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2010, 09-21 Study Session MinutesMINUTES SPOKANE VALLEY CITY COUNCIL REGULAR MEETING STUDY SESSION FORMAT Spokane Valley City Hall Council Chambers Spokane Valley, Washington September 21, 2010 6:00 p.m. Attendance: Councilmembers Staff Tom Towey, Mayor Mike Jackson, City Manager Gary Schimmels, Deputy Mayor Cary Driskell, Acting City Attorney Rose Dempsey, Councilmember Neil Kersten, Public Works Director Bill Gothmann, Councilmember Ken Thompson, Finance Director Dean Grafos, Councilmember Mike Stone, Parks & Recreation Director Brenda Grassel, Councilmember Kathy McClung, Community Development Dir Bob McCaslin, Councilmember Rick VanLeuven, Police Chief Greg McCormick, Planning Manager Morgan Koudelka, Sr. Administrative Analyst Steve Worley, Senior Engineer John Whitehead, Human Resources Manager Carolbelle Branch, Public Information Officer Chris Bainbridge, City Clerk Mayor Towey called the meeting to order at 6:00 p.m. ACTION ITEMS: 1. Motion Consideration: Ci . Manager Contract — Mayor Towey Mayor Towey said he has been working on the city manager contract for several weeks, and feels it is a good contract; that Council will have opportunity to discuss it, then vote and proceed from there. It was moved by Deputy Mayor Schimmels and seconded to authorize Mayor Towey to execute the Revised Draft Agreement with Mike Jackson, City Manager. Mayor Towey reviewed the sections of the contract, then opened the floor for council discussion. Councilmember McCaslin said he studied the other contract, and the first thing he did was look at the previous council action taken, which he said is not in this one as this was changed, and he read the following: "On August 10, 2010, City Manager [Council] authorized Mayor Towey to enter contract negotiations with Mike Jackson to fill the position of City Manager." Councilmember McCaslin said he has no problem with that; but does have a problem in that the Mayor and Mr. Jackson have negotiated a contract; he said he spoke with two attorneys and asked them if that was past tense: "The Mayor and Mr. Jackson have negotiated a contract" which he said to him, is a positive statement; and said he feels that is poor wording as it didn't state "are negotiating" or "have agreed on a tentative" but rather they said they have negotiated; and said he objected to that; and further Councilmember McCaslin said in looking at tonight's agenda, first is the discussion of the contract then is the swearing in of Mr. Jackson; and he asked if Mr. Jackson doesn't get a contract, are we still swearing him in. Mayor Towey said if Council decides not to approve this contract, he will not be sworn in. Councilmember McCaslin said he does not agree with a few things in the contract and has already decided to vote no; that he realizes he is in the minority and said he is used to that and he recognizes that majority rules and that is the system and said that is the way the system should be. Councilmember Dempsey said she feels Council authorized the Mayor to negotiate the contract with Mr. Jackson; that the Mayor did so in good faith, and said she approves of the contract and intends to approve it. Council Study Session Minutes, September 21, 2010 Page 1 of 13 Approved by Council: October 12, 2010 Councilmember Grassel said as she shared her concerns at the last council discussion, she does not think the contract should move from the $144,000 which is an increase from the Deputy City Manager of $131,000; and said the bottom line for her is that the contract negotiation was flawed to start with because it was basically extracted from the prior city manager's contract; she said that last contract was over $225,000 when you add base salary and car allowance and retirement excluding health benefits; and said this current contract, while a reduction, is still close to $200,000 annually when you add base salary, car allowance and retirement, and said it includes immediate vesting of the retirement program and a six - months severance, which is a reduction from the twelve -month severance of Mr. Mercier; but said we are using that contract as a basis for the new one; but that first contract was so excessively high from the average even across the state, and said council has not looked at additional facts such as what is the private sector getting for a similar job, and what is the median income and cost of living; and said she feels there are a number of issues which were not issued in fair faith; and that as a Councilmember, she said her job is to represent the taxpayer and not the staff; although she said she appreciates what the staff does; but said she was elected to be a good steward of taxpayer dollars and said she cannot vote for this contract as she does not believe it is a good and valid use of the citizen's money. Councilmember Gothmann said he grafted the existing data and it shows that what is being proposed for Mr. Jackson's salary, runs through the center of the annual salaries; he said the eastern Washington Cities' Managers' average salary was $149,000, and western Washington average $163,000; and said in looking at eastern Washington cities with populations of 30,000 to 100,000, that average salary was $151,000 on the west side and $157,000 on the east side; and cities with populations from 30,000 to 50,000 averaged $152,000; and said all the cities on the list averaged above $158,000; he said we also received information on the Washington State Employment Security Department on the salaries of CEOs within Spokane County, and said the figure is $157,000, which he said is just about what we are proposing for the City Manager. Councilmember Gothmann said the range and wage information of all staff positions for Spokane Valley is included in the budget; with the top range for Deputy City Manager showing $148,000, which is $10,000 less than what is being proposed; and said he feels the proposed salary is reasonable. Councilmember Grafos said he is interested in being fair to the citizens of Spokane Valley; that he knows Mr. Jackson is very qualified , but that under the present circumstances, going to $154,000 or $155,000 as a starting salary is too much; and said he would favor the contract if changes were made to show a starting salary of $150,000; which is fair and gives the opportunity for the salary to increase and for council to look at Mr. Jackson's performance in a year; and that 24% in retirement benefits is excessive and said he would prefer that be reduced to four, five or six percent; and said without those changes, he would not be in favor of this contract. Deputy Mayor Schimmels asked if Mayor Towey was going to discuss the changes made to compare what was first drafted with the current draft; and Mayor Towey said he would cover those during the comment section. Councilmember Dempsey asked what was used as a basis for negotiating this contract, and she asked if the Mayor used Mr. Mercier's contract or another contract from ICMA (International City /County Management Association) or AWC (Association of Washington Cities) or comparable entity. Mayor Towey said he did not use the old contract; that he recognized that the old contract was with a different manager, it was negotiated prior to this council's arrival, and therefore didn't think that was relevant; he said he studied the different levels of pay of all the executives and of the cities and towns in Washington State, and the only reference he obtained was that from AWC, the Employment Security Department, and other resources; and said at that time, he came out with $154,000; and with $154,000 there is no cost of living raise, so it is a $154,000 for life unless this council a year from now, decides to raise it; and said if the city is in financial straits a year from now, the salary could be lowered if council lowered the wages of all the staff; and