Solano Supervisors Review Midyear Budget Update
Solano County Faces Financial Challenges in Midyear Budget Update
The Solano County Board of Supervisors recently received a midyear budget update from county staff, highlighting the financial challenges the county is facing. The update outlines the difficulties the county must navigate through the remainder of this fiscal year and projects further budget issues in future years.
County Administrator Ian Goldberg emphasized that the county is dealing with difficult financial straits and continues to monitor revenues and expenditures while managing external pressures, such as state and federal budgets. He mentioned that some difficult assumptions were made for the midyear budget based on the county’s situation with organized labor earlier in the year. These assumptions are based on revenues through 2025 and are projected for the remainder of the fiscal year.
“Labor negotiation is key, and that’s because this time around our midyear was developed in the middle of negotiations, which is unusual,” he said.
The county has made some last-minute adjustments to the budget after reaching agreements with certain labor groups. However, changes in commodity prices, including fuel, could lead to higher costs than expected by the midyear update.
“Every dollar counts,” Goldberg said.
Key Adjustments and Projections
Staff reported that midyear expenditure additions include savings in salaries and employee benefits, reductions in services and supply costs, $5,891,000 from capital reserves to fund capital projects, and a projected reduction in the General Fund Transfer to the Public Safety Fund.
The general fund is projected at $405.2 million, with a revenue increase of $16.2 million and an expenditure decrease of $2 million. The General Fund Balance is expected to start FY 2026/2027 with a $32.4 million general fund balance, which is about $5.8 million lower than the past five years’ mid-year projection average. Staff included some Capital Project Updates, but a full list will be provided to the board at a meeting in April.
Concerns and Challenges
Staff expressed concerns about several factors affecting the county’s finances, including H.R. 1, state program changes, Medi-Cal responsibilities, Proposition 1, and Board of State and Community Corrections Rules and Regulations.
Goldberg highlighted that the state budget is facing billions of dollars in shortfalls in the future, which will increase Solano County’s fiscal responsibilities. Supervisor Mitch Mashburn noted that whether the county has to pay or the state does, taxpayers will still end up covering the costs.
Mashburn asked who the county can reach out to regarding state-level spending. Debbie Vaughn explained that the state often makes reactive spending decisions after federal government changes, especially in Health and Social Services.
Supervisor Wanda Williams called for increased volunteerism in response to benefit cuts and asked if the county could hold workshops to help potential volunteers fill out the necessary forms. Approximately 52,000 county residents receive CalFresh, with 8,000 of them at risk of losing their benefits due to not meeting work/volunteer hours requirements.
Rising Costs and Business Closures
Staff also raised concerns about increasing CalPERS pension costs and health care rates, as well as rising insurance costs and inflationary pressures on services, supplies, and construction costs.
Major business closures are expected to result in significant losses for the Solano County budget. Valero tax revenue provides about $3 million annually to the county, and Anheuser-Busch contributes about $1 million. Overall, about $10 million in general fund revenue is expected to be lost in the coming years.
Technology Investments and Community Impact
Despite these challenges, the county plans to continue investing in technology upgrades, including replacing existing security investments, web services, and public safety radio system technology.
Brian Espinoza of the Food Bank of Solano and Contra Costa called in to the meeting to discuss the impact of H.R. 1 on his organization. He warned that many residents could lose food assistance due to the changes. He noted that when benefits were halted last year, the organization saw a 400 percent increase in demand. He urged the board to mitigate the impacts of H.R. 1 and consider supporting emergency food providers.
New Budget Software and Future Improvements
Goldberg mentioned that the midyear update was more complicated than usual due to the implementation of new budget software. He stated that the process should improve over time as staff becomes more familiar with the software.
“It is a heavy lift for our department to get the midyear report before you,” Goldberg said.
