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2015, 06-16 Workshop MINUTES SPECIAL WORKSHOP MEETING SPOKANE VALLEY CITY COUNCIL City Council Chambers 11707 E. Sprague Avenue Spokane Valley,Washington June 16,2015 8:30 a.m. Attendance: Councilmembers Staff Dean Grafos, Mayor Mike Jackson, City Manager Arne Woodard,Deputy Mayor Mark Calhoun, Deputy City Manager Chuck Hafner, Councilmember John Hohman, Community Development Dir. Rod Higgins, Councilmember Eric Guth, Public Works Director Ed Pace, Councilmember Cary Driskell, City Attorney Ben Wick, Councilmember Mike Stone, Parks&Rec Director Bill Gothmann, Councilmember Pro Tern Erik Lamb, Deputy City Attorney Chelsie Taylor, Interim Finance Director Rick VanLeuven, Police Chief Morgan Koudelka, Sr.Administrative Analyst John Whitehead, Human Resources Manager Raba Nimri, Budget Analyst Carolbelle Branch, Public Information Officer Chris Bainbridge, City Clerk Mayor Grafos called the meeting to order at 8:30 a.m. City Clerk Bainbridge called the roll; all Councilmembers were present. Mayor Grafos welcomed everyone to the meeting and turned the meeting over to City Manager Jackson. Welcome and Overview: City Manager Jackson explained that this is the sixth year we have conducted the budget workshop as a means to check-in with Council on our budget. He said typically the City Manager objectives and Council objectives are well aligned. Mr. Jackson said that we will discuss the financial objectives in the back of the notebook, but right now, he directed attention to page 5 in the Business Plan and then briefly discussed the fiscal policies including Financial Management Proposals and Financial Objectives. He said that these objectives have been in place with minor changes for the last six years and are subject to change by Council. He also mentioned that we try not to duplicate services provided by others within the community, like the sport programs offered by the County. Concerning the figures in today's materials, Mr. Jackson said we continue to find corrections so please consider this a draft document. He also mentioned that there was Council discussion back in 2010 about not accepting grant funds, but they are an important part of the financial objectives of our City; said we have received over $54 million in federal dollars since our incorporation, and rhetorically asked everyone to imagine what our infrastructure might look like without those federal grant dollars. Said we currently use only 1.3% of our City's allowable debt capacity, and more importantly, 6.02% of non-voted bond capacity. Said of the six goals listed on page 5, the last goal to "strive to prioritize spending in the annual budget process and minimize mid-year addition of projects and appropriations" was just added last year. Said that if we have things that come up mid- year, as much as possible we try to hold onto those until the following year, but yet we realize there are some things that are beyond our control. Looking at the ending fund balance as noted on page 6 of the Business Plan, Mr. Jackson said we have agreed to maintain a minimum general fund ending balance of 50% of recurring expenditures, and agreed that the Service Level Stabilization Reserve Fund will not drop below $3.24 million, or 60% of $5.4 million. Mr. Jackson said already accounted for in next year's budget, is not to take the 1% property tax Workshop minutes:June 16,2015 Page 1 of 13 Approved by Council:July 14,2015 increase permitted by law, but we do include new construction, which usually amounts to about$200,000 in taxes; said unless the tax rate is increased, the rate doesn't increase to the City, but as we grow and flourish, we will be bringing in additional sales tax; said our objective is to grow the economy. Financially, he said, we have been successful to-date, but we will have some challenges, like the street fund maintenance;the gas tax remains flat as there hasn't been a lot of growth because of the efficiency of the automobile, and that perhaps people are driving slightly less; said we might reconsider the telephone utility tax, which was originally a temporary tax, but has been the platform of our street fund and without it, it would be very difficult to maintain the streets, and he noted that the funds we see now are less than when we first started, as people cancel their landlines with the extended use of cell phones. Mr. Jackson said we are fairly financially secure through 2017, but then we will start to depend heavily on our reserves,which means we will have to examine the street fund revenues within the next couple of years. Mr. Jackson mentioned the purpose of REET funds; said we have some exciting projects such as the Appleway Trail and Balfour Park; that the trail will require some funding agencies to be willing to work with us to reallocate some of the money for various sections of the trail; and for the park, we have no money set aside now, but, he said, we knew that when we purchased the property, and said we don't know what will happen with the library ballot issue, but if that is successful, we will want to develop that park. Mr. Jackson said those basic philosophies haven't changed much; and said that we have a razor-thin margin between revenues and expenditures for 2016, which is fine and we will meet the 50% ending fund balance objective. He said if we discover we have a strong need, we could spend money but we are not trying to increase reserves. In examining this budget, he said it is important to consider that we have added some programs, plus two police officers, and the Appleway Trail which will require maintenance; we have also added stormwater swales and landscape improvement, but we bring those issues to Council before the projects are approved; also upcoming is not only funding a new city hall but funding its operation and maintenance. Mr. Jackson noted that if there are expenditures in the budget that Council disagrees with, it doesn't mean we can't reallocate those. Moving to page 79 of the Business Plan, Mr. Jackson went over the Community and Economic Development Performance Measures, particularly the permit valuation over the years 2009 through 2014, and that upon examination of the data, said we are able to draw some correlations between the data and what's happening in the community. Director Hohman explained that we have seen a slow upward trend with the permits, from just under 3,000 permits in 2009, to almost 4,000 last year; he mentioned that so far this year we have seen increasing numbers of residential permits, which we haven't seen in a lot of years; said the commercial activity tailored off a little although we are looking at some large projects; and mentioned that the figures in the permit valuation indicate the community's willingness to invest in their community. Councilmember Pace mentioned a goal of weaning ourselves from needing grants; said they are great, but when it comes from the federal government, they are deeply in debt; and the state can't balance their budget; said he realizes it is hard work to write and receive grants. Councilmember Hafner also suggested keeping in mind we don't want to turn away from grants if they are needed for the project; while Mayor Grafos added that the project can't be driven by the grants, that each project's priority must be determined and each project has ongoing maintenance costs; said he doesn't want to "chase the grants" but said the grants are a good deal and we like all the funds we can get. Councilmember Hafner said that if we were to receive grants for Bridging the Valley,he thinks we'd accept them. Mr. Jackson said that the plan for today is to go through