said he feels $154,000 is fair with no raise; and said he went back to 2009 and figured out how much was spent in 2009, and said $309,000 base salary was spent in 2009 that was Mr. Mercier's wages and Deputy City Manager's Mike Jackson's wages; and said if you figure one month we paid Mr. Mercier in 2010, and eight months to pay Mr. Jackson at $144,000; and three months that we will pay if this passes, at $154,000, in 2010 we will Council Study Session Minutes, September 21, 2010 Page 2 of 13 Approved by Council: October 12, 2010 have saved the taxpayers $159,000 by this contract, and in 2011 we will save the taxpayers $155,000. Mayor Towey said in working with Mr. Jackson, Mayor Towey knows Mr. Jackson cares about this city, and said he (Mayor Towey) values that; and that Mr. Jackson is 110% committed to doing what this council wants to do, and he (Mayor Towey) puts value to that as well. Councilmember Grassel said when she said that the former contract was used, if you read Mr. Mercier's contract, and you read the new contract, the verbiage is almost identical; she said percentages and dollar amounts were changed, but the contract itself is basically word - for -word; that the accrual of vacation days, the sick days, the severance package wording is the same but was just reduced from twelve to six months; she said not that Mayor Towey used those exact figures; and said that even though there is a savings there is still the possibility that the City Manager would hire a Deputy City Manager; and said Council doesn't know how that department will be in 2011 or 2012 as that would be Mr. Jackson's decision to make unless you decide that you don't want to do that. Mayor Towey said council also has the option of taking that position out of the budget; and said Council is in control of base salary and of the deputy manager's position. Councilmember McCaslin asked how Mayor Towey arrived at the six - month's severance, and Mayor Towey responded that the typical range was from six months to one year; and he and Mr. Jackson decided to go with the lower end; and in response to further question from Councilmember McCaslin, Mayor Towey said the severance was not compared with the private sector. Acting City Attorney Driskell said in referring to the mention that Mr. Jackson's pay would stay at the $154,0000 potentially forever unless Council provided an increase based on the review, that there is a provision on the top of page three that identifies that "the agreement shall be automatically amended to reflect any salary adjustments that are provided or required by the employer's compensation policy" and said council should be aware that a reasonable interpretation of that would be the cost of living allocation COLA). Councilmember Grafos asked if the 2.5 COLA would apply in January and Mr. Driskell said his understanding is it would apply in 2012; and Mr. Jackson said the intent was it would not apply in 2011 since we are just now setting the salary, but in future years it would; which is the intent that was discussed and Mr. Jackson said if the contract doesn't read that way, that is how the final draft can read. Mayor Towey asked if it would be effective in 2012; and Mr. Driskell said if that is what Council wants, the paragraph near the top on page 2 of 9, the last paragraph which is stricken, could be added back in with the changed amount from $158,400 to the $154,000. Councilmember Dempsey said she would like to add that back in for the 2011, and that the 2.5% COLA will be considered inclusive in the amount of $158,400. Mayor Towey invited public comment. John Miller, 2124 S. Herald Road, Spokane Valley he thanked Council for what they do and noted the difficulty of deciding the salary of a new city manager; said last week the local newspaper reported that "$75,000 and below was, where people wanted to get to the $75,000 and beyond that money didn't mean much; and Mr. Jackson is almost twice that much and that probably means a lot to him but it means a lot to the rest of us taxpayers. I came up with a range of $121,000 to $140,000; in reviewing the contract, I'm disappointed that you seem to have to go back and average this in; this is the City of Spokane; we're unique, we don't necessarily need to do it like Bellingham, or Yakima or Pasco; we can do it the way we do it. I think the annual performance report that was mentioned in the contract should be made a public document so that we get to see how Mr. Jackson works; who the city manager is, does, perform; and on the salary review committee I think a citizen from the community ought to be part of that committee. I think that the City Manager should pay 50% of all of his health coverage: life, health, long -term; he should pay 50% of that out of his salary not as you know, from the city. Four weeks of vacation I believe is too much. I think he ought to start with three and after four years, after five years of service that can go up to four; four weeks max; I think he should accrue twice, a maximum of twice his vacation pay; he shouldn't accrue the unlimited so if he had vacation pay of 20 days, he could accrual up to 40 but that would be it; and after that if he didn't take it he'd lose it. Retirement contract; or retirement contributions; I put in my notes here that they should be 8% to PERS which is half of what's suggested in the contract, and only if the budget as determined the prior year has a 15% surplus; alright; in other words, the city manager would have a target to work for; if he can give us a 15% surplus, then we should make the Council Study Session Minutes, September 21, 2010 Page 3 of 13 Approved by Council: October 12, 2010 contribution to his 401(a), I presume that's like a 401(k). I have other comments here but I'm sure my three minutes are up." There were no further public comments. Councilmember Gothmann said he has the August 10 Request for Council Action form, and the motion was "I move to authorize Tom Towey to enter into contract negotiations with to fill the position of City Manager" and Councilmember Gothmann said that passed; he said he believes Council authorized Mayor Towey to enter into contract negotiations; that Mayor Towey has given due consideration to all of these parts of the contract; and said he appreciates the hard work and research; and Councilmember Gothmann said he will support the contract. Deputy Mayor Schimmels said he would like to address the information picked up which is dated 2010 on the Internet as "Workforce Explorer" and said it is headlined "Spokane, Total of All Industries Chief Executives Wage Survey" and said the hourly rate is $75.51, and if you extend that out is $13,000 month or $157,000 annually; and he said this is in Spokane County and labeled "all industries." Deputy Mayor Schimmels said when the city manager position was advertised, we had a minimum and a maximum and we are within that range; there has been some concessions made on the fringes, and said he will support this contract. There was further discussion about the retirement package with Councilmembers Grassel and Grafos expressing concern that 24% is too high. Roll Call Vote on the motion to authorize Mayor Towey to execute the revised draft agreement with Mike Jackson City Manager: In Favor: Mayor Towey, Deputy Mayor Schimmels, and Councilmembers Gothmann and Dempsey. Opposed: Councilmembers Grafos, Grassel and McCaslin. Abstentions: none. Motion carried. City Clerk Bainbridge then administered the oath of office to Police Chief VanLeuven, which had been previously overlooked; and to the City Manager Jackson. 2. Motion Consideration: Sending Items to Planning Commission (City Center) — Kathy McClung It was moved by Deputy Mayor Schimmels and seconded to direct the Planning Commission to consider text amendments to Book H..