PORT ANGELES — City Hall’s projected surplus for this year is expected to be swallowed by a large deficit in 2012.
The city of Port Angeles is estimated to be $900,000 in the red next year because of rising expenses combined with stagnating revenue, staff members told the City Council during a budget work session Tuesday.
That would follow a $230,000 projected surplus at the end of 2011.
City Manager Kent Myers said the projected deficit includes a “status quo budget,” meaning it has no staff increases except for a few temporary positions.
Cost-of-living increases for staff are also absent from the estimate.
“We’re being faced with an increase in costs without the ability to finance that with additional revenue,” he said.
City Finance Director Yvonne Ziomkowski said $600,000 of the deficit comes from increases in personnel costs, mainly from higher retirement and benefit expenses.
Myers said staff will plan to trim down the budget over the next few weeks and suggested that the new temporary positions will be eliminated.
“That $900,000 will be coming down as a result of departmental meetings over the next couple weeks,” he said.
The City Council has already used this year’s anticipated surplus to finance a few new projects this year: sprucing up downtown for dam removal celebrations ($14,500), a Hurricane Ridge Road fundraising effort ($25,000) and downtown mural repairs ($5,000).
Also affecting the 2012 budget is the expected loss of sales tax revenue from the Price Ford Lincoln dealership, which plans to move outside the city limit, as well as fewer large construction projects, Ziomkowski said.
The city is adopting a new budget strategy this year that focuses on the needs of programs rather than departments.
Ziomkowski said it may take another year to fully move to the new strategy.
“It’s a rather difficult transition,” she said.
The budget will be approved in December.
Public hearings on the budget are scheduled for Sept. 27, Nov. 1, Nov. 15 and Dec. 6.
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.
