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2012, 04-19 Special Jt with Spokane City MINUTES Special Joint Meeting Spokane Valley City Council and Spokane City Mayor and Council Thursday, April 19, 2012 8:30 a.m.—11:30 a.m. Spokane Valley City Hall Council Chambers 11707 E. Sprague Avenue, Spokane Valley,WA Attendance: City of Spokane Valley Spokane City Tom Towey,Mayor David A. Condon,Mayor Gary Schimmels, Deputy Mayor Ben Stuckart, Council President Dean Grafos, Councilmember Mike Fagan, Council Member Brenda Grassel, Councilmember Steve Salvatori, Council Member Chuck Hafner, Councilmember Amber Waldref, Council Member Ben Wick, Councilmember Arne Woodard, Councilmember Staff: Spokane City Staff Mike Jackson, City Manager Mike Piccolo,Attorney to Council Cary Driskell, City Attorney Gerry Gemmill,Acting Public Works Director Mark Calhoun,Finance Director Rae-Lynn Conger,LA* to Council Member Allen John Hohman, Comm Dev. Director Sheryl McGrath,LA*to Council Member Fagan Mike Stone,Parks&Recreation Director Lenore Stark,LA*to Council Member Salvatori Kelly Konkright,Deputy City Attorney (*Legislative Assistant) Morgan Koudelka, Sr.Administrative Analyst Steve Worley, Senior Engineer Rick VanLeuven,Police Chief Carolbelle Branch,Public Information Officer Chris Bainbridge, City Clerk Mayor Towey called the meeting to order welcomed everyone, and explained that Spokane City Council Members John Snyder and Mike Allen had a scheduling conflict with today's meeting, and Spokane City Council Member Nancy McLaughlin was feeling ill and sends her regrets.Mayor Towey said that today's meeting is informal, and after everyone at the table introduced themselves, discussion began on the topic of regional animal control. 1.Animal Control Mayor Towey began by explaining that the Board of County Commissioners had requested our city join in the coalition for regional animal control, and that we understood the City of Spokane was considering what would be best for their city and their citizens regarding animal control. Councilmember Woodard added that concern for the animals' welfare should also be considered. Council Member Salvatori said they would like to work together and hopes that it makes sense to do so;that they remain open to the idea while they await overall financial information, and said it is appealing to have one place to go instead of multiple places, adding that their reservations are more economical than anything else. Mayor Towey explained that Spokane Valley uses SCRAPS, and said the contract has worked well,that the overall costs have actually gone down over the years, and the problem is their facility; that it has no sewer, can't expand and is simply no longer workable; and in contrast, he said relatively little is known about SpokAnimal and said they would like to know more, Mayor Towey said SpokAnimal approached our Special Joint Meeting: 04-19-2012 Page 1 of 5 Approved by Council: 05-08-2012 city about talking with them about adding the responsibilities of our city's animal care, but he is concerned about their ability to handle the capacity now and in the future; he said the question for our council is whether we want to own a facility, even if it were in a partnering capacity. The discussion continued with comments about the pros and cons of a regional facility, including service, space, and overall financial concerns, with Council Member Waldref mentioning that over her last two years on council, she hasn't received any complaints and their relationship with SpokAnimal is good, although she shares some concerns about their facility size and that it appears costs increase annually. Several members from both councils mentioned they thought it a good idea to have one location,but also want to know the long-term costs, and it was mentioned by Councilmember Woodard that SCARPS' use of volunteers helps keep those costs down. Councilmember Grassel mentioned Spokane Valley Council sent a list of questions to the Board of County Commissioners, and asked if Spokane City had done likewise. The answer was they had not and copies of the Iist of questions and answers were distributed to members of Spokane City Council. Councilmember Hafner also noted that at a previous Spokane Valley Council meeting, the issue came down to whether Spokane City will participate, and said it appears the Board of County Commissioners needs a decision by July 1St,which he said is a short timeframe. Council President Stuckart said the Board of County Commissioners informed them that Spokane City's operational expense would stay level; so this becomes a value-based decision; and he said that Spokane City is doing an inventory of all the buildings they own and said he is not interested in owning another building which leaves them talking about a long-term lease, which would be on top of their current operational cost of about $160,000; and he asked rhetorically how that weights with a$10 million deficit, and to also weigh all that with services. Council Member Salvatori said they did not realize that SpokAnimal approached Spokane Valley, and he asked about putting out a county-wide RFP (request for proposal) and Councilmember Grassel said she too likes that idea;that at one time the County Commissioners were talking about a much more expensive building and the issue failed at the ballot box; but said now they have identified a building for $2 million with $2.5 million in