PORT TOWNSEND — The Port Townsend City Council has approved a 2025 budget with projected expenditures of $68.3 million and revenues at about $65.7 million.
The $2,549,557 discrepancy between expenditures and revenue was intentional, Director of Finance Jodi Adams said.
“We are drawing down the fund balances of some departments, primarily the general fund,” Adams said. “We have a healthy reserve balance, so we’re making some strategic choices to draw that fund balance down, in order to fund some things such as equipment that might be needed or projects for streets.”
The council approved the budget Monday night.
“If you take the time to review the previous years’ budgets, you’ll see them evolve into something increasingly clear-eyed, strategic and honest,” City Manager John Mauro said. “This year we move forward in a similar fashion.”
Mauro said the city is moving away from the uncertainty brought on by the pandemic and striving to think beyond the next calendar year.
The city finance team worked with department directors to build a budget based on principles set forth by the city’s strategic work plan, Adams said.
Of the more than $20 million devoted to capital outlays, almost $18 million will go toward capital improvement projects, to be spent mostly on streets, water, sewer and storm projects.
Sewer projects will see more than $9 million spent, and streets will see almost $4 million.
The city will spend almost $15 million on its 113.6 full-time-equivalent employees (FTEs), adding five positions to staff.
Budgeted staff additions include a community services director, an arts and culture coordinator, a water maintenance worker, a streets operator and a parks maintenance worker.
The community services director position replaced the library director position.
Also mid-2024, the city added a position for an engineer and a position for an electrician.
Salaries, wages and benefits are largely paid for by taxes, Adams said.
The city expects to see $65,746,488 in revenue in 2025.
More than $21 million is expected to come from charges for goods and services. Water, sewer and stormwater are expected to generate $12,633,586, an almost 11 percent increase from 2024.
Almost $16 million in revenue is forecasted to come from taxes. The city’s property tax accounts for more than $4 million, sales taxes are projected to be $3,668,40, business and occupation taxes are expected to bring in $918,000, real estate excise taxes are budgeted at $650,000, and the city’s utility tax is forecasted to bring in more than $3 million.
Adams said taxes are relatively similar to previous years.
“I do anticipate maybe in the next few years we are going to see some changes,” she said. “This coming year, we didn’t anticipate any drastic changes.”
The reason the city has a fund balance is that some funded projects were never completed due to staffing shortages, Adams said. Money marked for those projects carried over, she added.
The budget includes $5,758,436 in intergovernmental services, mostly grant awards, Adams said.
The city’s transportation benefit district (TBD) started generating revenue in 2024, when it produced $516,000 for streets. The TBD is budgeted to generate $521,000 for streets projects in 2025.
The city has allocated $265,000 in remaining American Rescue Plan Act (ARPA) funds to be spent in 2025.
“The only changes we made this year were, by the end of 2024, we need to have all of the ARPA funds allocated or obligated to projects,” Adams said. “That includes contracts being secured. We had one or two projects, the Pink House being one of them, that we were unable to get a contract in place prior to Dec. 31, so they reallocated the funds to a project that we already have under contract.”
Remaining funds will continue to pay for an ARPA-funded long-range planning position, as well as a part-time public records clerk and potentially a truck for the parks department, Adams said.
Adams was hired in 2024. She has a background in civic work, coming most recently from the department of community development at Jefferson County, where she worked on the department’s budget. Adams also worked at the city of Bainbridge and spent time in an accounting office at Bellevue College.
This year was her first time writing a municipal budget, she said.
Adams said she completed the budget with help from finance manager Rich Gould and accounting manager Karen Taylor, in addition to help received from city department directors.
The full budget packet is archived with the agenda from Monday’s meeting, which can be found on the city’s website, https://cityofpt.us/citycouncil/page/agendasminutesvideos.
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Reporter Elijah Sussman can be reached by email at elijah.sussman@sequimgazette.com.