the budget in the workbook, to discuss Council goals for 2016, and end with brainstorming; said this is a workshop setting and he encouraged questions throughout the day; said the pages are similar to what was done in the past showing several years of history, and that every department also undertook an exercise of projecting what would occur with a 3, 6, and 9% reduction; said we have not had to make those reductions, but this gives good insight into what departments feel would have to be reduced, or what we could live without, and is a good discussion and budget preparation activity. Workshop minutes:June 16,2015 Page 2 of 13 Approved by Council:July 14,2015 Preview of workshop: Interim Finance Director Taylor gave an overview of the General Fund budget figures, noted department changes from 2015-2016, and explained that departments were asked to maintain the 1% cost increase; she noted under recurring costs that revenues slightly exceed expenditures; and the overall deficit of total revenues compared with total expenditures is $356,880 and mentioned the need for a future 2015 budget amendment to address some of the nonrecurring expenditures; and once all the adjustments have been made, said we would have a 53.44% ending fund balance. Mr. Jackson said this was planned when we reduced the ending fund balance last time; he reminded everyone that this is not a spending plan and we do not spend every dollar we receive. When asked about the CAD(computer- aided dispatch) costs, Mr. Jackson said the County is putting in that system and have allocated part of their cost to us, to be paid over the two years of the acquisition of the software, and a contract will be forthcoming and part of the issue continues to be debated as the County proposes to start charging us for the new software that will have to be replaced in fifteen years, which would mean we would pay for the service citizens are using now even though we don't know the needs of the future years, and that this will come before Council later. Mr. Calhoun said what was adopted back in November continues to evolve and that Ms. Taylor will give Council an administrative report this September on all the proposed budget amendments. Ms. Taylor went over the revenue projections for 2016, the new property tax figures and actual 2015 levy amount, along with the estimated $200,000 for new construction, all assuming we are not taking the 1% property tax increase; she moved through the sales tax revenue estimates for 2016; mentioned the gambling tax drop which is related to the tax rate change on the card games,which she said amounts to an estimated $180,000 yearly reduction; said state shared revenues are projected at 2015 levels as we wait for the state budget; and said we hope to get an update late July or early August. It was also mentioned that all general revenues are subject to change as we get more information, and that most line item revenues are projected on a six-year history. Ms. Taylor went over the General Fund Department Changes noting the declining utility tax, and gave a brief explanation of the figures included on the Stormwater Fund 402 sheet. Tab #1: Legislative: In highlighting the changes, Mr. Jackson noted the state lobbyist cost could be slightly more in 2016; that although we hired Travis Lumpkin as our federal lobbyist last year, he was subsequently hired by Maria Cantwell; said he met with two members of Ms. Cantwell's staff yesterday and discussed economic development. Mr. Jackson said the plan is to submit a TIGER Grant application in June of next year for the sewer costs for Tschirley Road; and reiterated that the budget is not a spending plan and it is okay to put in funds and not use them; said our primary interest with the federal government is in financial support as not so much on the laws they are passing; mentioned that our local representatives for the federal system are very helpful; said he wasn't going to send out an immediate RFP (request for proposal) for a lobbyist, and asked Council for their input. Mayor Grafos said there is always an opportunity for a lobbyist and wants to continue as we have in the past; and Councilmember Pace questioned if we are keeping track of our spending for a lobbyist, and whether we are getting any funding from the federal government. Mr. Jackson said it could take a long time to see a cause and effect, but that part of our objective is to be more engaged at the federal level; said we are proposing funding for trips to Washington, D.C., as well as Olympia; and that those trips have paid off in Olympia as we work to keep our items alive and progressing. Mr. Jackson also noted there has been a reduction in the cost over the year for broadcasting our Council meetings. Concerning Council travel, Councilmember Gothmann said since he is temporary, perhaps it would not be a good use of money to send him on trips or to conventions, such as the NLC(National League of Cities), and Councilmember Pace said the easy answer to that is, to just not go, and suggested the control is up to Mr. Gothmann. Councilmember Pace also noted that he previously tried to shift some travel funds to Mr. Hohman's department so staff could attend the AWC and/or NLC conferences, and based on his last involvement at those conventions, feels it was a waste of taxpayer dollars and he won't attend again. Mr. Jackson also noted that if Councilmembers want to attend, the matter can be brought to the City's Finance Committee for a decision. There was some additional discussion about travel and cost, whether it is better to send Council or staff, that it depends on where the meeting or conventions are and the topic, and that even if we are unable to meet with federal Workshop minutes:June 16,2015 Page 3 of 13 Approved by Council:July 14,2015 officials, those officials pay attention to what their staff says, and so we gain recognition; GSI's (Greater Spokane, Inc.) presence at meetings was also mentioned. Councilmember Pace suggested in the interest of being efficient,that we limit Councilmember trips to one a year and that we can learn without going on a "boondoggle" adding that if someone travels, a report should be made back to council on at least certain aspects of that trip. Mr. Jackson said we can talk about the manager's cost and then come back to this later to determine whether we want to make a reduction in the budget. Tab #2: General Government: Mr. Calhoun explained some of the figures on the three spreadsheets; said we might have to extend our City Hall lease as it is will expire March 30, 2017; that we are setting aside funds in the general fund to cover the excess; mentioned the bond payment is about $70,000 more than the lease; mentioned the funding proposed for outside agencies of$110,000 with a separate $40,000 that would be at the City Manager's discretion for specific economic development purposes; said that Mr. Jackson has had preliminary discussions on this and it is progressing slowly as we want to have a measurable scope of work with whatever economic development agency we choose to work with. Councilmember Pace asked what do the taxpayers get for the $117,000 fee for the Spokane County Air Pollution Authority, and Mr. Calhoun replied that this is our portion of the cost, which is established by the state and handled through the County; and Mr. Calhoun said he will do some research about how this is set up and regulated. Mr. Calhoun went through the capital outlays, and said we always make sure pavement preservation figures evolve as the budget evolves; said we plan to spend a modest amount of funds to improve the twelve-year old speakers in the Council Chambers, and to add