Spokane Valley City Council Budget Workshop – June 9, 2026
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Spokane Valley City Council Budget Workshop – June 9, 2026
The Spokane Valley City Council held a special meeting and budget workshop on Tuesday, June 9, 2026, beginning at 8:30 a.m. at City Hall. The workshop was the second of 13 public touches on the 2027 budget. The primary focus was reviewing department budgets, discussing financial challenges—particularly the uncertainty surrounding the Spokane County law enforcement contract estimates—and considering supplemental requests, revenue options, and long-term planning. The meeting concluded with several consensus decisions on staffing, facility upgrades, and next steps.
Consent Calendar
- Model Irrigation Waterline Interlocal Agreement: Unanimously approved (motion carried). Authorizes the city manager to finalize and execute an interlocal agreement with Model Irrigation District No. 18 for installation of an 18-inch water main within the 32nd Avenue Preservation Project.
- 32nd Avenue Preservation Bid Award: Unanimously approved. Awarded the construction contract to Red Diamond Construction Inc. for $3,386,257.63 (base bid plus alternate one), covering pavement replacement, stormwater improvements, ADA upgrades, ITS installation, and waterline installation.
Public Comments & Testimony
- No members of the public provided oral or written comments on the two action items during the meeting.
Discussion Items
- Economic Forecast & Revenue Projections (Chelsie Walls): Property tax collections grew 2.41% in 2025; sales tax increased 4.4% in 2025 and 6.77% year-to-date through April 2026. Utility taxes, motor vehicle fuel taxes, and lodging taxes showed mixed trends. Real estate excise taxes declined 14.5% year-to-date due to large transactions in early 2025. Staff emphasized caution in estimates given inflationary pressures and potential changes.
- Council Goals: Reviewed existing goals, including public safety, infrastructure, economic development, homelessness reduction, and homeownership. No updates adopted; staff expects to bring proposed revisions later.
- Staffing Overview (John Whitehead): The city has 31 recruitments and filled 35 positions in the last 12 months. Current vacancy rate low, but compensation pressures noted. The council discussed growth in FTE counts (from ~88 in 2017 to 123 approved positions) and the city's lean staffing compared to peers.
- Public Safety Budget & County Contract Uncertainty: Staff reported that Spokane County has not provided reliable 2025 or 2026 cost estimates for the law enforcement contract due to a software changeover. The county's emailed estimate for 2026 ($32 million) contrasts with the city's internally estimated $38.5 million. City Manager John Hohman described ongoing coordination issues and proposed a negotiated settlement for 2025/2026. Other public safety contracts (district court, public defender, prosecutor, pretrial, detention, emergency management) also have stale reconciliations, with many last settled in 2022. The council expressed frustration but affirmed operational satisfaction with police services.
- Department Budget Reviews: Each department presented status-quo budgets with minor adjustments. Key highlights included:
- City Council budget: discussion on reducing travel/registration line items; no changes adopted.
- IT budget: large increase due to centralizing IT costs; new Copilot AI licenses ($55,000) for secure AI adoption.
- Communications: request for antenna at Center Place (backup communications) approved.
- Facilities: supplemental requests for blinds, water bottle fillers (approved), ice machine, carpet replacement, kitchen floor, and center place furniture were approved or discussed.
- Supplemental Budget Requests: Several one-time and recurring requests were reviewed. Approved items: antenna installation ($15,000), IT staff position (recurring, ~$180,000 all-in), facilities upgrades (blinds, ice machine, carpet, water bottle fillers, kitchen floor, center place furniture), and two vehicle replacements (snow plow and F-250). IT network penetration test ($30,000) was also discussed.
- Revenue Options & Fiscal Policies: Staff presented options for property tax levy increases, utility tax changes, transportation benefit district sales tax, and business license fee adjustments. Councilmember Merkel proposed a one-time tax holiday, but no consensus emerged. Fiscal policies were reaffirmed, including the long-standing practice of not taking the 1% property tax increase (18th consecutive year).
- Safe and Healthy Task Force Update: Council discussed the upcoming press conference on the task force report. Consensus was given for Mayor Laura Padden to attend, with a focused message thanking participants and emphasizing accountability and enforcement. The council also noted concerns about the county's financial position and potential sales tax measures.
Key Outcomes
- Action Items: Both motions passed unanimously.
