Democrats on the county Board of Supervisors took an initial vote Tuesday to unleash the county’s massive reserve fund to combat federal cuts.
Crucial context
The board’s 3-2 vote, opposed by both Republicans on the board, won’t allow the county to dip into its reserve account immediately.
First, the board will need to take a second vote on Sept. 9. The policy change will take effect 30 days later.
Soon after the early October effective date, county officials expect to ask supervisors to sign off on using newly unlocked reserve funds to cover millions of dollars in bonuses for county employees. (ICYMI, our Lisa Halverstadt previously revealed that county labor deals called for bonuses backed by reserve funds if supervisors voted to update the county’s reserve policy.)
About those other reserve plans
County Board Chair Terra Lawson-Remer estimates that the updated reserve policy could unlock up to $95 million annually in the next few years to help the county address federal policy hits and economic calamities. But to unlock that cash, Lawson-Remer and other Democrats on the board will need a Republican ally. State law requires a four-fifths vote to redirect funds outside the county’s budget process. It’s unclear whether they’ll have an ally.
What Board Republicans are saying
Supervisors Joel Anderson and Jim Desmond both expressed concerns about amending the county’s reserve policy Tuesday, arguing that spending those funds could imperil the county’s ability to prepare for future expenses or disasters. Desmond deemed the policy change “reckless behavior.”
What Dems are saying
Lawson-Remer and Montgomery Steppe argued otherwise.
“This is about smart fiscal governance,” Montgomery Steppe wrote in a statement after the vote. “We’re not touching long-term savings for frivolous expenses — we’re making sure that when families need us most, we have the tools to respond.”
In related news
Board Democrats took another partisan vote Tuesday to create a subcommittee of Lawson-Remer and Montgomery Steppe to further develop county plans to respond to federal changes and turn the county’s behavioral health agency into a standalone office capable of functioning as a Medi-Cal health plan.
