PORT ANGELES — The City Council on Tuesday unanimously approved a 2010 budget that includes some utility rate increases but no new taxes.
It is balanced through not adding new staff positions, making cuts to parks, recreation and nonprofit organizations, and through the use of reserves.
The budget totals $99.4 million and is about 3.6 percent smaller than the 2009 budget of $103 million.
It includes a $3.8 million reduction in funding for capital projects — mostly due to the completion of The Gateway transit center and the two Eighth Street bridges — but it also involves the use of about $3 million from about 13 different reserve funds.
About $5 million in reserves was used this year.
Even with the use of reserves, the city’s projected revenue stream for 2010 made up of taxes, permits and other sources is down $4.7 million, or nearly 5 percent, from what it expects to have for all of 2009.
Slide to continue
City Manager Kent Myers told the City Council on Tuesday that balancing the 2011 budget will be more difficult next year, as Port Angeles’ revenue base continues to shrink due to the loss of several stores and recession in general.
“I don’t see the economy getting easier in the coming year,” he said. “It’s going to be more difficult, if anything.”
With that in mind, Myers told the council that staff will begin working on the 2011 budget today.
Outgoing City Council member Larry Williams had a message for the new council next year that will include three new members.
Clearly sort out funding priorities, and do it early, he said.
The next three years, he said, “are going to be critical.”
While the city’s budget may still seem quite large, about half of it is taken up by utilities alone.
The amount it has available to allocate to what are typically called “core services” — such as police, fire, street maintenance, and parks and recreation — is mostly limited to the general fund, which gets the lion’s share of Port Angeles’ sales and property tax revenue.
That fund is set at $17.2 million in the 2010 budget, a slight reduction from the $17.3 million budgeted for this year.
Next year’s general fund includes the use of $190,000 from reserves and a $269,010, or 12.5 percent, reduction in funding for parks and recreation services.
That includes funding reductions for youth programs and park maintenance.
The difference in park maintenance is intended to be made up through the city’s park sponsorship policy enacted early this year.
The use of general fund reserves will go to maintain funding for street-related capital projects of around $1 million.
The city will have about $3.7 million remaining in the general fund’s reserves.
Nonprofit funding
Although the city council considered eliminating funding for the United Way, Fine Arts Center and Arthur D. Feiro Marine Life Center in 2010, it has chosen instead to reduce Port Angeles’ contribution to those organizations by 10 percent.
Last year, the city cut such contributions in half.
The latest reduction will save the city $11,250.
But funding will be available for a new motor pool vehicle, new fire engine, three police cars and a garbage truck.
The city also has in the budget $12,500 to convert its sole hybrid vehicle into a fully electric version.
Next year the city will not add any new employees, even though it will lose about nine full-time equivalents when it stops managing William Shore Memorial Pool sometime next year on behalf of the metropolitan park district formed to fund it.
Labor costs
City Finance Director Yvonne Ziomkowski said in an interview that labor costs, which account for about 70 percent of Port Angeles’ budget, remains the city’s main financial concern.
Port Angeles will have 256.6 full-time equivalent positions in 2010 after it stops managing the pool. This year it had 265.10 FTEs.
Ziomkowski said the city will remain “very hesitant” about adding new positions in 2011. She also said that she hopes to begin speaking with unions about possible contract changes earlier next year than usual. When asked, she said staff have not decided on any labor contract proposals.
The amount the city raises through property taxes, also known as levies, will remain the same in 2010 except for a special levy that will decrease by about $80,000 in 2010 through the use of a property tax reserve fund.
Utilities cost more
For utilities next year, Port Angeles customers will pay 8.5 percent more for water, 4 percent for wastewater, and 30 percent more in “combined sewer overflow” fees.
The city estimates that the higher rates will cost the average residential customers $7.77 per month.
On top of that, the Medic 1 utility rates — which helps pay for the cost of a ride in a public ambulance for Port Angeles residents — will increase from $52.12 per year to $52.20 per year for residential utility customers, from $53.74 per year to $54.93 per year for businesses, and from $11,489 per year on average for assisted living facilities to $12,574 per year, among other changes.
The higher water rates are partially due to a new water treatment plant coming online this month.
The combines sewage outflow fees increase about the same each year, and will continue to do so for about another 25 years to help the city pay back loans from the state Department of Ecology. The loans that are used to cover the costs of the city to keep sewage from overflowing into Port Angeles Harbor.
The budget is about $500,000 larger than when it was initially drafted in October because the city is now expected to continue to manage the pool through March on the behalf of the William Shore Memorial Pool District. The park district will reimburse the city for those costs.
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.