Lake County supervisors review recommended $418 million FY2025–26 budget; debate centers on cannabis reserves, vacancies and parks projects

Lake County, Calif. — The Lake County Board of Supervisors held a public hearing June 24 on the County's recommended fiscal year 2025'26 budget, a document County Administrative Officer Susan Parker described as the result of "significant collaboration" among department heads.

County Administrative Officer Susan Parker presented the plan and turned the overview to Deputy County Administrative Officer Casey Moreno, who summarized core priorities: "Our budget priorities are to maintain a structurally balanced budget, preserve the general reserves, avoid reduction in service levels, avoid layoffs, furloughs, and benefit reduction, and to serve the public through efficient use of taxpayer dollars," Moreno said.

Why it matters

The recommended budget covers the County and special districts the board governs and includes operating and capital spending across departments that deliver public safety, health, social services, solid waste and parks. Supervisors focused their questions on several recurring strains: declining net county cost allocations in some general-fund units, departments' ability to draw grant revenues, the size and use of cannabis-related reserves, vacancy-driven carryover and several park and recreation capital projects that went higher than budgeted bids.

Highlights of the presentation

- Structure and scale: Moreno said the county's budget is balanced on paper, with the appropriation totals matched by projected revenues and fund balance available, but warned that economic uncertainty and recent union salary increases require caution when moving from a recommended to a final budget.

- Revenues: Moreno said more than half of county revenue comes from the state, with federal and tax revenues also significant. She noted cannabis taxes were budgeted conservatively at $1,650,000 for FY25 but actual receipts this year were closer to $3.4 million; the recommended budget uses $2.6 million as a conservative estimate going forward.

- Vacancy and carryover: The deputy CAO said departments are continuing to hold vacancies and requested one-time carryover funds for specific needs. General fund vacancies were reported at roughly 13.6%, non-general funds at about 16.5%.

- Department-level briefings: Presentations included Social Services (Director Rachel Doman Parsons), Behavioral Health (Director Elise Jones), Public Works and Parks, Solid Waste, Public Health, and several other department budgets provided during the hearing. Jones said behavioral health revenues had grown rapidly with CalAIM-related Medicaid billing but that the department had used a short-term loan to manage state payment timing.

Board discussion and key debates

Cannabis taxes and discretionary funds: Several supervisors pressed staff about the size and use of cannabis-related reserves. "I think we need to reconsider the $500,000 that's allocated to the board," Supervisor Pysco said, arguing some discretionary funds could be redirected to youth and recreation programs. County staff and other supervisors described reserve balances, pledged funds and the difficulty of reprogramming funds already tied to multi-year commitments.

Parks and capital shortfalls: Public Services Director Lars Ewing reported the low bid on a state-funded Hammond Park improvement project exceeded the budgeted amount; he asked the board to appropriate $300,000 from the County parks reserve to complete the work. Ewing also proposed a $100,000 appropriation to explore an enclosure or heating for the Middletown pool so the facility could be used beyond the current seasonal window. Supervisors said they wanted more detail on some large regional proposals but generally supported moving forward on Hammond Park immediately because of the active bids.

Behavioral health cash flow: Behavioral Health Director Elise Jones reiterated that federal and state payment timing (IGT/intergovernmental transfer processes) had created short-term cash-flow pressure. The department used a $2 million short-term loan earlier in the year; Jones said repayment was on track and that future reserve-building for payment pauses was a priority.

Social services and CalWORKs: Social Services Director Rachel Doman Parsons told the board some caseload-funded programs were rising unexpectedly, and the department had adjusted budget requests to prepare for higher-than-anticipated benefits outlays.

Administrative and process notes

- Departments were instructed not to include use of general-fund reserves in the recommended budget itself; requests to use reserves are presented during hearing and adopted separately if the board approves.

- Moreno and CAO Parker said the administration will present a series of one-time reserve requests ("extraordinary requests") for board approval during these hearings and at final budget; staff cautioned that these are not routine operating sources.

Quotes

- "It is an honor to present the fiscal year 2025 through 2026 recommended budget for the County Of Lake and special districts governed by your board," Susan Parker, County Administrative Officer.

- "Our budget priorities are to maintain a structurally balanced budget, preserve the general reserves, avoid reduction in service levels, avoid layoffs, furloughs, and benefit reduction..." Casey Moreno, Deputy County Administrative Officer.

- "I think we need to reconsider the $500,000 that's allocated to the board," Supervisor Pysco (commenting on cannabis discretionary allocations).

What happens next

The board voted on many department budget units during the hearing; most passed by unanimous votes. Several reserve requests and capital shortfalls (notably Hammond Park and the Middletown pool follow-up study) were placed before the board for supplemental action. Departments will return at final budget with carryover adjustments and any additional information supervisors requested.

Ending

Supervisors and staff emphasized caution as they move from recommended to final budget in August, citing pending state payment timing and the need to align department staffing with available ongoing revenues. The board recessed the hearing and will continue remaining department budget presentations in subsequent sessions.