City Council - Regular Meeting

All right, I'll call the meeting to order. We'll begin with the invocation and the pledge. Almighty God, send down upon those who hold office in this city the spirit of wisdom, compassion, and justice. Grant that with steadfast purpose we may faithfully serve our community, seeking the common good, protecting the vulnerable, and promoting the well-being and harmony of all who dwell here. Amen.

I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

Okay, all members are present and accounted for. No announcements tonight. Do we have any amendments to the agenda?

We have none tonight, sir.

Very good. Declarations of conflict, ex parte contact, or site visits? Seeing none, please present the consent calendar.

Item A is minutes from the August 3rd, 2026 city council special workshop. Item B is minutes from the August 4th, 2026 city council meeting. Item C is payables, August 5th, August 19th, 2026. Item D is the May cash and investments report. Item E is Kootenai electric service proposal and easement for the quarry sports complex. Item F is G2 Development Subdivision Master Development Agreement, SUBA-26-1. And item G is Klondike Place Subdivision Master Development Agreement, SUBD-26-2.

Questions on the consent calendar?

I move to approve the consent calendar as presented.

Second.

Motion and a second. Further discussion? Roll call, please.

Stig Leder. Aye. Plew. Aye. Malloy. Aye. Ziegler. Aye. Mosby? Aye. Luca?

Aye. Motion passes. We're on to public hearings. First up is Beck and Bauer right-of-way vacation. I will open the public hearing.

Evening, Mayor, Council Members. Ethan Porter, one of the planners here with the city to present the Beckenbauer Vacation, VAC-26-2 tonight. The owner of this area that we're talking about for the vacation, it's public right away within the city of Post Falls. The applicant requesting to vacate this piece is Giovanni Amaler. and I believe Nate Ball is here too to represent as well from the applicant side. And so they're requesting from Wadsworth Development Group is requesting on behalf of the Point Partners LLC to vacate a portion of the existing road extension known as South Beck Road. Here you can see on the screen the map kind of where we're talking about in that area. And so it's a little kind of extension in to kind of the vacant property there south of South Beck Road. And so looking kind of more closely at this spot, we can kind of see what the water context looks like. Currently, as you can see, there is water and utilities in this area as well as sewer, which that green line there on this map kind of shows where that sewer line is. Currently, there are easements for that sewer and water, and so those would be retained as well as part of probably you've seen in the staff report, but... those utility easements would be retained. So they're just looking to kind of vacate it as public right-of-way for that little piece there, and then look to kind of develop that area into kind of a plan to help the developer kind of get more of their general idea, which they'll talk about more for their plan, but it opens up more possibility essentially for the development of the site. And so kind of as I mentioned, I mean, staff kind of went through, looked at this, and our staff report kind of highlights this as well, but there's no concern, you know, vacating this piece of property in the public right-of-way. Like I said, the sanitary sewer and the water mains, they do exist in that area, but... like I said the easements will be retained for those identified utilities. We also notified the agencies as well here listed out and essentially from these lists we got four of them back so there's Phillips 66 they don't have any utilities or for their company in the project vicinity BPA didn't have any comments Post Falls Highway District didn't have any comments and DEQ as well didn't have any comments to that so kind of looking at that there was no major concerns from the agencies that we notified. And so kind of looking at your proposal tonight or this proposal tonight and kind of your decision to vacate that and I'll leave kind of more of the kind of grand scheme plan of this property up to the applicant to discuss but Essentially, this vacation area was plotted way back when to make this road extension connect up to West Point Parkway as a public roadway, but vacating it would allow more flexibility with the development, which again, I'll let the applicant speak to. That's the idea kind of there behind the vacation. So as kind of staff outlined in the staff report, there's not a lot of concern vacating this little piece and kind of letting the development kind of move as they seem, you know, reasonable with their plans. So that's pretty much it in a nutshell. I would be happy to answer any questions you have for staff. Questions for staff?

So we're just vacating that we want a road there? Is that what you're saying?

It's basically vacating the public right-of-way right there in that little piece, and then that would basically go now to ownership for the property there to the west or the north and south of that, essentially. So Wadsworth Development would be the owner of that then, and then that would just get absorbed by them, and then they could develop that piece within whatever their plans are.

Okay, yeah, I guess... I mean, we still have water and sewer. It just seems like a weird thing.

At the time, previously, like I said, when it was plotted, I think the idea was to continue that and kind of wrap it around to go to Point Parkway. But there's not a need for that. They can develop the site and through standards kind of create that traffic flow internally through private roadways if they wanted to. So that's kind of that.

Is there any concern about it seems like then the main connection would be on to West Point Parkway on the north side there? Any traffic concerns or congestion with that being a main access point?

Not that was kind of outlined or identified through kind of our staff comments and review. No issues there that we've seen.

I guess I do have one more question, and I know we do this every time there's an easement vacation, but I just want to be clear. The city doesn't – this piece of property is already owned by the developer, right? Like, we don't own it. We just have a no.

It's public right-of-way currently, and so it's, like, managed by – I'm correct if I'm wrong.

Oh, turkeys.

Yeah, it's public right-of-way, so it is owned by the city. It's – we would be vacating that public right-of-way from public ownership, but we can't, it would just revert back to the neighboring property owners. So it's sort of like they've granted it to us for public use. And they donated it to us. Exactly.

Okay, great. Thanks.

Less road for us to maintain. All right.

Does the applicant wish to speak?

Nate Ballard of Wadsworth Development. Thanks for having me. Thanks for having us on the agenda. Ethan did a really good job of kind of going through kind of the highlights and big picture of what we're trying to do, at least for now. So I don't know that I have a lot more to add other than There are a few site plans in place right now of the next phase for this that would require that piece back. So that's kind of in the big picture. We're working through some of those site plans now in hopes to have that application in in the next, well, I'm hopeful 60 days. We'll see if that happens, but hopefully in the near future. And once that comes through, it'll make a lot more sense. Some of your questions and concerns, it'll make a lot more sense on why we're trying to do that. We'd had the conversation when we made the original application and design of that road if we should stub this. I don't remember the reasons why we had to stub it at the time because it was a future phase. We did talk about continuing that road just to make that not such a deep parcel. There was a lot of large box retailers floating around Early on those had kind of gone away. Some of those now have returned back so that that does interest us in squaring this off and not having that be a road through there just be an access point to a larger development that will hopefully make a lot more sense here in the months to come. So that's a little background on why we're making the request and asking for it back. And like I said it it'll make more sense to the overall development and to you all when we get to that point. So I'm here for additional questions. I can tell you as much as I can tell you as of right now, but hopefully that makes some sense.

So, yeah, my curiosity is killing me. So what I mean, obviously you can't give any details. So presumably the elimination of that road would mean that there really wouldn't be a smaller development kind of on the, freeway facing side, kind of a larger, maybe interior roadway access to something sizable?

Yeah, I think that's the best way to put it. That's fair. One of the ideas we had was really a continuation of what you're seeing on the east side, right? So carve that out. You end up with pads on each side of the road and then the frontage on the other side. That's still a possibility. We may end up reverting back to that at some point if this deal or these deals don't work out, I should say. But they're interesting enough, and I think they're great for the site, that, yes, much larger retail play would be there. And, yes, it would be internal connection points and then access points, which are already those stubs are already off of Point Parkway. So we just tie back into those and flow through the.

So this just gives you the flexibility to kind of entertain both.

Correct. Yeah, I really can't have the conversation and go through with a full site plan without it, knowing that we can get it back. As far as the deeding of it and all that type of stuff, I think we would probably hold off until we got a little further, but we just need to know we have your support to be able to go do this when the time's right. So, yeah, that's correct. Thank you. Anything else?

I mean, I don't like that corner then if we're not, I mean, if we're putting something big in there, that seems like, kind of like that place over by the 41 and the... The car wash behind where Thomas Hammer used to be where if you're following the road, you've got this parking lot that comes off and it's kind of all unmanaged and there's a lot of traffic back there. I would hate to unintentionally create that with this corner if there like wasn't a road that went through. Does that make sense if that's like the entrance to like a parking lot or like a lot of commerce there? So I guess whatever plan you have, it would just be my request that maybe we look at that because that's the post falls er if i'm not mistaken right yeah right there um anyway so

Yeah, I understand where you're going with it. We've had the same discussion, I know, in planning and at a high level based on some just conceptual plans that we've talked with them about. We've had similar type discussions, and from our vantage point, it is valid. How that traffic works, it's really not going to work much different than it is now other than there will be a stop sign probably have to be added. We've already talked about with the city traffic,

studies that will have to be done to make sure everything's going to kind of flow you don't build this road like if whatever plan that you have doesn't go all the way through like nothing on that site would connect back to point parkway like where that um no no there's going to be several points of contact you can see you can see one that's already cut i'm pointing but um like the little trail in the dirt can you see that here uh-huh

Am I answering your question? So there's, there's this one, there's another one over here and then there's a further one down.

I understood was like, that's just going to be an entrance to a parking lot and commerce in there. And so that was my concern. So no, thank you.

And then the conceptual plans as a, as they are today and they very well will change. do have more of kind of an entrance road, we won't call it a road, but an entrance feature coming in, not just like pulling into nose installs. So to maybe ease a little bit of your concern.

Yeah, yeah, no, I'm just thinking of that corner that we have over there.

It will flow in more as a feeder versus just right into a parking lot, if that makes sense. Yeah, great. As of right now.

Thank you so much.

Anything else? Good questions.

Well, two meetings ago, I was not here because I was a guest of said ER. And I found it to be very quiet roadway there. So as long as there's alternative access points, as you've pointed out, I don't have any. Any issue with that? And I do want to thank you in advance for filling up my inbox with speculation about Costco, Trader Joe's, and In-N-Out coming into that.

Yes, to all of those.

Yeah, I'm getting those with some others too. But yeah, there's a lot of strange rumors out there already. But yeah, we'll leave it at that.

Thanks for working on this piece of property as well.

We appreciate it. Yeah, of course. It's been a long road. I'm glad we finally are seeing real buildings and real cars driving around. So thanks for your patience.

Further questions? Thank you. Great. Appreciate it. Do we have any public testimony?

We do not, sir.

All right. Then there's no need to rebut. So I'll go ahead and close the public hearing. Council, how would you like to act?

One of the biggest factors is that there is no public need for this. at all whatsoever, so that's kind of the only thing we need to evaluate. So with that.

I think the only concern that there could have been would be the reservation of easements, and that's already addressed, so it doesn't seem like anyone has a problem with it, so I would support vacating it.

In that case, I would move to approve the Beck and Baugh right-of-way vacation, VAC-26-2. Second.

Motion and a second. Further discussion? Roll call, please.

Plew?

Aye.

Malloy? Aye. Ziegler?

Aye.

Mosby? Aye. Luca?

Aye.

Stiglieder? Aye.

Motion passes. Thank you. We're on to our next public hearing, Signal Point Vista Annexation. I'll open the public hearing.

Good evening, Mayor and City Council. My name is Justin Souder, Associate Planner here at the City, and the project before you is the Signal Point Vista Annexation, file number ANNX-26-3. So the property owner is Viking Construction, and the applicant is Whipple Consulting Engineering. and they are requesting the city council to approve their request to annex approximately 14.62 acres with a medium density r2 zoning into the city here you can see the project site outlined in red it is between syringa street and greens ferry road and it is just north of east 16th avenue there are three parcels here and they're all owned by the same property owner And here you can see the surrounding zoning. And as you can tell, there's no color on this parcel because it is not within the city at this point and does not have a zoning designation. So property to the north contains single family homes that are within the county as well as the recently approved G2 subdivision in the RM zone. That's what you see in that orange and white hatch. That property is currently a single family home and a small farm or agriculture uses. And then immediately to the west, east and south across East 16th Avenue, we have other single family homes that are within the county. This site had a single family home. It is over the Rathden Prairie Aquifer. Ross Point Water District would handle the water. Wastewater would be handled by the city, and the city does have capacity and willing to serve the property at the requested zone. For traffic, East 16th Avenue is classified as a major collector, and additional rights of way and easements would need to be provided as part of the annexation request. So now we'll begin to the review criteria for zone change. Number one is the proposed zoning district consistent with the future land use map and focus area contained in the currently adopted Post Falls Comprehensive Plan. This project site is actually, it has two future land use designations with both low and medium density, so the two parcels that are to the west or left are low density in the yellow, and then the parcel that's further east to the right in the orange is the medium density. Both of these categories encompass all types of single family residential uses with varying densities, somewhere between five and 16 units per acre, and that's based on location, street infrastructure, and what the focus area says. The properties to the north, south, and west are all within the low density residential, while properties to the east are in the medium density residential. The R2 zone is an implementing zone district for both of these land use categories, and the site is within the central island focus area, which prioritizes annexation opportunities and infill development within this area. So to clarify, low density includes R2? Yeah, R2 would be an implementing zone district.

Medium density also includes R2.

Here is a snapshot of the overall area with zoning overlays. You can kind of see what's going on. To the north, again, in that orange hatch, we have the recently approved G2 subdivision, which will contain single-family detached homes and cottage homes when it is constructed. And then a single-family detached neighborhood in the county that's kind of northeast. Immediately to the southeast and west, there are other single-family homes on larger lots. And then a little further out, there's actually a church on East 16th. There's also a church to the north up on Horse Haven. And there's also a church right here on the corner of Syringa Street and East 16th Avenue. And we actually just got an application for these two parcels to be annexed in and to continue the church use at this location. So that should be headed your way pretty soon. If approved, the applicant intends to construct 67 single family detached homes, which would turn out to be roughly five dwelling units per acre, which may be compatible with the majority of the development in the surrounding area. Moving on to the second review criteria, is the proposed zoning district consistent with the goals and policies contained in the comprehensive plan? The annexation request is consistent with goal one, which seeks to grow and sustain a balanced, resilient economy, providing community prosperity and fiscal health. The R2 zone in this particular project can deliver single family homes, which make up the majority of the housing product in Post Falls. There are several factors that need to be considered when applying a new zone listed here in policy two. We have already talked about the zone designation being consistent with the future land use map. It may be compatible with surrounding land uses and then the goals and policies of the comprehensive plan. As far as infrastructure, sanitary sewer connection will be made at the existing manhole in the Syringa Street and 16th Avenue intersection. And as I stated, the city does have capacity and willingness to serve the project. For traffic, East 16th Avenue is considered a major collector. It's currently configured as a two-lane, 26-foot-wide road. The proposed development at the requested zone is not anticipated to create an undue burden on the transportation network that would not be mitigated through the collection of impact fees, and the developer will be responsible to complete road widening along the project frontage. The annexation is also consistent with Goal 12, which seeks to maintain the city's long-term fiscal health. The R2 zone may help with fiscal health by providing housing. It's also consistent with policies 8 and 9, which encourage compatible infill development on vacant parcels and annexation of county islands within city limits. Annexation of the subject site with the zoning request would help provide land for future housing at a low density and in an area projected to be incorporated in the city. The development of the parcel following annexation would be considered both infill development and within a county island. Third and final review criteria, does the proposed zoning district create a demonstrable adverse impact upon the delivery of services by any political subdivision providing public services within the city? And there have been no identified demonstrable adverse impacts upon the delivery services at this time. Here's a list of the agencies that were notified of the project and we received comments back from these four. They remain neutral or will coordinate at the time of development. Phillips 66 did not have facilities within the project site and the Post Falls Highway District expressed their support or they are in favor of the annexation. That concludes my presentation. I'm available for questions and the applicant is also here.

I have just one question for you. we saw that the Post Falls Highway District was in favor of this project. And I heard your comments earlier about there's no anticipation from staff that the project would have a adverse impact on traffic along 16th Avenue. And I also heard what you were talking about, about the applicant would be responsible for widening 16th Avenue. So can you tell me, 16th Avenue, just for clarification, that is, maintained or under the jurisdictional control of Postal's Highways District. Is that right?

That is correct. Getting confirmation from city engineer.

Appreciate that. All right. And so, ostensibly, the political entity that is in charge of, or political subdivision entity, whatever you want to call it, that's in charge of that roadway is in favor of this project with the understanding that it's not going to be adversely impacting traffic along 16th. Would you say that that's a fair assessment? Yes. Thank you.

I think part of their motivation would then be under control of us from at least center line over. So they're actually limiting their or reducing their burden on their resources and kind of transferring them over to us eventually, hopefully, with the goal of getting that whole corridor under city jurisdiction. So I think that's probably a motivating factor as well.

I think this is one of the streets that we plow anyway because there's just that little section of county and the rest of it is, we are to the right and left.

That's very generous of us.

But that, So there is a planned street widening, but only along the border of this subject property, right?

Correct.

On both sides, or no, that's not a street, just the south side on 16th.

The north side, along their project frontage.

It's the south side of the project. South side of the project. Oh, yes, sorry. North side of the street. Gotcha.

Thank you. How wide and how much bigger will the street be then with the widening? Six feet, sounds pretty small, 67 units.

I'm gonna defer to city engineer for the total width.

I knew we could get him up here.

Good evening, honorable mayor, members of the council, Robert Paulus, city engineer. 16th Avenue as a major collector, Right now it's at 26 feet, one lane in each direction. At full build out, it'll be a 54 foot wide roadway, so it'd be a three lane configuration, one lane in each direction, a two way center turn lane, and then a bicycle lane on each side. As this area develops, the two lanes provide us the capacity The areas we're gonna first start to see deficiencies would be at Greens Ferry and 16th and then, well actually Greens Ferry and 16th, our master plan does not show any anticipated deficiencies at Syringa Street. We do have in the impact fees that Greens Ferry and 16th will eventually be either a traffic signal or a roundabout and that's anticipated within the next 10 years.

Fair enough.

