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Locals speak out on County grant cuts - Neighborhood Reinvestment grant program cut by 50%

The County of San Diego’s Neighborhood Reinvestment Program will see a 50 percent reduction in funding for Fiscal Year 2010-11.

A 4-1 San Diego County Board of Supervisors vote March 23, with Bill Horn in opposition, directed the county’s Chief Administrative Officer to implement a 50 percent reduction in the program, from $10 million to $5 million, for Fiscal Year 2010-11 and to direct the CAO to redirect the one-time resources available from the reduction towards priorities consistent with the supervisors’ strategic initiatives. The Neighborhood Reinvestment Program funding will be part of the overall 2010-11 budget which will be discussed by the county supervisors in June.

“This to me is more about being fiscally responsible in very tough economic times,” said Supervisor Dianne Jacob.

Each county supervisor has a discretionary Neighborhood Reinvestment Projects budget, which will be cut from $2 million per district to $1 million per district. The Neighborhood Reinvestment Program was called the Community Projects Program before being renamed in September 2009. It was initiated during Fiscal Year 1998-99 with a total budget of $5 million, which was expanded to $10 million for Fiscal Year 1999-2000. “During healthier times we had the ability to increase that,” said Supervisor Greg Cox.

The program is intended to provide grants to non-profit organizations for the furtherance of public purposes at the regional and community levels. In addition to non-profit organizations, county supervisors have also funded schools and fire departments, and some supervisors have also used money from their budgets to supplement other county funding for specific county projects such as parks, roads, and libraries. While each county supervisor recommends the allocation of his or her Neighborhood Reinvestment Program funds, those allocations must be approved by a majority of the board of supervisors.

“It’s a very, very important program,” Jacob said. “This is a very difficult decision for me.”

The Neighborhood Reinvestment Program budgets are funded by balances in the previous year’s general fund. “It’s been one-time money that’s been spent on one-time expenditures,” Jacob said.

The county also has a policy of spending one-time revenues for one-time projects rather than for ongoing programs. Thus the Neighborhood Reinvestment Program budget for one-time expenditures is considered a more preferable use for the previous year’s fund balance which is used to fund the program’s allocations, but a decline in the county’s general fund balance was likely to affect the program.

“What we are recommending here today I think is a balanced programmatic approach,” said Supervisor Greg Cox. “We can’t exempt this program from the cuts being suffered everywhere else.”

Over the years Jacob’s budgets have provided the Second Supervisorial District with nearly $14 million for recreational facilities. Horn has provided the Fifth Supervisorial District with more than $4 million for libraries, more than $3.5 million for parks and recreation, and more than $2 million for public safety.

“We’re getting money down to the local level,” Horn said.

Horn noted that the county receives more than $20 million of sales tax revenue paid by residents of unincorporated towns. “I think it’s only fair to return that money to their communities,” he said.

Supervisor Ron Roberts noted that many awards are given to projects ineligible for Community Development Block Grant funding. “These are priority items that we want to get done,” he said.

Each county supervisor also has a Community Enhancement Program budget which is funded by the Transient Occupancy Tax collected from lodging facilities in the unincorporated portion of the county, but that money must be given to organizations which promote tourism or economic development.

Lani Lutar, the executive director of the San Diego County Taxpayers Association, was one of the speakers in favor of the cuts. “This is a step in the right direction,” she said. “The state of the economy has impacted your core public services.”

The Neighborhood Reinvestment funding has been criticized as a “slush fund” for county supervisors seeking to find favor with recipient organizations.

“I do not consider this fund a slush fund, but I consider it a fund that supports critical programs in our communities,” said Abe Oliveras, the executive director of the Boys and Girls Club of North County.

Both Neighborhood Reinvestment Program funding and Community Enhancement funding can be given to organizations either in an unincorporated community or in an incorporated city.

Organizations in incorporated cities may also receive funds from their city councils. “We do not have funding from a city government,” said Marlene Rantanen, the president of the Fallbrook Center of the Arts.

“We cut our own budget and our own services 27 percent last season,” said Fallbrook Music Society president Brenda Montiel. “To cut our Neighborhood Reinvestment funds would be another blow.”

