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2009, 06-20 Special Retreat Meeting MinutesATTENDANCE: Council Rich Munson, Mayor Dick Denenny, Deputy Mayor Rose Dempsey, Councilmember Bill Gothmann, Councilmember Gary Schimmels, Councilmember Steve Taylor, Councilmember Diana Wilhite, Councilmember MINUTES Spokane Valley City Council Retreat Deputy Mayor Denenny's Lake Cabin 29897 N. Isle View Road, Spirit Lake, Idaho 83869 Saturday, June 20, 2009 Staff Mayor Munson convened the meeting at approximately 9:07 a.rn. Dave Mercier, City Manager Mike Jackson, Deputy City Manager Mike Connelly, City Attorney Mike Stone, Parks & Rec Director Kathy McClung, Community Development Dir. Ken Thompson, Finance Director MaryKate McGee, Building Official Greg McCormick, Planning Manager Carolbelle Branch, Public Information Officer Chris Bainbridge, City Clerk 1. Updated Financial Forecast - Ken Thompson Finance Director Thompson explained that as shown on "Problem Statement #1" the general fund deficit starts to show up in the year 2013. He said that it is bigger then it was before, caused by reduced projections on sales tax; which is down about 12.4 %; adding that service fees and building permits have decreased; and planning fees are all down about $200,000 for the first six months this year. Mr. Thompson mentioned that the third item under the 2009 estimate, the $20 million carryover from the prior year, although a large number, it keeps us healthy. He said expenditure increases are estimated annually at about 8 %; which works out pretty well in that it doesn't normally run that high so it that can of set other items; and said we don't spend everything budgeted which also helps. In the revenue side, Mr. Mercier said the Board of County Commissioners will include on the August ballot, the 1/10 of 1% for public safety and those figures are not in our budget; and added that in the expenditures, the 2009 police budget included a million or more in the event we had to pay the County an amount of arrears, which we did. Mr. Thompson said that general government has also decreased: we have two loans, one for winter weather and one in the general street fund in case we need them for operating costs. "Problem Statement #2," Mr. Thompson explained shows the street fund with several changes and more changes likely when we determine how to handle the winter street maintenance issue. He said the beginning fund balance was hit as a result of the heavy winter and is down to $1.2 million in carryover; and the utility tax is coming in at about $2.8 million this year but added he is not sure if we will see much growth. Mr. Thompson said that taxing cell phones has been going on for several years in many other areas so we're not a novelty. He mentioned there have been mild citizen complaints, and reminded everyone that the taxing is based on the billing address. Mr. Thompson said that regarding the stormwater share facility, if we end up with some facility for street operations, we may be looking at stormwater to share in that cost as now it pays for most street sweeping. Mr. Mercier said that about four years ago, Council approved a stair -step increase in stormwater fees tracking with the County's fees; and now we have completed the inventory of 14,000 structures with only a small percentage cleaned and repaired; that this represents a massive amount of work to be done, and we may need to come back to council on how to adjust that fee before the storm sewers fail, adding that the cost to fix them are hundreds of dollars for each storm sewer. Mr. Thompson said the motor fuel tax is settling a little, and is less then the $2 million estimated. For expenses on the street fund, Mr. Thompson said we spent about $4.5 million in 2008; but we might have to buy a facility or trucks, and that he is waiting for that to unfold in order to get a feel for the costs. Mr. Mercier said this is the fund which will be used if we have to buy the equipment as the enterprise fund Council Staff Retreat 06 -20 -09 Page 1 of 11 Approved by Council: 07 -14 -09 deals with the entire transportation system; we have a beginning fund balance and have put some dollars in there to make the initial purchase; but said he is hopeful to have a lease on a building and not make a commitment on a purchase; and will focus on the interim, one -year solution; adding if we had a structure and property to buy, we would have to look at choices of purchasing/funding, but said we don't know the target amount yet. Mr. Thompson said that `Problem Statement #3" also has some changes as it now shows parks capital separate from the street projects; he said we still have to address the higher bid on Discovery Park, but will come back to that later, probably in 2009 or 2010 to find another $400,000. He mentioned the real estate excise tax (REET) is down substantially, that prior to this year it was about one or two million, and is now down to about $380,000; REET 2 came after REET 1 and it has additional requirements, and if we are planning under the GMA (Growth Management Act), we can't use those funds for park facilities, we can use them for the parks but not for such things as pool at the parks. General discussion took place on the forecast for future years, and Mr. Mercier said staff prefers not to forecast sweet times when there is no current evidence that supports improvement; that this will be updated again for the January retreat, possibly before the end of the year, and as we see signs of positive recovery, we could be more daring. Mr. Thompson added if we are too optimistic, and then budgets come in with more projects and we get started on multiple year projects, then we would be tied in with no way out. Mr. Mercier said that most major expenditures on projects all came in higher then engineer estimates, including Barker Bridge at about $1 million higher; Pines /Mansfield, and the latest with Discovery Playground at an estimated 47% higher; which creates consternation as we are committed to those projects and those current obligations sap funds for other projects. Mr. Thompson mentioned the STEP program coming in about $2 million a year, and now those hookups will be deeper and wider, and thus cost more. Mayor Munson said Council previously made it abundantly clear if we don't have the funds to do curb -to -curb, we don't have the funds, and we' now there. Mr. Mercier said there has been some mental agony over that