Thorson, Conn, Chase won’t run

In an effort to stifle discussion and debate on a topic that could save taxpayers $2MM or more, a concerted FUDD (fear, uncertainty, doubt & distraction) campaign is under way. One of the conspiracy theories involves Jon Thorson running for office in a combined Ketchum and Sun Valley.

Jon Thorson has stated he wouldn’t run for mayor in a combined city. His contribution to the community includes his role as chair of the hospital board and acting in Clint Stennett’s Senate seat are keeping him busy along with family. Like Charles Conn and Dave Chase, he simply wants what is best for the community. There is no political agenda.

Conn and Chase have previously stated that they wouldn’t run in a combined city.

When you add it up, we are left wondering what the public officials opposed to putting the merger question to the voters are afraid of.  Maybe the towns will decide to combine services to achieve significant savings, while maintaining separate administrations, or some other plan. Surely we are better for having come together and discussed the facts, whatever the outcome.  All we’d ask from people in the community is to fully consider the topic, ask hard questions and to gather information from sources that aren’t trying to protect their jobs.

Summary of $2MM savings

One of the questions One Community, One Town has received is how we arrived at the $2MM savings. This post outlines how we arrived at that conservative figure. It should be noted, however, that ultimately the newly elected body will determine how much savings can be realized. We deliberately chose the low-end of the cost-savings range as the community may want to improve service levels which would take away from some of the savings. Nonetheless experience has shown in other consolidation of small communities that savings are roughly 30% of the combined budget which equates to ~$6MM of annual savings. We believe achieving one third of that is very straightforward. Any elected official with familiarity with city budgets could easily arrive at a more aggressive figure but our goal was to stay conservative.

The no-sweat savings are approximately $2mm (~10%) don’t go beyond the obvious. Clearly, there’s no need for a duplicative set of department heads and assistant department head (i.e., going from 4 to 2 or 2 to 1 FTEs for given departments). In addition, there would only be one city administrator, one set of elected officials and one P&Z. The fully burdened cost of those headcount savings is roughly $1.5MM of the $2MM savings. In a bottoms-up review of headcount, out of the roughly 90 employees in the two towns, 16.5 FTEs would be redundant. Other communities have been more aggressive on headcount savings but we believe our community has high expectations so we used the low-end of the range and didn’t assume further efficiencies (e.g., we have departments with 2x the headcount of other mountain resort towns).

In addition there are substantial and obvious operational savings. For example, elimination of the extra city hall would result in substantial savings. Further there are other items such as savings in computer and telephony where taxpayers would only be paying for one versus two sets of software licenses and service contracts. There are corresponding capital needs associated with the redundant 16.5 FTEs. Collectively, the operational savings and eliminated capital needs make up the balance of the $2MM estimated savings.

Beyond the operational savings from having one versus two city halls in our community, we haven’t taken into account the value of spare city hall (a few million dollars). Again, the newly elected officials would determine how best to utilize the spare city hall. One of the more compelling ideas floated is to finally tackle the issue of housing for emergency services personnel. With an aging population, there is universal agreement for the need to have emergency services personnel living in our community. Even staunch opponents of affordable housing believe this is one area that needs to be addressed. The reality is there has been very little progress on this issue and limited monies have been set aside in city budgets to tackle this but haven’t gotten the job done. This would finally allow the community to tackle this issue.

Without a doubt, the biggest downside of a consolidation is the individuals working in the towns that would be affected. While the new leadership would ultimately make the decision, other experiences have shown that most of the redundancy can be eliminated via normal attrition. There would be a transition period as the towns came together and reasonable severance packages could be developed for the remaining people. We believe both cities have strong staffs and believe these would be some of the most attractive prospective employees for new endeavors that may come out of a consolidation.

Further financial analysis on per tax parcel basis

A new version of the City Economic comparison that provides per tax parcel data, re-classifies some debt, and makes other small adjustments suggested by Mayor Willich and Councilor Ribi has been posted below. Charles Conn also added comparisons to other mountain resort communities.

