services to the full-time community.  Commissioner Moczygemba echoed his statements.  That brought Commissioner Passavoy over to the right side, and even Chairman Morrow, who seemed to think this was a slam-dunk approval, sensed the wind shifting and did a 180 to vote with the majority.  

Score one for the locals.  It’s a small win but a nice change in direction.  Thank you, P&Z!

But WTF is our Planning staff thinking?  They recommended the Commission approve the application.   Ketchum City Hall is infected with the Aspenization virus.  From reading the staff memo, you can tell they were conflicted on this one.  It took them 18 pages to examine the pros/cons.  Then they…folded.

The flaw in the staff logic is that if something nominally meets the criteria for a conditional use permit (CUP), they recommend approval, whether or not it furthers the big-picture goal of the Comp Plan.  That’s how the prior Planner ran Ketchum—help developers game the rules.  Yet, there is no requirement for P&Z to approve a CUP just because it technically can be approved.  

The planning staff should reflect on who they work for.  It is not the applicants.  It is us.  

A Looming Issue: Hidden Tax Increase

Many of my posts have described the genius of the Ketchum mayor in his Aspenization program for Ketchum. A reader alerted me to this latest tactic, and I am left in awe of the slyness.¹

The powers that be want to use fire consolidation (good) to raise your property taxes (not good) for no benefit to you (bad). Sound crazy?² Ha! Read on…

The LOT is NOT Just a Tourist Tax—In Ketchum, It Is a Locals Tax, Too

Let’s start with some taxation context. Idaho is a “Dillon state.”³ Cities only have the powers delegated to them by the legislature. Taxation is not one of those powers in Idaho. The City cannot impose property, sales, or income taxes.

And yet…[sigh]…they do.

I have written about how Ketchum has abused the “Local Option Tax” (LOT). This tax is allowed for resort cities of under 10,000 residents to offset the cost to the locals of “hosting” those tourists.⁴ It is meant to go to first responders, infrastructure, etc. Used as intended, it is a valuable tool to keep small resort towns solvent.

However, Ketchum (and Sun Valley and Hailey) have figured out how to leverage the LOT beyond the legislative intent. We have a LOT for Air, which was supposed to fund air service but is mainly used to promote tourism via Visit Sun Valley.⁵ We have a LOT for Housing to provide corporate welfare to the tourism industry and house its low-paid workers at public expense (e.g., Bluebird).

Ketchum (and Sun Valley and Hailey) don’t just tax tourists; they tax locals with the “tourist tax.” Every time you buy a beer, you pay the LOT. Every time you buy a nail in Ketchum, you pay the tourist tax. Every time you buy a ski pass, you pay the tourist tax.⁶ If your goal is, as Ms. Breen states, to maximize revenues,⁷ this is an inspired move. Use the tourist tax to tax locals!⁸

Yet, even this is not enough tax revenue for the Ketchum City Council. In a unique twist, they have figured out how to extract more money from locals via fire district consolidation…but only if you let them.

Doesn’t Fire Department Consolidation Make Sense?

Of course, it does. The plethora of fire departments in the WRV has never made operational sense. Politicians have tried for decades to integrate them. It became a “third rail” of politics. But thanks to some unselfish fire chiefs, we are finally about to be able to achieve something for efficiency and effectiveness. Finally, this November, we will vote in a referendum to consolidate fire departments. Fantastic!

Except, this is not what it seems.

We will vote to combine the Ketchum Fire Department, Wood River Fire & Rescue, West Magic Fire District, and Smiley Creek Rural Fire Protection District. Carey, Picabo, North Blaine, Hailey, Bellevue, and Sun Valley fire departments? They are not part of this deal. Why not?

I have written about the genius of the City of Sun Valley in figuring out how to get Ketchum taxpayers to subsidize the good life in Sun Valley, from subsidizing housing for Sun Valley Co. workers to subsidizing water for Weyakkin’s green lawns. So when Ketchum signs up for something that the City of Sun Valley takes a pass on, it bears some looking into. What do they know that we don’t know?

