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Conduct a noticed/published hearing to consider adoption of the FY2026/27 Recommended Budget which includes the following informational and action items:
a) County Administrator’s presentation of the FY2026/27 Recommended and Supplemental Budget;
b) Recommendations for consideration and action regarding the FY2026/27 Recommended Budget and Supplemental Budget documents, including technical adjustments proposed at this hearing;
c) Receive Public Comment of the FY2026/27 Recommended Budget;
d) Selection of budget units for discussion and Board of Supervisors members’ comments;
e) Board discussion of budget units selected for discussion by functional area;
f) Continue FY2026/27 Recommended Budget Hearings as needed until conclusion;
g) Receive final Public Comment of the FY2026/27 Recommended Budget; and
h) Adopt the Budget and Position Resolutions for FY2026/27 and other recommendations included in the Recommended Budget, Supplemental Budget and technical adjustments or other modifications arising from the Board budget hearings
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Published Notice Required? Yes __X__ No _ _
Public Hearing Required? Yes __X__ No _ _
DEPARTMENTAL RECOMMENDATION:
The FY2026/27 Recommended Budget of $1,743,202,587 is a balanced budget utilizing a combination of funding from State, federal, and local revenue sources. It is important to note that while the budget is balanced, it does rely on draws from reserves and the use of fund balance.
While the County’s ongoing revenues continue to grow over prior years, the County’s current General Fund fiscal projection reflects deficits through FY2028/29. Future revenue growth may not be sufficient to keep pace with increases in operating costs. In addition, challenging economic conditions, the State’s budget deficit, and heightened concern over the uncertain future of federal funding streams are expected to impact the County’s ability to balance the budget in future years. Staff will continue to actively monitor economic conditions, the State Budget, and budget performance to ensure proactive actions are taken to maintain a balanced budget.
State Budget
The Governor’s FY2026/27 Proposed Budget and May Revision included several policy and funding changes that could significantly affect health and human services programs. While statewide revenues improved since January, the May Revise proposed ongoing expenditure reductions and program reforms to address a projected structural budget deficit. Proposed changes included Medi-Cal eligibility and benefit modifications, reinstatement of Medi-Cal asset limits for seniors and persons with disabilities, adjustments to CalAIM services, changes related to In-Home Supportive Services (IHSS), and reductions to Adult Protective Services. However, additional funding was proposed to assist counties with increased workload associated with implementation of federal Medicaid and CalFresh requirements.
On June 15, 2026, the Legislature approved its FY2026/27 budget package, restoring funding for several programs that had been proposed for reduction and rejecting many cuts to health and human services programs, including reductions to IHSS and Adult Protective Services. The legislative plan also provides additional support for county administration, indigent health care programs, public hospitals, food banks, and other services that may be affected by federal policy changes and H.R. 1. However, budget negotiations and trailer bill discussions remain ongoing, and the final fiscal and programmatic impacts to counties have not yet been determined. Health and Social Services programs remain the areas most likely to experience significant impacts, particularly those tied to Medi-Cal, IHSS, CalFresh, and other safety-net services. The County Administrator’s Office is working collaboratively with Health and Social Services to monitor budget developments, evaluate potential impacts to County operations and services, and will return to the Board with updates and recommendations as necessary following final adoption and implementation of the FY2026/27 State Budget.
Federal Budget
Federal budget and appropriations discussions continue to create uncertainty for county governments. In April 2026, the White House released its federal fiscal year (FFY) 2027 budget request to Congress, proposing a 10 percent reduction in non-defense discretionary spending while increasing defense spending. Proposed reductions and program eliminations would affect several programs that support county services, including community development, housing, workforce development, public health, and certain human services programs. Proposed changes include elimination of the Community Development Block Grant (CDBG) and HOME Investment Partnerships programs, restructuring of federal homelessness assistance programs, consolidation of workforce development programs, and reductions to various public health and social service funding streams.
Because the President’s budget proposal serves as a starting point for the federal appropriations process, the ultimate funding levels and programmatic changes remain uncertain and subject to congressional action. County programs supported by federal housing, public health, workforce, nutrition, transportation, and human services funding may be affected depending on final appropriations decisions and any related federal policy changes. However, given the scope of proposed spending reductions, policy changes under consideration, and the compressed congressional appropriations schedule, it is anticipated that Congress may be unable to complete action on all FFY2027 appropriations measures by the October 1 deadline. As a result, a Continuing Resolution may be necessary to maintain funding for federal departments and agencies while budget negotiations continue. Staff will continue to monitor the federal budget and will return to the Board as necessary.