Sun Valley & Ketchum City Budget Comparison

Ketchum & Sun Valley Budget comparison

In response to concerns regarding the budgetary situation in Ketchum, an in depth multi-year analysis was done by Charles Conn. The slides indicate a very similar situation between the two cities. The primary differences are a greater debt level that the Sun Valley taxpayers are accountable for as well as some past years where Sun Valley spent significantly more than revenues. All of the data is from publicly available information.

This presentation has been replaced by a subsequent financial analysis in a later post.

Media Coverage

Thus far, the efforts by Citizens for One Community, One Town have received coverage on KECH Radio, KTVB, the Idaho Mountain Express, SunValleyOnline and The Times-News. [See links below]

News links:

• Citizen Group pushes Sun Valley-Ketchum merger
  
• Should Ketchum & Sun Valley merge
• Councilors hope for merger vote
• Petition effort underway to merge Ketchum & Sun Valley
  
• Elected officials weigh in on city merger
• Consolidation debate could be hot

Press Release: One Community, One Town

On Monday, February 23rd the following press release was sent to the media:

FOR IMMEDIATE RELEASE:
Contact:
Dave Chase & Charles Conn
ONE COMMUNITY, ONE TOWN February 23, 2009
An ad-hoc group of citizens, non-profit and business leaders, current and former elected officials and second homeowners have formed Citizens for One Community, One Town. The intent is to place the idea of consolidating Ketchum and Sun Valley on a ballot for consideration by the voters in both cities.
Citizens for One Town, One Community believe we are one community that shares a common interest, downtown, economy, cultural activities and more and that we would be better served by one government.
Spokesperson Charles Conn expressed that “Many visitors to the area express confusion and bewilderment over the division of Ketchum and Sun Valley. It isn’t clear where one city begins and another ends. They ask why the downtown is housed in one city, while the resort is in another.”
One of the most compelling arguments to merge is the estimated cost savings of approximately $2 million/year. Spokesperson Dave Chase states, “Consolidation of the two cities has been talked about for twenty years but fiefdom protection has thwarted efforts in the past. The tremendous cost savings can be utilized to improve infrastructure, reduce taxes and/or provide better services to its citizens.”
There are two ways for letting the voters of Ketchum and Sun Valley decide to merge. The first is a resolution where each City Council and Mayor votes to hold a special election with the issue on the ballot. The second is to organize a citizens’ petition. “We feel that the citizen petition allows the broadest public involvement and transparency. There are numerous compelling reasons to merge the two cities and we owe it to our constituents and our visitors alike to take this issue under serious consideration.” – Charles Conn.
Citizens for One Town, One Community have already done extensive analysis and study of the consolidation and will hold a Town Hall meeting in the coming weeks to discuss the benefits, review the procedures and to answer questions.
Dave Chase conveyed, “We have anticipated many of the questions as they were ones we had ourselves. For that reason, we have developed a whitepaper that outlines our perspective on the questions people have as well as let you know about the legalities of the process. We have created a website where this whitepaper is posted – http://www.onecommunityonetown.com. We invite you to review that and ask any questions that you might have so that we can respond with the answers.”
If you wish to sign the petition to put this before the voters of Ketchum and Sun Valley, please email us at oneconet@gmail.com.

Top 10 Reasons to Merge Ketchum and Sun Valley

1. Sun Valley and Ketchum are one community, but two towns. We share our downtown, our economy, cultural activities and more.

2. A merger of Sun Valley and Ketchum would result in savings due to efficiencies of approximately $2 million/year. That means we have squandered about $40 million over the past 20 years that could have been invested in our community programs and infrastructure and possibly lowered our property taxes! Future cost savings can be invested in initiatives that will improve our community’s economic outlook and our sustainability.

