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2009, 09-29 Study Session MinutesAttendance: Councilmembers Rich Munson, Mayor Dick Denenny, Deputy Mayor Rose Dempsey, Councilmember Bill Gothmann, Councilmember Gary Schimmels, Councilmember Diana Wilhite, Councilmember Absent: Ian Robertson, Councilmember MINUTES SPOKANE VALLEY CITY COUNCIL REGULAR MEETING STUDY SESSION FORMAT Spokane Valley City Hall Council Chambers Spokane Valley, Washington September 29, 2009 6:00 p.m. Staff Dave Mercier, City Manager Mike Jackson, Deputy City Manager Ken Thompson, Finance Director Kathy McClung, Community Development Dir Mike Stone, Parks & Rec Director Cary Driskell, Deputy City Attorney Neil Kersten, Public Works Director Morgan Koudelka, Sr. Administrative Analyst John Pietro, Administrative Analyst Carolbelle Branch, Public Information Officer Chris Bainbridge, City Clerk Mayor Munson opened the meeting at 6:00 p.m. and welcomed everyone to the meeting. City Clerk Bainbridge called the roll; all Councilmembers were present except Councilmember Robertson. It was moved by Deputy Mayor Denenny, seconded and unanimously agreed to excuse Councilmember Robertson from tonight's meeting. ACTION ITEMS: 1. First Reading Proposed Ordinance 09 -025 Substantial Need — Ken Thompson After City Clerk Bainbridge read the ordinance title, it was moved by Councilmember Gothmann and seconded to suspend the rules and adopt Ordinance 09 -025 finding substantial need. Finance Director Thompson explained that during the budget process over the last few months, we have occasionally talked about property tax, and he reminded Council that the City is allowed to levy a 1% increase over the highest lawful levy or an increase equal to the implicit price deflator, which is equal to inflation, whichever is less; that we now have the inflation number which is -.84 or almost a -1 %; and explained that when looking at the sales tax revenues which are down $2.8 million; the building and planning fees which are down $400,000; and gambling which is down $100,000, all for an approximate total of $3.3 million; and that expenses are going up, therefore he said it appears there is a substantial need. Mr. Thompson said that new construction will pay their fair share which would equate to an approximate 1% increase on property, and said passage of this ordinance requires a super majority. Mr. Thompson added that the assessed value won't be finalized until late 2009. Mayor Munson said that for the average home of $164,000, this increase equates to about 27¢ more per month and Mr. Thompson concurred. Discussion included mention that the 2.9% includes new construction, that if this were to pass, the average monthly cost for a homeowner would still be under $21.00; and a suggestion from Councilmember Schimmels to use monies from one or more of the other funds instead of increasing taxes in these economic times. It was moved by Mayor Munson and seconded to amend the motion to advance it to a second reading. Mayor Munson invited public comment on the motion to amend, and no comments were offered. Vote by acclamation to amend the motion: In Favor: Mayor Munson, Deputy Mayor Denenny, and Councilmetnbers Wilhite, and Gothmann. Opposed: Councilmembers Schimmels and Dempsey. Abstentions: None. Motion carried. There was additional discussion on the newly amended motion including comment from Councilmember Gothmann that the government could be managed in a slow and steady manner or council could wait until the precipice occurs then drop everybody off; and said he prefers the slow and steady manner; and said Council Meeting Minutes: 09 -29 -09 Page 1 of 3 Approved by Council: 10 -27 -09 that we would be increasing the levy on existing taxpayers just on the city's portion of 1% which amounts to 27¢ a month on the average house. Deputy Mayor Denenny said we know there are reserves, but we are looking at projects coming up where we might not have the current general operating capital; and in the meantime, the Sheriff's Office contract will see a 3.25% wage increase for the deputies every year, and said we are obligated to pay those increases; and said that on a budget component of roughly 15 million, that is about a 7% increase, and said considering not to levy some modest increase to help maintain those costs brings up the question of how to reduce services; he said we are fortunate not to have the budget struggles many cities are experiencing; and said he feels most citizens would prefer to maintain services with a modest level of increase. Mayor Munson added that the reserves are there for a "rainy day" and that today is a drizzle compared to a rainy day which could come in the future; and said he feels it is wise to keep those reserves as they are now as he believes 2011 will get worse before it gets better. Mayor Munson invited public comment; no comments were offered. Vote by acclamation on the amended motion: In Favor: Mayor Munson, Deputy Mayor Denenny, and Councilmenbers Gothmann and Wilhite. Opposed: Councilmentbers Schimmels and Dempsey. Abstentions: Motion. Motion carried to advance the ordinance to a second reading. 