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“Grim.”

That was the blunt assessment of Humboldt County’s budget outlook offered this morning by Deputy County Administrative Officer Jessica Maciel.

She was addressing the Board of Supervisors at a special hearing that kicked off the planning process for the upcoming 2024-25 fiscal year, and while the fiscal picture she painted was indeed dour — to the tune of an estimated $12.4 million deficit for the current fiscal year, which wraps up on June 30 — the reality is not as bad as the $18.4 million deficit projected when the budget was first adopted.

Still, that shortfall represents a loss of nearly a third of the county’s $38.3 million fund balance at the start of the fiscal year. Maciel explained that if the county maintains this structural deficit, and certain costs (like employee salaries) continue to increase at their current rates, then the general fund will run out of money before the end of the 2025-26 fiscal year, which is less than just over two years away.

What would that mean for county departments and the services they provide? Maciel said this kind of fiscal hemorrhaging would require a 20 percent cut in general fund allocations across the board by the time fiscal year 2026-27 rolls around. 

“Budget cuts at this level are not attainable without reductions in staffing and services,” she said. 

In the current fiscal year, the board implemented a program of voluntary furloughs, separation incentives and a hiring freeze. Those measures should continue to save the county money in the upcoming year, according to Maciel, though she warned, “these alone will not provide enough savings” to balance the budget.

Money could also be saved by reducing staff through attrition and potentially by reorganizing some departments. Staff plans to present some reorganizing options to the board on June 3.

A budget ad hoc committee comprising Fourth District Supervisor Natalie Arroyo and Second District Supervisor Michelle Bushnell recently met with supervisors from each of the county’s 21 departments to brainstorm ways to stanch the bleeding.

“Truly, it was a difficult set of meetings and a very productive set of meetings,” Arroyo reported to her board colleagues. 

Bushnell said she looks forward to collaborating with department heads to figure out how to balance the budget in the future, though she said the county is about to head into “a few lean years.”

Following this broad overview, county department heads took turns presenting reports that included accomplishments and challenges over the past year and goals for the future. Roughly half of the county departments delivered their reports today; the remaining departments will present their budget overviews at a follow-up hearing on May 20.

Yana Valachovic, director of the University of California Cooperative Extension in Humboldt and Del Norte counties, offered a rare ray of financial sunshine, saying her department was able to absorb some reduced funding thanks to a fortuitous new hire and some structural changes, so she’s requesting no additional funds for the upcoming fiscal year.

However, Valachovic went on to highlight the destabilizing economic impacts of climate change, including the effects of California’s increasing wildfire risks on the insurance industry.

Humboldt County Assessor Howard LaHaie also had some good news. In recent years, the county’s total assessed property values were going up by about four and a half percent, and in both last fiscal year and this one, the tax roll value has gone up by nearly six percent, he said.

He said his office currently has 27 employees. “And actually when I started in 2008, the assessor’s office had 36 staff so we’ve decreased it quite a bit,” he said. “I think that, in my opinion, 27 is probably the minimum to be able to continue to to produce the required assessments that we’re supposed to do. Anything below that would be detrimental to not only to our office but to the county as a whole.”

The county recently purchased artificial intelligence software called Just Appraised, which reads deeds and automatically enters the data into the county’s property tax database, so the work doesn’t need to be done manually.

At the end of LaHaie’s presentation, First District Supervisor Rex Bohn asked about the potential for A.I. to further streamline operations in the department. He went on to joke that some people “are looking forward to the day [when] there’s five computer screen sitting up here” on the board’s dais.

During his turn, the county’s director of aviation, Cody Roggatz, said Humboldt has seen a 50.6 percent increase in commercial aviation passengers from 2018 to 2023. 

“More passengers leads to more parking lot revenue, which is actually our biggest revenue generator for our entire department,” Roggatz said. He noted that his department has completed a series of major capital improvement programs in recent years thanks to funding from the Coronavirus Aid, Relief, and Economic Security Act, aka the CARES Act.

Aside from the Sacramento International Airport and the Santa Rosa Airport, he added, “we have garnered more funding and accomplished more for Humboldt County’s airports than anybody else in Northern California.”

Other county department heads said they’ve experienced significant staffing challenges, including difficulty recruiting and retaining employees. For example, Child Support Services Director Bennett Hoffman said his department has averaged a vacancy rate of 35 percent, and this year it was more like 60 percent among case management workers.

District Attorney Stacey Eads said she’s also having trouble with staffing amid a nationwide shortage of applicants for deputy DA positions. 

“We also live, obviously, in a very rural community; we’re very isolated,” Eads said. A number of people who’ve come to work in her department have loved the job and their coworkers but wound up leaving “due to the lack of adequate medical care,” she said.

Other department heads who presented today included Planning and Building Director John Ford, Human Resources Director Zachary O’Hanen and Library Services Director Chris Cooper. Each outlined the challenges they’ve faced this year and the ones they anticipate in the near future.

As noted above, the rest of the county department heads, including Sheriff William Honsal and Public Works Director Tom Mattson, will offer their fiscal presentations to the board two weeks from today.

Over the coming weeks, departments will submit their official budget requests, and the board will be tasked with finalizing a spending plan that preserves as many services as possible while minimizing the structural deficit.