FY2026/27 Supplemental Budget
The FY2026/27 Recommended Budget was published on May 22, 2025. Since then, several departments have identified budget-related technical and programmatic changes that require the Board’s consideration as part of your deliberation of the FY2026/27 Budget. There are also position changes included in the Supplemental Budget resulting in a net decrease of 1.0 FTE. If approved by the Board as presented herein, the revised total FY2026/27 Budget for all Governmental Funds subject to the Budget Act including the Supplemental Adjustments will be $1,743,202,587 an increase of $31,942,312. The increase includes $26,220,553 in supplemental adjustments due to re-budgets of FY2025/26 programs and an increase of $5,721,759 reflecting changes in anticipated revenues and expenditures. The Supplemental Budget adjustments result in a net increase of $867,762 in General Fund costs, funded by additional revenue of $225,553, and $642,209 funded through available fund balance or an increased transfer from the Employer PERS Rate Reserve in FY2026/27.
Detailed explanations of the Supplemental Budget proposed changes can be found in the Attachments. There is consensus between the County Administrator and department heads on the FY2026/27 Recommended and Supplemental Budget documents presented to the Board for approval.
The County Administrator, in collaboration with the Auditor-Controller, Human Resources, and the department heads, has prepared the attached Supplemental Budget Adjustment documents and resolutions for the Board’s deliberation during the Public Hearing.
Budget Considerations and Recommended Actions:
The following are the Recommended Budget actions:
1. Adopt the attached Budget Resolution (Attachment F) which includes both the FY2026/27 Recommended Budget and the FY2026/27 Supplemental Budget adjustments (Attachment A & B) that include the following specific authorizations listed in items 2-25.
2. Approve the attached Changes in Position Allocation List reflecting allocated positions included in the Recommended and Supplemental Budgets and Approve the Resolutions Amending the List of Numbers and Classifications of Positions incorporating the deletions and additions recommended in the FY2026/27 Recommended Budget, as modified by the Supplemental Budget requests for FY2026/27 (Attachment C).
3. Approve the Recommended Contributions to Non-County Agencies as included in the Recommended and Supplemental Budgets (Attachment E).
4. Approve the Fixed Assets included in the Recommended and Supplemental Budget (See Recommended and Supplemental Budget narratives).
5. Approve the Capital Projects included in the Recommended and Supplemental Budget (See Recommended and Supplemental Budget narratives).
The following delegated authority is recommended to facilitate the closeout of FY2025/26:
6. Authorize the Auditor-Controller, with the concurrence of the County Administrator, to transfer appropriations within a fund to cover FY2025/26 year-end closeout if justified, subject to the transfer(s) not increasing the total appropriation within the fund.
7. As part of FY2025/26 closeout, transfer and/or redistribute BOS approved County General Fund Contribution between Departments within Fund 900 (Public Safety) and between Departments/Divisions for Fund 902 (Health & Social Services), provided that the BOS approved General Fund Contribution/appropriation amount directed to each of the individual Funds 900 and 902 remains within the approved County General Fund Contribution/appropriations amount.
8. Authorize the Auditor-Controller, in consultation with the County Administrator, to carry forward Board-approved capital project appropriations into FY2026/27 to facilitate the accounting and management of multi-year capital projects, provided the funding has been received.
9. Authorize the Auditor-Controller, in consultation with the County Administrator, to carry forward Board-approved unspent grant appropriations into FY2026/27 to facilitate the accounting and management of multi-year grants, provided the grant-funding has been received.
10. Authorize the Auditor-Controller in consultation with the County Administrator, to carry forward Board-approved unspent American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds (SLFRF) appropriations into FY2026/27 to facilitate the accounting and management of Board approved ARPA projects.
11. As part of the FY2025/26 closeout, authorize the Auditor-Controller, with the County Administrator’s approval, to transfer available Accrued Leave Payoff funds appropriated in the General Expenditures Budget to any department/fund which has incurred unanticipated accrued leave payoff costs which cannot be covered within existing department budget appropriations.
12. As part of the FY2025/26 closeout, authorize the Auditor-Controller, with the County Administrator’s approval, to transfer any assigned fund balance remaining in the Property Tax System Replacement Reserve to the Technology & Communication Reserve.
13. In addition, as part of FY2025/26 closeout, if the Midyear projection of Fund Balance for the General Fund is not met (estimated at $32.4 million), then the County Administrator will authorize the Auditor-Controller to reduce, in this order, Accrued Leave Payoff, Employer PERS Rate Increase Reserve, Capital Renewal, and then General Fund Contingency for FY2026/27 by the amount short of the projection.
