Liberty Lake council reviews capital investment strategy, gap of about $13.5 million and financing options for possible library project

City Administrator Mark McAvoy and finance staff led a March 25 workshop with the Liberty Lake City Council to review the city’s capital investment strategy, show an estimated $13.48 million gap in the six‑year capital facilities plan and discuss how grants, taxes and debt could be combined to close the shortfall.

“This is going to be an ongoing dialogue,” City Administrator Mark McAvoy told council as staff moved from financing options to process recommendations. The meeting was a workshop; staff did not ask council to adopt any financing package on March 25.

City finance staff (Kyle, a city staff member) presented the revenue forecast and a six‑year list of projects that together total about $32.7 million. With currently secured revenues and funds projected for 2025–2030, the presentation showed roughly $18.5 million in available capital revenue and a remaining gap of about $13,482,000. Kyle said the gap assumes staff did not secure additional grants or change the project list.

Why it matters

The projected shortfall is material for residents because staff showed one plausible package that would use voter‑approved borrowing to finance an $18 million civic project: average annual debt service at current rates would be about $950,000 per year, equal to roughly $0.26 per $1,000 of assessed value and about $133 on a home assessed at $500,000. That example was illustrative, not a council commitment.

What staff told council

- General fund balance: staff reported the city began 2025 with about $8.5 million in the general fund (staff said that balance has historically averaged $4–$6 million). Kyle said the proposed $5.7 million library project at the Legacy Church site is currently reflected in the forecast and would consume a substantial portion of those funds if carried forward as proposed.

- Grants and secured awards: Kyle said grants remain the highest‑priority funding source: “Grants are king,” he told council, noting the city has a secured SRTC grant for a Mission Avenue overlay (just over $1 million) and a $937,000 Commerce grant for the library concept. He also said the city has an application in the state budget for about $1 million for a Mission Avenue project.

- Local taxes and borrowing: staff reviewed voter‑based and council‑level options. The city now collects a TBD sales tax of 0.1% (staff said it generates roughly $150,000 a year) and noted state law allows up to 0.3% before voter approval is required. Staff summarized debt capacity calculations presented on the slides: the city’s limited‑tax general obligation ceiling was described at about $53.6 million, the unlimited‑tax GO ceiling at about $89.5 million with roughly $83.3 million of remaining capacity, and the city’s assessed value was listed as about $3.5 billion. Kyle reminded council that an unlimited‑tax GO bond requires 60% voter approval and a 40% turnout/validation threshold in many cases; levy lid lifts require a simple majority.

- Election timing: staff cautioned that validation rules mean a special election with low turnout could cause a bond measure to be invalid even if it passes among voters who turn out. Kyle told the council the general election typically meets the 40% validation threshold and that special or primary elections do not.

- Other financing tools: staff described state loan and lease‑to‑buy programs (Public Works Trust Fund, state treasury programs), the potential to raise stormwater fees if a county‑level Aquifer Protection Act ballot measure fails, and bank borrowing as a faster, though sometimes costlier, alternative to public bonds.

Asset condition and program management

Public Works Director Ben Turner described a functional assessment that staff are building for each asset class (streets, parks, stormwater, facilities, stormwater) and said the city currently has about 54 public lane miles within its network. He walked council through an asset‑condition grading approach that will link condition, configuration and capacity metrics to priorities. Staff told council the city will carry out a street scan in July and expects completed assessment tools by the end of the calendar year to make needs estimates more data driven.

Advisory board and annual process changes

Staff proposed a new, annual validation and prioritization cycle and recommended the council create a Capital Investment Advisory Board to work with an internal Capital Program Office (CPO). “We’re proposing that the council create an advisory board,” Mark McAvoy said, describing a five‑member board made up of one representative each from the Planning Commission, the Parks & Arts/Library Board, the Community Engagement Commission and one at‑large community member.

Under the proposed schedule, staff would update functional assessments in spring, departments would submit capital requests in June–July, the CPO and advisory board would validate priorities in August–September, and the results would feed the October–November budget development process. Staff emphasized the advisory board would make recommendations; the council would retain final funding authority through the budget.

Council discussion and staff direction

Council members asked for clarification on membership, frequency (staff proposed up to four meetings per year), whether appointees should be current commission members or at‑large community members, and how staff would mediate disagreements between technical priorities (for example, failing streets) and community requests (for example, parks projects). Several council members said they preferred members who could “hit the ground running” because prior commission experience reduces onboarding time; others suggested recruiting recent former commissioners or at‑large community members to broaden participation.

Formal action taken

At the start of the meeting the council approved the published agenda on a motion that was seconded by Councilmember Dunne and passed 7‑0.

What staff will return with next

Staff said they will bring a draft ordinance to create the advisory board for council consideration, continue development of the asset assessments, pursue grant opportunities already applied for, and return with appraisal work and schedule for the Town Square/Legacy Church property (staff said they will engage a commercial real‑estate vendor; the vendor turnaround was estimated at four to five weeks). No council vote on a financing plan, a bond measure, or a levy was requested or taken at the workshop.

Why it matters going forward

The city’s choices about which projects to fund, when to go to voters and how to combine grants, interfund transfers and debt will affect residents’ tax bills, the pace of road and park repairs and the location and scope of a potential new library or community center. Staff framed the recommendations as procedural and informational steps to give the council a more objective, data‑driven basis for future decisions.

Ending

Council did not adopt any financing measure at the workshop. Staff said they will return with a draft ordinance to establish the advisory board and with further data from asset assessments and appraisals before presenting any voter‑facing financing proposals.