some acoustic panels. Councilmember Wick suggested we look at the idea of someone hosting our website, and Mr. Calhoun explained that our website is hosted by Qscend and that we can discuss later about how that works. Tab #3: City Manager and City Clerk: Mr. Jackson said his fund includes the City Manager, City Clerk, Deputy City Clerk, Council's Administrative Assistant and the Assistant to the City Manager; that the changes to wages and benefits track to the existing policy with a maximum of 4%, as outlined in our labor contract; said health care and PERS are calculated with Human Resources and Finance; said these figures are pretty static with a slight increase for travel and mileage, and includes figures for professional service consultants, bond counsel, and other kinds of personal services we might need to contract for; and includes services for Code Publishing for handling our Comprehensive Plan as we elected to have it published to our website, which works well, and is always up-to-date. Mr. Jackson mentioned the travel figures, that we don't have a per diem but reimburse for receipts of actual meals; said he feels the figures are pretty close based on actual receipts, and asked Council if they would like to discuss the two trips a year for the City Manager, and Councilmember Pace said he trusts Mr. Jackson's judgment. Mr. Jackson briefly discussed some of the past trips and meetings with Senators Murray and Cantwell, and of opportunities to discuss Bridging the Valley; said such meetings are beneficial although sometimes such benefits are intangible. Mayor Grafos said he feels the money is well spent and we need to "be at the table" and like advertising, have to be consistent in order to get results; said people are talking about how different we are from other cities; and this is a positive benefit and should be a priority; said he attended a GSI meeting yesterday and received two compliments about what we are doing, and that it's the old "squeaky wheel" that pays off. Councilmember Hafner agreed and said relationships are important and the federal and state government must know about our needs. Deputy Mayor Woodard suggested we might want to change the process and have funds for Council trips used every other year; but for the most part, said it is a good starting point. Mr. Jackson asked if Council agrees with the budget and of sharing the travel expenses as it is or wants to revisit the issue. Councilmember Hafner said he trusts each Councilmember on how they spend the funds, and Councilmember Wick and Mayor Grafos agreed. Council took a quick recess at 10:10 a.m. Mayor Grafos reconvened the meeting the 10:24 a.m. Tab #4: City Attorney/Legal Support: City Attorney Driskell went over the figures for legal support, and said that these are mostly stable and reflect business as usual. Tab#5: Operations and Administrative Services: Mr. Calhoun explained that this section of the budget increased overall by 3.2%, but the nonpayroll cost was actually down by about $10,000; said this Workshop minutes:June 16,2015 Page 4 of 13 Approved by Council:July 14,2015 department includes six FTEs (full-time equivalent) plus a PIO (public information officer) intern; said this shows a decrease for the city-wide survey as that is only conducted every other year; that the $18,000 in public information includes all the Hot Topics printing and one, city-wide mailing. Councilmember Pace suggested increasing the spending as a means of keeping citizens engaged, and said he feels it is worth doing a $30,000 mailing four times a year to all households and businesses. Mr. Jackson said he would take that under consideration. Deputy Mayor Woodard said he feels this is still a lot of"bang for the buck;" that we could see what response we get from doing the full mailing a couple of times to help determine whether it is worth four times a year; and Councilmember Hafner suggested looking at the content to see if it is relevant and make the decision at that time. Mr. Jackson said he will come back with a proposal. Tab #6: Finance and Information Technology (IT): Ms. Taylor reported that this shows an overall increase of 4.15% which is primarily related to payroll; and that overall the nonpayroll figure is down slightly by $96.00; and that there have been no major changes from 2015. Mr. Calhoun explained that the bond counsel figures were for the compliance consultation related to the previous bond. Tab #7: Human Resources: Mr. Whitehead said there have been no major changes and the figures are pretty straight-forward; and he went over the highlights of the spreadsheet; said there was a reduction in legal due to an anticipated lack of need for 2016; that the professional services includes background checks and physicals for prospective candidates for employment; that as the economy gets better, it is more difficult to recruit employees so we are spending a little more for advertising; and he noted we have had some staff move from our organization. Mr. Jackson said over the last several months we lost three engineers, plus one from the year before, all to the City of Spokane; said Spokane is gearing up for major construction and their staff positions are attractive to some of our people as a means to move to a position with a better career path and higher wage. Mr. Whitehead spoke of costs associated with safety-related training, the reduction in health care costs as part of the Wellness Program; and that staff might be bringing forward a position title change in the future to have the duties more accurately reflect the position, although there would be no fiscal impact. Mr. Jackson said members of the Finance Committee remember the discussion about the concept of instead of raising the pay in the matrix, to provide the opportunity for the City Manager to increase the salary on a temporary or ongoing basis for someone who steps far outside their responsibilities and takes on additional duties; said part of the struggle we face is while we work so hard to keep the number of staff low, employees want to move forward and we want them to, but employees can see there is a plateau, so it is difficult to keep creating opportunities at the top end; that we will always have some turnover, but one of the tools we use is to add a statement to the matrix giving the City Manager some discretion if someone does an exceptional job, as we don't want to create a new position but do want to compensate them for those additional duties; so something like that might come forward as a proposal in the final budget; but if so, he said it will be discussed beforehand with the Finance Committee. Mayor Grafos suggested we have a spreadsheet that examines our positions compared with those at the City of Spokane and Spokane County to give an overall view of where we are. Mr. Jackson agreed; and also noted that our biggest investment should be our mobile app and website which is a tool people use to make decisions about where to go, which lead to a brief discussion about social media. Tab #8: Public Works: Mr. Guth went over the figures covering the general, street and stormwater funds; said the total increase is 4.88% but removing payroll shows the increase at 3.38%; mentioned that he has worked with finance on the vehicle replacement fund, which is putting money away annually to re- examine how we do our vehicle replacement; said those numbers went up fairly significantly and said his department has the largest fleet; so removing those figures leaves his department with a 1% increase. He explained some of the items which are different from those in 2015, such as small tools and minor equipment, and that they are looking