County Could Tap Reserves to Retroactively Cover Bonuses

County officials are proposing to dip into rainy-day funds to pay for millions of dollars in bonuses for county employees. 

In October, the county paid $18.1 million in bonuses to thousands of  workers following labor deals calling for $1,000 lump-sum payments if supervisors changed the county’s reserve policy. Democrats on the Board of Supervisors approved the policy change freeing up more reserve funds, but they lacked the four needed votes to actually transfer money from the county’s reserve fund. 

County officials initially planned to absorb bonuses they had projected would total nearly $25 million. Yet the bonuses came as they also faced new costs from the criminal justice reform measure Proposition 36 and upcoming federal cuts. 

At Tuesday’s board meeting, county staff will propose using behavioral health funds to retroactively cover most of the bonuses and then replenish behavioral health services with reserve funds. It’s not clear that a required super-majority of the board will sign off. 

Officials want to redirect $14.2 million in unspent Behavioral Health Services Department funds that they describe as “operational savings” to cover bonuses paid out by about three dozen other county departments. Then they want pull $14.2 million from the reserve account and send it to the behavioral health department. 

County spokesperson Tammy Glenn said the $14.2 million represents the share of the bonuses that the county couldn’t cover with revenue from programs. 

She said the county will look at other options that don’t affect behavioral health funding if the board doesn’t approve the proposal.  

Thus far, Glenn said, the county hasn’t made any cuts to pay the bonuses.  

County Chief Administrative Officer Ebony Shelton noted in a letter to supervisors that the proposed moves also wouldn’t result in service cuts and are in keeping with the updated reserve policy . She described the proposal to pull from reserves as aiding with “time-sensitive operational expenditures.” 

Shelton also wrote that the $14.2 million withdrawal would leave another $81.2 million in reserve funds available for the county to potentially tap this year based on the county’s updated policy. Tapping that fund now or later would require four votes, meaning that one of the board’s two Republicans would need to break from their previous position on reserve spending for the staff proposal to pass. 

Supervisor Jim Desmond has repeatedly spoken out against the bonuses. Supervisor Joel Anderson, who supported the labor deals, previously told Voice of San Diego he wasn’t willing to use reserves to pay for them. 

Glenn declined to speculate on the impact to the county budget if not enough supervisors support the staff proposal. 

“Many factors impact appropriations and expenditures throughout the year,” Glenn wrote in an email. “The county will continue to monitor appropriations and make adjustments as needed to maintain the county’s commitment to the community by prioritizing mandated services and reducing costs to address additional needs.” 

Labor leaders and county officials including Supervisor Monica Montgomery Steppe have argued the bonuses made sense as both the county and its workers face funding uncertainties and rising cost of living. Similar payouts were also incorporated into past county labor contracts when there were more Republicans on the county board. 

“Our community expects services to be delivered at the highest possible level,” Montgomery Steppe wrote in a statement ahead of an August board vote on reserve policy changes. “To meet that expectation, we must also support the employees who provide those services. Our constituents and workforce are not separate groups — they are part of the same community and deserve our equal commitment.” 

Supervisor Paloma Aguirre, a fellow Democrat who took office in July, did not vote on the county budget incorporating the labor deals. 

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