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2014, 06-17 Special Budget Workshop MINUTES SPECIAL WORKSHOP MEETING SPOKANE VALLEY CITY COUNCIL City Council Chambers 11707 E. Sprague Avenue Spokane Valley,Washington June 17,2014 8:30 a.m. Attendance: Councilmembers Staff Dean Grafos,Mayor Mike Jackson, City Manager Arne Woodard,Deputy Mayor Mark Calhoun,Finance Director Bill Bates, Councilmember Erik Lamb,Deputy City Attorney Chuck Hafner, Councilmember John Hohman, Community Development Dir. Rod Higgins, Councilmember Eric Guth, Public Works Director Ed Pace, Councilmember Morgan Koudelka, Sr.Administrative Analyst Ben Wick, Councilmember Mike Stone,Parks &Rec Director Michelle Rasmussen,Administrative Assistant Others Attending John Whitehead,Human Resources Manager Mike Huffman,Valley News Herald Rick VanLeuven,Police Chief Tom Towey Carolbelle Branch, Public Information Officer John Pietro, Administrative Analyst Raba Nimri, Budget Analyst Chris Bainbridge, City Clerk Mayor Grafos called the meeting to order at 8:30 a.m. City Clerk Bainbridge called the roll; all CounciImemnbers were present. Mayor Grafos welcomed everyone to the meeting and turned the meeting over to City Manager Jackson. Welcome and Overview: Mike Jackson,Mark Calhoun Mr. Jackson explained that this is a workshop setting, an informal meeting and good opportunity to go over the draft budget worksheets, and to take a first look at the draft business plan; he also noted that the budget figures are based on certain assumptions. Mr. Jackson explained that the worksheets have been prepared as if we were going to construct and move into a new city hall when the current building's lease expires March 2017; he said that assumption could change as we move through the process, but that the Finance Committee agreed to prepare the worksheets in that fashion. He said that the two new police officer positions are included in this budget, as are funds for the maintenance of the new Appleway Trail from University to Pines. He also brought Council's attention to the supplemental requests of department directors. Mr. Jackson said we started these budget workshops with the new council and current City Manager in 2010 and that this is the fifth such workshop, and that it has now become an annual event; he said the Business Plan started in 2006, that staff first prepares a draft plan as a working document to get the department heads started on the process, and as the budget worksheets get refined, the draft business plan is modified to complement the budget; and that once the budget is completed, we start all over again for the next year. Mr. Jackson extended his thanks and commendations to Michelle Rasmussen for getting all the documents into the final format. Mr. Jackson stressed that the documents are working documents that outline all the departments' functions, and include a narrative concerning suppositional three, six, and nine percent reductions. Mr. Jackson said the documents also include performance indicators. Mr. Jackson said today's focus is the budget notebook, and today's plan is to discuss the budget worksheets, including the supplemental requests, and said he will be looking for ideas and a general direction from Council. Workshop minutes:June 17,2014 Page 1 of 10 Approved by Council:July 22,2014 Finance Director Calhoun explained the layout of the data under Tab #7 which includes actual budget figures from past years with proposed budget figures for 2015, and includes the budget reduction exercise of 3%, 6%,and 9%reductions.Mr. Calhoun said the direction was that the budget not increase more than 1%, not including payroll figures, and he said the 2015 proposed service level is the same level of service as 2014. City Manager Jackson said we started the 3, 6, and 9% reduction exercise four or five years ago and that reductions could come into play if council were to re-direct resources, or if the economy slowed; he said for example, 3% would be a reduction of one, full-time-equivalent(FTE); he said we have a tight budget across all departments, and these reductions would become devastating while striving to provide services. Mr.Jackson reminded everyone that this is a budget and not a spending plan; he said department heads spend only what they need to complete projects or services, and there is no policy that what you don't spend,you lose; but rather funds not spent go back into the general fund. Mr. Calhoun went over the three-paged General Fund summary, which shows proposed budget compared with last year's actual budget, and separates recurring and nonrecurring expenditures; and said that there will be a 2014 budget amendment transferring $2.4 million into the capital reserve Fund 312, which represents the 2012 year-end balance over 50%; the said that next year we will be looking at the year-end balance over 50% for year 2013; and after that transfer,the 2015 end fund would be $20.5 million, which means we will have met our two major goals: recurring revenues exceeding expenditures, and having an ending fund balance of at least 50%minimum balance. Mr. Calhoun said we keep those goals throughout the entire budget process to the actual budget adoption in late October. For revenue projections, Mr. Calhoun said he uses a six-year history to assist him; that he refrains from being overly optimistic or pessimistic in his projections and strives to be as conservative as possible. Mr. Calhoun said the property tax estimate assumes we do not take the 1% as permitted by law, but we do take the percentage of new construction; and said he hopes to hear from the County Assessor this fall on their estimated new construction figures. Councihnember Baffler asked about the effect on our budget of the Washington Supreme Court's edict for school funding as he anticipates state legislators will grab every financial source possible in order to come up with the necessary funds for education. Mr. Calhoun said the 2015 estimate for our state shared revenues is $1,769,000, compared to 2014 figure of$1,886,000;representing a drop of$116,000, which he said is not related to the McCleary case(the Supreme Court case referenced by Councihnember Baffler's comment above); he said we get funds from a variety of state revenue sources. Mr. Calhoun also mentioned the streamlined sales tax mitigation and criminal justice disbursements are