question; when we are in residential zones, the biggest bang for the buck is the STEP; for arterials and collectors we have been successful in getting grants, and we will have a choice on which area to set as the highest priority; adding that we have not had to do that yet; that both types of projects have beneficial cost returns to the City; and stated that the problem is that we were contributing a few hundred thousand in match funds before, now that match is between one and three million; and said the biggest areas with the deepest challenges were put off until the end. Councilmember Gothmann mentioned that in the Ponderosa area, the roads are gone and will have to be replaced; so putting in a trench is irrelevant; that they were all paved at the same time and now they are all gone at the same time. Mayor Munson said that as a philosophy, we are there and will have to make those difficult choices. Mr. Thompson said for the transportation projects, this is where the rest of that REET money goes; that now it looks like $550,000 annually for those REET revenues, but we might not make that as we are running about $380,000; the real estate sales likely are better in the summer and the fall but we will have to watch that; that we'll have to match the annual $300,000 from the CDBG (community development block grant) but said that is usually pretty easy to do; stormwater kicks in about $200,000 annually; and said that the problem is on the expenditure side in the 2009 through 2014 secured projects as we may be doing only those projects where we have some outside funds; and said we have not squeezed in the STEP projects in 2010 as we can't afford it at this point. Mr. Mercier said the outside money is from the state and federal sources, and those have already been awarded. Mayor Munson said if the STEP projects are not secured, where do we get the grant money; and Mr. Mercier responded that we don't; he said the $300,000 allocated to the STEP is the only non -city money that goes into it so no other grant funds are there to help in full -width pavement; that we have been relying on REET as there are about $49 million in projects that are under development. Mr. Thompson mentioned that the preservation projects of $4.3 million are planned but not funded at this point. Mr. Mercier explained that this is the most serious financial challenge; other than the operational challenge of how to get appropriate winter services, and what we do to maintain the current condition of our streets, and how to maximize our ability to capture the 80/20 leverage project; and that we must keep in mind the question of what will the street system look like in twenty years; and it was mentioned that Spokane is looking at an estimated $400 million to do their streets. Mr. Mercier said the unfunded TIP match means we will need millions each year to do our Council Staff Retreat 06 -20 -09 Page 2 of 11 Approved by Council: 07 -14 -09 projects; that we have over - achieved in securing projects and now we must determine which projects to use with our matching funds. Deputy Mayor Denenny said if we don't have matching funds for the projects we have been granted, we will have to prioritize those projects and/or turn some down; which Mr. Mercier added puts us in an unfortunate position; that we are usually panting to catch up with the grant allocators to see if we can get there; and said perhaps a $14 million bond could generate about $80 million in projects. Mr. Mercier said he was looking at that a few years ago; and a LID lift might help achieve that, but the ten -cent difference won't get us there; and mentioned that all the cost projections change every time we experience overruns. Discussion turned to possible funding ideas with mention that assessed values are settling now and next year will likely be down; the idea of moving forward in March for a bond issue for all those awarded, secured projects so we won't have to turn back awarded projects, unless there is an increase in the REST or the projects come in less than anticipated; there are several projects on the stimulus list but we don't know if there will be a second round; by examining the chart there is no way to deal with the pavement management and the $4.3 would be without any grant assistance, even though injecting those dollars now will save citizens eight times the cost in future maintenance. Mr. Mercier asked about Council's inclination in trying to address the millions in unfunded matching dollars. Councilmember Gothmann mentioned the figures are based on the economy remaining where it is which could change; and he mentioned possibly lowering the carryover of 20-21% down to 15 %; and said that the $5 million for a new city hall might be a source of money in these tight economic times. Mr. Mercier explained that our corporate strategy is to treat each line of business as hopefully being able to stand alone; that we are cash flush with our 2009 carryover, but in the general fund, this document shows we don't have a solvent general fund in this scenario; and unless you can remove all the deficits in the forecast, he suggests not disturbing the carryover as it will only open up a different source of problems; and said there are other sources of problems to deal with and other revenue choices to present to the other lines of business like bonds, but bonds cannot be used in the general fund. Deputy Mayor Denenny mentioned that if we take out those funds, it has an unbelievable compounding affect on future years which would show the deficit growing exponentially. Mr. Mercier said we would like no deficits in future years and have 15% carryover; that choices for council include the possibility of deferring the City Hall; adding that the fund in question is the capital facility fund and not a city hall fund; that hopefully we won't have to go there, but we could use those funds to front -end some projects. Mr. Mercier continued by explaining that Council would have to decide if all $5 million go elsewhere, keeping in mind that not all funds would be available if council wanted to make a land purchase; but there would be some residual and council can decide how to use it. Mr. Mercier suggested not taking funds from separate reserve accounts. Once created for a purpose, those funds should remain for that purpose; he said you can't use street fund dollars to support the police department, or can't use stormwater funds to support