COUPEVILLE — The light at the end of the tunnel sure didn’t shine for long.

Island County Treasurer Linda Riffe said Monday the dismal economy may improve by the first quarter of next year.

“All is not doom and gloom and there is hope on the horizon,” Riffe told a gathering of elected officials and county leaders, adding that the dramatic slide in the financial markets may settle out in early 2010.

Riffe has a keen interest in finding the bottom of the ongoing financial mess that’s gripped the county and the country. An unexpected drop in investment revenues has blown a

$1 million hole in the county budget, and Riffe has spent the past few weeks explaining how the county found itself facing further cutbacks in Coupeville after the $2 million budget gap that led to county layoffs just two months ago.

The treasurer herself has shouldered some criticism, which she brushed back earlier this week.

“Some would say, ‘Well, gee, how come the county treasurer allowed this economy to collapse? And how come the county treasurer allowed this interest rate to drop so far?’ Obviously, that’s ludicrous,” Riffe said.

She said she had adjusted her financial projections for the county, but the depth of the drop was too much to imagine.

“Do I wish that we had been closer? You bet I do. But nobody, even with a crystal ball, could have anticipated the depth of this trough and the length of time it was going to last.”

The magnitude of the crisis can’t be compared to other recessions, either, Riffe noted. “It’s just enormous.”

Riffe said experts have said the current downturn “is the closest thing to the Great Depression that anybody has seen.”

“Right now, it’s not a pretty picture, and it does not look like it’s going to get a whole lot better for the remainder of this year,” she said.

County leaders have met repeatedly in recent weeks to talk about ways to bridge the $1 million gap.

Earlier, Commissioner John Dean said as many as 20 county jobs may be cut. Since then, the county has started to explore the idea of unpaid furloughs, service cutbacks and other ways to solve the budget deficit.

Budget Director Elaine Marlow said the board of county commissioners is starting to come together to look at priorities and the budget process.

The budget picture looks bad and is getting worse. Beyond the drop in investment returns, other revenue streams are also starting to dry up.

“There won’t be any good news in the financial reports,” Marlow told county leaders at Monday’s meeting, adding that sale taxes were down by 10 percent, and there are “significant decreases” in permitting revenue.

The number of septic permits, for example, are down by 50 percent, Marlow said.

Building permits were falling as well.

Marlow said staff cuts alone may not solve the county’s budget woes.

“We’re going to need to look at several different options,” she said, including cuts in hours, reducing staffing levels and allowing unpaid furloughs.

Though some have suggested cutting a few hours here and there from employees to make up the $1 million gap, adjusting the pay rates for county employees would be no simple task. The county has about 450 employees, six unions and 150 different pay codes.

Many departments are already stretched thin, with workers now covering for employees who were laid off in December or for positions that have long gone unfilled. What’s more, that has happened as the demand for county services has increased.

The clerk of the court’s office says it has faced an almost tenfold increase in the workload in recent years, and the staffing level has not increased. The number of hearings and trials has climbed from

696 cases in 1999 to approximately 6,600 last year. And court clerks already do double duty during some hearings, processing court documents during lengthy testimony by lawyers and witnesses.

Others in county government are already working well beyond their paychecks. County Coroner Robert Bishop, for example, has donated all his time on after-hours calls outside of his office hours for the past 14 years.

The county’s facilities department maintains more than two dozen buildings on Whidbey and Camano islands, which include more than 183,000 square feet of space.

The public works department has 1,170 miles of county road to safeguard, worth more than $1.7 billion. It’s also facing declining gas-tax revenues because of the sputtering economy, and a drop in fees for the solid-waste fund because people are cutting back on spending and generating less garbage.

Deputies in the sheriff’s office handle six times as many calls as their counterparts in King County, and the department’s unpaid leave liability recently topped $1.5 million.

Department heads and elected officials recently provided the commissioners with detailed overviews on each department, from their staffing levels to programs and responsibilities.

Few departments have made specific suggestions for cuts so far, though.

Marlow, the budget director, has suggested cutting costs for legal advertisements in her office, and cutting her department’s working hours to a 36-hour week. Both moves combined would save approximately $11,500.

The county’s general services administration has suggested reducing the number of vehicles in the county motor pool, which would save on insurance and maintenance.

GSA officials have also noted that departments with assigned vehicles did not use them much, and that three vehicles available for employee use in the motor pool had only been checked out 10 times in the past four months.

They have also made the unpopular recommendation that the reimbursed use of private vehicles be curtailed.

GSA officials have suggesting changing commercial burn permits to 24 hours rather than the seven-day permit that now costs $50. A shorter time frame could mean more permits are sold, and the department has also suggested raising the price of residential burn permits.

Though commissioners have asked department heads to identify the major priorities in their departments, officials in many departments said they could not prioritize their activities, because those services were required by law.

The planning department, however, noted that much of its work is not.

The department’s optional workload includes the county’s surface water quality monitoring program, its efforts to oversee the Holmes Harbor Shellfish Protection District, as well as providing and maintaining parks.

At Monday’s meeting, Commissioner Angie Homola again suggested creating a surface-water utility that would bring in new tax revenues from property owners throughout Island County.

“I think it’s where we have to go,” Homola said.

“That’s not going to help us right now,” countered Commissioner Helen Price Johnson.

She said county employees need to take steps now to reduce costs, from making less copies to turning out the lights when they are not needed.

“It’s clear this is going to be a long-term problem,” Price Johnson said.