Incorporation Study Dec 2001 Spokane Valley Incorporation Study
Bob Noack
Summary Interim Finance Director
City,of Spokane Valley
Updated December 2001 11797 East Sprague Avenue, #106
Spokane Valley, WA 99206
City of Spokane Valley 509-921-1000 City Hall N 509-9211008 Fax
The new City of Spokane Valley is bounded on the west by the City of Spokane_and on the
east by Hodges Road approximately one-half mile ease of the newly formed City of Liberty
Lake (Map 11). The proposed City's current estimated population is 80,700 and is projected
to grow to a population of 89,425 in ten years. The new city boundaries encompass about
thirty-eight square miles.
Type of Government
The type of government selected for the new city is classified as a non-charter code city.
Code cities follow the Optional Municipal Code (RCW 35A) with the essential difference
between a charter and non-charter code city is that a charter code city can provide for an
individualized plan of government with a unique administrative structure, whereas a non-
charter code city must choose one of the forms of government provided and are governed by
statutory provisions,
Form of Government
The City of Spokane Valley will have a council-manager form of government. This form of
government has seven council members elected by the voters. Either the council may elect
a council member to serve as mayor and chair of the council or the city council may, by
resolution, submit a proposition to the voters to designate the person elected to council
position "one" as the chair of the council. If the proposition is approved, at all subsequent
general elections, the person elected to position one becomes council chair and the city's
mayor. Because the "mayor" continues to be a council member, however, the only elective
position under a council-manager form remains that of council member.
The elected officials must be residents of the city for one year and are elected for a four-
year term. Until a salary ordinance is passed, the salaries are restricted to $500 per month
plus expenses for the Mayor and $400 per month plus expenses for the council members.
The council appoints a person to the position of"city manager". The city manager is the
Chief Executive Officer of the city and the head of the administrative branch of the city's
government. Appointments of all department heads, officers, and employees are made by
the city manager.
Under a council-manager form of government, two positions must be appointed by the
council: City Clerk and Chief Law Enforcement Officer. Legal Counsel must be provided for
either by appointment or by contract.
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Washington State Boundary Review Board for Spokane County December 2001
Background of Spokane Valley Incorporation
Government alternatives for the Spokane Valley have been proposed and discussed for many
years, dating back to the 1950s. In the late 1970s, there were a number of Valley residents
who began to look at the issue of incorporation as a means for self-government. In 1984,
the Spokane Valley Chamber of Commerce published Directions for Tomorrow: Local
Government in the Spokane Valley on local government options for Valley residents.
Table 1: Comparison of Past Incorporation Proposals
= 199Oij L7iT.Wie 1995 42�D�Y
Land Area (square mites) _ 55 75 50 33 38
Population 78,200 91,200 76,700 64,800 80,700
Housing Units 32,349 34,992 30,929 25,600 32,280
Population Density (persons/sq mi) 1,422 1,216 1,534 1,963 2,124
Taxable Assessed Value (million) $2,160.0 $2,364.3 $2,096.6 $2,500.3 $3,952.5
1987 Spokane Valley Incorporation Proposal
In 1985, the Committee for Incorporation was formed and proposed the incorporation of the
City of Spokane Valley as a new city in Spokane County. A Notice of Intention to
incorporate the Spokane Valley was submitted to and subsequently filed by the Washington
State Boundary Review Board for Spokane County on July 3, 1985. On November 9, 1985,
following a series of public hearings on the proposal, the Board approved the proposal with
modified boundaries.
Before the incorporation proposal was placed on the ballot, the Board's decision was
challenged in Spokane County Superior Court by a consortium of affected entities. One of
the principal reasons for the suit was the consortium's claim that the Board had reached its
decision without sufficient information, particularly financial information. On September
22, 1986, the Court found in favor of the consortium, remanding the issue back to the
Boundary Review Board for further consideration.
A report entitled Fiscal and Service Analysis of the Proposed City of Spokane Valley was
then prepared. Following publication of this document in September 1987, the Board held
three public hearings in the Spokane Valley. After reviewing the report and considering the
factors and objectives of the state law for Boundary Review Boards, the Board voted to deny
the proposal on December 9, 1987.
1990 City of Chief Joseph Proposal
In February 1990, a Notice of Intention for incorporation of the Spokane Valley as the City
of Chief Joseph was submitted to the Washington State Boundary Review Board for Spokane
County. The Boundary Review Board filed the Notice of Intention on March 9, 1990. A
report entitled Chief Joseph Incorporation Study was prepared and published in July 1990.
After four public hearings on the incorporation, the Boundary Review Board deliberated on
the proposal and recommended against the incorporation. The state law had changed and
Boundary Review Boards could no longer deny a proposal if the population was over 7,500;
the Board's decision was limited to approve as submitted, modify the proposal by up to ten
percent of the land area, or recommend against the proposal. With the change in the state
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Washington State Boundary Review Board for Spokane County December 2001
law, even though the Board recommended against the proposal, the incorporation was
placed on the ballot.
The issue was brought to an election in November 1990 and was defeated by a large margin.
It needed a simple majority to pass but received only 34 percent of the vote. State law
requires that if an incorporation ballot receives less than 40 percent of the vote, three years
must elapse before an incorporation may be placed on the ballot again. November 1993 was
the earliest that the incorporation could be placed on the ballot.
