Custer County budget workshop: commissioners weigh freezes, one-time bonuses as insurance and revenue shortfalls loom

At a Custer County budget workshop, commissioners and county staff reviewed department-by-department requests for the 2026 budget and signaled they are likely to limit across-the-board pay increases while seeking ways to cover rising insurance and service costs.

County staff presented payroll totals and departmental requests, and warned that the county faces a multi-pronged funding challenge: a projected increase in personnel costs, an uncertain health-insurance premium increase, and declining non-property revenues. The county’s payroll bottom line was shown as $5,918,697 for 2024 (unaudited), a projected $6,003,308 for 2025 (a 1.43% increase) and a $6,306,299 salary-and-benefits request for 2026 — a roughly 5% increase from the 2025 projection “without any raises whatsoever,” staff said.

The session moved quickly from high-level totals to department detail. Officials said property-tax revenue is expected to rise about 12%, but property tax makes up a relatively small share of total county revenue, while sales, lodging and other fees have fallen since the end of federal COVID-era aid. Commissioners and staff repeatedly cautioned that the county is “treading water” and that choices will be required about services and staffing.

Why it matters: commissioners must balance legal and statutory obligations for essential services with constrained revenue. County staff said the general fund is projected to run roughly $500,000 below revenue in the proposed 2026 budget unless changes are made, and that the insurance fund also likely needs an infusion (staff cited roughly $150,000) to avoid running a deficit.

Key details and department notes

Salaries and benefits: Staff said the 2026 salary request reflects positions added during 2024–25 (for example, additional Veterans Service Officer staffing) and the reallocation of some positions into central IT. Health-insurance estimates are not final; staff said open enrollment is underway and that preliminary guidance suggests roughly an 8% increase in health premiums, but the final 2026 insurance number has not been calculated. One presenter stated the current draft budget is short by about $180,000 because the correct insurance numbers were not provided when the draft was prepared.

Pay policy options: Commissioners and staff discussed three policy responses: (1) freeze across-the-board salary increases (several speakers urged a freeze), (2) hold salary lines steady but consider targeted or one-time bonuses if revenue improves, and (3) pursue voter-authorized mill-levy increases for specific purposes (roads, emergency services, or insurance support). A county official summarized the practical tension: “We can try to freeze it, but there may be special cases where you have to catch somebody” (quote attributed to an unnamed commissioner present during the discussion).

Service and revenue trends: Multiple presenters noted declines in fee-based revenues — landfill fees, building permits, and other service fees — compared with the immediate post‑COVID years. Staff said landfill receipts were $258,789 year-to-date and have fallen from roughly $326,000 in 2023 to about $313,000 in 2024. Lodging and sales-tax receipts drew particular attention because those lines can fluctuate and are sensitive to tourism and statewide policy changes.

Insurance and reserve pressure: Beyond health insurance, staff flagged county property and liability coverage and worker’s compensation as rising cost pressures. The insurance fund will require additional support unless premiums or claim trends change; staff estimated the insurance shortfall at roughly $150,000 unless offset by other adjustments.

Elections and clerks: The clerk/elections budget rose about $11,000 for 2026 because the county expects two elections next year. Commissioners expressed support for adjusting pay or career-path steps for key elections staff, noting one elections supervisor’s hourly pay appeared low compared with similar roles.

Public safety, dispatch and capital choices: Law-enforcement staffing is largely grant-supported for some positions: staff described a court-security deputy at 100% grant funded, a school-resource officer paid roughly 75% by grant and 25% by the school district, and a community-service officer funded 75% by grant and 25% by county. Deputies and the sheriff discussed vehicle leasing, surplus-equipment sales and possible one-time receipts from military-surplus equipment (staff noted roughly $2 million of equipment acquired that could be sold, with proceeds available next calendar year after accounting rules are met).

9-1-1/dispatch: Commissioners questioned costs charged by the regional dispatch center (CRCA/dispatch partner). Staff reported changing quotes for console upgrades (figures discussed ranged from about $150,000 to $180,000 per console in staff communications) and said the county is reviewing whether to continue paying the regional provider or to pursue bringing dispatch back locally — a move that would likely require a voter-approved levy or other dedicated revenue. One staff scenario presented to the commission showed that raising an emergency-services levy could, if approved by voters, cover dispatch staffing and equipment costs and allow the county to locate dispatch locally again.

Landfill operations and fees: The landfill director’s budget requests include a payroll total requested near $275,698; staff noted turnover, retirements and benefit elections could change the final cost. County officials said landfill operations currently run a shortfall estimated around $60,000 and discussed options including modest fee increases, charging non-resident users, or structural changes such as selling the facility. Commissioners and staff also raised a longer-term idea discussed in the workshop: using the landfill or other county land for a solar project to create local, ongoing revenue — staff said they have previously explored grants and program options for solar at county sites.

Coroner and training: The coroner’s budget was finalized with no major changes but commissioners asked staff to carve out a dedicated training line; staff noted an individual certification cost of roughly $450 that the office may pursue to comply with forthcoming legislative changes.

Next steps: Staff said they will finalize health-insurance numbers after open enrollment closes, correct the insurance-line shortfall in the draft (the $180,000 figure referenced during the meeting), and return to the board with refined numbers. Commissioners and staff noted the option of developing one or more ballot questions for mill-levy increases next year to cover roads, emergency services, or insurance shortfalls if they decide to seek voter approval.

Ending: No formal votes or motions were recorded at the workshop; the meeting served as a staff briefing and direction-setting session as commissioners weigh options for balancing statutory obligations, staffing retention, and taxpayer impacts.