The Spokane Valley City Council covered a wide range of topics during its annual winter retreat Tuesday, but the conversation kept circling back to one issue: finding funding to pay for street maintenance.
Right now the city has no revenue to pay for annual street maintenance and preservation. In the 2011 budget the city took $500,000 from the civic facilities capital project fund and created a street maintenance fund, but that’s just small change compared to the millions it would take every year for a comprehensive maintenance program.
Finance Director Ken Thompson discussed the possibility of taking about $440,000 from the $27 million carryover the city ended with in 2010. City Manager Mike Jackson said a little of the carryover could be spent, but the money is there to help even out economic fluctuations. The money helps pay the bills when revenue is down, as it has been for the last two years. “The intent was to level that out,” Jackson said. “There may be room for reduction; I don’t think a lot. The future is just so uncertain.”
Councilman Bill Gothmann said having no dedicated revenue stream for street maintenance makes him uncomfortable. “What we’re doing now is saying preservation is getting the leftovers.”
Jackson said the city would need about $6 million a year for street maintenance and said it might be possible for the city to completely fund that amount, “but at what detriment to the community? What would you reduce?”
Public Works Director Neil Kersten said one of the maintenance projects that is needed soon is to grind down the pavement on Sprague Avenue between Evergreen and Sullivan roads and lay down a new layer of asphalt, called a “grind and overlay.” In as few as three or four years the road will be so deteriorated that a grind and overlay, which would cost about $1 million, won’t be possible, he said. The entire road would then have to be ripped up and replaced to the tune of $8 million.
Gothmann said he believed the city should fix streets now to avoid more extensive and expensive fixes later. He suggested that the city borrow money to pay for needed projects even though it has operated on a pay-as-you-go philosophy since incorporation. The only debt the city has is a bond that paid for the construction of CenterPlace. “I realize this is heresy,” he said.
Councilwoman Brenda Grassel said she thought the council should restructure the budget to look for more money so the council can tell its constituents that it did everything possible to pay for the projects.
“Let’s spend smart on roads,” said Councilman Dean Grafos. He advocated using the city’s limited resources to target strategic areas of the city that would help attract new businesses, particularly in the Auto Row area. “Enhance that area, fix it up, make it look right,” he said.
Local contractor preference
In past council meetings some council members have talked about whether they could give preference to local companies when awarding bids. Acting City Attorney Cary Driskell addressed the issue Tuesday, advising the council against it in strong terms. “It’s highly recommended that local jurisdictions should not engage in local bid preference,” he said.
The practice has been ruled unconstitutional in some states. Federal regulations penalize cities for doing it by making cities ineligible for some grant funds. It also limits the pool of contractors or companies, which can lead to inflated prices, Driskell said. “We’re raising the low bid, in effect.”
Cities that do have a local company preference spent a lot of time and money administering the program. Spokane Valley’s city code also specifies that contracts must be awarded to the “lowest responsible bidder.” “There are good policy reasons why not to do it and even better legal reasons not to do it,” he said.
All contractors should be treated the same, Gothmann said. “There’s a matter of ethical consistency,” he said. “Everybody ought to have the ability to contract. We’re elected to represent the citizens. We’re not elected to represent just the contractors.”
Grassel questioned whether the city had to accept the lowest bidder without exception and asked whether the city could reject a bid because they had previously had problems with a contractor.
Jackson said the city can only reject a bid for a narrow list of reasons, such as if the company has no experience doing the work to be contracted or if the company left part of the project out of the bid.
“By taking other than the low bidder, you’re almost inviting a lawsuit,” Thompson said.
Kersten said that as long as a company has a performance bond, the city must work with them. “That’s kind of the guarantee,” he said of the bond. “Other than that, it’s pretty hard to say they’re not responsible.”
Mayor Tom Towey said Spokane Valley doesn’t have enough local contractors to make local preference work. “In a small area I don’t think it’s feasible to go with limitations,” he said.
The council also discussed what it might do for economic development in the city. Community Development Director Kathy McClung said the biggest growth area in economic development is “keeping the business you have and helping them grow,” not bringing in new businesses.
“You need to do something for the businesses that are already here,” Thompson said. Options the city could exercise include things like widening a street or extending sewer connections. “We might need to budget a little bit of money,” he said.
McClung said the city could fast-track permits for certain types of businesses, modify zoning and look at tax incentives to help local companies.
Towey suggested working with other agencies that already work in the economic development area, including Greater Spokane Incorporated and the Spokane Valley Chamber of Commerce. “They have an expertise,” he said. “We have to connect with the experts.”
Grafos said whatever plan the city comes up with should be able to be enacted quickly. “It has to be feasible, it has to be affordable,” he said. “It has to be a common-sense plan.”
City hall options
During the retreat, held at CenterPlace, the council also took a short trip across the hall to look out the window at what may be a possible city hall site just to the north of CenterPlace. The small grassy area has a paved trail running along one side and butts up against the waterfall. Kersten said there is probably enough room to put in a multiple-story 40,000-square-foot office building with another 10,000 square feet of basement storage. Estimates done in 2008 put construction costs of a new city hall at $18 million if the city doesn’t have to buy land.
The city currently pays nearly half a million dollars a year in rent and that could pay off about $7 million in bonds, leaving the city to come up with the rest of the money, Kersten said.
Towey said the council needs to determine whether it wants a new city hall or prefers to keep renting. “We have to answer that basic question before we go any further,” he said.
While the city may own the site next to CenterPlace, it is not without issues. “We would kind of encroach on the trails and the falls,” Kersten said.
“It will have an impact on this particular facility,” said Parks and Recreation Director Mike Stone, referring to CenterPlace. “We use this area for a lot of community events.” A city hall could be “shoehorned” into the site, but it may not be the best use of the space, he said. “The falls are very popular.”
Driskell said a master plan governs the 236-acre site, which was donated. The plan may limit the city’s options. “We would have to do a much more detailed process,” he said.
Gothmann said the city should do a survey or use another method to find out what residents want. “I think this is an issue where we develop some scientific facts on what our citizens would like,” he said. “Right now as far as I’m concerned we’re flying blind.”
“I think we need some more information before we proceed,” Towey said.
Jackson suggested using focus groups in addition to doing a survey. Grassel said she thought the city hall issue should be taken up as part of the economic development discussion. “I don’t see why it can’t be part of the process in that committee,” she said.
“I do think we need a survey, I really do, but I think it needs to be specific,” Grafos said.
In other business, Spokane Valley police Chief Rick Van Leuven went over changes in Sheriff’s Office staffing that will affect the city. The city and Spokane County negotiated a policing contract last year that has the city paying for a portion of the lieutenants, sergeants and deputies working with various task forces and other special teams. The city will now have to pay for 6.5 fewer full-time equivalent positions in shared staffing because of cuts in the Sheriff’s Office, Van Leuven said.
The Property Crimes Task Force and the Investigative Task Force were merged to create the Investigative Support Unit. In the process several people were transferred back to patrol duties and one lieutenant is now being paid for by money seized by the Sheriff’s Office, Van Leuven said. This has had the effect of forcing detectives to cover more duties, he said. “We are doing our best to make sure all the positions are filled.”
The moves will save the city $300,000 this year, but Jackson said the city needs to monitor the effects, particularly if there are more staffing cuts in the Sheriff’s Office next year.