V2N28: Ketchum Council Confirms Its Fiduciary Failures

They dedicate Ketchum taxpayer funds to solve County problems ahead of addressing Ketchum’s challenges

The Giveaway is More Than The Firehouse

As I anticipated in my previous post, on Monday the Ketchum Council gave away over $10mm to a combination of the new fire district and Blaine County Housing Authority (BCHA). In my view this was gross negligence of their fiduciary responsibility to Ketchum taxpayers.

First, they gave the fire house and the millions of $$ of equipment in it, all paid for by Ketchum taxpayers, to the new fire district. What is their rationale?

One is a half truth: the fire house benefits Ketchum, so it’s okay to donate it to the fire district that serves much of the County and Magic. While that is true, the way the station is being transfered puts 100% of the cost on Ketchum taxpayers when it should be paid for by the entire fire district. Ketchum taxpayers will be taxed for every other fire expense in the new district. Where is the “consolidation” if Ketchum bears the lion’s share of the cost?

What should they have done? Instead of leasing the station to the district for $1 and committing to donate it once Ketchum taxpayers have paid off the bond, they should lease it for a price equivalent to the bond payments, and reduce Ketchum property taxes by the same amount. They should never give away the land underneath it—that should go to a ground lease. They weren’t this dumb for Bluebird—after 75 years we get the land back. Fire District taxes should be set at the level to cover these payments. All members of the district would pay. As they will for every other asset in the district. The basic principal is that if you transfer an asset, you also transfer the liability.

In addition to the station, they gave away the adjoining fire training facility (and the land under it). There is already a fire training station in Ohio Gulch. Why do they need another one? Isn’t consolidation supposed to create efficiencies? This was an unnecessary give away. Wouldn’t that land in the LI zone be better used for workforce housing—for fire fighters? And why does the new fire district need the land in perpetuity—we could have leased it to them. THIS WAS REALLY DUMB.

Zero discussion about this land giveaway by the Council. This shows their underlying hypocrisy in their approach to housing. They have no plans and no intent to provide housing for essential workers. It also is proof positive of their fiduciary incompetence.

The rest of the rational is fantasy The memorandum with the new fire district states the City’s intent is that it is a step toward county-wide fire consolidation. This is a pipe dream. No other city in Blaine County has expressed its intention to join the new district.

Indeed, those cities cooperate with Ketchum almost solely on tourism subsidies via the Sun Valley Air Service Board (SVASB). Almost every other county-wide activity is primarily paid for by Ketchum taxpayers. Mountain rides? Ketchum is the largest contributor. BCHA? No other city gives it $1 (more on that below). Blaine County Sustainability (5B Can)? Ketchum pays for half. Ketchum even subsidizes Blaine County Sheriff’s Office (BCSO) with free equipment. We are the honey pot. Thanks to the Bradshaw Administration.

The Boys Are Not Alright

In my last post I accused Council Members Cordovano and Hutchinson of joining the Troika of Bradshaw/Breen/Hamilton in selling out Ketchum taxpayers. They confirmed that with their actions on Monday.

Hutchinson, a volunteer firefighter, is a big supporter of fire consolidation. He has ties to the fire union leadership that went door to door to get consolidation approved. Guess how he voted? He is too smart not to be able to do the math here, yet he never spoke up about it in the meeting.

Cordovano wants the City of Ketchum to take over BCHA. While I support this acknowledgement that BCHA is an expensive and inefficient front for spending Ketchum taxpayer money, his motivation is so he can have more influence in its budget and spending. The voters might have something to say about that.

More Taxes Coming From This Council

Our council demonstrated this week that they are a FAIL on fiduciary responsibility. They should never have agreed to the fire deal. Ms. Breen is particularly culpable as she was on the committee that decided this.

I calculate that the City spends millions of dollars providing services for non-residents of Ketchum. It is just coming around to the fact that our infrastructure is crumbling, but is struggling with how to pay for it. We would have enough money if we taxed and spent in a fiscally prudent manner.

A cynic (me?) might argue that the reason they all went for fire consolidation is that it was a slimely way to raise property taxes on Ketchumites. Watch what happens to your tax bill when the fire district tax is set. Your taxes go up and service levels won’t change. My guesstimate is your tax bill goes up 10%. FOR NOTHING. The city will keep some of the property taxes it used for fire to fund other things. Another option under consideration is a property tax increase dedicated to capital maintenance.

None of this would be necessary if the Council acted in the interests of Ketchum residents.

I am not against Ketchum contributing to county-wide challenges. But it should do so when there is a consensus from its residents and the residents of the other cities to do so rather than just freely redistributing Ketchum’s largesse. And when we do it, we should be transparent to Ketchum’s constituents what we are doing rather than hiding it in multiple layers of (expensive) bureaucracy.

What do you think?