the planning department, but you can use general funds to support those other accounts. Councilmember Gothmann said if we could show there is some sacrifice on the part of the city, and stress the importance of the maintenance, we could postpone the actual construction of city hall then ask the public to put some funds in the pot. City Attorney Connelly said that the public needs to understand that this is something in the community that wasn't paid, and every year you put it off you almost double your costs down the road; he said the school district has a 60- year model we might want to examine; they identify capital costs; put together a bonding plan to have a series of bonds to fulfill those over the 60 years; they sold it to the voters and they follow it religiously. Councilmember Taylor said that many entities are issuing bonds and we have been holding back from putting this in front of voters because of timing issues, and he said we have to get in the game or it won't happen; that if keeping the road infrastructure up -to -date is less important then a jail or whatever else, we have to show we have priorities that have to get funded and our city can't function without these improvements. Councilmember Gothmann added that if we go to the voters with a program showing the projects we want to fund, the $4 million question is still a question; do we combine it or have separate items, or delay in the hope that a utility tax will come forward, which the public would have to approve anyway. Mr. Mercier said he recommends we go with a bond issue first, which is highly attractive Council Staff Retreat 06 -20 -09 Page 3 of 11 Approved by Council: 07 -14 -09 because of the leverage, and let the voters decide; if the community demonstrates they see value in supporting the road system, then we build on that; and said if we decide on a bond issue for roads, he suggested having a shorter span than expected, not a twenty -five year bond but more like ten or fifteen depending on the precise projects and their projected life -span. The group took a break at 10:04 a.m. and reconvened at 10:15 a.m. 2. Review of 2009 Council Goals — Dave Mercier Mr. Mercier mentioned that these goals get amended occasionally, and were last amended last June, then at the January retreat; and said this is the last functioning set, and he asked if Council has any other amendments, adding that we're making progress on each and will do a report soon on these as well as any overlapping 2008 goals. Deputy Mayor Denenny said the information from Neil Kersten regarding winter operations looks encouraging; and Mayor Munson said he is impressed with the progress. Mr. Mercier said he hopes the Board of County Commissioners will be reading the bi- weekly updates. There was Council consensus to keep the goals as they are with no amendments. 3. 2010 Goals — Dave Mercier Goal #1: Continue monitoring wastewater issues, including governance of wastewater facilities, and pursuit of the most efficient and economical methods to ensure the continuation of wastewater discharge licenses. Mr. Mercier said some of these are continuation goals, like the wastewater goal, as it requires continued activity; that an implementation group still meets regularly on these issues examining modeling for the river, standard changes, etc. and said the County has alternate plans if we can't get the discharge permit; that on April 9, he and Mayor Munson, Deputy Mayor Denenny, Commissioner Mielke, Mr. Farrell, and Mr. Bruce Rawls met to discuss the County proposal to pass on an interlocal which would have the effect of the County gaining an exclusive franchise for all the wastewater treatment sources for the length of their bonded indebtedness for this or any alternative facility plans; that he examined the document and there were some revisions made since the first draft; that the group met again and had more revisions; and he said the County's lead thought is when they go to finance this, if they can demonstrate to the financing world that they have a lock on a customer base, the hope is it would equate to a lower financing cost. Mr. Mercier said he is troubled with the proposal and wonders if there has ever been a precedent where the customer base was asked to be locked in; and said he has never seen such applied to a sewer enterprise; that if we are locked in we can't negotiate a safe harbor with the City of Spokane if the Board of County Commissioners' plan fails. Mr. Mercier said about three years ago council suspended conversation with the Commissioners regarding whether we wanted to take over the sewer enterprises; they are a public entity and we don't have an automatic right to assume the operation of their enterprise; and we can't do a hostile takeover; that Council agreed three years ago we would put off that conversation whether we wanted to do something like that until after we got a discharge permit and knew the plant would be put on line so there would be no need for a moratorium; that this late introduction of an interlocal would take that issue off the table for the next twenty -plus years; he said they market it as getting the lowest price possible; but Mr. Mercier said he hasn't seen any data regarding that. Mayor Munson said he has never seen a bond issue with that kind of guarantee unless there was a financial problem with the entity issuing the bonds; that they're likely to get a "B" rating due to their large deficit this and next year and he feels the bonding company wants to make sure the County has enough funds to pay the bond and the County is looking at not getting a reasonable bond rating unless we step up to assist. Mr. Mercier said our citizens represent about 73% of their customer base and said a more costly financial arrangement will be visited upon the citizen's monthly bill; and Mayor Munson said he is reluctant to do that. City Attorney Connelly said he spoke with their bonding attorney and mentioned maybe proceeding without any interlocal; and they didn't seem concerned, so Mr. Connelly said he feels the concern is more from the Commissioners than the bonding company. Mayor Munson said he is most concerned that if we sign this and then find a better alternative, that smaller plants are less expensive. Mr. Mercier said we don't want an agreement to make the prospect impossible of everyone Council Staff Retreat 06 -20 -09 Page 4 of 11 Approved by Council: 07 -14 -09 going to a regional