upgrades; and said she is also not interested in owning a building, but that the main goal is to provide excellent service for citizens, and excellent care for the animals. There was further discussion about issuing an RFP, and seeking input from the Veterinarians as well, with President Stuckart mentioning that an RFP would force the parties that want the business, to lay out the proposals so that all options could be considered and evaluated including cost and capacity now and long-range;and suggested perhaps working together on writing the RFP. In asking City Manager Jackson about that possibility, he responded that staff had not considered the issue from that perspective, and that perhaps members from both staffs could get together, adding that this would also depend on whether the Board of County Commissioners views themselves as a vendor to simply respond to an RFP; and said the staff members can explore that suggestion and report the outcomes to both councils. The July 1 deadline was mentioned and Mr. Jackson said he feels staff could come back within a few weeks, but will research the issue further. The question arose whether SCRAPS has a deadline to be out of their building, and Mr. Jackson said eventually they will be charged rent from the County Road Department. At approximately 9:10 a.m., Mayor Towey welcomed Mayor Condon and gave a brief a synopsis of what had been discussed thus far. Mayor Condon gave his apologies for his late arrival, said one issue they need to decide is what they want, then put it into an RFP; he said they have a task force with three key staffers looking at all the options of a consolidated cooperative model and there is some concern in looking at what they have been paying and starting from there, and said that he prefers to start fresh and not make a determination based on what they have been paying. Council Member Fagan added that since Spokane Valley has a July 1 date to make a decision, he feels this has been elevated as far as a sense of urgency. Mayor Condon talked about the idea of doing a capital campaign in the private, non-profit sector; to perhaps have a non- profit own the building and we pay for services within the building; or suggested the idea of raising some money for the capital expenditure and said some might be willing to donate on a capital facility. When Special Joint Meeting: 04-19-2012 Page 2 of 5 Approved by Council:05-08-2012 the question of donations was asked of SCRAPS Director Nancy Hill, she replied through their SCRAPS Hope Foundation, a 501C3 non-profit organization, they receive about a quarter of a million dollars in donations. Ms. Hill also stated that the SpokAnimal facility is smaller than the present SCRAPS facility; that she doesn't know their exact count on the number of animal runs, but SCRAPS is larger. Council President Stuckart replied that means either option would require some capital expenditure, and perhaps it would be good to timeline out the RFP process or see if there is consensus for that. City Manager Jackson suggested the two staffs get together and see what might be worked out. Ms. Hill also noted that County Commissioner Mielke is currently working to develop two draft interlocal agreements, one for building acquisition and retrofitting, and another with animal operational costs and said those are being reviewed by Attorney Emacio; she said those agreements will outline the financial aspects of what a regional agreement could look like, and said at least that is a starting point. In response to a question about how soon the staff members could get together, City Manager Jackson suggested a time frame of approximately two weeks and then determine if it is feasible to move forward. 2. Solid Waste System Council Member Fagan stated that he has another appointment and must leave at 9:30, and explained that they have been approached by the Board of County Commissioners about taking a regional approach to this issue; that the Waste-to-Energy Plant is paid for this year and said it would be a shame to see those services go to waste; that he is a proponent for regionalization but the Waste-to-Energy plant is an important asset that should be protected; and said if that is not the case, Spokane needs to do some serious thinking of alternatives; he said he understands other cost effective methods have been explored, such as trucking the waste to a different county; and said he realizes they will have to compete; but that he feels it would benefit the County as a whole and help keep garbage disposal costs down. Council Member Fagan then excused himself and left the meeting. Council Member Waldref asked about the status of this issue, and said the last she heard was that all jurisdictions were discussing potentially creating a consortium, or a bid for services, but said she hasn't seen a proposal or anything official. Council Member Salvatori explained that he is on the liaison committee and on the SWAC (Solid Waste Advisory Committee)Board, and mentioned the concern about determining the tipping fees; he said there is now a separate sub-committee task force to come up with a scope document for a consultant to determine if the plant operates 100% efficiently as possible, from transfer station to burners, what would the tipping fees look like; or even at 90% or 80% efficient; he said it is difficult to discount long-haul if the tipping fees are unknown and feels the top priority is to