In the month since Clallam County commissioners were presented with a preliminary 2025 budget indicating a $4.187 million general fund operating deficit, county staff have developed an administrator-recommended budget that updates the deficit to $418,000.

Most of the savings come from budget cuts that were mandated for the 18 county departments that receive general fund money.

Since the first week of September, about $3.486 million of potential savings have been identified by the departments. Nine departments have met the county’s goal of reducing their potential general fund expenditures by 7% or more, while the other nine departments are still working on identifying savings.

To cut general fund costs, departments identified new revenue sources, transferred expenses to other funding sources or reduced expenditures.

That included cutting staff; eight full-time employee positions were eliminated as a result of budget cuts.

Currently, the county is predicting it will generate about $55.354 million in revenue in 2025.

About 48% is predicted to come from taxes, with 21% generated from intergovernmental revenue, including grants.

“The biggest piece of the pie comes from taxes,” county Chief Financial Officer Mark Lane said.

The administrator-recommended budget predicts expenditures will total $55.772 million next year, with 72 percent of that going toward personnel costs. Overall, county staff is budgeting an increase of 0.42 full-time employees compared with 2024. That includes an addition of four employees in the sheriff’s office, three to help with the Recompete program and one for district court.

Those additional employee costs are offset by staff reductions identified by departments in the budget costs, Lane said.

Staff also incorporated new department and capital requests into the administrator-recommended budget.

Of the more than $1.63 million in department requests, about $370,000 was approved and incorporated into the recommended budget.

Of more than $3.06 million in capital requests, about $2 million was incorporated into the recommended budget, with more than $1.5 million being grant funded.

In total, 2025 predicted expenditures are almost $1 million more than adopted budget expenditures in 2024.

Administrator Todd Mielke said some things that contribute to the increased costs include employee step increases and cost of living adjustments; new collective bargaining agreements (CBAs); litigation costs; multi-year agreements with contractual increases; workers compensation and disability costs; and 20 percent insurance rate increases.

“This is not unique to Clallam County,” Mielke said regarding the insurance rate increases.

Currently, the administrator-recommended budget does not include a variety of potential costs including remaining CBAs, new financial software implementation costs, costs for an independent coroner’s office and more.

In total, those likely will add about $1.66 million to the budget expenditures, according to deputy Chief Financial Officer Rebecca Turner.

When those impacts are incorporated into the administrator-recommended budget, as well as the estimated payroll under spend of about $1.6 million, that leaves the operating deficit at $477,000.

“We’ve come a long way,” Mielke said. “We’ve moved the needle. We’ve addressed, I think, some of the other challenges facing the county.”

Over the next few months, Mielke said the budget team will work to get a fully balanced budget. He is not anticipating that the county will have to dip into the general fund reserves.

Based on current budget recommendations, reserves at the end of next year will likely be at 23 percent.

Mielke said the county’s goal should be to have at least 25 percent of total expenditures in the general reserves. That will allow the county to receive lower interest rates for future bonds, he added.

Throughout October, the county will hold a series of public outreach meetings in which staff will present the 2025 administrator-recommended budget.

Based on those meetings and county conversations, a draft budget will be presented to the commissioners on Nov. 18.

The final budget will be adopted on Dec. 3 or Dec. 10.