To: Board of Supervisors
From: Monica Nino, County Administrator
Report Title: Fiscal Year 2025-2026 Adopted Budget as Finally Determined
RECOMMENDATIONS:
ADOPT Resolution No. 2025/316 adopting the Fiscal Year 2025-2026 Adopted Budget as Finally Determined, including:
a. Final changes to close out the 2024-2025 County Budget, including changes to revenues, appropriations, and obligated fund balances; and AUTHORIZE the Auditor-Controller to make the necessary changes in the financial accounting system, as reflected in Attachment A;
b. Final changes to the 2025-2026 County Budget, including changes to appropriations, revenues, and obligated fund balances; and AUTHORIZE the County Administrator and Auditor-Controller to make technical adjustments to the budgets pursuant to Attachment B (County - Schedule A, B, and C);
c. Final changes to close out the 2024-2025 Special Districts Budget, including changes to revenues, appropriations, and obligated fund balances; and AUTHORIZE the Auditor-Controller to make the necessary changes in the financial accounting system, as reflected in Attachment C; and
d. Final changes to the 2025-2026 Special Districts Budget, including changes to appropriations, revenues, and obligated fund balances; and AUTHORIZE the County Administrator and Auditor-Controller to make technical adjustments to the budgets pursuant to Attachment D (Special Districts - Schedule A, B, and C).
FISCAL IMPACT:
As described in the background information below, this action adjusts FY24-25 appropriations and revenues to balance budgeted figures to actual experience; and for FY25-26, includes fund balances, reserves, designations and all estimated revenue and appropriation line-item changes to correspond to the latest information.
BACKGROUND:
On April 28-29, 2025, the Board of Supervisors adopted the State Controller's Office Fiscal Year 2025-2026 Recommended Budget Schedules for Countywide Funds and Special Districts, conducted public hearings on County and Special District budgets, and directed the County Administrator to prepare for Board adoption the FY25-26 County and Special Districts Budgets, as modified, to incorporate any changes directed by the Board during the public hearings.
On May 20, 2025, the Board of Supervisors requested that the Auditor-Controller make adjustments to the FY24-25 appropriations and revenues by reallocating and balancing budgeted and actual expenditures and revenues as needed for various budget units and special districts, subject to Board approval in September. This request is pursuant to state law that requires each budget unit and expenditure object level within those units not exceed appropriations. Each year, this requirement generates a substantial number of adjustments to balance each budget unit and object. Attachments A and C (County and Special Districts respectively) contain the necessary appropriation adjustments to close out the FY24-25 Budget. Due to the volume of adjustments required and as allowable by the Budget Act (with the exception of fixed asset accounts ) adjustments are made to balance by major object (i.e. 1000, 2000, etc.); therefore, the over/under amounts do not always tie to the specific appropriation account.
Also on May 20, 2025, the Board of Supervisors authorized the Auditor-Controller to make technical adjustments to the FY25-26 County and Special District Budgets when actual amounts were known. This action is pursuant to state law that requires the Board of Supervisors adopt a budget which includes obligated fund balances and all estimated revenue and appropriation line-item changes to the proposed Budget no later than October 2 of each year. Attachments B and D (County and Special Districts respectively) include changes to revenues, appropriations, and obligated fund balances in the FY25-26 Budget to correspond with the latest fiscal and legal information.
Schedule C lists the final year carryforwards and appropriations adjustments as described above. Note that the General Fund budget is required to be balanced, therefore there is not a recommended budget fund balance nor a final budget fund balance. Non-general funds can carry appropriated fund balance and therefore those funds may include recommended budget fund balance and final budget fund balance.
Schedule B enumerates the fund balances calculated by the Auditor for each fund. From that total, encumbrances, the total from Schedule C, and all the fund balance totals from Schedule A are subtracted. Encumbrances are used to control expenditure commitments and enhance cash management. The assignment to general fund reserve is the residual net resources excess of non-spendable, restricted, and committed fund balance over total fund balance.
Schedule A details the obligated fund balances. The obligated amounts increase or decrease only by Board adoption or adopted Board policy. The Schedule begins with the end of year totals in each fund balance category:
• Non-spendable: inherently non-spendable due to their form;
• Restricted: externally enforceable limitations of use imposed by creditors, laws or enabling legislation;
• Committed: self-imposed limitations set in place prior to the end of the year by the Board of Supervisors;
• Assigned: limitation resulting from intended use by the Board of Supervisors; and
• Unassigned: which is the residual net resources excess of non-spendable, restricted, and committed fund balance over total fund balance.