at a three-year history to determine if they have the right figures; he spoke of other services and charges such as our GIS (geographic information system) Contract with Spokane County, which includes some mapping services as well as GIS licenses; said his entire department includes ten FTEs. He spoke of the aerial photography cost which was previously discussed Workshop minutes:June 16,2015 Page 5 of 13 Approved by Council:July 14,2015 with Council; and said this will give us more accurate information, and said we share those costs with Community Development. Mr. Guth also spoke of the added funds for conference registration, which is a result of additional solid waste programs, which is part of the CDBG (Community Development Block Grant); that the majority of the cost is borne by the grant but this would be matching funds to attend training. He noted that vehicle replacement increase is a result of a recalibration of the cost for replacing vehicles. Councilmember Hafner asked about fuel cost and Mr. Guth replied that the figures are an estimate since it is difficult to predict what will happen with the cost of fuel, so he looks at the historical figures; said the cost did increase in 2015 because of adding a vehicle at the end of 2014. Concerning the street fund, with seven FTE's, Mr. Guth said they have been challenged with some declining revenues due to the phone tax, which has decreased by $750,000 since 2010 and which has resulted working through a budget shortfall for 2016 of$611,719. Mr. Guth said he has worked with the finance management team in working through some of the options of how to tackle that shortfall. After briefing Council on some of the figures on the street fund spreadsheet, Mr. Guth noted that the temporary city drivers' cost figures were taken out of the Poe contract figures; he said over the winter, many of the Poe Contractors are laid off and if they work for us, they don't get their unemployment; said we are having problems getting drivers and the solution is to look at temporary drivers; and said this would supplement what they were doing if working; or we could hire quasi-retirees; and said they are still working through the program. Mr. Guth mentioned that we did not get a lot of snow last year so we were able to conduct some training; said the deduction of the $20,000 from the Poe Contract is added here so those figures (the previous $20,000 deduction from the Poe Contract) is accounted for here; with a net effect of $60,000 less than 2015. Councilmember Pace asked about SRTC (Spokane Regional Transportation Council) membership, and Mr. Guth explained that the $18,000 is the amount of dues it takes to be a member of SRTC, and on top of that there is $15,000 for the SRTMC traffic management system, which together totals $33,000; Mr. Guth said the other figures shown represent engineers' continuing education, which is a two-year re-certification program. Concerning SRTMC, if we are not members, Mr. Guth said we could not receive any grants or receive the benefits of planning and funding that goes through them. Mayor Grafos asked how many lights we have and how they are paid for and whether we could work with them over time to reduce these costs. Mr. Guth explained that we have about one or two hundred lights, and the rest belong to Avista, Modern, or Vera; that we pay for the electricity and some operation and maintenance, like painting and/or changing bulbs, cleaning lenses; and that all those figures are built into the cost we pay them. Concerning LED lights, Mr. Guth said that SRTMC also seeks grants for retrofits and we would have to research to see if their grant plan includes Spokane Valley. Mayor Grafos suggested perhaps we could participate and upgrade the lights and get better looking streets; and Mr. Guth replied that he would have to research that; that he has had some vendors contact him in the past who are interested in what we are doing. Mr. Guth explained that the $150,000 bridge maintenance is for Fancher Bridge; that a center joint has opened on the bridge, which is a serious issue and needs to be addressed; he said we can't put a quick fix on that any further; that they had applied for a grant in 2015 through SRTC of$40,000, but did not score well and therefore, did not get the grant; said this needs to be fixed and he feels we can't postpone it any longer. Concerning snow operations, the decrease includes the $20,000 credit from the Poe contract as mentioned earlier; he also noted that part of the budget reduction, the $70,000, is for a full city plow with motor graders; said they have accounted for a snowplow in the emergency fund, but would need to replenish that fund in the future if it is used, so this could be seen as a one-time reduction. Under the intergovernmental services, Mr. Guth explained this mostly concerns street maintenance performed by the County and includes traffic signs, signals and markings the County does for us; he mentioned that some of the signals have been in the ground for over eighty years and need to be upgraded as technology changes we can't support the old technology; he said the net change result is a $23,000 decrease. Mr. Jackson said we could potentially require additional funding for the street fund but we don't need it yet as we work hard to reduce expenses; he noted a big shift to take up preservation costs through the REET funds; said we can do that for a while but not in the long term; said we also typically budget for Workshop minutes:June 16,2015 Page 6 of 13 Approved by Council:July 14,2015 moderate to heavy snow fall, but if we have to dip into that for snow plowing, something else will have to be tightened up. Moving to the stormwater fund, Mr. Guth explained that this includes three FTEs; the costs include sharing the backhoe with the street department with a full time inspector who works out of the shop and who needs his own pickup truck. Mr. Guth went through the other figures including GIS mapping costs, stormwater needs relating to structures and database; professional services; and the private stormwater maintenance with Poe Contractors. There was also brief discussion concerning the decant facility and associated cost savings as we share the facility with WSDOT (Washington State Department of Transportation); and that once we get through a full year, we will be in a better position to know our actual facility costs. The Mayor called for a recess for lunch at 11:45. He reconvened the meeting at 12:35 p.m. Tab #9 Public Safety: Senior Administrative Analyst Koudelka explained that the non-departmental figures are primarily fines and fees from district court which are mostly passed on to the State; he noted the decreasing revenue trend, which he said was expected with the traffic school participation starting late 2011; the District Court fee reduction is a coding change for fees labeled "deferred findings" with 44% of those fees now going to the State; said he is hoping to see the start of the pre-trial diversion program for DWLS3 (driving while license suspended) charges; which program is designed to get people back on track with a payment plan. Mr. Koudelka also mentioned the maintenance of the precinct building showing a small increase over the last few years. Concerning Crywolf, Chief VanLeuven said he feels this has been a beneficial program. Mr. Jackson said that staff routinely gets inquires about people sending their payments out of town, or someone with having a perfect record gets a false alarm; and said those are things we can look at; or if preferred, we could start on a RFP process, and whether such would be sent out this year or not, we could start