Spokane Valley City Council Highlights June 2023

Your Connection to the Spokane Valley City Council

June 26, 2023

The last item of business in last week’s Spokane Valley Council meeting was addressing a notation from the last State Auditor’s briefing. In an entirely new finding, The auditor concluded that the City’s procurement policies did not meet Federal standards. The staff has created policies that address the Auditor’s concerns (Ordinance 23-013). It should be noted that Staff was already following procurement guidelines as stated in the Federal Uniform Guidelines. However, Ordinance 23-013, memorializing the adoption of Federal Procurement Regulations, was adopted unanimously by Council.

The City uses high resolution aerial imagery in its Planning, Permitting, Economic Development, and Public Works departments in a multitude of ways which benefit those departments. The City partners with Spokane County in an interlocal agreement for those services. A mutually acceptable revised and updated agreement has been worked out between the entities. The motion to approve the Interlocal Agreement with Spokane County for Imagery License and authorize the City Manager to execute the same passed unanimously.

In the continuing struggle to effectively cope with the City’s homeless problem, it participates in an interlocal agreement with Spokane County for Community Development Block Grant (CDBG) funds distributed by the Federal Department of Housing and Urban Development (HUD). The agreement runs in three-year increments with 2023 as the final year of the current agreement. This being the final year of the agreement, the City must decide if it wishes to continue as part of the consortium or go its own way. The date for final notification to the County is July 7. The City’s 2023 HUD distribution is $605,710. Per the interlocal agreement, the County takes a 20% administrative fee, leaving $484,568 for the City’s set-aside.

If the City were to remove itself from the County consortium, it appears that the City could perform the administrative duties associated with a direct payment from HUD but probably not for less than the 20% administrative fee the County charges. Other considerations, such as startup expenses and ongoing administrative costs above those allowed, puts the City in the position of having sign on for another three-year membership in the consortium or make the necessary moves to administer the program within the City staff.

Concurrently, there is a move to form a regional coalition for the purpose of centralizing the effort to combat homelessness. Indecision on participation and uncertainty on funding sources have thus far hampered negotiations. The City channels its funding sources through the County, which, in turn, directs that money to the City of Spokane for application and administration. In the process, not only does the City assign control of the application of its money, but the current participants and the media seem not to appreciate the considerable funding that comes from the City of the Valley.

However, the most expedient way for the City to participate is to continue partnering with the County for distribution of its allocated funds. Council decided unanimously to renew the agreement for three more years assuming that the County continues with largely the same contract. If the County chooses not to renew the contract under the same terms, it will be necessary for Council to consider other arrangements for its HUD allocated funds.

The City contracts with Spokane County for the City’s criminal detention services pursuant to an interlocal agreement. Spokane County operates the Geiger Corrections Center as part of that agreement. Recently, the County Commissioners passed a resolution to place a 0.2% sales tax increase on the November election ballot for criminal justice, public safety, and behavioral health purposes from 2024 through 2054 with the understanding that a new jail would be constructed.

Pursuant to state law, Spokane County would, if the ballot measure is approved, receive 60% of the total sales tax collected. The remaining 40% would go to the incorporated cities based on population. By that measure, the city would receive approximately $3 million based on 2022 sales tax collections. That number is, of course, subject to economic fluctuations.

City Hall was completed and occupied in early September 2017. Since that time many significant constructions and/or design defects have been discovered. The City hired various consultants to identify the nature and extent of the defects. Based on their findings, the City filed suit in Spokane County Superior Court on April 27th, 2020, naming as defendants, Meridian Construction (prime contractor), Architects West (architect and project manager), Allwest Testing & Engineering (materials testing), and Eight31 Consulting (owner’s representative to assist in overseeing the project).

The City has completed some of the necessary repairs since the initial discovery of the defects. To date, the City has installed temporary micro piles (concrete pillars) along the curved wall in the building’s front (Council Chambers) to arrest further settling. Fire stopping processes have been installed in the north and south end staircases. Extensive repairs to the HVAC system were also necessary. During the staircase work, structural members were found missing above the ceiling, and have been added to bring the building into the condition it should have contractually been.

