As Mendocino County begins planning for next year’s budget, officials are staring down a projected $17 million deficit, prompting talk of hiring freezes, workforce reductions, and cuts to services.
At a budget workshop Tuesday, Assistant CEO Sara Pierce presented a grim outlook for the county’s finances, citing stagnant revenue and rising salary and benefit costs. The county anticipates needing $4.2 million in one-time funds just to close out the current fiscal year, a slight improvement due to new revenue projections.
Looking ahead, Pierce said salaries and benefits for general fund departments are expected to increase by roughly 7% over the revised 2024–25 budget. Meanwhile, key revenue sources are expected to remain flat.
Federal funding shortfalls are compounding the issue, with the county losing several public health and rural schools grants—although those cuts amount to only a few hundred thousand dollars.
Deputy CEO Tony Rakes told the board that general fund department salary and benefit costs are projected to climb from $138 million this year to $150 million in the next fiscal year. Options for closing the gap are limited, he said.
“If we assume that the deficit stays at $17 million, and revenues come in as projected, we’re looking at a major shortfall with few easy solutions,” Rakes said.
To address the crisis, the Executive Office suggested implementing an immediate hiring freeze across all departments and even considering layoffs. That idea sparked concerns among both supervisors and department heads.
Supervisor Ted Williams criticized the use of one-time funds to patch structural deficits.
“We did it once—actually, I think I voted against that budget because of it,” Williams said. “We’re going to be in the same situation next year, and eventually we’ll run out of one-time funds. We’re compounding the problem by not being honest about the structural deficit.”
The board also debated Measure AJ, a 2016 voter-approved advisory measure that prioritized cannabis tax revenue for specific uses like road repairs, mental health services, and fire and emergency services. However, officials acknowledged that no direct accounting system is in place to track how those funds have been spent.
“We actually allocated zero dollars for fire and EMS from the cannabis tax, despite what voters told us,” Williams said.
The board unanimously directed staff to provide a full accounting of Measure AJ revenues and a plan to allocate those funds according to voter priorities.
Supervisors floated various cost-saving ideas, including a voluntary separation program, contract reviews, and reevaluating recent salary increases for elected officials.
“I think it’s very important that we find out what we absolutely have to do versus what we want to do,” said Supervisor Bernie Norvell.
Department heads stressed the need to maintain essential services. Sheriff Matt Kendall noted the need to staff the county’s new jail wing.
“We can’t have any sacred cows at this moment,” Kendall said. “But we better look at this with eyes wide open or we could be shooting ourselves in the foot as far as that funding we received for the jail.”
Chief Probation Officer Izen Locatelli strongly opposed a hiring freeze, arguing it would cripple mandated services.
“A hard hiring freeze is draconian,” Locatelli said. “If you give me a hard hiring freeze, I’m not doing state mandates.”
In the end, the board directed staff to begin drafting a budget that does not rely on one-time funds, in order to better understand the full scope of potential cuts ahead.
