PORT ANGELES — Even before it finished this year’s budget, the City Council knew that balancing the books for 2011 was not going to be an easy task.
But just how difficult that will be became clear this week.
In her first projection of the year, city Finance Director Yvonne Ziomkowski told the council Tuesday night that it might have to shave between $1.1 million and $1.2 million in spending to balance next year’s general fund.
Ziomkowski, who said she will have updated figures in a couple of weeks, attributed the projected deficit primarily to declining sales tax revenue and rising expenses related to Clallam County District Court and jail costs along with health insurance.
“It won’t be a very enjoyable task this year,” said City Manager Kent Myers at the meeting.
As of April, Ziomkowski said sales tax revenue was down 2 percent, or $14,000, this year compared with the first quarter of 2009.
That revenue source has been on the decline since 2007.
The city may also see a 10 percent to 12 percent increase in medical insurance costs for employees, and double-digit increases for District Court, she said.
Ziomkowski said the projected deficit — which she stressed is “very preliminary” — isn’t likely the largest the city has ever faced.
But she still called it the most significant since it comes at a time when the city has a freeze on hiring and new programs.
She also warned that the council can’t rely on reserves to fill the gap.
The city has about $4 million in reserves for its general fund — which covers some of its main services such as police, fire, streets and parks — and will deplete its reserves by 2013 if further cuts don’t occur.
While displaying a spreadsheet on projected revenues and expenses to the council, she said that small adjustments will not cut it.
“It’s so important to start looking to budget for priorities and being very selective with programs we will budget,” she said.
Which is why the city is taking a new approach to budgeting, Ziomkowski said.
That new approach involves better defining the city’s funding priorities and focusing more on measuring the success of programs.
To accomplish that, the city is hoping Port Angeles residents will help.
A survey asking residents to rank how important the city’s programs and projects are to them will be mailed with utility bills this month.
The survey will also be available on the city’s website, www.cityofpa.us, by the end of the week, said city spokeswoman Teresa Pierce.
About 10,000 survey forms will be mailed.
At the Tuesday meeting, council members expressed strong support for the survey along with some concerns that some residents might complete more than the survey online more than once.
Myers and Ziomkowski said staff will look closely at the online submissions to weed out those that may be completed multiple times by the same person.
It’s being made available online, they said, to get responses from residents who prefer to use the online version.
Myers said households can make and submit copies of the survey if residents wish to complete their own.
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.