Further necessary repairs may not be completely known until walls and ceilings are further exposed. To that end, the City has opted for a non-standard delivery method for the major repairs that are known or may be needed. The method is known as the Progressive Design Build (PDB) process. PDB is a process in which both the design and construction of a project are procured from a single design-build entity that is selected competitively by the City. Under this process, Garco Construction has been chosen as the contractor.

Garco’s phased scope of work includes these key elements and planned time.

1. Council Chamber’s Exterior Wall

• Demolition is currently underway (started June 12)

• Reconstruction should be complete in September.

2. Council Chamber’s Interior Space

• Demolition is ongoing and should be complete by August.

• Reconstruction of the interior space is anticipated for completion in November.

3. Interior Building Doors. Throughout City Hall there are 10 interior doors that will be removed and replaced/reinstalled with new framing and connections.

• Removal/replacement to begin in late July.

• Efforts will take place while chamber’s work is occurring.

4. Roof and Attic Repairs/Replacement

• Required work to secure the roofing for this coming winter is minimal and will be complete this fall.

• Full roof and attic work is anticipated for spring and summer of 2024.

Staff will continue to update Council and the City frequently as the project continues.

Please note: There will be no Council meeting on Tuesday, July 4th.

City Council meetings are held in the Great Room at CenterPlace until further notice. City Hall, however, is open for business during normal business hours. The Public is invited to Council meetings to participate in action items or public comment periods in person or via ZOOM. Call 509-720-5000 or www.spokanevalley.org prior to 4:00 p.m. for access instructions. Council meetings are broadcast on Comcast channel 14.

June 20, 2023

This Study Session of the Spokane Valley City Council opened with a public hearing in preparation for adoption of the City’s 2024-2029 Six-Year Transportation Program (TIP). State law requires that the City prepare and, after holding a public hearing, adopt a comprehensive transportation program for the ensuing six calendar years.

The TIP is comprised of transportation projects intended to be implemented in the next six years that address the City’s transportation needs. Delivery of the proposed projects depends on outside funding support. Staff constantly monitors the City’s REET (Real Estate Excise Tax) fund balances throughout the scheduled years to ensure that there are sufficient funds to satisfy the fiscal requirements for planned projects. The required City match on federal and state funded projects is typically between 10% and 20%.

The program includes 41 projects planned over the six years the project categories encompass: 2024 Closeout Projects (8); Bridge & Grade Separation Projects (4); Intersection Improvement Projects (11); Annual Local Access Street Projects (1); Annual Arterial Preservation Projects (1); Safety, Sidewalk, Trail, and Stormwater Projects (9); and Other Reconstruction/Preservation Projects (7).

Resolution 23-007 encompasses the state mandated requirements for the City to adopt and implement its TIP. The motion to approve Resolution 23-007 passed unanimously.

With the remediation work ongoing at City Hall, the Planning Commission finds itself in the same situation as City Council per the labeling of its meetings, i.e.: Notice of its meetings must be labeled “special” meetings unless and until a resolution (Resolution 23-008) temporarily establishing CenterPlace as its regular meeting place is adopted. The motion to adopt Resolution 23-008 passed unanimously.

The Barker Road/BNSF Rail Crossing project was awarded to the Max J. Kuney Company (Kuney) for construction on January 28, 2021, by the Washington State Department of Transportation (WSDOT), the project manager.

The City and WSDOT coordinate on all change orders for the project with Kuney regardless of the amount. The total of those change orders number 67 with a cumulative total of $13,489,213.13 for the entire project which is 15.92% over the original contract of $11,637,134.

The Contractor’s successful low bid was $2,000,000 below the next lowest bidder. That bid must be accepted under the rules for selecting the successful bidder. However, a low bid can often be enhanced by the change order process and the project cannot move forward without approval of the change orders. The motion to approve various change orders totaling $192,936.33 was approved unanimously.

