On a regular basis, county officials contact NACo to find information and best practices about issues they are currently confronting. In this new feature, “What County Officials Want to Know,” NACo spotlights the latest information it has compiled in response to your questions concerning at-home county issues.
A recent inquiry concerned county commissioners’ discretionary funds.
Discretionary funds are dollars (sometimes as much as $3 million in Los Angeles County) that are allocated annually to County Board members to use at their discretion, usually only in their districts, for various purposes. Initially, there were few constraints on how these funds were to be used, but many officials used them to match grants for local groups, provide final funding for a project or to make charitable donations to social service agencies. As some board members began using discretionary funds for projects that some county residents considered questionable, counties began establishing guidelines for these expenditures.
These guidelines come in several general forms:
- requiring that all expenditures be approved by the entire board
- establishing written guidelines for eligible programs or projects
- establishing public oversight procedures for discretionary funds expenditures, or
- addressing whether unspent funds can be carried over to subsequent years.
As the economy started to slow, and several charges of ethical violations in the use of these discretionary funds rocked counties, some counties are revisiting the notion of even having discretionary funds at all.
Current Information Snapshots on Discretionary Funding in Various Counties
Los Angeles County – The Board of Supervisors recently passed new policy guidelines on the use of discretionary funds that did not include a proposed public oversight requirement. Draft rules written by the county counsel recommended that any grant from a supervisor for more than $1,000 to a social program appear on the Board of Supervisors’ public agenda. The recommendation was not adopted.
Each supervisor is allocated more than $3 million a year to spend at his or her discretion.
Miami-Dade County – The Board of Commissioners is grappling with a proposal to abolish the practice of carrying over unspent discretionary office funds from one fiscal year to the next. For years, commissioners have stockpiled funds that were allocated to them for office expenses. They were then able to allocate these funds with little oversight and few restrictions. The new proposed budget will no longer allow this carry-over of unspent funds but will return them to the general fund.
Prior to the adoption of this new proposal, it was possible for commissioners to allocate nearly $2 million of unspent office funds already on the books. Opponents of the flexibility of the funding say that commissioners allocate these funds to gain political support since there is a perfunctory vote by the board once a commissioner has submitted the allocations for approval. Nearly two years ago, Palm Beach County abolished the county commissioners’ discretionary funds after several public corruption scandals. Nearby Broward County does not have discretionary funds for commissioners.
Knox County, Tenn. – Knox County commissioners plan to increase their discretionary funds in FY13 after they cut them by half in FY12. Commissioners requested an increase for FY13 saying the cut was too great. Prior to the cuts in FY12 funding, each commissioner received $6,000. Most of the board members say the decrease was too drastic, so starting with the July FY13 fiscal year they have proposed to restore funding to the earlier level. Some commissioners, in fact, support bumping discretionary funding to $10,000. Commissioner Amy Broyles has said, “I can see where people would call it a slush fund … but I know, especially in the inner-city districts, the money is so vital to the communities that are made up of people who cannot pay (dues) for the homeowners associations, and they’re just grateful that we can pay for a newsletter,” adding that she also gave $500 to a youth basketball league to buy uniforms.
Deschutes County, Ore. – Each of the three Deschutes County commissioners is authorized to recommend approval of discretionary grants to qualified nonprofit agencies for projects or activities that benefit the economic health of the community. Discretionary grants are made available through the Video Lottery Fund, which is supported by state lottery proceeds. The intent of these discretionary grants is to assist eligible organizations with specific, short-term projects or activities that positively affect the economic health of either a specific community within Deschutes County or the county at large. Many of the grants relate to economic development, including, job creation, education and training, cultural tourism and natural resource management. The county discourages requests for ongoing operational funding that cannot be sustained beyond the grant period.
Butte County, Calif. – The allocation of discretionary funds is made by the entire board upon receipt of applications from eligible recipients. The county board reserves a certain percentage of its annual revenue for this program and works to see that programs and projects that are funded align with the county strategic plan.
Proposed projects can receive up to $2,500 or a one-time grant of up to $75,000. This program was created so the County Commission could have flexibility to respond to needs and opportunities that arise during the budget year that are consistent with the goals of the county’s strategic plan. The county’s Strategic Plan and Evaluation Committee reviews all proposals that are submitted and makes funding recommendations to the full commission.
Hamilton County, Tenn. – Some departing commissioners have not spent all of their discretionary funds (some have in excess of $200,000 remaining) and have raised the question of what happens to unspent funds once they are no longer in office. Commissioners annually gain access to some county money — $100,000 from bond issues in 2001, 2004 and 2006, and $100,000 in 2008, 2009 and 2010 for capital improvements — to spend on projects of their choosing. They largely direct their discretionary spending to local schools, civic organizations and religious groups.
The question of the carryover was not immediately resolved since other commissioners were making plans to allocate their funds.