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2018, 05-29 Study Session MINUTES SPOKANE VALLEY COUNCIL MEETING STUDY SESSION Spokane Valley City Hall Council Chambers Spokane Valley, Washington May 29,2018 Attendance: Councilmembers Staff Rod Higgins, Mayor Mark Calhoun, City Manager Pam Haley, Deputy Mayor John Hohman, Deputy City Manager Brandi Peetz, Councilmember Chelsie Taylor,Finance Director Linda Thompson, Councilmember Mike Stone,Parks &Roc Director Ben Wick, Councilmember Cary DriskeIl, City Attorney Sam Wood, Councilmember Erik Lamb,Deputy City Attorney Arne Woodard, Councilmember Bill Helbig, City Engineer Christine Bainbridge, City Clerk Mayor Higgins called the meeting to order at 6:00 p.m. ROLL CALL: City Clerk Bainbridge called the roll; all Councilmembers were present. ACTION ITEMS: 1.Second Reading Ordinance 18-011 Amending 2018 Budget—Chelsie Taylor It was moved by Deputy Mayor Haley and seconded to approve Ordinance 18-011 amending Ordinance 17-014 which adopted a budget for the period January 1, 2018 through December 31, 2018. City Clerk Bainbridge then read the ordinance title, followed by a brief explanation of the need for the amendment by Finance Director Chelsie Taylor. Mayor Higgins invited public comment;no comments were offered. Vote by Acclamation:In Favor: Unanimous. Opposed:None. Motion carried. 2. Mayoral Appointment; Continuum of Care for the Homeless—Mayor Higgins Mayor Higgins explained about some the functions of the Continuum of Care and of their request for a Spokane Valley Councilmember to sit on their board; and he noted his recommendation for this appointment is Councilmember Woodard as he has similar experience in his association with the HCDAC (Housing and Community Development Advisory Committee). It was then moved by Deputy Mayor Haley and seconded to confirm the Mayoral appointment of Councilnnember Woodard to the Continuum of Care Board for a term beginning immediately upon appointment and expiring December 31, 2018. Mayor Higgins invited public comment; no comments were offered. Vote by Acclamation:In Favor: Unanimous. Opposed:None. Motion carried 3.Motion Consideration: Spokane County Interlocal Agreement,Highland Estates Connector—Bill Helbig It was moved by Deputy Mayor Haley and seconded to authorize the City Manager to finalize and execute the interlocal agreement with Spokane County for the reimbursement of costs associated with evaluating the feasibility of the Highland Estates Connector. City Engineer Helbig explained that Spokane County is interested in evaluating the feasibility of a northerly fourth leg for the roundabout that would provide access to the Highland Estates subdivision so that their connection can be evaluated using the City's consultant, DEA; he said the agreement provides reimbursement to us for costs associated with this fourth leg. Mr. HeIbig also noted that the preliminary design will be done by us in parallel with work on the grade separation project,and again noted this would be done at no cost to our City. Mayor Higgins invited public comment. Mr. Bob West, Spokane Valley, asked for confirmation that this is not going to cost our city any Council Study Session:05-29-2018 Page 1 of 5 Approved by Council:06-19-2018 money, and Mayor Higgins confirmed Mr. West is correct. There were no further comments. Vote by Acclamation:In Favor: Unanimous. Opposed.-None. Motion carried. NON-ACTION ITEMS: 4. Spokane Airport Projects—Lany Krauter, CEO Spokane Airports Via his PowerPoint, Mr. Larry Krauter, CEO of Spokane Airports, provided an overview of the Spokane Airport projects; he mentioned Felts Field and the Spokane International Airport are actually in a straight line to each other; he spoke of the various runways including the turf runway for the older airplanes; he mentioned some of the improvements and planned projects to Felts Field,including their ramp project,field taxiways and taxi-lanes project,turf runway project,field fuel facility relocation,and their master plan.Mr. Krauter noted the planned historic district gateway study and showed some depictions of possible gateways. At the conclusion of his presentation, Mr. Krauter invited Council, staff and the members of the audience to the free,Felts Field Neighbor Day event which will be this Saturday from 9-4. Mr.Krauter also extended compliments to City staff for their professionalism and helpfulness,and thanked Council for the opportunity to present. 