• Development Regulations Sprague and Appleway Corridors Subarea Plan to address the following issue: City Center Core Street /Temporary Regulations — Consider removing the temporary restriction on City Center Retail. Community Development Director McClung said that she understands that Councilmember Grafos has asked for copies of the existing comprehensive plan, the Sprague /Appleway Plan, and the County's comprehensive plan which was in place at the time this city incorporated, and said councilmembers should all have the Sprague /Appleway Plan and the existing plan and council acknowledged they have those documents; and it was confirmed the County's Plan was the only document lacking, and Ms. McClung said council will get copies of those next week; and she explained that at the time this city was incorporating, the County had adopted the comprehensive plan but the zoning had not caught up with existing policies; so they were in a state of making changes. Director McClung said a question came up last week asking if council can put the entire comprehensive plan on the docket for change and she said the short answer to that is no; she said if the purpose is to revise the entire comprehensive plan, that is a two -year project and said it would not achieve the goals of trying to get something changed quickly in order to have some immediate impact on current businesses; and said if council's goal is to be able to continue to add things to the list as they come up, that circumvents the whole reason for requiring a deadline because the reason is put into place because that way when the notice is put to the public, the public will be informed of the issues on the list; and from a practical standpoint, November 2 staff will start to work on the list, which includes performing an environmental analysis and public notice, and if the target keeps changing, staff can never finish; and said Council can still come up with a list of things they want changed in the current comprehensive plan, and if council needs help crafting the list, she asked that council please let her know and she'll be happy to assist. Director McClung added that state law requires a major comprehensive plan update be conducted every ten years. Director McClung said she will be addressing Council October 5 with how to address the Sprague /Appleway Plan as it relates to the comprehensive plan, and said there is a range of options including revoking the entire plan, or just minor edits; and instead of having staff try to cover all options, she said it would be better to receive direction from Council on what it is council wants to accomplish; and said she will be providing council with the pros and cons for every option she can think of and then council can direct staff and thereby save time in getting to the achieved end product; and she mentioned Council Study Session Minutes, September 21, 2010 Page 4 of 13 Approved by Council: October 12, 2010 that Mike Connelly will be in attendance at the October 5 meeting and will provide council with options if there are specific items council wishes to address now instead of waiting for the entire process. Councilmember McCaslin asked that staff review RCW 35A.63.220. Mayor Towey invited public comments; no comments were offered. Vote by Acclamation: In Favor: Mayor Towey, Deputy Mayor Schimmels, and Councilmembers Gothmann, Dempsey, Grafos and Grassel. Opposed: Councilmember McCaslin. Abstentions: None Motion carried. NON - ACTION ITEMS: 3. Community Development Block Grant (CDBG) — Greg McCormick Planning Manager McCormick said that this is the time of year we start thinking about projects that would qualify for CDBG funding; he explained that several years ago a 20% set -aside was established for us out of the County's annual federal appropriation for our capital projects; and in 2009 this resulted in a set -aside amount of $310,000; which was used to partially pay for full -width paving on the Corbin Sewer Project. Mr. McCormick said the County has not yet received an estimate on the federal appropriation for the next funding cycle, and said staff anticipates providing that information to Council at the October 12 council meeting, at which time a public hearing will also be held to receive input on potential projects for consideration. It was noted that tonight is Mr. McCormick's last council meeting as he has taken a job in another city; and well wishes were extended to Mr. McCormick, as were thanks for his service to this city. 4. Chickens in Residential Zones — Kathy McClung Community Development Director McClung explained that last month a citizen requested Spokane Valley to adopt regulations to allow chickens in residential zones and during those comments, the citizen mentioned that the City of Spokane permits chickens in residential zones. Director McClung said while the City of Spokane does permit chickens in residential areas, they also limit them by requiring that they have to be housed 90 feet from any property line or center line of any right -of -way, which means the lots would have to be about 40,000 square feet; in checking with our code compliance officers, Director McClung noted we get one to two complaints a month, and typically these complaints come in shortly after the County Fair where people purchase chicks. There was some discussion about limiting the number of chickens to just a few, not to allow roosters, to require chickens be penned in so as not to wander on others' property. The majority of councilmembers had no objection to sending this issue to the Planning Commission for further review with a note from Mr. Driskell that if such regulations were to be enacted, we would need to look at the issue of enforceability, and said that noxious odors can be difficult to define. 5. Greenacres Park Support Resolution — Mike Stone Parks and Recreation Director Stone reiterated the history of the Greenacres neighborhood Park Development Phase 1 funding; and said that last May, Council approved the use of $200,000 from the Civic Facilities Fund to complete the City's local funding match; and the total needed from the City to start and complete the construction is $1,088,000; and explained that the Department of Public Works needs a council resolution conforming the City's commitment of $1,088,000 prior to signing the contract for the $200,000; and if Council concurs, Mr. Stone asked to place such a resolution on the next council's consent agenda. There were no objections from council. 6. SCRAPS Proposed Animal License Fee Increase — Morgan Koudelka Senior Administrative Analyst Koudelka said that Spokane County Regional Animal Protection Services (SCRAPS) is proposing increasing dog license fees with the intent of aligning their license fees with the City of Spokane in anticipation of Spokane joining SCRAPS; he explained the anticipated additional revenue is $128,000 based on the number of licenses remaining static; he mentioned if the County adopts the changes, the license fees would automatically apply to pet owners in Spokane Valley. Mr. Koudelka said if Council has any objections, to please let him know so the Board of County Commissioners can be Council Study Session Minutes, September 21, 2010 Page 5 of 13 Approved by Council: October 12, 2010 informed and if there are objections, we would come back next week for a motion consideration. There were no objections to the proposal. 