Port Townsend council adopts balanced budget despite impacts

City predicts less than $300K difference between expected revenues, expenses

PORT TOWNSEND — The Port Townsend City Council adopted a balanced budget for 2021 despite a dip in sales tax revenue caused by the COVID-19 pandemic.

Council members approved the 2021 budget unanimously during their Dec. 7 meeting.

The ending fund balance for 2020 will be $13,514,095, with the expected revenues of 2021 being $33,944,531 and predicted expenses being $34,162,454, according to city council documents.

The projected ending balance of 2021 is $13,296,172, which incorporates the $217,973 difference between the projected revenues and expenses for 2021, according to the documents.

Retail sales tax revenue for the city is projected to come in 13.5 percent below 2019 and 15.4 percent below the adopted 2020 budget due to economic impacts of the COVID-19 pandemic and its subsequent closures and reduction in tourism, the documents said.

The largest decrease in 2020 is due to a 53.4 percent decline in accommodation and food revenues.

But there was an uptick in retail trade revenues of 9.6 percent. City staff attributed that to an increase in online sales.

The adopted 2020 budget anticipated $2,516,000 in sales tax revenue, but the estimated actual revenue for 2020 is $2,194,014, with the 2021 budget anticipating $2,264,400, the documents stated.

The ending 2020 budget will be about where City Manager John Mauro expected it to be, but through staffing and hour reductions, the city prevented larger financial losses, he said in a letter to the council.

“Our community has been hit hard by the unfolding pandemic, and our lives and livelihoods have changed in ways we could have barely imagined just a year ago,” Mauro said.

“All of us — our people, our organizations, our schools, our businesses, our events — have struggled as we navigate the changing and uncertain landscape of new required behaviors and practices, state and federal direction, and myriad connected impacts.

“Despite these impacts, our 2020 budget ended up about where we expected, thanks to the quick action by my team to dramatically reduce expenditures and temporarily reduce staffing,” he continued.

“Doing so had an impact on the service levels that you are used to, but along with operational agility and new innovations, our actions helped us endure 2020 without need for an operational supplemental budget request or a need to dip into our reserve balances. It wasn’t easy for any of us, but we got there.”

One of the key expenditure assumptions for the city is labor costs for personnel wages and benefits of city employees, the document said.

The total budgeted positions for 2021 include 95.48 full time employees (FTE), which amounts to $11,001,908 or 39 percent of the overall anticipated operating costs of $28,206,381, the documents said.

The 2021 budget reduces 11.75 FTE in staffing positions compared with the 2020 budgeted positions, which includes full time, part time and temporary positions.

The city positions are divided among the police department, public works, administrations, finance/human resources, IT, planning, parks and recreation, facilities/maintenance and the Port Townsend library.

The full budget packet and city council discussion can be viewed at tinyurl.com/PDN-PTBudget.

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Jefferson County reporter Zach Jablonski can be reached at 360-385-2335, ext. 5 or at [email protected].

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