The Commission chose to hire 116 & West as their marketing consultant. However, 116 & West did not have the qualifications to provide sporting events recruitment and marketing services for the City. Recognizing that, the Commission selected Spokane Sports to provide sports recruitment services. Spokane Sports, by request from the Commission, submitted a proposal to work with 116 & West to round out the package to brand the City as a “host city” for future sports events. The additional cost will be $300,000. The motion to approve the City Manager executing a sports recruitment contract not to exceed $300,000 with Spokane Sports passed unanimously.

In a late addition to the agenda, Council approved a lease to the new owner of Splashdown Family Water Park located in Valley Mission Park. The previous leaseholders were caught in the COVID shutdown causing severe hardship. The new owner, a Valley resident, plans to open Splashdown later this summer.

The City participates in an interlocal agreement with Spokane County for Community Development Block Grant (CDBG) funds distributed by the Federal Department of Housing and Urban Development (HUD). The agreement runs in three-year increments with 2023 as the final year of the current agreement. This being the final year of the agreement, the City must decide if it wishes to continue as part of the consortium or go its own way. The date for final notification to the County is July 7.

The City’s 2023 HUD distribution is $605,710. Per the interlocal agreement, the County takes a 20% administrative fee, leaving $484,568 for the City’s set-aside.

If the City were to remove itself from the County consortium, it does not appear that the City could perform the administrative duties associated with a direct payment from HUD for less than the 20% administrative fee the County charges. Other considerations, such as start up expenses and ongoing administrative costs above those allowed, dictate that the City will likely sign on for another three-year membership in the consortium. However, the City may augment its participation through its Outside Agency fund, providing additional funds for local use.

On May 22, 2023, the Washington State Transportation Improvement Board issued a call for projects for its Urban Arterial Program (UAP) and its Active Transportation Program (ATP). The UAP has historically funded our City’s street-related projects. The ATP is newly revised to deliver more broadly used transportation projects such as non-motorized uses rather than sidewalk-only use.

The proposed UAP grant requests for projects are a) Barker Roundabout at 8th ($550,000-city match); b) Argonne Concrete Reconstruct-Indiana to Knox ($700,000-city match).

The sole proposed ATP project grant request is Sprague Ave. Pedestrian Crossings (near Chronicle, McKinnon-Howe) with a $196,000-city match.

Since early 2022, the Economic Development Department has been working a new city website to improve city communications and public engagement. In late August, CivicPlus was selected to complete the project. The total charges for the project are $59,365.80. The target date for start up is June 21. The new site features a home page as well as five department subsites with unique navigational menus including:

• Permit Center, allowing for a “one stop” that provides permitting, building and land use/planning guidance and documents.

• CenterPlace Regional Event Center which allows marketing as an event and small conference venue.

• Economic Development, allowing for in-depth business and industry data and demographics to support the selection of Spokane Valley for business recruitment and enhancement.

• Parks and Recreation, which positions the department to brand its programs and services, providing a single point of entry where citizens can access information.

• Spokane Valley Police Department, which presents the department services, many of which are offered at the city precinct building but are not well known to city residents.

The new site will use a new domain/URL: spokanevalleywa.gov The City’s old domain, spokanevalley.org will redirect messages to the new domain until eventually being retired. City employees will begin using the new domain in their email; name@spokanevalleywa.gov.

The City uses high resolution aerial imagery in its Planning, Permitting, Economic Development, and Public Works departments in a multitude of ways which benefit those departments. The City partners with Spokane County in an interlocal agreement for those services. A revised and updated agreement as been worked out between the entities. Council reached consensus to bring the revised agreement to a future meeting for action.

At the last State Auditor’s briefing, in an entirely new finding, the auditors stated that the City’s procurement policies did not meet Federal standards. The staff has created policies that should address the Auditor’s concerns. Staff is already following procurement guidelines as stated in the Uniform Guidelines.

