ISSUE #37: The Fleecing of Ketchum By Its City Council (and Others)

Where is the Transparency?

Sep 11, 2024

One of the first principles in investigating a financial crime is establishing “cui bono?”—Who benefits? Another principle is to “follow the money.” Applying these principles to how the City of Ketchum is run leads to an inevitable conclusion:

The Ketchum taxpayer is getting fleeced to provide corporate welfare and to transfer money outside of Ketchum.

Whether you are a long-time Ketchum local struggling to hang on while the City does its best to squeeze you out, or you are a local business trying to stay alive as Slack returns at the same time the City is permanently eliminating your parking, or you are a second-home owner who contributes to providing free arts education via the SVMoA, or free culture via SVMF, or free food via the Hunger Coalition, your taxes are going to subset of interests who are exploiting Ketchum for their own gain.

Not only are your elected officials not protecting you, they are in on the con. Let’s look at how the money flows out of your pocket and who benefits.1

Ketchum Housing Action Plan

The Bradshaw administration has a long track record of adopting plans that are not plans. Read the Master Transportation Plan that predicts intersection failure with no plan to address it. Or the Parking Plan that has no plan for parking other than to push it into residential neighborhoods. Or the Blaine County Sustainability Plan that won’t make Blaine County more sustainable. Or the…you get the point. But at least these wastes of time don’t do too much damage.

Except for one.

Please read the Ketchum Housing Action Plan. Then sit back and ask yourself, does it make sense? Does it make sense for the City to adopt a policy that says anyone who wants to live in Ketchum has a right to live in Ketchum, and if they cannot afford to, Ketchum taxpayers will subsidize their housing? That’s the guiding principle of that plan.

Of all the bone-headed plans adopted by the Bradshaw administration, this one is the bone-headiest. It is likely to cost the most money for the worst outcome.

The Ketchum Housing Department goes even farther than the plan. They have figured out how to fleece Ketchum taxpayers to pay for housing for people who do not live in Ketchum and do not work in Ketchum. If you read the BCHA strategic plan, it basically calls for Ketchum to pay for the housing needs of the entirety of Blaine County. In a classic conflict of interest, the Ketchum City housing staff are the staff of BCHA.

Do you know who is a huge beneficiary of Ketchum’s taxpayer-funded housing program? The tourism industry. It is corporate welfare—a wealth transfer from Ketchum taxpayers to the tourism industry. Companies like Sun Valley Co. can depress wages so that their employees will qualify for public housing like Bluebird (guess how many SVC employees have applied for it). They even advertise how to get public housing on their employee website.

SVC just got the City of Sun Valley to adopt a master plan to expand its resort operation by 75%, bringing about 900 more workers to…well, to where? They will work in Sun Valley, but where will they live? There is no master plan for that. Meanwhile, Ketchum has a massive public housing program, while Sun Valley has… none. Ketchum taxpayers end up paying for decisions made by the City of Sun Valley.

Guess who signed you up to pay for all of this? The Troika.

They have more corporate welfare in the works—next on the tee is their Bluebird project for the YMCA parking lot. Then the Lift Tower Lodge project. Then, some secret project code-named “Trail Creek” will be 108 units (2x the size of Bluebird).

Do you know who doesn’t benefit from the Housing Action Plan? The residents of Ketchum. You cannot be a full-time essential worker in Ketchum and qualify for the vast majority of the units the City Housing Department is developing. Teachers, first responders, healthcare workers—they are EXCLUDED from the Bluebird program.

You can point the finger at the Troika for this one. The Mayor lied to us about Bluebird.

LOT Tax

Let me start by saying: I am for a LOT Tax. I am for a LOT tax that does what a LOT tax is supposed to do: raise money from tourists for a city to offset the costs of tourism on the locals. Some of our LOT taxes do indeed do that. It pays a lot for our first responders.

But a lot of our LOT does not do that. It taxes locals to provide corporate welfare for the tourism industry. The LOT for Air? The majority of it does not go for air. It goes to Visit Sun Valley to promote tourism. Think about that— a tourist tax that is supposed to tax tourists to offset the burden of tourism is taxing locals to bring in more tourists!

