Good afternoon, everyone, good afternoon.

Thank you all for joining us today.

I would like to call to order the 2 p.m.

Thursday, June 18th, special meeting of the Board of Supervisors, and I'll ask the clerk, please call roll and establish our quorum.

Supervisor Marquez present.

Supervisor Cham.

Excuse Supervisor Miley.

Supervisor Fortunato Bass.

President Halbert.

We have a quorum.

Present.

Thank you very much.

Okay.

Well, first item as to ask for public comment on closed session items.

Um we have listings of closed session items.

This is not for the open session item, but public comment on closed session items.

Do we have any public comment either online or in person for closed session items?

There are no public comments.

Very good.

We'll close public comment on closed session.

Do we need to adjourn the closed session?

We're not going to need to adjourn the closed session, so we'll then move to open session, which is a fiscal year 2026-2027 recommended proposed budget hearing and deliberations.

I'll turn the meeting over now to our county administrator, Susan Murnichi.

Thank you, President Halbert, members of the board.

Good afternoon.

Today we are formally opening your budget hearings on the fiscal year 2026-27 proposed budget submitted to your board on May 28th of 2026.

The total proposed budget for all funds is $6.7 billion, a 9.3% increase over this year's approved budget, and it supports almost 10,500 full-time equivalent positions.

The budget is balanced and closes a 185 million dollar funding gap.

50% of that funding gap was closed with savings achieved through reduced employer retirement costs, the result of a thoughtful intentional fiscal strategy to help address the county's long-term unfunded pension liabilities that continue to increase annually.

The net funding gap for 26-27 after first applying countywide pension cost savings was 91.4 million dollars, still a significant structural funding gap, largely resulting from ongoing staff and operational cost increases without commensurate ongoing revenue sources, as we continue to provide the highest level of mandated and discretionary services possible to meet the growing and shifting needs of our residents and diverse communities.

As you know, the proposed budget closes the remaining 91.4 million funding gap for next fiscal year through a combination of one-time and ongoing expense reductions and revenue adjustments developed in collaboration with elected and appointed department heads, each committed to managing their respective agencies and departments within the budgets adopted by your board, making difficult choices, exploring innovative and creative solutions to address funding limitations with a common goal of continuing to provide the highest level of services possible within limited resources without major program reductions or staff layoffs.

Today we will begin to set the table for your budget hearings next week by providing a brief economic overview, an update on state and federal budget status, our current five-year forecast and mid-year projections, and a snapshot of the competing priorities and challenges facing the county, all significant factors as you prepare to consider the proposed $6.7 billion budget, hear from the public and stakeholders, deliberate and consider adjustments within the balanced budget, and finally adopt a final budget to start the new fiscal year with a balanced plan that provides a solid foundation for the year ahead, knowing that we are facing more challenges than ever this coming year, with significant unknowns and risks related to pending federal policy changes and funding reductions, economic instability, and global unrest, in addition to our local challenges, risks, and liabilities.

With that, we will provide a brief overview and then recommend that your board continue your fiscal year 26-27 budget hearings, deliberations and adoption to next Monday, June 22nd at 1 45 p.m.

We're going to start our overview with an economic outlook presented by Melanie Otendito.

Mr.

President, if we could have a motion to open the public hearing, and just uh for the record, I just would indicate that obviously since we did not recess into closed session, there was no report from closed session.

That's no reportable action was taken.

Okay.

Mr.

President, I'll move to open the public hearing.

I'll second.

Very good.

We're going to vote to open the public hearing.

Will the clerk please call the roll?

Supervisor Marquez.

Hi.

Supervisor Tam.

Hi.

Supervisor Miley.

Supervisor Fortunatabas.

Aye.

President Halbert.

I vote yes.

The public hearings now open.

We'll start with the presentation.

Thank you.

With respect to the broader economic outlook, top lines remain relatively consistent.

As you know, tech continues to invest in artificial intelligence while pulling back on investments and personnel.

So some of the headlines that you see here reflect some of the largest tech companies in the region going through multiple rounds of layoffs in some cases while simultaneously seeing record gains.

Uncertainty from changes in federal policy as well as market volatility and continued concern over federal debt are you know our overshadowing a lot of other changes that are happening.