down from what was budgeted last year; and said we have to be flexible as we don't know the exact amounts of revenues. City Manager Jackson noted that we are preparing the budget to include our own city hall, but said that could easily turn around and come off the table and cause us to re- direct our priorities. Concerning sales tax revenue estimates, Mr. Calhoun said lie feels his estimates are realistic and the briefly discussed other revenue sources like gambling tax. Mr. Calhoun also went over some of the other figures and the recurring expenditures; he mentioned the bond payment and what we think the additional cost would be if we constructed a new city haIl of approximately 44,000 to 55,000 square feet; and said our current lease expires March 2017. Mr. Calhoun went over some of the figures under Tab#13: capital projects, which show a projection cost of$14.4 million for a city hall, adding that he assumes that the entire $2.4 million over 50% would go into the city hall fund, leaving $8 million that would need to be financed through a bond issue, and said we would have to budget additional funds to handle the cost of doing the bond as well. Mr. Calhoun said if we own a building, we would have to include maintenance costs; and we currently don't pay utilities, so there would be additional expenses of those items plus janitorial and snow removal. Mr. Jackson said if we were to build a city hall, it would commit other funds not currently dedicated to city hall; for example, if Balfour Park were to come up,we would have to look at grants and other sources as committing to a city hall would take all our capital reserve resources. Mr. Calhoun said that bonding costs are currently at historically low levels; so we if we don't want to extend the lease,we would start with the March 2017 lease expiration date and work backwards to begin Workshop minutes:June 17,2014 Page 2 of 10 Approved by Council:July 22,2014 the process. Mr. Jackson noted that there would be more cost initially for a new city hall, but the savings would be realized once the bonds were paid, and Mr. Calhoun agreed that after thirty years, the bond payments would be finished and the City would own the building. Councilmember Higgins mentioned that another factor to keep in mind is that our lease payments will likely be greater over time.Mr. Jackson added that we would still have reserves but we wouldn't want to use those; and said if we were ever going to drop a principle,we would use our own reserves before borrowing money. Tab#1: Legislative Mr. Jackson went over some of the data, including the $92,400 for the Lobbyist Professional Services, and said that that addition accounts for this budget exceeding the 1% increase; in looking at the blue sheet, Mr. Jackson said travel and mileage have a total figure and any additional Washington, D.C. trips for Council or the City Manager have not been budgeted separately, but would be included as part of council travel. Mr. Jackson said if there is a need to go to Washington, D.C., we would go, but any time something is added to the budget, something else must be subtracted. Mr. Jackson said newly hired consultant Travis Lumpkin would like to see Mr. Jackson a few times in Washington, D.C. There was some discussion about council travel and of multiple councilmembers attending AWC (Association of Washington Cities) and/or NLC (National League of Cities) conferences, and mention that perhaps only Mr. Jackson and/or Mayor Grafos should travel to Washington, D.C. Mr.Jackson said that detailed travel expenses could include several trips and be built into the budget, but that he would have to take something out in order to do that. Council agreed that Mr. Jackson should include some D.C. trips. Mayor Grafos stated that he doesn't want to change the budget as there are enough discretionary funds to work in a trip or two to Washington, D.C., and that he likes the idea of examining what we get for our NLC dues. Deputy Mayor Woodard agreed with the need for Washington,D.C.trips and said there might be a little less travelling as some councilmembers near the end of their terms; however, Councilmember Wick said that next year will be a big federal year and lie feels there is a need to plan trips. Councilmember Hafner agreed that it is more important to send Mr. Jackson and Department Heads to these national or state conventions and doesn't see the need to send several Councilmembers; and said he feels the travel budget needs to be revised. Councilmember Pace agreed. Mr. Jackson said the budget figures are fairly conservative, and lie asked Council how they would like to consider revising their travel budget. Councilmember Pace suggested sending one Councilmember to each conference, and add staff as appropriate, with the focus on Mayor Grafos and Mr. Jackson going to D.C., and also suggested that Mayor Grafos and Mr. Holtman visit businesses. Councilmember Hafner said there are many local events and suggested keeping the funds in one lump sum and prioritize travel, and to send someone to a conference if it is important to do so. Councilmember Wick said he prefers to make his own choices based on what is allotted. Mayor Grafos said lie feels the system has worked well and suggested we not make any changes but rather wait and see how this year's budget ends. Mr. Jackson also noted that the topic of travel can be addressed when the finance committee meets again. Legislative Agenda: Appleway Trail Project — Mr. Jackson said lie will re-work that and continue to request funds for the unfinished portion of 2B, and sections 3 and 4, and include an update on what has been accomplished to date. Councilmembers concurred with the suggested revisions. Protect the Local-State Shared Revenues—no suggested change. Additional Lien Authority to Recoup Code Enforcement Costs—Mr. Jackson reported that this is an up- hill battle and we can't get any commitment from legislators as their concern is a potential tax burden on residents, and even though we explain that this wouldn't simply be due to a garbage problem but a much larger issue, legislators gave us a very cool reception. Deputy Mayor Woodard said that Senator Pain Roach is anxious for us to come back with a few revisions and that the lobbyists have some ideas on how to get local banks and realtors to support this idea. Long-Range Legislative Agenda