with a discussion that Crywolf has been successful in reducing alarms as well as notifying the appropriate property owner when an alarm goes off; he said the ratio or percentage of payment compared with fees can be researched, and suggested if we decide to conduct further research, that one more year is the most we should wait; he said the $40,000 is what we pay for the contract. In response to a question about the number of false alarms, Mr. Jackson said we would have to research the data. Mr. Calhoun said the gross revenues are about $180,000 a year; and Ms. Taylor noted that in 2016 we have budgeted for $195,000 in gross revenues. Mr. Jackson said we would have to break that number down to show what the registration fee includes, what our contract cost pays for, how much Crywolf collects for false alarms, and other associated data. It was suggested to perhaps bring Council a report on Crywolf in August. Chief VanLeuven said while there is always room for improvement, the program has been very successful, and that since the ordinance was imposed, the accounts have increased and the secondary responses to false alarms have decreased; and that it would formerly would take thirty minutes to an hour for each deputy to respond; now 40% of the accounts where we didn't have account information on who to call, we now have the needed information and said the lack of owner information has been virtually eliminated due to the registration fee of$25.00 for the first year, which is reduced by 50% for the following year; he also noted there was a certain group of businesses in the past who had over one hundred false alarms, and they were 100% human error, so with training and education, he said that has been eliminated. Mr. Koudelka went through the intergovernmental services and said that since the economic decline in 2008, we have a priority of making sure we are as efficient as we can be; that in working with the County we have done some things jointly, other things the County did on their own, again, to make sure we get the best value possible; said re-working some of the contract cost methodologies resulted in good improvements and savings; and he went through several of those contract savings, noting that we will determine what the Prosecutor contract impact will be with the pre-trial diversion program. Chief VanLeuven also explained the positive aspects and time savings for the workload power shift, and reported that his deputies feel this is the best method ever to help with efficiencies. Chief VanLeuven also noted the loss of thirty-two deputies over the last eighteen months. Mr. Jackson added that we need to keep good matrixes on these new programs in order to track their progress; mentioned the great cooperation between police and county officers and him and Mr. Koudelka; said they have had multiple Workshop minutes:June 16,2015 Page 7 of 13 Approved by Council:July 14,2015 meetings and the City has some control over how our police department operates, and it is through these processes that we shaped this program, which he said would not have existed without Mr. Koudelka and others working together; said it is not a program of the County but a product of the City of Spokane Valley and our work together. Mr. Koudelka then spoke concerning the jail contract and the 3.18% increase for 2014, which he said is still a decrease overall; said there was some deferred maintenance and the usage has dropped and as mentioned, he hopes to see the benefits from the pre-trial defense. He explained that emergency management shows an increase of 3.45% which includes the new animal control contract with costs fixed and capped at an increase relative to the CPI (consumer price index) change from year to year; that our actual costs in 2004 were $375,000, compared with our costs for 2016 of$295,000. Tab #10: Parks & Recreation: Director Stone noted that the overall increase for all items including payroll is down 3%; he explained the various divisions: Administrative with two FTEs, which is the biggest challenge as CenterPlace is becoming a place that never closes; there are no employees for maintenance as we contract with Senske Lawn & Tree Care; said we will be maintaining the first mile section of the Appleway Trail, and Senske does all the lawn maintenance on this trail as well as the Centennial Trail. Mr. Stone said that recreation has one FTE and is operated on 100% cost recovery; said they try to fill the gaps and not repeat services that other entities are providing; said he depends on temporary seasonal employees and hires one or two interns a year for functions like summer day camp or the outdoor movies. Mr. Stone reported that the summer day camp is very popular and filled the first week; said they also have a free summer park program at three parks which includes a free breakfast and lunch, provided by East Valley School District as an extension of the school year to supply meals to kids throughout the summer. Mr. Stone stated that the summer movies are very popular with attendance between 500 and 600 for each movie; he said that next year they will offer three movies, and said the more successful we are in getting sponsorships,the better. The Aquatics division also has no FTE's as Mr. Stone explained the outdoor pools are operated by the YMCA; he said we could not provide these services without the Y's competent management of all that it takes to run these pools, including managers, cash registers, attendance, and maintenance, and that they charge a small administrative fee plus their actual expenses, which Mr. Stone said he anticipates will decrease in 2016 since some repairs have been made and because each year the Y's organization and staff improve. Mr. Stone also reported that the pools were recently painted so we were able to reduce that for next year. Under small tools, Mr. Stone said they will be adding steps at each pool; the steps hook onto the pool edge and have been requested by numerous guests for assistance getting into and out of the pool with using the "lift." For the Senior Center, Mr. Stone said there is just one FTE, and he can't speak highly enough of her ability to deal with the daily challenges she encounters; said we have a Memorandum of Understanding with the Senior Center Association covering the aspects of the use of the CenterPlace, and said this has proven to be a very good partnership. CenterPlace, Mr. Stone explained, has five FTE's: a coordinator, two administrative assistants, and two maintenance workers who also work to maintain the police precinct; said the challenge is the Center is open seven days a week sometimes up to eighteen hours a day, making it tough to accommodate with staff, and therefore he depends heavily on hosts who work after hours and on weekends and are usually the public's first point of contact. Mr. Stone went over the small tools and minor equipment figures, mentioning the wear and tear and of the need to replace and repair such items as room chairs and tables. He mentioned there is a slight increase in janitorial services per the ISS Contract; and said that company also works to take down and set up as needed, especially when there is an event late in the evening followed by a different event early the next morning; and said although ISS will do that, he tries to keep that take down and set up to a minimum. Regarding the roof, Mr. Stone said that he has been in negotiations with the recommended roof contractor for about eight weeks; that he was having trouble getting them to sign the contract, that he has worked with our legal department and the contract has now been modified, but it is not yet signed, which he said is