79% Increase in Your Fire Tax—0% Increase in Your Benefit

The IME did the math for us.⁹

Currently, Ketchum citizens pay a standard property tax of $26.37 per $100,000 of taxable property value. The plan ultimately preferred by the council—the scenario reducing standard property taxes by 50% of the city’s annual fire contribution—would reduce that figure to about $13.19 per $100,000. That $13.19 would then be charged alongside the new Ketchum Fire District tax of $34.71 per $100,000 of taxable value. Therefore, Ketchum residents would be paying a total of roughly $47.90 per $100,000 of property value if the fire district was established, a little more than $20 per $100,000 of property value than what they pay now.

Council members were unanimous in voicing their support for the plan that called for a property tax reduction of 50% of the fire contribution. The plan that called for a reduction in property taxes of 100% of the city’s fire contribution would have resulted in a total payment of $34.71 per $100,000 of property value, while no change to property tax collection would result in a total of $61.08 per $100,000 of property value.

Let’s summarize…

If you vote “yes” on this initiative, your property taxes devoted to your fire protection will go from $26.37 per $100,000 of taxable property value to $47.90. Your fire tax will increase by 79%. What? Will your services improve by 79%? Uh, no.

But it gets worse. The Wood River Fire Department has been trying to build a new firehouse. Twice, the referendum for a bond to pay for it has failed. If the November referendum for consolidation is passed, if Wood River needs a new station, the referendum will go to the newly consolidated fire district for approval. That means Ketchum taxpayers would pick up a large portion of that as part of the larger district.¹⁰

Guess how much of Ketchum's taxpayer obligation to repay the $11mm bond for its recently built firehouse will be transferred to the new fire district? Zero.

A “yes” vote is to gift money to West Magic and the County residents. Not just once. Every year. Forever.

And then there is this. From the article, the Council could have opted for a 100% reduction in Ketchum district tax. They did not. Why not? What are they planning to do with the incremental tax money? (I have a suspicious mind.)

How Do We Keep Getting Fleeced Like This?

What cost/benefit analysis did your City Council do before unanimously voting to approve putting this on the ballot?¹¹ How did they devise their proposal for where the mil rate for Ketchum would be set?¹²

In the grand scheme of humanity, it may be a social good for Ketchum locals, second homeowners, and Airbnb investors to pick up the costs for fire services in West Magic and Blaine County. Council Member Cordvano put it clearly:

“I see it as a contribution from Ketchum to the valley, and I see it as we happen to be the bank,” he said. “The question I pose to the residents of Ketchum is, ‘Are you okay with this contribution?’” he said.”¹³

Read that again: “[w]e happen to be the bank.” That is a fair summary of how your Council sees you.

Your elected officials think it’s a good idea for the Warms Springs and West Ketch locals who barely hang on in Ketchum to pick up the fire tab for the Valley Club, Greenhorn Gulch, and Flying Heart residents. They think you will agree with them and vote “yes” on this gift.

“Are you okay with this contribution?” Mr. Cordovano asks of us. Me? No! You?

Where am I Wrong? This Measure Doesn’t Go Far Enough

My picking up the fire tab for the Mayor’s golfing buddies isn’t why I object to this. The real problem is that it doesn’t go far enough. Fire/EMS consolidation is an issue on which I think I am on the side of the Mayor and Council of Ketchum. If Hailey and Sun Valley did the right thing, all citizens of Blaine County would benefit.

Our regional government design has some flaws. Our economy crosses town lines. We all play all over the Valley. We have a county-wide school district (BCSD) and a county-wide recreation district (BCRD). We all use the airport, yet Hailey and Bellevue residents must suffer from the ever-growing noise and air pollution.¹⁴ We currently do most property taxes at the county level (County Assessor).¹⁵ We should also do fire and EMS at the county level.

While there might be some tax transfer from Ketchum and Sun Valley to the other areas, the overall costs of emergency services would decrease, and quality and service levels would increase. On-scene turf battles would end.¹⁶

Think of the money we could collectively save. There would be economy-of-scale benefits in training and purchasing and network benefits in staffing and administrative services. We could replace the almost useless fire training facility in Ketchum with something more useful—like housing for firefighters.

This referendum is about “fire,” but the issue is emergency services. EMS calls out of the firehouses run something like 10:1 in volume. We are blessed to have so many dedicated dual-trained fire/EMTs. We should be looking to optimize their ability to contribute to the community.