Item: Barker Road/BNSF Grade Separation — concerning the Barker Road Grade Separation, Mr. Jackson said we are moving ahead with the TIGER grant, and Council Workshop minutes:June 17,2014 Page 3 of 10 Approved by Council:July 22,2014 agreed to keep this as an agenda item. There was some discussion about bridging the valley with Councilmember Wick asking about adding that to this agenda item title. Mr. Jackson responded that the concept would be difficult to achieve, especially if United Pacific and Burlington Northern can't cooperate on combining the rail corridor. Councilmember Wick said that he is now part of a new ad hoc rail committee, that the story needs to be told of how many grade crossings we have, and that during the tour tomorrow with the joint legislative committee, he plans to show them the Barker Grade Separation and focus on those bridging projects. Mr. Jackson asked if there were any other ideas for the legislative agenda and none were offered. The meeting recessed at 10:00 a.m.,and reconvened at 10:12 a.m. Tab 2: General Government Finance Director Calhoun explained that this tab includes the overall necessary city services, like the Internet service, software and hardware maintenance and support, and city hall rent, and he went over some of the recurring and non-recurring activities. The Spokane County Air Pollution Authority (aka CIean Air Board) was mentioned and Mr. Jackson said while we don't know what they do for their $117,000 as we can't police other entities' budgets, we run our own budget very tight. Councilmember Pace asked about the Site Selector, Outside Agencies, and Economic Development line items and those were briefly discussed. Tab 3: Executive and Legislative Mr. Jackson said these figures include the City Manager and City Clerk's office; and he noted that all legal notices will now be shown as City Clerk expenses rather than splitting them throughout the departments. Tab 4: City Attorney As Deputy City Attorney Lamb highlighted the data, lie noted that the "other services and charges" are necessary as we use outside counsel for complex litigation like shoreline regulations, or litigation connected with Hollywood Erotica and could also be used in connection with code enforcement litigation. Tab 5: Ops and Admin Services Mr. Jackson stated that this is the Deputy City Manager section and includes the position of Deputy City Manager as well as other associated items such as professional services, which he said had included a survey every other year with ICMA (International City/County Management Association), but said that service was discontinued as a cost savings. Mr. Jackson said we would like to re-instate that at a cost of about$11,000; he said it is a very structured survey, scientifically accurate, and enables us to compare our city to other cities; and said that the last survey we did was in 2011. He mentioned the PIO (Public Information Officer) budget which includes items such as the Hot Topics newsletter, rental of a TV for city hall at the mall, and a city booth at Valleyfest; and said the major item here is the hot topic newsletter which gets mailed to all residents once a year. Tab 6: Human Resources Human Resources Manager Whitehead explained the expenses associated with his department and discussed the supplemental requests of a new wellness activity geared to increase the frequency of exercise by City employees; mentioned an increase in professional services for the ongoing maintenance of the City's Mobile Apps and mentioned the increase to the health insurance cost; he noted the proposed classification change to establish an executive assistant to directly support the City Manager as some duties such as the business plan assigned to the administrative assistant, are outside that classification.He noted a position was created to manage the daily operations of CenterPlace, but said that has never been filled and therefore the proposal is to lower that pay Ievel by one grade, Mr. Whitehead said that neither of these changes would mean any additional FTEs. Mr. Jackson added that Council adopts the budget and as part of that, also adopts the pay matrix, and that we would like to fill that coordinator position with someone one grade lower than presently shown; he said the position has not been filled and likely we will promote someone to that position. Mayor Grafos suggested that perhaps we need to refine the Workshop minutes:June 17,2014 Page 4 of 10 Approved by Council:July 22,2014 requirements of each position and Mr. Whitehead explained that staff looks at those positions to ensure we are at a minimum; but added that we are not a training ground;that we expect to hire people who have had several years' experience of doing the same work; he said our training budget compared to other organizations is almost nonexistent, and said training can be very expensive. Mr. Whitehead explained that every time we fill a position we look at those qualifications to make sure we are not exceeding what we need; but he said, our expectations are high and we have a very efficient personnel system. Concerning the extra $1,000 for the Wellness plan, Councilmember Wick asked if that would be enough to take care of the difference, and Mr. Jackson said we have a pretty fit workforce and would like to be known as an employer who cares about fitness, and that we are a high performance organization that takes care of its people, and promotes a healthy and fit workforce. Tab 8: Public Works Public Works Director Guth explained that his increase includes adding one and a half vehicles for the construction improvement project group; he said when they purchased the previous vehicle, they began setting aside funds for that vehicle's eventual replacement. Mr. Guth said that the wages at the top reflect the new position of grants engineer. Mr. Guth noted that the topic of funding the street fund would be held later, but that the idea is to look at some other revenue to continue to provide the service currently provided; that for this year, they reduced the snow plow replacement allocation, but that means they will need to be re-allocated at some point. After Mr. Guth went over some of the proposed changes from this year to next, he talked about the supplemental requests as noted under Tab 12, including the pavement- marking grinder to remove pavement markings on City