_{Thumbnail photo by Aisling Bludworth}

Eleven weeks after he presented county supervisors with a recommended general fund budget that included a $9.6 million deficit, Del Norte’s top administrative official said staff found additional resources to make an accelerated payment associated with the former Bar-O Boys Ranch.

But County Administrative Officer Neal Lopez blamed timing issues when District 2 Supervisor Valerie Starkey asked why that recommended $500,000 accelerated payment to the Bar-O Boys Ranch fund wasn’t included in the staff report she and her colleagues received Tuesday.

Lopez said he and others on the budget team also received last-minute information concerning the 2025-26 ending fund balance that would allow for the additional payment.

Starkey noted that she and her colleagues had expressed serious concerns about the county’s general fund since June. After asking departments to scrutinize their expenditures, limiting staffing requests and imposing a general fund hiring freeze, she pointed out that the general fund was about $393,000 lower than it was on June 24.

“Yet during that same process, the budget team is choosing to recommend an increase of a one-time transfer of approximately $307,000,” Starkey said. “I’m not saying that’s necessarily wrong. It’s not a wrong recommendation, it may turn out to be excellent financial advice, but if this Board is going to make that choice, I really feel we need to have the analysis behind it and why that was chosen to be done.”

Starkey and her colleagues voted unanimously to open the public hearing for Del Norte County’s final 2026-27 fiscal year budget. According to Auditor-Controller Clinton Schaad, the county budget total is $280,847,416 with a general fund budget of $52,671,919.

Before the Board of Supervisors discussed the budget, Schaad told them that last-minute changes led to a $70,000 discrepancy in the budget summary included in the agenda packet, though the budget details were correct.

“Those will be updated for the next meeting,” he told Redwood Voice Community News, referring to the Sept. 22 meeting when the Board is expected to adopt the final budget. “We’re working through a new system right now and it’s highly responsive. If I ran a report right now and I ran a report a few hours from now, they could be different.”

PJ Estlund, who was the Curry General Hospital finance director before moving to Del Norte County, also questioned discrepancies that occurred between the department budget reports and the budget summaries. Those variances would have to be addressed if the Board intends to approve the budget in two weeks, she said.

In Tuesday’s staff report, Lopez and Schaad said that the recommended budget the Board approved in June reflected the county’s compensation and organizational structure analysis as well as rising retirement and healthcare costs. In June, the recommended budget incorporated Measure R tax revenue “to support priority services and strategic investments.”

As Del Norte’s budget process draws to a close, the county’s financial picture appears to have improved. Schaad noted that a decline in the county’s vacancy rate led to a reduction in the amount of overtime staff worked. But the “main swings in balancing the budget” came from higher-than-projected revenues, he said.

Since then, departments countywide have made changes, Schaad said. There were reductions in the amount of overtime staff worked, which was a product of a vacancy rate that had decreased, he said.

“The main swings in balancing the budget (were) we had revenues come in much higher than projected,” he told Redwood Voice. 

That includes an additional $600,000 more in federal payments in lieu of property taxes. According to Schaad, the county received roughly $1.2 million more in federal PILT revenue.

Also, after the Board approved the recommended budget in June, Schaad said the budget team learned that assessed property value within the county had increased by 5%, which generated an additional $500,000 in revenue.

The general fund balance was about $6.2 million at the end of the 2025-26 fiscal year, according to Schaad.

On Tuesday, supervisors also authorized Schaad to adjust the final 2026-27 budget to account for interest allocations from the previous fiscal year. According to Schaad, this request is related to the county’s “unfunded liabilities” associated with the California Public Employee Retirement System and other post-employment benefits.

Schaad said his office is projecting an interest apportionment of about $900,000 to the general fund and recommended that amount be set aside to help pay for the county’s unfunded liabilities.

“We’re trying to have the board make the decision today on how you want to dedicate those funds and give me the authority to make those changes,” Schaad told supervisors. “In two weeks, when I come back to you, you know where they’re supposed to be and what the purpose of those funds are.”

Starkey raised her concerns regarding Bar-O Boys Ranch when she and her colleagues took up the discussion regarding appropriating general fund dollars to the Pacific Shores Watch Station, Fish and Game Advisory Commission and Veterans Cemetery operating budgets. 

Within the miscellaneous revenue and expenditures line items, Starkey said, revenues had increased by about $1.57 million “and staff chose to add $735,000 in transfers.” Those transfers included an increase to the Bar-O payment from $195,000 to $500,000, she said.

“I see the same transfer bucket being Fish and Game and the Veterans Cemetery and Pacific Shores — that’s all in the same bucket — I do not see Bar-O in that bucket, but it’s all within that same kind of transferring thing,” she said.

Bar-O Boys Ranch was a 42-bed facility northeast of Gasquet that housed juvenile offenders from communities across California. According to Lopez, its revenue was based on the number of wards it housed. For a number of years it was self-sustainable, he said, but towards the end of its life that revenue could no longer fund operations and it began to accumulate a deficit.

Bar-O Boys Ranch officially closed in 2020.

“Once the Board took that direction and closed Bar-O, a significant deficit had already accumulated,” Lopez said, adding that it was about $1.4 million. “That becomes a general fund obligation.”

In the past the Board of Supervisors had allocated about $190,000 to $200,000 to address that deficit, but it’s not enough due to ongoing costs, which includes insurance, Lopez said. There’s also a negative interest charge, which is compounding the deficit, he said.

“The recommendation, based on the resources available, is to increase that payment to $500,000 this year and, hopefully, for the next couple of years to address the $1.4 million estimated deficit,” he said. 

Starkey said she was comfortable with the recommended $500,000 allocation, but asked to the see the logic behind it.