Consolidation makes so much sense that one would think it would have happened already. But no. Our firefighting professional leadership is not professional enough in all departments for this to happen. Yes, they put their lives on the line for us and deserve our respect. But can’t they get over themselves on the issue of consolidation? What would it take to buy them out of their stubbornness? If this is just the jobs of a few holding up the good for the many, can’t they give us a one-time extortion payment rather than drawing this out over decades?

If you think the success of this referendum will lead the cities of Hailey and Sun Valley to adopt consolidation and you are willing to pay 80% more until they do, then a “yes” vote might make sense.

Sadly, I don't see it happening when I look at Hailey and Sun Valley's track record on issues of valley-wide cooperation. And if they were to see the light, I don’t think it would be because Ketchum taxpayers are picking up the tab for fire protection of the Mayor’s golf club.

I ask our elected officials to work on the Hailey/Sun Valley recalcitrants to properly consolidate fire and EMS services county-wide.

Recall? Stay Tuned

A LOT of people have contacted me about leading a recall of the Mayor.¹⁷ This is not an original idea—it has been tried twice before. I think it’s a great idea, but I don’t have the time to lead it.

However, a large and growing grassroots movement could pull it off. They did the background work and were ready to launch, but they hit the pause button.

They realized the cure might be as bad as the disease if they do it this year: when there is no mayor, the Council President takes the chair. They would spend the time and effort recalling Mayor Bradshaw only to get Council President Breen in his place 😳. If they wait until next year, there is a chance to get a more pro-locals person in the City President seat teed up to run things after a recall.

Make sense to me! Count me in.

What do you think? Leave a comment below.

1. I usually pay close attention to what goes on in Ketchum, but my jobs take me out of Ketchum, so sometimes I miss something. This was a big miss!

2. As always, if someone can show that I have my facts wrong, PLEASE DO. I don’t want the City to be this poorly run, so if it isn’t, please disabuse me.

3. https://definitions.uslegal.com/d/dillons-rule/

4. Like the ones we will be getting for the World Cup next March. Except we pick up the costs for them so that Sun Valley Co can improve its sale price.

5. The Mayor of Ketchum controls the votes for the Sun Valley Air Service Board (SVASB). SVASB devotes more than half of the LOT for Air to the VSV budget. Bet you didn’t know that when you voted “yes” on the LOT for Air because you really really want that Dallas flight on American.

6. Unless, like most tourists, you buy an IKON pass—then the tourist is exempt from the tourist tax. That’s right. Tourists don’t pay the tourist tax on ski passes unless they buy them at the window. Who is dumb enough to do that when the IKON pass is so much cheaper? Locals pay the tourist tax on ski passes. Alice is in Wonderland.

7. https://www.ketchumidaho.org/citycouncil/page/amanda-breen

8. Even worse, some of the LOT is used to PROMOTE tourism, not offset it. 🤮

9. https://www.mtexpress.com/news/ketchum/ketchum-leaders-support-fire-consolidation-plan/article_aeb15ea4-5f29-11ef-8ed4-6bbef5df934f.html

10. Thus my axiom: when it doubt, Ketchum taxpayers pick up the tab.

11. Okay, they did the cost, for the initial year. They did not do the ongoing costs (like new firehouses outside of Ketchum). And the benefit part of the analysis was easy, as there is no benefit. If you read the documents share in public meetings, it’s not laid out there in simple black and white. They don’t want to make this easy for us.

12. They pretty much just made up a number.

13. https://www.mtexpress.com/news/blaine_county/west-magic-and-smiley-creek-join-proposed-fire-department-merger/article_e51211ae-caa1-11ee-8ad3-23dd0574c8d1.html

14. I find it interested that the Hailey Mayor seems so unconcerned about this—but then, she chairs the Friedman Memorial Airport Authority (FMAA). Despite her rhetoric, all of her actions have been to expand operations at SUN (especially via her role on the Sun Valley Air Service Board).

15. Except for the ones KURA diverts to its own agenda.

16. Is it true that two responders from different departments once came to blows? Or is that apocryphal “lore?”

17. It is, by far, the number one topic in reader response.