examine the pricing,then discuss some of the other aspects such as hazardous waste or recycling. Deputy Mayor Schimmels said that the task force is moving but is close to running into a wall and that they feel they should back up a little and insist the City look at that plant as an affordable service to the public; he said they can't hire a consultant without an educational process and do the findings for that consultant; and said if they did the findings, it would cost money and "take forever." Deputy Mayor Schimmels also stated that the information needs to be graded by importance; he said they are losing tonnage because of recycling and they need to figure out how to reconvert that; he said the plant is a good plant and perhaps would be good for another ten years or perhaps even 20; and said there has always been the doubt about what it really costs and now since the debt is gone, the question is open; he said the tipping fees were raised $4 this year. Council Member Salvatori said they want to find a way to run the place efficiently and competitively to attract business; that the contracts will soon expire; he said he believes in the plant; that it is paid off and in good shape and he doesn't want to walk away from that lightly; he said he feels the plant will be even more efficient or the partners could make another decision, although about two and one-half years remain on the interlocal agreements; he said it is not the ownership that is so much controversial,but that it comes down to is this a good deal for the taxpayers and citizens. There was further discussion on the efficiency of the plant and that it has been consistent for years without needing any major upgrades; and that perhaps of more concern is the amount paid to Wheelabrator; and mention that many questions remain including options with the ash, steam, and several concerns of the transfer stations including rates and hours of operation. Special Joint Meeting:04-19-2012 Page 3 of 5 Approved by Council: 05-08-2012 Concerning regionalization, there was talk about having one study and of the benefit to consolidate that information to attain viable options. Councilmember Salvatori added that they also want to explore options that do and don't involve their city. Mr. Gemmill said everything is now"on the table;" that the alliance went from a very focused governance issue to a very fmancially focused discussion; he said the options are unlimited as the goal is,what makes the most sense for the consumers, adding that many years showed no rate increases. Mayor Condon said people buy services from companies, and the issue is whether it makes sense to combine them or sell them; he said there are three major services: recycling, transfer station/transportation service, and a burner, and said sometimes businesses are more efficient when combined, and sometimes they are not; he said the City is examining all its assets; he said when it comes to businesses, the question is do we care who runs it or who owns it, and what is the risk and the cost, and then examine the public value of whatever choice is made; he said they want to look at the three different structures and then ask themselves if they need to own the transfer station, or does Spokane Valley want to own and operate it; or own certain portions of it. Mayor Condon said these are large financial issues and they are compiling a complete review of all their assets as they are now asset rich and cash poor, not unlike many homeowners; and said to classify that as a renewal source of energy, the risks must be weighed against the rewards; and explained that they are waiting for staff to examine those three businesses and decide which the city should have, and if need be, separate them, determine the cost drivers, and recover the costs. Councilmember Grafos said he agreed with Mayor Condon's remarks and thinks it is time to look at those issues and break those business models down to see exactly what are the costs, and then make a sensible decision. There was further discussion about costs; that perhaps the system is an outdated way of handling solid waste disposal; whether private vendors would be appropriate, and mention from Mayor Condon that the value of the plant is the value of the cash flow and there would be no value unless it has a revenue stream. Council Member Salvatore said that Spokane Valley should do what it is most comfortable with, and that no one has these cost comparison factors on hand so it's difficult to come up with conclusions; but at some point we will need figures. It was again mentioned that the ideal is for a plant that runs as efficiently as possible without losing money on the operation. Mayor Towey called for a recess at 10:15 a.m., and reconvened the meeting at approximately 10:32 a.m. 3. Transportation Benefit District(TBD) Mayor Towey said Spokane has initiated a Transportation Benefit District and that our City is wrestling with the concept;he explained that the County has been pressuring us to form a regional TBD; he said we have weighed our revenues needed for roads, and just passed an ordinance whereby we will take 100% of our ending balance over a certain amount, and put that toward road preservation; he said it amounts to about $2 million. Mayor Towey said we realize most Washington Cities face the same concerns about road preservation and to our knowledge, there is nothing out there to solve the whole problem, but