projects to help facilitate striping removal; and the VMS(variable message sign) trailer for public notification of construction and maintenance activities. Councilmember Pace asked about SRTC (Spokane Regional Transportation Council) fees and Mr. Guth explained that our dues are based on a tier program,with larger cities paying$18,000 per seat; he said we are allocated one seat; he explained that SRTC is a metropolitan planning organization that examines regional projects; he said they are the stewards and planning arm for WSDOT and for all state and federal funding that comes through the local programs through cities and counties, much like the STP Grant we applied for with the Appleway Trail; he said they are the ones who determine who gets how much money. Discussion continued concerning funding from WSDOT, SRTC, CMAC and other available sources for such things as traffic management/coordination, traffic cameras and coordination of traffic lights for special events. There was also brief discussion about snow services and that future contracts for road maintenance and snow services should be separate, which led to mention of the number of trucks we currently use, and Mr. Guth stating that from his experience, nine appears to be the preferred number for that fleet. Deputy Mayor Woodard said he would like future discussions about this topic,why nine trucks works best, and what it takes to fund the fleet. He also asked about what our industrial park dues are used for and Mr. Guth replied he would have to research that, but assumes it is used to take care of the common areas related to the sewer needs since we use their land. Mayor Grafos said he would like to see the number of FTE's or half-time employees above each department in order to make it easier to understand and read, and Mr. Calhoun said that should be easy to include. Deputy Mayor Woodard mentioned he would like to consider changing the name of Community Development, to Economic Development and Community Development. Mr. Jackson said people identify with all aspects of community development, including engineering and code inspection; he said it is evolving, but all those aspects are also economic development, and said this can be a topic of a future discussion. The meeting recessed for lunch at noon, and reconvened at 12:45 p.m. Tab 9: Public Safety Senior Administrative Analyst Koudelka went over the list of items under the "general fund public safety" spreadsheet; said the wages are associated with the maintenance of the precinct facility; and after Workshop minutes:June 17,2014 Page 5 of 10 Approved by Council:July 22,2014 going over some of the figures, explained that the funds under contingency are mostly due to the unknown bargaining negotiation with the Sheriffs Officers' Union, and said it does not include settle and adjust. Mayor Grafos said since we own the police precinct, maintenance should be a high priority, that it is listed as non-recurring but should actually be under recurring expenses. Mr.Koudelka agreed and said maintenance of the building is a reflection upon us, and that the City Manager has identified this as a top priority, adding that Mr. Stone's department has the resources to take care of these things. Parks and Recreation Director Stone said he has a list of twenty-two projects they are working on, and it is a challenge to manage the time and resources; said if there is a roof leak, we take care of the problem immediately, and that he is aware of the challenges of the precinct; lie also mentioned there are seventy- five leaks at CenterPlace that still have issues related to finances. Mayor Grafos stated that he can't believe there are no discretionary funds to fix that building, and that lie would like a copy of that list of twenty-two projects. Mr. Stone replied that the goal is to have those projects completed at the end of the year; that lie has two maintenance people with limited time to devote to every single aspect, so they bring in expertise, and said they are working as quickly as possible and have been making progress. Mr. Stone noted that they are in the process likewise, of bringing someone in to assess the police precinct roof. Mr. Koudelka explained that the plan is to create a timeline and provide progress reports to the City Manager. Mayor Grafos mentioned his concern with the appearance of the front of the building; lie said it shouldn't be a "high-tech deal" we just need a handyman to power wash and paint the front of the building as it needs to be presentable. Mr. Stone explained that they have been writing specs and getting bids and some of the work has been done, but explained that we can't just hire someone off the street; that we must comply with the state bid laws including the Davis Bacon Act; and said they have re-bid some of the items and are moving forward. City Manager Jackson said that we realize this is a critical need and the projects will get done. Discussion continued on the subject of law enforcement in general and police precinct repairs and supplemental requests in specific, including the annual increase in county costs. Mr. Koudelka added that staff has explored the idea and is working on a cost plan that would identify true costs associated with every line of business; said the work is involved and there are more costs than "meets the eye;" he said there will always be administrative costs and he has had discussions about the idea of assigning primary personnel whose duties would be associated with all those issues; and he noted that we get a lot of work accomplished from a small staff. Councilmember Wick asked about the public defender costs and Mr. Koudelka replied that the county has not hired anyone else yet but they are looking at their 2015 budget, and said we plan to have more meetings with the County to discuss how they measure their cases. Mr. Koudelka mentioned page 2 and the data for public defender; he said we made a correction in what we had seen in previous years and brought the figure down, but there are added caseload standards on top of that; he said staff is looking at the use of investigators to support the attorneys.Mr.Koudelka said that the public safety contract represents two-thirds of our general fund budget and he suggested getting a quarterly report in order to better project what we receive from the county specific to the public