Title
a. Receive an update on budget development as part of the Board of Supervisors’ Fiscal Year 2026-27 Budget Workshop; and
b. Provide direction to staff.
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
a. Receive an update on budget development as part of the Board of Supervisors’ Fiscal Year 2026-27 Budget Workshop; and
b. Provide direction to staff.
SUMMARY/DISCUSSION:
The County Administrative Office (CAO) prepared the FY 2026-29 Countywide Financial Forecast; the forecast continues to show structural fiscal pressure resulting from expenditure growth outpacing available financing. While discretionary revenues are projected to continue growing modestly, they are not sufficient to cover substantial increases in labor, pension, health insurance, internal service charges, and formula-based funding commitments. According to the updated March 2026 forecast, the General Fund faces projected deficits of:
• $118.9 million in FY 2026-27
• $143.3 million in FY 2027-28
• $162.0 million in FY 2028-29
These projected deficits reflect current service levels, fully staffed operations, and all known labor agreement costs. The forecast does not assume new service enhancements, economic downturns, or additional wage adjustments beyond negotiated MOUs.
Current Year Fiscal Performance (FY 2025-26)
The County is currently projected to end FY 2025-26 with an estimated $8.4 Million positive year-end result, driven by improved non-program revenue and department-level cost controls. However, significant volatility remains due to federal funding uncertainties and rising salary and benefit costs. Eleven General Fund departments project surpluses, while twelve project deficits totaling $11.9 million, including pressures in the Sheriff’s Office, CAO, and Public Works, Facilities & Parks.
Drivers of the Structural Budget Gap
The FY 2026-29 forecast identifies the following major cost drivers:
• Salary and benefit growth from negotiated labor agreement...
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