16th to the east of Greens Ferry and west of Syringa are built out to this capacity or no?

So with the two lanes that are out there, it is able to handle traffic volumes where we have the problems. They start to show up at the intersections first. And we have a project laid out for 16th Avenue and Cecil Road, which is further to the east. And then the road widening, which will help, especially with the multimodal, the bicycle lanes, help a little bit with moving traffic with access by having the two-way center turn lane. those are long-term going to be needed but in the short shorter and mid-term the road will be able to operate with the two lanes and the periodic windings as development occurs along that stretch so presently those stretches of roadway to the east of greens ferry and west of syringa on 16th are just two lanes correct okay with no multimodal for the most part that is correct okay thanks it's a jigsaw puzzle all the way down to highway 41. sure

Is part of the discussion on the transportation part discussing 16th and this project site in a vacuum but also in the record is that the property to the north is now residential mixed. It's a high density potential R2 above SC4 and SC3. Is the cumulative effect of traffic of all of these now taken in or is this now because the RM is new that some sort of assessment has to happen about if we can handle that additional traffic.

The cumulative effect is taken into account because when we do the master plan, we laid out, not traffic, we laid out residential uses and housing in these areas. So if it falls within the realm of what we anticipated in the master plan, it's taken into account for the long term. If you see the properties to the north develop and then this develops, there will be road connections in between those two developments which give people more than one way out. They don't have to all go down to 16th. There'll be abilities for them to head north to get to Horse Haven Avenue or north and then westerly to get to Syringa Street. As other properties develop to the east of this, there'll be other routes to get to Greens Ferry Road as well. So you have a lot of different items in play that as development occurs within this whole island, A number of the transportation issues help resolve themselves by giving people more than one route on how to get to places. People will take the shortest route to get from point A to point B, and then they'll also take a look at what's the fastest and least inconvenient. We do anticipate we're going to be putting a traffic signal or roundabout eventually at Greens Ferry and 16th. Syringa Street is not anticipated for anything, but we are also looking at making or emphasizing access for Greens Ferry Road to be a major north-south roadway as discussed within the last couple months.

Is it fair to say that the subject area of the map that's in the presentation, not quite this large, but the closer up that has all these zones is now looking at being higher density than what was envisioned in the future land use map and the comprehensive plan. As I see this was low density and medium density housing. I don't know what the one to the north that's now RM was considered, but I see a lot of R1 all around it, but would it be safe to say that it's now a little higher density than what was initially envisioned?

Within what we had for the 2025 master plan, the TAS zones, how we populated them, did look at the higher density. We weren't looking at R3 type uses out here, but we were looking at an average across the area, which is higher than just plain single family residential.

Thank you.

And I have the numbers here. I believe the low density land use designation on the map is eight units per acre or less anticipated. And their proposal here, I think, is for five per acre. So we're still within the bounds of what was in the plan. Thank you.

and I hear that and I did pick up on that and it's eight to five to 15 and the average weighted between the two would be somewhere around eight point seven there want to do five but as we've discussed before once it's approved it's out there it could be something else later right so but I think that's all I have on that further questions for staff

All right, applicant wish to speak.

Or is there more in your presentation? I don't want to cut you off if you had more.

No. Thank you.

Thank you Justin, thank you Rob. Ray Kimble for the record, Whipple Consulting Engineers. I'm here tonight representing Viking Construction. Give you guys just a little bit of history on this project or this property, these properties. Wendell, the owner of Viking Construction, purchased the easternmost property probably five or six years ago. And it was not contiguous to the city at that point in time. So he just sat on it. It was just empty field, just sat on it. And then early this year, the two parcels to the west came up for sale, which is very rare in this area. These parcels don't often come up for sale. And rarely do they come up for sale next to one of my client's properties. So he, even though the price was higher than he wanted to pay, he begrudgingly purchased them and now became contiguous to the city. And so this is, of course you've seen this and, and I won't belabor a lot of the stuff that, um, even though most of my slides seem just like Justin's, um, I will speak to a couple other things. So we have the, this of course is the medium and low density, uh, As you all know the R2 what we're asking for is an R2 with a single family restriction so we single family detached don't want to put duplexes. We have an approved subdivision for I believe was 67 lots there in the average of right around 6000 square feet. The reason for the R2 is to go down to a little bit narrower width. The R1 subdivision code requires a 60 foot minimum width. Most, so Vikings entry level product line all fits on a 40 foot wide footprint. So with post falls, that means you can put it on a 50 foot wide lot, which is allowed in an R2 zone. So that gives us the ability to put basically more of the same product inside the same footprint, increasing the density, but not increasing the amount of streets or sewer or anything like that that is going in to serve it. So it's a little bit of bang for the buck by just changing that one little bit, going from 60 feet wide to 50 feet wide, which was the impetus behind this, knowing that the R2 zone is both an impending zone in the low density and the medium density comp plan designations. This, of course, the RM to the north is largely, it's actually, it's all detached single family. Some of it's just cottage stuff. And it is all in that, I think it's that five to eight units per acre range. A little bit more dense than what we are, I think. I don't know my project, so... But it is right in that range, similar to what we have. And we have provided connectivity in our subdivision plan to it, both vehicular as well as pedestrian connectivity, understanding that connecting the roads and the neighborhoods is really important because of the fact that there are churches and pathways and things like that, so people being able to walk to church or connect the neighborhoods up. Mom not having to pack six kids into the van to fire them over to to drive, you know, 500 yards to get to the neighbor just around the block versus, you know, just walking there because the streets connect properly. And so, you know, with regards to the annexation criteria, Justin went through this stuff. Is it consistent with the comprehensive plan land use map? Yes, absolutely. We're R2 with the single family restriction is implementing zone. The central island focus area promotes, says we need to promote infill development, prioritize annexation opportunities in that central island and support development patterns that are interconnected and provide pedestrian connectivity. You've seen this map before in some of my presentations. And because this is the green here represents the, uh, this is the city of post falls. So the green represents, um, all of the land mass of the city post falls. And we see there in that bright yellow, um, these 15 acres, uh, inside that island. And I know I've told the story before, but I'll say it again. When I was a young engineer, God, so many gray hairs to go, I asked Rob's predecessor when we were talking about this area, I asked him, why doesn't the city just annex it, surrounded by the city? Why don't you just do it? And he looked at me like I was stupid, and he said, because we'd have to buy the right-of-way. And we don't have the budget to buy the right-of-way to widen all the roads. So they come in. when they voluntarily annex and they come in and they develop and then they give us the right of way, and not only do they give us the right of way, but they widen the roads for us. So when they develop it. I said, great, that's awesome. Unfortunately, that's a really slow process because as I mentioned before, these properties don't often come up for sale. So in this island, I did this analysis in another presentation before you, In the central island here, there are right around 15 or so developable properties. And when I say developable, I mean by a single property that is of a size and shape that is convenient to develop. Now, if you can cobble three or four of these two and a half acre pieces together, that are contiguous right next to each other, and you can pull off that miracle of getting all of those put together at the same time, then you've got a project. That is incredibly difficult to do. And so when these projects and these three properties together came up, it's an important chunk So it's almost 1,000 feet of frontage of 16th Avenue that will be dedicated, widened pedestrian facilities. If I'm not mistaken, I believe the pathway is on the north side. So it will be the 10-foot wide multimodal pathway on the north side of 16th Avenue. And is it perfect? No. Does it connect all the way? And do we have this three mile long pathway along 16th yet? No. But it's a step in the right direction. And it's got to start in some place. And this is one of those places to start. Also important to remember is that the sewer for this project is located in Syringa. And we're going to pull sewer all the way from Syringa all the way to the far eastern part of our project. So somewhere in the neighborhood of 1,500 feet. And so why I say that is that because sewers located in the middle road, the whole road goes away. And so we're getting brand new road. So for that section in between our project and Syringa, it'll be brand new asphalt. And then across our frontage, it'll be all brand new asphalt on the south side to today's limits and then widened on the north side. So far better than what's there today. We're getting brand new road. Unfortunately, or fortunately, I guess, you know, the highway district is, I guess, they're in favor of it because they don't want to have to deal with it. I mean, our plows are driving it anyway, so I guess it doesn't cost any less for them to raise the plow or drop the plow. So, but... With regards to the annexation criteria, county islands, getting rid of those, slowly chipping away, really important. Post Falls growing inward. If someone from, I would bet probably 50% of the residents of the city of Post Falls don't know that that's not inside the city of Post Falls. Everyone that lives inside that island drives through the city of Post Falls to get anywhere. So if there's a 911 phone call that's in that county pocket, The sheriff gets there second, Postal Police gets there first. So all of those properties that are in there currently today, like it or not, they're using city resources in some way, shape, or form just by their location. And by pulling this property into the city, the city now gets the tax revenue and the ability to benefit from that versus just being the... The rich uncle, if you will, or maybe not so rich. I don't know. Not so rich. Maybe not so rich, right? So, but does it meet the annexation criteria? Yes, it meets all the annexation criteria. Should it be an R2 zone with single family restriction, we think that that's the one that makes the most sense for this. And we're requesting approval tonight. And if you have any questions, I will be certainly happy to answer any of them.

Can I confirm a couple of things? So the square footage on the lots are going to be 6,700 square feet? Is that what you said?

No.

No. Oh, God. 6,000.

I don't, they're in that, they're right in the 6,000 to 7,000 square foot range. Oh, 6 to 7. They're right, so they're 50 feet, they're right around, in that 50 by 125, if I'm doing my math right, it's right in, it's right about what the minimum would be for the R1 zone. It's not like they're all 4,000 or 5,000 square feet. They're all in that much larger, or they're in the, They look and smell like R1. They just don't have the width. They're just narrower.

Earlier you said 40 feet wide. Then you said 50 feet wide. Is it 40 feet or 50?

No, the buildings are 40 feet. So Viking has a 40-foot-wide building product. So the house is 40 feet wide. And so with five-foot side yard setbacks, they can fit on a 50-foot-wide lot, which is what they shoot for.

yeah so um everything is pretty much the same as far as setbacks go in r2 for single family except for the lot minimum width right and the coverage percentage so r1 you have to have a 15 foot setback in the front 10 in the rear 5 on the side and 15 from the street and that's all the same in r2 single family it looks like what's different is that minimum lot width that you referred to, so R1 like standardly needs 60, but R2 needs 30. So since we already have a development agreement for them to be detached, would your developer be interested in putting in additionally in that to have the 50-foot lot width. Because it really does sound like you're really saying that it is R1. You just are looking for that extra 10 feet. I think R1 is a better fit. And I would be more happy with it. And to, I think, Councillor Luca, you said it. Once it's zoned, again, this is not technically part of the proposal that you have to give us to approve it. But since we're talking about it, to approve the R2, since you're not asking for R1, would you be interested in having a development agreement that said that the lot width was that 50 that you're proposing to really make it more R1? I think, did you say smells like R1? Looks and smells.

So one of the reasons that we come to, one of the reasons that I always try to come to these annexations with a subdivision in hand is because I don't want this whole idea of the whole bait and switch, right? I want them to give you a concept plan and, oh, no, no, no, we're not going to do that, and then walk away. I have an owner and a developer that is, they build houses. They don't just develop land and sell it to builders. They develop land and they build on it. So we put together a subdivision plan with this in mind. So does a 50-foot bother us? No. I don't care. I mean, if it gets us across the finish line, it doesn't matter. It doesn't change a thing. Is it wonky for city staff in the future? Maybe. I don't know. I don't really care. It's one of those things that, you know, fine. It doesn't matter. Great. It's one more complication for someone in the future.

Not my problem. I mean, the other option would be to request R1, I guess.

Well, I could, but then I'd have to come back with a PUD because I'd have to come back with a restriction.

Or just build it to R1 standards.

That could. But R1 doesn't allow for the width.

Right. Right. I guess that's sort of my point is that, I mean, I guess, We're not to deliberation yet, so I'll get there. But thank you. You answered my questions. Yeah, great.

Further questions? I do have a question. Yeah. So if this is a, like you mentioned, three contiguous properties is such a unicorn, why would Wendell begrudgingly buy them? Oh, he's old, crusty.

I don't think Wendell begrudgingly buys anything. I think he begrudged the price. Let's just put it that way. And, you know, property, let's face it, property is expensive in Post Falls. Five-acre lots are really expensive. Two-and-a-half-acre lots per square foot are even more expensive because they come with a house, and usually the house is in the wrong spot, which means that even though it has value to the people who live there, it doesn't really have value from a development standpoint. It's actually a disbenefit because there's a cost to tear down. I mean, that's just. the plain economics of it all. That's why some of these infills are really, really difficult because you've got these houses that are within the front 150 feet of the property. And you can see it on this map, this area right here. The property is just to the west. The back property is largely unused. And yet it's... hard to cobble those things together. So, you know, that's just one of the, it's one of the challenges. That's one of the challenges I get to face in putting these things together. And then bringing them to you folks. But it's something that we're working on and we're doing our best.

Further questions? All right, thank you. All right, thank you.

Mr. Mayor, before you go to comment, I do have one more question for staff. Do you want me to answer it before we go to public comment?

I think it's better to do it now.

Yeah, okay. I'm curious about the parks plan in this area. As we continue to develop out housing and maybe some commerce, do we have a plan for a park in the Central Island? The maps that were shown in my memory, I don't see one within... Like a mile, maybe half a mile?

Justin, again, as far as I know, for the comments we received from parks, I don't believe there is a park planned in the central island, but in a map that they provided for us, there are parks. This project is right about at the half mile buffer from a park. Okay. Isolation.

Great. Yep. Thanks.

Yes.

All right. Any public testimony?

No.

All right. So no rebuttal. I'll close the public hearing. Deliberation.

All right, so this is an annexation and initial zoning review. So the first question before you is, is the annexation of the property in the best interests of the city?

I would argue yes. It takes a big bite out of a large county pocket. It will make improvements to one of the busier streets in this focus area. So I'd say, yeah, it makes sense.

Yeah, this is one of the target areas that we've talked about for many years, and I do like... The idea of, I've said this probably 15 times before, annexation, just for the sake of annexation, I don't think this makes a lot of sense, but especially with these in county islands, we get the benefit of continuity of services and safety, but not enlarging the footprint of the city and not gobbling up more of the prairie and having some urban sprawl. So this, to me, is an ideal annexation.

I would agree that annexing this piece of property at some point is something that the city should do. I don't know that I'm convinced that it's within the best interest of the city with what's being proposed to be put on it presently. I'd like to see some of our other R2 developments build out and see what those look like and how those, how those do in post falls before we continue to, I would just like a pause on it for a second. I mean, I think eventually that this will be annexed into the city no matter what. I don't know that in the best interest right now, I would say yes.

If it's relevant, the starter home subdivision law killed the R1 zone, which hasn't technically taken effect yet.

Oh, gosh, I forget about that.

If we were to revisit this soon, this is all by right after the annexation version, down to 1,500 square foot lots, I think it was. So these 6,000 to 7,000 square foot lots are a lot more than the minimum required at this point.

We don't get an R1 anymore, huh?

No.

I think I had this like totally nicely for I've been living my life without that on my mind, and it's been delightful.

Welcome to the new reality.

still doesn't actually change my mind about it. It just sort of forces my hand, which I think are two different things. Yeah.

I believe it's in the best interest of annexation. I think the reasons other council members have already mentioned, you know, County Highland, it's infill, and the focus area calls it out as a prioritized area for annexation. I also think that the applicant did an excellent job of explaining the benefits, particularly to 16th Avenue. 16th Avenue. It's an important area for connectivity purposes, and I think I especially was interested in the connecting neighborhoods and trying to ride bicycles down through those neighborhoods or go on a walk or go for a run or what have you. It's very difficult when you have all these pockets without any connectivity.

Yeah, I would just second Nathan's comment to fill that island in. That makes sense. We have to do it. And the continuity that you get to see and the road improvements all make sense to me.

As recently as today, I was reading on social media comments that our citizens in response to your post, Mr. Mayor, were talking about how we'd love to have development pay for itself and have people that are coming here pay rather than having to put more burden on the taxpayers. Certainly the discussion about this being a county island, I love islands when they're surrounded by ocean. I don't like islands when they're surrounded by city. And our residents are being asked to subsidize the country living of others. And so for those and the other reasons that have been articulated, I would agree that it is in the best interest to annex it into the city.

I would entertain a motion. One more quick comment.

Go ahead, Joe. Not to conflate annexation and zoning, but one benefit of this particular request is that on the easternmost five acres, it's in the future land use map is medium density, which implementing zones are also R3 and SC4. So this one is locking all that in at R2, so that kind of maintains that least single family detached kind of feel, whereas if we wait, somebody comes back with an R3 proposal for that five acres, then that's a totally different picture then.

Well you can't have, can you have five acres at R3? It doesn't matter. We can talk about this later, but sure.

Just a quick comment about annexation. The presenter mentioned that one of the possibilities, and we've had this discussion come up probably more privately than out in the open here, but with that county island being kind of forcibly annexed into the city, and so this has been a target area for many years, even before either Joe or I were on the council. What do we do with this? And I will say, while Waiting for a voluntary sale and annexation request from the property owner is much more difficult to plan and just feels disjunct. I love that we protect the rights also of our county residents within that area, that this is their property, they're voluntarily doing it. I think it'd be really difficult to come in there and say, We're annexing all of this in not only from an expense to the city standpoint from the right of way, but also kind of the atmosphere that we're creating in that area. So I do think while it's unfortunate that it's piece by piece, we can kind of jump on the opportunity that we can and I feel do it the right way.

So how are we doing these now? Are we motioning these separately? Yes.

Yeah, we're taking them separately.

Okay. I would move to approve the Signal Point Vista Annexation ANNX-26-3. Second.

Motion and a second. Further discussion? Roll call, please.

