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2017, 02-14 Special Meeting, Workshop MINUTES SPOKANE VALLEY COUNCIL SPECIAL MEETING WORKSHOP Spokane Valley City Hall Council Chambers Spokane Valley,Washington February 14,2017 Attendance: Councilmembers Staff Rod Higgins,Mayor Mark Calhoun, City Manager Arne Woodard,Deputy Mayor John Hohman,Deputy City Manager Caleb Collier,Councilmember Cary Driskell, City Attorney Pam Haley,Councilmember Mike Stone,Parks&Rec Director Mike Munch, Councilmember Chelsie Taylor,Finance Director Ed Pace, Councilmember Eric Lamb,Deputy City Attorney Sam Wood,Councilmember Morgan Koudelka, Sr. Admin.Analyst Mark Werner,Police Chief Henry Allen,Development Engineer Carolbelle Branch,Public Information Officer John Whitehead,Human Resources Manager Christine Bainbridge,City Clerk Mayor Higgins called the meeting to order at 8:30 a.m. ROLL CALL: City Clerk Bainbridge called the roll; all Councilmembers were present. Overview of Discussion Topics: Mark Calhoun City Manager Calhoun thanked everyone for coming,and explained that today's focus brings topics forward that don't necessarily require any follow-up; said he also recognizes that some Councilmembers will be leaving early in the afternoon for Olympia to participate in the City Action Days conference, and that today's meeting should be over by 1:30 p.m.Mr.Calhoun noted that items for today address City priorities of public safety,pavement preservation,transportation and infrastructure and economic development. Information Items: 2017 Business Plan Mr. Calhoun noted that although the Business Plan is included here, he doesn't plan on going over that document,and he acknowledged that there are still some corrections needed. 1. Legislative Update: Gordon,Thomas, Honeywell Government Affairs Consultants Briahna Murrayand Chelsie Hager Via telephone conference, Ms. Hager went over the legislative information contained in her handout, including cutoff deadlines and upcoming meetings with various legislators,adding that Senator Shelly Short is new, is on the Senate Operations Committee and that she would be a good point of contact. Ms. Hager discussed the legislative priorities including the water rights legislation and said that some changes were made over the last few weeks and that the House version is not likely to make it through the cutoff,although the Senate bill will be moving forward. Ms. Hager asked that Councilmembers let her know now or once they arrive in Olympia, of which meetings they would like to attend, and said she can be in contact with Councilmembers tomorrow and Thursday. Further concerning the water rights legislation, Ms. Hager said that there have been several discussions with legislators on that committee as well as with members of the Department of Ecology and other stakeholders, such as Attorney Joe Carroll. Council Special Meeting Workshop:02-14-2017 Page 1 of 6 Approved by Council:03-14-2017 Regarding the Barker Road Grade Separation Project, she acknowledged our City's letters and said she anticipates hearing from the transportation leadership soon;said they are on a tight budget and she cautioned Council not to expect much change with the transportation budget; said if you want something moved up on the list, something else would have to be moved back. Moving to state shared revenues and the liquor bill,Ms. Hager said there is a small triumph here as the bill passed out of the House appropriations by 33 votes; said there is a large coalition of lobbyists working on Cities' behalf to restore some of the liquor funds back to 2012 levels after this was privatized in 2011; and said the Senate version of the bill is likely to die with the 17th cutoff date. For streamlined sales tax, she explained that there were two different approaches on how to fund indigent defense services; said that in 2013 the Washington State Supreme Court started a new caseload standard that includes the cost to provide that service, said HB 2012 was introduced which seeks to provide additional funding for indigent defense by eliminating and repealing the Streamlined Sates Tax Mitigation Program, which provides mitigation payments to cities; said we have issued our opposition to HB 2012 and are asking that it not be scheduled for a hearing,as it is never helpful taking money from one place to put into another. Mr.Calhoun asked if it would be helpful if we prepared a letter opposing HB 2012 and Ms.Hager indicated it would.City Attorney Driskell said if Council desires, he can have a draft letter ready by noon for Council's review,and Councilmembers concurred. Ms. Hager said she testified at the hearing on the State Agency Rulemaking where there were six bills up for consideration, one of which addressed public records reform, which she said was lengthy and well attended, so the rule making was only allocated a few minutes; said she followed up with committee members and urged their consideration to look at this issue;and said she will continue to monitor the items. Under Hot Legislative Issues, Ms. Hager talked about the indigent defense standards, and mentioned HB 1987 concerning preempting local zoning on affordable housing development on church property,and said Ms. Murray testified on that issue; said two bills were considered under the Public Records Act, both up for executive action later this week; said the hearing was well attended with 44 people signed in to