7. Signage on I -90 — Neil Kersten Public Works Director Kersten explained that a request was made in April that staff research options for installing business signs at the Sprague Avenue eastbound exit from 1 -90; and he said staff submitted an analysis to Council as an informational item on the June 29, 2010 council agenda. Mr. Kersten explained that the Washington Department of Transportation ( WSDOT) has jurisdiction over I -90 signs, governed by regulations set out in the Manual on Uniform Traffic Control Devices (MUTCD), the Revised Code of Washington (RCW), and the WSDOT Traffic Manual; and Mr. Kersten explained the guide to signage as noted in his September 21, 2010 Request for Council Action form. There was discussion concerning the verbiage for such a sign to either read "Business route: Sprague /Appleway" or "Sprague Avenue /Appleway Business Route" and Mr. Kersten said he will check with WSDOT and report his findings to council. Mayor Towey called for a recess at 7:25 p.m. and reconvened the meeting at 7:35 p.m. 8. Winter Maintenance Contract — Neil Kersten Public Works Director Kersten said he got a little behind on preparing a Request for Proposals for the winter maintenance contract, and would like to continue with Poe Asphalt for this year; and said he will prepare a bid for snow plowing road graders; said the fleet we have can handle the arterials but we'll need backup for the residential areas; that this will give him another winter to more precisely determine needs as last winter was extremely mild; and said he hopes to get the proposals out in February or March, which will allow for plenty of time to get it done for the following fall. Regarding the Waste Management property, he reported he is working with some property real estate agencies and has looked at about five different properties, and will have a report to council in the future; and added that we need to use the current facility this year as he doesn't want to move now. Mr. Kersten went over several aspects of the contract and mentioned the costs changes from last year to this; and said the contract will come back before council soon, and in the meantime, said he is examining the summer contract as well; and council voiced no objections in bringing the contract back next week. Mr. Jackson said the contract with Waste Management runs through September, 2012 unless cancelled with a twelve -month written notice by either party- 9. Spokane Regional Transportation Council (SRTC) Congestion Mitigation & Air Quality (CMAQ) Projects —Neil Kersten Mr. Kersten explained about the various project considerations for submission in response to a Federal Congestion Management Air Quality (CMAQ) call for projects, which anticipated allocating $10.5 million for the 2010 -2012 funding cycle; after which Mr. Worley asked if there were any objections to staff preparing for the grants, which are due Friday. There were no objections from council. 10. Pre -Call for Regionally Significant Projects — Neil Kersten Senior Engineer Worley said this information was included in Council's packet last week, at which time this was a "pre- call" for projects since the official call had not come out yet; since then the official call came out from the SRTC (Spokane Regional Transportation Council) for projects of regional significance. Mr. Worley explained that Washington State Transportation Commission sent a letter to all the regional transportation councils asking for a list of top twenty transportation projects, and that they wanted the list submitted to the State in November; he said the SRTC has been working to identify criteria to use to identify which projects in this region would be considered to be of regional significance. Tonight's information, he explained, is relative to the list of projects submitted last year for this same call; he said the Washington State Transportation Commission is putting out this call as they feel the State of Washington will be pursuing another gas tax revenue package, and if that occurs, there is the possibility they may identify projects off this regional significance list and fund transportation projects in different Council Study Session Minutes, September 21, 2010 Page 6 of 13 Approved by Council: October 12, 2010 areas of the state; and said staff is working now to try to identify which projects within the City of Spokane Valley might be considered regionally significance, and staff would then submit those to SRTC to have our projects compared with projects from other jurisdictions. Mr. Worley said these types of projects are generally those which benefit more than one jurisdiction, and would be the type of project to increase revenues to the local jurisdiction or to Washington State, by such things as sufficient movement of freight, and increase in development opportunities for property tax and/or sales tax. Mr. Worley said they used the list they presented last year as a starting point; and we went over some of the proposed projects; and asked if council would like to include any projects they feel would be regionally significant; or if council prefers to change the list that is council's prerogative, and said the deadline to submit the list is next Wednesday. Mr. Worley added that staff received a notification from the Freight Mobility Strategic Investment Board, which is a state agency which funds freight related transportation projects, and the notification informed us that both of our applications for two projects were selected for funding by the state; one was the Sullivan Road West Bridge, where we requested $3.8 million to use as matching funds for a federal grant we applied for, and it was recommended we receive a $2 million award; and the second project was the Barker Road Grade Separation Project, and it was recommended we receive $10 million of state funding for that project. Mr. Worley said these were the recommendations from their selection committee and the Board determination has not yet been announced; and said the projects are not submitted in any priority, but once submitted, the projects are ranked so the top twenty projects can proceed further. Councilmember Grafos brought up the Appleway Extension project. Mr. Worley said regarding that project, there must be justification for the project, and by further explanation, said whenever a road is going to be built that is federally classified, like Appleway Road which is a principal arterial, there must be a purpose and need, and a support for that roadway; and said now the support for that extension of Appleway is SARP; and said if there is no SARP, there would be no Appleway Extension project; and Mr. Grafos said he would like to take that project off the list. Deputy Mayor Schimmels said that STA has a meeting the first week of October which should shed some light on what their thoughts are regarding the Appleway Extension. Mr. Kersten said that meeting was postponed until early November; and he added that the Appleway Extension would be a major project; and that project scored high last year. Councilmember Gothmann said he feels that project should be removed from the list since we cannot justify it based on a city center or on traffic flow. Mr. Kersten said if warranted, the project could come back on the list in the following year. It was determined that the Appleway Extension project would be removed from the list; and council concurred to keep the remainder of the projects on the list. 11. Code Revision, Assessment Reimbursement District — Cary Driskell Acting City Attorney Driskell explained the history behind an assessment reimbursement district and the purpose for such district, as per his Request for Council Action Form; and said the current notice and hearing procedure set out in Spokane Valley Municipal Code (SVMC) 3.75.050 references Chapter 10.04, which no longer exists as that was recodified with the adoption of the Uniform Development Code in 2007; and to update the Code, we would change that reference to SVMC 17.90. Mr. Driskell said as there were no council objections, this will be scheduled for a first reading on a future agenda. 