The final figures in Schedule A are updated for the General Fund as follows:
• $449,308 is restricted for East Bay Regional Communications System
• $2,902,973 is restricted for the CCTV’s Public, Educational, and Governmental Fund
• $28,346,722 is restricted for Medicare Part D
• $20,000,000 is assigned for litigation and audit exceptions
• $10,000,000 is assigned for Property Tax System Replacement Project
• $9,326,361 is assigned for Bay Point Library Construction
• $585,000 is assigned for Law and Justice Information Systems
• $585,395 is assigned for Dependent Care Assistance Plan (DCAP)
• $1,025,354 is assigned for Health Care Spending Account (HCSA)
• $151,090 is assigned for Probation Juvenile Justice Data
• $4,737,964 is assigned for Facility Improvements For Juvenile Hall
• $2,364,379 is assigned for Vehicle Theft Prevention
• $1,035,564 is assigned for Office of Restorative Justice Planning & Implementation
• $3,784,110 is assigned for Elections Capital Replacement Surcharge
• $8,507,464 is assigned for the COVID-19 FEMA Reserve
• $20,000,000 is assigned for the Measure X reserve
• $24,878,825 is assigned for an increase to the Capital Reserve as required by the General Fund Reserve Policy, plus an additional $181,000,000 for Board of Supervisors approved projects.
In September 2022, the County adopted the 20-year Capital Facilities Master Plan (CFMP), a forward-looking strategy anticipating capital needs and better forecasting major capital expenditures over time. The CFMP breaks down this long-term vision into sequential 5-year implementation plans specifying the projects and funding requirements in the near to midterm.
The first 5-year implementation plan began in FY24-25 and will run through FY29-30. The major projects identified for this period are the East County Service Center (ECSC), Youth Center for District 5, Youth Center for District 3, and the remodel of Module D in the Martinez Detention Facility (MDF). These projects were most recently presented and discussed at the Board of Supervisors meeting on February 25, 2025.
The East County Service Center (ECSC) is the first major project in the CFMP. It will be a 120,000 square foot, three-story County office building for 440 staff across nine departments. The Board approved a progressive design-build approach and a phase one design contract with Webcor Builders on July 8, 2025. Construction is expected to be completed by the end of 2027, with a total budget of $143 million. The project includes sustainability and energy conservation measures, and the County expects to receive Federal energy credits currently still available through 2027 which, if realized, could reduce the total project cost by $5.3M.
The Board authorized the creation of Youth Centers in Districts 3, 4, and 5 using Measure X funding. District 4 partnered with the Community Youth Center (CYC) in Concord to provide services. District 5 is pursuing an existing location which the allocated Measure X funds could cover acquisition and refurbishment. In District 3, no suitable facility was found, so the County purchased land with the Contra Costa Fire Protection District to build both Fire Station #90 and a new youth center. Design is underway, and the total project cost beyond Measure X funding is estimated at $13 million, with further refinement expected in the next 6-9 months as design and pre-construction progress.
The final major project in this 5-year window is the remodel of Modules D and Q at the Martinez Detention Facility, scheduled to start in FY26-27 and take approximately two years. Module D requires significant upgrades to meet modern correctional standards and has been a frequent concern of the Prison Law Office under the ongoing Consent Decree. Module Q will be remodeled to increase holding capacity for detainees on court appearance days. As the West County Reentry, Treatment, and Housing facility is completed by the end of 2025, more detainees will be housed in West County, which will increase the number of people coming to the Courts complex. Module Q will serve as the holding area for these detainees. The total budget for Modules D and Q renovations is currently estimated at $25 million.
Assigning fund balance to the General Fund Capital Reserve for the Board of Supervisors approved projects totaling $181M will enable the County to execute its long-term capital plans, ensuring sufficient resources are allocated for completion, avoiding debt and the administrative burdens and costs of debt issuance and management, helping maintain the county’s excellent credit ratings, updating county facilities to meet operational needs and legal requirements, lowering the long-term operating cost of the county’s real estate portfolio through increased ownership and reduced leasing, helping address deferred maintenance, and building reserves to fund additional planned projects and emerging capital needs.