sewer enterprise some day; and the growing idea is likely that the only rational way would be to coordinate the facilities in our region; that we don't want to foreclose on some supplemental service operation or other technology or another way like the Inland Empire Plant idea, and we don't want to disturb the customer base but augment what can be used. Mr. Mercier said the County has a legitimate obligation to see that the bonds are paid for; the question for Council is do you want to forgo all other opportunities; he said the County feels passionate about this kind of agreement and us doing something to demonstrate what we can to the bond market to keep the rates lower; but said he doesn't believe this is the right instrument for that. City Attorney Connelly stated that we need more information and we need to hear from bond council concerning a guarantee and what kind of impact would it have on ratepayers; if there is a significant savings to our citizens and whether a guaranteed flow agreement is good or bad; and their opinion on the option of a moratorium; and added that once the pipe is in the ground, that's considered a guarantee so he feels we need more information. Mayor Munson suggested having an appendix with a list of `what -ifs" or exceptions because if they don't get the permit and the other plans don't work, we'd all be in dire straits and we need to protect our citizens. Mr. Connelly asked if the motivation really is about bond ratings or making absolutely sure that the City of Spokane doesn't get their grips on us as they are in direct competition; and he said questions to be addressed are what would a guarantee result in in terms of percentage points and rate savings. Mr. Mercier said that the only reason we talked to Spokane City is as a Plan "B" but that Bruce Rawls has alternatives, none of which include the City of Spokane; he said we don't want to upset the County, but if a discharge permit is not allowed and we want to forestall a moratorium, we want options. After further discussion on the options, Mr. Mercier asked if Council would be comfortable in stating that our City will not declare any interest in assuming any sewer operations for the next 20,30, or 40 years; as that is the proposition being asked, plus the length of any current or additional bonds. Deputy Mayor Denenny said there is nothing to prevent us from entering in the same conversations regarding any kind of takeover; that we could enter an agreement whereby we assume the whole thing; or any two entities can enter into an agreement and that is not prevented by an interlocal. Mr. Mercier said the Commissioners are waiting for a signal from Mayor Munson and Deputy Mayor Denenny on when to enter into discussion on this. Mayor Munson suggested we have a list of exceptions; and said if the plant can't go into operation, then what; perhaps negotiate a regional sewer district. Mr. Mercier asked what criteria council would use to judge when one of those agreements is suitable and when it is not. Mayor Munson said that building a new plant and using it is the best choice, but if that service isn't available, then we need to look at other alternatives. Councilmember Gothmann suggested proposing if the County processes our effluent, we can give them twenty years; and if they can't then there is no agreement; that it would seem reasonable that if due to any reason this can't be processed, then we shouldn't agree to exclusive rights. Mr. Mercier asked at what price; if the alternative plans might exceed the cost of an inceptor with somebody else, then at what cost? Deputy Mayor Denenny said everyone needs to keep in mind the complete picture of a brand new, high quality technology plant. It was determined this will remain as a 2010 goal. Goal #2: Implement records indexing and phase in a document imaging system City department by City department with the goal of achieving on -line availability of our records to the public by the end of 2010. Mr. Mercier explained that we have the equipment necessary to digitize records; that all of the clerk's records have been digitized; we have two document scanners working daily, and we have emptied out a large number of files from the basement, so we are making progress. As part of what council does, it recognizes the major undertakings in the organization and what these projects demand in terms of staff resources, and said that this is a half - million dollar project which consumes a lot of staff energy. It was determined to keep this as a goal for 2010. Goal #3: Implement and evaluate regulations specified in the Sprague /Appleway Revitalization Plan as adopted and amended by the City Council. Mr. Mercier said as of October 1, 2009, we are half -way there in having an adopted set of regulations. It was determined to keep this as a goal for 2010. Council Staff Retreat 06 -20 -09 Page 5 of 11 Approved by Council: 07 -14 -09 Goal #4: Develop a Shoreline Master Program to provide appropriate regulatory protection for waters of statewide significance as required by state statute (Spokane River and Shelley Lake). Mr. Mercier said a shoreline master program isn't optional for us; we will coordinate with the County on this as we would like to see them move on this before we tackle it; and said inventory represents a huge component; and that we have put out an RFP (request for proposal) and received consultant information, and will award a contract soon, and will build an inventory. Community Development Director McClung said that the City of Spokane has adopted their plan; that the County ran into some trouble in adopting theirs and the State stepped in and took over the process as they didn't like what the county was doing. In the County's defense, Councilmember Taylor said the process is pretty defined that it should be a grass- roots public input process, and based on the work of their Shoreline Committee, they implemented many of those suggestions, and the state said they didn't like it; that the County went to relax some of the more stringent regulations, but the Department of Ecology (DOE) said you can't go back down to standards on the west side. Ms. McClung said she experienced this in anther jurisdiction; that it is very difficult as they too tried to reduce a few minor regulations and got a lot of pushback from the DOE; she said they have set up the interview process with the consultant, and they have asked someone from the City