Yolo County supervisors approve budget principles and calendar as staff warns modest revenue growth and rising labor costs

Laura Lidico, the county’s chief budget official, told the Board of Supervisors on Jan. 28 that Yolo County expects modest revenue growth for fiscal year 2025‑26 but faces cost pressures from labor agreements and pension rates.

Lidico said initial projections included about 4 percent property tax growth—roughly $3.1 million—and flat sales tax receipts, while Prop. 172 (the public safety sales tax allocation) was expected to rise about 1.87 percent (approximately $533,000). “We are anticipating revenue growth in the 25, 26 fiscal year, but that growth is projected to be modest,” Lidico said.

Nut graf: The presentation placed particular emphasis on the county’s largest recurring cost—labor. Lidico said the budget assumes 3 percent cost‑of‑living adjustments for bargaining units plus the second year of negotiated equity increases, and staff plans to reinstate a supplemental pension charge that had been paused during the current fiscal year.

Key details and risks Tom Haines, chief financial officer, explained that property tax residuals from dissolved redevelopment agencies are being held in a “Chula Vista fund” and that the county has used that fund to bolster reserves in recent years. Haines estimated 42 general‑fund positions were vacant as of early January. Staff also flagged a Department of the Treasury / Office of Management and Budget pause to some federal funding streams, announced to county staff the night before the meeting, and said the county was evaluating impacts.

Board action The board voted unanimously to: (1) receive the preliminary assessment, (2) approve the budget principles found in attachment A to the staff report that emphasize structural balance and long‑term sustainability, and (3) adopt the budget development calendar with public touchpoints through the March–June budget hearings.

Supervisor questions and staff responses Supervisors pressed staff on the budget reduction exercise and vacancy savings. Lidico said departments were asked to submit budget requests “as if it was a normal year” and staff would analyze how requests compared against projected general‑purpose revenues. When asked about whether position budgets assume step‑3 for new hires, Lidico said new positions are budgeted at step 3 for salary and benefits calculations.

Clarifying details - Property tax projected growth: ~4% (~$3,100,000). (Laura Lidico.) - Estimated vacant general‑fund positions: 42 (as of early January). (Tom Haines.) - Budget timeline: departments submit budget requests by Feb. 24; mid‑year update Feb. 25; recommended budget released June 2; budget hearing June 10.

Ending: The board approved the principles and calendar unanimously, and staff said it will return with updates as revenue projections firm up and to propose any necessary budget balancing solutions.