Here’s a fun one: when a local buys a ski pass, they pay LOT. When a tourist buys an Ikon pass, they pay no LOT. How is that a “tourist tax?”

Then there is the LOT for Housing, which goes to housing projects that require companies to depress wages so their employees qualify for housing. The tourism industry is happy to comply.

Do you know who door-to-door campaigned to tax locals with the tourist tax? The Troika. And they plan to raise the LOT tax on you next year.

Zoning Code

We get fleeced by the zoning code, too. By passing an ordinance in 2018 that altered a footnote to a table in the zoning code, the Troika opened up the commercial district for development into low-income housing projects like Bluebird. Bluebird is a for-profit development owned by out-of-state investors. Its income caps require employers to depress wages for employees to qualify. It is impossible to work full-time as an essential worker in Ketchum and qualify to live in Bluebird.

When Bluebird was jammed through, we had a minimum setback requirement for a fourth story. The for-profit developer didn’t like that. He wanted to build up to over 40 feet from the sidewalk. The Troika obliged and changed the code for him. The city even asked him what language he wanted for the ordinance! This has set a precedent—KURA’s Washington Lot housing project will be another massive four-story lot line-to-line box. And the City plans to do this again and again and again.

The Troika handed over multiple zoning code waivers to the Marriott developer in Utah, which are worth millions of dollars to that developer. What did they get in return for Ketchum residents? Zippo.

The Troika recently proposed commercializing Forest Service Park.

All of this is a wealth transfer from the Ketchum public to private interests.

Short-Term Rentals

Did you know that you subsidize the short-term rental industry in Ketchum? The very industry that squeezed out almost all of Ketchum’s workforce housing under the Bradshaw administration. You help pay for their marketing via your taxes that go to Visit Sun Valley. You subsidize the industry through concessionary zoning for ADUs (shorthand for AirBnB). You subsidize some of them through the City’s refusal to enforce Ketchum’s STR registration requirements.

Even our zoning code subsidizes them. Last month, the P&Z approved a lot split in West Ketch. That turns a single-family residence into two new AirBnBs and contributes to the destruction of West Ketch as a residential neighborhood.

And then there is the ADU scam. They are just more AirBnBs.

Ketchum Urban Renewal Agency (KURA)

As far as I can tell, KURA exists to fund the Mayor’s priorities “off the books” of the City’s budget. It is a scam. He appoints the members. He has used KURA as a piggy bank to fund things a URA is not supposed to fund (like consultant studies) to do things outside of the Ketchum City budget process.

A URA is supposed to mitigate urban blight and enhance the commercial viability of a downtown. This includes fixing the roads and sidewalks, improving lighting, etc. The URA economic model is to borrow money for those improvements that it repays from incremental property taxes that result from its investment in reversing the blight.

But that’s not what KURA does. It is actually diminishing the commercial viability of our downtown. How do we know this? Because our business community has taken out ads in the IME to protest KURA.

Think about that. An agency meant to help businesses has created a rebellion of the businesses it is supposed to be helping. What more evidence do you need that KURA is a scam?

KURA is working on permanently destroying commercial parking in the commercial core, which will cost us millions and millions of dollars to replace. These are not my numbers—they are based on KURA’s estimates of how much it takes to build a parking spot in Ketchum (up to $120k).

They have already succeeded in conspiring with the City Council to permanently destroy 37 parking spots worth over $3mm with the Main Street Project. With that mission now accomplished, they plan to permanently destroy 65 more, worth over $6mm, in their Washington Lot development project. How does that help the commercial viability of the commercial core?

But it’s worse than that. Remember, they are supposed to be taking actions that increase property values in the commercial core. Yet their Washington Lot development will generate zero incremental property tax because the developer is a tax-exempt entity. How is this even legal? Do KURA’s bondholders know about this?

Two members of the Troika sit on KURA as commissioners. So much for its “independence.”