very frustrating as this company was highly recommended and is the only company that specializes in tile. Mr. Calhoun added that Council had previously discussed potential projects with Mr. Stone,and gave Workshop minutes:June 16,2015 Page 8 of 13 Approved by Council:July 14,2015 as the first priority, the sound system in the Great Room, followed by the sound system in Room 109; he noted since we refinanced our bonds last year we saved the PFD (Public Facilities District) about one million dollars and the premise was that they would share some of that back with us to help with some of these projects. At approximately 2:00 p.m. Mayor Grafos called for a recess; he reconvened the meeting at 2:10 p.m. Tab #11: Community Development: Director Hohman explained that he tried to keep this much as it was last year except for training; however, the vehicle replacement fund came up and skewed his numbers; said overall total recurring for all four divisions is about 2.57%, and if you take out payroll and remove the vehicle replacement fund, we are left with a 1.025% increase. He noted the Administrative Division kept costs consistent across the board; said he will be sending a staff member to a weeklong economic development training session in Ellensburg; that he and Mr. Jackson have discussed the business plan and of the need to incorporate some performance measures connected with economic development; he said that hasn't been done yet but they realize that it is pertinent to do so and will be having regional meetings as a line item; said he will probably add another category about ongoing recruitments; and he mentioned as an aside,the work staff is doing connected with the heavy recruiting of a manufacturing company. Concerning economic development, Mr. Hohman said there are 2.6 FTEs; that he re-analyzed the .5 person and realized the person was working three days a week, hence the change from .5 to .6; he mentioned the newly hired Diane Prevost, Economic Development Specialist, who brings with her twenty year's marketing experience. Mr. Hohman said he also tried to increase some of the line items for publications, travel mileage, and subscriptions since staff has to be out in the community to attend such things as lunch meetings with their associated monetary costs, and wanted to make sure there is an adequate budget for that activity. Councilmember Pace suggested this might be a field where we could invest more. Mr. Hohman said there is a consultant on retainer to develop a recruitment strategy, and staff will be putting together a plan on how to move forward, where to target in order to acquire some of these commitments; said they have done a lot of research showing that we need a vibrant website and more testimonials, and he is working with John Guarisco on marketing commercials, including the possibility of YouTube or even television commercials, as we want to promote our city and its attributes, like free parking, great businesses and infrastructure. Councilmember Wick asked about certified sites and Mr. Hohman said staff was working to put together our own program; and has been discussing this topic with GSI to determine what the best program would be; he said there is no specific line item for this as staff works on the issue of hiring our own consultant or working in conjunction within the region. Mr. Jackson said we could add more detail for that and come up with a line item amount for perhaps adding a contractor. Mr. Hohman explained development services has eleven FTEs and is a compilation of development engineers, planning and code enforcement and funds are moved from different places in the budget depending on the circumstance, such as making sure code enforcement activities are adequately covered. Mr. Jackson noted that the next time we put these documents together, we will include the number of FTEs in each department/division, even though those figures are shown in the Business Plan. Mr. Calhoun talked briefly about the vehicle replacement fund, schedule and needs of the City's fleet. Concerning page two of the spreadsheet, Mr. Hohman noted the Spokane County GIS figure has been reduced since previous figures included costs for the Hearing Examiner, so $20,000 was added to intergovernmental services to cover those costs. Mr. Hohman said the building division has fourteen FTEs; and noted that the move of the permit center to this building works well and has increased his ability to coordinate and communicate, thereby making for more streamlined customer service. There was also brief discussion about the fees associated with accepting credit cards. Mayor Grafos suggested periodically going back to the bank or other entity issuing the credit card and remind them that costs continue to go up on all accounts, said banks will increase those costs if we don't monitor them, and suggested the banks might make adjustments if asked to do so. Workshop minutes:June 16,2015 Page 9 of 13 Approved by Council:July 14,2015 Tab #12: Supplemental Requests: Ms. Taylor gave an overview of the several supplemental budget requests and explained that these items are not included in the earlier budget's general fund. One of the requests is a facility maintenance position for Public Works. Mr. Guth said that he would like to add this position toward the end of 2016 in order to have them closely involved with the close out of the City Hall construction project, and said he would likely advertise in the fall and that the position would be the same pay grade and work the same schedule as the Parks and Recreation facility maintenance position;that the idea now is to have one person and if another is needed, to borrow one of Mr. Stone's staff. Mr. Guth said the new City Hall building maintenance would be minimal, and this person could perform maintenance for the shop and police precinct as well. Mr. Calhoun said this position would reduce the budget by $217,000 and would be an additional position. Mr. Jackson said it is a major decision to add a staff member;that we can work out the amount, and said if this position were contracted out,we would pay the same amount plus overhead;that CenterPlace has proved that it is a lot of work for staff and somehow we have to provide maintenance for the new City Hall, and not a journeyman level type of position. There was some discussion about the timing of bringing the new person on board; the idea of having the new person learn all the systems and where they are located, with Mayor Grafos and Councilmember Hafner agreeing we need to have someone for that position. Concerning the tools and equipment, Mr. Guth said those are place holders to accommodate what this individual might need. Mr. Stone said the one regret he has about his maintenance person is that person was not there when the building was constructed and they find issues later that could have been taken care of earlier and saved money. Mr. Jackson said the position will be kept in the budget and he will determine the appropriate time to fill the position. Although the budget requests for Parks and Recreation requests the purchase of two acres of land near Sullivan Park, Mr. Stone explained that Washington State Department of Transportation is selling their property totaling thirteen acres and the City has been given the first right of refusal; that this additional property would allow us a concise north property line and remove any threat of new property owner's impact on the property; he said property acquisition is a priority within the Parks and Recreation Master Plan, and the property has been appraised at $844,000, which gives a per acre cost of$65,000. Mr. Stone said we have about two