PORT TOWNSEND — The City Council has approved a 2015 budget, setting the stage for what the city manager calls one of the largest capital expansions in the city’s history.
The $48,356,154 budget approved Monday night includes $19,885,807 for operations and $28,470,347 to support capital projects.
These projects include the Howard Street expansion, a water treatment plant, a reservoir, renovation of Mountain View Commons and sidewalk projects on Sheridan and Landes streets.
City Manager David Timmons said funding was available for all the projects, adding that he had “a lot of confidence” in the budget that was prepared by Finance Director Nora Mitchell, who was hired this summer.
“Nora did an incredible job in getting up to speed and making sure all the numbers matched,” Timmons said.
“I’m impressed with how fast she caught on.”
The operations budget estimates the city will collect $20,124,576 in revenues, which will leave a $4,133,794 balance at the end of 2015.
“We’ve forecast conservatively on the revenue side, so if revenues improve, we’ll be able to bring in some other projects,” Timmons said.
Mayor David King, Deputy Mayor Kris Nelson and council members Deborah Stinson, Pamela Adams, Michelle Sandoval and Catharine Robinson voted to pass the budget with Councilman Robert Gray opposed.
Gray’s objection centered on staff salary increases as well as projections that new hires could receive substantially more than those they replaced.
The increase schedule resulted from a report prepared for the city by Prothman, an Issaquah consultant firm, that was meant to bring the city’s salaries in line with those offered by other municipalities and aid in succession planning.
Gray, who had approved the new salary schedules while in committee, said he was having second thoughts.
He said not implementing the raises could save the city as much as $100,000 that could be spent on other programs.
“I believe that people should be paid as much as they can be paid, but these are government employees who are paid by the taxpayers,” Gray said.
“Some of these are pretty healthy increases, and I don’t begrudge them that, but I think we should hold off until we get a better handle on the economy.”
No existing staff will get a substantial increase aside from Deputy Police Chief Mike Evans, who will receive a $14,000 hike because he was considerably underpaid, according to the Prothman study.
The increases will be put in place as new hires are made, the study recommends.
Gray, with King’s help, crafted a motion to sequester the funds earmarked for the wage increases until a future time, but the motion failed for lack of a second.
“It’s too vague,” Nelson said.
During a public comment period, former City Council candidate Patrick Moore criticized the council for raising staff salaries while people in Port Townsend struggle to make a living.
“The Port Townsend Food Bank gave away 350 turkeys, which was a new record,” Moore said.
“To approve what is essentially a $100,000 raise for city employees while people are waiting in line for a turkey is insensitive.”
“I understand that people are having a hard time, but not having city employees earn what is fair and determined by an independent study unfortunately doesn’t help people at the food bank,” Sandoval said.
“It is irresponsible to ignore the study,” she added.
After the meeting, Timmons said Gray “was comparing apples to oranges” and the money earmarked for salary increases would not necessarily return to the general fund if the increases did not occur.
Timmons said all the capital projects will be completed by the end of 2016.
The city will save $17 million on the water filtration plant with the acquisition of low-interest loans instead of using its bond capacity, he said.
If bonds were used to finance the project, the total payback for the $26 million project will approach $43 million over 25 years, which would require a utility surcharge to stay in place for that time, according to Timmons.
By securing $26 million in low-interest loans from the Public Works Trust Fund, the state Department of Health and the Environmental Protection Agency along with “loan forgiveness,” the payback cost would be about $26 million or essentially interest-free, Timmons said.
The city will know if all these loans are in place Friday, he said.
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Jefferson County Reporter Charlie Bermant can be reached at 360-385-2335 or at charlie.bermant@peninsuladailynews.com.