3. Homeowners in Sun Valley would have a greater voice in decisions made about their downtown. Ketchum voters would have a greater say in decisions about proposed development by Sun Valley Company. If downtown Ketchum deteriorates, property values in Sun Valley will decline. Conversely, when Ketchum thrives, property values in Sun Valley rise and vice versa.

4. Consolidation of the two cities has been blocked in the past because of “fiefdom” protection. Now is the time to come together for the benefit of our current citizens as well as future generations.

5. We must pool our community resources to better deal with challenges of today and tomorrow. It’s important to note that neither city nor any property located therein is legally responsible or obligated for any debt or obligations of the other city incurred prior to the effective date of consolidation.

6. Service levels will remain the same and in many cases will get better. Fire response time can be shortened and EMT response can be substantially improved.

7. Design Review Standards should be maintained. The combined town honors the zoning codes already put in place and adheres to existing design review requirements for that neighborhood.

8. Leverage valuable real estate. In merging the two towns, many of the efficiencies come from eliminating redundancies such as two city halls.

9. Ours is a tourist-based economy. One town allows marketing our area more effectively and more efficiently.

10. Elected officials have a fiduciary duty to put the consolidation decision on the ballot and let the decision be made by the voters. Once this petition is filed, there will be a town hall meeting to review the process, the pros and the cons and to answer your questions. It then becomes your decision. If consolidation is passed, there will be election of a mayor and Council. Exercise your right to decide what is in the best interest of our one common community. Community means common unity, and it is time for us to recognize this and work together.

Position Paper Executive Summary

The purpose of this position paper is to advocate for a change we feel is long overdue. Sun Valley and Ketchum are already one community deeply intertwined: Ketchum represents the downtown commercial and business center with year-round residents, 2nd homeowners and visitors. Sun Valley is home to the single biggest economic driver in the valley – The Sun Valley Resort as well as many year-round and 2nd homeowners. This paper will address the following items:

• Legal ramifications of city combinations
• Financial and economic development implications
• Health and safety service levels that are expected in the combined communities

Executive Summary
Sun Valley and Ketchum are deeply interdependent. Like the bow of a boat Ketchum is in that it is the place most people first see and experience when they arrive in the north Wood River Valley and where much of the local dollars are spent; Sun Valley is home to the economic engine of that boat.

For over two decades there have been discussions regarding a Ketchum and Sun Valley combination. Fiefdom protection from your city representatives (elected and appointed) has thwarted these efforts until now.

An ad hoc group of citizens, business leaders, non-profit leaders, 2nd homeowners and current and former elected officials agree that today’s economic challenges demand that we do what is best for everyone – have the municipal government reflect what is already reality. That is, we are one community that shares a common interest, downtown, economy, cultural activities and more. Now, more than ever, we need to pull together to not only address these challenges but also take advantage of the opportunities of combining our two cities that is available to us.

In today’s dollars, it is estimated that roughly $2MM per year in efficiencies could be realized by the merger of Ketchum and Sun Valley. This is a conservative estimate based upon an analysis of a proposed combined Ketchum and Sun Valley budget. The analysis was done by current and former elected officials as well as people with deep experience in city management both in the Wood River Valley and beyond. Savings come from headcount, operational and capital costs. Multiplied over the past 20+ years that is well over $40MM of squandered savings while city representatives have been protecting fiefdoms rather than acting for the greater good. Ketchum has just over 2000 voters and Sun Valley has fewer than 1000 voters; yet there is the full complement of duplicative municipal bureaucracy whose City Hall’s are separated by the distance of one mile.

This paper will answer many of the questions and concerns about consolidation. Those questions that are not addressed here will be in an open and transparent forum at the town hall meetings that will be organized to further seek community input. We invite you to engage with us to ask any questions we may have missed.

There are two ways of letting the citizens of Sun Valley and Ketchum decide to merge. The first is a simple council resolution where each City Council and Mayor votes to add a merger referendum to a ballot. The second is to organize a citizens’ petition. We feel that the citizen petition allows the broadest public involvement and transparency on this important issue.

