PORT ANGELES — Clallam County will use fewer reserves to balance the 2017 budget than previously thought, commissioners learned this week.
Thanks to spikes in revenue and across-the-board spending cuts, Clallam County ended May with $14.9 million in revenue and $14.2 million in expenses for a better-than-expected five-month gain of $714,140 in the general fund for day-to-day operations.
Based on that performance — and absent any surprises such as a state government shutdown — County Administrator Jim Jones is projecting a $1.5 million use of general fund reserves by year’s end.
The county budget for 2017 is $2.7 million in the red.
“We’re much better than that, but we’re not out of the woods,” Jones said in the commissioners’ work session Monday.
A five-month budget vs. actual performance analysis shows increased revenue from sales taxes, building permits, park and use fees, and interest income, Jones said.
However, the sale of county timber, intergovernmental revenues and charges for goods and services were “significantly lagging” from 2016 and the three-year average, he added.
“The net, though, is good,” Jones said. “I’m very optimistic about where we are.”
Clallam County was spending less than projected in all major categories in the general fund.
More than 94 percent of county spending is in salaries, benefits and contracted services.
“All of our expenditure items are running significantly under their three-year average based on projections through May,” Jones said.
“So we’re actually $1.8 million to the good on the expenditure side.”
Clallam County has saved money this year by holding open staff positions and replacing retirees with new workers who are lower on the salary scale.
Based on the annual fiscal cycle, it is rare for Clallam County’s general fund to have more revenue than expenditures at the end of May, Jones said.
“On average, over a three-year period, we would typically expect to be $788,000 upside-down as of the end of May in terms of actual revenue collected and actual expenditures paid,” Jones said.
“In this particular year, we’re $714,000 to the good.”
As of May 31, Clallam County had collected $8.4 million in taxes, $2.5 million in charges for goods and services, $2.1 million in intergovernmental revenues, $753,398 in miscellaneous revenue, $458,382 in fines and forfeits, $383,142 in licenses and permits and $268,468 in other financing.
It had spent $7.7 million in salaries, $3.2 million in contracted services, $2.7 million in benefits and $560,172 in supplies and capital improvements, according to Jones’ analysis.
Jones has been providing monthly financial updates to help the three commissioners track budget performance.
Commissioners are looking for ways to correct a long-term structural budget deficit to avoid a fiscal cliff in the years ahead.
With a general fund reserve of $11.3 million, Clallam is one of the few counties in the state with a healthy rainy day fund, commissioners have said.
Most of that reserve, however, is restricted by policy for specific purposes such as emergencies.
Commissioners have set a goal of using no more than $1.5 million in reserves this year.
“If the year progresses the way we expect it to, based on a comparison to the three-year average, and also a comparison to just last year, we will be upside-down by about $1.5 million at the end of the year,” Jones said.
“That’s still better than the $2.7 million projected.”
Chief Accountant Stan Creasey of the county auditor’s office reviewed general fund expenditures with the county finance committeeon June 8.
Creasey agreed with Jones’ assessment that the general fund would be in deficit somewhere between $1 million and $2 million by year’s end.
“You never know exactly what’s going to happen, but so far, I’m not any more scared than I was in January,” Creasey told the finance committee.
In other budget news, county officials are preparing for the official launch of a new software system that will help the public and department heads keep track of county finances.
The OpenGov financial reporting system is scheduled to be launched in early July.
“When we’re up and running, it will get right down to the transaction level,” Jones said in the work session.
Financial data will be downloaded monthly from the county’s internal system to the OpenGov platform, which is designed to improve transparency and strategic planning.
“I personally think it’s tremendously exciting, and I hope that it’s well-received by the public,” board Chairman Mark Ozias said.
Clallam County purchased the OpenGov software from the Redwood City, Calif.-based company in March at a cost of $10,925 per year with a one-time startup fee of $2,700.
The system is already being used by Clark and Thurston counties and the cities of Olympia and Redmond.
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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 56450, or at rollikainen@peninsula dailynews.com.