The following delegated authority is recommended to facilitate other actions related to approval and financing of the FY2026/27 Recommended Budget:
14. Authorize the Auditor-Controller, with the County Administrator’s approval, to fund the net General Fund cost for Supplemental Budget Adjustments, by utilizing any year-end available Fund Balance in the General Fund or by increasing the transfer from the General Fund Committed Fund Balance for the Employer CalPERS Rate Increase Reserve.
15. Authorize the County Administrator, assisted by the Auditor-Controller, to draw down (please refer to Schedule 4 of the FY2026/27 Recommended Budget and Supplemental adjustments):
i. Committed Fund Balance - Unfunded Employee Leave Payoff by $1.5 million.
ii. Committed Fund Balance - Capital Renewal by $1.3 million
iii. Committed Fund Balance - Employer PERS Rate Increase by $1.5 million.
16. In the event the General Fund’s year-end Fund Balance exceeds the amount needed to balance the FY2026/27 Budget, as may be authorized by the Board following Budget Hearing deliberations, authorize the County Administrator to authorize the Auditor-Controller to (please refer to page D-15 of the Budget Construction & Legal Requirements of the FY2026/27 Recommended Budget):
i. Increase the General Fund Committed Fund Balance for Capital Renewal up to $15.0 million; and/or
ii. Increase the General Fund Committed Fund Balance for the Employer CalPERS Rate Increase and/or PARS 115 Trust up to $10.0 million; and/or
iii. Increase the General Fund Committed Fund Balance for Technology and Communications up to $5.0 million; and/or
iv. Increase the General Fund Committed Fund Balance for H.R. 1 Implementation up to $5.0 million; and/or
v. Increase the General Fund Committed Fund Balance for Accrued Leave Payoff up to $2.0 million; and/or
vi. Increase the General Fund Committed Fund Balance for General Fund Reserves up to $5.0 million.
17. Authorize the Auditor-Controller to apply year-end available Fund Balance at 6/30/2026 as an Operating Transfers-Out to the Library Contingency (BU 9304) in the following Budget Units: Library Zone 1 (BU 6150), Library Zone 2 (BU 6180), Library Zone 6 (BU 6166), and Library Zone 7 (BU 6167).
18. Authorize the Auditor-Controller to increase (decrease) appropriations in the Department of Child Support Services Operations Division (BU 2488, subobject 0002312) by the available year-end Fund Balance at 6/30/2026.
19. Authorize the Auditor-Controller to increase (decrease) appropriations in the East Vallejo Fire Protection District (BU 9814, subobject 0002245) by available year-end Fund Balance.
20. Authorize the Director of Human Resources, with the concurrence of the County Administrator, to make technical changes to the Position Allocation List.
21. Authorize the Auditor-Controller, with the concurrence of the County Administrator, to make adjustments after the close of the Budget Hearings and the end of the fiscal year as needed and where applicable to balance the FY2026/27 Adopted Budget.
22. Authorize the County Administrator to delete positions that have been vacant for over six months, in accordance with the 2011 Budget Reduction Strategy of eliminating or freezing vacant positions and only filling positions that are “Mission Critical” to the organization, and to accordingly direct the Director of Human Resources to make technical changes to the Position Allocation List as needed.
23. Authorize the Auditor-Controller, with concurrence of the County Administrator, to increase General Fund Committed Reserves for Capital Renewal, Employer CalPERS Rate Increases or General Fund Reserves by repayments from General Fund Loans.
24. Authorize the Auditor-Controller, with the County Administrator’s approval, to increase the General Fund Balance or the General Fund Committed Fund Balance for Accrued Leave Payoff by the amount appropriated in the General Expenditures Budget for Accrued Leave payoff not used by the end of the fiscal year.
25. Authorize the County Administrator to sign all agreements and/or contract amendments resulting from the Board’s approval of the FY2026/27 Recommended Budget and Supplemental Budget requests.
In Summary the following separate attachments have been prepared in support of the recommended Board actions and provide additional detail and explanations:
Attachment A: Summary of Supplemental Budget Adjustments
Attachment B: Supplemental Adjustments to FY2026/27 Recommended Budget
Attachment C: Changes in the Permanent Position Allocation and Resolutions Amending the List of Numbers and Classifications of Positions in the Recommended and Supplemental Budget
Attachment D: Update on Impacts of H.R. 1
Attachment E: Community Investment Fund Update (Reflects previous Board approved awards for FY2026/27)
Attachment F: FY2026/27 Budget Resolution
Attachment G: Link to the FY2026/27 Recommended Budget
Attachment H: Budget Notice