DATE:
January 28, 2026
21
TO:
Board of Supervisors
SUBJECT
Title
ENSURING TRANSPARENCY AND GOOD FISCAL PLANNING BY ALIGNING THE UNLOCKED RESERVES PROCESS WITH THE QUARTERLY BUDGET ADJUSTMENTS AND ANNUAL BUDGET CYCLE (DISTRICTS: ALL)
Body
OVERVIEW
On September 9, 2025 (23), the Board of Supervisors (Board) adopted updates to the San Diego County Administrative Code relating to General Fund Balances and Reserves, effective as of October 9, 2025, that are aligned with the Government Finance Officers Association's best practice standards. These reforms are intended to maintain strong fiscal reserves while responsibly deploying one-time resources-known as "Unlocked Reserves"-to protect core services and respond to extraordinary fiscal risks.
Unlocked Reserves are designed to function as a strategic, one-time fiscal tool in periods of heightened uncertainty, particularly when federal or State actions threaten County-administered programs. At the time the policy was adopted, the Board directed the Chief Administrative Officer (CAO) to develop a proposed framework for the first year of Unlocked Reserves based on County strategic priorities, identified service gaps, and anticipated impacts from federal and State actions such as House Resolution 1 (H.R. 1). The framework was to incorporate consultant findings, input from relevant ad hoc subcommittees, previous memos, and any memos submitted by Board offices, and return to the Board with the proposed framework for deliberation and adoption no later than January 2026. Therefore, this item is being added to the January 28, 2026 docket agenda.
Since this Board's original direction in September 2025, the County has continued to experience changes in the financial landscape. The Governor's initial State budget proposal did not include backfills for significant federal reductions under H.R. 1, increasing the likelihood that counties will be required to absorb programmatic and administrative impacts without additio...
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