By Daniel Nielson, Director
As our budget journey continues through the summer, I thought I would provide an update.
Two weeks ago, the Board of Supervisors allowed us to move Realignment Funds and General Fund from the current 2025/2026 Fiscal year back to the 2024/2025 Fiscal year in order to allow us to close our books.
What this means is that we are operating in the current fiscal year with $3,287,692 less local revenue that we had planned. This is comprised of the following: The reduction in anticipated 1991 Realignment and 2011 Realignment I previously told you about when the Governor downgraded his anticipation of revenues from the January Budget proposal to the May Revise of $1,547,900; the use of $655,200 of General Fund intended for the current year; and the use of $1,084,592 Fund Balance we had intended to intended to carry forward into the current year.
As some examples of our prior year problems: we were $3,081,362 ($1,769,492 local funds) above budget in Categorical Aid (think Foster Care, Adoptions and CalWORKS as primary things in that area – these are costs that we do not control). We also had $1,705,326 ($542,247 local funds) above budget in Salaries and Benefits of which $733,274 ($277,336 local share) was for overtime.
We also had in excess of $2,257,890 less revenue for the 24/25 Fiscal Year than planned/budgeted.
The Department has not been filling vacant positions for months and has eliminated many non-labor items from our budget over the past six months. We are currently operating with 43.5 fewer full-time employees than budgeted for the current year and will continue to hold vacancies from separations and retirements as they happen. We are in the process of assessing possible additional reductions in our non-labor budget and are drafting a new budget that we will be presenting to the Board of Supervisors in early October. I will provide an update on how things are looking shortly before that Board presentation in October.
We are not alone in our financial issues as you will see when you read a message from our CEO that will be coming out sometime today. The County as a whole is anticipating difficult fiscal times and all Departments will be working with the CEO in the coming months to make sure we all have balanced budgets for the 26/27 fiscal year. Some other departments are already experiencing impacts this year. At DSS we already know that federal action will cause a significant increase in the need for additional local funds to support the administration of the CalFresh program beginning in October 2026.
As I said in earlier budget update emails, this will be a long journey. Let’s stay focused on providing the best service we can with the resources we have. The work that each of you does every day matters to so many.