12. Budget Comparisons — Ken Thompson, Mike Jackson City Manager Jackson said staff is here to discuss budget comparisons; that a few weeks ago we were asked to look at the budget and to look for areas in the budget which had had increased by 5% or more over the last few years; and said we went back to 2007 because in a few departments, there were significant events which occurred earlier, and this way council would have a deeper history of the budget figures. Mr. Jackson said that at various times, Council questioned staff about the basis of the budget reductions, and that we were basing the reductions on the 2011 forecasted amount. Mr. Jackson said he asked Senior Administrative Analyst Koudelka to perform some research, and what was discovered by contacting Spokane County and the City of Spokane, is that they also base reductions on their 2011 forecasted amount. Mr. Jackson said that the City of Spokane Valley has currently reduced the 2011 Council Study Session Minutes, September 21, 2010 Page 7 of 13 Approved by Council: October 12, 2010 projected budget by about 5% or $1.8 million; and said in looking at Mr. Koudelka's research, the City of Spokane is proposing a reduction of 3 %, and Spokane County is reducing its projected 2011 expenditures by 2 %; and said even though we hear larger numbers from those entities, it is because they have larger budgets, but percentage -wise, it should be noted we are making some rather large cuts, in spite of the fact that we have reserves; and he noted we are not quickly going to the reserves to offset some expenses, and are in fact, making some pretty dramatic cuts compared with other entities in our area. Mr. Jackson said the budget before council shows 7.5 full time positions reduced, but we are going to reduce that by 8.5 as we determined we could remove the additional position; and said that none of those positions are currently filled; and by removing those 8.5 full -time positions, that equates to a 9% reduction in our city's workforce; and in contrast the City of Spokane, which we heard was reducing their staff by 44 employees, that represents a 2% reduction in their workforce; and said that for comparison purposes, we are making at least as large cuts as are our neighbors. Human Resources: Mr. Whitehead, Human Resources Manager explained that we have seen a decrease in retirement contributions because the state actuary changed which reduced our contribution rate as an employer; he said the City has used a 2.5% increase over time through the years, which has combated some of the effects of inflation as well as other costs that employees might have, such as contributing to their health care plans; that there were two increases in January 2010; one was 2.5% and the other was a 3% increase which was a structural adjustment to the compensation plan, which increase was in response to where we saw our compensation slipping compared with other organizations as well as to the inflationary rate over that period; health care costs usually have between seven and ten percent increase annually; and he said we were notified that we can expect approximately a 10% increase in health care for 2011. Mr. Whitehead said since 2006, employees pay a percentage of the increase of health care; and employees have the option of choosing a lesser cost plan, which when such choice is made, the employer contribution is also reduced. Mr. Whitehead said the retirement costs were lowered from about 1.5 to 2% last year, and said as Mr. Thompson mentioned, we are setting funds aside since we know there will be an increase in the future in those contribution rates on both employer and employee contributions. He said in looking at the 2011 budget, overall the labor costs will be reduced by approximately $700,000, which includes the reduction of 8.5 full time equivalent (FTEs), and that there are some positions which we will hold vacant in 2010. Legislative Branch Mr. Jackson said the biggest change was from 2007 to 2008 which increased that budget from $242,000 to almost $320,000, which is a 32% increase; and said the reason for that was the city hired a lobbyist, and said the initial fee that year for the lobbyist was $30,000, which is now about $36,000; and said the City added $6,000 in professional services and the salaries of the Mayor and Council were also increased at that time by 50 -60 %; he said through 2011 those budget figures have remained mostly flat with a slight increase in 2011, which is likely due to minor changes due to changes in council. Legislative and Executive Mr. Jackson said this is the City Manager department; the increase came in 2007 and 2008 with a 13% increase taking the budget from $881 to about $997,000; and said at that time the city decided to hire a full time deputy city clerk where previously there was a half -time position; and also hired a legal administrative assistant where there had been no administrative assistant for the legal department prior to that time; and said thereafter, the budget has remained fairly flat with a reduction in the 2011 budget over the 2010 budget. Public Safety Senior Administrative Analyst Koudelka explained that public safety comprises 60% of the general fund budget and said that from 2009 to 2011 there was a 6.4% increase; and in looking at the entire budget between 2009 and 2011, if public safety was removed, then the rest of the budgets decreased by $450,000 over that time period. Mr. Koudelka said that public safety is different from in- house departments as most services are provided through contract with Spokane County; he added that these are not and were not fixed cost contracts; in examining the five -year period, he said there was a Council Study Session Minutes, September 21, 2010 Page 8 of 13 Approved by Council: October 12, 2010 larger increase from 2008 to 2009 and said a contingency was included that year which was the result of accumulating reconciliations that had not been performed to law enforcement and corrections as a result of billing discussions with the county, and said that contingency remains through 2010 and 2011; he said the process he goes through in determining the public safety budget is mainly in relation to these contracts, such as criminal justice, and said he takes a five -year history of costs that the county has provided, and determines an annual growth rate and applies that to the current year's costs to get next year's costs. In looking at the difference, he said between 2009 and 2010, the increase was a result of union - negotiated salary increases of 20% in the prosecutor's and public defender's offices, that Geiger shifted all home monitoring costs to the jurisdictions which costs had previously been paid by the participants; and daily rates for work crews, work release and home monitoring increased respectively by 48 %, 42% and 148 %. Mr. Koudelka said our usage rate in all contracts increased due to a large reduction in state patrol cases; that the County is responsible for those cases generated by the state patrol, and since the County did not adjust their budget, once the State cut back the patrol and generated fewer cases, the result is, even keeping the same number of cases, we would comprise a larger percentage of the overall usage of those contracts. Mr. Koudelka said the county had two years of cost of living adjustments, plus a large PERS rate that occurred all at once; they were behind in union negotiations and when those were settled, the figures were retroactive; costly pre -trial software was implemented, additional communications, FTE and with more hours allocated to law enforcement, county -wide campuses costs increased by 48 %; and he said as a result of all that, we were hit pretty hard and all that had an effect on subsequent year's budgets as well. He explained that in 2010, the County made some budget reductions and as a result we are looking at projecting cost expenditures for us that are $275,000 less than what we budgeted for in 2010; and for 2011 and moving forward, he said the County is projecting additional decreases that we hope will affect us as well. Mr. Koudelka said there are still multiple years of jail and law enforcement contracts that we are attempting