PORT ANGELES — Residents will be able to comment on issues facing Port Angeles at a public meeting to reveal aspects of the “scary picture” of the future budget today at City Hall.
The meeting, hosted by City Manager Kent Myers and city Finance Director Yvonne Ziomkowski, will last from 6 p.m. to 8 p.m. in the council chambers, 321 E. Fifth St.
Ziomkowski told the council Tuesday that she predicts the city’s general fund — which is the main operating account for the city — will be in the red by $150,000 at the year’s end due to several revenue sources coming in below projections.
“It’s a scary picture,” she said. “It really shows you where we are going with the economy.”
Today’s meeting will include staff presentations on the budget planning process and how the budget is structured. A quorum of City Council members may be present.
The meeting comes at a time when the City Council has begun planning for the 2010 budget with potential spending cuts on the horizon. Formal public hearings on the 2010 budget are planned for Nov. 3, Nov. 17 and Dec. 1.
Revenue down
Among the economic woes facing the city is sales tax revenue.
Traditionally the largest revenue source for the general fund, revenue from the tax is expected to be $2.9 million this year — the lowest level in six years and a 13.5 percent drop when compared with 2008.
“At the same time, our expenses are going up, not down,” said Ziomkowski, who was recognized with awards from three municipal finance organizations — one from Washington state and two including both the U.S. and Canada — at the Tuesday City Council meeting.
Spending cuts would most likely come from personnel, she said.
As of June, the tax revenue is down 17 percent when compared with the same period in 2008.
In response to questions from council members, Ziomkowski said the closure of Gottshalks earlier this year alone will bring sales tax revenue down by about $40,000 per year.
The loss of the Chevrolet dealership at Murray Motors’ — which now is selling used cars and providing car repair — means another $20,000 per year loss for the city, Ziomkowski said.
Utility tax revenue is also expected to drop $150,000 this year, partially because of a lack of growth in the customer base and closure of businesses.
Despite the transfer of $575,000 from the general fund, the capital improvement fund is expected to be $285,4999 below budget.
The street fund is expected to have a shortfall of about $30,000 because of lower-than-expected revenue from the gas tax.
One bright spot
On the other hand, community development revenue — which comes from building and planning permits and other associated fees — is expected to be $40,000 over budget thanks to fees from the future construction of the Maier Hall building at Peninsula College.
But revenue from the economic development fund — which is paid for with interest on investments — and from the electric, water and wastewater services is projected to be below expenses by $329,709.
Revenue from the lodging tax, real estate excise tax and housing rehabilitation also is expected to be below previous projections.
Property tax revenue will vary little at the end of the year, since it is based upon a levy, Ziomkowski said.
To help offset the overall decline in revenue, the city this year has cut the number of hours that residents can pay utility bills at City Hall and reduced the pay for new seasonal hires.
Hiring freezes for some positions also are in place.
“We are very frugal with replacing vacant positions,” Ziomkowski said. “We are trying to save as much as possible and postpone hiring.”
Ziomkowski said the city’s attempts to balance the budget would be hindered more if state Initiative 1033 is passed in the Nov. 3 general election.
The initiative would place more limits on the amount of revenue municipalities can receive from property taxes.
“It would threaten basic services,” she said.
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.