testify, some for and some in opposition; said she will continue to monitor this bill but the bill being considered is 43 pages in length, and Ms. Murray is engaging with legislative members and other communication organizations to work through any potential amendments. City Attorney Driskell mentioned his upcoming presentation to Council on small cell deployment; said we don't have any detailed regulations now but this is a current issue for us; said Council needs the opportunity to consider this but doesn't want to support efforts to do away with local discretion. Ms. Hager said it looks like the senate version will move out of committee, and if Spokane Valley wants to weigh in, that should be done soon and add to the collective number of cities opposed to this,as it does take away from local authority. • Concerning HB 1987,Councilmember Pace said he doesn't want to give up local control,that he is a pastor and encourages churches to develop tiny homes on their property, but said pre-empting local zoning is not acceptable and it should be up to the cities. Deputy Mayor Woodard also noted he doesn't want to have a pre-emptive strike against our City or on our local authority for local zoning; said state mandating this is not the way to do it as it eliminates the choices of the private sector. Ms. Hager asked Council if there is consensus to oppose any bill that would pre-empt local authority and Council concurred. Ms. Hager said she will sign in as the City opposed to this. Mr. Hohman said there are two issues with a general theme of pre-empting City authorizing on zoning,said it would eliminate any standard that jurisdictions have to bring in tiny homes,but that this bill doesn't affect us as we don't have those eliminations here;and said in staff s review,he doesn't see this bill having an impact on site specific properties.Ms.Hager said she will sign in as the City being in opposition to those issues,but Councilmember Munch said he would rather have each bill considered separately as he doesn't want to support anything that would preempt our authority,and said he likes HB 2057 (abandoned homes). Ms.Murray joined the conversation, explaining that she had been testifying on the abandoned home issue, and it is progressing nicely. Concerning HB 1574, Ms. Murray explained that the City has already weighed-in in opposition; and Mr. Driskell reminded Council that this is one of the two letters Council discussed at the last Council meeting,about interfering with the contractual Council Special Meeting Workshop:02-14-2017 Page 2 of 6 Approved by Council:03-14-2017 relationship the City has with contractors and claim notice requirements. Ms. Murray said that Senator Padden might have signed on in support of this, but she can talk to him to let him know Spokane Valley opposes the bill,and said she will confer with him later this week. In closing, Ms. Murray said the abandoned homes issue/bill is still a work in progress, but appears it will have more traction this year than in previous years. Mr.Calhoun and Council thanked Ms.Murray and Ms. Hager for their report. 2.General Fund—Fund Balance—Mark Calhoun As explained in Mr. Calhoun's memorandum, money taken in should be equal to or greater than what is being spent; and a fund balance should not be less than 50% of recurrent expenditures, which figure was brought about by an involved analysis,but which amount is also the equivalent to a six-month reserve.Mr. Calhoun explained that fund balance means cash flow,and much of this depends on the timing of when we receive revenues such as property taxes and state shared revenues.Mr. Calhoun spoke of cash outflows in terms of three months of operating reserves in the bank, and of projects and grant reimbursements. Mr. Calhoun also brought Council's attention to the accompanying articles about levels to maintain in cash reserve fund balances; and noted that the MRSC (Municipal Research Services Center) article dispels the myth on governmental useable finances which suggest 15% reserve, which is bogus guidance as it didn't include cash flow;the Why We Put Money Aside article is also interesting as it discusses the range of fund balances,with 34%shown as an average amount of unreserved general funds.Mr.Calhoun said that smaller cities can likely get by with less and that several smaller cities also have utilities taxes. Mr. Calhoun pointed out the Moody's article and of our City's newest rating of Aa3; and said that prior to that we were an Aal but the new rating is due in part to our extra healthy financial situation,which means paying a lower interest rate. Concerning the idea of using reserves for road preservation, Mr. Calhoun explained that if we did, we would have a problem in handling cash flow. Deputy Mayor Woodard asked what would happen if we had 25%instead of 50%,and Mr.Calhoun replied that we would be going through an interim financing process,which means borrowing money and paying interest. Councilmember Collier asked what changes a bond rating, and how much would we save by going down to 49% and less. Mr. Calhoun explained that each one percent reduction equals $400,000; and Ms. Taylor replied that it would just be a one-time spend down and wouldn't lower rates. Councilmember Collier suggested we might be too aggressive in our projects, and Mr. Calhoun explained that we have had remarkable success in coming up with grant-funded projects and said we