Clallam County could impose two furlough days a month on county employees to avoid layoffs and cope with unforeseen budget woes.

Two new rules impacting the county's revenue and expenses took what was a balanced budget and created a problem, Clallam County Commissioner Mike Chapman said.

The first is a change in state law requiring government employers to contribute more to the state retirement fund. Beginning next July, the county's contributions will rise from 5.3 percent to 8.7 percent of salaries. It will rise again the following year, costing the county about $700,000 each year, Clallam County Administrator Jim Jones said.

The second change is a new rule requiring banks that accept public deposits keep all of the deposit instead of 10 percent collateral, which means the county won't get the annual interest of $2 million it normally receives when the banks loan its money out, Jones said.

"We thought for 2011 we'd have a balanced budget and, if you look at the numbers, we would've been spot on," Chapman said.

To cope with the $2.7 million budget gap without laying off staff, Jones proposed implementing two furlough days a month for county staff.

Without the furloughs, which represent a 9-percent cut in pay, up to 64 full-time positions would need to be cut to achieve the same savings, he said.

Salaries make up the largest portion of the county's budget, but many of the largest salaries, including judges and the prosecutor, are set by state law and can't be changed by the county, he said.

Even though staff is stretched thin, the county can't continue to support the payroll as it is now, he said.

Jones said the county doesn't have much control over revenue, with caps on property tax increases and ever-declining sales tax revenue.

Chapman said he thinks it is important people know the board hasn't gone to the public asking for tax increases to deal with budget woes.

The problems with this year's budget were due to unforeseen changes and the county is trying to adapt to it, he said.

The county could draw $940,000 from its reserves to be used to balance the budget, leaving $8.5 million in the reserve fund, Jones said.

As the budget process continues, county officials will have to meet with union bargaining units to discuss the furloughs, he said.

To see the preliminary county budget, go to www.clallam.net.

Reach Amanda Winters at awinters@sequimgazette.com.