Malloy. Aye. Ziegler.

Aye.

Mosby.

Aye.

Luca.

Aye.

Stiglitter. Aye. Plew.

Aye. Motion passes.

On to the next criteria. All right. Now we're talking about the zoning review and approval criteria. So the first one is, is the proposed zoning district consistent with the future land use map and focus area contained in the currently adopted Post Falls Comprehensive Plan?

I would say it is. Both low and medium density are called out in the future land use map are to satisfy both of those criteria and is an implementing zone.

And as I mentioned, In the annexation question, the focus area prioritizes this sort of development. I think that the R2 in both implementing zones satisfies that requirement for the focus area and future land use map and comprehensive plan.

Is the proposed zoning district consistent with the goals and policies contained in the currently adopted Post Falls Comprehensive Plan that are relevant to the area under consideration?

This focus area specifically states that we should prioritize annexation, so this kind of fits that to a T. Comprehensive plan states to allow for a mix of housing types. R2 is probably the least utilized housing type in the city at this point still, so that's consistent with the comprehensive plan policies. It improves vehicular and pedestrian connectivity, not all the way to Syringa, unfortunately, but it gets us closer there. Also, the sewer service being extended 1,500 feet improves connectivity of services.

I believe in accordance with comprehensive goal seven, the R2 will help establish land use that supports our community needs for long-term sustainability by providing a highly needed land use that is detached single family housing. I believe that also the requested zone will also go forward with comp plan policy 15. Again, as Councilman Malloy said for providing for future housing needs. In accordance with Comp Policy 8, it's compatible infill development of vacant underutilized properties within city limits. It's too bad that the two parcels to the west of it weren't also part of it and could get that connectivity almost all the way there, but I digress. I think in accordance with comprehensive policy one, the impact fees will help pay for maintaining levels of service. Added housing can help with long-term fiscal health of the city by housing more potential employees and business owners near business centers. I mean, this is pretty close to Mullen that area in Post Falls. And development of the county island will help maintain and enhance resident quality of life with the urban improvements like sidewalks, trails, and paths. I think it also fulfills comp policies 26 and 27 when the annexation will include allowing maintaining and improving the sidewalks and continuity trails and bike paths we talked about before and street connectivity and walkability.

I think the comp plan also and the future land use map and all of those plans really envision up to if you take a weighted average of what could be there of around 10.3 units per acre and this is half of that. So I think it definitely falls within that and also gives a hat tip to the residents who are concerned about density. would meet the goals of providing the housing that we need, filling in the islands that we need to fill in, and yet not massively increasing the density to even half of what it could be. So I think it's a well thought out proposal.

Finally, does the proposed zoning district create a demonstrable adverse impact upon the delivery of services by any political subdivision providing public services within the city?

Multiple agencies were routed and no adverse impacts were noted by any of them.

It actually might have been nice on this one to have the ones that say that they're not affected by increased growth, talk a little bit about how this would actually help relieve services for them since it's in the middle of our city and they're providing services, but they still say no comment.

Along those lines, I wish the highway district explained why they were in favor. I was thinking just because it was broadening the roadway, but it sounds like there's a potential that it might just be because, well, now if it's off our plate, it's great, but that means that they would be in favor of every project, so...

perhaps within their jurisdiction, yeah. All right, a couple general comments on this. Thinking about density in kind of the compatibility with the surrounding areas is always forefront on our mind, and we kind of have the discussion between R1 and R2 and the compatibility with surrounding areas and all the things that we do when we're talking about annexation and zoning criteria, but I also think... kind of considering this over the last few days. One of the things that I do like about R2, first thing is what we would consider an R2 home compared to an R1 used to be just called a house, you know, with its kind of standardized square footage that we've, over the last 50 years in this country, have kind of grown and grown and grown to the standard side house instead of 1,700, 1,800 square feet is now 2,500 to 2,700. So I think it is a good return to kind of what an initial investment or starter home I think really should look like. And secondly, in light of our conversations about our budget hearing and fiscal plan, not that I would advocate for any higher density than R2 in this particular area, but it is kind of, I think, consistent with the financial issues that we're faced with in the next 10 to 20 years. to get as much as we can out of these types of properties that are still consistent with their surrounding areas. And so the difference between a 50-foot and a 60-foot lot is one more home for every five, which in a project this size, you're looking at probably, what would that come out to, 12? to 13 additional homes, that means that another parcel paying taxes toward not just the initial cost, you know, I know that we collect with impact fees, but ongoing, like we talk about when we put in new streets in R1 or R1S, you know, the tax base isn't enough to pay for its ongoing maintenance. So I think this is also, I think, part of what we need to keep in mind in strategy for these particular types of parcels, the long-term ongoing fiscal impact that that these developments may have. And I think R2 is kind of that middle ground between, I don't think it completely solves the problem. I don't know how the math comes out on that long term, but it at least kind of helps.

This is kind of a tangent, but along the same lines of highway district and we've got a budget hearing tonight also, but it was last year or two years ago, the Post Falls Highway District had a 1% decrease in their budget and to a lot of I'd say self-promoted fanfare, which is great. I'm glad they did that. But they're in a unique position that the more the city grows, the more of their responsibility gets taken over by the city. So the bigger the city gets, the less the highway district has to do. And so they get to cut the budget. On the other hand, the bigger the city gets, the more the city of Post Falls has to do. So just bear that in mind when these budget hearings are had throughout the various taxing districts.

Yeah, I feel like there should be some automatic transfer of revenue from whatever they had taken care of that street to us, but we don't get that. That's wishful thinking.

And perhaps if I may, before we vote on this, I appreciate that we talk often about what house sizes used to be. But from a public standpoint, at least the feedback that I hear has very little to do with the size of the home and very much to do with how close those homes are to each other. Even some of the R2 that we have built, like on North Spokane, dwarf the size of the house that I first bought, but not the lot. And so that, when we talk about the charm of Post Falls or the small town feel, it's really not about at least, what I hear and what I perceive from talking to people, it's not often about the size of the home. It's about how close that home is to the next one, and thus where you park your car. Or, I mean, can you hear your neighbors? Or can you see through your window into theirs? And so I think there's more to consider in those instances than just the actual square footage of the home. And while I do agree that it is in, I mean, these lots were going to be annexed at some point. We were told, quite frankly, that they were purchased with the point of being annexed. And my only reservation is really about the speed at which we move with our annexations in our buildings. And one of, again, many things that I hear from the public is just the speed at which they see things. So sometimes I think that it's worth thinking about, is this something that needs to be done right now? Mr. Mayor, you make a good point. will we do now for reasons that none of us had anything to do with? So, um, in, in this specific instance, yes. Um, I think that it is something that needs to be done now, but having a little more care in like, yes, we know that it's going to be annexed and we understand the financials of the streets and managing these things, but that doesn't always mean that we just have to do it right now. Um, and because it will eventually be in the best interest or it is at some point, um, I think it's reasonable for us as representatives of, um, the best interests, but also the anxieties and fears of those that we represent to take that into consideration sometimes. So I'm not totally dense to the things that you guys talk about, but I also think that sometimes we don't just have to do it right now. So that's my only comment, but today we do, but today we do.

Yeah, I don't think we're in an urgent need to bring more people to Post Foles, but we do have an obligation, I think, to provide a pipeline of employment for people who are building and supporting the building of these. And that is one consideration. I did want to say on the density part and on the starter homes, I think that lately, and this is maybe more of a council comment, so I'll keep it short. But we are talking too much about reducing the size of the American dream. and trying to fit, build houses that tell people to scale back what they want for their families to what the current inflationary cycle allows them to afford. And certainly, in this particular development, I think knowing Viking's product is 1,200 and up in terms of square feet, generally you can I like this. This is saying that if you are a young married couple or whatever and you want to start out, you could start a family in a house like that and you could dream a little bigger for something larger as the kids get larger as well. But I do hope that we don't, in our conversations about starter homes, use the current milieu to say that Everything we build has to be 900 square feet to accommodate the pricing that our inflationary cycle handed to us from our federal government has provided. Instead, I think we push back against that and provide something that everybody can dream for. So anyway, thank you. That's my soapbox.

We'll get to more of that later.

Yeah. I move to assign the R2 zoning designation to the Signal Point Vista Annexation ANNX-26-3. Second.

Motion and a second. Further discussion? Roll call, please.

Malloy. Aye. Ziegler. Aye. Mosby. Aye. Luca. Aye.

Stiglitter. It is my sincere hope and trust that it gets built out the way that it was presented. Again, I think a lot of the public anxiety comes from what they see here. and then either what comes back for special use or PUD that's different than what we talked about, or just doesn't get built out. And so without the development agreement promises, if you will, agreements in there to what was presented, it always gives me a little bit of, I don't know, unrest that it might not be what we represented, but in good faith to an already approved subdivision, I would say aye. Aye.

Motion passes, thank you.

I'm trying to say things when they tell me to say things.

On to the next public hearing, annual budget for fiscal year 2027. We'll open the public hearing.

Okay.

I can't raise the dice.

Tall people problems.

Yeah, right. It's close enough. Good evening, Mayor and Council. Lovely to see you again. We talked about this a week ago. We talked about it the week before that as well. Tonight is the annual budget hearing that we have annually to talk about what we're going to do for the next fiscal year. We also have following this a hearing on the fees for the next year, generically. Quick rundown of what we're going to cover. This is gonna look an awful lot like what we talked about in the workshop a week ago. There are some updates to the slides that we've made in response to questions as well as comments during the workshop. So we're gonna go through those, do a quick review mostly for the folks who are listening at home or who are here to have a better understanding of how property taxes work in the state of Idaho. We're going to cover a quick economic update. what we're doing as an ongoing project to try to reduce our expenses long term. I'll run you through the general fund budget and then I'm gonna invite John Beecham to come up and talk to you about the enterprise funds that was covered two weeks ago in a workshop. So with that, we're gonna jump into this. So this, year not unlike the past couple of years is a bit of a difficult budget year. We continue to have capped new construction annexation revenues as a result of legislation that was passed a handful of years ago, House Bill 389, that limited our ability to recapture all of the value created by new construction. We see reduced state revenue sharing dollars, particularly this year, the legislature rated, I'm gonna use that word even though it's probably pejorative, they rated the alcohol fund that was, the city's share of the alcohol revenue was cut by $2 million this year. the impact to us is $100,000. So again, a difficult budget year with also continuing high inflation. We had some to-dos to going into this budget. We wanted to make sure we're taking care of our ongoing expenses. We're funding salaries, including knowing that we're looking at a salary survey, as well as we have a PD expansion project that is underway now. We're doing the parking lot this year. We're starting the design on the building. And we wanted to see if we could add some additional PD resources. So what was our big picture approach? On the expense side, we're again very limited on the capital that we can afford given the budgetary constraints that we're working under. Our operating numbers are held essentially flat for the second year in a row. We're trying to add three new police department employees. That's one new officer, one new sergeant, and one new support staff. And we're looking for our employees to do about a 3.1% scale adjustment. That number's based off of the CPI in March, as well as a 3.5% merit increase for those people who have not reached the top of their range and who qualify for a merit increase. The revenue side of that equation to make all of that work is essentially a 4% property tax budget increase. This is just the portion of the budget that's funded by property taxes. A one-year only 3% capital foregone that would go solely towards the PD expansion project as well as we're, you'll hear about this at the next hearing, we're looking at trying to index most of our fees by CPI so that we're not transferring the cost of fee-supported services to the tax rolls. So quickly, property tax review. Most people, I shouldn't say most people, a lot of people, their expectation and understanding of what property tax law looks like is based on where they grew up and what the laws were like. It may be in a different jurisdiction and so they come here assuming potentially that the valuations are going up and so our revenue is going up along with those valuation increases. That's not how it works in Idaho. In Idaho, local jurisdictions levy a fixed amount. So in my example, it's $10 million. If we need $10 million to meet our needs, we levy $10 million. we don't levy a percentage per thousand evaluation and so we're not getting that immediate flush every time there's new construction or there's valuation changes. There is a separate levy for new construction and annexation that we'll come back to but we don't get those ongoing increases as a percentage as your valuation goes up, we're netting more money. Our levy rate is determined by taking that whole amount, that $10 million and dividing it across all of the property values across the entire city. So what that causes is that for you as an individual property owner, as your valuation changes, the amount of taxes you pay changes based on how your property value compares to your neighbor's property value but also to the industrial property in the community and the commercial properties in the community. So if your valuation is growing, faster, so if you've been either reassessed or you've done something to make more value than your neighbor's house, you're gonna pay more than your neighbor's gonna pay a little bit less. The truth happens in reverse as well. So even if we don't take a tax increase, there is a potential that your taxes are gonna go up, somebody else's taxes are gonna go down. we could take an increase and your taxes could still come down because it's based on what your valuation looks like. Did your valuation drop compared to the overall what's happening across the city? So it's for the individual what it matters is what's happening with your valuation and then the levies made by all of the various taxing entities together is really at the end of the day what drives what happens for your individual taxes. In Idaho we have a an 8% max budget cap for most instances, which means that we can take a maximum of our new construction and annexation, we're only allowed now to take 90% of that value, which in effect transfers 10% of the cost of new construction and annexation to the existing taxpayers. you take that amount and you can take the 3% that's a general increase for everyone, those can't exceed 8%. If they exceed 8%, you're ratcheted back down to 8%. So you live under that 8% cap as well as a separate, you can only raise your budget by 3% in any one year, with one additional percent for foregone generically. The new construction and annexation value is really there to offset the added cost of growth. So if we're having to hire new officers or if we're having to buy new equipment to mow parks, those things are typically paid for out of that initial investment coming out of the new construction and annexation levy. whereas the general increase is really there to pay off increased costs that we may have from inflation or if we have decided to create a new service that's for everybody is to pay for those increasing costs that affects everybody rather than growth. This is where we're getting to the first one of our council questions that we received this week.

Wait a minute, back up here.

neglected to mention that we also collect impact fees along with that new construction and annexation levy to help pay for for the cost from growth which leads to this question that came in I believe from a constituent is can we use impact fees to pay for non-capital impacts and And the answer to that is no. Under the impact fee statutes in the state of Idaho, and this is probably not unique to Idaho, I think this is reflected across the country, impact fees are really there to pay for capital items, that's items that have a life expectancy of greater than 10 years, and it's typically for us, it's gonna be for the police department, it's going to be for our parks and for our streets, for new facilities, essentially, and long-term equipment. They're the only things that we can pay for out of impact fees. The other thing that's a little bit unique in Idaho is historically there's been this thing called a foregone balance that if you didn't take a tax increase because you didn't need it in one year, the value that you didn't levy that year would go into a I'm going to call it a savings account, but that's not really what it is. It's reserved levying authority. It goes into the savings account that in the future if a need arises and you've got a rainy day and you then need to levy an additional amount beyond the 3% that you could have levied, you can then tap that amount, that savings account, to meet the need that you've encountered. It allowed you to, rather than levy it up front and stick it in a rating day fund, you just saved that levy authority, let the property tax owners keep it in their pocket until you absolutely needed it. The calculus on that also changed with House Bill 389 a few years ago because they changed how you can take it out. Now you can only withdraw money from that savings account an additional 1% annually towards any operating cost and up to a maximum of 3% annually for a capital project. The trick with the capital project is once you take it, it's gone. It's a one-year infusion of cash. So we're going to talk about that in a minute. If we take 3%, it's around $550,000. You levy that one time. The levy goes up a little bit to pay for that $550,000. The next year it comes right back down because it's fallen off the levy. We have currently a balance of just under $3 million in our foregone balance. What that tells you is that annually every year we could today be levying an additional almost $3 million. which would be helpful meeting some of the issues that we have today, but the councils at the time were doing two very rational things. One is they were only raising taxes to the extent that they felt they needed to and we would pull it back out in the future. Unfortunately, the rules changed and we're not really in a position to do that anymore. The other thing that tells you is that for Year in, year out over decades, the city has been very, very conservative in how it has approached tax increases because you don't generate a foregone balance like that overnight when you can only take 3% annually. It takes a very long time to build up a balance like that. So cost saving strategies, I'm going to give this short shrift because the mayor did an announcement yesterday that kind of covered most of this, but I'm going to talk briefly about it. We have a number of strategies that we've begun over the last year or so trying to get on the backside of this. You can only The revenue piece is one side of this equation. The trying to do cost savings is the other side of the equation. We've created a long-range financial model that allows us to hopefully model changes so we can project out what's going to happen with our budget. We're reviewing each position as it comes open to make sure that we need to fill a position before we do. We're beginning a priority based budgeting process where the community essentially will be asked to help rank the value of the programs that the city provides and based on those rankings, the budget dollars will follow those rankings. So if you're a higher ranked program, more dollars will flow to that. If you're a lower ranked program, fewer dollars will flow to those programs. The net impact of that ultimately will be there will be reduced service levels at some level unless revenue changes are made at the state level because that's just going to have to happen. We're also doing a review of all of the real property that this city owns to determine is there anything here we can get rid of or can we lower our maintenance obligations. We've begun an efficiency program. We have training scheduled for two of our department heads starting next month and after that we'll start rolling that out to other employees to have an employee led efficiency program that's modeled on lean manufacturing principles. Finally, I kind of alluded to this earlier, we are reviewing all of our fees to try to make sure that the fees are fully capturing the cost of providing the service rather than passing those costs on to the tax levy. Which leads to council question number two that came in. If we were to sell a piece of property, for example a park, would revenues from the sale be usable for payment of salaries or for buying a police car? This is the lawyer answer, maybe. Like I said, the review of city-owned properties is ongoing. We're currently doing that. I would tell you that we typically try not to use one-time revenues to pay for ongoing expenses. You end up upside down if you do that. We try to use one-time funds to pay for one-time needs. Another thing, especially with parks, to keep in mind, if we used federal funds to either acquire or to help improve that property, We typically are using land and water conservation funds to do that, and then at that point, if you try to take that out, it's what's called a conversion, which is prohibited. So there's no funds left for you to be able to get back. The other thing, and this is something that came out of our impact fee discussion a few weeks ago, We have an adopted level of service for park land, acres per thousand. If we're selling park land that brings that level down, we probably need to spend those funds somewhere else to bring the level back up unless we somehow lower the overall level of service or we're essentially invalidating our impact fees.

