Clallam County projects ongoing $1.35M general‑fund shortfall for 2026; officials weigh hiring review and levy option

County Administrator Todd Melky and county finance staff presented an updated 2026 general fund outlook at a Clallam County town hall, saying a preliminary shortfall identified in September had been narrowed but an ongoing deficit remained. "We did have a pretty substantial, funding gap, that was staring at us when we presented the preliminary budget," County CFO Mark said during the presentation, citing a $3,258,000 gap in the preliminary numbers and describing department‑level adjustments and revenue changes that reduced the projected deficit.

Finance staff reported a mix of one‑time and recurring changes. One‑time revenue adjustments cited included the return of working capital from a reservoir project and the sale of surplus land; recurring savings and revenue gains reduced the gap further. After those adjustments, staff said the budget still showed an adjusted deficit of about $1,931,000. Staff also described about $1,350,000 in general‑fund capital requests for 2026, of which roughly $992,000 is expected to be grant funded.

Officials highlighted personnel costs as the largest ongoing pressure. Mark estimated that roughly 71–74% of general fund expenditures pay salaries and benefits and explained that anticipated step increases, cost‑of‑living proposals and rising retirement and insurance costs drive much of the yearly expense growth. The presentation called out an actuarial liability for legacy "left‑1" retiree health obligations of about $3.3 million in the financial statements; that is an actuarial measure of future expected obligations, not a single cash payment.

Staff presented several options to address the remaining shortfall and preserve services: adopt an "allowable" budget using reserves for one year; pursue revenue options such as a 0.1% criminal justice sales tax if statutory criteria are met (staff said the county does not yet meet those criteria); lower the assumed vacancy/underspend rate used in modeling from 3% (roughly $1.2M) to 2% (roughly $800K), which would require identifying the equivalent of about three FTEs in net savings; or take a deeper, service‑level approach that could require the equivalent of about 11 FTEs to close the remaining gap if no new revenue is available.

Melky said the board has instructed staff to pursue a "case‑by‑case" review of vacant positions to identify where roles are essential and where vacancies might be held or reallocated, but he said correction officers and juvenile correction officers would be exempt from the intensified vacancy review because of the high overtime costs and operational risks in understaffed detention operations. "With the exception of correction officers and juvenile correction officers, we will be issuing... an intense review as opposed to a hiring freeze, that every position that is vacant today or becomes vacant is going to go, basically... a case by case review of, is this something we need to fill?" Melky told the meeting.

Public commenters pressed commissioners on the tradeoffs of cutting positions, asking whether other line items could be reduced first and whether the county should ask voters for a levy lid lift to raise the general fund levy rate (county staff described a proposed levy lid lift from roughly $0.75 to $0.95 per $1,000 assessed value as a single‑year question on the ballot rather than a permanent CPI escalator). Residents also raised concerns about preserving essential services, the county’s mix of tax sources, and accountability for contracts and metrics.

Ending: County staff said they would continue department‑level line‑by‑line reviews with the board in October and November, accept written comments during the public comment period, and return to the commissioners with a more detailed recommended 2026 budget after negotiations with bargaining units and final updates to timber revenue and other placeholders are resolved.