Del Norte County’s top administrative official admitted that finding $9.6 million to balance the fiscal year 2026-27 general fund budget was an arduous task that goes beyond sharpening pencils.
County Administrative Officer Neal Lopez affirmed concerns District 2 Supervisor Valerie Starkey raised Tuesday. But, according to him and according to at least one of Starkey’s colleagues, the “huge deficit for the general fund, one of the largest I’ve seen in my career” can be traced to the Board’s actions in the fall to increase the county’s ability to be market competitive.
When the Board of Supervisors raised wages and approved the county’s new salary structure across all bargaining units in December, retirements increased too, Lopez said. Still, he reminded supervisors that the county’s 2026-27 budget is still preliminary and all the accruals from the current fiscal year that ends June 30 have not yet been realized.
“A lot of the prior year’s revenue will increase the revenue from the general fund side of things so we won’t be $9.5 million out,” Lopez said. “I don’t know where it’s going to land, it’s too early in the process, but the bottomline is we have to have a balanced budget so we will have a balanced budget.”
Despite the CAO’s assurances, Starkey voted against the recommended budget that will allow Del Norte County to continue to function when the new fiscal year starts July 1. She also cast the sole opposing vote to allocating 2026-27 general fund dollars to operate the county’s watch station at Pacific Shores after Lopez said he didn’t yet know how much money would be needed.
Starkey and her colleagues authorized Lopez and Auditor-Controller Clint Schaad to conduct a second round of department-level budget meetings to determine where cuts could be made.
Supervisors also agreed to disallow 2025-26 budget transfers that would involve moving money designated for salaries and benefits to another expenditure category. Lopez said departments that are requesting a reduction in salaries and benefits should come before the Board of Supervisors.
“We’re saying we don’t want someone to use their salary savings on one-time costs,” he said. “If they wanted to buy a car, that’s something that wasn’t budgeted for, it wasn’t approved by the Board so we’re asking them not to do that.”
This direction applies to general fund and non-general fund departments, according to Lopez.
District 3 Supervisor Chris Howard was absent.
According to Lopez’s staff report, he and Schaad presented supervisors with a balanced 2026-27 recommended budget using “anticipated year-end adjusting entries and projected balances.” The total recommended budget is about $301.34 million with a general fund budget of about $52.9 million.
In his staff report, Lopez stated that implementing the changes the county’s compensation and organizational structure analysis called for as well as rising retirement and healthcare costs represent significant challenges. The recommended budget he and Schaad presented to the Board on Tuesday also incorporates Measure R tax revenue “to support priority services and strategic investments.”
The county’s 2026-27 recommended budget will be policy until the Board of Supervisors adopt a final budget, which must happen no later than Oct. 2. Lopez said his budget team will urge department leaders to report the accruals they have processed as early as possible so they know what the county’s fund balance is.
“Accruals are expenditures that have been incurred in the prior fiscal year, this fiscal year, so it’s anticipated revenue,” he said. “We say it on a regular basis at department head meetings and budget meetings that we have to have those as soon as we possibly can in order to know the fund balance. It’s helpful if we know that prior to the budget workshops.”
Starkey, however, pointed to several errors in the recommended budget she and her colleagues were asked to approve. This included a missing zero in Del Norte County Sheriff’s Office budget, making it look like his office requested $17,200 instead of $172,000 for in-custody medical expenses at the jail.
Other errors include staff salaries missing from department budgets as well as Measure R revenue transfers, Starkey said. She also pointed out that last year’s fund balance going into the 2025-26 budget process showed a $4.1 million gap.
“We’re now at $9.6 million,” she said. “I believe our fund balance about $7.2 million from the information that I got and I’m going to tell you, on a personal level, I’m not writing a check in my checking account that I know is not going to cash, and that is what you’re asking us to do today.”
Starkey said she’s worried that Del Norte County is relying on salary savings due to its staff vacancies to “keep that fund balance going.” It’s a concern she repeated later during Tuesday’s meeting before voting against Measure R funding requests.
Measure R is a voter-approved 1% sales tax to support law enforcement, emergency and disaster response, public nuisance and blight abatement, code enforcement, emergency dispatch, animal services and planning and capital improvements, according to Lopez’s staff report.
According to the county’s staff report, Measure R is expected to generate about $2 million in projected revenue for fiscal year 2026-27. Its total annual obligations for fiscal year 2026-27 are about $1.7 million.
Lopez said that the $2 million in estimated Measure R revenue and the $1.7 million in estimated obligations aren’t expected to change during the budget process.
During the Measure R discussion, Starkey made a motion to approve one-time funding requests totaling about $468,050 for new probation and law enforcement vehicles, improved vehicle abatement services and a new booking management system at the jail. Measure S funding was also called upon to partially fund a new vehicle for the Del Norte County Agriculture Department.
Starkey proposed holding off on approving requests for ongoing funding from Measure R until she and her colleagues received more information about the county’s overall budget. She and her colleagues were asked to approve allocating up to $360,000 for annual costs associated with an economic services manager position, a third code enforcement officer and the reclassification of a deputy sheriff-coroner.
District 1 Supervisor Darrin Short initially seconded Starkey’s motion. However, when their District 5 colleague Dean Wilson said that both the code enforcement officer and the economic development services manager would further the strategic plan, Short changed his mind.
Wilson urged his colleagues to approve the Measure R requests as they were presented to the Board. He argued that the third code enforcement officer and the economic development services manager were needed positions and as salaries increased it was going to “bite into that Measure R.” Wilson also noted that it’s easy to determine when a car is going to need replacing, but preparing for that eventuality often gets overlooked.
“The crisis comes up when you have personnel driving cars they shouldn’t be driving because there’s too many miles on the vehicle,” he said. “And then it comes back to us to look at the need and, especially when you’re looking at patrol vehicles and the like, I’m not willing to put an officer in a car unless I know that car is at least operationally something we can put them in.”
Starkey acknowledged that Measure R is separate from Del Norte County’s overall budget, but maintained that using that revenue to fund ongoing positions was concerning.
“What if we need to tap Measure R for something else?” Starkey asked. “I just feel this is premature given the situation that we’re in.”
Del Norte County will continue developing its final budget over the next three months. That process will include holding budget workshops in August to allow individual department leaders to speak with the Board of Supervisors and the public about their needs.