But is it still considered a conversion if we sell a piece of property that was purchased with money out of a parks account and then use it to buy a police car, which is not necessarily ongoing? Yes, it is. I think that was the direct question.

So you may be able to do it depending on the type of property and what funds went into acquiring it, but we would probably suggest that once we got there that we're looking at using one-time funds for like a police car or something. So economic headwinds, city budget history. We do this every year. We go through what's happening in the economy. We continue to be in an era of high inflation, unfortunately, this year. We typically pick, we just use March for most things across because that's kind of when we're starting our budget process. And it doesn't make sense to give you a moving target for every time we talk about it. So we just pick one and we typically stick with it. So we're seeing from the March numbers, inflation up 3.1% year over year. Over the last three years, you bring them together, it's 9% over the last three years, which ironically is exactly how much you could have taken in tax increases over that three year period. In theory, you could have, if you took 3% each year, inflation has essentially soaked up all of the value of that tax increase by and large. Our construction index for the cost of doing capital projects this year is up about 3.22%. Over the last three years, that's about seven, almost 8%. On the insurance side, we saw some huge increases a couple of years ago. The premium this year is looking at going up 6% over the last three years, almost 44%. And those are largely things that are beyond our control, large storms, fires elsewhere in the country that we get to help pay for. On the labor front, we follow, there's an index that the federal government puts together that also comes out through the state of Idaho. It's called the All Occupations Average Wage. So they take the broadest sector, they look at what are the wages across all employment categories, what's happening in that, what's the trend in that. For the Coeur d'Alene area, this year the number was up 3.78%. Over the last three years, it's up over 18%. which is pretty wild, but then you look at the next blocks I've got there, what's happening with housing costs. Over the last three years, we're up about 8.2% for sales price for homes. For fair market rent, this is an estimate put out by HUD for what they, estimate is for what they think a fair market rent would be to rent a standard issue apartment. Over the last three years, that number's up almost 25%, which is just, again, wild to me. So turning to our budget history since 2009, this council has authorized exactly 7% in new ongoing revenue. And that was the last two years as we entered into this really difficult post House Bill 389 high inflation period. Prior to the 389, we largely relied on new growth revenue and that's really just not feasible anymore. Graphing that out for you, this is just in the last 10 years, looking back to 2017. The green line represents what's happened with inflation over that period of time, that 10 year period. The dashed blue line is what's happening with our revenues. So if you look at the 2026, that's kind of where we're at today and then we're projecting out next year if the council approves the proposed budget, we will ratchet up a little bit closer but we're still, that would take us up to about 15% versus call it 37, 38%. The budget dollars are not tracking with inflation. It'd be one thing potentially if we were just dealing with inflation, but we're also struggling to provide the growth or the services to provide, meet the new growth demands. In that same period of time, looking back to 2017, we've added about 15,000 people, 50 miles of roads, an additional 7,800 calls for service from our police department, added eight new parks, 3,500 new wastewater accounts, I'm just going to cherry pick some of these. We've had essentially 4,000 new users of our REC programs for a whopping 100,000 hours of additional REC participation, which is just an amazing number. And we've added about 59 full-time equivalent employees. So we're struggling with the inflation side, but we're also struggling a little bit with we need to be able to provide services to the new areas of our community. anticipated revenues.

Warren, can I just, can you go back to that slide? Sure. And maybe, it's not just new people that have moved here from 2017.

No, it could, certainly. Yeah, it could be people.

We're providing services to all of the people here.

Absolutely. Okay, thanks. So looking at our state revenues, this gives you our fiscal year 2025 actuals, our fiscal year 2026 budgeted amount, and our projected amount for the next fiscal year. If you compare the last two there, the 27 and 26, you'll notice that the liquor account is down about $100,000, highway dollars is down, call it $900,000, and sales tax rebounded about $250,000, I wanna say 200, something like that. Graphing that out since 2021 when we flipped it around so it reads for people who like words not numbers. You'll note that since 2024 we've been on a little bit of a down slope. This year we're significantly lower than we were back in 2024 for the cumulative in numbers that we're getting in state revenue. We're dropping down from what was pushing 10 million to just over Further on our anticipated tax revenues, looking at our fiscal year 2026 levy, that's where we start with, so that was $17,400,000 and change. If you add on what we anticipate for new construction annexation, which is close to $400,000, you add in a 3% increase, that's $522,000, a 1% operating foregone is 183, and a one-year capital foregone, that's 549, That gets you to a total of about $19 million. This is essentially the same numbers but just broken out so you can see what the value of an individual percentage is. Turning to the new construction and annexation values over the last handful of years. Looking at 2021 and then comparing it to where we are today, we were just under $700,000 in revenue. Today we're just under $400,000. we've lost about $300,000 in revenue over that period of time, largely due to House Bill 389. Here is across the categories what we're anticipating for revenues from charges for service, sales tax, liquor, franchise fees, it all adds up to about $44 million total. You'll note that the property taxes is that $19 million down at the bottom. pulling out the carryover so you can see closer to true budget amounts rather than the amounts where we're taking it out of one pocket and putting it in another. and comparing it versus last year you'll notice the total number of amount of new revenue is about two million one hundred thousand dollars i'm hoping that's getting close to what you're asking for it turns out that's an extraordinarily difficult thing to figure out is that why i've had to ask it three years in a row yeah yeah we're working on it we'll get there um oh wait are we not going to talk about that i just get that one slide in that we'll come back to it when we get to the expense side So on the expense side, again, this is mainly a maintenance budget for the operations and capital. Our operations is largely capped at 2026, kind of meaning 2025 levels, because we did the same thing last year, with some exceptions where we have to pay for increasing fuel, we have service contracts, we have to pay the contracted increases for those things. I already mentioned the I-CRMP increase for our insurance. One thing to note, this year we created a designated street fund so you'll see some noise where money is leaving the general fund going into this new street fund that lives in the general fund so it's not really new revenue or really new expenses, it's just moving it to a new designation. On the personnel side, as I mentioned earlier, we are reviewing all open positions before filling them. This year we've eliminated one position so we're down one. and we're asking to add three so we'd be netting essentially two new positions. Of those we'd have three that'll be in the PD. We have a number of promotions across the city that we'd be looking to fund. I also added in just as a gee whiz we are not funding a number of positions not because they're not needed it's just because the dollars don't go that far. and that would have been an additional $781,000. Council question number three, no new hires. If we decide not to hire the new officer or the new PD staff, how much of a budgetary difference is that? It's about $440,000, 239,000 in personnel, 200,000 in capital. Just for this year. Yeah. And the salary obviously is ongoing. Capital comes back in every few years at some point as you replace those capital items. On wages, last year, as you recall, we defunded our incentive pay program. We took that away from our employees. We did a relatively small scale and merit adjustment, which didn't meet our goal of trying to get people from the entry level of their wage to the top of their range in 12 years. It also was significantly less than that all occupations wages for Kootenai County last year. That was up about 7.6% just last year. This year we're proposing a bit of a catch up, a 3.1% scale adjustment, again based off of that March CPI, and a 3.5% merit. If you compare the two year total, it's 11.6 versus about 11.4 for the all occupations wage, which is remarkably close. What that doesn't account for in that comparison is the loss of that incentive pay and it also doesn't factor in the folks who are already capped out. The impact on them is different and we'll cover that in a graph in just a second. So this is where I'm gonna wish I had some way to highlight this. So the top line here you're looking at on the graph, the brown on this monitor, that's our target of 12% or getting them through the ranges in 12 years. The next line down that shows you The yellow line, that's kind of what we've done for our employees over that period dating back to 2019. This is for employees who are not capped out. So if you're an employee who was hired in 2019, we would have expected you to be on that brown line. We've been able to be on the yellow line. The dark line below that is what's happened with the all occupations wages in that period of time. They're about eight and a half percent behind what we've done for our new employees, the folks who aren't capped out. And then the inflation line is the gray line at the bottom, that's what's happened with cumulative inflation over that period of time. for employees who have reached that max in their range, the picture is remarkably different. Here the black line is that all occupations wage, the gray is the inflation, cumulative inflation over that period, and the green line, the bottom line, is what we've been able to actually do for our employees who have reached the top of their range and just in the way of salary, or excuse me, scale adjustments, so it, Once you've reached that point, in the public sector, you can typically ramp up a little bit faster, but then you stop keeping up with the market over time, and it kind of norms out.

warren can can i clarify something um two slides back then when we're talking about the difference between the essentially raises that we're approving with tactile tax dollars for city employees versus the raises that we're seeing all of the public get we're only talking about percentage of what they get paid we're not talking about the actual amount of money that they're getting paid so i i just want to sort of put that statement out there. Because you look at a slide like this, and I think it could easily be interpreted that we are looking to pay city employees more than what the average citizen is getting out in the market. And I would like to be clear that, for one, that's not a goal that we're looking to do. We're not looking to increase taxes so that we can pay more because we can increase taxes and do that but we're just looking at the percentage increase on the wages not the specific wages themselves and I think that one of the challenges that we still have in the city is being competitive with the actual dollar amount that we're paying for many of our positions and so looking at the increase and making sure that that percentage is meeting the market is one of the ways in which we can try to be judicious with our tax dollars and not overpay for the positions in the city, but also make sure that we're being fair to those that we hire and are serving our residents. So looking at this number, you know, you're like, oh, you're, you're giving higher wages or like raises to city employees. And you guys are the ones that approve budgets and, and have taxing authority. But, but there's more under the, there's a couple layers under the surface to that. And I didn't mean to slow your roll.

No, no, you're perfectly fine. This is a, We do a couple of different things. This is one thing that we take a look at is how are we doing versus the broadest sort of indicator of what's happening locally because we employ a lot of different types of employees and a lot of different functions. And so taking this broad range gives us the ability to say against the biggest market, what's happening generically on a percentage basis? We also, we're working through a salary survey now comparing how are we doing position by position our position compensations lining up so we're trying to we try to make sure that we're not getting either too far ahead or too far behind what's happening locally because we have to be good stewards of the money but we also need to try to be competitive and make sure that we're We're providing value to recruit and retain our employees because the cost of recruitment and training is just, especially for police. I'll ask Mark to come up if you want to talk about what it costs to train a new officer. It's astounding, the costs.

If I might just add, Natasha, great point. A perfect example of that is a starting streets worker in the city of Post Falls starts at just over $20 an hour. And I could tomorrow be making that at Del Taco. So it's really hard to compete with the private sector at that wage. So bear that in mind that a lot of positions at the city start with really low wages. And then the city tries to move them through their grade a little bit faster to make up for it. But great point. The starting point often is really tough to compete.

And on that point, too, I'd add that we talk about it in terms of competitiveness, but it really needs to be framed also, which is competitiveness is important because we're trying to recruit people, but it's also a basic moral question. In the Bible, Luke 10, 7, 1 Timothy 5 says the worker deserves his wages. And it's something that's picked up from a theme in the Old Testament in Deuteronomy 25 that says, don't muzzle the ox while he's threshing the grain. And it's saying that, look, if the ox is producing that grain for you, you need to give it its due. So allow it to eat some of the grain that it is producing and don't muzzle or throttle it while it's trying to do its job. And so this is really a basic moral question as well. And we have street workers that are making, like you said, what Del Taco is. workers do not that del taco workers don't provide a valuable service but it's different than shoveling hot asphalt or snow plowing or those kinds of things that our street workers do and i think anybody would agree it's an easier job to be inside and all that rather than than outside so again for me it's it is a competitiveness question and it's a simple business math question that I deal with in my private life, but it's also a basic moral question that people deserve to earn a fair wage for what they're providing.

You beat me to the punch on that. What's that? That was going to be my comment. You can still make it.

You'll probably be more eloquent with it.

So getting to the cost side of this discussion, to provide the wages increases that we're talking about, again, kind of a reminder we are a service industry. We have the biggest expense in our budget is always going to be people because we provide. That's what we do. We are a service industry. It's about $1.4 million to provide the wage increases we're talking about. We're anticipating, again, that 15% increase to our benefits this year. That's going to be about $600,000. For reference, I've given you the total of the new construction annexation, 4% increase is about just to $1.1 million. Our anticipated total new revenue is about $2.1 million. Excuse me.

I'm sorry, can you parse that a little bit more for me? So new construction, annexation, and the 4% budget increase, correct?

Yeah, so if you take the new construction and annexation, which we...

I get that part. I'm not done yet. Okay, great.

I'm sorry.

And then what is the anticipated total new revenue? How is that number different?

It's just you have more revenue coming in than just those. We're going back to this slide. So you see the variance down the side that shows increases almost across the board. We have liquor going down and state highways going down. So it's the net of all of the changes across those boxes.

So the $2.1 million is... new construction annexation plus the 4% increase and all of the things listed on this slide that you wouldn't let me talk about when you showed it to me the first time. I just want to make sure that's the anticipated. I just don't want to add those two numbers together. I don't want to add $1 million and then $2.1 million.

No, you wouldn't put the $1 million on top of that. The $1 million or $1.1 would be rolled up into that.

Okay, awesome. Thank you.

on the capital side, we're recommending some pretty limited expenditures on capital this year. Um, with the, these are all essentially new items that are not funded minus the last one that's Asterix the replacement vehicles. We have a rolling program where we pay into a fund to, to save up money to buy replacement vehicles. So that's already funded at 1.67 million. Um, We talked a little bit in more depth at the last meeting about the things that we weren't funding this year and here, I just left a few representative samples of things that we didn't fund. Again, this is kind of like the personnel side. It's not that they aren't needed. For instance, the city hall boilers are, they're not needed until they are. You hope that the day that they are isn't in the middle of the winter and so at some point we need to replace those. The total unfunded capital this year is about $815,000. Council question number four, what happens if we take less capital? If we don't buy the park benches, the cargo trailers side by side, or the new police vehicles, that's about a $300,000 amount. Could we make the budget work with either like a 2% increase or removing the operational foregone? So the value of those is the 1% increase is about 1.6. 174,000, a 1% foreground is about 183,000. Together, it's about $350,000 in revenue. So we can always figure out a way to make that work. What we would do if you take something less than the proposal is we're going to get back together with the department heads, reprioritize. These items may still be a higher priority than some of the things that we would otherwise have funding for. So we would get together and go through the list, figure out what things are the biggest priority for the group. So I mentioned that we're beginning the PD expansion project. This has been planned since the original construction. We knew that at some point we'd have to expand this facility. It was included in our 2021 facilities master plan. That plan provides us a very high level planning level estimate of $14 million cost. Those numbers have been pretty accurate on the other projects we're doing, so we think it's at least a good starting number. To fund that we will take up all of the available police department impact fees as well as paying the bulk of the cost out of the facilities fund for about 10 and a half million dollars. We currently have about 4.1 million in police department impact fees and 16.1 in the facilities fund. So the project is funded today assuming that the revenues continue to come in as we've sort of forecast them. I would note that a portion of the impact fees that we have on hand is gonna be used up finishing the parking lot at PD, so it'll be whatever's left after we're finished with the parking lot. And then the facilities fund, there's also two other additional projects to come out of that at this point. There's a public works facility and a parks project, or parks facilities project, I should say. The Mayor alluded to this at the workshop and John I think did as well that currently what you're seeing in the escalation of construction costs year over year at the current E&R index, the cost of delay is about $450,000 a year. So if we just hold off on doing a project for one year to save up money, you may actually be falling behind because the project is getting $450,000 more expensive annually just at the inflation cost on construction materials. For the impact fees, we've been collecting about 550 annually over the last couple years. We projected that at about a $600,000 number, so we've been, the last two years we're coming in a little bit light. This year we're actually coming in over that, we're at about just over a million dollars to date as we're closing out this fiscal year, so we've made up the ground in a little bit more this year. So we're okay on that target. the one-year capital foregone would generate about $550,000 towards the project. Excuse me. As I noted, this would fall off the levy after one year. It can't be used for anything else. It can only be used on this project. And once we spend it, those dollars are gone forever. They can't be levied again in the future. General refund or general fund recap. This is again excluding the transfers to try to make it a little clearer what we've got across the board. This is a five year look back. You'll see operating capital and personnel. We've tried to roll these up so you can get a better sense of what we're saying in each one of those categories. The one thing I would note is because of the deficit in state funding for transportation this year we're having to backfill that out of rev reserves to pay for street operating so you'll notice on the operating line for 2027 that that number looks like it's jumped significantly it's because we're putting reserves in to replace those those state dollars so Absent that the numbers that you would be looking at in that column is more akin to those 7.18 and 7.13 that you two years prior with some obvious incremental increases to pay for fuel and then the things that we have to pay for.

Warren, can you elucidate some of the ways that staff has been really prudent about keeping that operational number steady for the city for so long? I mean, we're talking about increasing everywhere else, but essentially that operating number being the same as saying that somehow we're not paying more for water or electricity or are subscriptions in there as well, which means that we must be making up ground somewhere because subscriptions are going up.

