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Friday, May 29, 2020  Spokane, Washington  Est. May 19, 1883
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County proposes full-cost allocation to charge for services

A Spokane County proposal to charge Spokane Valley for more of the overhead costs associated with services it provides to the city provoked indignation from the City Council Tuesday night, and some council members interpreted the move as a hint that the county is interested in getting out of the contract business altogether.

“We have some people in the county who have forgotten that we are county residents,” said Councilman Mike Flanigan. He evoked a long-simmering question on the council as to what extent the taxes city residents pay directly to the county should cover the peripheral costs associated with the services it provides to Spokane Valley.

Spokane County takes care of Spokane Valley police service, weed control, street maintenance and other tasks on a contract basis that the young city does not have the departments to handle. The county’s charge for those services takes into account the cost of actually doing the work plus overhead expenses like equipment depreciation or the paperwork associated with the employees needed to fill the contract.

The new proposal would use a method known as full-cost allocation to figure out how much to charge the city for overhead. Previously, the city and county followed a policy used by the federal government that requires compensation for fewer tasks associated with the work. Full-cost allocation would consider additional things like county employees’ dues for professional organizations as well as part of the cost of the assessor’s office, the county commissioner’s office and tax collection in the treasurer’s office.

The later group of charges is regional in nature, said Councilman Rich Munson, and the county could be trying to boost its sagging budget at the expense of Spokane Valley.

“If they applied this concept to Deer Park, it would bankrupt them,” Munson said.

As far as he knows, city administrative analyst Morgan Koudelka said the county has only applied the full-cost measure to the City of Spokane so far, following a dispute over costs associated with a records storage facility.

But under full-cost allocation, the county also could be allowed to charge Spokane Valley for a portion of its expenses associated with lobbying, marketing and certain other county activities that could conflict with city interests, council members said. One example cited would be a county lobbyist’s efforts to change annexation laws in a way that would run counter to what the city would want.

Some questioned if Spokane County even wants to continue providing the services in the future.

“We’re seeing indication after indication, as subtle as it is, that that may not be their intent,” Councilman Mike DeVleming said.

During the ensuing discussion, Councilmen Steve Taylor, DeVleming and Munson said it would probably be a good idea to start looking at what it would take for the city to perform services now provided by the county.

No one on the council, however, indicated it would be beneficial to either government to end the contracts in the immediate future.

Late in 2004, the city and the county began ongoing negotiations on model agreements that would make determining overhead costs more consistent among the service contracts.

If the city and the county agreed to the full-cost allocation method, it likely would become part of the contracts for 2006.

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