safety contract. Mr. Koudelka distributed copies of a "2014 City of Spokane Valley Public Safety Contract Quarterly Cost Projections" and said that John Pietro is responsible for the daily management of contracts. Mr. Pietro went over the cost projections handout, especially noting the table on the front page and the nine steps of the contracting cycle. Mr. Jackson stated that this will be included in the quarterly report from now on; and Mr. Koudelka agreed it is a useful tool and could he expanded in the future to examine trends over multiple years. Tab 10: Parks and Recreation Director Stone explained that his department contains six divisions, and that the overall non-payroll increase is 1.11%, which includes $20,000 for the annual Centennial Trail maintenance fund; and said without that, his department would be mostly status quo. Mr. Stone noted he has a lot of interaction with the public and that staff works to accommodate those requests; lie said this year the plan is to begin to replace some of the old Spokane County Park signs with new signs like our gateway signs; lie said they Workshop minutes:June 17,2014 Page 6 of 10 Approved by Council:July 22,2014 don't have the exact replacement and installation costs yet. Mr. Stone said there are no full time staff members in the maintenance program, and we contract with Senske to cover all the parks as well as some of the maintenance on city properties such as the gateway property, Centennial Trail,Appleway Trail, and Balfour Park. For the recreation division, Mr. Stone said they have one FTE; he said recreation programs including the summer day camps recover 100% of costs as they are paid for by user fees; and he said their overall budget is down from 2014. He explained that the aquatics program has no FTEs as that is all done through a contract with the YMCA, adding that revenue from aquatics is significantly less than budgeted and there is no way to recover costs; he said the cost to swim is $1.00, and if participants are unable to cover the fee, we have partnered with Spokane Valley Partners for scholarships and swim passes so we don't turn anyone away. Director Stone said the Senior Center has one FTE and the majority of the expenses are attached to that position, which staff member he explained, does an outstanding job. Mr. Stone said the Senior Center also has Meals on Wheels delivered five days a week. There are five FTE's for CenterPlace, Mr. Stone said, which includes two administrative assistants, and two maintenance people; he said the Center is open over eighteen hours a day, seven days a week, which poses some staffing challenges. He explained that the janitorial contract costs went down a little from their first year's bid, adding that the contractor also handles cleaning restrooms and carpets, and helps in the evenings when a room needs to be quickly turned around from one use to the next. Mr. Stone said that the supplemental requests under Tab 12 include Phase 2A of the Appleway Trail, which is from University to Pines; and a request for funding to replace the existing modem and dial-up communication at the three outdoor pools. Mr. Stone said the current technology is outdated and extremely difficult to service and repair and has caused numerous problems and customer service issues with the payments of pool patrons; lie also noted the request for carpet replacement at the lounge to replace the ten-year old carpet. Mr. Stone mentioned that next year CenterPlace will celebrate its ten-year anniversary and they are working on plans now for an event perhaps in September. Other projects Mr. Stone mentioned included the volleyball courts at Browns Park and the pocket dog park at Valley Mission Park on the site of the former Senior Center. Councilmember Pace asked why have a ten-year celebration of CenterPlace since it's just a building; and Deputy Mayor Woodard replied that CenterPlace also includes the Senior Center, and it is more than a building as it is our community center, and said he thinks a celebration is a good idea. Councilmembers Pace, Hafner, and Deputy Mayor Woodard also said they like the idea of the dog park. Councilmember Wick said he likes the idea of being able to have Wi-Fi at the pools, and said perhaps the cost of the admission should be $2.00 with free Wi-Fi provided; and he expressed surprise that we still use a dial-up modem. Mayor Grafos asked if Comcast might be able to help with the Wi-Fi and Mr. Stone replied that he has been working with Comcast. Councilmember Pace said he thinks it would be nice to fund it without raising the entrance cost; and Mr. Stone said he would do everything possible to keep pool fees as they are and still have Wi-Fi. Councilmember Bates asked about parkland acquisition and Finance Director Calhoun said that is addressed in section 13. Mr. Jackson said parkland acquisition is a general request and depending on how we prioritize the City Center, the impact might show it is not even feasible; and said that parkland acquisition is more of a placeholder; he said we are not approving capital projects at this point; and depending on how the budget is prioritized,there is little chance we can afford most of those items. Tab 11: Community Development Director Hohman said his department experienced a big transition this year; that one of the long-time division managers resigned, so Mr. Hohman is taking the opportunity to Iook at possible different department configurations, although no decision has been made yet; he said the data sheets for his department and the business plan were done before that staff member's resignation; he said many changes were made since last year including incorporating the economic component; that they changed their goals and mission statement, and looked at measurables and work plan items in an attempt to integrate economic development into every division as well as keep that in mind as each project comes forward; Workshop minutes:June 17,2014 Page 7 of 10 Approved by Council:July 22,2014 and said staff wants to further the economic development of the City. Mr. Hohinan said that last year he designated Mr. Basinger as the Economic Development Coordinator, and since then determined since the job is large, that Mr. Basinger needs some assistance, and he chose part-time Development Engineer Gloria Mantz. Mr. Holunan said this is the start to what