EDITOR’S NOTE: Feiro Marine Life Center’s 2014 budget has been corrected in this report.
PORT ANGELES — The City Council is wrestling with a projected $250,000 deficit in 2016 by identifying the Olympic Peninsula Humane Society, the Feiro Marine Life Center and other programs for possible budget cuts.
By a 6-1 margin, council members at a Thursday work session approved moving a list of reductions forward for May 5 and May 19 public hearings and future council consideration.
Color-coded priorities
The May 19 hearing could be followed by adoption of three color-coded lists of lowest- to highest-priority programs that council members would use as a guide for budget cuts — when the time comes.
The lists were contained in a PowerPoint presentation by city officials that were divided into three groups.
Red colored the lowest priorities, which would be the first to be eliminated to balance the budget.
Orange was the color for programs to be reduced if additional budget reductions are required.
Green was the color for highest-priority programs that cannot be reduced without council consensus.
The presentation is available at http://tinyurl.com/PDN-Prioritysetting.
“Need to Clarify Misinformation,” reads one frame. “The City is NOT Broke, Destitute, Out of Money.”
But it is hurting.
‘Only so much money’
“At the end of the day, there’s only so much money,” City Manager Dan McKeen warned council members.
He said it makes more sense to trim programs according to priorities set by council members than to reduce expenditures through across-the-board cuts.
“There’s probably more than $250,000 in that red group,” he said.
“To balance the budget, this is one of the multiples.”
Loss of revenue
The deficit is being generated by the loss of $350,000 in annual city electric utility revenue caused by the ongoing, long-term shutdown of one of two Nippon Paper Industries USA paper machines.
Byron Olson, city chief financial officer, said Friday the loss was predicted at about $30,000 a month in December but is now “in the $50,000-a-month range,” or $600,000 annually.
Nippon is “balancing paper production with market demand,” Olson said.
Nippon will not be commenting on any aspect of mill operations “over the next several months,” mill Manager Steve Johnson told the Peninsula Daily News in an April 18 email.
McKeen said the cuts would be phased in, not come all at once.
Humane Society
The Olympic Peninsula Humane Society, which has contracts with Clallam County, Port Angeles and Sequim, would be hardest hit on the lowest-priority list in terms of total cuts, losing $54,000.
“Those contracts help us care for the animals that come in from those specific areas,” Mary Beth Wegener, executive director, said Friday.
The gap in the nonprofit’s funding would have to be filled with private donations or other funding, she added.
“The worst-case scenario could mean we would say we can’t take in animals from the city limits, but that’s very worst-case,” she said. “We’ll come out OK.”
Port Angeles’ contribution is 9.5 percent of the organization’s $564,000 budget.
Feiro marine center
Feiro, also a nonprofit with a $280,000 budget for 2014, receives about $23,000 annually in city money.
Feiro officials are planning a marketing survey and permit analysis for the proposed expansion of the facility on City Pier.
“While it is a challenge, we do not necessarily consider it a blow in terms of our overall picture of the new building,” Melissa Williams, Feiro executive director, said Friday.
“It’s a pretty big chunk to make up, but I don’t think we are completely unaware of the city’s budget issues.”
City Council members have been addressing budget issues by meeting over the past few months to set priorities for this year and for the 2016 spending plan, which department heads will begin preparing later this year in earnest.
City supervisors began the process earlier this year by providing lists of lowest-priority programs and services.
That was followed by a public “listening session” where residents said police and fire services are the most important programs.
Ranked from 0 to 4
Council members ranked the department heads’ priorities on scorecards, ranking them from most important — 0 — to least — 4.
The council members’ scorecards are public information, though Brad Collins did not sign his.
“I think it exposes the council to some level of lobbying,” he said after Thursday’s meeting. “I didn’t think that was the intent of the priority-setting.
“I feel fine about my priorities.”
Councilman Lee Whetham did not score programs but did attend Thursday’s work session.
His was the lone dissenting vote on forwarding the priorities for public hearings.
Review salaries first
He suggested city officials should first review salaries and staff perquisites instead of thinking about cutting services to residents.
“I would like to look within salary ranges,” he said during the meeting. “We are top-heavy with junior leadership.”
The city has imposed a hold on filling all vacancies unless a department is down two positions, at which time McKeen considers filling the slot.
Other council members lauded the priority-setting process.
“This is a reliable tool, and it should be used to further the budget process,” Councilman Dan Gase said.
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Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at pgottlieb@peninsuladailynews.com.