can't be aggressive enough; and it actually gets us some of our own money back; he said that many, but not all street projects grants are an 80/20 split, which is good leverage of our money.Mayor Higgins and Councilmember Pace indicated they agree with keeping reserves at 50%. Mr.Calhoun noted that the economy will decline,we just don't know when.Councilmember Wood added that those funds are not sustainable to use for road preservation. There was some brief discussion about the rate stabilization fund (disaster fund), and the winter weather reserve fund, with Mr. Calhoun mentioning that this spring we will likely bring forth a proposed budget amendment to replenish the winter weather reserve fund. 3.Potential/Pending Projects—Chelsie Taylor,Mark Calhoun Mr.Calhoun referred to page five of his December 2,2016 memo under the previous agenda item,and said that is a nice segue to the spreadsheet accompanying this agenda item,and said Council will see this again in connection with the summer budget workshop. Ms. Taylor then gave Council a brief overview of the projects under the completed or in-progress list,and the future construction projects,and explained that this is a dynamic document and Council can expect future changes. Mr. Calhoun mentioned that in comparing this to last June's version,the top row numbers,and the pavement preservation fund 311,that we are doing our best to make the money work for us, and at this year's June workshop, we will go through the budget development and get a sense from Council on where Council wants to see the money used; he also noted that by the end of this year, some of these projects will be completed, and as a reminder, said we have an Council Special Meeting Workshop:02-14-2017 Page 3 of 6 Approved by Council:03-14-2017 infmite number of projects but only a finite amount of money, hence the need to be very selective on the projects; and once a project is on this list, the project gets done. Deputy Mayor Woodard noted the funds are dedicated to one-time projects and he reminded everyone that we don't have a"use it or lose it"policy, as we run the City as tight as we can and if the funds are not used, it goes back into surplus. A recess was called at 9:50 a.m.,and the meeting was reconvened at 10:03 a.m. Once reconvened,Mayor Higgins asked for a Council consensus to send the letter to the legislators regarding streamlined sales tax. Council concurred. 4. Solid Waste Collection RFP and Contract—Erik Lamb,Morgan Koudelka Mr. Calhoun mentioned that we will be moving forward on this in the near future, and staff will bring Council up-to-date. Mr. Lamb explained that we are reaching a culmination of one and a half year's work on solid waste collection, which was a continuation of the previous ten years on collections; said some Councilmembers have been through this entire process,while to others,this is something new. After Mr. Lamb went through the background on the process as described in his Request for Council Action form,he asked Council to keep the survey results in mind as we continue the process; said after extensive discussion with Council,the RFP(request for proposal)was released October 6,2016, and the deadline to submit just closed last Monday.Mr.Lamb said we received a proposal from Waste Management, Sunshine,Republic, and Waste Connections, and staff is going through all the proposals now to see how these companies meet the requirements. Mr. Koudelka then went over the survey results, as well as the process for drafting the survey;said we received 669 responses,which is a very good turnout.Mr.Lamb stated that apparently most people are satisfied with the current providers.Next steps outlined on the Request for Action Form were also discussed by Mr. Lamb. Mr. Lamb further explained that it will take a few weeks to determine how each company scored,and said we are not required to choose the highest score or lowest rate, and the final decision will be Council's. Mr. Koudelka mentioned that a decision will not be made at the February 28 Council meeting as there are still several moving parts and questions about the process, the contract, alternates,exceptions, and whether a"best and final"round will be necessary. It was noted the anticipated date for Council to consider a final contract is April 18,2017. 5. Street O&M Pavement Preservation& Street Construction—Mark Calhoun,John Hohman Over the past years,and in particular during 2016,Mr.Calhoun said there has been a variety and numerous discussions on the question of how to finance street operations and maintenance, street construction, and pavement preservation;and Mr.Calhoun addressed the highlights contained in his City Council Workshop document; he discussed the declining revenues in the Street O&M Fund #101 that will impact our future ability to deliver historic service levels and what that fund depends upon in terms of revenues; balancing the cost of pavement preservation against other transportation and infrastructure needs, and how that has been historically financed. Mr. Calhoun noted that because Fund 123, which is the Civic Facility Replacement Fund reserve will be depleted in 2016,that beginning in 2017, we will be forced to dedicate more REET(Real Estate Excise Tax) funds toward pavement preservation if we want to keep the historic levels of funding.Mr. Calhoun said that he is trying to get a sense from Council of Council's preference on funding