After requests from residents to hold additional budget hearings and increase investment in affordable housing, the Merced County Board of Supervisors did neither on Tuesday and unanimously passed the proposed $1.15 billion budget for fiscal year 2025-2026 with no amendments or questions for county staff.
It was business as usual for the five-member elected board, which passed its proposed budget the same day it was introduced for the past several years. The board is scheduled to take another, final vote on the budget in September.
A dozen residents from Merced County communities, including Merced, Planada, Le Grand, Delhi and Winton, showed up to the meeting and spoke during public comment. Many of the speakers said they organized with their neighbors through the advocacy groups Communities for a New California or Líderes Campensinas.
The residents referenced their Latino ethnicity and the barriers Latinos face in accessing affordable housing. They pointed out that 60% of Merced County’s population is Hispanic and/or Latino.
“It’s… Hispanic Latinos that have to deal with disproportionate and unreasonable housing cost burdens, meaning that those individuals spent more than 30% of their income on housing, making it difficult or nearly impossible to pay for other necessities – and when we talk about other necessities, we talk about water, and we talk about electricity and food,” said Irene Cacho, a Le Grand resident.
“So I am here today with my neighbors to request two things: an increase in the affordable housing program and to improve the Merced county budget process through transparency and additional opportunities for public comments, such as workshops.”
The $1.15 billion spending plan was introduced at Tuesday’s meeting with a 30-minute presentation by the county’s deputy executive officer.
The supervisors then heard about 30 minutes of public comment before the board chair, Supervisor Josh Pedrozo, and Interim CEO Mark Hendrickson, responded briefly to the public commenters, encouraging them to take the issue of affordable housing up with lawmakers in Sacramento. They also thanked the residents for taking the time to attend the meeting and speak.
Pedrozo addressed the residents’ concerns about transparency, saying he and the other supervisors are available to answer questions and meet with people.
“I’m happy to answer any questions and talk to people… as evidenced by meeting with your organization multiple times. And I know my colleagues have really met with you guys multiple times as well,” Pedrozo said. “I don’t think we have anything to hide. I think that what we’re trying to do is, once the questions are brought to us, and we’re able to get you the information, sometimes it might be information that you don’t want to hear. But it’s information that we are able to gather based off of the facts and what we’re having to work with.”
Prior to Tuesday’s meeting, supervisors met individually with county staff for budget briefings.
Merced County’s proposed budget is based on the federal and state budgets, both of which are pending approval. It provides the county with a temporary spending plan as the new fiscal year begins on July 1. County budget staff may make adjustments in the coming months as federal and state budgets are finalized and the county’s resources become more clear, according to county budget documents.
The final budget is scheduled for consideration at the Sept. 23 Board of Supervisors meeting.
What’s in the budget?
Hendrickson opened the budget hearing with a message that federal and state decisions largely determine the county budget, and as a result, “fiscal uncertainty will remain a persistent challenge.”
Because of this, county governments are forced into reactive positions, making it hard to plan for resilient public service delivery.
“Ultimately, California counties like Merced need more stable and predictable funding partnerships to meet its obligations to your residents,” Hendrickson told the board.
Government agencies use a “general fund” for the main operational fund in budgets. Much of the money in government budgets, especially for California counties, is earmarked for certain health and social services, meaning that funding is required by law to be spent in a specific way.
Merced County maintains a number of other funds outside of the general fund, including for roads, Castle and fire. This year, those funds represent around $330 million, or 29% of the proposed budget, Anderson said.
In this year’s proposed budget, the Merced County’s general fund is $818.1 million, an increase of $5.6 million from last year, or about 71% of the total budget, according to Vanessa Anderson, the county’s deputy CEO who gave the budget presentation.
The Board of Supervisors can control about $219.3 million of the general fund, or about 27% of the general fund and 19% of the total budget.
County officials said nearly 80% of the supervisors’ discretionary resources are dedicated to public safety, demonstrating that public safety remains a top priority for the Board of Supervisors.
This year’s budget was guided by the county’s newly-adopted strategic plan, which prioritizes customer service, fiscal discipline, quality of life, revenue enhancement, and enhanced infrastructure.
Employee raises
This year’s proposed budget represents a $10.7 million increase over last year’s budget, mostly stemming from salary increases for a majority of the county’s nearly 2,500 employees.
Salaries and benefits represent over 43% of the county budget, at $379.8 million, an increase of about $13.5 million over last year, Anderson said.
Costs for employee benefits also increased, including retirement rates and the county’s contribution for healthcare premiums.
Last month, the Board of Supervisors approved 10% pay raises for more than 1,700 employees, about one year after avoiding a strike authorized by the largest labor union representing county employees.
The county also has agreed to increase its contribution to healthcare premiums for employees following skyrocketing rates.
Pedrozo on Tuesday thanked the labor unions who didn’t get raises last year and waited until this year for their patience.
Public safety and jail renovations
This year’s proposed budget saw a number of changes from last year related to public safety costs and the renovation and expansion of the John Latorraca Correctional Center, a project with a price tag of $138.5 million.
For one, the budget reflects a $19.4 million reduction related to the jail project as the county spends down the money and one phase of the project nears completion later this year.
Additionally, the budget shows another $8.3 million reduction in funding related to AB109, the 2011 California prison realignment law that shifted low-level offenders from state prisons to county jails. As part of the jail project, the county used state money to build a jail-based competency treatment wing and a pre-trial building for probation. Both projects are nearing completion and the funding was spent in the past year.
Additionally, around $6 million from the county’s operating transfers budget is tied up since the county used that money to cover change orders for increased costs on both phases of the jail project.
Meanwhile, costs increased about $5.9 million for sheriff’s and correction’s contract costs, specifically related to jail medical services.
Flood control and creek projects
Hendrickson noted that water and flood control remain a priority for the county, particularly when it comes to debris removal in creeks and combatting future disasters.
This has been an acute focus for the county after the devastating 2023 flood in Planada that was the result of a failed levee on nearby Miles Creek during an intense atmospheric river storm.
Merced’s state legislators secured $20 million in state aid for Planada residents affected by the flood. Many residents are still waiting to receive money or see repairs begin on their damaged homes.
Merced County is administering the $20 million in aid, and this year’s budget shows a $6 million in reduced appropriations of the aid.
The budget also saw a $7.3 million increase for various creek projects, including repairs to the bank of Bear Creek, repairs at 27 other locations throughout the county, and a beaver relocation and exploration program.