June 13, 2023

This meeting of the Spokane Valley City Council was a special budget workshop which occurs each year at about this same time as City staff prepares next year’s budget. This is the first of the eight times (including three public hearings) that Council will address various items or sections of the budget enroute to its final adoption on November 7th, 2023.

There was an increase in the employee count in the amended 2023 budget to accommodate compliance with mandated reporting and expense requirements such as stormwater tracking and implementation. The 2024 Proposed Budget calls for two additional employees who are needed for compliance with Department of Ecology mandates, bringing the total employee count to 113.25.

An important note: A transfer from the General Fund to the Street Maintenance Fund was necessary to cover the 2024 cost of street maintenance. That transfer is an increase of $1.2 million from $3.5 million to $ 4.7 million, highlighting the alarm that without a constant, dependable source of revenue for street maintenance, the City is on an unsustainable trajectory.

A recap of income for 2024 compared to 2022 and 2023 thus far is informative to gain a perspective on likely trends for the future. Taking the City’s major sources of income in order of importance:

Sales Tax. In 2022, sales tax collections grew by 2.69% over 2021 which was a recovery year from COVID. Inflation in Washington state continues to track higher than the national average while growth in personal income is lower than the national average. Growth in sales tax collection statewide seems to indicate that consumers are beginning to adjust spending habits in anticipation of continued inflation. Statewide numbers tend to bear this out.

Real Estate Taxes. The City had record collections of real estate excise taxes (REET) in 2021, increasing nearly 70% after a 40% decrease in 2020. That increase brought REET revenues to an historical high in 2022. Thus far in 2023, REET collections are returning to pre-pandemic levels of around $3 million. State projections appear to be following that same path.

Permitting Revenues. Spokane Valley has seen record highs for permitting and development as the City continues to grow. 2021 was the highest to date for permitting revenue, with 2022 declining after the burst of development activity in the northeast industrial area. In the first four months of 2023, permitting continues to see a high number issued paralleling historical numbers. This analysis is based on average permitting revenues collected over the past six years.

Motor Vehicle Fuel Taxes. Just as every other source of revenue was impacted by COVID, so was fuel tax revenue by nearly 14% in 2020. The trend in driving habits was altered by COVID and has been further changed by the high price of fuel. The City’s fuel tax revenues are based on the number of gallons of gasoline sold rather than the dollar amount of the sales which means that a reduction in the number of gallons sold adversely impacts fuel tax collections. The number of electric vehicles mandated and now on the road will also have a deleterious effect.

Lodging Taxes. Lodging taxes were heavily affected by COVID. The direct impact in 2020 was a decrease of more than 40%. However, these revenues bounced back to pre-pandemic levels in 2021 and reached a record high in 2022. January through April of this year has seen a slight decrease compared to the same time in 2022. Inflationary pressures continue to affect travel habits, which in turn, impact revenues.

Telephone Utility Taxes. The Telephone Utility Tax which was, at its inception, supposed to solve the City’s road maintenance and preservation problems. However, since it was adopted, it has had a steady downward trajectory. In 2022, the collection decreased by 3% from the previous year, which is the lowest decline since 2011. Collections have dropped just over one percent from the same period the previous year.

Taken in their entirety, the above summaries would indicate fairly level revenues and expenses for the City in the face of international turbulence. National and state politics affecting inflation and levels of taxation from higher levels of government will, of course, also play an important role in impacting City revenues.

June 6, 2023

After two weeks of intensive agendas, the Spokane Valley City Council enjoyed a rather light program. This meeting was a Study Session with only two action items, other than the Consent Agenda where the bills are paid, and only two non-action items. However, next Tuesday, June 13th, Council will be in its annual Budget Retreat starting at 8:30am at CenterPlace. That meeting will last until mid-afternoon and will be followed by a regular meeting of City Council after a short break.