lie hopes will be the Economic Development division. Director Holunan said they have created that separate group from the existing budget without exceeding the recommended 1% increase,with this representing a .89% increase. Mr. Hohman explained that means their capabilities are stretched and there is very little backup on any one position; he said he has witnessed some of the stress as they have tried to recruit a plans examiner for the past six months; and said they currently have four different openings. Mr. Hohman said some of the other agencies and jurisdictions are now hiring, making it difficult to find someone to "fit our mold." Concerning supplemental requests, Mr. Hohman said they are asking for a development engineer to try to accommodate for some of the vacancies, and he agreed a column on the spreadsheet showing an employee count would be beneficial; he said they went from a high staffing level of 36 in 2011, to the current 29.5 positions now; and are therefore doing a lot more with a lot Iess personnel. Tab 12: Supplemental Requests City Manager Jackson said that he and Finance Director Calhoun have discussed these requests with the department directors to determine what we can afford, and will be revising the general fund estimates. Mr. Jackson said that the requests are broken down as either recurring or nonrecurring; and mentioned the request for two scanners as part of the document management process. After Mr. Jackson went over the list,he explained that none of these items are currently included in the budget. Tab 13: Potential Capital Projects Mr. Jackson said unless there are further questions, this won't be discussed further since these projects have been discussed throughout today's meeting. Tab 14: Financial Objectives Mr. Jackson brought Council's attention to page 6 of the Business Plan, and said there have been no changes in fiscal policies. Deputy Mayor Woodard said he would like to talk about the three challenges on page 7; said there is also a potential increase as the Sheriff's Office union works toward settlement, which has a potential increase in their COLA (cost of living allowance); said he understands between 2014 and 2105 there is a best case scenario for us of about $650,000 extra, and a worst case scenario of about $2 million; and said he recognizes the law enforcement records management system (the CAD system [computer aided design software])needs to be able to work throughout all law enforcement. 15. Council Goals The 2014 Council Goals on page 28 of the Business Plan were discussed with the following results: I. Monitor the Discharge Permit Process:there was Council consensus to remove this goal. 2. Solid Waste Alternatives: there was Council consensus to remove this goal. 3. Pursuing funding for Appleway Trail Project: this goal will remain as stated. 4. Economic Development Plan: Councilmembers briefly discussed this and determined the goal will remain as stated. 5. Street Preservation: it was agreed to have this focus beyond 2018, and to include something about the street fund. Although it was mentioned that Bridging the Valley is in the legislative agenda, Council determined it would be appropriate as a goal as well. 6. With the addition of the two police officer positions,there was Council consensus to remove this goal. After brief discussion concerning law enforcement, Mayor Grafos asked for a list of what is included for each officer, such as training, retirement, etc., and how we arrive at the figure of 100 officers. Mr. Jackson said the topic would be a good future agenda informational item. There were no other goal suggestions. The meeting recessed at 3:00 p.m. and reconvened at 3:10 p.m. Workshop minutes:June 17,2014 Page 8 of 10 Approved by Council:July 22,2014 BRAINSTORMING: Mr.Jackson said this is an opportunity for Council to discuss whatever is on their mind. Staff and Council Coordination: Councilmember Pace said lie is aware of the need to maintain a good boundary between Iegislative and executive, but said they also need to work as a team, and he would like to pair a councilmember and staff member to attend seine of the various committee, board meetings and conferences. Mr. Jackson said some of the boards, like the Health District, want elected officials; he said that doesn't mean staff couldn't attend meetings, and said he could look at some of those committees and boards where that idea might be applied. Mr. Jackson also noted that this is one of the reasons lie seeks to fill the Deputy City Manager position so that person can keep abreast of what is happening with other organizations,committees and boards. Community Events: Councilmember Hafner said this is the third year lie has mentioned a farmer's market; he also suggested a carnival, and a one-day garage sale. Mr. Jackson said the farmer's market idea was brought forward previously but at that time, Council was not interested. Councilmember Bates said there is a lot of activity going on sponsored by others, like Valleyfest; and agreed with the idea of having community events as a gathering place for citizens. Councilmember Wick added that once the Balfour Park is developed, that would lend itself to those kind of events. Bridging the Valley (conversation with the railroads): Deputy Mayor Woodard said he would welcome interactions and/or round-table or other discussions with members of the two railroad companies or other groups. Expand Outside Agencies for Neighborhood Organizations' Events: In relation to offering grants to neighborhood associations, Councilmember Pace asked about including them in community events, such as the 4th of July Parade at Greenacres Park; and suggested inviting Greenacres Neighborhood group to apply. Councilmember Wick suggested that might prove difficult to include neighborhood groups with the outside service agencies. Old Mission Trailhead: Mayor Grafos said there is a lot of development on Indiana Avenue, and that we should make sure we complete the Old Mission Trailhead as soon as possible. Trent: Pines to Sullivan: Mayor Grafos suggested looking at that to see if perhaps through text amendments,we could initiate some changes of more appropriate uses on Trent. Land Acquisition: Councihnember Wick mentioned that now that the economy has improved, perhaps we could look for land to purchase for development or to develop pieces of land