- Public Safety Director Position: Council gave consensus for staff to bring back a fully baked proposal for a new public safety director position, to be funded initially through salary savings from new officer hiring. The position is intended to address capacity issues in managing public safety contracts and exploring alternatives (e.g., in-house options, contract renegotiation).
- IT Staffing: Consensus to move forward with adding one IT staff position (recurring) to improve cybersecurity and project capacity.
- Supplemental Approvals (by consensus):
- Antenna installation at Center Place ($15,000)
- IT network penetration test ($30,000, one-time in 2027)
- Facilities upgrades: blinds, ice machine, carpet in room 219, water bottle fillers (all approved)
- Center Place kitchen floor replacement ($32,000)
- Center Place furniture replacement ($80,000)
- Replacement of one snow plow truck and one F-250 (funded from replacement reserves)
- Press Conference: Authorized the mayor to attend the Safe and Healthy Task Force press conference with a message of thanks and emphasis on accountability.
- No Action: Tax holiday proposal and business license fee increase were not advanced; revenue options remain informational. The council did not vote on any revenue increases.
- Next Steps: Staff will prepare detailed proposals for the public safety director and further analysis on law enforcement contract alternatives. The next budget touch is scheduled for August 2026.
Meeting Transcript
That's what it is. It's 8 30 when you'd like to start. Thank you. So thank you. We will call to order the Spokane Valley City Council special meeting, budget workshop on Tuesday, June 9th, 2026. So welcome to this 2027 budget workshop. This is the second of 13 public touches the council will have on the 2027 budget. It is a thorough, transparent, robust, and reflective process with many opportunities for staff, council, and the public to weigh in. In the end, this will deliver a budget in the black that complies with our requirements of having recurring revenues greater than recurring expenses and maintaining a general fund balance of at least 50% of the recurring expenses. Achieving this along with compliance with our other guidelines, like uh minimizing debt has allowed Spokane Valley to provide a very stable environment for growth, the ability to provide necessary services and enhance the quality of life for our residents. But there's a lot of work to do, so we best get started. Can the the uh clerk call the roll, please? Certainly. Mayor Padden here, Deputy Mayor Hattenberg. Here, Councilmember Yeager here, Councilmember Kelly? Present. Councilmember Haley? There. Councilmember Wick? Here. And Councilmember Merkel. Here. Thank you. Thank you. If you stand and say the Pledge of Allegiance with me. We do have a couple of action items today. The first is uh interlocal agreement with Robert Blagan. Move to authorize the city manager to finalize and execute the interlocal agreement between model irrigation district number 18 and the city for 32nd Avenue Preservation Project. Second. Would you like to read the title? I can read the title. Uh agenda item title, interlocal agreement with model irrigation district number 18 for the 32nd Avenue Preservation CIP number 355. All right. Uh Mayor Padding Padding, Council Members, Robert Blegan, Public Works Director. So uh model irrigation district number 18 uh needs to install an 18-inch water main within the limits of the described project and requested that that main be included as part of the project to minimize impact uh on the traveling public. Their work was identified as Schedule C in the bid proposal and construction documents uh to pay for the water main interlocal agreement uh needs to be executed by the district and the city. Uh this interlocal agreement uh allows the district to pay for the cost of the water plus a portion of some of the other prorated costs associated with the project. Bids were received on June 3rd. The model irrigation board uh examined the bids at their board meeting on Friday, June 5th and approve their portion of the bid, the schedule C and staff is seeking your approval for the city manager to execute the interlocal agreement with the district. Any questions from council? Councilmember Kelly. Yeah, so I was reviewing the bid and I was uh wondering you seem like there was a couple of bid items that were way out of whack with both estimates and other bidders. Um I'm just wondering how do we typically approach that if we feel like either we have an unbalanced bid or maybe something that the contractor missed, and does that ever I guess uh create uh a questions of their ability to perform or anything like that. I mean, we don't want to get you know you don't want them to get over their head and get halfway through the project and realize this is gonna lose money and they walk away. I know they have bid bonds and all that performance bonds and such, but obviously that we drive that's something you want to avoid. So how do you look at that? And is that any concern in this particular instance? So this particular part of the estimate was um was less about half of what the um water district's engineer estimate was. Um so we look at the bids. We also looked at the bids from the second bidder, and they had a very similar estimate, which which gives us um a reference point.
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