Merced supervisors to adopt rules for controversial discretionary funds

The outgoing Merced County Board of Supervisors is scheduled to adopt new policies this month that will tighten guidelines and add transparency to the discretionary funds supervisors hand out.

District 3 Supervisor Daron McDaniel, who opposed the discretionary funds and advocated for change, called it a “huge win.”

Each supervisor receives $40,000 of public money every year to spend on community projects or programs or to help nonprofits. If the money is not used up in one year, the balance rolls over to the next year. The board must approve spending of discretionary funding, but individual supervisors choose what projects to put up to a vote to receive funding.

County documents show the funds have been in place off and on since 1984, and the amount of money allocated also has fluctuated.

“The process is transparent now. (The policy) takes the liability away of writing checks to anybody,” McDaniel said. “Every time it would come up, I’d have questions, and nobody was there and there were no details. Now, all of that will be available to us.”

The new policy will require those seeking funds from their district supervisor to fill out a request form that also serves as a contract so recipients use the funds only for what is listed on the form. The new policy also includes a project “close-out” form that shows how much of the money was spent and if any was left over. The forms will be available online beginning next year.

The new policy also says that any unused money will be returned to the county’s general fund at the end of the fiscal year instead of rolling over. And the new policy requires recipients to be registered nonprofits or government agencies.

The new policy was on the agenda for this week’s meeting, but the board continued the item to the next meeting to give the public a chance to view a few minor last-minute changes. The board is scheduled vote on the new policies Dec. 20.

The majority of supervisors expressed a willingness to approve the new policies and wished to settle the issue.

“We’ve beat this to death,” said John Pedrozo, District 1 supervisor. “I don’t know how much more we need to discuss this.”

District 4 Supervisor Deidre Kelsey said discretionary funds have been a non-issue in her district.

“I think it’s been trumped up by the press and a few people here and there,” she said.

The new policies come after the Merced County grand jury in June made recommendations for supervisors to improve the process. The grand jury’s recommendations included writing policy for the funds, establishing a follow-up process, requiring those granted funding to provide documentation and information about the projects and making more information available online.

The discretionary funds were a campaign topic before the June elections in which three supervisor seats were up. Incumbents Pedrozo and District 2 Supervisor Hub Walsh defended their use of discretionary funds. Challengers, such as Supervisor-elect Rodrigo Espinoza, criticized the practice, calling the money “slush funds.”

Last year, McDaniel asked the board to require filling out a form when supervisors allocated money from their discretionary funds, but the board didn’t vote to make it mandatory. McDaniel typically abstains from voting on special board project agenda items and has only used about $20,000 during his two years on the board for things such as graffiti abatement and repairs to Atwater’s veterans hall.

Earlier this year, the supervisors’ pool of discretionary fund money was worth more than half a million dollars. The amount has since declined as board members doled out money to groups here and there.

Supervisors use the money differently. Pedrozo and Kelsey typically grant many small requests, while District 5 Supervisor Jerry O’Banion and Walsh have granted fewer requests but for larger amounts.

Walsh, who had money accumulated, provided $40,000 for software in the County Administration Building in Merced so the staff could process and prepare passports. Last month, he also used $50,000 for a study on the former county library and high school building on M Street in Merced to see if it’s possible to bring it up to seismic codes and earthquake standards.

This story was originally published December 7, 2016 at 4:56 PM with the headline "Merced supervisors to adopt rules for controversial discretionary funds."