Millions of dollars yet to be spent in Sonoma County sales tax collected for mental health, substance abuse and homelessness needs

Apr. 24—A quarter-cent sales tax that Sonoma County voters approved to fund mental health, substance abuse and homelessness services has been fully in place for three years but tens of millions of dollars that it has generated remain unspent.

That there is that much money still to spend is both gratifying and frustrating for Shirlee Zane, the former county supervisor who championed the Measure O tax measure, which has collected more than the $25 million a year it was projected to raise.

"It means that this is a great success," said Zane, who is a member of the oversight committee responsible for reviewing the receipt and spending of Measure O funds.

But, she added: "There is too much (Measure O revenue) sitting around. We've got to get it out the door."

As of January, the tax — which passed in November 2020 and took effect in April 2021 — had brought in about $89 million. The county still has $31 million of that in the bank to be doled out to service providers.

Projections are that by June 30, the end of this fiscal year, Measure O will have raised $103.5 million in all and $25 million will still be unspent, according to the county Department of Health Services, which is charged with allocating Measure O funds

Things are going as planned, said Tina Rivera, the health services director.

"We have accrued and carried a high fund balance for the past two years as we've ramped up and developed the anticipated programs. Over the next two years, both our spending will go up and the fund balance will go down," Rivera said.

"We had actually hoped there would be more in the fund balance by this point because there's so much more we want to do," she added.

But Zane and some other members of the oversight committee say it is contrary to what voters wanted to have millions of dollars still banked while there are acute mental health, addiction and homelessness needs that desperately need addressing.

"That's unacceptable to us because we envisioned and we think the voters envisioned that it go out quicker than that," said Gregory Fearon, one of seven people on the committee, which the Board of Supervisors appoints.

Committee members acknowledge spending millions of dollars in new revenue needs to be done carefully and getting systems in place to do that takes time.

"I believe that there's a bit of a ramp up and that it's just hard to push that big of an increase out quickly," said Petaluma Mayor Kevin McDonnell, who is on the committee.

But, he said, "When you know there's so much need out there and you see the need out there, to see the money in the bank is just a huge, disheartening disconnect."

During the pandemic, Zane said, Sonoma County had to allocate emergency funds rapidly in order to keep them, which should serve as a model for Measure O spending.

"We did it. And where there's a will, there's a way, and there has to be a will, and that's got to be always from the top," she said.

County political leaders said outside factors figure into the equation and warrant — for now, at least — a more conservative approach.

Sonoma County Supervisor James Gore pointed to the still-to-be-finalized state budget — with an estimated shortfall between $38 billion and $73 billion — and the newly passed Proposition 1, a state ballot measure that is to refocus some mental health and substance abuse treatment services and spending.

Another concern, he said, is the county this fall will have to implement Care Court, a bipartisan California initiative under which counties must set up new court systems to address homelessness by making it easier to compel people with severe mental illnesses into treatment and housing.

"It's too dynamic to outlay those funds without analyzing what hits we're going to face, what cuts we're faced with," Gore said. "In my opinion, it was smart to kind of pump the brakes a little bit with all these changes coming."

That aside, he said, "This cannot languish into next year. That's too much money to not be going into vital programs that have need. These are not taxpayer funds to build government reserves, they are there to deliver mandates."

Supervisor David Rabbit, the current board chair, noted the county has been criticized for spending without proper controls, referring to controversy about DEMA Management and Consulting. The for-profit company, founded during the Covid-19 pandemic, was awarded $26 million in no-bid contracts over three years to operate homeless housing sites.

The county last week started severing ties with DEMA after a financial investigation — prompted by a Press Democrat investigation — raised questions about the company's billing practices.

"We're damned if we do, damned if we don't," Rabbitt said. "Because if we spend it too quickly and we don't track it, we don't have the compliance on it. And we're criticized if we don't spend it quickly enough."

The sudden collapse of Social Advocates for Youth, a venerable 53-year-old nonprofit that had more than $4 million in contracts with the county when it declared bankruptcy in February, also was a lesson to exercise caution in spending decisions, Rabbitt said.

"I want it to be spent responsibly," he said. "I don't care how quickly it gets spent."

Seen from one angle, the unspent funds reflect government overreach, said Dan Drummond, executive director of the Sonoma County Taxpayers Association. Seen from another, they indicate proper prudence at work, he said.

"On one hand, they went out and they got this money before they really knew what they were going to do with it, playing on voters' good intentions," Drummond said. "On the other hand, maybe it's not such a bad idea to sit on it rather than just go rush out and spend it and have a DEMA."

Looking forward, Rivera said, "The next fiscal year, starting in July, will look very different as several of the new programs are getting off the ground," including permanent supportive housing in Guerneville at the former George's Hideaway resort, the expansion of a mobile support team program that responds to 911 calls involving mental health crises, and funding of other homelessness services programs.

"Measure O funds have been such an incredible shot in the arm to our social safety net. It's been gratifying to see funds accrue in the savings 'account' over the past two years to get us to the point where we can launch planned initiatives and position ourselves for changes in the Mental Health Services Act and any possible shortfalls in the state budget. This is something to celebrate," Rivera said in an email.

You can reach Staff Writer Jeremy Hay at 707-387-2960 or jeremy.hay@pressdemocrat.com. On X (Twitter) @jeremyhay

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