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Priorities May Be Shifting on County's $2 Billion Reserve

County supervisors for years have focused on buildings and the county’s bank account (plus flirtations with the Chargers and a gondola). Two county supervisors’ pitch to dip into reserve funds for affordable housing speaks to a growing movement calling on San Diego County to dip into its bank account to address today’s problems rather than staving off long-term ones.

For years, county supervisors have prioritized big buildings and the county’s long-term fiscal health. They’ve built up a massive $2 billion savings account and earmarked hundreds of millions of dollars with both ends in mind.

Those priorities are starting to change.

At least two county supervisors see an opening for the county to play a more significant role in combating San Diego’s homelessness crisis. They’ve proposed  pulling $25 million from the county’s reserve account and looking into offering up county properties to accelerate affordable housing development.

If those proposals are approved, it would represent a dramatic shift for a county that’s historically invested few substantial resources in housing. Until now, county supervisors have largely relied on state and federal money to address that need and let other agencies take the lead on housing projects – even as the region’s homelessness and affordable housing crises festered around them.

Political winds could soon push the county even further. By 2020, four Republican supervisors who’ve held office for more than two decades will be termed out, making way for new leadership that’ll likely push new priorities. Progressives and even a Republican running for supervisor have been vocal about the need to use more reserve money.

A county government long known for its fiscal conservativism could undergo a big transformation.

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San Diego County didn’t always have a reputation for money-hoarding – or the savings account to back it up.

When Supervisors Greg Cox, Bill Horn, Dianne Jacob and Ron Roberts were elected in the 1990s, they confronted an entirely different fiscal reality.

The county had a paltry reserve account of only a few million dollars, and lacked up-to-date labor deals with its thousands of employees. It had dozens of crumbling buildings but no plan to fix or replace them. Rising pension debt loomed.

Jacob, Roberts and former County Supervisor Pam Slater-Price still talk about the tattered drapes and dirt-covered carpet they found at the County Administration Building upon their arrival.

“I thought, ‘We’ve got to get this squared away. We’ve got to do business differently,’” Roberts said. “And that’s what we’ve done.”

In the two decades since, the county’s amassed hundreds of millions of dollars in reserves. It’s used the money on a slew of construction projects, and passed policies mandating the money stay stashed away and narrowly earmarked for specific uses. The board has used those self-imposed restrictions to bat down labor union and progressive demands for the county to focus on immediate needs.

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County supervisors have largely taken the long view on county priorities since they took office years ago. Recent decisions to use more reserve money to pay off the county’s pension debt, one of its biggest budget threats, follows that pattern.

But Roberts, a former city councilman, has been more bold – lately and historically.

Roberts advocated spending $49 million on a waterfront park outside the County Administration Building that opened in 2014. That same year, Roberts offered up $75,000 in grant funds from his office to explore building a gondola from downtown San Diego to Balboa Park.

Roberts’ most audacious proposal came two years ago, when he suggested the county deploy $150 million from its reserve fund for a bridge loan to help bankroll a new Chargers stadium. He planned to sell the idea to fellow supervisors with the promise that a significant chunk of the loan could be paid back quickly. Supervisors never took a vote, and it’s not clear a majority would have signed off.

As those conversations played out, the suffering on San Diego County streets increased dramatically. Street homelessness has spiked 41 percent in San Diego County since 2014. County supervisors who once rarely heard complaints about homelessness are now facing the same angry calls as city leaders to take action.

Last year, Roberts and Cox proposed a new initiative largely funded by the state’s millionaires’ tax to house 1,250 homeless San Diegans with serious mental illnesses.

And earlier this year, at other local officials’ urging, Roberts became chair of the regional group overseeing countywide efforts to address homelessness.

Roberts decided San Diego County needed to do more.

And though it’s only recently that Roberts has advocated spending county reserves to combat homelessness, he has said his own life experience helped sell him on the need.

Roberts’ family was initially taken in by a Logan Heights family decades ago when his father, who didn’t have a job, moved the family to San Diego. The Roberts family eventually moved into public housing in Linda Vista.

This week, Roberts teamed with Jacob to propose using $25 million in reserve cash to build an affordable housing investment pool they hope will spur the construction of at least 1,000 new affordable housing units. They’re also asking fellow supervisors to sign off on analyzing whether 11 county properties could serve as sites for new affordable homes. Roberts also threw in $500,000 in grant funds from his office to support research on innovative, lower-cost affordable housing options.

The three initiatives would mark a dramatic uptick in the county’s investment in tackling the region’s homelessness and affordable housing crises – as well a substantial shift in its role.

For years, advocates have criticized the county for not doing enough to address homelessness despite having significant resources to help.

Roberts acknowledges he watched the increasing problem from afar for years. For years, Cox was the elected official from the county who participated in regional conversations about homelessness. Roberts said he let Cox and county bureaucrats take the lead.

He said he wished he’d done more sooner – and that the issue was not high on supervisors’ list of priorities before, even as street homelessness grew just steps away from their downtown office.

“It wasn’t the problem in the past that it has become today. It’s been with us and it’s been growing and it’s overdue,” Roberts said. “I wish I’d have personally gotten involved earlier but hindsight’s always easier.”

Now he’s hoping fellow supervisors will support his push to deploy more of the county’s cash and land assets to address the problem. They’ll vote on June 20.

If the others sign off, Roberts said it’ll mark a notable change in priorities.

“This board has always tried to recognize, what are the needs at any given time? We’ve focused on a lot of construction and other things. We did that during a recession. We felt like that was the priority,” Roberts said. “As times change, you gotta to keep your eye on what is going on.”

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