PORT ANGELES — The bad economy’s grip on Clallam County government is getting tighter, and more cuts are needed at the courthouse to avoid a fiscal choke hold, according to information given to the three county commissioners Tuesday.
The preliminary budget for 2012 projects a $2.7 million deficit, County Administrator Jim Jones said.
Over the next two months, county officials will look for cuts or new revenue to cover the gap.
“Our plan to balance the $2.7 million shortfall is, we’re going to be meeting with all of our union groups, we’ll be meeting with all of our department heads — both appointed and elected — and we’re going to be looking at a number of options,” Jones said.
Those options may include wage concessions, closing programs, a reduction in operating hours and “significant layoffs,” Jones said.
“We’re trying to avoid those if we can, but at the same time, we’re now figuring that this is pretty much the new reality right now.”
County officials are already operating on a bare-bones budget.
Twenty-seven positions have been cut since 2009, mostly through attrition, leaving the equivalent of 385½ full-time employees on the payroll.
Four were laid off in December.
Customer service hours were reduced in the Prosecutor’s Office and the courts to allow staff to complete their mandated tasks.
“Clallam County has been very frugal over the last three years, cutting noncritical expenditures and eliminating any new staff hires, except for temporary grant-funded positions,” Jones said.
The preliminary budget takes the 2011 budget and adjusts it for new realities such as higher fuel and utility costs, new contracts and payment schedules.
Clallam County has made the first of three mandatory increases in payments to the state retirement fund.
The preliminary budget is available on the county’s website at www.clallam.net.
“It’s not, by any means, ever expected to be the final budget,” Jones said.
“This starts what is a three-month process of budget meetings and budget hearings.”
Projected expenditures in the general fund are $33,050,019 compared with $30,323,289 in projected revenues.
That leaves the general fund, which supports core services, $2,726,730 in the red.
That deficit would pull the county’s $9.4 million general fund reserve below $6.7 million.
The required minimum for the reserve is $6.5 million to cover urgent capital replacement projects without borrowing money.
“We don’t have the luxury of the larger reserve we’ve had over the last five or six years,” Commissioner Mike Doherty said.
“It’s more serious than usual.”
Clallam County built up its rainy-day reserve in better economic times.
It has helped the county balance budgets without more drastic cuts that other counties have had to make.
One of the big reductions in Jones’ forecast is a 5.2 percent cut to state grants and contracted services.
“We’ve been told to be on the lookout for as much as 10 percent more, which could happen in the middle of this process but right now is not included in this particular roll-up budget,” Jones said.
“And then the big loss has been what is amounting to now $2,300,000 per year in treasurer’s interest,” he added.
“That is due to the extreme low-interest rates that the Federal Reserve is maintaining out there in the world and has just promised to continue that policy for at least two more years.
“So we really don’t expect to get treasurer’s interest revenue back.”
Commissioners will meet with department heads in early October to go over their specific budgets.
Jones and budget Director Kay Stevens will present a recommended budget in November.
After a series of public hearings, the three commissioners will adopt a final budget Dec. 13.
Meetings between the county and union representatives are scheduled for Monday.
“We’ll be discussing with them what the options are moving forward,” said Commissioner Mike Chapman, a union liaison.
Doherty said those options at the local and state level have been four-day work weeks, furloughs, cuts in hours and the elimination of cost-of-living raises.
“That will all be on the table,” Doherty said.
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Reporter Rob Ollikainen can be reached at 360-417-3537 or at rob.ollikainen@peninsuladailynews.com.
