PORT ANGELES — City Hall is proposing a 2011 budget that includes no cuts to services or staff and increases funding for infrastructure improvements despite stagnating sales tax revenue.
The proposed budget, to be considered for adoption by the Port Angeles City Council in December, uses little in the way of reserves and is able to avoid employee and service cuts as a result of conservative planning, particularly during the economic recession, said Yvonne Ziomkowski, city finance director.
But whether services are maintained may depend on a handful of labor concessions the city will propose during union contract negotiations that begin next week.
Ziomkowski said some service and staff cuts would have to be made if the proposals are not met and the council doesn’t approve spending more from its reserve accounts.
Staff members are proposing using $531,000 in reserves in 2011. About $2.4 million in reserves will be spent this year.
Labor concessions
The labor concessions the city is pursuing include no cost of living raises, a 50 percent reduction in merit increase and a 1 percent increase in the employee’s contribution to medical insurance payments.
All together, the proposed concessions would save the city between $310,000 and $330,000 next year.
Ziomkowski said the city already is cutting funding for supplies and “outside services,” and she doesn’t think any more cuts can be made without affecting services and staff.
“In my opinion, we’ve already made quite significant cuts in the discretionary spending,” she said.
Ziomkowski said the city hasn’t determined what would be cut if the concessions are not made and reserves are not used.
It’s the city’s policy to not use reserves on operating expenses, such as salaries and benefits, she has said.
Representatives of Teamsters Local 589, which represents Port Angeles police officers, and the International Association of Fire Fighters in Port Angeles declined to comment on the city’s proposal since they are about to enter negotiations.
The representatives of the other two unions with contracts with the city couldn’t be immediately reached for comment.
The overall proposed city budget for 2011 is about $123.18 million, an increase of about 24 percent over 2010’s $99.4 million amended budget.
A majority of the budget covers purchasing electricity from the Bonneville Power Administration and other utility costs.
Ziomkowski attributed the increase to the city investing more in infrastructure projects, which would total $35 million next year.
Almost all of that is for utility-related projects, such as the state-mandated effort to control the city’s sewage overflows and plans to install automated meters.
More than $14 million will be spent on those projects alone, she said.
Another $4.1 million is proposed for street improvements.
Ziomkowski said the city is mostly paying for the projects with $10.25 million in bonds, grants and a wastewater utility fee.
Some of the other utility projects include storm water improvements on west Fourth Street intended to eliminate flooding there, the purchase of low-energy light bulbs for street lamps, concrete pipe replacement and the construction of a sewer trestle at Francis and Eighth streets.
Property taxes
The city is proposing a 1 percent increase in property tax revenue next year.
That would add $40,000 to city coffers and cost the owner of a $200,000 home an extra $4.52 a year.
By law, the city could raise the property tax revenue by 2 percent because it didn’t increase it last year. The City Council has told staff that it wants to keep the raise to 1 percent.
Sales tax revenue, which has been decreasing over the last six years, is expected to remain the same in 2011, Ziomkowski said.
The only proposed fee increases would raise the cost for banner rentals from $85 to $100 and the city’s after-school day camp program from $155 to $165 per person.
The city is also proposing to spend $1.6 million from its economic development fund.
The money would mostly go the city’s waterfront improvement project and facade improvement program and assist Angeles Composites Technologies Inc. to expand its campus.
The fund was established with $7.5 million from the state in compensation for the failed Hood Canal bridge graving yard project.
About $4.4 million would be left after 2011.
Ziomkowski said the city intends to use revenues from economic growth to maintain the fund.
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.
