(The Center Square) – Spokane Valley’s proposed $165.2 million 2027 budget remains balanced, but city officials are pointing out that uncertainty over the cost of law enforcement services delayed the budget process which in turn left little time to finalize the actual spending plan.
City Manager John Hohman presented the city’s first complete version of next year’s budget to the City Council earlier this week.
Hohman said the full budget normally would have been presented about three months earlier, but the city was still in talks with Spokane County regarding police services.
As previously reported by The Center Square, Spokane Valley has several contracts with Spokane County for police, court services and more, but concerns are growing among city leadership over the county’s annual settle-and-adjust bills falling years behind.
“We were unable to determine law enforcement contract costs,” Hohman told council. “That still is up in the air.”
The preliminary budget currently includes $39.59 million for law enforcement, an increase of approximately $1.08 million, or 2.8%, from 2026.
Hohman said the city met with the Spokane County the day before the presentation and received updated information, but discussions over the contract continue.
“There’s not a whole lot of time between now and then to get this resolved,” Hohman said.
The city’s proposed 2027 budget calls for approximately $71.8 million in recurring General Fund revenue and $71.7 million in recurring expenditures, leaving about $159,000 more in recurring revenue than expenditures.
Public safety accounts for approximately 65% of the General Fund, with $46.4 million budgeted for public safety compared with $25.3 million for all other General Fund operations.
The city says rising public safety costs remain one of its primary budget challenges. Police costs have increased by approximately $14 million since 2022, while sales tax revenue has increased by about $8 million during the same period.
Despite those pressures, Spokane Valley projects ending 2027 with a General Fund balance of approximately $41.3 million, or 57.54% of recurring expenditures.
The city’s financial policy calls for maintaining a reserve equal to at least 50% of recurring expenditures, or about six months of operations.
Hohman said the reserve is also important for cash flow because many capital projects are funded through grants that reimburse the city after expenses are incurred.
“We have to pay for things before we get reimbursed,” Hohman said.
The city also maintains an approximately $8 million Service Level Stabilization Fund, which can be used if necessary to help maintain the 50% General Fund reserve requirement.
Officials announced that the preliminary budget includes approximately $51.7 million in capital projects, with about $29.6 million, or 57.3%, expected to be offset by grant revenue.
Taking a look at transportation projects, those include the Pines/BNSF grade separation project, Sullivan/Trent interchange, Barker/I-90 interchange, South Barker Corridor and Argonne/I-90 Bridge.
The city also said it has maintained a policy of limiting debt and using a “pay as you go” approach to capital spending.
Spokane Valley has not taken the state-allowed 1% property tax increase since 2009. City officials estimate that decision saved taxpayers approximately $11 million between 2011 and 2026.
The city’s estimated 2027 property tax levy is approximately $14.59 million.
The preliminary budget calls for 121.25 funded full-time equivalent positions, one more than the current level. City officials are scheduled to continue reviewing the budget before its expected adoption on Nov. 17.