2. First Reading Proposed Ordinance 09 -030 Cable Franchise — Cary Driskell After City Clerk Bainbridge read the ordinance title, it was moved by Deputy Mayor Denenny and seconded to advance ordinance 09 -030 to a second reading. Deputy City Attorney Driskell mentioned that the local manager of Comcast, Mr. Ken Watts is here tonight should Council have further questions; that Comcast reviewed the proposed franchise and it should be before Council soon; that this new code is more comprehensive and establishes what our minimum expectations would be for any cable provider requesting a franchise. Mayor Munson invited public comment; no comments were offered. Vote by acclamation: In Favor: Unanimous. Opposed: None. Abstentions: None. Motion carried. NON - ACTION ITEMS: 3. County Contract Presentation — Morgan Koudelka & John Pietro Senior Administrative Analyst Koudelka explained that tonight's presentation is to discuss the 2009 contracts and the costs associated with them; and that there are two reasons for this discussion now: (1) that our review process of estimated costs have been cumbersome this year and it has taken this long to nail down the estimated costs for the year; and (2) because of the large increases in contract costs we saw for 2009, it affected the 2010 budget as the public safety contracts comprise most of the general fund budget; and he added that the estimated budgets are based on the five year trend; and he said that the large increase this year is significant, and that staff was not able to identify anything that would lead them to believe that 2009 was an anomaly. Mr. Koudelka went through his PowerPoint presentation which explained the contract components and process, the indirect costs, the positives, the challenges for 2009, the methodology and calculation errors corrected during the City's review, comparison between first and last versions of estimates received, and then showed the charts on the various contracts, such as animal control, district court, pre - trial, emergency management, public defender, prosecutor, and law enforcement which included the jail and Geiger Corrections Center. Mr. Koudelka also discussed the impact on our budget of the decrease in Washington State Patrol initiated cases; then gave an overview of comparison of all contracts from 2008 and 2009, ending with the impact on Spokane Valley and suggested corrective actions. City Manager Mercier added that the more moderate increases are 6% or more, that we included rates in our projection of about 6 %, but that the difficulty is with the revenues increasing one to two percent, and expenses increasing 4 %, it creates a gap over time which requires a lot of attention to manage and budget. Mayor Munson called for a recess at 7:20 p.m. and reconvened the meeting at 7::35 p.m. 4. Aquatics Contract — Mike Stone Parks and Recreation Director Stone explained that a Request for Proposal (RFP) was sent out for the three pools, that currently these services are being provided by the YMCA, which contract expires December 31, 2009; that responses were due last Friday, and there was only one response, that from the YMCA. Mr. Stone said that staff will bring this item back to council for a motion consideration for contract approval, and he anticipates it would be for one year, with four, one -year renewals, which are the Council Meeting Minutes: 09 -29 -09 Page 2 of 3 Approved by Council: /0 -27 -09 same terms as previously used. Mr. Stone also mentioned that financial control is a key point and they are considering having the Y collect and deposit the funds in their account, and we would work an exchange between revenues and expenses and then write them a check. Mr. Stone said that due to the added feature of each pool, there is increased staffing needs; and that consideration is also being given to expanding the pool season next year; that this year the season was slightly extended and the late August 90° temperatures helped to keep attendance up at the pools; but said staffing is a challenge as many staff members are college students. 5. Parks Maintenance Contract — Mike Stone As noted in Mr. Stone's Request for Council Action form, Mr. Stone explained that this contract is a little more challenging that staff developed a bid package for the park maintenance services; that all work would be considered a "public works" which means state prevailing wages will need to be paid by the contractor; that the bid package will be publicly advertised September 25; and said the bid opening is scheduled for October 16. 6. Preliminary Legislative Agenda — Dave Mercier City Manager Mercier said tonight's agenda item is to give Council opportunity to edit the preliminary legislative agenda, and to determine if Council would like to have the adoption of the legislative agenda within a meeting or two. After Mr. Mercier went over the preliminary agenda items, discussion included mention of the Transportation Improvement Board (TIB) rules, TIB funding issues and that the gas tax funds the TIB, and rules for cities with populations under 5,000 and that this might be something for the lobbyist to work on; the concept of a street utility fee and monitoring of that process, and mention of state budget deficits. 7. Council External Committee Reports - Councilmembers The SWAC (Solid Waste Advisory Committee), SRTC (Spokane Regional Transportation Council), and STA (Spokane Transit Authority) recent meetings were briefly mentioned but nothing definitive was mentioned requiring council consensus. Mayor Munson mentioned that if the STA recommends service cuts, he will bring that information back for council consideration; and said that the GMA (Growth Management Act) Steering Committee will meet to consider expansion of the UGA (urban growth area) for the County, but there is no documentation yet, and Council concurred that Mayor Munson should proceed to vote as he determines the facts to be. 8. Advance Agenda — Mayor Munson Mr. Mercier mentioned that next week Council will receive an update on the project costs of the SARP. 9. Information Only: The Traffic Interlocal Agreement, Response to Public Comments, and Community Development Monthly Report were for information only and were not reported on or discussed. 10. Council Check -in — Mayor Munson. No comments. 11. City Manager Comments — Dave Mercier. No comments. There being no further business, the meeting was adjourned at 8:10 p. dira ATTEST. 4 / AS t . .1-L 'chard M. Mun-: , ayor hristine Bainbridge, City Clerk Council Meeting Minutes: 09 -29 -09 Approved by Council: 10 -27 -09 Page 3 of 3