Hayden police contract shows $245,679 shortfall; including overhead could raise county deficit to $1.2 million

Kootenai County budget staff on June 25 presented updated FY26 numbers for the county’s law-enforcement contract with the City of Hayden, showing a projected personnel-and-vehicle shortfall of $245,679 under the sheriff’s revenue proposal. When county overhead is included in staff calculations, the contract would create about a $1.2 million deficit.

Brandy Falcon told commissioners that personnel costs for the positions historically assigned to the Hayden contract — including a newly proposed lieutenant position and the average cost of a full-time detective — totaled $1,294,923 for FY26. Adding a new vehicle for the lieutenant brought total direct costs to $1,389,679. The sheriff’s office-proposed revenue for the contract was shown as $1,144,000, producing a gap of $245,679.

Falcon then presented a broader calculation that prorated county overhead (depreciation, administrative overhead, command and detective support, records, civil and other shared costs). Using that methodology, county staff estimated roughly $98,000 of overhead per deputy and a total contract cost near $2,300,000. Under that overhead-inclusive approach, the county-facing deficit on the Hayden contract would be about $1,200,000; staff told commissioners that funding that level of deficit would require about a 2% tax increase countywide.

Falcon said the county’s proposed FY26 budget currently assumes a 0% COLA for county employees; she reported she could not yet find Hayden’s FY26 COLA proposal but recorded Hayden’s recent COLAs (5% in FY23 and FY24, 3% in FY25) and Kootenai County COLAs (6% FY23, 4.5% FY24, 2.5% FY25). She also noted she could not find Hayden’s FY22 COLA number.

The presentation also covered vehicle purchases under the contract. Based on signed contracts on file, Falcon listed vehicle purchases shown as 0 in FY22, three in FY23, zero in FY24, two in FY25, and one proposed in FY26; she said the sheriff’s office was still confirming purchase counts. Commissioners asked whether amortization of vehicle costs is included; Falcon said it was not included in the current signed contract but would be considered an overhead cost in the broader calculation.

Commissioners and county staff discussed options for changing the overhead allocation based on anecdotal or service-level differences. Falcon offered a range: using a 71% overhead markup per her full calculation, or reducing the overhead allocation as low as 40% if commissioners judged Hayden receives lower service levels than other jurisdictions; a 40% overhead figure would put the contract around $1.9 million under her model.

Undersheriff Nelson and other law-enforcement staff told the board they could prioritize requests and work to retain personnel; staff also said the sheriff’s office might track Hayden-specific operational expenses (overtime, training, uniforms, fuel) separately going forward to give more precise cost attribution.

Ending: Commissioners were left with a range of cost estimates and the option to either absorb the shortfall (requiring additional property tax revenue) or renegotiate service levels and overhead allocation with the City of Hayden. Staff was asked to continue confirming vehicle purchase records and develop more precise service-level cost data.