of Spokane to participate. The good news, Ms Clung said, is that the bids came in and the set aside amount of $150,000 will cover the cost of everything, including the inventory and the regulations. It was determined to keep this as a goal for 2010. Goal #5: Pursue a legislative capital budget request for state funding for the acquisition of parkland adjacent to the Park Street Pool. Mr. Mercier said this is a legislative capital budget request; that we made two this year; one for funds for the continued development of Greenacres Park, and $300,000 for park acquisition. Mr. Mercier said he previously e- mailed council a working model of a draft legislative agenda and said we will have our legislators here in Spokane next week as part of the AWC (Association of Washington Cities) Conference; and he invited Council to examine that and said that this is the only capital budget request; that we had envisioned another $500,000 but we didn't score high enough to get funding; he said that CTED (Community Trade and Economic Development) gets a little nervous as they don't want to see a project partially completed; so we are in process to re -scope so the two advances will complete the project and we will have more open green space; adding that we can always look at this again in the future; and will be diligent to appropriate the allocated funding as a demonstrated complete project breeds success. Mr. Mercier said we have no hold on the Park Street property now due to failing REET dollar collections, and we are already showing a potential deficit for next year; and there remains only $100,000 in there now to keep the playground functioning; which is not a financial position that would enable us to secure an option now; but added that some budget numbers are still moving; and he does not want to speculate yet on how the economy is going. It was determined to keep this as a goal for 2010. Mr. Mercier asked if there are other goal ideas; mentioned the potential for a several changes in council and said this list should be one of the subjects for the January retreat. Ideas for other goals included a longer range capital plan like the school district; or the $4 million bond issue where it was mentioned that Mark Anderson might be able to give us a presentation on their plan. Deputy City Manager Jackson mentioned the contracts with the County and winter maintenance; and Mr. Mercier said that last year's goal was to study the situation for a long term solution, and perhaps a new goal would be to re -state the winter services; such as implementing a multi -year winter services program similar to those contracts we have with AAA Sweeping, Senske, and with the YMCA for aquatics services. City Hall was also suggested as a goal and Mr. Mercier said exploring funding services was the previous goal, but that Council hasn't made a decision yet to make the fundamental investment in a city hall; and said our legal department is researching funding source alternatives; and said he still likes the notion of finding a demonstration project such as City Hall as a "living building" but said council is not at a point to further a city hall; and said this is a good check -in point to acquire the land via one mechanism or another. Mayor Munson suggested we pursue the City hall concept and development and leave it as that instead of getting Council Staff Retreat 06 -20 -09 Page 6 of 11 Approved by Council: 07 -14 -09 too specific; and Deputy Mayor Denenny remarked that the SARP addresses city hall as part of the facilities so maybe add in the "continued pursuit of the civic component of a city center." Councilmember Taylor mentioned annexation and Mr. Mercier said Council did a number of things to create an annexation policy including Comprehensive Plan amendments in 2008 and 2009 that lay the foundation for us to do that; that we must identify future acquisition areas; and said that the County planning staff believes that the CWPP (County -wide Planning Policy) dictates they must complete their updated plan and identify a UGA (urban growth area) before we can go forward but there is a hurdle; and City Attorney Connelly said we don't need that to annex; that if we identify a UGA we can move ahead; and there was discussion about where we could end up with a net positive; mention of the area in the South Park south of the City; that a legitimate cost analysis would likely be in the area of $250,000; that it would be a worthwhile exercise to go through if we have a small annexation area so that we have relatively small financial consequences and it would not be dramatic either way, adding that some folks have expressed interest in being annexed. Councilmember Taylor mentioned the valley lacks areas of higher income housing; that there has been some developing that way along Coyote Rock in the shoreline areas; and suggested we need to have a good mix of wealth in community. Mr. Mercier suggested having a presentation reminding us where we are in readying for annexation, and then wait for a petition. 4. Park Acquisition — Mike Stone Parks and Recreation Director Stone reminded everyone that there are other aspects that make up the community; that quality of life is important; that a park plan was issued several years ago and that they have implemented that as best as they can with the current financial challenge; in looking at the city fifty years from now, there is a need to acquire some property as it will become scarce; he mentioned the current ratio of park land to population includes developed park, and said this is very short in comparison to the City of Spokane, and said we are short of open spaces. Mayor Munson mentioned the thirty acres that the school owns in the Ponderosa area across from the fire station, and said they might be interested in talking to us about getting that surplus land as they have no plans to build a school; but added that he doesn't know what the price would be, but that such a natural piece of property could be left that way for a long time. There was some discussion of parcels eligible for conservation futures consideration, including mention of the property about twelve acres on the south side of Appleway between Park and Avista. Mr. Mercier suggested we go back to the 2010 goal statement and look for one that discussed examining opportunities for the use of conservation futures in the Spokane valley; and perhaps consider additional sites. Mayor Munson