Board directs staff to draft balanced FY 2025–26 budget; options include hiring freeze and targeted cuts

The Mendocino County Board of Supervisors on April 8 directed county staff to draft a balanced fiscal year 2025–26 budget that starts from a baseline that does not rely on one‑time funds, and to return with specific options to close a projected $17 million shortfall.

Acting Assistant CEO Sarah Pierce told the board the county is currently projecting a roughly $17,000,000 deficit for FY 2025–26, after accounting for revenue estimates and operating transfers out. Pierce also told supervisors the county learned this week that the federal Building Resilient Infrastructure and Communities (BRIC) program — for which the county had a multiyear application and a Phase 1 award — has been canceled at the federal level. Pierce said the county has incurred about $77,000 in BRIC project costs to date and is working with state partners to determine whether any federal funds can still be recovered.

Why it matters: Supervisors and staff framed the shortfall as structural — recurring personnel and service costs outpacing flat non‑departmental revenues — and said postponing action by relying on one‑time reserves would only delay harder choices. The board asked staff to show explicitly what a budget would look like if it were balanced without one‑time funds, and to present a set of concrete options that could reasonably be implemented in 2025–26.

What staff will return with: Deputy CEO Tony Rakes and budget staff said they will bring a set of scenarios and supporting detail. The board asked for at least the following to be analyzed and returned to the board for deliberation: - A baseline budget built per “Scenario A” (no one‑time funding used to balance recurring costs). Staff will show what services and positions would need to be reduced to reach balance. - A second scenario that uses limited one‑time funds as a gap filler and shows the difference in required cuts. - Quantified options for staff reductions (hiring freeze impacts, review and removal of budgeted vacancies, and, if necessary, workforce reductions), including dollar amounts tied to each option and the operational impacts. - A list of budgeted but vacant positions and the estimated savings if budgeted vacancies are removed. - A review of contracts, conferences and discretionary services and potential reductions, and an estimate of the savings. - A proposal to evaluate voluntary separation incentives where that could reduce recurring payroll obligations.

Board direction and votes: Supervisor Ted Williams (mover) asked staff to produce the Scenario A baseline and the suite of options to close the $17 million gap; the board voted to direct staff as requested. That directive was recorded on a roll call vote. Supervisors emphasized they wanted options that made clear the tradeoffs: which services would be reduced, which positions would be affected, and which reductions would carry ongoing obligations.

Related budget context discussed at the meeting: - Revenues: Non‑departmental revenues were presented at about $96.8 million for FY 2025–26; after required operating transfers out (debt service, Measure P commitments, road transfers, and others), the figure available for general fund departments was presented at roughly $81.6 million. - Salaries and benefits: General‑fund departments’ salaries and benefits (the 1000 series) were presented at roughly $150 million, up from $138 million in the current year; staff said a 7% increase in salary/benefit costs was included in current department submissions. - One‑time funds: Staff listed roughly $9.1 million of “one‑time” unrestricted or restricted carry‑forward funds (retirement contribution reserve, various PG&E settlement carry forward allocations, drought funds and other one‑time items). The board asked staff to treat those as finite and to show the effect of using such funds as temporary gap solutions versus not using them. - Federal & state risks: Staff and members of the public warned about larger external risks, including proposals in Congress to cut Medicaid/Medi‑Cal funding that could dramatically affect county health and social services and the cancellation of BRIC. Supervisors requested staff continue to track those developments and the county’s exposure.

Quotes: - “We have to have some tough conversations around staffing and salary benefits to right‑size the budget and bring expenses in line with revenue projections,” acting Assistant CEO Sarah Pierce said. “A discussion regarding an immediate hiring freeze across all departments will need to be considered.” - “We can’t keep balancing the budget year after year with one‑time funds,” Supervisor Ted Williams said. “If this is a structural problem, we need to face it head on.”

What happens next: County budget staff will return to the board with a baseline balanced budget (Scenario A) and a packet of options for closing the gap, with quantified savings and operational impacts. The board’s action was intended to force a clear starting point for public deliberations in coming public budget hearings.

Ending note: Multiple members of the public and several department heads told the board it should prioritize public safety and core services when weighing options. Supervisors emphasized they want transparent, data‑driven proposals that make clear the operational consequences of cuts.