5. Arts in Public Spaces—Cary Driskell,Mike Stone City Attorney Driskell explained that the Spokane Valley Arts Council (SVAC)was formed in 2004, is a separate entity from the City, is a nonprofit organization, and that Spokane Valley and the Arts Council have had a valued relationship. Mr. Driskell stated that the SVAC has conducted fundraisers to help fund purchases of public art, and several of those art pieces are now publicly displayed in the City, particularly around City Hall. Mr. Driskell noted that a new sculpture,"Heart of the Valley"is nearly complete but we do not have specifics on exactly when the project will be completed, how large it will be, or a suitable location for the piece; so one question for Council to consider is, where should this new piece be sited; he noted that to keep in line with our recently adopted policy for acceptance of donations and gifts,this and other aspects associated with art pieces should be discussed, and he noted that one of tonight's discussion points deals with an agreement to memorialize the donations,where the art will be placed,and to make sure we incorporate all aspects of these art pieces, including maintenance costs, etc., into a contract in order to alleviate the possibility of miscommunications. Mr. Driskell asked Council if they are interested in approaching the Arts Council to discuss an agreement of this type. City Attorney Driskell noted that staff will come back at a future meeting to present the analysis to Council on costs to the City in accepting this sculpture, whether the piece will require lighting, and to discuss possible locations. He also noted the City has not budgeted for any of these costs because we did not have this information during last year's budget process. Mr. Driskell and Mr. Stone also discussed the possibility of drafting and adopting a master plan to guide Council in issues relating to public art. Mr. Driskell asked if there is Council consensus for staff to proceed with the above-mentioned approach. There was some discussion about the Arts Council and who sits on that Board; and it was mentioned that a former Councilmember was (and likely still is) a member of that board. Mr. Stone added that there could also be others who might be interested in art, such as collectors, artists, or others who work to advance art in our community, and it would be beneficial to have a written agreement, as well as an arts master plan. Councilmember Woodard noted that having a plan is a great start, not just to achieve goals but also in applying for grants; and it would give the public opportunity for input; and said he agrees a written contract is a good idea. There was Council consensus to proceed with an agreement with the Arts Council, and to continue working on an arts master plan. City Manager Calhoun mentioned that such an agreement will help the Council and the community preserve a long-standing relationship with the Arts Council and with Dr. Harkin; he said the Arts Council is interested in continuing to use CenterPlace for their fundraising event in exchange for periodic donations, adding that it is important for Council to have a say early in the process of where such art would be placed, as well as having an opportunity to discuss whether to accept each piece. Council concurred. Mayor Higgins mentioned the idea of having Council representation on their Board, and Mr. Calhoun said we could possibly build that into the agreement. Council Study Session:05-29-2018 Page 2 of 5 Approved by Council:06-19-2018 6. Street O&M Fund #101 Level of Service and Financial Challenges —Chelsie Taylor, Erik Lamb, John Hohman Deputy City Manager Hohman explained that tonight's agenda item is in follow-up to numerous discussions since 2004, concerning street preservation and maintenance and how to fund those activities;and that street fund 101 has some challenges which will impact the 2019 budget preparation. Via his PowerPoint presentation,Mr. Hohman noted that Fund 101, Street O&M, gets its funding from gas and phone tax, and the proceeds are used for street patching, crack sealing, snow plowing, and other street operation and maintenance activities. He mentioned a past attempt in 2004 for Council to pass a utility tax ordinance, but that it did not advance; he noted the 6% telephone utility tax ordinance was approved by Council in 2008 and went into effect in 2009, and that tax is applied to land lines and the voice portion of cell phones, but that those tax collections have declined since implementation. Mr. Hohman noted that the immediate need is determine whether to add additional 2019 revenues for Street O&M Fund 101; and if no additional revenues are to be added, services will need to be cut to stay within current revenue constraints. Finance Director Taylor gave further details about Street O&M Fund 101;she mentioned this fund generally accounts for the operations and maintenance of our streets and as mentioned, includes street pavement repairs,but also traffic signals,signs, landscaping and vegetation control;that the adopted 20I 8 budget has recurring expenditures of about $4.587 million, but that identified needs at last year's budget workshop were approximately $4.826 million, which