PORT ANGELES — In an era of tough budgets and a slow economic recovery, Clallam County Administrator Jim Jones brought a bit of welcome news to a midyear budget review.
Clallam County’s projected gain of $1.4 million in the 2012 general fund is “a little better than expected,” Jones said in charter-mandated hearing on the midyear budget Tuesday.
Projected revenues in the general fund are $31.9 million, with $30.5 million in projected expenses.
That compares with a budgeted $31.6 million in revenues and $31.7 million in expenses.
The analysis was based on a three-year midyear average vs. actual performance at year’s end.
Better than break-even
Jones said the midyear budget was “better than the ‘break-even’ budget that was originally projected for 2012” for three main reasons:
■ The state Legislature’s cuts did not hit Clallam County as hard as expected.
■ Clallam County had “nice surprises” in revenue, including a onetime refund of $115,000 from the state Department of Natural Resources, an additional $269,000 in federal Payment in Lieu of Taxes and an $86,000 increase in privilege tax, Jones said.
■ The county challenged every expenditure by staff attrition and overtime cuts to the tune of $1.2 million in savings.
Jones said his projections are “pretty optimistic” because of onetime financial events that can’t be counted on in the future, “but I think it is very safe to say that we will do a little better than ‘break even’ this year,” he added.
While the county has positioned itself to do better than break even, the economy has performed “a little worse than was expected” in the first six months of the year, Jones said.
Countywide sales tax collections were down 7.9 percent, or $158,670, from last year.
Interest income was down 66.2 percent, or $150,012, from 2011. Clallam County has a conservative policy that restricts how it can invest public funds.
Property tax collections
At the same time, Clallam County saw a 2.4 percent gain in property tax collections — up $126,456 from last year — and an $823,033 spike in real estate excise tax collections from two large private timber-holding sales.
“As for the rest of the year, we believe that revenues during the second half of the year will stay flat, as continued uncertainty over economic conditions puts a damper on new initiatives and growth,” Jones wrote in an executive summary that he read into the record Tuesday.
“Looking forward to 2013, there will be a negotiated cost-of-living adjustment, as the June to June COLA is reported at 2.7 percent, increasing base salaries by about $410,000.
“While union/employee concessions negotiated last year still have one more year to run, they don’t include forgiveness of the 2013 COLA payments,” Jones added.
Murder trials
Jones said he was troubled by the prospect of having to fund the cost of five murder trials, two of which originally were considered death-penalty cases.
Clallam County Prosecuting Attorney Deb Kelly on Tuesday said she is seeking the death penalty in the retrial of Darold Stenson, whose 1994 double-murder conviction was reversed by the state Supreme Court in May.
Earlier this month, Kelly announced she would seek life without parole for Patrick Drum, a 34-year-old Sequim man who is charged with aggravated first-degree murder in the deaths of Jerry Ray and Gary Blanton.
The three commissioners Tuesday approved a maximum of $100,000 to appeal the Stenson case to the U.S. Supreme Court.
In an earlier interview with the Peninsula Daily News, Kelly said the Stenson case could exceed $1 million.
“This problem further demonstrates the need for the county to continue to maintain adequate reserves to cover these and other eventualities,” Jones said.
No debt
Clallam is one of the few counties in Washington with no debt, officials have said.
It built up a reserve fund before the economic downturn in 2008 and used the reserves to maintain core services with no new taxes in the first few years of the recession.
The county put the brakes on reserve spending in a special budget session last winter.
A $2.7 million shortfall was balanced with 15 layoffs and 16 furlough days that amount to a 6.13 percent pay cut in 2012.
An additional 16 layoffs would have been necessary had the unions that represent county employees not agreed to wage concessions.
The midyear budget is posted on the Clallam County website at www.clallam.net.
Commissioner Mike Doherty thanked the Treasurer’s Office for mitigating the loss of interest income.
The county budgeted to earn 0.5 percent interest but is actually earning more than 1 percent, county Treasurer Selinda Barkhuis said.
Doherty said Price Ford Lincoln’s new location in the Port Angeles Urban Growth Area may “help us a little bit” because of the county’s 50-50 split with the city of Port Angeles on tax collections from the auto dealership.
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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 5072, or at rob.ollikainen@peninsuladailynews.com.
Reporter Paul Gottlieb contributed to this report.