Shasta County budget hearing spotlights reserve gap, $46 million pension bill and constrained capital funds

Shasta County opened its FY 26-27 budget hearings on June 9 with a recommended budget of just over $658 million, along with a set of fiscal constraints that will shape the final budget discussion before adoption on June 23.

Deputy County Executive Officer Erin Bertane told supervisors the proposal is down a little more than $27 million from the prior adopted budget, including a $7.3 million drop in the general fund, according to the county’s budget presentation. She said projected general reserves would total just over $32.8 million, or 14.8% of general fund expenditures, below the county’s 17% to 25% target range.

Bertane also said the county is working with limited restricted balances, including about $21.2 million in jail-related committed funds and a little more than $1.5 million in remaining impact fee money. The county’s capital and one-time spending options will also be shaped by those restricted funds, along with opioid settlement money earmarked for jail treatment, probation treatment and victim services.

A separate presentation from Auditor-Controller Nolde Short focused on retirement costs. Short said the county’s PERS liability is about $1 billion, with $791 million in assets and $322 million in unfunded liability, leaving the system about 71.28% funded. She said the county’s projected FY 26-27 PERS contribution will total about $46 million, including about $14 million for normal cost and about $31 million to reduce the unfunded liability.

Short also discussed OPEB retiree health benefits, saying the county is between 53% and 71% funded depending on the measure used. She said newer employees no longer receive traditional retiree health coverage and instead participate in a 401-style contribution arrangement.

County Counsel staff and the CAO office described additional budget pressures tied to staffing and operations. County Counsel said vacancies have increased reliance on outside counsel, especially for public records requests, child welfare matters and public administrator work. The CAO office said it is absorbing new responsibilities tied to SB 707 meeting-access requirements, countywide legislative tracking, town halls and major capital projects, including courthouse demolition, a jail remodel and the correction and rehabilitation campus.

The board did not adopt the budget at the June 9 hearing. Final action is scheduled for June 23.