The evening’s business opened with a Motion Consideration to award the bid to complete the Barker at Union Pacific Crossing Project. In 2018, the City was accorded multiple grants to reconstruct the Barker Corridor and provide a multi-use route from the Spokane River to the Barker/BNSF Grade Separation Project on the north end of Barker. The project is the last segment of the total project and will construct the remaining road improvements from Euclid Avenue (east) to Euclid Avenue (west), including the UP rail crossing and the multi-use path from Euclid Avenue (east) to the Barker/BNSF Grade Separation Project limits.

Consolidated Irrigation District No. 19 will install a water main within the roadway project and is partnering with the City to include that construction as part of the City’s project. Spokane County will also install a sewer main within the roadway project and is partnering with the City on that segment. The budget for the total combined project is $4,402,550. The Engineer’s Estimate for the City’s road construction share was $2,649,536. The motion to award the bid to Corridor Contractors, LLC in the amount of $2,727,828.20 passed unanimously.

On May 18th the Spokane Regional Transportation Council announced their call for projects to be included on its Unified List of Regional Transportation Priorities. The primary function of the Unified List is to communicate SRTC’s regional priorities to state legislators and federal congressional members. The City’s existing list, adopted on December 20, 2022, included:

• Sullivan/Trent Interchange

• South Barker Road Corridor

• Argonne Road Bridge at Interstate 90

At its May 30th meeting, Council voted to include the Barker Road/Interstate 90 interchange (I-90). Adding I-90 to the City Transportation Improvement Plan (TIP) and adding it to the Unified List. The motion to add I-90 to the TIP and Unified List passed 5-1.

In 1965, Congress enacted the Older Americans Act to organize community-based programs for older adults. Amendments to the Act added a nutritional program for the elderly and required states to form Area Agencies of Aging. Ms. Lynn Kimball, Executive Director of Aging & Long Term Care of Eastern Washington (ALTCEW), updated Council on the agency and its work to help older adults and adults living with disabilities find and access the resources needed to plan, prepare for , and support living independently.

The primary goal of ALTCEW is to help people stay in their homes if that is their choice. ALTCEW served more than 2,000 Valley residents in the past year, offering counselling and direction services and working directly with such agencies as Meals on Wheels and Frontier Behavioral Health to provide assistance. Approximately 56% of ALTCEW’s clientele are females. ALTCEW can be reached for assistance or to answer questions at 509-960-7281.

On September 20th, 2022, Spokane Valley City Council adopted Ordinance 22-016, establishing a Spokane Valley Tourism Promotion Area (TPA). Pursuant to the TPA, the Spokane Valley Hotel Commission (Commission) was formed. The Commission developed and sent out requests for qualifications (RFQ) to develop a five-year destination marketing plan with an 18-month marketing service plan.

After interviewing qualified candidates, the Commission recommended 116 & West as the most qualified. Council concurred with the Commission’s recommendation and 116 & West was hired. The five-year marketing plan will identify strategies, tactics, and costs for the initial 18-month service plan for Council approval. The campaign will feature paid digital advertising reaching the Seattle region, western Montana, and Canada focusing on the City’s newly developed tourism website.

Subsequently, it was recognized that 116 & West did not have the qualifications to provide sporting events recruitment and marketing services for the City. The Commission recognized that Spokane Sports, who also responded to the RFQ did qualify to provide sports recruitment services. Spokane Sports, by request from the Commission, submitted a proposal to work with 116 & West to round out the package to brand the City as a “host city” for future sports events. The additional cost will be $300,000. Consensus was reached by Council to bring this action at a future Council meeting.

At its Budget Workshop on June 13th Council will spend most of its day considering and discussing budget priorities for 2024. That meeting will begin at 8:30 AM at CenterPlace. It is open to the public. The retreat will be followed, after an intermission, by a regular Council meeting.

View Past Spokane Valley City Council Highlights

The City Council holds more formal meetings the second and fourth Tuesday of each month and holds Study Sessions on the first and third Tuesday of each month. Agendas, minutes and background materials can be found on the City’s website: www.SpokaneValley.org by 5pm the Friday before each meeting.

Contact City of Spokane Valley:

10210 E. Sprague Ave.
509-921-1000
www.SpokaneValley.org