Board hears third‑quarter finance report, introduces FY 2026–27 recommended budget; DA warns of staffing shortfalls

The San Luis Obispo County Board of Supervisors on May 19 heard a third‑quarter financial status update and a county debt report, then accepted staff’s recommendation to introduce the fiscal year 2026–27 recommended budget.

Addison Gregory of the County Executive Office said the third‑quarter report is an "exceptions only" document and highlighted projected year‑end overages in the sheriff's and district attorney’s budgets driven largely by overtime and negotiated salary and benefit increases. The presentation noted lower‑than‑expected revenue realization rates in some funds and continued shortfalls in camping reservation fees and other community parks receipts.

Auditor‑Controller Jim Hamilton outlined the county’s low debt burden, explained that pension obligation bonds are a significant portion of general‑fund‑backed debt and called the county’s debt management “very healthy.” He said market conditions make refinancing the Nacimiento pipeline bonds plausible, with marketing tentatively planned for October 2026 if the debt advisory committee concurs.

The board then heard Lisa Howe of the Executive Office introduce the FY 2026–27 recommended budget. Howe said the all‑funds recommendation totals about $1.2 billion (up 2%), with governmental funds a little over $1 billion (up 4%) and a recommended general fund of roughly $830 million (up about 2%). The proposal uses a baseline budgeting process, assumes certain vacancy savings and includes $10.8 million in one‑time add‑backs and $1.4 million in augmentations recommended by staff.

The recommended budget, Howe said, also builds contingencies to meet the board's 5% general‑fund target and places one‑time funds into economic development and reserve designations to cover potential state and federal impacts.

During public comment, District Attorney Dan Dow asked the board to fund five positions he described as necessary to carry out the office’s statutory duties — a paralegal, a restored victim‑witness advocate, an administrative assistant, a restored felony deputy district attorney and a new elder‑abuse vertical prosecutor. Dow said those positions would cost about $857,839 at step‑one salary rates and warned that "adoption of the county executive officer's recommended budget without approval of these five budget augmentation requests will materially impair the district attorney's independent investigative and prosecutorial functions." He placed the county on formal notice on that legal question.

Board members asked staff follow‑up questions about vacancy rates (the behavioral health vacancy rate was discussed as being around 12–17% in places), the county’s enterprise resource planning costs and planned positions funded from grant sources. Staff said the ERP project includes a recommended budget adjustment but that overall costs were not projected to exceed the previously identified $4 million additional need and that departments will return with ongoing support cost estimates.

Supervisor comment emphasized both caution on long‑term revenue volatility and support for exploring funding sources. The board voted to introduce the recommended budget and schedule public hearings beginning June 8; adoption is expected after hearings and any adjustments, with final legal adoption in September.

What’s next: public hearings on the recommended FY 2026–27 budget begin June 8 in the Board Chambers; staff will return with details on specific augmentation requests, including the district attorney’s five‑position request.