Fire Consolidation

The Ketchum Council voted to put consolidation of the Ketchum Fire Department with several others on the ballot for November. While I am for consolidation (in theory), I am against this referendum. Former firefighter and ex-Blaine County Commissioner Tom Bowman had this to say in the IME comments section on September 7:

The imbalance of taxable property values between CoK and WRFR will result in the lopsided situation where Ketchum will be paying 73% of all costs and WRFR 27%. Ketchum taxes for fire protection will go up, while WRFR taxes go down around 40%.

WRFR is in dire need of a new multi-million dollar fire station immediately. It’s difficult to imagine Ketchum voters agreeing to pay for another new station in Hailey that they will hardly ever see or use. And, again, Ketchum taxpayers would be paying 73% of that cost if it ever did pass. Any consolidation should occur after WRFR and Hailey pass their own bond and bring that asset to the table.

Here’s a better roadmap for the stable future of fire protection in the county: Ketchum consolidates with Sun Valley and the North Blaine County Rural Fire District and puts an ambulance at the Greenhorn Fire Station and at the Elkhorn Fire Station. WRFR consolidates with Hailey and Bellevue and builds their new fire station. After that is completed, the two entities consider merging if it makes sense.

This is another situation where Ketchum ends up paying for…nothing. Big cost with no benefit to Ketchum. Why did the Mayor and Council put this on the ballot?

“Free” Water For Sun Valley Co.

Forty years ago, Sun Valley and Ketchum teamed up to develop the Water Treatment Facility (what I affectionately call the “WTF”). The WTF sits on about 7 acres of Ketchum City land at the sound end of town. The WTF sits on about half the site. It was built with enough capacity to handle the two cities' needs as if every lot had been built within the zoning code limits. We use about half of its capacity.

We are going to increase its capacity as part of the $34mm project to rebuild the old WTF. The Ketchum City Council spent over 10x the time discussing pickleball courts as it did discussing the most significant capital investment in Ketchum’s history. The Council rubber-stamped the City engineer's recommendation. No analysis. No options. Typical Ketchum City Council process for allocating taxpayer funds.

My research at the time indicated we could have gotten a brand new WTF with a smaller footprint and all the bells and whistles (methane capture, pathogen testing) for less than the price we will pay for the rebuild.

This is not fleecing; this is just bad government.

Where the fleecing comes in is who gets the treated water. We take water from the aquifer, use it to shower, flush our toilets, brush our teeth, process it at the WTF, and then return the treated water to the Big Wood River.

Except for the water we don’t return to the river. That water we pipe to Sun Valley Co. to water its golf course at Elkhorn. For free. That is the fleecing. More corporate welfare.

Guess who controls the Ketchum portion of the WTF? The Mayor.

Free Mountain Rides for Sun Valley Co Guests

This is one where it is hard to tell that we are getting fleeced, but my gut says we probably are. Mountain Rides is a non-profit funded by federal funding and monies from the cities of Ketchum, Hailey, Bellevue, and Sun Valley. And Sun Valley Co., the only private payer.

During the winter months, “resort” ridership is about 1/3 of total system r’ total system ridership. SVC pays about 5% of Mountain Rides' revenue. It is impossible to tell from publicly available information whether SVC is being subsidized or not.

US Post Office

Our local post office fleeces you by breaking its own regulations to charge you for your PO box while not offering home delivery.

What do your elected officials do to address this? In 2015, Ms. Breen ran for Council on the platform to get this fixed. Nine years have passed and she hasn’t accomplished it. I think they sent a protest letter to a regional postmaster and then just let it drop.

The Troika have plenty of time to help developers exploit Ketchum, but they can’t make the effort to represent the people they are supposed to represent.

How does this End? Hint: Aspen/Vail

This ends like it always does in towns where tourism interests control the political machine.

The middle class gets squeezed out.
The tourism industry takes over their housing for short-term rentals.
The super-rich pay for new luxury development. Then, they are taxed to pay for public housing projects for the wage-depressed to service the tourism industry.

Is this what we want for Ketchum?

The Troika has been implementing its “locals replacement program” for over six years.

We can’t turn back the clock, but we can follow the number one principle of good governance: stop doing stupid things. That way, we can at least slow down the process and save what is left of Ketchum.