PORT ANGELES — Clallam County commissioners held a pair of public hearings Tuesday on a $33.2 million general fund budget for 2015.
Board Chairman Mike Chapman said he intended to vote against the budget because of his opposition to a debatable budget emergency that Commissioners Mike Doherty and Jim McEntire approved Tuesday.
No verbal public testimony was given in the 10:30 a.m. hearing. A second budget hearing was scheduled for 6 p.m. Tuesday.
The quarterly budget emergency included a $482,559 medical benefit refund that employees volunteered as part of union negotiations in late 2011.
The money for the refund was awarded by the state as reimbursement for the extraordinary expense of Darold Stenson’s double-murder trial in 2013.
“Just to give my fellow board members a heads-up, because of the vote of this issue, I will be voting against the budget, and I’d like to put on record for next year we should have no budget emergencies,” Chapman said in the first public hearing Tuesday.
“Obviously, the entire bureaucracy, staff, department heads and elected officials support this, so everyone should then live within their budget. And I would not support any budget emergencies in the new year.”
Commissioners had the flexibility to approve the budget after the second public hearing or during their regular business meeting next week.
Using reserves
The draft 2015 budget was balanced by using $707,528 in reserves, including $321,304 for onetime departmental requests for new equipment and capital spending.
Clallam County will enter the year with at least $4.5 million in unrestricted reserves for onetime capital replacement projects and “a cushion for future surprises as we really don’t expect to see the economy recover much more over the next several years,” County Administrator Jim Jones said during the morning hearing.
The county has a “very healthy” $12 million total reserve fund, but $7.5 million of that is specifically restricted, Jones said.
Meanwhile, Commissioners Chapman and McEntire have said they would not support a 1 percent property tax levy increase because the economy is still lagging and the county budget is in relatively good shape.
Property tax revenue
As such, property tax revenue is projected to remain at $10.2 million next year.
Taxes account for $15.6 million, or 48.3 percent, of all revenue in the county’s general fund for day-to-day operations. Charges for goods and services are projected to be $7 million.
Salaries account for $17.2 million, or 52.8 percent, of general fund spending in the draft budget. The county will spend $6 million for employee benefits and $7.4 million for services.
Law and justice departments will spend 58.7 percent of the entire general fund with $19.2 million budgeted next year.
The county’s general fund supports 274.2 full-time jobs. Other funds support the equivalent of 94.2 full-time employees for a total county workforce of 368.4.
The total county budget, including grant-supported funds, projects $80.2 million in revenue, $90.5 million in expenses and a $37.4 million ending balance going into 2016.
In an executive summary to the draft budget, Jones explains how he and Budget Director Debi Cook projected next year’s revenue.
“State grants, reimbursements and sales taxes are projected to be reduced, while major economic indicators and property taxes for the whole county remain flat or project slightly lower,” Jones said.
“We are expecting a $250,000 decrease in sales taxes from 2014, as the economic boost we received from the two big highway projects between Sequim and Port Angeles end, together with reductions in penalties and interest on delinquent taxes, as the foreclosure boom is projected to start winding down.”
The state’s $28 million construction project to widen U.S. Highway 101 between Kitchen-Dick and Shore roads is winding down, and Clallam County’s $4.8 million highway underpass at Deer Park is finished.
“The latest information from the DNR [Department of Natural Resources] projects a slowing-down of public timber sales in our region, but we are hopeful that private timber sales will maintain their high levels for at least one more year,” Jones said.
The Clallam County road department, which has its own fund, projects the “first of several years of declining revenue” from $13.9 million this year to about $12.7 million next year, Jones said.
County officials project declining state and federal reimbursements for road projects and “little to no increase in gas taxes being collected as more convert to electric, hybrid and high millage vehicles,” Jones said.
The road fund budget was balanced through the use of $2.6 million in reserves.
On the spending side, the county has maintained “good control of our spending, living within our means by cutting back wherever we can and by reducing staff through attrition as each year’s inflationary pressures continue even though revenues remain essentially flat,” Jones said.
Shrinking labor force
Clallam County’s labor force has shrunk considerably since the recession began.
There were 413 workers on the county payroll in 2009 compared with 400 in 2010, 391 in 2011 and about 363 in each of the past three years.
Most union-represented county workers will stay on a 37.5-hour-per-week schedule next year and not receive a cost-of-living raise.
The draft budget includes $12.9 million in spending — and nearly $10 million in loan proceeds — for the Carlsborg sewer project in 2015.
Construction of a pump station that will send effluent to the city of Sequim’s sewer system is expected to begin next spring.
As part of his normal practice in budget hearings, Jones provided a snapshot of the county’s effect as an “economic engine.”
Clallam County projects to take $28.6 million out of the economy in taxes, fees, licenses and permits while infusing the economy with $75.2 million in salaries, supplies, service contracts and capital projects, Jones said.
The net economic effect is $46.6 million to the good, Jones said.
The Peninsula Daily News will provide coverage of the Tuesday night budget hearing in Thursday’s paper.
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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 5072, or at rollikainen@peninsuladailynews.com.
