PORT ANGELES — City Council members made clear during a 2014 budget work session Tuesday that they want to steer $46,150 in new city utility tax revenue expected next year to health and human services.
The consensus at the session — where no vote was taken — came after the staff presented a proposal to direct $35,000 in 2014 to health and human services, with funding administered by the United Way of Clallam County and given to nonprofits.
City Manager Dan McKeen’s initially proposed 2014 budget called for no health and human services funding.
The additional money was part of a staff proposal for new expenditures of $293,900, which are expected to be possible through new utility tax revenue expected because of rate increases going into effect in January.
Utility tax revenue
Total new revenue from the utility excise tax after new rates come into effect is expected to be about $389,000.
Staff also proposed that the Olympic Peninsula Humane Society receive $50,000 for 2014 rather than the $41,645 contract Police Chief Terry Gallagher had proposed last month.
But council members discussed moving about $8,300 of that $50,000 proposal, plus another $2,850 of the expected utility tax revenue staff had left unassigned, to health and human services.
“I see that we’re spending $15,000 [more] on animals than [health and human services] in this community, and this concerns me,” Councilman Dan Di Guilio said.
Council members Patrick Downie, Di Guilio, Dan Gase and Brooke Nelson recommended the $41,645 amount at the Tuesday work session, while Mayor Cherie Kidd, Deputy Mayor Brad Collins and Councilwoman Sissi Bruch preferred the $50,000 amount.
The $128.3 million proposed 2014 budget, with an approximately $19 million general fund, is expected to get its first public hearing at the 6 p.m. Tuesday regular council meeting at City Hall, 321 E. Fifth St.
‘Critical’ to general fund
City Chief Financial Office Byron Olson said city customers pay the utility taxes as part of their utility bills at a roughly 6 percent rate for electric charges and between 8 percent and 10 percent for all other utilities.
Such tax revenue theoretically could be poured back into the city’s utilities, though such a decision is ultimately up to the City Council.
“I would say that it would be a very rare occurrence because utility taxes, not only for Port Angeles but for all cities in the state, utility tax is a very critical revenue for helping to fund the general fund,” Olson said.
Olson said staff also have recommended $60,000 of the new revenue from the taxes be steered to help the city’s low-income customers with their non-electric utility costs, since the city already offers an assistance program for electric bills.
Divert to bills
At the work session, Nelson asked whether more of the money could be diverted to electric bills, and Olson said his staff would look into that.
For 2014, Olson said the city is budgeting between $80,000 and $90,000 just for help with low-income customers’ electric bills. In 2013, the amount budgeted was $83,000.
Regarding the Humane Society contract, Nelson said she appreciates the work the organization does but thinks the amount Gallagher had proposed was fair.
“I don’t feel like we have enough information to justify this extra money when we have a smaller amount of demographic to take care of,” Nelson said.
Gallagher said he arrived at his proposal, which was down from a previous contract amount of $54,000, after determining the city paid more per resident than the county did.
“[The Humane Society is] a very good organization, and I think they use that money wisely, and I think [Gallagher’s proposed amount] was calculated on a very realistic formula,” Gase said.
The Humane Society figures its cost per animal rather than per community resident, Executive Director Mary Beth Wegener has said.
She said Wednesday that less money from the city would not prevent the shelter from taking animals turned in by residents, though it could mean shelter staff asking the community more often for donations of food and supplies.
Wegener, who proposed a $50,000 contract amount as a comprise at the Nov. 5 City Council meeting, said she will continue to work with Gallagher on the issue.
“I understand that the city is working in really tight parameters as far as setting their budget,” Wegener said.
“I just think and I hope there is some kind of middle ground we can come to that will work for everyone.”
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Reporter Jeremy Schwartz can be reached at 360-452-2345, ext. 5074, or at jschwartz@peninsuladailynews.com.