led to a decision about reducing recurring expenditures due to revenue constraints. Finance Director Taylor went over some of those expenditures, which included such things as $1.5 million for pothole patching, repairs and other maintenance, and also included about one million for pavement preservation. She noted other expenditures such as traffic operations and maintenance, street lighting and sweeping, fleet maintenance, snow maintenance; as well as estimated revenue sources, all as included on slides 7 and 8 of the PowerPoint. Director Taylor also showed some charts depicting the motor vehicle fuel tax collections over the years as well as the percentages of decrease and increase, the declining telephone utility tax revenues over the years as well as those percentages of decrease and increase, and she noted that we anticipate the telephone utility tax to continue declining,but are uncertain when those revenues will bottom out. As noted on slide 14, Deputy City Manager Hohman explained some of the challenges in this street O&M fluid and of our attempts to provide recommendations to improve efficiency and cost effectiveness;and the slide also showed projected revenues, expenditures and deficits for years 2020-2023, which culminated in projected funding needs of between $1.3 and $1.8 million over those years. Deputy City Attorney Lamb then explained about the revenue options, and that recurring revenues must be at least equal to recurring expenditures to finance current service levels. The revenue options Mr. Lamb explained about included a Transportation Benefit District, or TBD, property tax banked capacity, a levy lid lift, and a utility tax, all as noted on the PowerPoint slides. In conclusion,Mr.Hohman said our street fund 101 needs a new revenue source for 2019, or historic service levels would need to be reduced by $741,000 for 2019. Mr. Hohman noted that this issue needs public input and discussion;that we can look at new revenue sources,or Council could direct us to scale back some of those operations. Mr. Hohman also noted that back in February we talked about fund 101 and pavement preservation 311, but he feels the immediate need is to focus on 101, even though we are reviewing the needs of 311 and the amount of money needed to keep that preservation at its current level; he said staff is looking for an additional consultant to double-check what we've done to make sure that number is as accurate as it can be; he said there are several issues staff are working with including working through the bottleneck of construction projects., and said staff realizes Council might want to look at some residential streets and what kind of treatment would be best; adding that this will be a continuing and ongoing discussion as more information is developed. Council discussion included comment from Councilmember Peetz that she wants to keep our good roads, but would not be in favor of a utility tax as citizens are already struggling financially; said she feels there Council Study Session:05-29-2018 Page 3 of 5 Approved by Council:06-19-2018 should be more public input on this, or even put it to a vote; adding that there is a lot of information concerning a TBD,and perhaps we could have more discussion and detail on that option. Councilmember Wood mentioned that there was no discussion on the PCI index or discussion about what level of roads we would maintain, and Mr. Calhoun noted that the focus tonight is street fund 101;that fund 311 is pavement preservation,and that those issues are for a different discussion later. Councilmember Haley stressed again that the telephone utility tax is on land lines and only on the voice portion of a cell phone and does not include data. Mr. Calhoun said that we are not trying to answer anything tonight, but merely trying to get a bit ahead of the June 12 budget workshop where all this will be discussed more; that this is a big topic requiring a big decision and that the 2019 budget is the budget where this comes home to roost and that we must find more revenue or cut$740,000 of existing service levels, adding that we will need a decision by late summer or early fall on how best to proceed. Councilmember Woodard said he has seen this coming for years and we are now at that uncomfortable position and he hopes that Council will take this seriously and not rule out anything, but have a good discussion June 12 to set staff on the direction of what needs to be done. 7. Economic Analysis of Tourism Related Venues & Events—Chelsie Taylor Finance Director Taylor explained that as shown in the spreadsheet, staff have prepared an analysis of the economic impact of ten potential tourism enhancement projects. After Director Taylor went over the information in the RCA and the spreadsheet, Mr. Woodard asked if this too will be discussed at the June 12 budget