source and strategy; he said that each black bullet on the bottom of page 2 of the memorandum could actually be a separate topic of discussion on separate meetings in the future,to be discussed in four consecutive meetings,and the fifth bullet item—the street condition report—could likely be discussed over multiple meetings. Mr. Hohman added that we want to take the opportunity to look at those numbers to make sure we have confidence in them, as everything will be based on those figures moving forward. Councilmember Wood said he thinks this is worthy of public comment and involvement, and perhaps we should have a workshop to give the people an opportunity to see what it is we are talking about, and find out what they want;perhaps do a survey and find out not only what they want,but what are they willing to pay for. Mr. Calhoun mentioned the Pavement Condition Index(PCI) and what level does Council want on what streets,and then examine the potential sources of income,and bring in members of the community for workshops like we did for the Shoreline Master Plan, and/or take meetings out to various locations in Council Special Meeting Workshop:02-14-2017 Page 4 of 6 Approved by Council:03-14-2017 the City. Mr. Hohman said there is a need to explain the practicality of a PCI to see what exactly such a number looks like; and try to get as much feedback as possible. Mr. Calhoun said he wanted to stress that a tax is a terrible thing to contemplate and should be considered only as a last resort; he said if at the end of all this it is determined we don't want a tax, but want to live within our existing resources,then we will need to determine how to make that happen; and said if that is the case, he does not promise we would continue to maintain historic levels of service; he said the biggest concern is the financial issues of the Street O&M Fund, that telephone taxes decline and this presents a pressing need; said for pavement preservation,we will continue to pursue grants; and along with all this is the need to prioritize the greatest needs and the idea of taking care of what we already own and not work on new projects. Mr. Calhoun stressed that it is important to report to Council and the community so everyone knows what is happening with our infrastructure. Mr. Calhoun asked if Council is comfortable with this approach and they agreed it is a good approach. 6. Small Cell Deployment- Cary Driskell City Attorney Driskell explained that the issue of small cell deployment has been coming up for over a year now as wireless providers strive to deliver better service;through his PowerPoint presentation he explained that a small cell facility is a personal wireless service that meets the qualifications of having an antenna located inside an antenna enclosure; and of the primary equipment enclosures being no larger than seventeen cubic feet in volume; said the small cell facilities anticipate using either a fiber connection to the closest macros cell, or using a microwave signal, although that has limitations because it requires uninterrupted line of sight to the pole; and he showed some depictions of what small cells could look like and of where they could be placed, and that recent federal law changes now allows private companies to place some of these facilities in public rights-of-way, without charge, and local jurisdictions must allow them, although there are limits to height and location. Mr. Driskell stated that we do not have any regulations addressing this,although staff is working on them; and the type of regulations should reflect a policy approach balancing aesthetic concerns with having greater connectivity and bandwidth available for businesses and residents. Mr. Driskell mentioned that some cities formed a consortium to try to take a consolidated approach on common issues,and although we are a part of that,we still want to try to identify what is it we want as a city. Discussion included comment about these being controlled by the FCC (Federal Communications Commission); and Councilmember Pace asked if there is any legislation speaking to the idea of taxing the vendors for bandwidth, or taxing anyone who takes up the electronic magnetic spectrum, such as radios. Mr. Calhoun said staff will take a brief look at these issues and possibly come back with the development regulations within the next thirty to forty-five days. The idea of having the battery boxes underground was also discussed,and there was mention of snow accumulation should boxes be placed next to green strips or phone poles. Councilmember Collier spoke of his concerns that this could affect the preservation of life as some of this technology has the potential to cause cancer and said putting small cells around town might pose a cancer risk; as well as potential violations of the Fourth Amendment concerning anything that uses and collects data that can track citizens, and said we need to be wary of this. Councilmember Munch said he agrees there could be health concerns; that he feels charging for these would not be right as we don't charge the utility company to put in underground utilities; said he is not too inclined to make the vendors pay unless they use our infrastructure; and if these are placed in our rights-of-way, perhaps there could be a liability fee associated with storms,and accidents;and suggested that needs further research.Mr.Driskell said that most cities own