1993 Spokane Valley Incorporation Proposal
Proponents for the Spokane Valley incorporation continued their efforts and a petition was
circulated in early 1993 for another proposal to incorporate. In the proposal, the
boundaries encompassed less land area and a smaller population. The Boundary Review
Board held several public hearings and after deliberation, again recommended to deny the
proposal because of the large amount of rural land included. The Board's decision was
appealed because a request for modification to exclude the Kaiser and Spokane Industrial
Park property was not approved. Both the Superior Court and later the Court of Appeals
upheld the Board's decision and the matter went on the ballot in April 1994. The proposal
was defeated but received 44 percent of the vote so that the matter could be placed on the
ballot without any time restrictions.
1995 Spokane Valley Incorporation Proposal
Inspired by the 1993 election results, the proponents again initiated the incorporation
process. A Notice of Intention for the incorporation was filed on January 12, 1995. The
Boundary Review Board held a public hearing on the proposal on February 13, 1995. The
matter was placed on the ballot in May of 1995 and was again defeated at the polls. The
vote for incorporation was greater than forty percent in favor, which enabled the proposal
to go on the ballot the following year.
1996 Cities of Opportunity and Evergreen Proposals
Immediately after the 1995 election, proposals to incorporate five separate.cities in the
Spokane Valley were filed with the County. Proponents of two of the five cities submitted
petitions in a timely manner and the petitions were certified by the County Auditor. The
proposed cities of Opportunity and Evergreen were scheduled for public hearings before the
Boundary Review Board on February 26th and 29th, 1996, respectively. The incorporations
went to the voters, but received less than forty percent of the vote, preventing another
election for three years.
2000 City of Liberty Lake
Proponents for Spokane Valley incorporation had in the past included the Liberty Lake
community within its incorporation boundaries. In 1999, a committee was formed to look
at governance options for the Liberty Lake community. An incorporation of the area was
proposed in early 2000; was placed on the ballot in November 2000; and was approved by
the voters. The official incorporation date for the new City of Liberty Lake will be August
31, 2001.
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Washington State Boundary Review Board for Spokane County December 2001
Existing Conditions in the Spokane Valley
Population The estimated 2002 population for the proposed City of Spokane Valley is
80,700 people. There are approximately 32,280 residential units. These numbers are based
upon the 2000 U.S. Census data updated with Spokane County residential building permit
information from April 2000-2001. The population density for the new city would be 2,124
people per square mile based on a land area of 38 square mites. The tables are based on
2000 Census data for each city and show how the new city would compare to other cities in
Spokane County and Washington.
Table 3: Population Density of Spokane County Cities (2000)
_ t
Narnemof Cit_1 ?-KO PoRulatrann-.Area -.__S Density
Spokane 195,629 59 3,315/sq mi
Spokane Valley 80,700* 45 2,124/sq mi
Cheney 8,832 4 2,154/sq mi
Airway Heights 4,500 5 900/sq.mi
Medical Lake 3,758 4 1,043/sq mi
Deer Park 3,017 6 479/sq mi
Millwood 1,649 1 2,356/sq mi
*2001 population estimate
When analyzing population density, it is important to realize that concentrated
development can lead to greater efficiency, reduced fiscal and social costs, and potentially a
better quality of life. Population density can also be used to identify areas that are urban
character. Out of the twelve cities on the table below, the proposed City of Spokane Valley
has the lowest population density.
Table 4: Population Density of Washington Cities over 50,000
I�me_o#
Shoreline 53,025 12 4,418/sq mi
Tacoma 193,556 49 3,942/sq mi
Federal Way 83,259 21 3,927/sq mi
Bellevue 109,569 31 3,534/sq mi
Spokane 195,629 59 3,315/sq mi
Everett 91,488 28 3,279/sq mi
Vancouver 143,560 44 3,240/sq mi
Lakewood 58,211 19 3,063/sq mi
Yakima 71,845 26 2,763/sq mi
Kent 79,524 29 2,704/sq mi
Bellingham 67,171 25 2,686/sq mi
Kennewick 54,693 25 2,187/sq mi
Spokane Valley 80,700 38 2,124/sq mi
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Washington State Boundary Review Board for Spokane County December 2001
Projecting population growth into the future is exceedingly speculative and can be
particularly complicated considering all the potential constraints that could be imposed on
future growth. In order to estimate growth within the boundaries of proposed City of
Spokane Valley; the total population growth from 1990 to 2000 (9.7%) was continued to
2010. Population projections for Spokane County and the City of Spokane were estimated as
a part of the growth management planning process. For the table below, the 1990-2000
population growth rate was continued to 2010.
Table 5: 10-year Population Projection for the Spokane Valley Incorporation Area
WOW 2000 °fo ChangI—2x10
Spokane County 361,333 417,939 13.5 F 453,881
Unincorporated Area 165,443 199,135 16.9 232,788
Incorporated Area 195,890 218,804 10.5 221,093
City of Spokane 177,165 195,629 9.4 214,018
Spokane Valley Incorporation Area 71,081 80,700 9.7 89,425
Assessed Valuation
The proposed city has an estimated 2001 assessed value of real property of $3,952,562,092
This estimate of value is for taxable regular value and includes a component for personal
property and state assessed value and excludes certain taxable value exemptions. Table 6
compares assessed valuation and per capita assessed value to Washington cities with
populations of 50,000 or more.