to resolve; that we are close to resolution, and hope the financial impact will be favorable, but said we reserve some contingency for those expenses if needed; adding that we added a new administrative lieutenant as well as two other FTE's to the 2010 budget. Mr. Jackson said the contract was recently increased by about $1.3 million, but that has been offset by some reductions in other county costs. Deputy City Manager Mr. Jackson said the major increase occurred in 2007; that in 2007 and 2008 the city was developing and we did a number of customer service plans and evaluated the need within the city for additional positions, and at that time resulted in about a 21% increase which was mainly due to the addition of an administrative analyst position which was greatly needed; he said we manage about twenty -five complicated contracts, and the analysts review those monthly to make sure we are paying the correct amount, and their work typically saves us considerable funds in corrections they discover. He said the budget stayed fairly flat with a small increase in 2009 and a decrease in 2010 and again in 2011; with the primary reduction in 2011 was to eliminate the unfilled administrative assistant position. Finance Mr. Thompson said the main increase in this budget over the last four or five years is that we added three additional employees: a project accountant, an accounts payable technician to keep the bills paid on time, and a new accountant, which was not actually added although that position showed up in the 2010 and 2011 budget, and said this is the position we would use to help with our annual financial report; he said one of the things we are not doing but need to do, is examine the sale tax returns for the retailers. He explained that the coding numbers are easily exchanged resulting in our taxes going elsewhere, or someone else's taxes coming here, and without monitoring those fees, we run the risk of losing sales tax funds. Mr. Jackson said Mr. Thompson had two new positions this year, and the accounting technician position was one of those eliminated unfilled positions, and once the budget is approved, we will move to fill that second position. Mr. Thompson said almost everything done in finance is required by federal, state or local ordinances; he said things we do which are not required include funding of outside agencies, and said nineteen agencies submitted their requests for funding in 2011. It was noted we have six months to try to recover lost or misappropriated sales tax. Councilmember Grassel asked if this was something we could have an accounts temp service perform, and Mr. Thompson said that likely would not work Council Study Session Minutes, September 21, 2010 Page 9 of 13 Approved by Council: October 12, 2010 since it must be someone who is familiar with the procedure; he said several years ago we worked out an agreement with the County who has an expert who was keeping track of which retailers and how they report; and we hired her for three days; that it cost us $600 or $700, and she found us over $100,000. Human Resources: Mr. Whitehead said the changes from 2007 to 2011 shows a significant jump from 2007 to 2008; that a half -FTE was added to the Human Resources Department in 2008, and the HR Manager position was added also in 2008; and also during that time, city training was consolidated into the HR budget, making it easier to track training funds. It was moved by Councilmember Gothmann and seconded to extend the meeting to 9:30 p.m. Vote by Acclamation: In Favor: Mayor Towey, Deputy Mayor Schimmels, and Councilmembers Grassel, Grafos, Dempsey and Gothmann. Opposed: Councilmember McCaslin. Abstentions: None. Motion carried. Public Works: Director Kersten said the big change in his department occurred in 2007; at that time development engineering was in the Public Works Department, and it moved to Community Planning, so from 2007 to 2008 three staff moved reducing the budget by about 31 %; and in 2008 there were eleven staff in public works which has not changed since; and the increases each year are the result of personnel cost increases. Community Development: Director McClung explained that as mentioned by Mr. Kersten, in 2007 some of the Public Works staff was moved to Community Development, and that change didn't show up in the budget until 2008; at that same time, the City did some work with the development community as there were a lot of complaints about the amount of time it was taking to process permits, and it was determined additional staff was needed and about six positions were added primarily to improve the permit turn- around times; those personnel changes she said had impacts to the 2008 budget; in 2010 she was asked to make some suggested changes to reflect the decrease in projected permit revenue, and said that was when they loaned an engineer to Public Works, and have now decided to make that a permanent move; and that staff took on some additional responsibilities from other departments, and cut a lot of the consultant fees where we were paying out and started doing more in- house, and cut half of an administrative assistant position. Director McClung said with the changes in the elimination of the consultant fees and the elimination of some positions that have left and have not been filled, that explains the reduction for the 2011 budget. Director McClung also explained that for 2009, the budget was not increased but was in fact, cut in line items and she said she reorganized the budget showing an admin division, a development engineering division, and building and planning as before only long -range planning was in the planning budget with the rest in building, resulting in the mangers not having control over their own budgets; and explained that she separated it to give the control where it was needed. Parks and Recreation Mr. Stone, Director of Parks and Recreation, said his budget has increased and decreased over the years in a number of areas; that his department has six divisions: administration, maintenance, recreation, aquatics, senior center and CenterPlace; and said many times administration and maintenance budgets are combined; he said his Department has had no permanent staffing increases since 2007; there are still nine full time employees: two in parks, one in recreation, one in the Senior Center, and five in CenterPlace. He said the administrative division has had no significant increases since 2007; that there were some reductions in the maintenance area due to the reduction in the parks maintenance contract with Senske Lawn & Tree; he said the number of times the parks are being used has increased significantly, but the bid from Senske was actually lower than the previous year; in 2010 the Discovery Playground was added to the maintenance section, but the budget for 2011 will still be less; and said for at least part of 2011, Greenacres Park will be added to the maintenance contract. In recreation, he said expenditures have increased slightly since 2007, which was primarily due to the increase and addition of new programs and services provided in recreation, as well as major changes made to the recreational brochure, and added that the revenue has increased as well and said the recreation programs recover 100% of the cost; he said some new programs were added such as a free movie night, the Haunted Pool, Council Study Session Minutes, September 21, 2010 Page 10 of 13 Approved by Council: October 12, 2010 and various classes. Mr. Stone said the aquatics budget increased approximately 6.5% since 2009 when three new features were added to each of the three pools; he said that brought increased attendance and increased our contract with the YMCA which maintains and operates our system; which required additional staffing and an increase in water utilities; and said that the aquatics program is the most heavily