mentioned there is no park in Ponderosa; but Councilmember Taylor mentioned there might not be a need in that area since the lots are so large. Councilmember Gothmann suggested brainstorming about places where parks could occur and possible opportunities for Parks and Recreation to explore. Mr. Mercier said there is no match requirement for the conservation futures; but if we are forced with choices due to meager resources, perhaps we would want to discuss acquisition or development as there probably are not enough funds to do both. Several councilmembers mentioned a preference for acquisition. City Attorney Connelly mentioned a small five -acre parcel below 12` on Carnahan and Mr. Stone said they have been approached by the property owner and he is happy to hear about Council's interest. Mayor Munson said he has a neighbor who wants to build more of an advanced skate park and said they are serious in assisting, and said that maintenance and operation would need to be addressed; adding that he would like to pursue that and other activities to get citizens involved to raise money for such projects. Mr. Mercier said that idea could be paired with the ongoing commitment for maintenance and in that regard, a metropolitan park district might be worth pursuing; that there is money to acquire the land but no money at this point to develop it; and such a district would be an independent taxing entity. Mayor Munson said that would also be a good topic for the Metro Mayors; and Mr. Stone added that the "Friends of the Falls" is a group which has shown to be a successful mechanism on the west side. 5. Comprehensive Plan Update/LTGAs /JPAs - Greg McCormick Planning Manager McCormick mentioned the past struggle getting population allocations worked out with the County and the issue of a five versus a ten -year update; that five is required by CWPP, but the Council Staff Retreat 06 -20 -09 Page 7 of 11 Approved by Council: 07 -14 -09 UGA requires review at least every ten years; mention that the County adopted a change in their CWPP to go to ten years, with triggers and that a review should happen sooner if certain thresholds were met; recently there was a chance for a re- examination of the twenty -year population allocation by the County, that there was some misunderstanding about what 12.5% meant and due to that misunderstanding, the 12.5% was applied to the entire county population instead of just the increase over the twenty -year time, which resulted in a much higher twenty -year population future growth trends indicator; and he said the County is scheduled to adopt a new twenty -year population that reflects the original intent. He further explained that given the jurisdiction's analysis of land quality within the UGAs, this gets us close to that number on the existing capacity of the UGA; he said that we did most of our land quality analysis and are pretty solid and are checking to make sure our numbers are correct. He said the City of Spokane finished as well and just needs to update and refine. in reference to the percentage numbers, Mr. McCormick said we had some double counting going on and it was changed so now allocations are made to the city property and to the specific UGA and double counting is no longer occurring; that our capacity is about 19,000 given the existing comp plan; and that all entities are on the same schedule and are calculating capacity based on regional methodology. Mr. Mercier asked where we are in terms of having UGAs bordering Spokane Valley, allocated to Spokane Valley; and if we were to pinpoint another area ripe for a TPA (joint planning agreement) which would it be. Mr. McCormick said part of the policies joint planning process should address are that urban growth areas are recognized as potential growth areas for cities and that specific areas will be designated for cities; and Mayor Munson said council previously submitted a letter saying we want that on the record; and that he prefers this get pursued and cleaned up now rather then wait until the next update, as the Board of County Commissioners views the annexation process as depleting their ability to pay their bills. Mr. Mercier said if we have four houses on those twelve acres versus three, it still gives you one more unit to divide some of those costs; and the option of having UGAs officially designated to Spokane Valley lays a good foundation to have our development standards apply in those UGAs to make the eventual conveyance into our city smooth, and sees that as much more rational versus the County's perception that they are the County's UGA. Mr. Connelly suggested a motion to the Steering Committee to designate that and send it to the County. Mayor Munson said they tried that and it was confirmed that the CWPP stated that TPAs are designed in their comp plan and that's when it happens in the update; and Mr. Connelly said we need to make sure it happens in the 2010 update. Mr. McCormick said that Spokane County and the City of Spokane have been involved in a lengthy negotiation over an interlocal to address these issues. The topic of street standards was mentioned and Mr. Connelly said that Commissioner Mielke said he wants urban and rural the same; and Mayor Munson added that the County contends they cannot administer thirteen different standards even though there really are only about four. Other discussion included mention that the Morningside area is in the process of platting the land but boundaries are uncertain; that Greenstone has about 2,100 platted lots all contained south of the river; mention of possible areas as UGAs or TPAs, the impact on 32n and that the Greenstone development and extension of Indiana will change traffic flow markedly; the area adjacent to the Dishman Hills natural area and the possibility of a third access to that area which would bring in additional growth; but that no road will be built until the lots can sell. Mr. Mercier suggested staff examine that issue as the objective is to acquire land in the UGA so they can participate in the road construction, and expanding the UGA will be a major issue; and Mayor Munson said he would like staff to examine these issues and report back with options and implications. The group took a break for lunch at 12:15 p.m. and reconvened at 12:52 p.m. It was noted that Councilmember Schimmels left at 12:15 p.m. Mayor Munson mentioned that Councilmember Schimmels received an e-mail from the Director of the Regional Solid Waste System, which stated that the City of Spokane discussed but not yet promoted the concept concerning the annexation process, and it stated that the waste energy plant would be within their city limits and therefore they should own it; and that they would charge their 20% utility tax on solid waste collections and that amount would be about the same amount people currently pay for the bond Council Staff Retreat 06 -20 -09 Page 8 of 11 Approved by Council: 07 -14 -09 coverage; and that they'd then distribute the 20% to the different participating cities, and for Spokane Valley it would be about $1.17 million annually. Mayor Munson also mentioned that information on the process to select Councilmember Taylor's replacement will be forthcoming in a council packet; and Mr. Mercier gave a brief overview of the procedure; and Councilmembers concurred to move forward as the statutes direct and Mr. Mercier explained. 