San Juan County officials spent the meeting focused on closing a multi‑million dollar gap in the 2026–27 biennial budget, with County Auditor Natasha and Dr. Molly Foote, the county’s budget analyst, warning that status‑quo spending plus decision packages produces a deficit between about $9 million and $10 million for 2027.

Why it matters: the shortfall—driven in part by a sharp projected rise in liability and related insurance costs, continued staffing obligations and declining one‑time federal funds—would force cuts across county services unless revenue options or other offsets are identified.

Auditor Natasha (County Auditor) opened the budget portion of the meeting by describing the current projections: “the state of where the current expense fund is right now, we’re looking at 2026 has extra $27,000 in ending cash. But for 2027 in our status quo budget, we are short $6,600,000,” and, accounting for decision packages, “we’re looking more at closer to 9 or $10,000,000 deficit.”

Dr. Molly Foote, the county’s budget analyst, walked the council through a new worksheet that models status‑quo spending, adjustments and decision packages and allows departments to test how changes would affect beginning and ending cash balances. Foote said the auditor’s office and budget team plan to rerun those numbers as departments return reduction proposals.

Council discussion centered on two basic approaches to the gap: increasing revenues or reducing expenditures. Councilmember Paulson asked whether a levy lift or other new tax revenue could affect 2027 cash; Natasha said a successful 2026 levy process could generate collections in 2027 depending on timing and whether the county captured the receipts during mid‑biennium amendments.

A newly enacted, councilmanic public safety local option sales tax was raised as a potential revenue source. Councilmember Holston described the measure discussed in Olympia as a 0.1 percent sales‑tax increase that could fund domestic violence services, public defenders and co‑response teams; Foote and Jessica Hudson, the county manager, estimated revenue of about $800,000 to $850,000 per year if implemented locally. Councilmembers emphasized that the tax had not been included in the present draft and that staff would need to verify eligibility and timing with the county’s lobbyist and legal advisers.

Liability insurance emerged as a major driver of the shortfall. Natasha said the county paid about $1.2 million for liability and related premiums in 2025 and told the council staff estimate a roughly 30 percent increase to liability‑related premiums for the next year; council members calculated that the insurance increase could amount to roughly $3 million across the biennium and account for a large portion of the budget gap.

Council members and staff agreed staffing and vacancies are another high‑impact area. Several councilmembers said historical comparisons—using 2019 as a baseline for pre‑pandemic staffing—would help identify positions that are now funded but not essential, while county manager Jessica Hudson and others cautioned that grant‑funded positions and public‑safety hiring needs require careful, department‑by‑department review.

On procedure, the council directed departments and elected offices to return reduction proposals and a short narrative describing impacts on mandated services and levels of service. Members said the council will use that information to balance competing program priorities rather than impose a blind, uniform percentage cut. Using current numbers as a guide, Foote and Natasha said the county’s target to reach a balanced biennial budget is in the neighborhood of a 9 to 9.5 percent reduction spread across the two budget years, recognizing the final package will not be a strict across‑the‑board cut.

Other operational options discussed included: a thoughtful hiring freeze with exceptions for health‑and‑safety positions, deeper review of transfers out of the current expense fund and internal‑service allocations (fleet, IT, insurance), and stricter collection or application of indirect grant overhead (the transcript and staff referenced a 15 percent de minimis indirect rate under federal guidance as a practical approach the county has applied).

Timing and next steps: staff noted the county had publicly noticed an initial budget hearing for Oct. 7 and that state law prescribes hearing timing; Natasha and Foote said they would consult the prosecuting attorney about whether to keep the Oct. 7 hearing as a formal opening and add workshop days or to pursue the alternative schedule that begins the public hearing in early December. Foote said the auditor’s office needs at least two weeks after receiving department reductions to compile updated, systemwide projections.

The meeting ended with the council reiterating direction: departments should return specific reduction proposals, the auditor’s office and budget team will recompute impacts, and the council will reconvene during scheduled budget workshops and hearings to review the compiled results.