subsidized program we offer, which is not unlike all aquatic programs throughout the nation. Mr. Stone said the senior center budget has decreased since 2009; that there have been some significant changes in CenterPlace since 2007 when two positions were added to cover the increasing workload, one of which was a maintenance position, and he said in 2007 we also acquired the police precinct and the maintenance position covers the precinct as well; an additional administrative assistant was added then as well to CenterPlace to handle the increased number of reservations and to help centralize all the reservations into one system. Mr. Stone said in 2008 CenterPlace was asked to begin paying $317,000 annually for building replacement funds through the interchange fund, which is a charge we pay to the city to replace our building; and during 2008 the City had just completed a new marketing plan for CenterPlace and the council was concerned about implementing the marketing plan, so we started using funds the city was receiving through the lodging tax for CenterPlace, 100% for promotion and marketing. Mr. Stone said the CenterPlace budget is down in 2011 and said they are removing the majority of those marketing and promotional funds as a budget decrease. Councilmember Grafos asked if there is a way in the future to break out the contracts so the annual administrative costs can more readily be determined; and Mr. Stone said that is something he has advocated for; that it is broken down but with this information, it was combined; and Mr. Jackson said Mr. Thompson indicated this can be broken out in the future. General Government Finance Director Thompson said the general government budget is a place where we collect costs the city has to pay, which costs don't seem to fit elsewhere in the budget, such as the audit costs, maintaining the computer network, paying for insurance, city hall rent, records management, and funds we are setting aside to pay future retirement costs. Mr. Thompson said the big change in 2011 can be seen by looking at the 2007 figure of over $5 million, when we were transferring funds out of the general fund to build those reserves such as city civic facilities reserve, winter weather reserves, etc., and in looking forward to 2011, the large jump is $2 million, with the $1.5 million coming out of civic facilities to be used for the full -width paveback on top of county sewer lines; and $.5 million from civic facilities to use for street capital projects, or preservation projects, or maybe as a match for federal and state grants. Councilmember McCaslin said that some time ago, they discussed how uncomfortable their chairs are, and he recommended we borrow the chairs from upstairs. Mr. Jackson said we don't own those chairs but we could come back to Council with some chair prices and choices; and Councilmember Dempsey said she would also like to not need a pillow to sit on. Concerning the library line item, Mr. Thompson said when we got started, we hired the Library District to run the library for us; he said state law allows cities to levy an extra 50¢ per $1,000 if you run a library; which is what we did and that was what we paid the Library District; and said we are still just making the final payments to the Library District as the tax dollars come in from people who have been late on their taxes. Councilmember Gothmann said he feels it would be beneficial if Mr. Jackson would explain the history of the business plan and why those positions happened in the fifth year of the city; that it came out of a detailed study and said we had been over working our staff prior to that. Mr. Jackson said that this is the fourth year of our business plan and that our customer service improvements began in 2007 with the major emphasis on the planning and permitting department; and as explained, there were many changes made to streamline the process; and as the business plan was developed the mindset was, we were a developing organization and the department heads spent a great deal of time meeting with their Council Study Session Minutes, September 21, 2010 Page 11 of 13 Approved by Council: October 12, 2010 employees, doing a SWOT (strengths, weaknesses, opportunities and threats) analysis to determine where additional personnel were needed; and about the time we started to implement the plan, it was cut back severely and since that time we have been in more of a holding pattern, and with the reduction in services, that has been appropriate, but he said not all departments have a reduction in services, and said that last year Public Works had a very busy year in terms of projects; and summarized that the intent of the business plan is to have staff align the resources necessary so we can make council aware of what is needed; and said we complete the business plan prior to the budget adoption, and after the budget adoption, we go back to the plan and make adjustments based on the actual budget; that the plan is more of an internal planning tool for staff, and is in a constant state of change. Street and Stormwater Funds Public Works Director Kersten said that about 60% of the projects under general public works, are designed by consultants, and the other 40% are done in -house and said where typically Spokane City and County design 100% of their projects and are fully staffed, when a decline hits they can't shift around some of the workload to cover everything and during the decline, they end up with too many staff. Mr. Jackson mentioned that a large portion of the engineering staff is paid for by the projects funds; and Mr. Kersten said all the staff who work on grant projects, about half their time is charged directly to grants so it doesn't show up in the general fund; and the rest of the time we try to get projects designed and on the shelf to make us more competitive for grants. Concerning the street fund, Mr. Kersten said in 2007, 2008 and 2009, we were lacking revenues with basically only gas tax as a main source of funds and we tried to keep those budgets low; in 2008 he said we spent $5.3 million — which is the year we had the very heavy snow in December, and still received a lot of snow in 2009 with spending about $4.9 million then; in 2007 and 2008 there were four and a half staff, and in 2009 we changed a half time staff to full time; and in 2010 we had the utility tax come into effect which gave us more funds; and said the street fund went up about $1.8 million, with about $1 million of that being an energy grant; and there was a onetime payment to pay back the general fund from previous years, and a $150,000 one -time cost for an ADA (Americans with Disabilities Act) study. Mr. Kersten said about 10% of the street fund is staff, with the rest in contracts, and said they manage about eight different contracts. Concerning the stormwater fund, Public Works Director Kersten said there were seven staff in 2007 and that didn't change until this year when we added the other half -time person for the maintenance /inspector position to run the snow plows; and in the street fund there were five positions in 2010, and that was decreased by one position, but bumped it back up one -half. He said stormwater was fairly flat, went up 4% in 2008, 5% in 2009 due primarily to contract work, and in 2010 it went up 14% which is mainly to cover increases in stormwater repair work. Mr. Kersten said they found many flooding and problem areas with the stormwater and they are fixing those; and said they budgeted to increase the maintenance on the drywells; he said there are about 8,000 drywells and another 2,000 catchbasins, which had never been cleaned; he said many were full of debris and failed; and said with the current budget, they have cleaned about 300 or 400 a year; and they are working on a drywell maintenance schedule based on the location of the drywells. Mr. Jackson said Council also