Supervisors' discretionary funds subject to debate

Questions abound about how monies are distributed

rgiwargis@mercedsunstar.comDecember 28, 2012 

— Merced County's Board of Supervisors' use of discretionary funds was at the forefront of scrutiny this past year, even becoming a key issue during November's runoff election.

Every year, $40,000 is allotted to each supervisor to use at their discretion, usually for community projects and nonprofit organizations.

A few examples of expenditures this year include the McNamara Pool, Tri-City Youth Football and community cleanup projects.

The use of the funds began in the late 1990s with $100,000 per supervisor, and later was decreased to $70,000 because of budget constraints.

It was eventually reduced again to the current amount, said Merced County Chief Executive Officer Jim Brown.

Despite public criticism, some supervisors have defended the discretionary dollars, saying the funds allow them to support organizations that may otherwise not receive assistance.

Merced County isn't the only county in California that allots discretionary funds to its board of supervisors. San Bernardino, Los Angeles, San Diego, Kern and Riverside counties are among those that have discretionary funds.

Still, many questions remain, including how the organizations are selected, whether the money rolls over each year, and how much each supervisor has in his or her account.

Brown said each supervisor receives the $40,000 at the beginning of the fiscal year. The money is added as part of the county's overall budget. Any unused dollars from the previous year's discretionary funds are rolled over.

In the most current report ending in October, the five districts had a combined balance of $622,739.59. District 1, represented by John Pedrozo, had a balance of $73,994.72; District 2, represented by Hub Walsh, had $151,853.48; District 3, represented by Linn Davis, had $74,052.50; District 4, represented by Deidre Kelsey, had $89,620.96; District 5, represented by Jerry O'Banion, had $233,217.93.

Helping underserved

Brown said the money is meant to help underserved parts of the county, many of them unincorporated areas that do not get services.

"This is a way to get dollars out to smaller communities who are taxpayers also," Brown said. "If we didn't do this, some of the needs in the community would not be met."

However, there are some requirements about how the money can be used.

"It has to be something that's considered public expenditure with a benefit to the community," Brown said.

Because the supervisors have the best idea about what their community needs, Brown said, they make the decision on where -- and how much -- they want to spend, as long as it's a legitimate public expenditure.

The item goes to the county counsel, then appears on the meeting agenda with the supervisors casting a vote to approve the expenditure. If an expenditure doesn't appear to serve a public purpose, it won't be voted on, Brown said.

"There have been times where we want to make sure the expenditure is for a public purpose -- or it doesn't go on the agenda," he said.

Brown acknowledged the concerns about the discretionary dollars, but said the county receives just as many letters and phone calls from people supporting the funds, saying it's the only way their needs will be met.

Still, many residents say the taxpayer money -- a combined $200,000 a year -- should go back into the general fund, especially in light of the county's strained budget.

How to spend money

In the final budget for fiscal year 2012-13, the county reduced its deficit of $10 million and used $1.6 million in one-time revenues carried over from 2011 to patch up the shortfall.

But would putting the discretionary dollars back into the general fund help close the county's budget deficit?

"It would reduce it (the deficit) by $200,000, but is that going to close the deficit? No," Brown said.

"These resources have been set aside to address the needs of the community. Some of them go into youth programs -- which is a long-term investment."

Some critics of the discretionary funds took aim at the fact that the money rolls over each year.

Community activist MaryAnn McKissick wondered why the funds aren't fully spent annually, as opposed to being rolled over, if they're so vital.

"Why do some supervisors hole up a quarter-of-a-million dollars or more, letting it accumulate and languish year-after-year?" she said.

Merced radio talk show host Casey Steed ran for the supervisor seat in District 2 twice -- once in 2008 and again in 2012. During both campaigns, he took a strong stand against use of discretionary dollars.

"To me, it's a form of political patronage and I don't feel that in these economic times, we can afford to have these funds. It just lends itself to corruption," Steed said. He said the selection process for the benefiting organizations is also outdated and needs to change.

Community requests

According to Brown, board members work with the community and funding requests go directly through them.

"It's too arbitrary the way it's handed out and it's a form of favoritism," Steed said. "It needs to be much more transparent. There needs to be a benefit cost analysis for how these funds are given ... when we do spend it, we spend it foolishly and the things we buy are not useful."

For example, Steed cited District 2 using more than $15,000 in 2011 to update the county library's work stations without adding Wi-Fi capability.

Another issue to come under fire is supervisors hiring personal assistants, and paying their salary through the discretionary dollars. Districts 1 and 4 paid for personal assistants. District 1 paid the assistant $23,249.18 in salary; District 4 paid $5,111.92. District 3 had one expenditure titled "Salary for Extra Help," which amounted to $151.35.

"There's just not enough hours in the day to get everything done," said District 4 supervisor Deidre Kelsey. "The main things my assistant (handles) are scheduling, research and attending meetings if there's a conflict. She only works a few hours a week."

Kelsey said the assistant's salary is budgeted to $5,800 per year, and she does not go over.

Layoffs not fiscal

When asked how an assistant is a public expenditure, Brown said they serve an important purpose.

"There is a benefit," Brown said. "The supervisors use those assistants to help them address and assist constituents in the community."

Meanwhile, about six county positions were eliminated during the 2012-13 fiscal year, including a nurse practitioner, supervising librarian and two correctional facility cooks.

Brown said some of the county's layoffs were a result of re-evaluating how the county does business, not because of the budget.

"No one wants to see people lose their job, but it's not always fiscal," Brown said. "And $200,000 would not have funded all those positions."

For now, the county is not getting rid of the discretionary dollars.

"It's a policy decision that's looked at annually," Brown said.

A full list of each district's expenditures for the fiscal year through October 2012 is available online at

Reporter Ramona Giwargis can be reached at (209) 385-2477 or

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