Spokane Valley council reviews sheriff contract as law enforcement consumes 56% of general fund

Mayor Padden opened a discussion-only workshop Feb. 24, telling the council there would be no votes and no public comment as staff briefed members on priorities for the 2027 budget. City manager John Holman and deputy manager Eric Lam led a multi-hour presentation focused on the city’s interlocal law-enforcement contract with the Spokane County Sheriff’s Office and Spokane County.

Eric Lam, deputy city manager, told the council that "56% of your general fund recurring budget is for law enforcement," and walked members through the agreement’s history, current service mix, and why the contract’s settlement and reconciliation process complicates budgeting. He said the city has added 23 dedicated officer positions in recent years and that additional officer hiring and a new collective-bargaining settlement are primary drivers of higher budgets.

Lam emphasized that the agreement is a three‑party interlocal: the sheriff signs the operational side, the county controls budgeting and many indirect supports, and the city pays for the services it receives. He described recurring (personnel and operating) costs versus capital items the county sometimes purchases and later allocates to participants. Lam warned that a county financial‑software transition in 2025 delayed estimates and made 2025–26 figures less reliable than 2024 actuals.

Chief Ellis, speaking for the Spokane Valley Police operation under the sheriff’s umbrella, defended staffing investments as necessary to restore response times and beat coverage after years of vacancies. He described the department’s patrol-district model, shift staffing and the goal of proactive policing built into the staffing matrix. On recruitment, Ellis and staff credited a post‑2020 compensation strategy and binding arbitration for stabilizing staffing.

Council members pressed staff on indirect costs billed by Spokane County — IT, insurance, HR and countywide depreciation — and on the transparency and timing of the county’s estimate-and-reconciliation process. Morgan, a finance analyst, told the council that the county’s indirects were about $6.6 million in 2024 and that insurance increases (cited in conversation as 15% and possibly much higher in 2026) are a material driver. Lam said work with an external consultant (FCS) is under way to review the allocation methodology and that staff expect a report in a few weeks.

Lam explained contract mechanics: the current agreement runs through Dec. 31, 2027, can be renewed up to five years with council approval, and carries a two‑year rolling termination notice if either party elects to exit. He noted the contract’s practical complexity: monthly payments are made on an estimated basis and then reconciled the following year; disputes can be resolved through binding arbitration.

Several council members urged staff to press Spokane County for timelier and clearer budget data; others suggested options for controlling costs, including rethinking the mix of dedicated versus shared positions or negotiating different allocation formulas. No formal decisions were taken at the workshop; staff said the sheriff and a county commissioner will present to council on March 17 and that council would return to contract and budget choices at subsequent meetings.

The workshop concluded with staff identifying next steps: continue reconciliation work with the county, receive the FCS methodological report, and prepare options for council review ahead of 2027 budget decisions.

The council adjourned at the close of the workshop; no votes or ordinances were adopted during this session.