Neighborhood Reinvestment Program policy unchanged, waiver provision may be used

A 3-2 San Diego County Board of Supervisors vote May 19 rejected a temporary modification to the board policy regarding Neighborhood Reinvestment Program grants, although the supervisors still have the option of waiving portions of the policy for specific grants.

Kristin Gaspar and Jim Desmond voted in favor of the motion while Greg Cox, Dianne Jacob and Nathan Fletcher provided the majority to defeat the proposal.

“I don’t think we need to make any modifications. I like the restrictions we’ve put in place,” Cox said. “We do have a policy within the existing policy which allows the board to waive portions of the policy.”

The Neighborhood Reinvestment Program was originally called the Community Projects program when it was created in 1998. The Neighborhood Reinvestment Program is funded by balances in the previous year’s general fund and is intended to reflect the county’s policy of spending one-time revenues for one-time projects rather than for ongoing programs.

The annual budget of each county supervisor has ranged from $1 million to $2 million depending on county finances. The program is intended to provide grants to nonprofit organizations for the furtherance of public purposes at the regional and community levels.

Each county supervisor has a discretionary budget which can be used for nonprofit organizations, and county supervisors can also fund schools and fire departments or use money from their budgets to supplement other county funding for specific county projects such as parks, roads and libraries. Each county supervisor recommends the allocation of their Neighborhood Reinvestment Program funds, although those allocations must be approved by a majority of the board.

“These grant funds provide financial support for critical programs,” Gaspar said.

“I’m a firm supporter of the program. I think it’s done tremendous good,” Cox said. “I think they’ve been very good allocations.”

In September 2009, the board of supervisors changed the program’s name to the Neighborhood Reinvestment Program and created board of supervisors Policy B-72, which included process and eligibility requirements. The original policy included a statement that a higher priority shall be given to requests for capital projects and other one-time expenditures but did not specify restrictions on the types of projects for which the funds could be used.

Policy B-72 was modified in September 2010 after various controversies arose.

“There were some issues with a couple of our colleagues years ago that made some headlines,” Jacob said.

The 2010 revisions prohibited funds from being used for food and beverages or for fundraising activities, allowed the county to seek the return of funds not spent according to the grant agreement, required public acknowledgement of funding to credit the county of San Diego rather than the individual county supervisor and prohibited county supervisors from receiving gifts with a value of at least $50 from organizations to which they have provided Neighborhood Reinvestment Program funds.

Language was added that the grants must serve lawful public purposes and cannot be used for purposes prohibited by law for public funds such as religious, political campaign or private purposes.

“The fact that some people can act badly is always a risk with everything,” Desmond said.

In 2012, a $50,000 grant to the North County Economic Development Council for the “Prosperity on Purpose” comprehensive economic development study required a waiver for the grant to be spent on a purpose other than capital improvements, equipment, materials, goods or supplies.

The grant passed on a 3-2 vote, and the motion also created a subcommittee to work on revising the restrictions to allow for economic development programs.

Several other restrictions also had unintended consequences. The prohibition on spending money for food or beverages was intended to address community events but also prohibited food banks or social service agencies from feeding the needy and prevented animal shelters from purchasing food.

The restrictions to tangible items precluded information and technology services, including websites and databases, which for formation are more one-time expenditures rather than ongoing programs. The prohibition against supervisors receiving gifts resulted from a controversy over symphony tickets and was not intended for nonprofit fundraising activities.

An October 2014 revision to Policy B-72 allowed expenditures for food or beverages provided to individuals in need through organizations which provide meals to needy individuals or families and allowed grants to pay for feed for animal shelters to support the rehabilitation of animals.

Those revisions also allowed grants for one-time website, software and related information and technology development services. Admission or participation in nonprofit fundraising activity allowed under the California Political Reform Act was exempted from the ban on gifts as was anything received which was not defined under that act as a gift or income.

Other October 2014 modifications required that the recipient organization maintain a governing body or employ an administrator or staff responsible for the funds’ expenditure, required county supervisors’ offices to post each district’s priorities which guide funding recommendations, added a hyperlink on the county’s website application page directing potential applicants to the grant instruction page and required board members to maintain applications for at least three years, prohibited late docketed items docketed between the initial deadline and the Friday deadline for urgent items to be heard unless the recommendation satisfied requirements for immediate action.

The modifications also prevented a county supervisor or staff member from publicly presenting an actual or mocked-up check to grant recipients while also preventing the posting of such awards on a supervisor's social media site and clarified that the prohibition against recognizing an individual supervisor applies only to written recognition on the item received, allowing for recognition in newsletters and in board minutes and also allowing for an explanation of the process.

Gaspar proposed a temporary modification to suspend the purposes, requirements and processes of Policy B-72 and replace them with the board of supervisors’ policy covering Community Enhancement grants funded by the Transient Occupancy Tax and allocated during the annual budget process.

“We have a unique opportunity to leverage and modify our current Neighborhood Reinvestment Program grant policy,” Gaspar said. “This is a temporary solution to give our community partners the opportunity to thrive and succeed.”

Limited county resources during the coronavirus outbreak has led to increased demand for services provided by nonprofit organizations.

“We need to make some changes,” Gaspar said. “People have unique challenges at this time”

The nonprofit entities have been financially impacted by the shutdown as well as by increased demand for services.

“They’re struggling. The impact of this pandemic has been significant on our nonprofit partners,” Gaspar said.

Shutdown-related delays are also hindering organizations from complying with deadline provisions of past grants.

“They haven’t been able to implement all of their plans and programs,” Gaspar said.

Gaspar noted that the nonprofit organizations tend to implement the county’s Live Well policy.

“We won’t have these tax revenues coming to the county,” she said. “It’s really important that we as a board protect our valuable Live Well partners.”

The suspension of Policy B-72 would have been retroactive to Feb. 14, when the county issued a proclamation of local emergency due to the coronavirus outbreak, and would have been suspended through June 30, 2021.

“This is temporary. This does not permanently change it,” Desmond said.

“This item doesn't change the dollar amount available,” Fletcher said.

“I cannot support this,” Jacob said. “It guts the Neighborhood Reinvestment Program policy.”