$3.5M in reserves aids 2021 budget

Largest budget shortfall Clallam County has had in at least 13 years

PORT ANGELES — Clallam County commissioners have approved a 2021 spending plan that uses $3.5 million in reserves to maintain services and respond to COVID-19.

The $44.6 million general fund for day-to-day operations was balanced by lowering reserves from $13.9 million to a budgeted $10.3 million. It represents the largest budget shortfall that Clallam County has had in at least 13 years, according to previous budgets.

Given historical underspending for unfilled staff positions, Chief Financial Officer Mark Lane said the true deficit for 2021 will be about $1.8 million, leaving a “still healthy” $12 million reserve.

Clallam is one of the few counties in the state with no debt.

“We believe the general fund will remain on solid financial footing at the end of 2021 despite the considerable operational and financial challenges that the COVID-19 public health emergency has presented to our county in 2020 and 2021,” Lane told commissioners in the second of two budget hearings Tuesday.

“Given this, we do not believe further cost reductions to the 2021 budget are needed at this point. Obviously, this is prefaced on economic conditions not worsening considerably from our expectations that this budget is based upon, or significant additional COVID-related costs needing to be funded in 2021 beyond what is currently budgeted for, which no federal or state assistance is available to fund.”

Commissioners approved the budget after the second public hearing Tuesday.

“I don’t look at the deficit that we forecast,” Commissioner Randy Johnson said in the first hearing.

“I look at the $1.8 million. I mean, that’s still a negative, and we have to pay attention to that, but that’s the number I’m looking at.”

Johnson said the budget would be “very close to being break-even” were it not for COVID-19.

The budget includes $685,000 of pandemic-related capital and transfer costs, Lane said.

Clallam County opened a Social Distancing Center last spring to give the homeless population a place to maintain 6 feet of physical distance or quarantine and will continue to operate the shelter through May.

Other COVID-related costs in the 2021 budget include $145,000 for dedicated Health and Human Services personnel and $90,000 for information technology upgrades, Lane said.

The general fund budget shows $41.1 million in total revenue, including $529,000 in Coronavirus Aid, Relief and Economic Security (CARES) Act money that the county received in 2020.

“A continued unknown is the amount and timing of future federal stimulus that will be injected into the local economy in support of local government and county residents/businesses impacted by the COVID emergency,” Lane said in an eight-page budget summary.

“At this point, no CARES funding or similar federal/state assistance relating to COVID is reflected in the 2021 proposed final budget.”

The county budget is available at clallam.net under “Budget and Finance.”

No public comments were made in the first hearing Tuesday. Two comments were offered in the second virtual meeting.

Ed Bowen of Clallam Bay said the budget appeared to add $99,432 in state Veterans Service Officer program funding to the county’s Veterans Relief program.

Only 23 percent of the veterans in Clallam County receive their full benefits, Bowen said.

“We’re going to, it appears, capture that $99,000 in the Veterans Relief program, but we have no metrics to show how we improve upon benefits to the under-served veterans of the county,” said Bowen, a veterans advocate who frequently comments at commissioner meetings.

“I never saw any metric from 2020 on how this particular expenditure played out, other than supporting the Veterans Relief program, which is a valid program, but that’s not the purpose of this funding solely for that.”

Another speaker who identified himself only as Thomas urged commissioners to open businesses in defiance of Gov. Jay Inslee’s COVID-19 orders.

“This lockdown is unconstitutional,” Thomas said.

“The county should cut back their spending like the rest of us. If you want to increase revenue, open up businesses and your tax revenue will increase.

“Hunger and poverty from the lockdown kill more people than the virus,” Thomas added.

The 2021 county budget shows a $500,000 decline in interest income from lower interest rates, Lane said.

Clallam County’s investment portfolio consists of two-year CDs and a Local Government Investment Pool through the state.

“Interest rates are assumed to not begin to recover to pre-COVID levels until 2022 at the earliest,” Lane said in his summary.

“This decrease in interest income is mostly offset by increased campground and facility usage fees reflecting the resumption of campground being opened the entire year in 2021 as compared to the COVID-related closures in April-early July 2020, and the return of the county fair in 2021.”

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Reporter Rob Ollikainen can be reached at [email protected].

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