the light poles,but we don't;that there are other types of poles such as street light signal poles,but we don't know if those would be appropriate;and he would like to do more research about these in general, as well as placing them in unobstructed places. Councilmember Pace said whatever we do,we need to be less restrictive than Spokane County;and Mr.Driskell said he does not know the County's regulations, and that would be something else to research. Council Special Meeting Workshop:02-14-2017 Page 5 of 6 Approved by Council:03-14-2017 It was moved by Deputy Mayor Woodard seconded and unanimously agreed, to adjourn for lunch. The meeting adjourned at 11:34 a.m. Mayor Higgins reconvened the meeting at 12:15 p.m. 7.Police Statistics Reporting–Chief Werner Chief Werner went over the differences between the Uniformed Crime Reporting (UCR) style, and the National Incident-Based Reporting System(NIBRS),as noted on his Request for Council Action form,and said the new system, the NIBRS system is more accurate in reporting not only crimes, but crime trends. Councilmember Collier suggested having some public education and that perhaps this could be included in a Hot Topic newsletter. Mr. Calhoun noted that as a means of communicating this to the public,this could also be brought back on a future study session. 8. 2018 Budget Development Calendar–Chelsie Taylor,Mark Calhoun Ms.Taylor explained that the plan is in place for the 2018 budget development process,and it tracks pretty close to this current year's process;and she mentioned the chart for comparison purposes showing the three previous years.Mr. Calhoun said the process appears to work well for Council and the community;that if Council determines,this will be the ninth consecutive year with no property tax increase;he said staff will do their best to obtain no greater than 1%increase in the general fund,but he is not sure if we can pull that off two years in a row, but staff will make the effort; said if we can't make the 1%, we could look at the 3,6,9 percentage reduction scenarios and come up with the least amount of harm; said he wouldn't say that would be recommended,however, and much depends on if Council is comfortable with the existing levels of service. Deputy Mayor Woodard asked about how the minimum wages increase affects our contracts and staff, and Mr. Calhoun said that increase went in effect 2017, but goes through four installments; said the immediate impact in the 2017 budget is the pool contract and CenterPlace hosts; said it would also affect our legal interns and that there could be a budget amendment on a variety of services since the minimum wage was increased; said we could also see a change in supplies and other areas;and mentioned that in reality,most things do not go up 1%;most things increase much greater. 9.Advance Agenda–Mayor Higgins Councilmember Pace said he would like the following items on an advance agenda,to see what we can do as a City to help solve (1) officer recruitment and retention problem, (2) officer personal safety problem, and (3) if we can continue the property crimes initiative when the grant period is over. Mr. Calhoun said we could possibly add those to a March agenda.It was mentioned that Mr. Driskell has prepared a letter to consider for Olympia regarding the small cell facilities, SB 5711 and HB 1921, and there was Council consensus to secure the Mayor's signature on that letter for Olympia. It was moved by Deputy Mayor Woodard, seconded, and unanimously agreed to adjourn. The meeting adjourned at 12:35 p.m. + �V. • ATTEST: L.R.Higgins, ayor t–eL— Christine Bainbridge, City Clerk bia- Council Special Meeting Workshop:02-14-2017 Page 6 of 6 Approved by Council:03-14-2017 February 14, 2017 Members of the Washington State Legislature: The City of Spokane Valley opposes both Senate Bill 5711 and House Bill 1921 regarding siting of wireless facilities in the public rights-of-way. Both bills would improperly interfere with the authority of local jurisdictions to determine important matters of particularly local concern: what • the community looks like, and how those decisions are made. The City of Spokane Valley fundamentally believes such decisions should not be made through a state-wide, one-size-fits-all approach. Instead, cities should be able to retain discretion to determine how their communities should develop and how they look. The City of Spokane Valley very strongly supports business development, both within our jurisdictional border and in the broader state of Washington. Consistent with that philosophy, we believe it is beneficial to create a regulatory environment that encourages businesses to locate in our City, and to create an environment that allows businesses to thrive and grow without unnecessary regulatory hurdles. However, the type of regulations that are appropriate to fulfill our philosophy should be Ieft to us as the legislative decision-makers representing our citizens. Currently, cities have the ability to adopt land-use regulations and negotiate franchise terms for use of the public rights-of-way that are appropriate to each locale, which is as it should be. We oppose SB 5711 and HB 1921 because they would significantly infringe on that discretion, and respectfully request that the Washington State Legislature reject both bills, and ask that you vote against both. Thank you for your consideration. Sincerely, L.R. Higgins, Mayor