ACTION ITEMS
#2 – Interlocal Agreement (ILA) with Model Irrigation District No. 18 for the 32nd Avenue Preservation, CIP #355
Model Irrigation District No. 18 has identified the need to install a new 18” water main within the limits of the 32nd Avenue pavement project and has requested that the water pipe installation be included as part of the city’s project. This will minimize the impact on community members traveling through the area. To pay for the water main work, an ILA has been developed and signed by the district. Costs incurred on behalf of the water district will be reimbursed to the City by the water district.
A motion to authorize the City Manager to finalize and execute the ILA between Model Irrigation District No. 18 and the City for the 32nd Avenue Preservation project passed unanimously.
#2 - 32ND Avenue, Pines to SR27 Preservation Award
This project is designed to replace the deteriorating pavement on 32nd Avenue from Pines Road to State Route 27. It also includes stormwater improvements, ADA upgrades and Intelligent Transportation System (ITS) installation. Model Irrigation District No. 18 needs a new water main installed within the project and has requested the work be performed as a component of the roadway project contract to minimize traffic disruption and save costs. The water main work will be identified as a separate bid schedule, as an additive alternate, in the construction bid documents. Due to project’s proximity to three public schools, construction is scheduled to take place during Central Valley School District summer break. The bid opening was held on June 3, 2026, and the lowest responsible, responsive bidder was Red Diamond Construction, Inc with a bid of $3,386,276.63, approximately 25% less than the engineer’s estimate. The project bid tabulation was provided.
A motion to award the 32nd Avenue Preservation project to Red Diamond Construction, Inc. for the Base Bid and Alternate 1 Bid in the amount of $3,386,257.63 and authorize the City Manager to finalize and execute the construction contract passed unanimously.
NON-ACTION ITEMS
#3 – 2027 Budget Workshop
Staff and the City Council kicked off the 2027 city budget process during an all-day budget workshop on June 9. The process takes about six months, and the final 2027 budget is scheduled for adoption in November 2026. The workshop agenda included an economic forecast and revenue projections, a review of the Council’s goals and city’s fiscal policies, and individual presentations and discussions on each department’s forecasted 2027 expenses.
The city manager explained that staff are unable to provide the Council with a completed draft budget at this time, as Spokane County has been unable to provide accurate budget numbers for the city’s public safety contracts, which account for 65% of the city’s budget.
The city’s finance director reviewed the following revenue sources:
• Property tax collections in 2025 were $14,026,579, a 2.41% increase from 2024. This is attributable to new construction as the City has not increased the property tax levy by the 1% allowed increase since 2009.
• Sales tax collections in 2025 were $33,671,147, an 4.4% increase from 2024. Locally, sales taxes for the City are primarily from auto sales, construction and retail sales from big box stores.
• Telephone utility tax collections in 2025 were $976,433, a 0.8% increase from 2024.
• Motor vehicle fuel tax collections in 2025 were $1,892,706. Comparisons are challenging to calculate, as the Department of Revenue had errors in its reporting throughout the first half of 2025. City fuel tax revenues are based on the number of gallons of gasoline sold, rather than the dollar amount of the sale. Higher fuel prices and an increasing number of electric vehicles will likely cause decreases in this revenue stream.
• Lodging Tax collections in 2025 were $857,517, which is down 5.34% compared to 2024. However, in the months of January through April 2026, lodging taxes increased by 2.76% compared to the same period in 2025.
• Real Estate Excise Tax (REET) collections in 2025 were $4,332,412, a 21.54% increase compared to 2024, but in January through April 2026, REET decreased by 14.47% compared to the same period in 2025. Overall, trends indicate this revenue could be stabilizing at pre-pandemic levels.
City department directors reported on their budget projections and estimates for 2027. The draft 2027 budget will continue to evolve throughout the year with community and Council input. Community members are encouraged to share their thoughts with Councilmembers via phone or email or speaking for up to three minutes during Public Comment at Council meetings, which occur most Tuesday evenings at 6 p.m. at Spokane Valley City Hall. Three public hearings in 2026 for the 2027 budget are scheduled for September 15, October 13 and November 17, during which residents are invited to provide input and share their comments.
About Spokane Valley City Council
City Council meetings occur most Tuesdays at 6 p.m. at Spokane Valley City Hall, 10210 E. Sprague Avenue, Spokane Valley, and online via Zoom. Meeting agendas and minutes are available at SpokaneValleyWA.gov/Agendas. Community members are invited to attend Council meetings to participate in action items or public comment periods in-person or online. Council meetings are broadcast on Comcast channel 14. Email the Council at CityCouncil@SpokaneValleyWA.gov or learn more at SpokaneValleyWA.gov/CityCouncil.
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