workshop. Mr. Calhoun replied that it will not as that June 12 agenda will be full enough as we will go through the line-item funds, and the "bigger picture" types of projects for that afternoon; that for tonight, he said we are not seeking a decision from Council on which projects to include and of how to narrow down this list often projects;he said some of those items are in the northeast area that could generate 150+ family wage jobs, while some of the other projects would be minimum wage, part-time jobs which are not really economic development projects; he said the reality is none of these projects will make money; the CenterPlace project could "pencil out" and the Fairgrounds project could get started as the land is reasonably close and there is no land acquisition needed, and the County would operate it rather than us; adding that most of these projects pertain to bringing in tourists during the sunny, warmer months, while the Fairgrounds is geared more toward other seasons. Discussion ensued about the Browns Park improvements and the sand volleyball courts as well as the masterplan; with Mr. Calhoun mentioning that lighting for Browns Park went out to bid and we received two bids,each over$300,000,which is substantially greater than what we have budgeted; and said that will be discussed at the workshop. Councilmember Wick asked about the extra lodging tax money and about using that to purchase land somewhere, and perhaps to do that in phases instead of having a bond payment. Mr. Calhoun said if you don't have a bond consideration, and are simply looking at operations, that is a different discussion.Mr.Calhoun said that he and Ms.Taylor want to bring this topic back again so Council can come up with ideas of what to do, and that it would be the City making requests of the LTAC(Lodging Tax Advisory Committee) and then having that committee appropriate funds to us or not. Mr. Calhoun noted that this topic will come again to Council in July so that perhaps Council can start narrowing down the list to perhaps two or three projects. Council concurred, and Ms. Taylor said that time would also work nicely with the agenda topic of Council goals for the LTAC, 8. Splashdown Contract-Cary Driskell City Attorney Driskell gave a history of the Splashdown lease agreement, as noted in his May 29, 2018 Request for Council Action form; he added that the Bleasners are here tonight with their attorney Mr. Montgomery; he stated that the Bleasners are interested in taking over the ownership of Splashdown and are interested in executing a lease agreement. Mr. Driskell then went through the essential terms of the agreement, and stated that if Council is interested in a longer term,to please let him know as the Bleasners would also prefer a longer agreement as it helps with financing and stability. Mr. Driskell noted that the Bleasners' desire is to open the weekend of June 8, and if Council agrees with the terms of this agreement, Council Study Session:05-29-2018 Page 4 of 5 Approved by Council:06-19-2018 it will be brought back at next week's Council meeting for a motion consideration. There was Council consensus to go forward with a five-year lease and a five-year extension. Mr. Driskell said he will speak with the owners before the next Council meeting, and if there are any differences,he will let Council know, adding that it has been a very amicable discussion with the Bleasner's attorney Mr. Montgomery. 9. Advance Agenda Mayor Higgins There were no suggested changes to the Advance Agenda. 10. Police Department Monthly Report This item was for information only and was not reported or discussed. 1L Council Check-in—Mayor Higgins Councilmember Woodard mentioned that someone approached him about our permitting process and our planning department, and said that gentleman reported that he has never had a project go so smoothly as what was done here, and that's he's telling people what a business-friendly city we are; and also extended compliments to Micki Harnois and some of the engineers assisting with his project. 12. City Manager Comments—Mark Calhoun City Manager Calhoun reminded everyone that the budget workshop will be held in this room June 12, from 8:30 a.rn. to about 3:30 p.m., and that there will be no evening meeting that night; he also reminded everyone that the June 26 Council meeting will be cancelled as the majority of Councilmembers attend the AWC (Association of Washington Cities) conference in Yakima. Concerning the budget workshop, Mr. Calhoun said we will be setting up a finance committee meeting sometime next week. It was moved by Deputy Mayor Haley, seconded and unanimously agreed to adjourn. The meeting adjourned at 8:08 p.m. 4.J A se. L.R. Htggr AV. or Christine Bainbridge, City Clerk, Council Study Session:05-29-2018 Page 5 of 5 Approved by Council:06-19-2018