Budget staff brief supervisors on FY26 risks and supplementals; board delays decisions to March 4

Pima County administrators and the director of finance presented a preliminary FY2026 general fund projection and an initial set of departmental supplemental budget requests to the Board of Supervisors on February 18.

Why it matters: Finance staff said the county faces continuing pressures — state cost shifts, compensation and benefit increases, rising internal service fund rates and capital needs — and that early estimates show a material shortfall if all requested supplementals are approved. The Board directed further analysis and deferred final decisions to the March 4 meeting to allow time for more detailed review and for departments and elected officials to answer questions.

Key presentation points: Finance director Javier Cuaron told the board that the county’s base revenues for FY2026 are projected at about $794.5 million, with property‑tax (net assessed value) increases and an estimated $5 million uptick in state‑shared sales tax improving revenues. On the expenditure side, base spending projections include benefit and internal service fund (ISF) rate increases; Cuaron said an initial gap would require the use of fund balance or other balancing measures. Director Cuaron noted the county’s policy reserve equals 17% of audited FY24 expenditures and that projected year‑end fund balance was about $112.6 million, leaving a modest excess reserve in the near term.

Supplementals and process: Departments submitted supplementals totaling roughly $72.6 million across all funds; approximately $39 million of that was general‑fund requests. Administrator Lesher and the deputy county administrators reviewed the requests and offered initial recommendations on a subset. The requests include continuing programs (for example an emergency eviction assistance program and affordable‑housing PAYGO), public‑safety operational items and equipment, and information‑technology and enterprise system upgrades. Staff emphasized some requests are one‑time and some are recurring, and that recurring costs have larger long‑term implications.

Board action: Supervisors unanimously voted to continue formal consideration of FY26 supplemental requests to the March 4 meeting and asked county staff to provide additional detail — in particular: an itemized, obligation‑status accounting of federal grants (per an earlier briefing), a breakdown of which supplementals are recurring vs one‑time, and options for balancing the FY26 projection (changes to PAYGO, a penny of property tax, 1% general‑fund reductions and other levers were discussed).

Ending: Finance staff and the county administrator will return with more granular analyses and recommendations. Several supervisors recommended that department heads and elected officials be available on March 4 to answer questions about specific requests, and requested that presenters be time‑limited so the board can consider the full set of supplementals and balancing options.