months to consider this purchase option, and if someone else purchases this property, we would have to shrink our boundaries. Mr. Stone said Sullivan Park has started to become more emphasized in connection with the river use; and perhaps this would be an opportunity to turn that park into an outdoor destination; adding that in the long term, if the City decided later not to use the property, it could be easily surplused. Mr. Stone said he realizes the timing might not be good, but would like to seriously consider moving this forward, and the deadline to respond is August 7. Deputy Mayor Woodard asked about the status of a brownfield cleanup under the Union Pacific and Mr. Jackson said if Council is interested in this purchase, we would look into that first; but if there is no interest, then we would not pursue it further. Councilmember Pace said $1.7 million could be invested in several things; we could invest .8 million in land instead of investing in the banks; and seems it would be the smart thing to do. Councilmember Gothmann agreed it would be a good transfer of assets, and asked if we have the cash for the purchase. Mr. Jackson said we do. Mayor Grafos said he feels we should not make that purchase,that it is not a priority and we have other projects and we could be opening a can of worms with that property. Councilmember Hafner agreed that money could be used for Balfour Park if the library bond passes, which he said would be more beneficial to the City than buying this piece of property. There was additional discussion regarding the idea of this thirteen-acre purchase, including mention of other projects such as the library/park and that the library ballot outcome would be known August 4t. Mr. Jackson asked if there were any objections to staff looking further into this proposal and learning more about the cleanup. There were no objections. Concerning the public works storage shed,Mr. Guth said this was already calculated into the budget. Mr. Jackson asked if there were any objections to adding this item, and there were no objections. Mr. Guth said they have a lot of old equipment and would like to replace some of the ten-plus year old video equipment for vehicle detection at arterial intersections; said the useful life of the equipment is about eight to ten years, and they are starting to fail. Councilmember Pace said he wants to see the bigger picture and compare the loops to cameras, and Mr. Jackson said we can do that and examine different Workshop minutes:June 16,2015 Page 10 of 13 Approved by Council:July 14,2015 ways to fund the project. Councilmember Wick asked about the possibility of an SRTC grant or bunching the equipment together from several intersections. Mr. Guth said he will ask Traffic Engineer Sean Messner about that idea. Mr. Stone explained that the next request is to continue the installation of the new park signs with three new signs, and replace the County signs with our City standard; also requested was to continue the installation of a splash pad at Browns Park; said this is the most requested improvement in our parks and the construction for 2016 is part of the Browns Park Masterplan; said the design costs are probably low, but the figure represents a good estimate and this would be a good way to demonstrate to the public that this park's focus is not just on volleyball. Another request, Mr. Stone explained, is to complete phase 2 of the Valley Mission Pocket Dog Park construction; also included is a request is to replace the existing modem and dial-up communication and point of sale systems at our three public swimming pools; and a final request is to develop the east half of Valley Mission Park; that reservations have stopped for use of the horse arena and he thinks other amenities would be more attractive and useful to our citizens, adding that this is still in the planning process. Councilmember Hafner said he likes the idea of the dog park. Mr. Calhoun said that Ms. Taylor will work with Mr. Stone to determine how much money would be left over in the general fund at the end of 2015, which will give us an idea of which of these requests to move forward, stating that we realize we cannot afford them all. Mr. Jackson noted that these requests are prioritized, and we could get them included even if not done, this year; said the Parks' projects would be paid for with money allocated specifically for parks; and if we buy the thirteen acres, that would come from the capital reserve; the rest of the requests are primarily vehicles. As the time was getting late, he asked Council if they want to continue today's discussion and talk about the snow plows, or end today's meeting now. Council agreed to keep going. Mr. Calhoun said vehicle replacements are replacements of existing vehicles and we have set funds aside so there is no additional expense to any fund. Concerning the request for a snow plow, Mr. Guth explained that he is requesting one replacement in 2016, a tandem truck,that we only have one in the fleet and ideally, we should have two; that the tandem leads the one group; that it would be a new one, bigger truck and bigger engine and would help on the hills and with performance, and when we get a good storm, we'll be ready. Mr. Guth said he found that the best performance is to have nine plows; a group of seven with two to help on hills; by running nine plows, he said we can plow arterials in twelve hours; with seven plows it would take sixteen hours; that we have nine plows but will have one newer one bought in 2011 or 2010; the next oldest plow is from 2000, and the rest were purchased in the 1990's from WSDOT. He added that WSDOT keeps their plows longer so it is no longer easy to buy used plows; that every three years he would like to buy a plow, thereby have a surplus or backup when needed. Deputy Mayor Woodard said that this idea leads to "personnel creep" and to beyond what was intended; said he is very reluctant to replace it and build a larger fleet. Mr. Guth explained that we are not building a larger fleet as now we have no backup plows; and with the age of our equipment, we typically have a breakdown. Mr. Jackson said he and Mr. Guth will discuss this further; and also noted as the old plows are replaced, we have nine plows and during the interim, there is a need for these as backup, so it is not a creep; these old plows do break down; they are well-maintained but they are old and Mr. Guth has come up with a long-term replacement plan, not just a growth plan but a backup plan where we get one and drop one; and he added that it is not uncommon to have one break down. Mr. Guth said it doesn't cost a lot to have one sit as a backup. Deputy Mayor Woodard suggested using a contractor as a backup; that spending $225,000 every three years would pay for services. Mr. Jackson explained that when the County decided to no longer provide us with snow plow services, we looked at a variety of options;the intent was for the City to own the plows and contract with street maintenance for the operation; he said that research showed us going in that it was extremely difficult to find contractor/employee truck drivers to work in the winter as they are laid off and their compensation is better being laid off then working for us; said we ran into this issue with trying to find qualified drivers so the idea of owning the trucks was the idea from the beginning; and Council agreed we would own them; we have gone from five to seven to nine and we need to make sure we have the right number of vehicles, and Mr. Guth said nine is the correct amount; whether we need backup is a big part of the question; if we go back to 2008 and 2009 when we