Yeah, and often it just means that we do less things. So if we maybe do less travel and training, we may do less. And some of this is also made up with efficiencies. As things get more efficient, you don't have to like, the day was you used to have to photocopy everything and you would then have filing cabinets full of paper. Today, we don't have to do those things. And so some of it is made up in efficiencies. Some of it's made up in things that we're just not doing. not so much this year, but last year, we sat down with each department head and went through the operating lines line by line and saying, looks like you haven't spent this one fully in the last couple of years. Can we cut this one? Can we reign this one back? And so there was also some of that just pruning where people were wanting to make sure that they had enough But if history wasn't showing that they were fully spending that over a few years, like, well, it looks like you're having enough without that last little bit. Let's take the last bit off.

Gotcha. I think that that kind of detail is helpful for the public to hear because my personal operating budget has never decreased in my life. It only goes up and up and up. And to do that, I think, takes a lot of dedication from the staff. And I just like... hard work and really wanting to make these numbers stay steady. So thank you for that. I got a question.

I did. Thank you. In regard to your 2027, the asterisk amount, if I'm understanding what you're saying correctly, we're taking out of basically our savings, but so there's not enough to make up for the difference in that for the streets because of what the state has taken away from us.

Yeah, essentially. So the cost of maintaining the streets, the operational costs, those are kind of fixed. And regardless of what the state does, we still have the same staff. We still need to do the plowing, the maintenance. All of those things still need to be done. And so we're essentially backfilling that out of savings, if you want to put it that way, in the hopes that those revenues bounce back in future years.

So if we... Hypothetically, if we as the council decide we're not increasing taxes at all, how long before we run out of savings because we have to do this every year?

Oh, boy. That's probably not a question for me. I'm going to turn that to the numbers people in the room.

So we have a three-month reserve of operational costs, and so that covers our personnel and operation, not capital.

So for this operating number for streets, this is coming out of three months of reserve?

Well, that's if we had no more money coming in, right? That's if we could operate it for three months with no revenue. But he's saying that if we don't increase, if I understand the question, if we don't increase taxes and we continue to draw from savings, how long before we ran out of savings?

Three months. That's what we have set aside.

That would be if no revenue comes in at all.

I don't know if we can answer that for you because we have reserve policies that the council has said this is how much money you should have in reserves and it's that three month number and that's based on what does it cost to operate the city for that amount of time if we had no revenues if we had a little bit less revenues I don't know that I can tell you today how long that would take but over time you would eventually reach the point where you've fallen below that threshold where you don't have sufficient funds in reserve, how long that would take, I couldn't tell you. And I don't know if anybody wants to hazard a guess.

So maybe a different way of asking is how much of that 8.09 million is the amount added to what is coming in? So how much out of that? Is it a million dollars that we're taking out of the reserve?

So we were about $900,000 short of transportation funding.

So if... let's just call it a round number of million dollars, if we have three months of operating in reserve, which is how much in total? About 10 million. About $10 million. So it would be about 10 years if everything stayed flat as far as operating costs.

Oh, but that's not, I mean, that's just operating costs. That's not even personnel. So if we say no, there's no raises.

So our operational includes personnel and operations. So total, our 30% is on personnel costs and operation costs, not on capital.

In this slide, operating and personnel are in the same number?

We've broken them out for the purposes of the reserves. It's treated as one.

Yeah.

OK. Oh, OK. I see. Go ahead.

Part of the reason it's so hard to forecast things in the general fund is that the property tax levy is only a third of our revenue there. And the other 2 thirds is not really something you can predict year over year. So we have no idea what the state's going to give us next year. We have no idea what new construction is going to be or what the sales tax is going to be. And it makes it really difficult to look ahead for any of this stuff.

I guess the point I was getting at is that we're pulling out of savings and we're talking near term. We run out of savings if we are not increasing because this is not sustainable.

It's probably not near term, but you add this to the rest of the things that are going on. It doesn't help.

Thank you.

So turning to what's the impact to property taxpayers? So we've run this at a couple different values. So if you have a home that's assessed at $650,000, currently you're paying about $1,200 annually for the city portion of your tax bill. The proposed increase would raise that by about $25, $26 a year, or just over $2 a month of that. uh... fourteen dollars is represented by that one time capital levy which would fall off after one year which then lowers the impact down to eleven sixty nine annually on an ongoing basis before ninety seven cents a month and that's not counting this value of a home you're seeing about a hundred and fifty dollars in state property tax relief funding so if you add all of the the the impact up, so you're at 1190, you add in $25, you would deduct from that $150 before you would calculate what you're actually going to pay.

And that is only the city portion of your tax bill.

This is the city portion of your tax bill. And the credit, the state property tax relief credit is reflected on just the city piece. The portion that's going to the other parts of the levy would be captured there.

And your tax bill will probably be higher. That's what I just want to be clear. Like, because there are other taxing entities that you're going to pay. Yep. That we're all going to pay, not just. Yeah, we all pay. We also pay.

For a home assessed at $800,000, currently you're paying about $1,500 annually in city taxes. The proposed increase would increase that by about $33 or $276 a month. Of that, the impact of the one-year capital increase is about $18, which falls off after that first year, leaving an ongoing impact of about $15 annually or a buck and a quarter a month. And here you're looking at about $180 a year in state property tax relief that's attributed to the city portion of your tax bill. Again, this is in big pictures because what's happening with your valuations is gonna depend based on what's happening with other levies as well as what's happening with your value versus everybody else's value. So your results are likely different than these examples.

What's our average valuation, somewhere around 400 to 600 to 500 or so?

Any idea?

It's like 580, I believe. So the 600 is kind of average.

Yeah.

And you said that that number goes up by roughly $1 a month?

On the 650 home, it's about, for one year, it's $2.14. But the ongoing impact is? The ongoing impact is about a buck.

About $1 a month. OK.

So with that, I'm going to, unless you have more questions for me at this point, I'm going to hand it over to John to run through the enterprise funds. And then we have a bunch of folks here who can answer questions. Shelly, John, Jason. I've done my bit.

Rob Paulus. Rob Paulus, the chief.

Warren, I do have a couple questions. I forget which side they would have applied to. Regarding the foregone, you said that it's a one-time, then it's done, it can't ever be done again. That's just for that project. So let's say if it's for the police expansion, then it's the foregone for that capital expenditure for the police expansion project. But then the next year, there could be a different capital project with a different foregone for this 3% for capital for something else. So technically... the taxpayer could see, well, there's a capital foreground this year, there's a capital foreground next year. It's just for different projects, and it's still deducted from our foreground balance.

Yeah, you're correct. So what happens is you could, for so long as you have a foreground balance that you can reach into, you could reach in and say, this year we have a project that's going on. We think it makes sense to build that now because it's cheaper than it will be one, two, three years down the road. ultimately saving expenses for the residents in the long run. So we're gonna spend that $550,000 this year to get that done sooner and then do that again next year and next year. I think.

You could also do it for the same project. I was gonna say it's not project designated, it's that amount of dollars.

It is. It's tied to a project. So we're going to take that, in this case, $550,000, and we'll say it's tied to the police department project. We can't spend that money anywhere else other than... Again next year. But it could go to the same project. Yeah, you could designate another sum to that project. Okay. until you run out of foregone balance. So once you've spent that one time, so every time you do that, you're lowering that foregone balance by $550,000, where taking it this year would take us down from just under $3 million to just over $2 million. So you're gonna run out of balance relatively quickly doing that. So there is a finite time in which you could continue doing that.

Well, the biggest difference too is that if, say the 1% is about $180,000, so the 1% for, Ongoing operations is $180,000 every year if we exercise that. It just keeps on coming. But these capital expenditures, you only get it once. So it comes off the balance and it just stops. So that's the primary difference between the capital and the ongoing.

Can you, Joe, maybe you can remind me, the 1% from foregone for operating, does that get added in so that it then gets calculated in the increased percentage next year?

Yeah, it also gets added to the basis, whereas the capital does not.

Yeah, okay.

And then the, thank you. And the other question I had just for clarification, what we're talking about today is a budget. It's not the actual levy, right?

So, yeah, we, we're setting a budget amount.

And then the point I'm getting at with that is, is it possible that if we go at, I'm sure many of the people watching and most of the people in this room have probably read what the mayor put out today in regard to the plan moving forward to improve our efficiencies and reduce costs, et cetera. If some of that starts seeing near-term differences, is it possible that we can levy less than the maximum budget approval that we're talking about tonight?

So from here, procedurally, tonight we have the hearing. We get a motion from council directing staff on which direction you want to go. we will bring back to you at the next meeting a budget that sets, or excuse me, a budget, an ordinance that sets the budget for the next fiscal year. Once that's approved, we send that off to the county to the, we file our documents with the state. We have to have that done by a date certain, which is coming up in three weeks, I think, and so we don't have a ton of time to wait for that to happen. We do this strategically so that we If there's an error, we have one last meeting to make it up so we don't have no taxes next year. So we don't really have the ability to do that for this year, but certainly any feedback that they have can help shape what happens year over year over year.

So in effect, what we're talking about is the amount of tax levy that we're ultimately going to be approving.

But we don't approve the levy. That's just like a calculation, right? Yes. Yeah. We just do the budget.

We're setting the budget.

Yeah.

Right.

And then from there, the levy just gets calculated by doing math.

Well, I mean, it is technically a levy. So there's going to be a levy, which is going to be how many millions of dollars this budget is. And then there's a levy rate, which is the percentage somebody is actually paying. We don't set the rate. That's based on values and budgets and blah, blah, blah. We do set the amount, which is a levy. It's just not a levy rate. It's the same money in a different term. Right.

You just do math. It's really easy.

The point of it is this is the amount that we are asking the public to pay. We can't come in less than this. It's not a budget and we can, oh, we can come in under budget. No, we're asking people to pay this.

So, yeah, essentially that's correct. What would... What would happen after tonight, we'll bring you the ordinance at the next meeting, that's gonna lock in stone what we're going to levy for a budget. Our expenses may come in less than that, but what we're going to levy is gonna be, going back to my initial example of a $10 million levy, it's gonna be, you're setting that top line number that is then used to do the math and figure out what everybody individually pays.

but Jack maybe is your question like given the plan that just came out if we are able to cut a million dollars from whatever our expenses are can we like we can't change that on the fly but then maybe next year when we get to this point we can start talking about if we need to oh dear if we need to increase take all of the increase like we can make edits at that point but like we can't do it as we're as we're making those efficiencies and not spending that money, we can't not request the money. We've got to get it back first.

Yeah, yeah. That's what I was getting at, yes.

Yeah, whatever we can save during the year, we spend that first in the following year's budget. So yeah, we have that opportunity. Thank you.

We'll get there. Oh, if all of us explain it.

Looks like I'm handing off to John.

Good evening, Mr. Mayor, members of the council. I'm John Beecham, Public Works Director. I'm here, I think, to save Warren's voice and talk about enterprise fund budgets. Enterprise funds are business-like entities throughout the city. I know you know this, but for the benefit of those listening. So these are specific funds that are set up to take in revenue for a specific purpose and only spend that revenue on that specific purpose. so we have three of these in the city of post falls we have a drinking water enterprise fund water reclamation and sanitation water reclamation includes the collection system treatment system and storm water system is that by state statute that's the only enterprise funds that we can There are a list of enterprise, a list of things that you are allowed to have enterprise funds for. These are just the three we have. And I would punt to legal or to Warren for what the list entails. But there are other things you can do. These are just the three we have.

Thank you.

There's one slide on sanitation. This is managed by the finance department. So any questions, I will defer to Jason. But it didn't make sense to have us popping up quite like whack-a-moles. Sanitation is funded through user fees. We're proposing a total of $5 million in revenue pays out a contract payment of about $4.7 million to Republic Services, who manages this for the city. The balance goes to city staff who are working on the bill collection and accounting contract management for that. The user fee would increase by 5.5%, and that includes a contractual fuel surcharge. So it's pre-negotiated that that increase includes that fuel surcharge with the cost of diesel right now.

Stupid question, is this historical or is it mislabeled with a fiscal year? Yeah, that's mine.

I'm presuming that is a title. Is that fair? Or is that historical fiscal years, the payments that we made in the last couple of years? So these are labeled fiscal year 25, is it the, is that what the number was in 25? Okay, thank you. So not a typo, those are the actuals from 25 to set a context for where this is. Thank you. Are there any questions on sanitation? There's one slide on it. For the Water Division, there are a few more slides. This Water Division provides water service to about half of Post Falls. Historical funding here as well. This is $4.5 million in annual funding. We are proposing a 3% increase to the user fees. That is in line with the projections in our financial plan. The financial plan is designed to get us just enough revenue to operate for 20 years with the projected expenses. So not too much more, not too much less. We have enough to do projects and maintenance. So the 3% increase is what was projected to get us there. I will note we're updating that financial plan toward the end of the calendar year. We'll have a new plan for you all to look at. In terms of what is in the bank, there's currently $27 million in our operating reserves and $5 million in our capital reserves and zero debt for the water system. That is of note. Some of the funding for this year will come out of reserves for both water and for water reclamation. Significant expenditures in the operating division listed there, but worth noting electricity is just under half a million dollars. It's not cheap to pump water out of the aquifer. General fund expenses reimburse general fund staff who spend part of their time working for the water division. Examples of that would be utility billing, legal, HR, where we don't have dedicated people in the utilities fund who do those services. in terms of operating and personnel requests. Operating is really largely just looking at increased cost of doing business. The single personnel request we have for the Water Division is to fund a utility billing technician. So this is the person who interprets the meter reading data and gets it to utility billing for sending out through the billing software. We have one of these with the growth of this system and with our water reclamation system We are now at a place where the workload is such that we need two of them We're also recommending provisional licensure incentives and promotions if those are earned throughout the year In terms of capital projects, we have two water line replacement projects. One we know about, which is the second phase of Westwood. You saw that last council meeting. The other one is a design of another project. We will identify a water line based on a condition that comes out of our master plan, new master plan, and start the design process to replace that as well. So we're working on an ongoing replacement project year over year over year for the water lines. We'll finish our master plan update and fund the Water Division's portion of the Public Works Operations Center. I'll move on to water reclamation, unless you have questions specifically on water. Water Reclamation Division collects wastewater for Post Falls and then treats wastewater for both Post Falls and Rathdrum. Rathdrum funds that through contract payments. These are, again, historical values. We receive about almost $21 million annually in user fees. The reason that Post Falls is significantly larger than Rathdrum in this is because that also includes the collections fee. So Rathdrum doesn't pay the collections fee because they transport all the water to our treatment facility. We also receive capacity fees. You can see the values there. Those are adjusted annually based on a formula of the system value and the projected new users.

I'm so sorry. They transport all of their wastewater to us?

Through a pipeline, but yes.

Oh, OK. Thank you. I was like, I have never heard of this. In three years.

See all those people with buckets?

I was just like, what?

OK, thanks. They do own the pipeline all the way to the treatment facility. So own and maintain.

I thought they were going to make a really good deal. Wow.

John, have we ever explored electricity cogeneration from our water treatment plant?

We have, short answer is we don't generate methane, so it would require us adding a lot of treatment infrastructure to be able to generate methane, to be able to generate electricity. So if we were doing that anyway, it would make total sense, but since we don't need that treatment technology, it doesn't pencil out. Thank you. In terms of what we have in the bank, these are the, cash and investment balances for operating treatment capital and collections capital. We do have almost $29 million in debt for water reclamation. This is what financed our last two projects. It's worth noting the interest on that debt is two and one quarter and two and three quarter for two different loans we have. So pretty good interest rate.

And for those who are newer to the city, that debt was essentially incurred for the upgrade to the water reclamation facility that the tertiary treatment and that was all mandated by the epa and their new permit so that was one of those that we didn't have a choice but to spend the money and spend it sooner than later so that's that's why we incurred that debt correct thank you for explaining that it was an unfunded mandate from the epa so

On the personnel side for the Water Reclamation Division, these are just the projected personnel expenditures. It's about $3.7 million in personnel to keep that system running. Other significant expenditures on the operations side are listed here. We spend about a half a million dollars a year in chemicals. It costs us a million dollars to have our biosolids treated by a third party, hauled and turned into compost by a third party. three quarters of a million dollars in electricity to treat the water, another $100,000 to convey it to us, shown below. The Vactor Trucks is, I wish they were $100,000. This is a contribution to sort of a replacement account that we make every year. They are closer to a half million dollars, so we set that money aside each year so that we can, it's not such a shock when we get to the replacement cycle. I will note the lift station maintenance item for $542,000 here. That is just ongoing work to replace pumps or odor control or whatever is needed at the various lift stations. We have almost 30 of them. There's always something that's breaking and expensive to fix. So we do budget for those repairs. So the operating personnel requests here, again, we've made a lot of adjustments to the individual operating line for things like utilities, for fuel, sanitation for inflationary reasons. We're also proposing a utilities engineer. This is a position to improve our efficiencies within water reclamation specifically. It would probably help water as well some, but really to... look at our operations, manage really small projects that don't merit going to the capital projects group, and also to manage things like our master planning efforts, so things that benefit from an engineer's oversight and could help us save money in the long run if we're able to capture some of those efficiencies inside the treatment system. In terms of large capital projects, we have a lot going on this year, multiple pipeline projects, 12th Avenue Force Main, the Guy Road Gravity Main, which eliminates a lift station, Chase Prairie is a connector line connecting a dry line that's been installed in the previous year, and some existing sewer, and then the Celtice Way Force Mains that are currently underway if you go on Celtice Way, so finishing that project. We also have two significant lift station projects, Fisher, which you've heard about, and Fourth Avenue, which we hope to talk to you soon about. And there's also what seems almost laughable on this slide, but $50,000 in camera truck equipment that will allow us to do better inspections of our sewer system with better cameras to go down them to look for leaks, look for defects in the line, that sort of thing. More capital projects at the treatment facility itself. We're looking at the solids handling project. You've heard a lot about that. The next year's share of that project is projected at $25 million. That's the bulk of the upgrades. Also starting design for expanding the secondary treatment system and looking at installing monitoring wells for the reuse system at the community forest and the water reclamation portion of the operations center. This is not my slide, but that is the end of the enterprise items. If you want me to go back to anything or if there's any questions, I'd be happy to entertain those.