Table 6: Per Capita Assessed Value of Washington Cities over 50,000
�a�re.ofrCity�Y_Assessetl Valua��_,� �e�Ca�it�As�essed Valve_ �-
Bellevue $14,980,866,542 $136,725
Kent $6,468,268,324 $81,337
Everett $7,183,712,229 $78,521
Shoreline $3,708,147,323 $69,932
Vancouver $8,479,116,092 $59,063
Bellingham $3,932,604,474 $58,546
Federal Way $4,717,399,199 $56,659
Lakewood $2,968,214,814 $50,990
Tacoma $9,847,273,062 $50,875
Spokane Valley $3,952,562,092 $48,978 _
Spokane $8,461,699,950 $43,254
Yakima $3,076,532,870 $42,822
Kennewick $2,261,626,148 $41,350
Land Use
The Spokane Valley incorporation area contains a typical mix of urban land uses as well as
rural and suburban uses (Map 5). Urban land uses in the Valley consist of single and multi-
family dwellings; recreational areas; light manufacturing; commercial, including many retail
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Washington State Boundary Review Board for Spokane County December 2001
•
stores; professional office buildings; business parks; schools; and undeveloped land suitable
for residential, commercial and industrial growth. Rural and suburban land uses include low
density residential and agriculture.
The land use inventory information was compiled using aerial photos, windshield surveys,
and parcel data from the Spokane County Assessor's Office. In order to make better use of
the data, smaller areas within the incorporation boundaries were identified. These were
based upon the responses to the Valley Survey questions on community identity and on
observable physical and cultural features.
Spokane Valley Community Views
Survey of Residents: At the onset of the Spokane Valley Incorporation Study, a survey of
Spokane Valley residents was conducted with the cooperation of the Spokesman Review
newspaper. The survey attempted to identify Valley residents' satisfaction with existing
service providers, service levels, community identity, and governance options. The results
were used in determining staffing levels for a new city, assumptions for service providers,
boundaries of neighborhoods and communities within the Valley, and priorities of residents
for future capital projects.
The survey was prepared by the Incorporation Study staff and published in the Valley Voice edition of
the Spokesman Review in November 2000. Five hundred responses were received and the results were
compiled and analyzed as shown on Table 8 on the following page. A score of I indicates a high level
of satisfaction with the service provided; a score of 2 indicates an acceptable level; and a score of 3
indicates that residents are unsatisfied with the service provided.
Open-Ended Questions
In addition to the quantifiable responses on the survey, open-ended questions were asked
regarding the most positive change in the Valley, most negative change, and biggest
concern with the development of the Valley. Some of the responses from the survey are
summarized below:
What do you think has been the most positive change in the Spokane Valley?
By a large majority, citizens listed investment in roads,with new additions and improvements to
the freeway and road system, as the most positive change in the Spokane Valley. Over one
hundred respondents noted the freeway improvements and widening of I-90, and the new
Evergreen Road Exchange.Additional new roads were mentioned by over ninety citizens, who
listed both the Valley Couplet and the Argonne railroad overpass at Trent Road as important
projects.
Business and commercial growth received the second largest response as being a positive change
in the Spokane Valley. Although most mentioned the Spokane Valley Mall, others mentioned
various new commercial developments that have brought businesses and services that they no
longer have to go to Spokane to find.
Citing their pleasure in maintaining natural areas, a few people mentioned the development of
the Dishman Hills Natural Area and the Mirabeau Point area as positive developments for the
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Washington State Boundary Review Board for Spokane County December 2001
Valley. Others indicated the recreational facilities created by the construction of the Centennial
Trail and the Mirabeau Point/YMCA complex were their picks for the most positive changes.
Table 8: Spokane Valley Survey Results
Transportation
Traffic Movement X
Public Transit Service _ X
Sidewalks X
Bike and Pedestrian Trails X
Pedestrian Access to Schools X
Planning and Land Use
Quality of Planning for Growth X
Land Use Regulations X
Enforcement of Zoning Violations X
Quality of New Development X
Land Use Decision-making Process X
Sign and Billboard Regulations X
Environment
Noise Levels X
Visual and Aesthetic Quality X
Air Quality X
Protection of Natural Areas X
Protection of Shorelines X
Sense of Community
Community Events and Gatherings X
Employment Opportunities X
Arts and Cultural Events X
Preservation of Historic Sites/Buildings X
Parks and Open Space
Availability of Parks/Open Space X
Quality of Parks and Open Space X
Quality of Recreation Facilities X
Public Safety
Enforcement of Safe Traffic Speeds X
Fire Protection X
Sheriff Response Time X
Safe to Walk in your Neighborhood X
Neighborhood Crime Rate X
Animal Control X
Utility Services
Sewer Service and Availability X
Water Service X
Garbage Service X
Street Cleaning X
Snow Removal X
Street Repair and Maintenance X
Street Lighting X
Stormwater Control/Flooding X
Community Services
Library Services and Facilities X
Shopping X
Schools X
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Washington State Boundary Review Board for Spokane County December 2001
- --
Nearly fifty respondents listed sewer construction as a slow, but positive development. A
few mentioned improvements in other services, such as police or fire, but the availability of
medical services did receive a few positive responses,
Government was mentioned several times as bringing positive changes to the Valley. Some
mentioned their satisfaction with the fiscal responsibility shown by the current County
Commissioners.
What do you think has been the most negative change in the Spokane Valley?
