Solano County projects $37.7 million year-end fund balance; board approves midyear financial report

The Solano County Board of Supervisors approved the county's fiscal 2024-25 midyear financial report on a 5-0 vote March 11, receiving projections that the county expects to end the year with about $37.7 million in available fund balance while facing notable revenue shortfalls in public-safety sales tax and some state and contract revenues.

County Budget Officer Emily Combs told the board the midyear projections reflect a mix of higher-than-expected property tax and interest income and declines in other areas: "Prop 172 . . . we're projecting a $1.7 million decrease compared to the working budget," she said, and staff also reported a $3.3 million loss in institutional care revenue tied to the Sonoma contract.

Why it matters: The midyear report sets the county's near-term spending picture and frames decisions for the requested budget in June. Supervisors said the report underscores a structural gap between ongoing revenues and expenditures and highlighted the risk that further state or federal funding changes could require program reductions.

The report shows the general fund's projected net county cost is down $21 million versus the working budget, in part because departments realized vacancy savings, but that the county still expects to use about $17 million in prior-year carryover to sustain operations. Combs summarized the outlook: "Midyear projections show overall reductions in net county costs when compared to the working budget. However, it's important to note that going into the fiscal year, we rely very heavily on our reserves and prior year fund balance to cover our gap."

Board members asked staff to track vulnerabilities tied to potential federal and state cuts and return with a detailed list. Supervisor John Vasquez moved adoption of the midyear report and its recommended appropriation and position changes; Supervisor Brown seconded. The motion passed 5-0.

The midyear packet included recommended one-time appropriations and fixed-asset purchases across departments, including library facility work, probation client services renovations funded by AB 109 funds, and replacement radios for probation and other departments. Staff also recommended a position-resolution update that adds 10 positions and deletes nine, for a net increase of one full-time-equivalent, reflecting targeted, revenue-offset additions.

Public discussion during the item ranged from requests for more detail on HUD voucher risks to concerns about reliance on reserves if federal Medicaid funding is reduced. Supervisor Williams asked that the board and staff remain proactive: "Let's make sure we're staying abreast on where things are with that," she said, referencing possible federal funding changes tied to Medicaid and HUD programs.

Ending: The board directed staff to continue monitoring state and federal budget developments and to return with vulnerability analyses and contingency plans during the requested-budget cycle.