Mendocino County Projects Balanced Budget with Reduced Reliance on One-Time Funds
The general fund is now projected at $100 million
Mendocino County’s fiscal outlook has improved significantly, Deputy Chief Executive Officer Tony Rakes told the Board of Supervisors on Tuesday. Rakes reported the county is on track to end the fiscal year with a balanced budget while relying far less on one-time funds than initially expected.
During a third-quarter budget update, Tony Rakes reported that non-departmental revenue is now projected at $100 million, about $5.4 million higher than anticipated in the adopted budget.
The increase in revenue, combined with savings from unfilled positions across departments, is expected to reduce the county’s use of one-time funds to about $700,000, down from the $6.15 million originally budgeted.
The improved outlook prompted questions from supervisors about the county’s forecasting practices.
“The county’s projections seem to always be really conservative, underestimating revenue,” Supervisor Ted Williams said, adding that the public may perceive the difference as “found money” at the end of the fiscal year.
Auditor-Controller Treasurer-Tax Collector Chamise Cubbison defended the approach, saying revenue estimates are intentionally cautious due to uncertainty in key sources such as interest earnings and property tax adjustments, as well as fluctuations in department budgets.
“We can’t predict to an exact science how much interest is going to be available,” Cubbison said. “We would rather not have the general fund depend on more revenue than we’re likely going to receive.”
She added that while property tax revenues have recently trended upward, delays in assessments and changing market conditions make those increases difficult to forecast in advance.
Dee Pallesen, a resident of the county’s Fifth District urged officials to avoid using the term “found money,” saying it could create confusion.
“The money isn’t found; that suggests that we lost it and then all of a sudden found it,” Pallesen said. She encouraged the board to better explain the uncertainty inherent in revenue projections.
Supervisors approved several actions related to the improved fiscal position, including a $2.8 million transfer to the county’s health insurance fund to support cash flow and offset costs using remaining federal pandemic relief funds.
The board also adopted a policy directing that any unused one-time funds at the end of the fiscal year be placed into reserves, with half allocated to a “rainy day” fund and the other half to infrastructure and systems reserves. The move reflects the new reserve policy approved in March.
Supervisors said the policy could help address long-delayed capital needs, including building maintenance and repairs.
Final budget hearings for the 2026-27 fiscal year are scheduled for early June.
Read additional coverage of the May 5 Board of Supervisors Meeting:
Proposed Ukiah Annexation Could Cost Mendocino County as Much as $27 Million Over 16 Years
Mendocino County Sheriff Warns of Staffing Shortages, Safety Risks