Overwhelmingly,respondents to the survey listed uncontrolled and poorly managed business,
commercial and residential growth, and the resultant traffic problems they have caused, as the
most negative change in the Spokane Valley. Many residents expressed their discouragement
concerning the continued lack of use of the University City Mall and the closure of dozens of
businesses along the Sprague corridor. The proliferation of new businesses and strip malls being
built, while dozens of commercial and retail stores remain vacant, was viewed by some as
leading to urban sprawl.
A few residents surveyed indicated that rapid growth has brought increased crime, heavy traffic,
poor air quality, loss of natural habitat and a reduced quality of life to them. They expressed
their displeasure with the small, clustered, gated developments, too many apartment complexes,
and the small lot size in new subdivisions.
Other respondents mentioned environmental concerns, such as not enough protection for the
aquifer and danger to the river from pollution and increased shoreline building. Loss of natural
habitat with resultant negative effects on wildlife and quality of life was a concern expressed by
others.
Do you feel a sense of community in the Spokane Valley?
Although greatly outnumbered, a few residents felt positive about their sense of community,
either through their schools or community events. Valleyfeet, a fall community event, was listed
by many as giving a sense of conununity. Others mentioned the Dishman Hills Association, the
Centennial Trail, the Mirabeau Point/YMCA complex and the Spokane Valley Mall as providing
new ties for Valley residents and offering great hope for future cultural events.
Those few positives aside, the overwhelming majority of Spokane Valleyites responded that they
do not feel a sense of community. While a few voiced the opinion that they relate to Spokane
County,many others felt they are a part of the City of Spokane. Still others revealed that
although they do not feel they are affiliated with Spokane, they believe they have to go into the
City of Spokane to find any cultural opportunities.
Rather than feeling part of another larger community, a few responding felt that a cohesive,
community-defining element is missing in the Spokane Valley. Some reasons proposed for this
deficiency in sense of community included: lack of a civic center and other meeting places,lack
of events, both community and cultural, and lack of communication about community and
cultural events.
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Washington State Boundary Review Board for Spokane County December 2001
Steering Committee
The Incorporation Study team selected Spokane Valley residents who indicated on the
survey a willingness to participate to a Spokane Valley Incorporation Study Steering
Committee. The Steering Committee included a mix of residents from eighteen to over
sixty-five, men and women, living in all areas of the Valley, and not having been involved
in incorporation efforts in the past. Fifteen members were originally included and, in
addition, the incorporation proponent and the chair of the Spokane Valley Chamber of
Commerce Governance Committee were included. The Steering Committee met five times
from January 2001 through June 2001 and reviewed preliminary budget proposals, staffing
levels, potential revenue sources, and community identification. Based upon the comments
and suggestions, the staff formulated assumptions for a new city budget, acceptable levels
of taxation, and service providers.
MUNICIPAL SERVICES
The proposed incorporation area is served by a large number of public agencies and private
companies. In addition to the services provided by county, federal and state agencies, there
are various local taxing districts that have jurisdiction within this area. These
governmental units are:
Spokane County: Within general government are the legislative, administrative, budget
and support services. Judicial and legal include the district courts, superior courts,
prosecutor's office, and public defender's office. The public safety function of Spokane
County includes the Sheriff's department, corrections, probation, and jail. Other
departments within the County include planning; building and code enforcement;
hearing examiner; parks, recreation and fairgrounds; animal control; noxious weed
control; geographic information services; community development; and public works
including engineering, wastewater management, solid waste management, stormwater
management, and transportation.
City of Spokane: Water and sewer service and wastewater treatment.
Special Purpose Districts:
Fire Protection: Spokane County Fire District 1
Schools: Central Valley School District No. 356
East Valley School District No. 361
West Valley School District No. 363
Spokane School District No. 81 •
Library: Spokane County Library District
Water Purveyors:
Consolidated Irrigation District No. 19
Vera Irrigation District No. 15
Trentwood Irrigation District No. 3
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Washington State Boundary Review Board for Spokane County December 2001
Model Irrigation District No. 18
Carnhope Irrigation District No. 7
Hutchinson Irrigation District No. 16
Orchard Avenue Irrigation District No. 6
Pasadena Park Irrigation District No. 17
Spokane County Water District No. 3
Irvin Water District No. 6
East Spokane Water District No. 1
Solid Waste Collection: Waste Management of Spokane
Private Water Purveyors:
Modern Electric Company
Holiday Trailer Court
Hutton Settlement
Pinecroft Mobile Home Park
Kaiser-Trentwood
Spokane Industrial Park
County-wide Authorities:
Spokane Transit Authority
Spokane Regional Transportation Council
Spokane County Health District
Spokane County Air Pollution Control Authority
Noxious Weed Control Board
State of Washington:
Washington State Patrol
Washington State Department of Transportation
The services provided by these entities are normally referred to as "municipal", that is, they
are usually performed by a city within a city's jurisdictional boundaries. Cities require that
these services be provided at a higher level than rural areas. Law enforcement would be an
example of a municipal service now being provided to the Spokane Valley by the County.
County services such as the Coroner, Auditor, Assessor, Treasurer, Superior Court,
Prosecutor, Public Defender, and District Courts are performed county-wide in both
incorporated and unincorporated and are therefore considered "non-municipal". These
services will not be affected to the same degree as municipal services. The provision of
educational services is another non-municipal service that will not be directly affected by
incorporation of a new city.