that instead we put short term money on a long term problem, analogous to plugging holes; he said the legislature this session was discussing raising the $20 car tab fee to$40 but that did not reach fruition; he said we realize we could initiate a $20 tab without going to the ballot but the question remains, what is most beneficial for Spokane Valley, and said the idea of a regional TBD is still being debated. Mayor Towey said Spokane Valley needs to decide if we need a TBD and if so, in what form, either city-wide or regional; and said he realizes there are pros and cons for each option; and he asked if the idea of a regional TBD is something Spokane is researching. Council President Stuckart mentioned he previously spoke with County Commissioner Mielke to try to ascertain where they are in the process; and he said they are waiting for Spokane Valley to send a letter to move forward with exploring the possibility; and once the letter is received, they would form the TBD and see if there was interest in going to the voters, but said until they receive the letter from Spokane Valley, they can't make a determination. Council President Stuckart said he feels we need sustainable, long-term funding for roads, and he asked if Spokane Valley would be willing to explore that plan, adding Special Joint Meeting:04-19-2012 Page 4 of 5 Approved by Council: 05-08-2012 that he would like to get together to see what such a plan might look like. Mayor Towey mentioned that having a plan and working out the details later is of major concern and said he prefers seeing the details prior to making a commitment. The revenues generated from various tab fee amounts was discussed as well as having a concentration on roads just in Spokane Valley, or region-wide, with pros and cons associated with that as well, and mention that citizens travel through the area instead of just staying in one municipality, and that we all own all the assets and as such, are responsible for their upkeep. Further discussion included costs to manage the TBD and of the distribution and management of funds, and that it would be another layer of bureaucracy, and that there is no clear definition of how this would be administered. Councilmember Grassel said she prefers identifying regional projects and forming a coalition for those specific regional projects as they come up and not be intertwined with an interlocal. Mayor Towey said in regard to the county getting a letter from Spokane Valley, we are not in favor of putting a plan together then discussing the numbers, and again stated his preference to have better information and once the information is gathered, to put the question to the voters. Council Member Waldref said if a regional TBD is formed, regulations require a board be formed and projects identified; and she said if there were a regional TBD, there would obviously be a need to discuss the projects; she said she felt Commissioner Mielke's discussion points were starting points for discussion to consider if it warrants further investigation, and said she prefers going out to a regional vote; that for their city, their thought was to put it out there and produce some good values and get some streets re-paved and maintained in the hope they will pave the way for Spokane Valley to show their citizens the benefits of a TBD;and said she hopes that will enhance the conversation of a regional option. Mayor Towey said that earlier last year a letter was sent to the Board of County Commissioners that we would be willing to pursue the idea of a regional TBD but at the time we were in the midst of budget discussions,and explained we would encourage discussion of a regional TBD later; and said we needed to know what our revenue stream would be for roads, and not knowing that makes discussion difficult. Mayor Towey said we would be in favor of discussing a regional TBD and realize that Commissioner Mielke's original figures were just a starting point; he said Spokane Valley will have to determine if we need a TBD and if so,whether it should be city-wide or regional. Councilmember Grafos said he is not in favor of a regional TBD at this point as he is not in favor of creating another revenue source or tax on the citizens. Council Member Salvatori mentioned one of the problems with their TBD is that it applies to everything, including trailers,pickups, motorcycles, etc.,which amounts to $20 each, and said there is no flexibility in that regard,that they must tax anything with a license plate the same way. Further discussion included mention that a regional TBD could be a tool for street preservation but it won't solve all the problems; some discussion of a port district which would have to be placed before the voters; mention from Council Member Waldref that no fee or tax will ever be popular or perfect; and Mayor Towey explaining that he would be concerned with giving up tax authority to others. The Sullivan Bridge was mentioned and several council members said they felt that would qualify as a regional project. Other suggestions included urging the legislature to cap any TBD, and to include a sunset clause. There being no further business, it was moved by Deputy Mayor Schimmels, seconded and unanimously agreed to adjourn. The meeting adjourned at 11:35 a.m. A Tlimas E. Towe'y,Mayor Christine Bainbridge,B inbrid e i a g , C ty Clerk Special Joint Meeting: 04-19-2012 Page 5 of 5 Approved by Council: 05-08-2012