Administration warns 36% state health‑benefits jump raises budget pressure; reserves used for retro pay and storms

Hussam Mohammed, director of finance, briefed the Board on central county finances and said a large state increase in the State Health Benefits Plan will raise county costs materially for the 2026 budget.

Mohammed said the state plan’s increase translated into roughly a $24.5 million jump in the county’s health‑benefits line; he and other officials told commissioners that the county will evaluate self‑insurance or hybrid arrangements for future years because repeated large increases are unsustainable against fund‑balance levels. "The state went up 36%. And this translates to $24,500,000 extra from 2025," Mohammed said.

He also reviewed conservative budgeting practices: the administration built reserves over multiple years to cover retroactive contract awards, and used a storm reserve for recent winter storm costs (the storm reserve was about $7.2 million at the end of the year and is now around $5 million after the latest storm). Mohammed said the county had set aside reserves for pension/retro liability and paid many retros in recent years but is still awaiting final state pension bills for employer share liabilities.

On debt service, Mohammed said the county’s 2026 debt‑service payments will be lower than recent years (roughly $87 million projected) and that the administration used short‑term notes to avoid high bond rates, planning to bond when market conditions improve.

Commissioners asked how long reserves have been used strategically; Mohammed and others said that practice began a few years into the current administration to avoid single‑year budget shocks from retroactive awards and storms. The board requested continued updates on health‑benefit negotiating options and the potential for self‑funding if other large entities exit the state pool.