6. Metro Mayors — Mayor Munson Mayor Munson explained that he and Mayor Verner have been discussing issues that effect both entities, such as sewer and wastewater, and said that he suggested and she agreed to have other metro mayors enter these discussions about regional items, with the goal of establishing common ground, and would later invite the County or the Sheriff's Office or others to participate, which idea was readily accepted. Mayor Munson reported that Mayor Verner said there is some disadvantage to the City of Spokane participating in a regional wastewater plant as they don't have any reserve capacity for growth currently within that system, and if it were to go regional, she feels they would lose even more; and he reported that she mentioned considering where that the growth is taking place in the north, it appears the new plant is in the right place. Mayor Munson mentioned some of the advantages are that the new capacity means newer technology which will add to keeping the river cleaner and result in more effective use of sewage; and he said there are models in the state that look at a regional sewer system including governance, taxation, and flow control agreements; and with Mayor Peterson having the newest facility so far he (Mayor Peterson) said he'd have difficulty in selling it to his citizens as the rate payers in Airway Heights are paying the high price of about $60.00 monthly; that the local control issue becomes very important and by going with the City of Spokane, they'd lose control of their water and said unless they'd show they would replenish the water, they'd loose their water rights which would stop development in the city; but concerning the rates, it would present them with a better alternative because their rates would go down and our rates would generally go up because we'd have to equalize the rates. Mayor Munson said Liberty Lake is unique as they have a sewer district which is not controlled by the city; but that the real question is the County and he mentioned that the Board of County Commissioner's concept is very attractive as it gets them out of having to get. into a governance issue with us. Mr. Mercier mentioned that sewer districts generally have independently elected representatives; that people sometimes worried about those special districts being isolated and there was a concern on term limits; but he said he has not witnessed support for any term limits among the there mayors; and said the next step would be that Mayor Munson will get some models for the next meeting, perhaps in August; and Deputy Mayor Denenny mentioned John Maxwell as a good resource. Mayor Munson said a regional fire district is politically a big time -bomb and said that Mayor Verner is uncomfortable about leading the discussion; but said their firefighters are receptive to the concept. He said that administrative overhead would be reduced dramatically; that we have ten fire districts and five municipal fire departments in the County and the organization seems a bit top heavy; and if regionalized, the number of stations will not be reduced and he added that they will look for a model in the area that is working. Councilmember Wilhite mentioned SB 5808 concerning the annexation of unincorporated areas served by fire protection districts; and she said fire districts could merge without a vote; and mentioned that someone has already put out an initiative to change that. Mr. Mercier added that there is a statutory prohibition about the size of cities which could not annex into a fire district; and Mayor Munson said they would like to look at other models to see how they work, and get the fire districts involved in the conversation; and he concurred we do not want to get involved as it is not our issue but it would be up to the fire districts. Mr. Mercier said that Spokane Valley already annexed into two fire districts, and if the fire districts see the value in merging among themselves, they could pursue that option. Mayor Munson mentioned future discussion items for the metro mayors include regional parks or a regional park district as a separate taxing authority; and City Attorney Connelly mentioned there has to be a common philosophy which doesn't now exist; and added that the County is getting rid of neighborhood parks and we support neighborhood parks. Mayor Munson suggested weighing the pros and cons and Council Staff Retreat 06 -20 -09 Page 9 of 11 Approved by Council: 07 -14 -09 discussing recommendations later. Mayor Munson also mentioned the library district and that it would probably be more cost effective to have one; he said Liberty Lake has their own and said if they wanted to be part they would have joined the County so they're out; and mentioned that city government in Spokane is the largest in the region and if they are having financial problems, we will all feel it so we are looking at some ways to help each other. Other comments about a library district included mention that resources are short for the library as well as for other entities; that libraries have become very sophisticated and are a great network for accessing information; and mention that the concept of the Metro Mayors meeting is to frame discussions for cooperation and not try to solve the questions; mention that the taxing authority for cities is $3.60 and annexing into a fire district we give up $1.50; and if we give up $1.50 for police that only leaves 10¢ for everything else so financing would be challenging; policing