There was a slide, I think, maybe at one of our workshops where you kind of showed where we were at with regards to a master plan, which we love a master plan here at the City of Post Falls. And I mean, I think we are all very comfortable with the enterprise funds as opposed to maybe our general fund budget just because it marches out so well. But the increase to a lot of these services still requires city council approval. So my question is how well are we doing with sticking with the master plan, spending the money that, like we're not over, we're not bringing in more money than we need, We're not significantly under what we need. How are we doing with our enterprise funds in that regard?

Great question. I'll start with wastewater because that's easier. I think it was in 2024 we adopted the new water reclamation master plan and its associated financial model. We are doing a really good job of sticking to that because we're only one and a half years into it and our projections have turned out well. Our projects are going the way we thought they would go.

Okay.

We're right on track with that financial model.

Great.

The water master plan is closer to 10 years old. And by my napkin analysis, we are ahead on revenues and have not had to build as many expensive capital projects as we thought we would. So we're slightly ahead in terms of what is money in the bank. That is why we are updating our financial plan as we speak with a goal of the end of this calendar year. In the event we come out and my napkin math is correct, we have extra money, that can be reflected in lesser rate increases going forward or we can address that. The other alternative is replacement projects have gotten really expensive, and that extra money will help us fund those replacement projects without significant rate increases either. So I think we're well positioned to be going into that effort. We're not doing the financial plan because we've run out of money, which would be Okay. Very bad situation.

Yeah.

So we're well positioned. I think we might be slightly ahead of where we thought we'd be at this time for the water master plan. Does that answer your question?

Yeah. Can you refresh my memory? I feel like on one of them, we actually did decide to not increase as much as one of our master plans recommended that we do recently. Was that last year? I want to say there was like a two maybe dollar increase. Was that? Yeah. And we chose to not to. Anyway. Okay.

I do not recall that. I do recall that we discussed it for last year's budget, but to my knowledge, we adopted the recommended increases.

We didn't want to fall behind.

We didn't want to fall behind. Now, when you're saying that we are ahead in revenues, we're not. Where is that thing in the basement where we dive in?

The gold room.

The gold room, right. We're not funding the gold room in the basement. We're just enough ahead that perhaps if something costs more, we have the ability to pay it. Or next year might be a good year to look and see if maybe we don't need to increase as much as the master plan suggests.

I think you said that very well. I think we do not have a gold room. We have lots of projected replacement projects. We have lots of capital projects. It looks like for the near term we're doing well with that, and we'll have a lot more clarity with that as the master plan wraps up.

Okay, fantastic. Thank you.

Thank you. Other enterprise fund questions?

Just out of curiosity, partially related, but I think we were looking to do land acquisitions. Is that a part of your budget for this year?

It is. I did not, so these are not an exhaustive list of the projects, but there is some money set aside for land acquisition for water reclamation to water If we are able to find land with a willing seller toward future recycling, water recycling projects, we would look to purchase that. We need more property according to our master plan. We are also hoping to purchase some property for additional lift station expansion projects. So both of those are in there. Thanks for that question.

If you can drink our reclaimed water, do you think you could swim in it, like in a pool? Oh, like in a pool. that you purchased that land.

Go ahead. Splash pads are on the approved list of uses for Class A water. Oh, yay. That's pretty close. I don't know about swimming pools, but splash pads.

They're going to chlorinate the water. Yeah. I mean, yeah. It's fine.

Other questions for staff?

No.

Thank you for your time.

So I'm gonna hit this one from here so we have the mic open if you have questions for anybody else or so the next person can pop up. After we get done tonight with the hearing, once you wrap up, we have some motion options for you up here. You need to give us direction on what to bring back to you. tell us to bring it back as presented or you can give us a different outcome. Tell us what, if you're going to say we want to do a different, either no increase or a different percentage increase, just identify what that percentage increase is so we know what to bake into the ordinance and bring that back We also need direction on passing a resolution on the foregone balance. As presented, we're, excuse me, we're proposing taking both the one and 3% foregone balances so there would be no need to tell us to reserve the foregone balance. It would just be would we bring the resolution to expend that amount. On the other hand, you don't wanna spend either one or both of those, then we would want direction from you about presenting a resolution to reserve those amounts for future years. And that's kind of the punchline.

Would this be the time that we could ask questions of other staff members about their departments?

Yeah, if you have questions for staff, just do it now.

Okay.

Am I the only one that has questions for staff? No? Do you wanna go first, Nathan?

Okay, no.

Okay, great. Chief Brantle, can I ask you a question about the police? Absolutely. How are we doing with salaries comparatively to the other law enforcement agencies in our area?

Sure. So Mark Brantle, Chief of Police. Two different classes, really. We're talking about our sworn staff. Our sworn staff, I think we are pretty competitive with locally with Coeur d'Alene and Kootenai County. Civilian staff, not so much. I mean, I have not seen a copy of the salary survey to understand what that is yet, but doing a little bit of my own research, they're behind definitely on all the civilian sides.

Okay, should we choose not to take any increases that would allow us to increase the wages of the police force, sworn and civilian staff? Would we become uncompetitive with our sworn staff? And if we weren't able to, because part of that money is what's gonna come out of the salary survey as well. So how would that look in our police department if we weren't able to provide those?

I'd have to see what Coeur d'Alene and Cooney County are doing with their budgets this year and what they're doing for their pay increases for sworn staff. But I would venture to guess that there are some already baked into those budgets. So what that is, I don't know for sure.

Gotcha. Okay. My concern, of course, is... all of our city employees, but I think as a council, we're very vocal about making sure that we live in a very safe environment and our police force does a great job of that. And I'm particularly concerned with making sure that you guys stay as funded as we can possibly make you. So thank you for that. I appreciate that.

Yeah. Isn't Coeur d'Alene exploring an increase with their police union?

Uh, there were in the middle of a contract negotiation. Um, that was last I heard, but I don't know the particulars of it.

probably including I'm sure it would do it any other we're fine let's talk about it right okay thanks time for Rob yeah right I'm going to make the reason I was wanting you to go first is I have I'm going to try to make this as coherent as I possibly can because there's kind of a lot of moving parts as we all know with this type of budget so kind of to start From what I witnessed since I've been on the council to give some historical context as to why over the last number of years, kind of a cost of living or inflationary adjustment of the 3% increase has not been taken. Historically speaking, the council really did rely on growth and new growth coming in. And I think we were hit in two different ways with House Bill 389 reducing that amount. to 90%, but also just a significant decrease in the overall amount of growth in the last few years, comparatively to say 2020 or 2021. So there's been a bit of a double whammy there. Um, another thing I think, I think to put it in the most simple terms that I can, I think a lot of what residents here at post falls have at least communicated to me is that they're frustrated that what we talk about, the growth that we have experienced, the, the old term that growth should pay for growth. Again, I think House Bill 389 did have a lot to do with that. But it's also, I think, a little bit inaccurate to think that the increasing expenses that we have here for the city budget is directly as a result of the amount of growth. It is impacting our expenses, and some of it is partly has to do with kind of the level of services that we're now needing to provide to the increased number of residents. The police department's a classic example of that and I appreciate the question on that. That is one of the primary, services that I feel is the highest priority in our city. So I appreciate that. I think the other high priority services that we are responsible to provide, fortunately, most of them are provided through enterprise funds. So that's helpful in that way, other than streets. So growth does have an impact. I think specifically we're talking about, and we did talk about a little bit of this in our workshops about when we're talking about increasing maintaining a level of service that we've all come to expect from Post Falls is also affected by how much we have to pay for by the amount of growth that comes in. So if we were to maintain the same level of growth for a population of 20,000 compared to 40,000, obviously it's going to be much more money that is required to do that. So with that, I do think we need to take a close look at our capital improvement projects that drive not only our impact fees that we charge that directly, you're supposed to offset that, but then our ongoing general fund maintenance of those purchases that we make with those impact fees. So I know it's a, you know, reduction of level of service is never something that we would like to do, but I do think there are some amenities that we, because of the responsibility that we have financially that we do really need to take a close look at. On the other hand, Really, the biggest driver of our increase in budget is inflation. It's the big one in the room. And unfortunately, a lot of that is outside of our control. But I think we've been thinking about this in the last few days and months about our budget. And I remember just not long ago, we were asked to participate in one of the helicopter funds from the federal government when they print money. So, you know, inflation is basically caused by the injection of cash into the market with no direct influence on product or services that's been sold. So it's an artificial injection of cash. We kind of saw a lot of that in about 2020, and one of the things that we participated in as a city was the distribution of ARPA funds. And I remember it very specifically because the council was split, the mayor had to make the tie-breaking vote, and the reasoning for it at the time was that the money's already spent The inflation is going to happen anyway, so we might as well take the money. Which, you know, I don't want to relitigate the reasons for the yeas and the nays in that. But I think one of the side effects or maybe unforeseen results of that is because we relied on such a large grant amount and alongside of it with the reliance on new growth funds that we're bringing in, it really put us in another position of not increasing the levy. So we were really relying on these outside sources of funding to kind of put a bandaid on what it's kind of ironic to me that we participated in the very thing that caused the inflation, which stopped us from keeping up with inflation with our levy rate. So it was kind of a, it hit us twice really. Um, and so having said that though, it still puts us in the position that we're in today, um, of having to somehow catch up to that and, Just briefly, I want to touch on your point of we can talk about the interpretation of different scripture and the moral implications of it. A worker is due his wage, but I think in this case, it's kind of like the tail wagging the dog because I don't think it's the government's responsibility to inflate wages. That's why I'm really against a federally mandated minimum wage to say a worker should be able to earn good living on the minimum wage that is out there when the reason why we can't afford to buy things is because of another government program so it's kind of this snowball effect if we we make the problem government it's classic government we make a problem then we sell you the solution to it and it just continues to go down the road so just my quick statement on that so it's an uncomfortable position to be in as an elected official and I and I can relate to those who were before my time, which would be Joe. But I'm not questioning perhaps the morality of previous councilmen to make the decision that they made. I think they were making the best decision with the information that they did at the time. And the fact is that it's politically unpalatable to vote for raising taxes. So it's kind of a two-headed dragon of if we can get the money somewhere else, reasonably thinking that it won't catch up to us like we had, that's great, because then it gives us better political leverage to stay in office. And I think we probably all up here kind of feel that pressure. I don't want to go meet with residents and say, you tell us that the rate of inflation since 2009 is in the, what is it, 46% or something like that? for the city and the city expenditures. Well, that means everybody out who lives with us and as our neighbors, everything else has increased at that same rate for them. So, you know, we don't operate in a bubble just like no one else does. So, um, an incremental increase does seem, um, as the numbers reflected in real dollars of how it's going to affect each, each of our residents, I think reasonably speaking, I think it's, Affordable I don't make decisions for anybody else's budget just mine, but I think it's reasonable to ask for It's still not something that I relish doing and I think the reality is That we will probably need to do this in the for the next foreseeable future To try to catch up to the kind of the decisions that were made in the past And hopefully position ourselves to where it becomes more palatable, to be reasonable with, this is the expected increase that we're going to see. Let's keep up to it so that we don't see such a broad disparity in the graph 10 years from now. That's all I have to say.

We should check for public. Are there any other questions of staff? And then we can go to public testimony if there's any. All right. Uh, Randall Hildebrand wishing to speak in opposition. Go ahead. Come on up.

Counselors mayor. Appreciate you taking the time to listen to me this evening. I want to start off by prefacing my testimony that this is taken from fiscal year 2025 and it is also. from numbers in May of this year. And then a lot of this is just gonna be frustrations from a citizen. So I'll start it off. My name's Randall Austin Hildebrand. I'm a resident and I own businesses. Here's what's on the table. So 4% property tax budget increase plus a 3% one-time capital levy about one point six million more from taxpayers and this is at the same time the county is also asking for their own three percent you don't get one small ask you get a stack of them on the same bill from governments that never compare notes on what you owe total They'll point to a lean budget, and some of it is real, as you've heard this evening, but look at what the city is sitting on. As of May 31st, we have $255 million in cash and investments, $17 million in facility reserve, $2.7 million in public safety impact fees, and $2.94 million foregone. Now, if we look at the police expansion driving the levy that was discussed this evening by the own, by the, excuse me, by the city's own slides tonight, that $14 million building is already paid for. We have 2.7 million from the impact fees and around 11.3 million from the facilities fund. So it is funded. Now the bigger question on that issue is why is a single new dollar of property tax attached to it? That levy. $549,821 of our money is a waste. Now, we should fund the building from the reserves you've stockpiled exactly for this and not one more dollar from the people. And then speaking to just kind of overall government taxation in general, you'll notice that it's all justified lately by one word, inflation. But their own charts show the city's pay scale grew 57% since 2019, while inflation was around 34%. Now, I know there's a lot of different numbers out there around inflation, and nobody can agree on it. They gave their own people raises that beat inflation funded by taxpayers. Now, none of us got a raise from the city to match inflation. My tax bill did not shrink to ease my costs and my health insurance premiums did not go down for myself or for my local businesses I own in Post Falls and Coeur d'Alene. Now, inflation is the reason that the city governments want to protect payroll and take more money in taxes, but they never give us a reason to give us a break. Now, while we're funding money, I think it would, excuse me, finding money, I think it would be relevant that we start at the top. This city pays a city administrator around $207,000 a year, and a deputy city administrator around $204,000 a year, and that is before the laid-in costs, including benefits and everything else. Now, that's over $400,000 for two overlapping jobs, and I say that because Mike Dominguez of Coeur d'Alene is the current city administrator. They have one position. Now you elected a mayor, you elected six council members, every department already has a director or a manager that is more than enough to run this city. We do not need an unelected administrator layered on top, let alone two. That's not service, that's overhead. And before the city funds a single capital request, the vehicles, the cameras, the benches, I think we should show our work. Prove each one is needed now and show the cheapest way to do it. I think that's the bare minimum that we should ask. Now, costs went up for every single person in this room, in this city, in this county, in this nation. Now, what we didn't get was a bailout. We cut, we absorbed it because none of us get to vote ourselves a slice of our neighbors' dollars. So here's the choice that most governments pretend they don't have. Take 0% this year, live on the 17.4 million you already levy and growth you already collect, fund the building from the 255 million you already hold, trim the overhead at the top, and leave the properties alone. We're tired. We're tired of government sitting on a quarter billion dollars that still comes back for more. We're tired of one-time levies and difficult years that seem to be every year. And I just want to make it plain. Do not raise the property taxes. In addition to the raise we're discussing here, I challenge you to tell me how many different levies and different amounts of property taxes I have total on my yearly bill. We shouldn't be raising it by 4%, we shouldn't be raising it by 3%, and we shouldn't even be raising it by a single dollar. We should fund what you need from your reserves, cut the overhead you don't need, and leave the houses alone. Because a government that takes more from people who never agreed to give it has a name for what it's doing. Taxation without consent is theft. Thank you. Thank you.

Any follow-up from staff? All right, then I will close the public hearing. We're on to deliberation. And for me, I'll just say that I've said most of what I wanted to say in the plan that I released, the draft plan. What we're doing tonight, I think the recommendation that's coming from staff that we've worked on is the appropriate course of action for this year. But going forward this would be a multi-year process that I want everyone to know that we do have a plan that we are working on this and there are going to be some significant structural changes and probably service cuts that won't be popular but it's going to be a discussion with everyone and we're going to have that discussion over the next several months and probably a couple years as we make some significant changes to adapt to the rule structure that we find ourselves under. It is a lot about the destruction of the value of the dollar from an irresponsible federal government that has destroyed our household budgets, it's destroyed our personal finances, it's destroying city budgets, taxing district budgets all over the country. Those ripple effects are still being felt and will be felt for a long time, I think, as they propagate through. We're not going to be in a good situation for any funding, no matter what we do, but there is a plan and we need community input on that plan. I want to hear from everyone about what are we going to do about this? How are we going to come together as a community and decide what do we want to fund? What do we not want to fund? What's the appropriate course of action? And so that's the kind of what I have to say on it. And again, I would welcome community feedback on kind of the plan that we've put forward. We're going to be discussing it more. And with that, it's council deliberation.