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Washington State Boundary Review Board for Spokane County December 2001
REVENUE AND EXPENDITURE ANALYSIS
New City Expenditures
Based upon the description of each municipal service in Part III, an example of a new city
budget was developed. The following section represents an allocation of resources to
specific functions to provide the basic municipal services to the new city during the first
full year of operations using 2001 costs as a base. There are many options available both as
to who provides the service and also as to the way the services are organized. This budget
is provided as an example.
The ultimate decision as to the types of service provided, the levels of service and the
choice of service provider for each function will depend on the priorities established by the
new city council. The hypothetical budget that has been created was done using
conservative amounts for both revenues (low) and expenditures (high) in order to test the
financial feasibility of the incorporation.
The expenditure budget is divided into two sections, the first are departments, which would
be created and staffed by city employees, and the second group is services that by their
nature may require substantial study or capital outlay to provide internally. Many newly
incorporated cities have contracted with the county in which they are located to provide
these services; some cities continue to contract for services while others have decided after
a period of years to bring some service in-house. This budget proposes contracting with
Spokane County for these services.
In compiling this budget many resources were used including budgets from other
Washington cities of similar size including Federal Way, Kent, Everett, Bellevue, Yakima,
Lakewood, Vancouver, and Spokane to analyze costs of providing service including staffing
levels along with the overall scope of services provided.
Spokane County departments were interviewed extensively to determine the cost of service
currently being provided to the area to be incorporated. It became apparent that most
departments other than the Road Department, County Jail and the Sewer Utility did not
have the capability to unit cost their service to a specific area within the County. Therefore,
many departmental costs are estimates of the percentage of resources allocated to the area.
There is now an effort within the County to develop methodologies to more accurately track
the expenditure of resources on a geographic basis and data should be available if and when
the new city desires to negotiate for services with the County.
Table 13, on the following page, is an example of a new city budget.
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Washington State Boundary Review Board for Spokane County December 2001
Table 13: New City Budget
Mayor/Council $150,842 $156,455
City Manager $281,919 $298,564
City Clerk $160,062 $169,396
City Attorney/Prosecutor $510,128 $540,016
Human Resources/Risk Management $303,477 $321,416
Finance $482,205 $510,417
Planning $481,669 $509,849
Information Services $377,885 $400,018
Temporary Help $91,250 $93,988
General Administrative $236,845 $251,056
Total City Departments $3,076,282 $3,251,173
Municipal/District Court $1,792,732 $1,900,296
Probation $276,682 $293,283
Public Defender $463,413 $491,218
Sheriff $12,236,273 $12,970,449
Corrections (Geiger) $1,223,539 $1,296,951
Jail $997,831 $1,057,701
Animal Control $284,887 $301,980
Engineering Administration $3,063,000 $3,246,780
Street Maintenance $4,065,250 $4,309,165
Sewer Connection Subsidy $2,960,000 $2,960,000
Building and Code Enforcement $805,401 $853,725
Hearing Examiner $81,529 $86,421
Parks $891,964 $945,482
GIS $70,318 $74,537
Total Contracted Services $29,212,319 $30,787,988
SCAPCA $135,000 $143,100
State DOT $300,000 $318,0b0
Total Other Services $435,000 $461,100
Total City Budget $32,724,101 $34,500,262
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December 2001
Washington State Boundary Review Board for Spokane County
City Revenues
The financial and tax information presented below is intended to provide the types of
revenue sources available to new cities and estimates of the amount that could be generated
from each source. If projected expenditures are less than revenues currently generated in
the new city boundaries, additional revenue sources will not be assumed. However, if
projected expenditures are greater than the amount of revenue currently generated in the
new city boundaries, additional revenue sources will be needed to balance the new city
budget.
Table 14: Revenues Available to the New City
R'evenue-Source _ -2 1_ x2002 - _ _m 2003` i_ DO!� X2,005 _
Property Taxes $6,340,168 $6,521,970 $6,705,589 $6,891,045 $7,078,356
Sales Tax $14,311,514 $14,669,302 $15,256,074 $15,866,317 $16,500,970
Criminal Justice $1,036,694 $1,078,162 $1,121,288 $1,166,140 $1,212,785
Franchise Fees $385,000 $404,250 $424,463 $445,686 $467,970
Gambling Taxes $875,000 $875,000 $875,000 $875,000 $875,000
Admissions Tax $100,000 $100,000 $100,000 $100,000 $100,000
Building Permits $894,890 $939,634 - $986,616 $1,035,947 $1,087,744
Planning Fees $125,000 $125,000 $125,000 $125,000 $125,000
State-shared
Revenues $2,099,007 $2,119,157 $2,139,501 $2,160,041 $2,180,777
Grants $100,000 $100,000 $100,000
Fines and Forfeits $1,501,575 $1,516,591 $1,531,757 $1,547,074 $1,562,545
Interest Earnings $175,000 $180,250 $185,658 $191,227 $196,964
Total Revenues $27,668,847 $28,449,065 $29,365,288 $30,312,249 $31,191,146
Hotel/M otel Tax $400,000 $412,000 --$424,360 $437,091 $450,204
2D05-
T
Arterial Gas Tax $596,820 $602,549 $608,334 $614,174 $620,070
Real Estate Excise
Tax (1st 1/4%) $845,798 $879,630 $914,815 $951,408 $989,464
Real Estate Excise
Tax (2nd 1/4010) $845,798 $879,630 $914,815 $951,408 $989,464
Total Capital
Improvement
Revenues $2,288,416 $2,361,810 $2,437,964 $2,516,990 $2,598,998
Special levies and property taxes for Fire District No. 1 and the Spokane County Library District are not included.
