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Alameda County staff outline $105.7 million preliminary budget gap and shortfall in two‑month reserves
Summary
County budget staff told supervisors the FY2025-26 'maintenance of effort' developing budget shows a preliminary $105.7 million funding gap; the county's designated contingency ($151 million) is well below the two-month benchmark (~$663 million). Staff proposed adopting a balanced budget the week of June 9 with public hearings the week of June 23.
County finance staff on May 20 presented a budget update showing a preliminary $105.7 million funding gap for the FY2025-26 maintenance-of-effort budget and highlighted structural cost drivers, contingency needs and next steps toward adoption.
"We have identified our funding gap of 105,000,000," said a county budget presenter as staff outlined the May Revision's state proposals and a range of federal uncertainties. Melanie (budget staff) summarized that salary and benefit increases, risk management premium rises and non-program drivers are among the drivers of higher net costs.
Auditor-Controller Melissa Wilk presented highlights from the county's Annual Comprehensive Financial Report for FY2023-24, reporting a $2.4 billion general fund balance with the following classifications: nonspendable ($55 million), restricted ($607 million), committed ($1.1 billion), assigned ($316 million) and unassigned ($389 million). Wilk noted the county's designated contingency reserve of about $151 million is below the two-month operating benchmark (approximately $663 million).
"The general contingency reserve amount as of 06/30/2024 as reported in the ACFR is 151,000,000, which is far short of the county's goal of having 2 months of operating expenditures," Wilk said.
Staff described next steps: the County Administrator's Office aims to present a balanced proposed budget the week of June 9 and hold public hearings the week of June 23. Options to close the gap under consideration include vacancy and position reviews, program cost reductions, and additional revenue measures; staff cautioned that some options will have tradeoffs and require engagement with labor and community partners.
Supervisors pressed for detail on reserve composition (the "Emerald Fund" was discussed as a designated capital/reserve account), trust and escrow accounts, and potential exposure to audit disallowances and federal program cuts. Staff said they will continue analysis and provide status reports and that the board's financial-management policy directs incremental reserve building by allocating a portion of discretionary revenues each year.
No final budget decisions were made at the meeting; staff requested direction and said they will return with a proposed budget and additional analyses in early June and public hearings later in the month.
