Spokane Valley City Council Regular Meeting – October 27, 2026

The Spokane Valley City Council met on Tuesday, October 27, 2026, at 6:00 p.m. at City Hall. The meeting included a public hearing on the 2026 budget amendment, first readings of ordinances for the 2026 and 2027 budgets, a motion on holiday city closures, and non‑action reports on the Tourism Promotion Area (TPA) 2027 budget and a Multifamily Tax Exemption (MFTE) residential target area. Council also discussed a draft letter to the county regarding urban growth area (UGA) expansions. The meeting was marked by procedural disputes over a $90,000 item for Councilmember Merkel’s appeal, leading to a 6‑1 vote to recuse him from that discussion.

Consent Calendar

• Claim Vouchers (Oct. 27, 2026): $2,223,286.36 approved.
• Payroll (period ending Oct. 15, 2026): $769,218.60 approved.
• Council Meeting Minutes (September 1, 2026): Approved. All consent items were approved unanimously without removal.

Public Comments & Testimony

First General Public Comment:

• Thomas Quinlan read excerpts from the Washington and Georgia constitutions, stating that the rights of the people have been violated by the city government.
• Jonathan Plum (Spokane Valley resident) criticized council infighting and inconsistent enforcement of the governance manual. He cited a review of 138 meetings dating back to January 2024 that identified at least 38 apparent violations. He warned that voters are paying attention and that the mayor’s conduct could cost him his council seat.
• Keith Clark invited the council to a ribbon‑cutting ceremony for the “Giving Machines” on December 11, 2026, from 11:00 a.m. to 11:30 a.m.

Public Hearing on 2026 Budget Amendment:

• Ben Lund (Spokane Valley resident) expressed support for the city manager form of government and economic development, then criticized Councilmember Merkel’s conduct, claiming the total cost associated with his tenure has reached approximately $713,000 ($623,000 already reported plus $90,000 in the budget amendment). He urged Merkel to voluntarily forgo salary and benefits as a demonstration of accountability.

Public Comment on Holiday Closures:

• An audience member (not named) praised staff and supported the closures, thanking them for their work.

Discussion Items

2026 Budget Amendment (Ordinance 26‑010) & Procedural Dispute

• Finance Director Chelsie Walls presented the amendment, affecting 16 funds with revenue increases of $6.8 million and expenditure increases of $5.6 million. Major changes included updated capital project timing and cost estimates, a $540,000 increase in catering commissions (due to a revised contract), and a $619,000 increase in the public safety equipment fund for police vehicles.
• Councilmember Merkel moved to separate the $90,000 increase for contract attorney services related to his appeal from the rest of the amendment. The motion passed on a voice vote (no tally recorded).
• A subsequent motion to recuse Councilmember Merkel from discussing the $90,000 item, citing a conflict of interest, passed 6‑1. Merkel objected, stating the action was illegal and that conflicts are self‑recognized. The mayor ordered his microphone turned off.
• The $90,000 item was then advanced to a second reading by a 6‑0 vote (Merkel recused).
• The remainder of Ordinance 26‑010 was advanced to a second reading 6‑1, with Merkel voting against.

2027 Budget (Ordinance 26‑011)

• Chelsie Walls presented the 2027 budget: total appropriations of $163 million across 31 funds; general fund $73.4 million; capital expenditures $51.4 million (57.3% grant‑financed). Recurring revenues exceed recurring expenditures by about $59,000 in the general fund. Full‑time equivalent employees increase by two to 121.25. The projected general fund ending balance is $40 million (55.7% of recurring expenditures).
• Council discussed minor errors in the document and the inclusion of Councilmember Merkel’s email as an attachment to the public record.
• Councilmember Merkel urged tax cuts and opposed the budget. The ordinance was advanced to a second reading 6‑1, with Merkel opposing.

Holiday City Closures

• John Whitehead (HR Director) proposed closing City Hall and CenterPlace at noon on Wednesday, November 25, 2026; all day Thursday, December 24; and at noon on Thursday, December 31, 2026. The closures are paid non‑working time for staff and align with past practice and federal holidays.
• Council expressed appreciation for staff. The motion passed unanimously on a voice vote.

Tourism Promotion Area (TPA) 2027 Budget & Work Plan (Non‑Action)

• Teri Stripes (Economic Development Manager) reported that the TPA commission unanimously recommended a 2027 budget of $1.4 million: $500,000 for destination marketing, $700,000 for sports recruitment (Spokane Sports), $170,000 to replenish the opportunity fund grant, and $30,000 for Placer AI year‑two contract. The total is lower than the $1.7 million allocated in 2026.
• Council debated the value of the Spokane Sports contract. Councilmember Merkel questioned the return on investment, calculating ~$140 per room night based on 7,000 participants in a recent event. Councilmember Haley and others noted broader economic benefits (retail, restaurants, sales tax). City Manager noted that a full analysis is forthcoming and that hoteliers will have an opportunity to speak at the next meeting.
• No action taken; item will return for ordinance adoption.

Multifamily Tax Exemption (MFTE) Residential Target Area (Non‑Action)

• Teri Stripes presented the MFTE program as a voluntary incentive to help meet state‑mandated housing targets. The program offers property tax exemptions for new multifamily construction (4+ units) in exchange for income/rent restrictions. Stripes recommended a valley‑centric approach, tying the target area to zoning rather than a specific geographic boundary, and proposed requiring 20‑25% of units at specific area median income (AMI) levels to avoid concentrated poverty.
• Council discussed blight concerns, the need for homeownership options, and lessons learned from Kendall Yards and other Spokane projects. Councilmember Merkel expressed hesitation, citing potential long‑term blight and police service costs. Councilmember Wick asked about annual compliance audits; Stripes estimated one‑and‑a‑half staff at scale. Deputy Mayor Hattenberg emphasized the ability to tailor the program to local priorities.
• No vote taken; further details will be presented in a future ordinance.

City Manager Comments – UGA Expansion Letter

• Eric Lamb (Deputy City Manager) presented a draft letter to Spokane County supporting the city’s requested industrial/commercial UGA expansion east of the city, but opposing proposed residential expansions north and south. The letter asks the county to instead fill in an “island” of residential properties adjacent to the city’s requested area, which would create more logical boundaries.
• Council discussed adding language about a land swap as a last resort and about designating a future joint planning area east of the city (Otis Orchards area). Consensus was reached to incorporate those comments.

Key Outcomes

• Consent Agenda: Approved unanimously.
• Ordinance 26‑010 (2026 Budget Amendment): The $90,000 contract attorney services item was separated and advanced to a second reading (6‑0, Merkel recused). The remainder of the ordinance was advanced 6‑1 (Merkel opposed).
• Ordinance 26‑011 (2027 Budget): Advanced to a second reading 6‑1 (Merkel opposed).
• Holiday Closures: Approved unanimously.
• UGA Letter: Council directed staff to add swap and future joint planning area language and to send the letter to the county by the October 30 deadline.
• Advance Agenda Items: Council agreed to place on the advance agenda: discussion of the Washington State Supreme Court’s proposed cash bail rule changes (Councilmember Merkel) and review of ordinances related to public emergency declarations (Councilmember Yeager) – the latter to be addressed in an upcoming emergency management training session.