for parks. Deputy Mayor Woodard said that perhaps people who have land for possible neighborhood parks, aren't aware they could donate or bequeath the land; and Councilmember Higgins said that perhaps it would be an incentive to be able to name a park after a donor. Market Economic Development and Economic Development Tax Tools, or Incentives: Councilmember Higgins suggested having a team go out and market various places, like California. Councilmember Hafner suggested having some kind of tax breaks or other incentives to attract businesses here. Mr. Jackson said that Deputy City Attorney Lamb has gathered some information on what is available, and perhaps he can refine that into a report for Council. Mr. Lamb acknowledged that he has been working with Mr.Basinger on how to make those tools available to potential businesses. Historic Preservation: Mayor Grafos suggested adding historic preservation to this list to explain the heritage of the valley and who we are. Mr. Jackson said that topic is on our pending agenda list. Workshop minutes:June 17,2014 Page 9 of 10 Approved by Council:July 22,2014 In reference to a city hall, Councilmember Wick asked how many years it would take to pay cash, and how much would we gain. Mr. Jackson said we would have to examine how much we would have each year to allocate to a city hall, and come up with a plan. Realizing we would have to account for inflation, Deputy Mayor Woodard said he would like to have it by 2019. Councilmember Wick said if we wouldn't have paid for a couple projects, we would have several million more as at least a couple million has been removed from that fund for various purposes. Mr. Calhoun said time would work against us in terms of inflation, land cost and construction cost, but that current interest rates are remarkably low now; adding that at some point interest rates will reverse and the next two to three years could be dramatic. Councihnember Pack asked about grants and Mr. Jackson said those are difficult to come by as most deal with self-sustaining and "green"buildings. Concerning the McCleary decision, Mr. Jackson said that Deputy City Attorney Lamb has put together a synopsis of the potential impact. Mr. Lamb explained that this will represent a significant challenge for us; and said that the paramount duty of the state is to supply ample education to all its children; that formerly the funding methodology was based on how many students were enrolled, but said that has shifted now to a performance-based education model; but in 2005-2007, the state still had significant amounts of basic funding needs coming from local Ievies, all of which were subject to voter approval. Mr. Lamb explained that the McClearys were a family faced with horrible school conditions and terrible facilities, and that low-paid teachers brought a challenge to the state alleging that the state was not meeting its Constitutional duties; and in 2012 the court agreed. He said the Supreme Court retained jurisdiction since the schools hadn't done what was needed to be done for the last thirty years. Mr.Lamb said he understands that the legislature came up with about $1 billion but still needs at least another $4 billion,which would be 10% of the state's budget. He said that the Court required a report for a funding I plan by 2018; that the state came out with a plan but the court blasted it as not being a real resolution to 1 tackle significant funding issues. The court told the state that a direct plan was needed, and to come to the Court in September with a plan or show why the state legislators shouldn't be held in contempt and have the Court take over the budget. Mr. Lamb said there is a doctrine addressing separation of powers and said one power doesn't hold control over the other; that the legislature sets policy and the judiciary states the law; he said if the Court were to assume control of the budgeting process, it would likely cause a major fight between the court and the legislature. Mr. Lamb said he has not heard the State's rebuttal about having a plan in September; and said the State is looking for money, and that because so much is locked up in programs like basic education, that leaves cities as a prime area where they can make cuts. Mr.Lanib said the issue remains in a large state of flux. There being no further business, it was moved by Deputy Mayor Woodard, seconded and unanimously agreed to adjourn. The meeting adjourned at 3:45 p.m, .4110111r ,-- A ST/ Dean Grafos, Mayor ‘F ristine Bainbridge, City Clerk Workshop minutes:June 17,2014 Page 10 of 10 Approved by Council:July 22,2014 2014 City of Spokane Valley Public Safety Contract Quarterly Cost Projections Cost Projection Table User's Guide: The City of Spokane Valley contracts for public safety services. All these services are provided by Spokane County and, therefore,these costs are not controlled by the City's budget appropriations. In most cases, the costs are not fixed. For these reasons, it is important to track the City's usage and project annual City costs for these contracts to insure that the City's budget can accommodate the associated public safety costs. These projections are guides to allow staff to investigate changing trends and project whether actual costs will be substantially different from estimated costs. These projections are also useful in helping the City Manger and City Council gauge the annual financial commitment necessary to accommodate public safety needs_ Steps in Public Safety Contracting Cycle Step 1 City staff prepares Public Safety budget based upon multiple years of usage and cost trends Step 2 County provides contract estimates to City Step 3 County provides quarterly usage figures for City Step 4 City staff prepares annual cost projections, updated quarterly Step 5 City staff calculates final end-of-year cost projection Step 6 City staff calculates a liability to book and prepare an accompanying budget amendment if necessary Step 7 Spokane County staff calculates the actual contract costs for Spokane Valley and reconcile those costs to the estimated costs that were paid during the year Step 8 City staff reviews County calculations for accuracy and appropriateness of costs If the actual costs are less than the estimated costs, a credit is issued to the City;if the actual costs are greater Step 9 than the estimated costs,the City Manager