in Spokane and in Spokane Valley are vastly different; whether there is something unique about the needs of our constituents versus those in other areas; and that there are likely areas in the state that have accomplished this. Mayor Munson asked if there is merit in pursuing the conversation and Mr. Connelly mentioned the Sheriffs Office would be the likely entity to be in charge of such a system; and Mayor Munson added that he feels the Sheriff's Office would find it attractive to be in charge of their own budget. Regarding affordable housing, Mayor Munson said we can support it to a degree but budgets are not focused to provide DSHS services. Councilmember Gothmann said that Mayor Verner feels cities should provide this and Spokane Valley Council feels safety and roads are a priority, and therefore he doesn't see corning together on that issue; Mr. Connelly said provisions to address this are in our comprehensive plan. 7. Wastewater Treatment Plant Interlocal Agreement -- Mayor Munson Mayor Munson mentioned this topic was covered earlier so we will leave the crux of the topic to a council study session to answer questions; but attention was drawn to page 4, section 2.5 of the draft interlocal; and Mr. Mercier mentioned some of the definitions are changed in this rendition. Mayor Munson said he feels it is essential we participate in the rate setting; Councilmember Gothmann asked what it would do to our rates if one of the entities withdrew; mention by Mr. Connelly about the need to find out about the service area, credibility and bond ratings, and Mr. Mercier asked that Council read pages four through seven which makes multiple references back to the definitions and that some of the definitions have changed; which prompted Councilmember Taylor's observation that at times the word "system" is capitalized and at times it is not. 8. Snow Removal — Mike Jackson Deputy City Manager Jackson explained that there are two processes: the long term and the short term; that we have contracted with HDR Engineering to develop the scope of work; that yesterday was the closing date to receive letters of interest regarding a long term service provider; and said we received at least three responses but he hasn't examined them yet; he mentioned that Waste Management is interested in leasing the site for one to three years and that the site is for sale now on the open market; and said staff is preparing a draft lease agreement. Mr. Jackson also mentioned that it appears that WSDOT has equipment and has invited us to perform an inspection; that the equipment is of late 1990's vintage with about $17,000 to $25,000 per piece; and said some equipment has duel uses; and that Poe Contractors has committed to the project, although we don't have the details yet. City Attorney Connelly mentioned that the Waste Management site is in the middle of the SARP; and our current Code doesn't allow this type of contractor yard; that the County was confronted in 2002 as they felt it was an illegal use but Waste Management wanted it, so the Board of County Commissioners did an administrative interpretation that it was a contractor's yard so decided it was a legal use as of June 2002; however, our Code adopted in 2003 doesn't allow the use but they can continue as a legal nonconforming use; and our change of the SARP makes it an illegal use but again it can continue as a nonconforming use; and under those rules, the use continues unless discontinued for twenty -four months; unless it falls under the SARP exceptions for a new permit and the 20/50% rule would kick in; and if the site is in excess of that, then the conditions would have to be complied with in terms of design and setback; and said this is not what was intended to be developed in the SARP zone; but we could amend the Code to allow it as a civic use but would exclude other uses; and this could be done by emergency motion effective immediately or the slow way. Mr. Connelly also mentioned that the Poe Contract will be presented as an emergency to approve the Council Staff Retreat 06 -20 -09 Page 10 of 1 Approved by Council: 07 -14 -09 contract and that we will have to do the bid competitively next year; and Mr. Jackson said staff will continue to pursue this with the County in the event all this doesn't come together. 9. Information only: (a) Work Plan; (b) Business Plan: these were not discussed as they were for informational purposes only. 10. Brainstorming Ideas for reaching out to the public on a regular basis included keeping the public educated as to our form of government; keeping to the facts; determine where we want to end up and work from there; how to be more pro- active on various topics; list of items to address in specific issues; putting a positive foot forward; public announcements on when final reports are available and what the essence of the report means; inform the public of all players involved; doing things in a "hold harmless" approach; be consistent in our statements of what we want or did; be assertive yet non - emotional keeping in mind the positive outcome; ways to provide the best services for our community and ways to get more community participation; [it was noted that Councilmember Dempsey left at 3:07 p.m.]; don't forecast the outcome at the beginning of a conversation but present the facts and all the variables without discussing outcome; the idea of neighborhood associations and that we don't have sufficient staff to handle such; specific ad -hoc committees with specific purposes and a charge to get citizens involved; continue networking with the Chamber of Commerce and the business community; mention that conversations with the community were not well attended; volunteer coordination was mentioned with comment by Ms. McClung if the goal is to involve citizens, we need to have workshops to have staff bring a menu of things to consider and move from there; mention of Carolbelle Branch's e-mail list for the e- newsletters and Deanna Griffith's e -mail lists; articles written by Councilmembers and of the idea of dividing up the load on article writing; and such things as "Friends of Discovery Park" and other similar organizations generates funding and public participation. There being no further business, the meeting adjourned at 3:28 p.m. ATTEST: ree:)1 Christine Bainbridge, City erk 4sTA/4 and M. • unson, Mayor Council Staff Retreat 06 -20 -09 Page 11 of 11 Approved by Council: 07 -14 -09