Proposed 2026-27 Budget

Overall Budget Summary

The Proposed Budget decreases staffing by 3.0 full-time equivalent (FTE) positions to 43.0 FTE positions and includes negotiated salary and benefit increases. Appropriations total $83,625,010, funded by revenues of $43,804,882, a General Fund Contribution of $821,671, and Other Fund Contributions of $38,998,457.

Human Resources

The Human Resources division budget decreases staffing by 3.0 vacant FTE positions to 30.0 FTE positions and includes negotiated salary and benefit increases. Appropriations total $4,934,192, funded by revenues of $3,949,774, a General Fund contribution of $821,671, and a credit from the Risk Management division of $162,747.

The budget reduces staffing by 2.0 vacant FTE Human Resources Technician positions, decreasing appropriations by $251,054. Partial reductions in 1.0 FTE across a Human Resources Analyst and Human Resources Technician position supporting the Training program result in salary savings of $112,807 and reduce capacity to deliver employee training service.

The budget increases expenses by $614,857, largely from a $726,197 increase in negotiated salary and benefit adjustments, offset by reductions of $480,624 from the reduction of 3.0 FTE positions ($363,951) and in extra help ($116,673). Other expense increases include a $171,123 increase in Internal Service Fund costs, largely related to an increase in technology support for the County’s Payroll and Human Capital Management System. Additionally, there is a $73,724 increase in liability and property insurance charges, offset by a $67,989 increase in intrafund transfers.

The budget increases revenues by $424,568 primarily due to a $246,413 increase in County overhead cost recovery, along with a $178,155 increase in charges for personnel services.

Risk Management

The Risk Management division budget maintains 13.0 FTE positions, including negotiated salary and benefit adjustments. Appropriations total $78,690,818, funded by revenues of $39,855,108 and Other Fund contributions of $38,835,710. A separate General Fund contribution credit of $162,747 is allocated to the Human Resources budget.

The budget increases expenses by $5,785,401 largely from a $2,482,805 increase in liability costs, a $1,891,647 loan payment to the General Fund, a $564,097 increase in legal expenses, a $481,000 increase in property insurance costs, and a $52,294 increase in technology support charges.

The budget increases revenues by $4,113,544, primarily due to a $3,500,000 increase in charges for services to departments for liability and insurance programs and a $252,000 increase in other insurance charges. The budget provides $28,421,961 in reserves, which remains below the recommended funding level of 70-75%, with Workers’ Compensation reserves at 53% ($20,176,946) and Liability and Property reserves at 20% ($6,084,630).

Human Capital Management Implementation: In partnership with the Auditor-Controller-Treasurer-Tax Collector and with support from the Information Services Department, Human Resources is implementing a new Payroll and Human Capital Management (HCM) system (Workday) to automate workflows, streamline personnel processes, and improve payroll operations. Implementation requires significant staff involvement, with approximately 50% of Human Resources staff time dedicated to system configuration, testing, training, and transition activities. This effort reduces capacity for routine operations and increases pressure on existing staff to maintain service levels. The budget includes $83,000 for extra-help staffing to support implementation and ongoing system maintenance; however extra-help funding decreases by $116,763 to meet the department budget target. Reduced support may increase the risk of delays in system updates, payroll processing issues, and compliance challenges as the system is implemented and stabilized.

Negotiating Labor Contracts: Human Resources faces increased complexity in negotiating labor contracts during a period of constrained revenues and rising operational costs. The department must balance competitive compensation and benefits with the County’s fiscal limitations. These negotiations directly affect workforce stability and service delivery. Ongoing fiscal pressures may limit the County’s ability to meet compensation expectations, potentially impacting recruitment, retention, and long-term workforce planning.

Labor Relations Challenges: Human Resources is experiencing an increase in requests from one of the County’s largest labor groups to meet and confer on management prerogatives and items already established in collective bargaining agreements. This increase requires additional staff time for review, response, and negotiation, reducing capacity for other Human Resources functions. Continued growth in workload may lead to delays in service delivery and could increase costs if extended negotiations or legal review are required.

Rising Liability and Insurance Costs: Liability and insurance costs continue to rise, straining the County’s budget and Risk Management programs. Expenses increased from $10.5 million in Fiscal Year (FY) 2024-25 to $12.3 million in FY 2025-26, with projections ranging from $14 million to $15.5 million in FY 2026-27. These increases may require reallocating resources, delaying initiatives, or adjusting staffing and service levels. Continued cost growth limits the County’s ability to reach its minimum 70% funding target for claims and increase long-term financial risk without cost-mitigation strategies.

Artificial Intelligence in Human Resources: Human Resources is beginning to use artificial intelligence (AI) tools to improve administrative efficiency, including drafting policies, job descriptions, recruitment materials, and supporting research and analysis. Expanded use of AI presents opportunities to improve recruitment, training, and data analysis; however, it also introduces risks related to data privacy, bias, and regulatory compliance. The department must evaluate governance, oversight, and appropriate use to ensure responsible implementation.