County Could Tap Reserves To Retroactively Cover Bonuses

By Lisa Halverstadt, the Voice of San Diego

December 15, 2025

This post has been updated.

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. Their latest approach will only require three votes.

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 dipping into reserve funds to retroactively cover the bonuses using an accounting scheme that relies on unspent behavioral health funds. They insist this move – if approved – won’t impact any behavioral health services.

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.

Here’s how a letter to the board describes the proposal: “Transfer appropriations of $14,248,297 from HHSA, Behavioral Health Services, to Public Safety Group ($4,757,000), Health and Human Services Agency ($6,488,297), Land Use and Environment Group ($1,332,000) and Finance and General Government Group ($1,671,000), for one-time lump sum payments to the general employees as listed in Appendix D, based on previously allocated federal and state funding to be replaced with Unlocked Reserves.”

Glenn said the county officials won’t proceed with their plan if what they consider a joint reserve and behavioral health proposal doesn’t pass. Thus far, Glenn said, the county hasn’t made any cuts to pay the bonuses, and also won’t if supervisors approve the proposal.

“The BHS spending authority is funded with BHS specific funding, like Mental Health Services Act revenue,” Glenn wrote in an email. “This recommendation would replace that funding with unlocked reserves.”

County Chief Administrative Officer Ebony Shelton also noted in the 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.

Though pulling from reserves usually requires four votes, Glenn said this proposal is different. It only requires three votes since the county plans to dip into funds it can more easily tap under the updated reserve policy.  The updated policy changed how the county calculates the minimum amount it tries to keep in its rainy-day fund, essentially freeing up more cash.

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.

Correction: An earlier version of this post misstated the majority of the Board of Supervisors needed to approve this proposal. County staff clarified that it will require three votes. This post has also been updated to further clarify county officials’ commitment that the proposal won’t impact behavioral health services and the approach the county is proposing to cover the bonuses.

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