I want to add just something that Councilor Ziegler mentioned that prior councils were not immoral or wrong by not raising taxes to keep up with inflation and I want to say that if I had been on the council at that time I would have wholeheartedly agreed not to raise taxes at that time. And the reason is because, not just because I've been basically an anti-tax activist since the 90s, it's because there was an agreement with the state legislature about how we are funded. And what prior councils did was they made decisions in accordance with the rules that were there at the time. Those rules said, this is what you can expect from state revenue. And that was an agreement. And you'll know that I also don't like HOAs, but I've been a great advocate for keeping your promises. And I think the legislature has to keep their promises as well, and they didn't. They changed the rules on the city, and they took away money out of our pocket. Now, there are at least two attorneys in the room with criminal litigation experience who can correct me if I'm wrong, but I believe that if I point a gun at you and tell you to steal someone's car, that I am equally guilty of the theft of the vehicle. And so if the legislature is going to pat themselves on the back for balancing the budget by taking money from cities, what they've done is transferred the theft, which taxation is indeed theft, Mr. Hildebrand is correct, permissible only in very narrow circumstances. But that theft is something that they're forcing us to do as cities and counties. And they're forcing it and calling it conservatism, and it's not. It is a serendipitous fact that I am, as you face the dais, all the way to the right. It's also often described my politics. So I'm not somebody who relishes the idea of raising any taxes, even though, and I hope the headline in the press is that what we're debating is a dollar a month, not 7% and all the millions of dollars, it's a dollar a month of ongoing revenue impact on the average homeowner. But that agreement that we have with state legislature is important what happens if next year they balance the budget again in the same way they take another three percent of the city and force us to once again be the bad guy when at the same time they have limited the amount that we can even take to try to catch up it is uh... again fundamentally immoral We are, and I didn't know this until briefly before I was elected, we are a Dillon's rule state, not a home rule state. So that means we can only do on the council what the state allows us to do and nothing more. And yet, even though they give us a very narrow set of responsibilities that is our sandbox to play in, they have of late gotten an appetite to come and meddle in that too. And so to my conservative colleagues in the state legislature that I have wholeheartedly support and some of whom I would consider personal friends, I would just ask, one, please keep your hands out of our responsibilities and restore what has been taken. and balance the budget at the state level in ways that are responsible, that use the levers that they have, which are more than the levers that we have because ours have been given to us by the state. We have a small slice of authority and they have decided to usurp that. The citizens come to us for example and they ask us to pay for the city by taxing outsiders like through a hotel tax and yet the state doesn't allow us to have a hotel tax because we had the audacity to grow past 10,000 people. So there's no transient lodging tax as a result. And so they've cut highway funds, they've cut liquor revenue, they've cut sales tax distributions, imposed levy caps, foregone caps, new construction caps, annexation caps. So every tool has been restricted, and yet they can give themselves credit for lowering our taxes. They didn't lower their taxes. At gunpoint, they've asked us to raise your taxes. They have more flexibility than we have, as I mentioned. We don't have the tools that they have. And so we're going to be blamed if we pass this for doing exactly what the state has engineered. As I said, taxation is theft, and what they're doing is the moral equivalent of saying, I refuse to steal, but I'm going to force you to steal for me. They can keep their hands clean. They can make us dirty ours. And that's not conservatism. It's hypocrisy. So I'm calling on my friends, and I mean that, in the state legislature, no matter what happens here tonight and in the days and weeks ahead as we debate this, to restore city portions and county portions of revenues that are due, that were agreed to, and balance your budget in other ways. Otherwise, if you're going to restrict a local authority, then own your consequences. If you're going to cut revenue, own the impact. If you're gonna claim the mantle of fiscal conservatism, then actually practice it. And don't outsource the hard parts to city councils and county commissions around the state and pretend that you had nothing to do with it.

To add to that, I guess we can call this bag on the state hour. But also to the, First of all, I think property taxes stink. You never own anything. You always have to pay rent to the government. If you don't pay that rent, your house goes away. And I think that's atrocious. However, given the state of Idaho statutes, there's only two ways that local taxing districts can raise funds. And one of those, for general fund purposes, is a property tax. We have no other choice. And of course, there's fees, which can be used in a pay to play sort of thing. So I think property taxes are terrible. I would support their abolition so long as the replacement isn't worse and remains under local control. Also, the way state and federal government collects taxes largely is on a percentage basis. And that's what most of us think of when we think of taxes. Whereas local taxing districts, we're in absolutes. If we need to ask for another $300,000, to keep up with inflation have to actually have a public hearing, have everybody tell us how horrible we are, and make a vote, and then somebody runs against us the next time around and the same thing happens again with new faces. Whereas take the sales tax, for example, at the state level. Gallon of milk is $1. You pay $0.06 in sales tax. Gallon of milk doubles to $2. Now you pay $0.12. Your tax bill just doubled. There was no hearing. There's no vote. There's no nothing. You just pay more. Same thing on the income tax side. You get a 10% raise. Guess what? You get to pay 10% more state taxes. There's no hearing. You don't get to tell anybody about it. It just happens by default. And we don't get to do that here. So to piggyback along what Council Luca is saying is that we get to do this every year. We get to get the vicious emails and get flamed on social media every year because we have to deal on absolutes. And we have to have a hearing about it. And it stinks. I pay taxes here too. We all do. So we're really aware that the city's portion of your property tax bill isn't the only one. But it certainly is a different perception when we have to ask for it and have a hearing about it every year and the state and federal government do not. I would love to see a local option sales tax replace the property tax for all kinds of reasons. In terms to address one of Mr. Hildebrandt's comments directly, we do have, yeah, we have reserves enough to finish the PD. If we were to drain it completely to do that, we also have a lot of other projects that need to get done. And because the state restricts us now in how much we can take and foregone, which isn't a balance of money, by the way. It's just a theoretical amount that we can take with authority. If we were to drain that account, then none of the other very important projects we need to get done in the future could get done either. And we can't ask for enough money ahead of time or in the future to be able to cover those other projects. Yeah, I'll address that directly. And I think the city of Post Falls, I'm, matter of fact, every council that went for that 14 years without taking a tax increase, I was on. The whole reason I chose to run for city council in the first place is because the person I chose to ran against made the motion to raise property taxes. And so I had been asked to run already. I was debating about it. I saw that motion. I was like, sure, I'll run against that guy. And for 14 years, we made it without a property tax increase. And then HB 389 just changed everything. It used to be that you... There's no way in heck I was going to vote to raise property taxes until we absolutely positively needed to. And at that time, before HB 389, if we had the inflationary period like we did after COVID and are still going through now, and it's like, ooh, jeez, we are really in a deep hole here, and the state's not dispersing as much as they used to, Sorry, guys, it's been a good run for 14 years. We've got to raise it 12% this year or we're screwed. We don't have that option anymore. So the more prudent strategy now is to, if it looks like you're going to need it, take it because it's not going to be there in the future. And then the only option is to cut services. And it's another difficult position that we are in as elected officials because everybody wants the services and nobody wants to pay for it. I'm also one of those people. I'd love to have all that for free. But it's not a sustainable method. So I think the ask this year, the whole thing stinks. Property taxes stink. We're paying more in state taxes and getting less for it. And as Councilor Lucas said, that means we've got to stand in front of you guys and say, hey, this is what we're doing to you. So I begrudgingly intend to support it. as it's presented, but I don't like it.

couple of comments about to clarify foregone because I don't know it probably took me like 12 times of you guys explaining foregone to me before it finally clicked and maybe Randy you explaining it another 12 times too we still have to take it like that is money that we have not taken that has an absolute value so there's no way to use the 3 million slightly less than 3 million dollars that we have in foregone without Taking it. We don't have it. So to talk about foregone as a collection of dollars that we should spend before we decide to vote for any more money being levied isn't what foregone is and wouldn't work. We don't have the money. It was never given to us. So if we're going to use foregone money, we still have to approve it. So I just want to be clear about that. I think that there's some confusion, which I was a part of.

CHRIS JERRAMSEN. That's money we could have taxed but didn't.

But didn't, right. We, I think for those that know, we talk about it like it is money that's just like sitting there and easy to access. But I think that that's confusing to people that don't do this all of the time. My other comment before I get into this specifically, if I can add to the state is that we are actually like disincentivized to build commerce and industry. in Post Falls given the way that sales tax is set up. So when we talk about growth and what we build here, we get reimbursed in sales tax based on population, not based on how much we sell. in the city of Post Falls. So while we're writing emails to our state legislature, that might be a good little footnote to include in there as well, because the more houses we build and the more people we bring in and the higher population, that's the best way for us to try and recoup some of that sales tax. For those of us that are sitting on the left side of the dais but are still conservative, thank you so much for that allusion.

I just want to be clear about it. It's all about perspective. I'm here. You're on the far right.

I'm on the right, yeah. I think that we should be rewarded for building commerce in Post Falls. We should be rewarded for starting businesses that sell things. We should be rewarded for making valuable products that people maybe from other states want to come and spend their money here. But we are actually not. the state isn't set up that way so bigger cities will receive more than we do so that's a bummer okay i am a person that likes to start from no ask my children and my husband you ask me for something i start in the box of no i don't think so you can't have juice with dinner you cannot go play outside until your room is done and no you can't watch spider-man 2. just no um and i think i have started there with our budget hearings generally i kind of like to start from a probably not Because I think that that is a more prudent place to start when you're talking about other people's money, especially in a government that maybe historically, I mean, it's how we got here with spending money that we didn't give them consent or representation to spend. That being said, I'd like to just go over the numbers really fast from a couple of slides that I was jotting down. So total with the, as presented, that's how we're saying it, that's 2.1 million new dollars into our budget. I would love $2.1 million. Sounds great. Sounds like a lot. However, our wage increases, so that's just to pay the people that work in Post Falls a reasonable increase, not even top wages, to be clear. We're not approving to pay the people that work in the city of Post Falls more than their counterparts. make somewhere else. We are just approving that we increase that in the same percentage. That's gonna cost us 1.4 million. Okay, great. They want health insurance just like all of us want health insurance and benefits from our employers, which is a reasonable and conscious thing, and I think something that we would all wanna do. That's $600,000. And then we've got another $26,000 from iCrimp, which if you don't know what that, acronym stands for neither do I but it's insurance and we have to pay it and we don't have a choice we like truly don't have a choice in the matter so that's 26 okay so 1.4 plus 6 is 2 so we are at two million twenty six thousand dollars so that leaves us with like eight thousand left the eight hundred thousand left right these are the math people not me to spend on new things so we talked about capital recommendations that's where this eight hundred thousand would go Um, a new patrol vehicle for the police officers that presumably don't want to walk around post falls to do their really important job. That seems reasonable. Um, let's see body cams for the PD. That's another 200,000. So we're already half of that $800,000. That also seems reasonable. I'm going to tell you right now, I don't know what an it switches. It's not like one that's on the wall, but that costs $42,000 and we need them to not have all of our data leaked and other things. I think the it guy is shaking his head. That's great. This is not my area of expertise, but we have to pay for that ADA compliance. You can rewind in our YouTube videos and watch me make a huge stink about that, but. The reality is that we have to pay for it, and we don't have a choice. We have to be ADA compliant. So that's another $120,000. Feel free to look at slide 38 that Mr. Warren Wilson showed us. But that's pretty much $800,000. So there's that money. The slide directly preceding that is a bunch of other stuff that we didn't choose to fund that also seems like really great stuff and that's a hundred no i'm sorry eight hundred and fifteen thousand dollars so we've actually chosen to not fund almost as much as we have chosen to fund um which i think is pretty prudent i when i go shopping i don't usually um not buy as the same amount of stuff that I choose to buy. I usually am like, well, I want these four things and I'm going to make myself feel better by not getting this one thing. Um, but here we're making very reasonable decisions. I think it's also worth noting that, so we have the choice to take any person, any number between zero and 3%, right? Like we could come up with whatever integer. Is that a whole number greater than 1? So maybe we can't. So we can do decimals, too. But 1% is only $175,000. So we couldn't have a new patrol vehicle. We couldn't have dash cams. We couldn't have ADA compliance. We could still have switches. You know? the amount of money that we're looking at here like we're not talking about the city of post falls being flush with cash because we're gonna approve um we're looking at approving a four percent increase so when i start from no and have to ask questions that don't make sense to people that understand this but is how i see the budget this is what convinces me i'd love to be able to say Let's take 2%. But these are actually things that we need. And if I was on the receiving end and trying to also pay property taxes in the city of Post Falls while working for the city of Post Falls and not getting any kind of wage increase or looking at my health insurance for my family of five and then having to pay more there, that's really disheartening as well. And so we're trying to balance those two things Um, and again, starting from a place of where I generally try to be, um, I don't try to be difficult. It's really a natural disposition that I have, honestly, but I don't like saying yes to things, especially about spending money. But when you look at that, we're asking for 2.1 million new dollars because the state is not giving us as much money. Um, primarily even though they're taking it and we have to do basic things like pay our employees a modest amount of money make sure that they have health insurance and then like make sure that we don't get hacked and also that we have police we're not asking for a lot right i'm so sorry i hope that i ran through that kind of quickly i know that it's getting late but when i deliberate on this and and i know this is the third time that i've had to do it and i don't always say yes honestly um This is what convinces me, is that the money is laid out very clearly. There's not a bunch of extra, and what we're using it on is truly quite reasonable. Oh, turkeys, and my phone locked. I would love to direct everyone to the last paragraph of... What are you calling this? The plan?

The mayor's plan.

It needs a better name than that. It can't just be the mayor's.

We can rename it when we adopt it.

Yeah, okay, that's good. I would like that. But the last paragraph is titled The Outlook. And let's see, the second sentence says, to sort of recap a lot of what we have been saying about historic decisions that have been made. There are going to be difficult decisions and unpopular changes, but we will not leave harder choices for those who come after us. And I think that that is the strength of the council that you have presently. I'm sure every council has strengths. We had a council for 14 years that really wanted to spend new money and not request more money from the residents. And that's... probably had its merits at the time, but I think the strength of your council right now is that we're sitting up here as elected officials that are 100% responsible to all of the people in in the city of Post Falls and having the ability to say we know that you don't like it and we know that the optics aren't fantastic but we want to try and make this hard decision prudently so that in another 14 years we're not talking about selling City Hall or not having services in their entirety and I think that that's maybe important to point out. I might have had a hand in crafting that really nice sentence too so.

Wow.

Sorry, that's my tirade.

So this is my first time handling one of these decisions. And, uh, for two reasons, one of them very similar to councilwoman stick leaders point. Uh, I also start with no in this particular, uh, kind of a question. obviously for good stewardship purposes, not wanting to, uh, place a burden on the public is one, but for the point that also councilman Ziegler said, I'm paying the taxes too. So I don't want to pay taxes and I definitely don't want to pay higher taxes, but that's exactly what I'm, uh, what we're discussing right now. And, uh, councilor Ziegler, uh, quoted this already, but I've had several people message me. I've had, uh, I've, read comments about it, uh, whether on social media or in, uh, quarterly impressed letters to the editor, um, growth should pay for growth. And in principle, you know, I agree with that, but we've heard planning today, both from staff and from, um, my fellow counselors that it's just not legally possible in Idaho. it can't actually pay for all of growth. I really appreciate staffs going out of their way to address the various reasons why that's not possible, whether it's House Bill 389. Got it, okay. House Bill 389 or whether it's just because the growth Impact fees is what we're really talking about. It can't be used to pay for all of the impacts for growth. Warren was talking about that with how it can't be used to pay basically for salaries. If I ever say anything wrong, just stop me and correct me, please. But as I understood it, you can't use it to pay salaries. We need to be paying our people. We've heard some great reasons why, so I won't reiterate them. But the point is, We need to be paying our people and we can't do that if we don't have sufficient funds to do that. And it can't all come from development. So that leads to, well, the question that I'm often asked is, well, why don't you stop development? Why don't you just stop it? Okay. That's a great idea. Why don't we, as the council just put a moratorium on all development and say, nope, full stop. We can't do it. Well, that's not right either. I'm pretty sure that that is illegal and I know that that is immoral and me personally from my own background and one of the things I've said several times now is that as a city councilor, for me, protecting the private rights of property owners to develop their properties and to derive value from them is paramount. We should not be as a government at any level, whether it's a local or the state or whatever, oppressing that rights to keep people from doing what they want with their properties. Obviously we can't support development in a way that is harmful and detrimental to our neighbors. But there's a very fine line. And we can't just say, well, we're just going to stop it because it's becoming expensive and we don't want to raise taxes on people in order to afford the growth. We can't do that. So ultimately, growth is inevitable. We can't stop it. And I mean, I suppose if we had some very wealthy people in the community that just wanted to buy up all the property and not develop it, that would be one way. But that's not likely to happen. I'm being a little facetious, but yes. We as the city council though, we don't control it. We guide it. And we have very limited abilities as to how we're going to guide growth. We've heard plenty today about all the various costs, whether it's the state deciding that they're just going to, on their own, pull funding because they're the big state and they can do what they want, and they can say, well, nope, sorry, city, we're not giving you the money that we were giving you before, and you have a limit on every tool available to you, so now you need to take the hit. Well, our options are either We take the hit, and we actually approve this budget, or we have to end up basically defunding the police. I'm not going to do that. That's not acceptable to me. And I think it was Councilwoman Stiglitter's point. We believe, and when she was asking Chief Brantle questions, we in the city value our safe streets. We value our safety. I like when I call 911 that I have a very fast response. I think that's important. I don't want to see that change. I want Post Falls to stay and to even more so increase being the greatest city in this state. And we can't do that without a properly manned police department. Unfortunately, As I was saying, the growth and development is requiring more of that. We require more officers. We require more people. We have more needs as a city in order to support that, but we don't control the amount of people coming to Post Falls or the amount of needs that we have. We only can guide it within limited... with limited, I think we've called them levers in past council meetings. We have very limited leverage. And even that the state has taken away from us, as we have expressed from this day several times, is frustrating. Now we have... I forget which one it is that limits our ability to decide what lot size it is that makes R1 go in a way. There's plenty of reasons why our levers to control development are going away, and growth is continuing, but we don't have the tools to meet it unless we sacrifice what we have, which I'm not willing to do. So I think it's very valuable, and I would... Once again, I would praise the work that our staff has done to present a very meaningful and comprehensive presentation as to the numbers and what they mean and what the impacts are. If we decided not to approve this or that, what would be the impact to the overall requested budget? And at the end of the day, we are only talking about $1 or $2 per average home, I think is what I recall. I think 214 was the number, and that's including the So talking about a minimal increase to take a small bite out of what could potentially be a hazardous future if we continue to not increase knowing that expenses only increase because yes, I think despite our staff's amazing job at somehow managing to get our operational budget to go down, which as Councilwoman Stigler said is rather remarkable because in my household, same as hers, my operational budget only ever goes up. So I think that we can anticipate that that's only going to be true even further moving forward in the future because our needs as a city are only going to increase. So for that reason, I will be voting to approve the budget as presented, not because I want to, not because I started with a yes, but because frankly, in order to preserve the city for our future, I don't think we have a choice.

