PORT ANGELES — Left unchecked, the Clallam County budget for 2017 would be $2.4 million upside down.
County officials will spend the next few months working to close that gap for next year.
“Obviously, this won’t be the final budget,” Commissioner Mike Chapman said in a Tuesday presentation at the Clallam County commissioners’ meeting.
The preliminary roll-up budget shows flat revenues of $34.7 million and roll-up expenditures of $37.2 million in the county’s general fund for day-to-day operations.
The document, which is available at www.clallam.net, is the sum of 93 budgets in 20 county departments that reflects all services, contracts and labor agreements required for next year, County Administrator Jim Jones said.
It does not include some $2 million in new spending requests from elected and non-elected department chiefs.
Jones said the preliminary budget is based on “basically flat, status quo revenue and dealing with expenditure increases that happen because of both inflation and contractual agreements.”
Chapman said commissioners have “a lot more work to do” before they adopt a final budget in early December.
“Hopefully the department heads and elected officials will bring some ideas to the table to help close down this gap a little bit,” Chapman said.
“It would not be prudent to pass a budget with that large of a gap.”
Since county budgets must be balanced, the projected $2.4 million structural deficit would be covered by general fund reserves.
Clallam County will end this year with a “still healthy” $10.2 million reserve fund, $6.7 million of which is restricted for specific purposes, commissioners were told. Meanwhile, the county Road Department is projecting a $7.9 million shortfall with $13.7 million in revenue and $21.6 million in expenses.
Chapman, a 16th-year commissioner who is running for state representative this fall, noted that preliminary budgets are typically “out of balance.”
“I don’t think this [$2.4 million] number is all that unusual at this time,” Chapman said.
“The real budget that gets passed, still conservatively, is generally less than half of the exposure,” Jones said.
Chapman asked Jones to prepare a comparison of preliminary budgets, adopted budgets and actual performance at year’s end, which Jones provided shortly after the meeting.
The analysis showed a $1.9 million nine-year average structural deficit in the preliminary budget, a $1.1 million eight-year average shortfall in the adopted budget and a $155,317 seven-year average actual use of reserves.
Clallam County added an average of about $1 million to its general fund reserve in 2012, 2013 and 2014 before drawing $455,974 from reserves last year.
“This analysis demonstrates the significance of the budget reduction work that takes place between the roll-up budget, the adopted budget and during the year,” Jones wrote in an email.
Jones and Budget Director Debi Cook have begun a series of budget meetings with elected officials and department heads. Budget and Road Department planning presentations will be held in each commissioner district Sept. 27-29.
Commissioners will hold budget meetings with individual departments Oct. 5-7. Jones will present a recommended budget to the board Nov. 15.
Two public hearings will be held in Port Angeles on Dec. 6 before a final budget is adopted by resolution.
As part of Tuesday’s presentation, Human Resources Director Rich Sill briefed commissioners on staff turnover resulting from retirements.
Clallam County has replaced the equivalent of 34 full-time employees so far this year and officials expect to replace another 20 to 25 before year’s end, Sill said.
The equivalent of 46 full-time staffers left county employment last year, and the trend is expected to continue in 2017 and 2018, Sill said.
Because each layoff costs the county $30,000 to $35,000 in unemployment payments, Sill advised the board to consider attrition as a means to reduce staff should it decide to eliminate positions.
“Those kinds of issues are really much more impactive of the staff and service levels if they’re done at one time where a decision is made for cuts versus doing them ahead of time where you don’t impact families and lives and so forth,” Sill said.
Said Chapman: “It makes no sense to hire someone in September and lay them off in December.”
“Layoffs are not a good deal for the taxpayer because we’re self-funding on unemployment insurance,” he added.
Commissioners Chapman and Bill Peach directed Jones to hold off on new hires and look for opportunities to restructure through the budget process.
Commissioner Mark Ozias had a planned absence Tuesday.
“Ultimately, at some point, I’m sure that the future board of commissioners will have to start a conversation about new revenue,” Chapman said, “or cut core programs.”
Chapman warned the second half of next year could be “very different than we’re budgeting right now” because of cuts associated with the state’s $3 billion education funding mandate.
“I think we need to avoid two things: a lot of layoffs because that’s not a good deal for the taxpayer and try to get a budget number that’s a little more reasonable,” Chapman said.
Peach agreed that next year’s budget is “going to be a real challenge.”
“We may not have a full answer by July 1 next year,” Chapman added.
“It’s going to be a very fluid year for local governments.”
Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 56450, or at [email protected] dailynews.com.