“We’re almost operating in the black, but we need a lot of help,” said Brigitte Schlemmer, the executive director of the Fallbrook Center of the Arts. “We have a lot of momentum right now. It’s important that we continue to move forward.”

Fallbrook Area Visitors Bureau president Kim Murphy is also on the board of directors of the North San Diego Association of Realtors. She told the supervisors that 45 percent of the 605 homes sold in Fallbrook and Bonsall last year were foreclosures.

“Our neighbors have been hit hard with our downtown restaurants and businesses just barely hanging on,” she said.

“Our local restaurants and businesses have benefited economically as a result of your support,” Murphy said. “It’s critical to our community that we continue to receive the grants.”

“Some of the small investments have multiplied many, many times,” said Fallbrook Village Association president Vince Ross.

“Many, if not all of these projects, meet the vision of the county supervisors,” said Fallbrook Chamber of Commerce chief executive officer Richard Kennedy.

“Huge illegal dump sites no longer blight the community,” said 39-year Fallbrook resident Jackie Heyneman.

“I don’t think of libraries as an extra or a luxury,” said Friends of the Fallbrook Library president Marlo Miller.

“We have been able to maintain and improve our library,” Miller said of past grants. “It is more important to ever to keep whole these services.”

Miller notes that the new Fallbrook branch library is expected to open by early next year. “A beautiful building with no programs and fewer books is not what we want,” she said.

An overwhelming majority of the 126 requests by members of the public to speak on the issue opposed the cuts. “I’m impressed with the number of people who came down,” Jacob said. “This is really the first time we have heard about the depth and extent of this program throughout the region.”

The Neighborhood Reinvestment funds constitute approximately 0.2 percent of the county’s approximate $5 billion budget. “If I had my druthers we wouldn’t be cutting anything, we would be adding to it,” Cox said.

“We all have to make sacrifices,” Cox said. “We have other programs that we’re going to have to cut.”

In 2005 the Board of Supervisors agreed that a 1990 increase in the Transient Occupancy Tax from eight percent to nine percent had been approved illegally due to the lack of a public vote. The increase was repealed, reducing Community Enhancement revenue by 11 percent.

This year Transient Occupancy Tax revenue is expected to decline from $3.2 million to $2.5 million due to lower usage of local hotels, motels, and recreational vehicle parks. “That’s another program that’s going to take a hit,” Cox said. “We’re going to have to make some more tough decisions.”

Property and sales tax revenues are expected to give the county $16.5 million less than it had for the 2009-10 budget. “It helps to make up a little bit of the difference,” Jacob said of the Neighborhood Reinvestment Program cuts. “The cuts in other programs don’t have to be so severe.”

Horn noted that non-profit organizations can often achieve county objectives with less bureaucracy than county programs.

“Some of these are very essential services,” he said. “I think we have made very good use of the money.”

Roberts noted that non-profit programs have an advantage over county programs. “You leverage those dollars,” he said.

Roberts noted that shifting those programs to county operation not only wouldn’t obtain the donors non-profit organizations receive but also wouldn’t receive the volunteer commitments of private non-profit groups. “I’m going to do it reluctantly,” Roberts said of cutting the Neighborhood Reinvestment Program budget. “I don’t think the discussion is necessarily closed.”

Roberts noted the county’s economic situation in his decision to vote for the cuts. “Business as usual isn’t going to work,” he said. “We have to lead by example.”

Supervisor Pam Slater-Price noted that projects awarded through Neighborhood Reinvestment grants have gone through the county’s verification process. “Not only do the moneys provide a match, they also provide an imprimatur of legitimacy,” she said. “That actually saves a lot of work on the part of other donors.”

Slater-Price promised to ensure that the money cut from the Neighborhood Reinvestment Program budget would be used for a suitable purpose. “I’m going to look very hard at any potential use of the additional $5 million,” she said.

“The budget process is the best time to make those decisions,” said Chief Administrative Officer Walt Ekard.

“By taking this action you’re effectively freeing up $5 million in one-time money,” Ekard said. “It is one-time money.”

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