That's it for me. Well said, and I did want to add, just parenthetically, in the case of the police department, growth did pay for it, almost 100% of it, because those impact fees is what paid for most of that. We're asking for a small piece to finish it off before the annual inflation eats all of that up, and we have to make it twice that much. So it did. Almost $14 million is impact fees that developers paid for growth. So sometimes it does pay for itself. And I would just add, you did commend staff, which is appropriate. I wanted to take a moment to commend the mayor for his plan so that this doesn't become our reality every single year. That's what I think we're all committed to is making sure that we're not having to respond to these external pressures by raising taxes by the maximum allowable every year. I voted at the state GOP convention to eliminate property taxes because I don't believe they are a moral choice to tax people's property. I want to find alternative funding mechanisms. But in this case, this is what we have. And so thank you, Mr. Mayor, for your leadership on this.

Thank you.

Further comments? Well, I guess I'll go. You can't say nothing, so you have to say something. You guys have all expressed very good sentiments. Excellent detail was recalled, so I'll just throw on my own sentiments. Less facts, a little more feeling. I wanted to say doing this tonight is not us pressing the easy button. This is us taking our role seriously, making tough choices and I think acting with integrity because kicking the can, saying no, all those things are easy points and the Boise legislature has proved how well that works for them. Passing the buck. We can't do that, that's not what we were elected to do. We all have to sleep at night knowing that we made the right decisions. And I think that's what we're doing tonight. In the meantime, we spent hours coming to City Hall for special meetings. pouring over the numbers, looking, can we take this out? Can we move this around? Do we really need IT switches? I think I beat that drum pretty hard, and we do. And it's not just cybersecurity, Sam. Oh, sorry. It's actually functioning systems in the city hall. And, you know, I think in the meantime, we truly are with the mayor's plan. And, you know, we came out of last year with the same mindset, and I think we're going to really get somewhere, but we're grinding now to find solutions. It is a revenue problem, and so we have to work on it. None of us love it. Like I said, these are tough decisions and there are tough decisions to come and we are ready to face those tough decisions with serious actions so we can somehow quell this but the deck was not stacked in our favor so here we are.

I think we're ready for a motion.

I'd move to approve the annual budget for fiscal year 2027 as president.

Second motion in a second for the discussion. Roll call, please.

Ziegler.

Aye.

Mosby.

Aye.

Luca.

Aye.

Stiglitter. Aye. Plew.

Aye.

Malloy.

Aye. Motion passes. Thank you. Do we need to recess before the next public? Yes, please. We will recess for five minutes.

All right, I'll call the meeting back to order.

And next item on the agenda, public hearing, is fees for fiscal year 2027. I will open the public hearing.

Mr. Mayor, can I ask a question? I don't know how to do this officially. Those in charge, do we have to do a public hearing about fees tonight?

I advertised it for tonight. Oh, okay.

Cool. Let's go.

I know if I hadn't advertised for it, we could probably postpone, but...

Got it.

We're here. We're wide awake. We're ready to go. You could move to table. We're not hungry at all.

Move to table? Is that what? I could still? I don't feel like I can now.

No, you could. It would be unpopular.

Okay, great.

I don't think it would pass.

Oh, I see. You could. Okay.

All right. Get my vote. I'm Jason Faulkner. I'm the finance director. I'm going to present the proposed fees for fiscal year 27.

Are you presenting them left to right or right to left?

Well, they will be left to right, because if you do the annual comprehensive financial report, they want the newest to the left. You read left to right, or you read it on the newest on the left. So when I put together those presentations, I used to do an annual report, and then But as you noticed, they were changed for this one, so they will be going forward. Okay, this is just a recap of the rates that we have talked about during, budget workshops. Water rates are proposing 3% increase. Wastewater is two and a half. I have a little slide on here for water cap fees and also wastewater cap fees. Those are based on FCS. They did a calculation for those and finance does the updates each year. So we do those in-house. Impact fees, we collect those for both our streets, public safety, and also for the fire department, and also parks, and we are increasing those by the ENR. That's what we do every year with those. sanitation, there'll be a five and a half percent increase with them, and also this year's a little bit different. Warren had alluded to that we are going to start increasing the service fees that we have for mostly community development by the CPI index. We are looking at adjusting those fees in the meantime. We'll just be adjusting those by whatever the CPI is for that year. So that will be coming forward to council as well.

Quick question about sanitation, that 5.5%. Is that reflective of the fuel surcharge?

It is, yeah.

Is that a contract negotiation then when that dollar amount kind of becomes the norm?

Our contract doesn't expire for quite a while. Probably I think it's 2033 or 2034 the contract expires. But, yeah, back in the day when diesel was under $3 a gallon, it was very rare we had a fuel surcharge. Maybe once every other year maybe we had one. The last few years it seems like we've had one because diesel has been over $3. Yeah.

So that's the cap of that increase is 5.5%?

There is a cap on. I don't know what the cap is for the fuel surcharge, but I do know there's a cap for when I do the calculations based on the CPI indexes, the cap is 4%. And then what I do is I back off last year's fuel surcharge, and then I add the new one on. This year it came out to be 5.5%. So I don't know if there's a fuel surcharge cap, but I can find that out. Thank you.

Gas went down to $2 a gallon. Did that fuel surcharge reduce or go away?

Once it went under $3 a gallon, it's for diesel. Once diesel goes under $3 a gallon, the fuel surcharge does go away, yeah.

So we have to get diesel below $3.

Yeah.

Was that kind of the normal price when the contract was negotiated?

Yeah, it was about maybe $1.50, $2. And so they said, well... Was that 17 years ago or what? Probably. They said, geez, if diesel ever goes to $3, that might be crazy talk, but yeah, we'll have to add a fuel surcharge. But that's been the norm lately with diesel being over $5.

Does it adjust by the actual price?

No. Whatever the percentage is, it's on a quarter for every increment that there's a... of metrics that I used to increase it. Lighting scale increase. All right. And so just to put it to real actual comparison dollars, I put a side-by-side comparison of what your utility bill looks like if it is fiscal year 26, the current rates, and at 27 at the proposed rates. Going to the 5.5% for sanitation, the 3% for water and the water usage, and then the... Two and a half percent for wastewater. The increase view over a year is $3.27.

And if your bill is lower than that, it might be because you don't use post falls water.

Correct. There's some cities that don't use like if you're on Ross Point or if you're on East Green Acres. Correct. Yeah. All right, and on the cap fees, I wanted to show what the cap fees are currently. They are for wastewater is $7,600. The proposed for next year is $7,725 of an increase of $104. And then when John was giving his presentation, he was talking about what Rathdrum pays for cap fees. And yes, they do pay cap fees, and yes, we do increase those every year. And so theirs was $4,600, and there's going up to $4,666 of an increase of $63 for next year.

And theirs is lower than ours because they own that one pipe, right?

Yeah, they do all the distribution. Collections? Yeah, the collection down to Post Falls, and this is just for the treatment side of it.

When we say cap fee, that's the new meter, is that right?

No that's for the buy into the distribution system for any new household. So every new house.

Doesn't include the meter itself. It's just that's how much if you put up a new house you want to get in the system. That's how much you pay. That's what you pay. Yeah.

If I can jump in just for a second, Jason. The idea of the fee is when you hook up, you're taking an increment of capacity that the system has and you're using that and so we're trying to replace that increment and so you're essentially paying off to buy that piece and it's based essentially on the replacement value of the entire system that you're buying into. What would it cost us to replace that increment of service so that the next person that wants to tie into the system has capacity to buy into. And the number fluctuates annually based on where are we at on how much, essentially what's the system cost us to date.

And that's not, I mean, Just as you stated, that's a calculated fee. It's not something that we just impose. It has to be a calculated fee based on capacity.

Yeah, there was way too long of litigation in the city of Hayden about this. It went up to the Supreme Court twice. The Supreme Court said, essentially, this is the formula. Do this.

And we waited for their lawsuit to settle before we used the calculations from SCF's group. So we learned from their mistakes, and then we change how we calculate it and then move forward with that. And that's what we update every year.

So following that logic then, any new cap fees as they bank toward future expansion, which would be reflected in a fund somewhere.

It's in a fund.

So I think that's a bit of, I think, some misconception when we talk about where are we going to get money to not raise the levy rate because we see these large balances in savings, which is really, yes, it is savings, but it's for an anticipated real expense.

And this is a little different as well because this is for enterprise funds, and I can't mix the two together. And so that's where it gets cumbersome because you say, oh, geez, look how much money you have. Like, yeah, it has a purpose, so I can't use it for this because it's been paid with rate payers. I can't divert it to general fund.

Yeah. I mean, by statute you can't, but it's also the –

Yeah, and that's what they do is they build up the reserves and then if they have a construction project they have to have it, yeah, based on whatever the plan they have, yeah. And the same holds true for the water cap fees. We have a current of $3,277 and next year the water cap fee will decrease $17. And we also have different meter sizes based on what's at your house. And so we have a current cap fee for the meter and we have a proposed cap fee for that. And you see they range anywhere between $3,200 clear up to $158,000. As the current and the proposed will decrease slightly from $3,200 for a three quarter inch to an inch meter clear down to an eight inch meter will run you $157,000.

Is that an actual cost of that apparatus?

That's actual cost.

And it went down?

It went down $838, yeah. market on the calendar. Yeah.

And it's going down because there's more people sharing the same system?

There's a calculation for the formula, and it's based on the cost of your infrastructure, I believe it's your unfunded depreciation. There's a lot that goes into the calculation, yeah. Now we're moving on to other items that we didn't have very many, but I thought they were worthy to point out. Cemetery wanted to make a few adjustments to their rates, burial charges, opening and closing on Sundays, so up to 1,000, 1,300 for burial deaths, and then changing, they've noticed that they've had a large increase of activity on Saturdays, and so they're spending more time on Saturdays than they wanted to. bump that charge up from 650 to 700. Recreation, they've added for tournaments that the minimum charge up to 500 per day, they are upping that to 800 per day. And they also have added application fees for large events. And these are new, so they might have a, for renting a shelter, based on the people that are attending, so it starts with 1,000. And for each increment of people, you add 400 to 800 to 1,200. So these are new for fiscal year 27. And also, the popular ball and sports field usage. Parks has broken out a residential and non-residential rate for softball and baseball. Rates, as you can see, have an hourly rate. Those are new fees as well. And of course, Recreation had went through and updated their of what they currently plan to offer for next year, and they broke out from resident to non-resident, and those are maybe just a few dollars here and there, but I didn't list those on there, so they weren't the 5% that we needed for the public hearing, but they just made some minor tweaks and changes along the way. And that's all I had for the fees.

Quick question on the sports field usage. That's $35 an hour per field or per person? Per field. Yes.

And this isn't, just to be clear, this isn't like a comprehensive look at all of our fees. These are just the ones that we're choosing to change for the fiscal year.

Yeah. These are the ones that are either they were new or they, they bumped up over the 5%. Yeah. And that's all I had.

oh i do i'm so sorry um for parks there's this additional material and then it says charged at cost do we not charge like a personnel fee for whatever it is that we're buying or installing or managing or staff time on this additional material sort of thing here um i do know they have

Well, we understand is the hourly fee is the staff time, and that if there's any additional physical materials required, then that's a time plus materials sort of thing.

Where's the hourly fee? So per field, yeah.

Sorry.

Pre-game prep for baseball field. So that's, if we're going to prep it, that's the charge. And then if they want additional material, the field conditioning agent for the field, that's the hard cost of that.

Okay.

This wouldn't, okay, okay, that sounds great. Sorry, I was thinking of like, what did we, we were talking to Little League about like the scoreboard and like we were getting into all of that.

Oh, that would be improvements that would offset their annual user fees, which is different than this.

Than this, okay, thanks. Great.

And to what degree are these more than last year?

I mean, percentage-wise, that fee schedule? Is that it again? I'm sorry?

The fees that were just up, like ball, field, sports usage fees. Can you give me an idea of how much these are increased from previous years?

I don't know how much they've increased. I do know a lot of those fees are new based on the activity that they've had to do at the fields. They thought they needed to start charging a nominal amount and start recouping some of those costs. And also, because the ball fields are... They're in high demand and they're pretty intensive for getting the field prep from one game to the next. And so they also wanted to make sure they outlined a residential rate along with a non-residential rate as well.

Thank you. You're welcome.

So baseball is not my... my sport so i guess and i'd invite uh counselor ziegler's input on this is fifty dollars enough of a fee to prep a baseball field would you do it for fifty dollars um it's a tough estimation um in our climate a lot of the baseball that is played is in mud and

And so it does make it more difficult to prep the field. I think that's a pretty low number, realistically. But I don't also want to make it prohibitively expensive for them to use. So I think that could definitely tolerate scrutiny year over year. Like, is this really recouping our costs? Because I think it is. We talked about this a little bit before what it's actually costing us. So we're not supplementing those usages from our general fund. So I think it's a great question. Something that Chris, maybe we could just keep a close eye on

That's kind of what I expected. It seems like $50 is not a whole lot. It did seem nominal. Baseball fields are big. Even if you're paying one guy to do it, it's going to take at least an hour, I would guess, to go out and rake the field and do it. I don't know what you do.

And especially, I mean, that doesn't count our routine mowing and all the other things. It would be kind of at the time of use, I'm assuming. would be that fee.

Yeah.

Not the whole field. Not the whole field, yeah. But there is quite a bit of variability in that.

The residents have already paid for it, though. We have to take that into account. There's tax money that went into the purchase and impact fees, of course, but the purchase and maintenance on the general fund. think that it's wise to not have it cover the entire fee you know unless it's somebody from similar to what we did with Camelon Park you know there's a discount for residents that's pretty significant which free in the case of Camelon Park but I'd love to see us get there where user fees for residents are free obviously we can't be there right now but

There's a question about that too in relation to our contracted leagues that play. I imagine that that's already baked into their contract price as their field usage fee. So this would be, am I correct in assuming that?

Could you repeat the question?

Is this fee also include usage from consistent year over year programs like Little League or is their field usage fee kind of baked into their contract fee and this would be for any outside event that would come in or?

So the way I understand it, they propose what they're gonna use for the year and then at the end of the year, we would charge them for actual use. and then if they want to offset that fee with an improvement like a flagpole or a scoreboard or something, that is taken out of that overall payment. So am I answering your question?

Partly. I think is the rate for the usage that they project at this rate or is it a negotiated contract rate?

Well, so Little League, for example, gets half of the rate, the field rate. So they're already at a 50% discount when we start.

So this rate would be for any other event or team that wants to come and use the field. It really doesn't apply to year-over-year usage of the field. That is kind of at a different rate.

As far as I know, they get that 50%. And I think that's the only user group that does. So this would be the rate that everybody else gets. And then your non-resident is more.

Okay. So then in the case of like the Spokane Adult Baseball League that comes and plays in Brett James, the team is an Idaho team, but the league is a Washington league. So are we charging them out of state or are we charging them in state?

They're getting the non-resident.

Non-resident.

Yeah.

Okay.

I believe so. Thank you.

Any other questions?

I'd also add just for, since we're in the public hearing, so fees collected need to be sort of based on that reasonably related to the actual cost, but they can't really exceed that actual cost. And so when we're capturing these fees, we have staff look at these to determine what the actual cost is to provide these services. And that's generally that non-resident rate is the cost. fully loaded cost and then the resident rate is that subsidized cost that we're devoting tax dollars to because of those improvements were sort of paid for with tax dollars so just so that's clear for everyone as well the state law doesn't allow us to profit out of out of state folks that's correct the fee has to be reasonably related to the actual cost of providing the service

Reasonable, but not exact.

Can we account for any, similar to what we do for any other enterprise fee, account for any anticipated improvements and make that into the fee, or is it just usage?

It's just usage. It's just the cost to provide the service.

The cost of what's already there. Okay.

All right.

That's it.

Do we have any public testimony?

We do not, sir.

So there's no need for rebuttal. So we're done. We can close the public hearing. And deliberation or motion?

Move to approve the fees for fiscal year 2027 as presented.

Second. Motion and a second for the discussion. Roll call, please.

Mosby.

Aye.

Luca.

Aye.

Stiglitter. Aye. Plew.

Aye.

Malloy. Aye. Ziegler.

Aye. Motion passes. Thank you. We are done with public hearings and we have no unfinished business and no new business and no staff reports and council comments. Nothing for me. Is there anyone who would like to speak on an issue not on the agenda? Seeing none. Council comments.

Just one. As Councillor Luca said, I do want to commend the mayor on his plan. I think that that's something our city really needs and I have like seen a lot of the response on social media to it. I think people like seeing that Post Falls is doing it differently.

I was very impressed with the level of discussion we all had during that. I feel very proud of everyone here involved in the process and I'm very happy with where we're going. Thank you everyone.

I'd say the level of transparency is being commended. and the engagement is great, and seeing it on your Facebook and X page is nice. I will renew my objection to our communications plan that took away citizen comments from our typical posts, because I think it's been very instructive.

All right.

Oh, I'm so sorry. I do have one. But this is a thank you to the residents of Post Falls. And I work with a number of people that have been displaced, were displaced, evacuated from the fires in Spokane. And I have heard nothing but delightful things and just really really heartfelt thanks to the people of Post Falls to the people that run the Hyatt specifically to just everyone that they encounter they say they just have nothing but nice things to say and they're hoping that they get a lot of money from their houses that they lost so that they can move to Post Falls because they love it here so much so anyway that's just a big thank you to our community and in all ways that have been really welcoming to people that needed a place to go for a short time and it was a really lovely to be at work and actually hear about how great Idaho is and not them hating on me all the time. So it was really lovely.

Awesome.

Sorry.

All right. Well, seeing no further business, this meeting is adjourned.