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Plowing contract OK’d

Thu., Oct. 8, 2009

Council approves $920,000 deal with Poe

The last major piece of a new Spokane Valley snowplowing operation slipped into place Tuesday night with a unanimous City Council vote.

A plan to pay for that and other general fund services with a higher tax levy also passed, but without Councilman Gary Schimmels’ support.

Schimmels stood by his assertion last week that the council should draw on its reserves rather than declare a “substantial need” to collect more property tax than ordinarily would be allowed.

Council members were more enthusiastic about a contract that ensures city streets will be plowed this winter despite Spokane County’s decision to quit providing that service.

Poe Asphalt Paving, which already handles the city’s summer street maintenance, will provide nine drivers, a combination mechanic and driver, three road graders, a front-end loader and liquid de-icer for $920,000.

Public Works Director Neil Kersten said two city employees will be reassigned as drivers, and additional Poe drivers will be available if the city pays them for two hours a day while they’re on standby.

The city already has leased a maintenance yard and purchased six used plow-sander trucks – two of which will be converted to apply liquid de-icer.

Also Tuesday, the council unanimously renewed a contract with Spokane County for street striping and maintenance of street signs and traffic signals.

Kersten said a county crew, which is paid according to the work that’s needed, “does a great job” and there has been no problem with the contract.

Although city and county officials have strong disagreement over other contracts, Councilwoman Diana Wilhite said the sign-signal-striping contract is one where “we’re pleased to be partners with Spokane County.”

Nevertheless, Mayor Rich Munson urged city employees to speed up efforts to develop a “Plan B” in case the county quits offering the service.

The council’s 6-1 vote to declare a need for more property taxes was based on large declines in sales and gambling taxes and fees for permits.

The declaration allows the city to charge owners of existing properties for a 1 percent increase in its property tax levy. Without the declaration, a decrease might have been required.

State law limits levy increases to 1 percent or the amount indicated by the “implicit price deflator” index, whichever is less. In most years, that works out to a 1 percent increase.

Next year, however, city Finance Director Ken Thompson expects the index to show a drop in prices of more than eight-tenths of a percent. Consequently, instead of collecting a 1 percent, $110,250 increase, the city would have to trim $89,040.

The net result would be a nearly $200,000 reduction from the amount the city would have received in a better economy, Deputy City Manager Mike Jackson told the council.

By preserving the ordinary 1 percent levy increase, city officials expect to increase their property tax levy a total of 2.9 percent, or $299,500 – to nearly $10.8 million. That’s because the levy restrictions don’t apply to new construction.

Citing projections of declining revenue in future years, Jackson recommended preserving as much income as possible.

He said the city’s reserves, about 15 percent of its general fund, remain healthy but will take a substantial hit next year because sales tax receipts, planning and building fees and gambling tax receipts are expected to fall nearly $3.3 million.

The city has a separate “service level stabilization fund” that is expected to total $5.4 million by the end of the year, but Jackson urged the council to view it as “a hurricane fund, not a rainy day fund.”

Councilwoman Rose Dempsey balked last week in a vote to advance the “substantial need” declaration to a final reading.

This week, however, Dempsey said she was persuaded by a calculation that the 1 percent increase would cost the owner of a median-priced, $164,325 home only about 27 cents a month.

“You can find 27 cents a month walking around in a parking lot,” Dempsey said. “I would rather save the hurricane fund and pay the 27 cents now.”


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