PORT TOWNSEND — The Jefferson County commissioners have declared a financial emergency, a legal move to allow them to use the county’s banked capacity to bolster the county road fund and increase property taxes to create more revenue.
Commissioners are considering a $53.3 million budget that would cut 10 staff positions and reduce services in 2010, as well as closing some parks.
A public hearing on the proposal is set at 4:30 p.m. Dec. 7.
After this Monday’s public hearing, the three commissioners also diverted $720,000 to the general fund for Jefferson County Sheriff’s Office traffic law enforcement.
In addition, they passed a temporary levy shift of $216,000 for the 2010 fiscal year, moving it from the road fund to the general fund.
Taking the $216,000 of road banked capacity and a temporary levy shift to the general fund means property owners will see an annual tax increase of about $11.42 for a home valued at $275,000, or $4.15 per $100,000 of assessed valuation during 2010.
The commissioners also approved changing the county conservation levy — increasing it by the 1 percent permitted by state law — after County Administrator Philip Morley said a “substantial need” exists in the conservation futures fund because “potential conservation projects continue to outstrip our available funding.”
Such conservation projects include protecting Tamanowas Rock near Anderson Lake, converting Quimper Wildlife Corridor Department of Natural Resources leases to a purchase and saving other DNR lands otherwise ripe for conversion to development, Morley said.
The commissioners adopted the levies, which will be collected in 2010.
Morley said the road fund proposes $23 million be spent over the next six years, of which $10.7 million was not secured, leaving projects unfunded.
“We need to find the funding. We need more money in the road fund,” Morley told the commissioners, adding that by not doing so, the road fund would see a shortfall by 2015.
Banked capacity
Morley said it was necessary to take the $216,000 in banked capacity in the road fund, starting in 2010, which amounts to about 6 percent in added revenue to the 1 percent limit.
Initiative 747, approved by voters in 2001, imposed a 1 percent limit on increases in property tax levies. The initiative does not limit additional tax revenue coming to local governments from the valuation on new construction or from voter-approved tax levies.
When government entities do not raise taxes by the 1 percent permitted, they can “bank” the raise for use later if the need exists.
Since 1999, Jefferson County commissioners have not always assessed the full amount of property tax allowed, Morley said. This saved taxpayers more than $6 million in the past 11 years for all funds, he said.
But this year, dipping into the reserve of unused property tax levy authority, or banked capacity, was necessary, he said.
Last year, faced with the most significant recession since the Great Depression, Morley said, and to limit reductions in county services, the county commissioners voted to take the general fund banked capacity in 2009, worth $437,000 a year.
Not ‘out of the blue’
County Commissioner David Sullivan said it was important to note that the decisions the commissioners made Monday were not “coming out of the blue.”
He pointed that Morley had been working with elected department heads, such as county Assessor Jack Westerman III, who sat beside Morley during his presentation.
Citing tough times at the courthouse, Westerman said he had to lay off one of his property assessors.
Westerman said a number of counties around the state are now approving levy shifts and fund diversions to deal with hard times.
Morley in August briefed the commissioners about a five-year financial projection for the county general fund that showed a $1.9 million annual gap by 2013 between general fund revenues and the cost to maintain current services.
Protesting the proposal at the hearing was Joe D’Amico, president of Security Services Northwest, who said while he did not like to see county staff and service cuts, “I have seen no action from this board to bring in new business to this community.”
He said that, instead, the county’s actions would place the burden on the county’s longtime taxpayers by increasing their taxes.
County resident Bill Miller said taxes “have always been on the backs of people before us” and that will continue. He commended the board for its efforts.
County resident Tom Thiersch asked for the legal definition of “substantial need” for additional revenue.
Westerman, the county’s elected assessor for more than 30 years, later explained that state statute provides no definition for substantial need, but it was generally believed that it was intended “to protect the future levy capacity.”
Sullivan said that county Public Works Director Frank Gifford, who oversees the road department, recommended diverting road funds to the general fund. This means that infrastructure improvements would still be made, Sullivan said.
The county commissioners have set a public hearing on the proposed 2010 budget at 4:30 p.m. next Monday in the Superior Court room on the third floor of the county courthouse, 1820 Jefferson St., Port Townsend.
Funding gap
The budget is proposed to help narrow a $1.9 million funding gap over the next four years.
The funding gap reflects the existing recession and dramatic declines in sales and real estate excise taxes and construction fees.
Morley recently said that the county sales tax is projected to be 10 percent less than 2006 levels.
Already-made county budget cuts include 10 layoffs and positions left unfilled, along with cutting remaining staff hours to 36 in December 2008.
Hardest hit since the 2009 budget is the Department of Community Development, which has seen a drop in construction revenues.
In 2010, the department plans a staff reduction of 3.8 full-time equivalent positions.
DCD cut staff by eight and closed on Fridays in December 2008. Three more DCD staffers were laid off in August 2009.
The department’s 2010 budget is proposed as $375,000 less than 2009 budget, excluding pass-through expenses, Morley said.
Community Development will continue to be closed on Fridays.
Public Health two months ago closed Environmental Health on Fridays, cut Public Health nurse support to many mothers of newborns and cut family planning clinics by one day a week.
The county Sept. 28 announced it would close four parks and cut maintenance to six parks this year and reduce maintenance to six more parks in 2010.
The cuts over the past year bring the county staff to 287.5 full-time equivalent positions in 2010.
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Port Townsend-Jefferson County Editor Jeff Chew can be reached at 360-385-2335 or at jeff.chew@peninsuladailynews.com.
