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Outsiders Clamor for County Officials to Loosen the Purse Strings

Progressives and some Board of Supervisor candidates are taking aim at the county’s flush reserve accounts.

For years, a progressive chorus has urged the county to unleash its massive reserve savings account. The volume of that conversation’s grown this year – and two county supervisors just responded.

County Supervisors Dianne Jacob and Ron Roberts announced a handful of proposals Monday to pull $25 million from the county’s reserve account to create an investment pool to encourage more affordable housing development and to consider building affordable homes on 11 county properties. They’re also looking to use $500,000 in grant funds from Roberts’ office to catalyze innovative, lower-cost development. The duo hopes fellow supervisors will approve the changes later this month in a bid to help address San Diego’s homeless and affordable housing crises.

“This is a bold initiative for the county,” Roberts said. “These are real assets, cash and properties in a significant way, and this couldn’t be happening at a more important time.”

Yet the chorus pushing supervisors to dip into reserves is unlikely to quiet anytime soon. Supervisor candidates, union leaders and advocates say they want to see more of the county’s $2 billion savings invested in the community rather than in a reserve account that’s spiked more than 60 percent since 2010.

The county’s largest employee union, Service Employees International Union Local 221, is leading a coalition pushing for increased salaries and benefits for county workers plus expanded safety net services and other policy priorities. This spring, the coalition displayed charts breaking down the county’s substantive reserves at a series of community meetings across the region.

Activists alone aren’t likely to encourage the county to abandon long-held policies that allowed it to accrue billions. But politicians ramping up campaigns to replace four long-sitting supervisors could. By 2020, all but one current county supervisor will be termed out, and a new board could usher in a new approach.

Only San Marcos Mayor Jim Desmond, one of six supervisor candidates who spoke with Voice of San Diego last week, said he supports the county’s reserve policies.

Even Oceanside Councilman Jerry Kern, a Republican who’s running to replace Supervisor Bill Horn, said he’s determined to dip into the county’s savings.

“The county needs to spend more money on services,” Kern said. “They’re holding onto money.”

County officials see the situation differently.

For decades, the Republican-led County Board of Supervisors has preached fiscal discipline and placed strings on the county’s reserves as part of a long-term strategy to address some of the county’s most looming budget challenges. They’ve set aside hundreds of millions of dollars to bankroll new county facilities and in more recent years, have set aside more cash to pay down pension bills. They’ve argued the increased savings and improved credit ratings this approach has wrought have helped the county stave off worst-case budget scenarios and better serve the public.

Progressive advocates have long called for supervisors to loosen the purse strings. Before Monday’s announcement, many had zeroed in on the region’s growing homelessness crisis as more evidence the county should free up cash.

Oceanside Councilwoman Esther Sanchez and San Diego activist Omar Passons, both Democrats running for supervisor next year, are among those who said they’d like the county to step up its role in addressing homelessness.

“Look around you. There are 5,000 homeless people around you. This is what you have a reserve for,” said Passons, who said he’s also exploring ways the county could also do more to aid children and seniors.

Kyra Greene, deputy director of the left-leaning Center on Policy Initiatives, has spent significant time digging into the county’s reserve numbers. She criticized the county for building up its savings even as county revenues rose, as did community need.

The county’s reserve account has increased an average of $116 million a year since 2010. Greene said she’s grown frustrated with county officials’ tendency to point to potential budget risks – like Jacob did earlier this year when she warned of of a potential $100 million budget hit that never came – as justification for its approach.

“While these problems have been growing in our communities, they’ve been putting this money aside and now it turns out, all of the sudden those were the safe old days when we could have spent money but we didn’t,” Greene said.

Supervisors and county staff said they are increasing county investments in causes like homelessness and mental-health needs, even beyond Monday’s announcement. For example, this year’s proposed budget includes plans to bankroll about 260 new affordable housing units and add more long-term care beds for people with mental illnesses who need assistance after being released from jail or hospitals.

At the same time, the county’s not planning to use reserves to pay for salary increases and service expansions that many outside advocates have pushed.

It’s long had a policy against using onetime influxes of cash from grants or other sources to support ongoing programs, and thus only pulls from its reserves for onetime needs.

Supervisor Greg Cox acknowledged that policy isn’t popular with everyone, yet he and other supervisors are adamant about sticking to it.

“It makes no sense whatsoever to implement a whole bunch of new programs if you can only do them for a year or two,” Cox said.

Roberts also doubled down on the importance of that policy after Monday’s press conference.

He told VOSD his $25 million proposal is a recognition of the need for more affordable homes in the region but said it’s in keeping with the board’s onetime money policy.

“It’s still being done in a prudent way,” Roberts said. “These are onetime dollars so use them as onetime dollars, not ongoing programs.”

But outsiders appear poised to force a debate over this longtime policy and the county’s overarching approach to its savings account.

They’re eager for a closer look at the county’s bank account and a new set of priorities.

“They’re not a bank and they’re not a hedge fund,” said former Assemblyman Nathan Fletcher, who’s mulling a run for supervisor in 2018. “They’re there to provide services to people who need them.”

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