San Diego supervisors reject proposal to reform reserve policy to unlock funds for potential federal cuts

The San Diego County Board of Supervisors on Tuesday rejected a proposal to change the county's reserve policy that would have made it easier to spend portions of the county's rainy‑day funds if federal or state funding were cut or a recession struck.

Supervisor Monica Montgomery Stepp, who co‑authored the measure with Vice Chair Lawson Reimer, moved the item after describing recent federal budget proposals and local public‑health funding reductions. "This policy does not raid anything," Montgomery Stepp said during debate, framing the change as an alignment with Government Finance Officers Association guidance and as a precautionary, countercyclical tool.

Supporters said the policy would update county accounting and create a guarded mechanism to tap reserves for urgent short‑term needs. The proposed revision would base reserve targets on recurring operating expenditures (excluding one‑time capital projects), allow certain assigned and unassigned fund balances to count toward the target, and create an "unlocked reserves" account with strict triggers for release. The board letter said spending from that account would be capped at 25% per year and could be authorized only if the county faced: (a) significant federal cuts to programs that fund county services, (b) significant state funding reductions, (c) a recession, or (d) urgent strategic investment imperatives identified by the chief administrative officer.

Labor leaders, county employees and local officials urged approval during public comment. Crystal Irving, president of SEIU Local 221, told the board the county is "in a rainy moment now" and urged the supervisors to open the reserves to stabilize services and staff. Dion Akers, speaking for San Diego Mayor Todd Gloria, said the reform could unlock "hundreds of millions of dollars" to serve residents if federal support recedes. Legal Aid Society CEO Joanne Franciscus warned that cutting federal supports would be more costly later and said, "The rainy day is here. It is today." County staff and dozens of front‑line workers described recruitment and retention problems and urged investment in pay and staffing.

Opponents, led by Supervisor Jim Desmond, said the item amounted to using one‑time funds for ongoing costs and would mask the board's prior spending decisions. "This item proposes to raid the reserves to cover up years of this board overspending," Desmond said, arguing reserves should be held only for true emergencies such as wildfires or floods. Supervisor Joel Anderson said he would abstain because he had limited time to consult his district about potential impacts on capital projects.

After debate, the motion to adopt the reserve policy reform failed for lack of the required affirmative votes. The roll call recorded two aye votes (Supervisor Monica Montgomery Stepp and Vice Chair Lawson Reimer), one no (Supervisor Jim Desmond) and one abstention (Supervisor Joel Anderson); the motion did not pass.

The measure's authors and supporters said they intend to continue the discussion and may return with adjustments. Opponents said any future proposal should clearly protect capital project funding and avoid committing one‑time reserves to ongoing salary or program costs.

For now, the county's existing reserve policy remains in place. The failed motion does not itself change current budget allocations or authorize spending.

Ending: Board members said they would continue to discuss county fiscal policy and that staff would provide more detailed briefings for supervisors and the public if the topic is redocketed for further consideration.