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Washington State Boundary Review Board for Spokane County December 2001
Property Tax Revenue
The regular levy property tax is based upon the total assessed value of all taxable property
within the city boundaries multiplied by the city's annual levy rate. The assessed value of
taxable property is determined by the County Assessor. Taxable property includes land and
improvements; and can include certain personal property such as machinery, some business
equipment, and non-attached mobile homes. Specifically, it does not include household
goods or business inventories. It is an unrestricted tax to be used for any municipal purpose.
The maximum property tax levy for Washington State cities is $3.60 per thousand of taxable
assessed value. Of this, $1.50 is to be used for fire protection services, and $0.50 is to be used
for library services. If a city is annexed to either a fire district, a library district, or both, it
cannot levy those corresponding amounts.
For this study, it is assumed that the City of Spokane Valley annexes to both Fire District 1
and the Spokane County Library District. Therefore, the City of Spokane Valley's maximum
Regular Levy would be $1.60 per thousand of taxable assessed value.
The Spokane County Assessor's Office has estimated that the 2001 property tax revenues for
the proposed incorporation area are $6,340,168. This is projected to increase to $7,078,356
in 2005 because of the general growth in the community's assessed value and new
construction.
Property Tax — Excess Levy
A property tax levy in addition to the one cited immediately above also can be imposed by a
municipality either to pay the debt service on a voter-approved or Council-approved
("councilmanic") municipal bond, or can be imposed for a voter-approved annual
maintenance and operation levy. Usually, such an excess levy is imposed in order to
finance a major public improvement or land acquisition,
Leasehold Excise Tax
Can apply to the lease or rent amount a private entity pays to occupy space in a publicly-
owned building (or use of land). There was no revenue assumed to be generated from this
source.
Sales Tax Revenue
A sales and use tax is applied to all qualifying retail sales in Washington State. Qualifying
sales include tangible personal property (except groceries and prescription drugs) and certain
personal services, and the tax is applied to the selling price. In the Spokane Valley, which is
part of the Spokane County Transportation Benefit Area, the retail sales tax is 8.1 percent.
A portion of the total sales tax is considered the "local" sales tax. In unincorporated areas,
this amount is imposed by the county and accrues to its benefit. In incorporated cities, the
local portion is levied by that city. Eighty-five percent of the local portion accrues to the
city, but the remaining fifteen percent is remitted to the county in which the city is located.
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Washington State Boundary Review Board for Spokane County December 2001
The local sales tax is 1.0 percent. In the Spokane Valley, this amount is currently imposed by
Spokane County. The City of Spokane Valley could impose this same 1.0 percent tax to
replace what is imposed by Spokane County, though the City would only be able to receive -
eighty-five percent of the amount, the balance accruing to Spokane County.
The net effect to the consumer is zero, since the local rate would be the same and the_-
Spokane Valley levy would replace and not add to the total sales tax. The revenue generated
from this source is unrestricted and can be used for any municipal purpose.
The Spokane County Budget Office estimated the retail sales tax that would be generated in
the incorporation area. With the deduction of the fifteen percent that.the County receives,
the sales tax revenue to the new city for 2001 would be $14,311,514. Growth of that annual
collection for 2002 and beyond is based upon general inflationary growth in the amount
currently collected and new sales tax revenue attributable to increased business activity.
This is projected to increase to $16,903,432 in 2005.
Criminal Justice
On a county-by-county basis, voters were given the option in 1990 to approve the imposition
of a 0.1 percent sales tax for the benefit of criminal justice purposes. Voters in Spokane
County approved this sales tax for all qualifying transactions, whether they occur in cities or
unincorporated Spokane County.
By statute, ten percent of the total amount remitted to the county is retained by that county
for its own criminal justice purposes. The remaining ninety percent is divided between the
county and the cities in that county on a per capita basis.
The City of Spokane Valley would not need to enact any special legislation to benefit from
this sales tax, since the tax already has been approved by the voters of Spokane County.
The estimated revenue for 2001 is $1,036,694 increasing to $1,212,785 in 2005.
State-Shared Revenues
The State of Washington generates a number of revenues that it distributes partially to-
jurisdictions in the state on a per capita basis and retains the rest. The City of Spokane Valley
would not need to enact any special legislation to receive these revenues.
General purpose revenues to be refunded by the state are estimated to be $2,099,007 in 2001
and are projected to increase to $2,180,777 in 2005; and the arterial gas tax which is limited
to road projects is projected to increase from $596,820 in 2001 to $620,070 in 2005.
Hotel/Motel Tax
Local jurisdictions can impose a special tax of up to 2.0 percent on the charges for lodging
at hotels, motels, private campgrounds, RV parks, and similar facilities on stays lasting up
to 30 days. This tax is a part of the 8.1 percent sales tax collected, and the State
reimburses 2.0 percent of the 6.0 percent sales tax that it receives. Use of the revenues is
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Washington State Boundary Review Board for Spokane County December 2001
•
restricted to purposes that promote tourist-related activities. Revenues of $400,000 are
projected for 2001 and are expected to increase to $450,204 in 2005.
Business and Occupation Tax
Although, not imposed by any cities in eastern Washington, this revenue source allows for a
certain degree of responsiveness to local jurisdictions. Unlike many municipal revenues,
which are derived by affixing a certain tax or fee to a readily-identifiable base, business and
occupation taxes can be based upon gross business income, or other rational factors; and
can differentiate between different classes of business provided every business in such a
class is assessed on the same basis.