asked for a review of the ending fund balance over the past several years, and said Mr. Thompson will discuss that. It was moved by Deputy Mayor Schimmels and seconded to extend the meeting to 9:45 p.m. In Favor: Mayor Towey, Deputy Mayor Schimmels, and Councilmembers Grassel, Gothmann Dempsey, and Grafos. Opposed: Councilmember McCaslin. Abstentions: None. Motion carried. Ending Fund Balance: Mr. Thompson explained that if you looked at the 2003 budget when we incorporated, and looked at all the revenue that came into the city, and subtracted each year all the expenditures, the remaining money is the fund balance, and said he is only speaking of the general fund. Mr. Thompson explained that in rounded numbers, the ending fund balance for 2006 was $8.7 million; 2007's was $13.7 million; 2008's was $21.7 million; and the fund balance at the end of 2009 was $24.6 Council Study Session Minutes, September 21, 2010 Page 12 of 13 Approved by Council: October 12, 2010 million. Mr. Thompson further explained that things look pretty good in the general fund; that we are planning on spending some of that over the next few years unless our revenues equal the expenditures, in which case it could stay as it is; and reminded everyone that these figures are for the general fund only, and if he were to add in all the other funds, it would give us an additional $20 million or about $40 million total city -wide on hand; and said some of those funds can only be spent on specific items, such as stormwater and street funds can only be used for stormwater and street purposes respectively. Mr. Jackson said if council is comfortable with the schedule, we will continue with the budget process with a public hearing scheduled for next week, along with the first reading of the ordinance to adopt the budget. There were no council objections to continue as scheduled. 13. Advance Agenda — Mayor Towey Mayor Towey mentioned the staff /council city tour this Thursday; and said he would like to add a discussion of the wastewater issues to the October 5 meeting, and mentioned the Aquifer Protection Area Interlocal and said we have $469,000 which is available to us after 2011; and said if we decide to take those funds it would raise all sewer rates, and said he feels this topic warrants further discussion. Councilmember Grafos asked to also add to the October 5 agenda, a report concerning the Senior Center Ping Pong controversy; and Mr. Jackson reported that he met with several of the players and Mr. Stone met with the Senior Association Board, and the issue can be further discussed during the October 5 meeting. 14. Council Check In — Mayor Towey Councilmember Grassel said she attended the GSI (Greater Spokane, Inc.) annual meeting and heard a presentation from a representative from Alaska Airlines; and GSI announced that the Jigsaw Company is coming to our city; and attended last Saturday night's Art Council Fundraiser. Councilmember McCaslin asked if legal staff has any additional information about the gain sharing decision; and Mr. Driskell said they are working on gathering that. Councilmember McCaslin said this amounts to a $7 billion problem, and said many people don't realize the seriousness of the problems in Olympia. 15. City Manager Comments — Mike Jackson No comments. There being no further business, it was moved by Deputy Mayor Schimmels, seconded and unanimously agreed to adjourn. The meeting adjourned at 9:40 p.m. 24 r ATTEST: Christine Bainbridge, City Clerk E. T Council Study Session Minutes, September 21, 2010 Approved by Council: October 12, 2010 Page 13 of 13 City Manager Compensation Survey (AWC) c Bellevue .(120,.600) Bellingham .(76,130) Everett.(103,500) Federal Way (88,580) Kennewick (67,180) Kent (88,380) Lakewood :(58,840) Pasco (54,490) Renton (83,650) Shoreline (54,320) Spokane (205,500) Spokane Valley (89;440) Tacoma: (203,400) Vancouver (164,500) , Yakima :(84;850) Averages Median Executive Officer Compensation .(Spokane :MSA)* Title City Manager Chief Administrative Officer Chief Administrative Assistant City Manager City Manager Chief Administrative Officer City Manager City Manager Chief Administrative Officer CityManager City Administrator City Manager City Manager City Manager City Manager *Source: Washington State. Employment Security Department Salary. Range Low High Flat Rate $17,983 $10,.125 $9,831 $12,806 $12,669 $8,336 $12,315 $9;461 $13 $12,629 $12,149 $10,900 $.13,272 $13,99'1 $10,927 $13,841 $15;300 $19,614 $14,304 0 $9,559 $11,618 w rt $10,565 $13,812 $131180 0 rn 0 n $12,983.00 OrQ ,sr w rt P Employment Security Workforce Data Hourly Monthly Annual Median Executive Officer wage in Spokane County* $75.51 13,088 $157,060.80 Average Executive Officer wage in Spokane County* $85.41 14,804 $177,652.80 *Source: Washington State Employment Security Department forkforce Explorer, Data Librar http:/ /www.workforceexplorer.c( —/cgi /dataanalysis /oes WageReport.... Home l My Labor Market Info I Career Center Search: f ..........._.__ .... -- ......_, ._ .............. Advanced Search © Customers Business Owners / Employers Job Seekers News Media Research Analyst Students Teachers /Counselors Workforce Professionals 0 Data Dashboards Industry Trends Numbers and Trends © Press Release Info Current Employment Situation • Publications Publications & Reports Page • Interactive Tools Assessments Career Clusters Find Employers Local Employment Dynamics Occupation Explorer Training Programs Training Providers • Wages & Training Training Resources Wage and Benefits Information Glossary © Select Data Type All Data Types Consumer Price Index Occupational Wages Restart II Back Save: Results I f Download Help with Download Page 1 of 1 (20 results /page) Yea ;Period Area Ind Occ F Industry Occupation� Wage Rate Median Source aCode %Code aTypeNAWages Spokane 000000 Total, All 111011 Chief BLS OES Wage Hourly $75.51 2010 Mar MSA Industries Executives Wage Survey Home I Site Map I Feedback I Contact Us I Help I Privacy Policy I Terms of Use 0� I of') 9/14/2010 1:03 PM City of Spokane Valley - Retirement Systems All Regular Employees 2010 Public Employee Retirement Systems (PERS) - Through the State of Washington, the City offers two plan choices and contributes 5.31% of an employee's base compensation to the plan of their choice. Vesting in these plans occurs after 5 years. 401(a) As a Social Security substitute the City and the employee are required to contribute 6.2% to these accounts. There can be no other contributions exceeding the 12.4% aggregate. After age 55 and leaving City employment, employees may begin withdrawing the value of their account. This account vests after one year of employment. 457 The City offers a deferred compensation plan to allow employees to defer income into a retirement account. The City has not contributed to these accounts for regular employees. This plan has flexibility for employees as they can change their contributions at any time and may withdraw once no longer employed by the City. Max yearly contribution is $16,500. City Manager (Exceptions) 457 The City offers a deferred compensation plan to allow employees to defer income into a retirement account. The City has historically contributed a percentage of the City Managers base compensation to this account. This plan has flexibility for the employee as they can change their contributions as any time and may withdraw once no longer employed by the City. 401(a) Executive Historically the City has contributed a percentage of the City Manager's base compensation to this account. The vesting of this account has been immediate and the employee can make withdrawals at age 55 and after leaving employment with the City. Max yearly contribution for all 401 (a) accounts is $49,000. CITY OF SPOKANE VALLEY GENERAL FUND ENDING FUND BALANCE AT 12 -31- 2006 $ 8,706,611 2007 $ 13,747,197 2008 $ 21,692,296 2009 $ 24,597,004