authorizes payment to County for the difference This quarterly cost projection report is the result of Step 4 above. City staff has prepared cost projections based upon the most recent information available. During the course of the year, projections will incorporate the latest Spokane Valley usage statistics as the City's usage often determines how much of the total costs are charged to the City. At the end of the year, staff will also incorporate any actual cost data that is available from Spokane County into the cost projections. Table 1 on the following page displays, by contracted service, the County provided cost estimate and usage estimate,the County provided current quarter's City usage,the City staff calculated cost projection for each of the eight public safety contracts,the City budget amount, and the difference between the budget and the projection; represented either as a cost overage or a cost savings. These costs are only specific to the contracts listed and do not represent the entire Public Safety budget but they do represent the majority of that total budget. Tables 2 and 3 show in greater detail the calculations for Law Enforcement and District Court. 1 -/.7- 7,1675/ 2014 City of Spokane Valley Public Safety Contract Quarterly Cost Projections Table 1. 2014 Public Safety Contract Cost Projections Incorporating 1st Quarter Usage Statistics County Provided County Provided at Beginning of Year City Calculated Quarterly Contracted Service 2014 2014 Year to Date 2014 Difference:Cost 2014 Spokane Valley 2014 Spokane Valley Spokane Valley Spokane Valley Spokane Valley Overage/(Cost Cost Estimate Budgeted Usage%Estimate Usage Projected Annual Cost Savings) Animal Control $ 287,081 n/a n/a $ 287,081 $ 287,081 $ - District Court $ 866,842 Refer to District Court Table _ $ 883,409 $ 891,304 $ (7,895) Emergency Mgmt. $ 82,542 19.06% 19.06% $ 82,542 $ 81,398 $ 1,144 Detention Services $ 1,464,592 4.46% 3.61% $ 1,184,721 $ 1,501,222 $ (316,501) Pretrial $ 114,812 16.91% 17.52% $ 118,945 $ 102,894 $ 16,051 Prosecutor $ 415,137 36.12% 33.89% $ 391,687 $ 406,777 $ (15,090) Public Defender $ 617,431 37.23% 34.25% $ 568,385 $ 852,965 $ (284,580) Law Enforcement $ 17,709,872 Refer to Law Enforcement Table $ 18,174,439 $ _ 18,144,552 $ 29,887 Total $ 21,558,309 $ 21,691,209 $ 22,268,193 $ (576,984) Notes: 1.Annual increases in Animal Control costs can increase no more than the increase in the CPI. Usage statistics are not used. There is no settle and adjust provision i.e. the estimate and the projection are the same 2. The County does not provide a District Court cost estimate at the beginning of the year. Instead, we receive estimated Cost Per Case (CPC) rates which are calculated using prior year cases and costs. These rates are then applied to our current period case totals and constitute our estimate. Until the final quarterly usage report is prepared, the total Annual District Court cost estimate in the table above is the annualized amount paid year to date and will change each quarter_ This differs further from the Projected Annual Cost which involves our recalculating the estimated CPC to factor in changes to the total number of cases per case type, which is a component of the calculation of the actual CPC for the year. CPC=Case Type$'s/#of cases by case type. 2 2014 City of Spokane Valley Public Safety Contract Quarterly Cost Projections Table 2.2014 District Court Projections Incorporating Current Usage Estimate Paid Projected 2014 2014 2014 2014 2014 Total District 2013 Total All Annualized Case Type 2014 Cost Annualized Annualized Projected Spokane Valley Court$'s Per Jurisdictions Total All Per Case Spokane Valley Spokane Valley Cost Per End of Year Case Type Cases Jurisdictions Cases YTD Paid Estimate YTD Case Projection Infraction $ 1,153,689 37,568 $ 30.71 6,480 $ 198,997 36,484 $ 31.62 $ 204,909 DUI $ 815,389 1,820 $ 448.02 348 $ 155,910 2,172 $ 375.41 $ 130,642 Criminal Traffic $ 759,300 4,862 $ 15617 1,196 $ 186,780 4,704 $ 161.42 $ 193,053 Misd.Domestic Violence $ 396,549 850 $ 466.53 308 $ 143,691 776 $ 511.02 $ 157,393 Criminal Non-Traffic $ 501,598 1,758 $ 285.32 636 $ 181,465 1,616 $ 310.39 $ 197,411 $ 866,842 $ 883,409 Notes: 1. The "Total District Court$'s Per Case Type"use to determine the 2014 estimated Cost Per Case(CPC) rates include 2013 actual direct costs and 2012 actual indirect costs. 3 2014 City of Spokane Valley Public Safety Contract Quarterly Cost Projections Table 3. 2014 Law Enforcement Costs Projection Incorporating Current Usage County Provided City Calculated 2014 Law Enforcement 2014 Contract Contract's Cost Component/ Estimate's Usage 2014 Actual YTD 2014 Estimated 2014 Projected Department (Actual 2012 Usage Annual Cost Annual Cost Usage) Forensic Unit 49.63% 51.97% $ 271,100 $ 283,832 Crime Check 54.96% 52.70% $ 202,229 _ $ 193,923 Property Room 54.43% 63.11% $ 150,172 $ 174,119 SIRT(Incident Response) 45.61% 32.56% $ 18,773 $ 13,402 Radio Dispatch 45.01% 48.98% $ 798,694 $ 869,233 Records Management 53.61% 53.20% $ 655,974 $ 650,948 K9 55.45% 73.76% $ 429,367 $ 571,174 Investigative 51.98% 54.90% $ 2,428,643 $ 2,564,963 Items below are not impacted by quarterly statistics projections County Explosive Disposal 34.09% 34.09% $ 4,451 $ 4,451 Spokane Explosive Disposal 34.09% 34.09% $ 813 $ 813 Helicopter 19.04% 19.04% $ 16,935 $ 16,935 SCOPE 38.84% 38.84% $ 137,923 $ 137,923 Dedicated SV Admin 100.00% 100.00% $ 331,370 $ 331,370 Intelligence Led Policing 47.83% 47.83% $ 203,682 $ 203,682 Dedicated Officer Charge 47.17% 47.17% $ 11,614,918 $ 11,614,918 School Resource Officers 57.14% 57.14% $ 542,754 $ 542,754 Total Projected Cost $ 17,807,798 $ 18,174,439 Notes: 1. Law Enforcement estimate excludes the two year prior S&A which is paid with booked prior year expenses 2. Explosive Disposal, Helicopter, and SCOPE usage is only available at year end 3. Dedicated SVAdmininstration, Intelligence Led Policing, Dedicated Officer Charge, and SROs are allocated using Spokane Valley FTE totals that are kept constant in this projection (Spokane Valley FTE totals are only modified through Council action) 2014 City of Spokane Valley Public Safety Contract Quarterly Cost Projections 2014 Public Safety Budget Contract Cost Projections $22,400,000 • $22,200,000 $22,000,000 $21,800,000 $21,600,000 = $21,691,209 $21,400,000 1Q 2Q 3Q 4Q =Budget — —Projected S