This source of revenue was not considered for the City of Spokane Valley and therefore, an
estimate of potential revenues was not calculated.
Utility. Tax
In Washington State, cities are statutorily authorized to levy utility taxes but counties are
not. Therefore, the Spokane Valley does not pay local utility taxes at this time because, as
a part of unincorporated Spokane County, such taxes cannot be levied.
Local utility taxes can be applied to any private utility operating within the boundaries of
the city, and to public utilities provided that the public utility is an enterprise of the city
itself. No city can legally tax a public utility that is its own special purpose district. For
example, the City of Spokane Valley cannot levy a utility tax on the many water districts
within its boundaries.
A city's local utility tax levy can range up to 6.0 percent on private utilities. There is no
established utility tax rate limit on city-owned public utilities. The city's tax is levied upon
the utility provider and is based upon the gross revenue the utility provider derived from
sales within the city. The private utilities in turn are authorized to collect an amount equal
to the tax from its customers.
For the Spokane Valley, the following utilities could be charged up to six percent in a utility
tax with the amount for each percentage listed.
Table 15: Utility Tax Revenue Rates
Electricity $427,000 $854,000 $1,281,000 $1,708,000 $2,135,000 $2,562,000
Natural Gas $173,600 $347,200 $520,800 $694,400 $868,000 $1,041,600
Telephone $453,600 $907,200 $1,360,800 $1,814,400 $2,268,000 $2,721,600
Cable TV1 $77,000
Refuse $104,728 $209,456 $314,184 $418,912 $523,640 $628,368
1Spokane County currently assesses a five percent cable television franchise fee; a one percent
utility tax could be assessed in addition to this by the new city.
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Washington State Boundary Review Board for Spokane County December 2001
Gambling Tax
•
Gambling activity as reported to the Washington State Gambling Commission is the basis for
this revenue source. The maximum rate varies from two to twenty percent depending upon
the nature of the activity (amusement games to card rooms), and the base is the gross
receipts the business derives from the activity. Taxes collected must be used to offset costs
a jurisdiction incurs to enforce such•activities.
Spokane County currently collects $1,000,000 in gambling taxes in the Spokane Valley. The
study assumes that the same rate of tax would be levied; however, with the impact of
Native American casinos, it was assumed that the gaming activity in the incorporation area
would decrease, lowering gambling taxes collected to $875,000 annually.
Admissions Tax
The City of Spokane Valley has the option of imposing a tax of up to five percent on
admissions. The tax collected can be used for any municipal purpose. Counties cannot
impose an admission tax, therefore one is not being collected at this time. It was assumed
that $100,000 annually could be generated by this source in the Spokane Valley.
Planning and Building Permit Fees
Local jurisdictions can charge a fee for special services, such as those services associated
with planning, zoning, and development. For the Spokane Valley, fees were assumed to be
the same as Spokane County's current fee structure. This would provide $125,000 from
planning fees and $894,890 in building permit fees in revenue to the new city.
Franchise Fees
A franchise fee of up to five percent can be imposed by either counties or cities on the gross
receipts of cable television providers in the jurisdiction. This would generate $385,000 in
revenue in 2001, increasing to $467,970 in 2005.
Business Licensing Fee
Local jurisdictions can charge a fee to license all businesses that operate in the jurisdiction.
There are no set guidelines for these fees. Some jurisdictions charge only a modest amount
in order to track business activity in their jurisdiction. Others charge a sizable licensing fee
in place of a business and occupation tax. Still others require licenses only from those
businesses that have special regulatory issues associated with them, such as taxi services or
pawn shops. The taxes collected can be used for any municipal purpose. It was assumed
that a business license fee would not be collected.
Fines and Forfeits
Every city collects a certain amount in fines and forfeit revenues through the judicial
enforcement of its municipal code. The court system in Washington and the nation
operates according to a well-defined hierarchy, so the kinds of infractions, citations, and
other judicial proceedings that are within a city's purview is somewhat limited. In broad
terms, a city court handles primarily traffic infractions and criminal traffic citations, though
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Washington State Boundary Review Board for Spokane County December 2001
some other cases such as certain domestic violence or misdemeanors also can be "city "
cases.
The maximum fine for each type of court filing is defined in State law. The amount that is
actually assessed, though, is decided by the judge — unless a person simply "pays the ticket"
without contest. Revenues collected can be used for any municipal purpose.
The level of filing activity for the Spokane Valley was based upon a percentage of Spokane
County as a whole. An estimate of revenues collected in 2001 is $1,501,575 increasing to
$1,562,545 in 2005.
Capital Expenses
Capital improvements are those investments a city makes in its physical infrastructure that
allow that city to improve its overall position for the future. These improvements could
include repair and construction of roads, acquisition and development of park lands,
construction of sewer lines and facilities, or development of structures to enhance
stormwater management. These investments are as important to a new city as the day-to-
day operations of the city. Because the returns to capital improvements are generally
received over a long period, and because the costs of these improvements are substantial, it
is important that a city plan these investments carefully. In fact, as required by the Growth
Management Act, the City of Spokane Valley is required to develop a six-year capital
improvement plan that conforms to the policies outlined in its comprehensive plan.