At the conclusion of FY23-24, the Board of Supervisors established an assigned General Fund reserve designation titled “COVID-19 FEMA Reserve” in the amount of $37,644,395. The purpose of the reserve designation was to ensure that the County was made whole in case outstanding FEMA claims related to the COVID-19 pandemic were disallowed or otherwise not paid. The County Administrator’s Office requested that the Board direct staff to return at least annually to report on the status of outstanding COVID-19 FEMA claims to assess whether a portion of the “Assigned” General Fund balance amount should be reduced at which time the Board could provide direction as to the use of those funds.
At this time, the County Administrator’s Office is recommending a reduction in the amount from $37,644,395 to $8,507,464 in recognition of funds that have been received from FEMA over the past year and as discussed at the Board of Supervisors FY25-26 budget hearings and subsequent meetings. The proposed $8,507,464 figure is composed of two parts: 1) $8,217,932 reflecting 10% of the County's total obligated claim amount ($82,179,316) in case of future audit by CalOES or FEMA; and 2) $289,532 in anticipated funds not yet received related to final closeout of the County’s COVID-19 FEMA claims currently being processed by CalOES.
Included in these annual materials are several items of note, specifically Schedule C in Attachment B totals $258.7M. Of this amount, $89.5M are non-General funds and restricted. The balance of $169.2M is for General Fund appropriation carryforwards and adjustments that fall into five general categories as detailed below:
• Measure X assigned funds total $132.2M or 78% of the total carryforwards;
• Restricted funds total $4.0M or 2%;
• Information technology costs total $1.8M or 1%;
• Capital project costs total $27.6M or 16%;
• And $2.6M are for program related costs, such as $1.1M Contra Costa County Futures, $462k related to Rodeo Unocal Return to Source, and other appropriations.
Attachment B (Schedule B) includes encumbrances totaling $79.0M, of which $77.1M are in the general fund. Encumbrances reflect the outstanding contractual obligations for which goods and services have not been received and are set up to reserve portions of applicable appropriations. Encumbrances still open at year end are not accounted for as expenditures or liabilities, but as a constraint imposed on fund balance.
Timing of the phases of the compilation, publication, presentation, and adoption of the County budgets is an important topic of discussion. All of the individual phases of the County budget process have significant timing restrictions and adhere to the County Budget Act, as prescribed in Government Code 29000-29144. The County of Contra Costa operates on a modified accrual basis. Modified accrual accounting combines accrual basis accounting with cash basis accounting. Revenues are recognized when they become available and measurable and, with few exceptions, records expenditures when liabilities are incurred. For practical purposes this means that the final budget for June 30 includes a sixty-day adjustment period, leaving very little time to prepare the State Schedules for review and adoption. Government Code section 29088 states that the budget shall be adopted by Resolution no later than October 2.
CONSEQUENCE OF NEGATIVE ACTION:
Delay in Final Budget Adoption and failure to meet state requirements in Government Code section 29088.
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I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. |
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ATTESTED: |
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Monica Nino, County Administrator and Clerk of the Board of Supervisors |
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By: |
THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
and for Special Districts, Agencies and Authorities Governed by the Board
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IN THE MATTER OF
Adopting the Fiscal Year 2025-2026 Adopted Budget as Finally Determined and closing-out the FY24-25 Budget.
WHEREAS,
The Contra Costa County Board of Supervisors acting in its capacity as the Governing Board of the County of Contra Costa and all districts of which it is the ex-officio governing Board.
NOW, THEREFORE, BE IT RESOLVED
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The Board ADOPT final materials including:
1. Final changes to close out the FY24-25 County Budget, including changes to revenues, appropriations, and obligated fund balances; and AUTHORIZE the Auditor-Controller to make the necessary changes in the financial accounting system, as reflected in Attachment A;
2. Final changes in the FY25-26 County Budget, including designations and changes to appropriations, revenues, and obligated fund balances; and AUTHORIZE the County Administrator and Auditor-Controller to make technical adjustments to the budgets pursuant to Attachment B (County - Schedule A, B, and C);
3. Final changes to close out the FY24-25 Special Districts Budget, including changes to revenues, appropriations, and obligated fund balances; and AUTHORIZE the Auditor-Controller to make the necessary changes in the financial accounting system, as reflected in Attachment C; and
4. Final changes in the FY25-26 Special Districts Budget, including designations and changes to appropriations, revenues, and obligated fund balances; and AUTHORIZE the County Administrator and Auditor-Controller to make technical adjustments to the budgets pursuant to Attachment D (Special Districts - Schedule A, B, and C);