Reaching out to members of the community, there have been several themes summarized below on the strong rationale for combining the two governments of Ketchum and Sun Valley:

• The current economic difficulties require decisive action on something that has been considered for decades – now is the time. We’ve already squandered millions of dollars in cost efficiencies in the 20+ years city consolidation has been discussed but not pursued. With our economy suffering, we can’t afford to squander more taxpayer money. Plus, this money could have been used to strengthen our cities infrastructure, reduce taxes and provide better health, safety and welfare to the citizens.
• There is over $2MM of recurring annual savings that could be realized as well as a one-time boost from duplicative real estate (i.e., two city halls).
• As a result of the merger, the redundant city hall could be used to house emergency services personnel (either directly or by leveraging the real estate value to locate housing elsewhere) while also providing an economic stimulus if new construction was needed (i.e., there was a better location).
• Those in opposition are driven by protecting fiefdoms rather than the good of the community. We can no longer let fiefdom protection thwart what is best for the community.
• Sun Valley voters would like a voice in “their” downtown and Ketchum voters would like a voice in what happens in Sun Valley since the success of the Sun Valley Company begets the success of Ketchum commerce and the area’s economy.
• The elected officials of each city have a fiduciary responsibility to analyze the pros and cons of a city consolidation for our mutual economic sustainability. If elected officials do support a merger, the measure should be placed on each city ballot. As public officials they need to clearly communicate their viewpoint and analysis prior to a vote. In the public interest, a responsible public official should not stand in the way of putting this issue on the ballot. Not giving citizens a vote on an issue is not consistent with our democratic government.

Legal Background

Idaho Code allows for two adjacent cities to be combined into one city. This is spelled out on the State of Idaho’s Statutes website in Title 50 Chapter 21 Consolidation of Cities. There are two approaches to getting merger on the ballot of each town: 1) The City Council & Mayor pass a resolution to put the issue before the voters (detailed 50-2102 – RESOLUTION FOR JOINT SESSION OF GOVERNING BODIES ); each city would have a separate election and 2) The other alternative, spelled out in 50-2103 PETITION FOR CONSOLIDATION is that citizens of each town can initiate via a petition if their Councils refuse to put it before voters to decide. With signatures of 20% of the electors in the last city election, the Councils would be compelled within 30 days to have a joint meeting (see code for more details on steps to be taken). At that meeting, they must set a date for an election within 60-90 days of that meeting.

If a simple majority of the electorates of each town vote in favor, what follows is another election to determine the new City Council and Mayor. Two of the Council positions are for two year terms while the other two are for four year terms. The election occurs between 60 and 90 days of the approval of consolidation. Upon election, the new officials move immediately into office.

Frequently asked questions:

• What happens to the ordinances in the two cities? The city ordinances of the larger city prevail although there is some grandfathering of the smaller cities codes as spelled out in Idaho Code 50-2112 EFFECT OF ORDINANCES OF CONSOLIDATED CITIES
• What happens with zoning? The zoning laws of the larger city takes precedence in terms of an overall framework however specific zoning areas in Sun Valley would be grandfathered.
• What happens with Design Review? There is little, if any, change. Homeowners’ Associations remain heavily involved while the city processes in Ketchum and Sun Valley are largely the same.

Health and Safety Issues

When many citizens count on their local government, they are primarily thinking of one main area – health & safety. With low crime and an older population in Sun Valley, health & safety is ensured by their fire department. In general, there should only be a positive change to current services levels.

The Ketchum Fire Department has Paramedic-level personnel who are able to provide a significantly higher level of medical care that is vital in the minutes after a medical incident occurs. If the fire station in Elkhorn was staffed like the Ketchum fire station (i.e., 24 hours), it is likely that response times would be reduced (i.e., improved) in Sun Valley and a more qualified Paramedic first-responder would arrive on the scene. With the aging population in our valley, this is more critical every year.