While it is not possible to know what a new city would develop as its comprehensive plan,.
to give an idea of possible capital projects, those identified in the Capital Facilities Plan for
Spokane County area used. Some of the Spokane Valley projects identified in the Capital
Facilities Plan include parks, sewers, and roads as identified on Tables 16 through 19.
Spokane County plans to contribute over $20 million in local funds for park and sewer
projects in the next five years in the incorporation area and close to $20 million in local
funds in road projects.
Stormwater facilities have not been identified in the Capital Facility Plan because Spokane
County has not as of this time, committed to a capital facilities plan that will fund the
needed regional stormwater facilities.
Table 16: 2002-2006 Planned Capital Improvements for Sewers
Self Pfole t+*" - _ _ ---Art‘talta total Cost=;
Pasadena Park Sewer Construction $4,776,000 $1,579,000
Hills wn/Beverly Sewer Construction $3,141,000 $377,000
Hills _
Chronicle Sewer Construction $2,296,000 $276,000
Minor sewer construction in conjunction with
Misc. Projects - 2002 County roads, maintenance projects, and repairs $400,000 $163,000
(80°I° of total budgeted)
Mansfield Sewer construction $246,000 $99,000
Pinecroft Sewer construction $116,000 $47,000
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Washington State Boundary Review Board for Spokane County December 2001
Harrington Sewer construction $3,063,000 $1,220,000
Upriver Drive Sewer construction $2,097,000 $836,000
Minor sewer construction in conjunction with
Misc. Projects - 2003 County roads, maintenance projects, and repairs $400,000 $159,000
(80°/0 of total budgeted)
Carnahan Sewer construction $2,385,000 $824,000
Weatherwood Sewer construction $3,166,000 $1,092,000
Sipple Sewer construction $2,690,000 $928,000
Owens Sewer construction $411,000 $142,000 _
Veradale Sewer construction $2,619,000 $903,000
Minor sewer construction in conjunction with
Misc. Projects - 2004 County roads, maintenance projects, and repairs $400,000 $172,000
(80°/0 of total budgeted)
Mica Park Sewer construction $774,000 $293,000
Orchard Avenue Sewer construction $2,905,000 $1,099,000
Inland Sewer construction $685,000 $155,000
Parks Road Sewer construction $1,450,000 $550,000
Edgerton Sewer construction $3,497,000 $1,322,000
Minor sewer construction in conjunction with
Misc. Projects-2005 County roads,maintenance projects, and repairs $400,000 $189,000
(80%of total budgeted)
Electric RR Sewer construction $3,021,000 $1,131,000
Veradale Heights Sewer construction $3,598,000 $1,348,000
Vera Terrace Sewer construction $2,232,000 $836,000
Upriver Terrace Sewer construction $2,694,000 $897,000
Minor sewer construction in conjunction with
Misc. Projects-2006 County roads,maintenance projects, and repairs $400,000 $188,000
(80%of total budgeted)
Total Sewer $49,862,000 $16,825,000
Table 17: 2002-2006 Planned Capital Improvements for Parks
Park itEa ec - ave t ,_Loca[eost
Valley Senior Center Construct $1,868,000 $1,400,000
Valley Mission Park Redevelopment $1,000,000 $1,000,000
Centennial Trail Restrooms — Harvard, Flora, Mission Road $210,000 $21 0,000
Trailheads
Picnic Shelters Valley Mission, Edgecliff Parks $214,000 $214,000
Edgecliff Park Tennis Court $150,000 $150,000
Barker Road Trailhead Parking lot paving $350,000 $350,000
Total Parks $3,792,000 $3,324,000
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Washington State Boundary Review Board for Spokane County December 2001
Table 18: 2002 Planned Spokane County Road Projects within Incorporation Area
16th Avenue Reconstruct to three-lanes with curbs
$253,000 $25,000
(State Route 27 to Sullivan) and sidewalks.
Construct multi-lane road with curbs
Valley Couplet
and sidewalks; remove islands and $6,733,000 $1,656,000
(University to Evergreen)
restripe.
Reconstruct and widen to three lanes;
construct curbs and sidewalks; traffic
Mission Avenue
(McDonald to Sullivan) signal at McDonald; overlay; $3,010,000 $602,000
preliminary engineering; right of way;
construction.
Evergreen Road Reconstruct and widen to three lanes;
$1,274,000 $255,000
(16th Ave to 2nd Ave) preliminary engineering; right of way.
Park Road/BNSF Reconstruct and separate road and
(Indiana to Montgomery railroad grades; preliminary $100,000 $40,000
Ave) engineering; right of way.
16th Avenue
Reconstruct as three-lane arterial. $1,335,000 $180,000
(Dishman Mica Rd to SR 27)
Implement and evaluate voluntary CTR
Commute Trip Reduction
(Sullivan Road) programs among Sullivan Road $104,000 $94,000
businesses.
Various Roads Resurface arterial and residential roads
$800,000 $300,000
(Sewer Paveback Projects) after sewer construction.
Various Roads (Urban
Resurface or reconstruct road surface. $900,000 $600,000
Arterial Preservation)
Various Roads
Minor improvements. $400,000 $400,000
(Minor Urban Projects)
Havana Street (Sprague to
Sidewalk $45,000 $9,000
Broadway Avenue)
Barker Road Engineering and design costs to
$411,000 $83,000
(Spokane River) replace bridge over Spokane River.
TOTAL $15,365,000 $4,244,000
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Washington State Boundary Review Board for Spokane County December 2001
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