were buried in the Workshop minutes:June 16,2015 Page 11 of 13 Approved by Council:July 14,2015 snow, we couldn't call up a plow in this region, and ambulances couldn't get down the street; so we decided we needed to be responsible for that decision. Mr. Jackson added that we have graders on contract. Deputy Mayor Woodard replied that you buy the equipment and start the process to maintain the equipment, and we then become a maintenance driving equipment owning operation with a continual cost and said he thinks that is going in the wrong direction and would move us to become a big public works department. Councilmember Gothmann said that contractors own graders and do not own the kinds of trucks used to plow streets; said that these large trucks can plow in greater time than graders; but we can't find people with these big trucks, so the City determined to buy the equipment; he said we have to have graders and large trucks and can't do an effective job of plowing the city without both. Mayor Grafos said that he doesn't want to expand the fleet and again asked, what is the ideal number of trucks; if that number is nine, then we should have nine working trucks; and the question remains whether we need backups. Mr. Guth said liability is the key; that generally with nine new trucks, we won't need any backups; but we don't have nine new trucks, our equipment is much older and breaks down; that once we get the newer truck, we sell off the older one. Mr. Guth said that nine trucks will get the job done in twelve hours, which is the length of a normal shift and it works well labor-wise. Mr. Jackson said staff will come up with a plan such as the next time we buy one, we drop one, or some semblance of that idea; as when it snows heavy you will wish you had those to provide the necessary level of service for our citizens. Mr. Jackson said we can come back with a plan over the next couple months to help us settle on the right number of vehicles. Tab 13: Potential Capital Projects Mr. Calhoun said we bring this back to Council about twice a year; that this continues to evolve over time; and he went over the projects listed on the spreadsheet; said we have a finite amount of funds and an infinite amount of projects; he explained the numbers in the small box on the bottom left of the page, and said Council can consider these and we can come back later for further discussion. Mayor Grafos agreed there are limited funds; said we should prioritize where we spend;that for just Parks,these represent over$1 million; said there are a lot of challenges coming up and we need to set some funds aside for the Pines Road Underpass and not wait for the federal and/or state government to give us some funds; and that perhaps we could dedicate 25% of the $1.7 million each year for that underpass; because if we never start it, it will never be finished; also if the library passes, we will have Balfour Park; or perhaps we could work to have quiet zones; and said he would like to finish some of these projects before starting with a new thirteen acre property. Councilmember Pace said not for now, but for some time in the future, he would like to understand more of what is involved with the sewer industrial area east of Flora. Mr. Jackson said that is possible; that the intent was to start with the discussion with Tschirley Road and include that area. Councilmember Hafner said there are safety factors to consider and these projects need to be prioritized; he mentioned the railroad at Trent and that serious consideration should be taken to alleviate that problem; and he suggested finishing some of those types of jobs before adding others. Councilmember Wick said he thinks these issues will change soon as the Appleway Trail project get completed, perhaps there would be an opportunity to examine parkland acquisition; or the Barker Road Grade separation, and that if we continue, we could bring those issues forward faster; and said he would like to consider the parkland acquisition as we could always sell some or all if we wanted to later. Mayor Grafos questioned if we were in the real estate business, and Councilmember Wick replied we are not, but said it is easier to purchase property when the property is actually for sale, versus trying to find land. Councilmember Hafner said he sees no reason why Council shouldn't look at it; adding that Balfour Park has to be finished. Mr. Jackson said we can examine these together as we don't want to shortcut the process; and that there is no harm in examining these issues and coming to a conclusion. It was agreed that the discussion on Council goals will be held at a later date. Brainstorming: Mr. Jackson opened the floor for ideas, and mentioned that we acted on 90% of items Council brought up in previous sessions. Workshop minutes:June 16,2015 Page 12 of 13 • Approved by Council:July 14,2015 Councilmember Pace: long term goal: put together a plan for marketing/development to set a goal for five years out, of getting multiple bidders on every single contract so that in five to ten years, the results will show multiple bidders on every contract. Councilmember Wick: Development around and/or promotion of the River, especially the north side. Councilmember Gothmann: need a bike path at 16`" and Dishman Mica to Appleway as you can't get through there as there is no path or lane. Councilmember Pace: concerning an economic development plan, we need to prioritize the big projects like the sewer in the industrial park, bridging the valley, and would like to see those meshed together in an economic development plan that helps us prioritize those by making those projects the strategies within the economic development plan. Councilmember Hafner: regarding the new library and new city hall, to have a culture center of some sort or an arts center which represents us. Mr. Jackson said we increased the lodging tax funds to get a study done,that although a motion was related to a sports facility, we could talk about trying to spend that as we don't know what type of tourist venue will attract people to our community. Councilmember Hafner said we don't have anything like the City of Spokane, and Councilmember Wick added that he would like to have conversations about those tourism destinations. Councilmember Pace: said he would like to see a 1% property reduction in 2018. Mayor Grafos: concerning our small works roster, asked if there is any way we don't have to pay prevailing wage, and Mr. Guth replied that is state-mandated. However, Mr. Jackson said there is some discussion about that in the legislature and we could research that topic. Councilmember Wick: his goal is to prioritize the grade separation; and try to bring that up with our legislators. Councilmember Higgins added the idea of bridging Pines; said we would have to have both railroad companies consolidate their lines through the valley, but would like to get the railroads to the table to begin talking, as we have bonding capacity and cash. Councilmember Wick: mentioned the challenges to maintain our street maintenance preservation funds and would like discussions on how to fund preservation projects. Mayor Grafos: suggested prioritizing bus shelter pads. Mr. Jackson said Mr. Guth is working on that and will come back to Council with a plan; that the biggest constraint many times is in the acquisition of right-of-way. There were no further ideas, and it was moved by Deputy Mayor Woodard, seconded and unanimously agreed to adjourn. The meeting adjourned at 4:10 p.m. 4111. ATTES : Dean Grafos, Mayor- � Ltt.�7�Ii—i Christine Bainbridge, City Clerk Workshop minutes:June 16,2015 Page 13 of 13 Approved by Council:July 14,2015