The San Diego County Board of Supervisors today finalized a reserve reform ordinance with a second and final vote, expanding the County’s recognized emergency reserves from $692 million to $1.327 billion. The action aligns County policy with national best practices and strengthens San Diego’s ability to protect vital services as federal cuts threaten healthcare, food assistance, and housing programs.

The policy, authored by Chair Terra Lawson-Remer and Vice Chair Monica Montgomery Steppe, modernizes an outdated formula and provides a clearer, more accurate picture of the flexible funds under Board control in a crisis. With today’s second reading and formal adoption, the policy now becomes County law, modernizing reserve definitions and protections for the first time since 2017.

What Changed

• Updated reserve formula: Now based on day-to-day operating expenses, not one-time capital projects. That puts today’s minimum reserve target at $945 million, down from the previous $973 million.
• Expanded definition: The policy now includes both “unassigned” and “assigned” reserves — all fully under Board control and available in a true emergency, in accordance with best practices from the Government Finance Officers Association (GFOA).
• Net effect: Recognized reserves increase from $692 million to $1.327 billion, approximately $380 million more than the new $945 million minimum. 

Strict Guardrails Before Spending

The new policy does not authorize automatic spending. Instead, it installs the strongest protections in County history:

• Any use requires a public Board vote
• Funds may only be drawn during a recession or in response to state/federal cuts to core services
• Withdrawals are capped at 25% per year — or roughly $95 million annually

Correcting the Record

Some reports have claimed this policy unlocks or spends “51% of reserves.” In fact:

• The reform increased recognized reserves from $692M to $1.327B
• The $380M in flexibility reflects that larger base
• With guardrails in place, only ~7% of reserves per year can be used, and only with a Board vote and the appropriate triggers.