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Alameda County CAO presents $91.4 million maintenance‑of‑effort funding gap as board readies May budget
Summary
County CAO staff told the Board of Supervisors the FY26‑27 maintenance‑of‑effort budget shows a $91.4 million preliminary funding gap (structural gap near $180 million before certain savings), and outlined steps to close it ahead of the May revision and the board’s May 28 proposed budget.
Alameda County’s CAO office presented a maintenance‑of‑effort (MOE) budget and a $91.4 million preliminary funding gap for fiscal year 2026‑27 at a special budget work group meeting.
The county budget presenter (introduced as "Ressler") told the board the MOE framework assumes baseline year‑over‑year changes, a 4% cost‑of‑living adjustment for eligible community‑based organization contracts and other known salary and benefit changes. For FY25‑26 the county reported a balanced budget of $6.1 billion for county programs and services and general fund appropriations of $4.3 billion.
CAO Susan Marenneshi described the arithmetic behind the MOE gap and emphasized the short timeline to deliver a balanced proposed budget. "We're on a shorter time frame this year because we are presenting the proposed balanced budget to the board on May 28," Marenneshi said, urging department heads and labor partners to sharpen revenue and expenditure proposals.
Key drivers: The MOE numbers show program appropriations rising and revenues largely flat, producing a program net county cost increase of about $1.045 billion and net adjustments on the non‑program side that together produce the $91.4 million gap. The CAO noted a larger structural gap of about $180 million that is partly offset by retirement‑related savings.
Notable line items discussed included a $76 million year‑over‑year net county cost increase, increases in workers’ compensation costs (a noted near‑90% year‑over‑year rise in case costs), new capital and maintenance needs (about $125 million of appropriations), and decreases in some federal contract revenues. The budget team said the county will combine program reviews, vacancy analyses, revenue adjustments and other one‑time and ongoing strategies to close the shortfall.
Next steps and constraints: Staff listed pending factors that could widen or narrow the gap—labor negotiations, litigation and settlements, federal/state audit disallowances, and the unknown impacts of HR1. The CAO’s office will incorporate the state’s May revision when available and present a proposed balanced budget to the board on May 28.
The board did not take formal action at the workshop; staff were directed to continue budget development and to return recommended closing strategies for the board’s consideration.
