Mayors Seek State Audit of OC Homeless and Mental Health Money

SPENCER CUSTODIO, Voice of OC

The former Plaza of Flags homeless camp in the Santa Ana Civic Center, which was cleared out in April. Photo taken March 30, 2018.

South Orange County mayors said Thursday they will ask state officials to audit tens of millions of dollars the county has stockpiled that’s meant to address homelessness and mental heath.

“The county is sitting on some amount of money,” and it’s unclear if it’s $70 million, $90 million, or $190 million, Irvine Mayor Don Wagner told Voice of OC Thursday morning, after the south county mayors’ monthly meeting.

Wagner said the mayors will send a letter to the state Assembly and Senate’s Joint Legislative Audit Committee asking for an audit of the county funds.

The announcement came as county and city officials said the county is working on a proposal for adding shelters at three yet-to-be-named locations.

“The county is working on a global solution and we should know more in about two weeks,” Supervisor Lisa Bartlett said via text message Thursday. “I am also working on getting additional public safety resources down in south county to assist the ongoing homeless liaison efforts.”

Wagner, who has been leading south county mayors’ recent discussions of homelessness, said he and other south county mayors have not been told any details of the county proposal, and that he doesn’t know which cities it’s proposed for.

But, he said, he’s been told county officials have contacted the city managers whose cities the proposed shelter would be in.

“I am cautiously optimistic,” Wagner said of the county proposal.

Wagner said Thursday night he was told none of the proposed shelters would be in Irvine, and that he doesn’t believe any would be in any of the south county cities.

South county mayors have been under court pressure since April 3 to find sites for one or more new emergency homeless shelters. As of Thursday county officials and south county mayors hadn’t agreed on potential locations or worked out how costs would be split between cities and the county.

Regarding the audit, Wagner said questions about the county funds include how much unspent money there is and what the restrictions are for using it.

County officials, through spokeswoman Jennifer Nentwig, didn’t have an immediate comment about the audit request.

State auditors in February released a report about unspent Mental Health Services Act funds in counties across the state. It found a lack of oversight over the $2 billion in non-reserve mental health funds that have accumulated statewide.

A Voice of OC analysis in March found Orange County had roughly $186 million in unspent Mental Health Services Act funds, much of which could be used to assist homeless people who have mental illnesses. The amount was separate from $71 million in reserves for the mental health funds, to be used to keep services running when revenues decline.

After the article was published, and U.S. District Judge David O. Carter raised questions about the money during a March 17 court meeting, county supervisors designated $70.5 million of it toward purchasing and renovating properties for housing and support services for people with serious mental illnesses.

As of Thursday, the supervisors apparently hadn’t designated the $70.5 million for specific projects. If the mental health funds are used for housing with support services, it can only be used to serve people with serious mental illnesses, who are an estimated 10 to 15 percent of Orange County’s homeless population.

County officials say the unspent mental health funds grew so large partly because of “large revenue spikes” in fiscal years 2013 and 2015, in which the county received $30 million more than the prior fiscal year.

“It has taken time to plan, strategize and implement needed programs to spend these additional dollars,” county officials wrote in a fact sheet released last month.

There is a countywide shortage of emergency shelter beds and Carter has said he’s leaving it up to city and county officials to figure out where a new shelter would go.

Following up on the most recent court hearing with Carter on April 3, the south county mayors met April 19 and recommended placing a shelter outside their cities, in a rural area along Santiago Canyon Road next to a preschool.

The site was rejected by county supervisors the following week, putting the ball back in the mayors’ court.

Thursday’s meeting didn’t yield any specific potential shelter sites in south county cities, said Wagner, the Irvine mayor.

As for next steps, Wagner said the mayors would review the county’s proposal and discuss it on June 1, at their next monthly meeting.

It’s unclear where the possible locations are. Wagner said he and the other mayors haven’t been told any details, and Nentwig, the county spokeswoman, didn’t have information about it Thursday.

Bartlett didn’t return a request for a phone interview, but confirmed in a text message Thursday night the proposed shelters would be in three locations.

State audits often take months between their proposal and the published audit report. Wagner said he’s concerned about that, but that he hopes an audit will “shake loose” information about the county funds.

A state audit regarding Irvine’s city audit of Orange County Great Park contracting took one year to complete, from the time it was requested by the legislative committee in August 2015.

In seeking the state audit and awaiting word from the county on potential shelter sites, the mayors are largely putting the ball back in the county’s court to locate shelter sites and take the lead in paying for them. Wagner said south county cities have already been helping reduce homelessness through hosting transitional housing programs and homelessness prevention programs.

“We’ve been doing stuff already, and we pay,” Wagner said.

Wagner also reiterated south county mayors are upset about Santa Ana’s filing of a court action seeking to bring all Orange County cities into the federal lawsuit on homelessness.

“The group [of mayors] was somewhat militant and upset” at the filing, Wagner said, adding it had the effect of shutting down communication between the cities and Santa Ana.

As for when the cities will be responding in court to the filing, Wagner said there was no deadline because Santa Ana hasn’t served the paperwork on cities.

Santa Ana appears to have paused its serving of the court papers.

More than a week after the court authorized Santa Ana to serve the papers, city spokesman Jorge Garcia said four entities had been served, out of the 33 cities and the county.

There was “no particular order” to which four entities were served, Garcia said. He declined to explain further or say which cities had been served.

Carter, the judge, has said county officials have been “cramming” homeless people into already-full shelters in Santa Ana and Anaheim.

On April 3, Carter warned city officials he would ban them from enforcing anti-camping laws against homeless people – based on the U.S. 9th Circuit Court of Appeals ruling in Jones v. City of Los Angeles – if they don’t find additional shelter beds.

The Jones decision found the government cannot “criminalize conduct that is an unavoidable consequence of being homeless.”

Carter hasn’t publicly given a deadline for when he would consider a ban on anti-camping and loitering laws in Orange County, but said he wanted an answer from the south county mayors soon after their April 19 meeting.

In a radio interview Wednesday, Supervisor Todd Spitzer said it’s crucial for city officials in south county to identify a place for new shelter beds.

“The judge has put the burden on south county…to come up with a location that can house the homeless,” Spitzer said on KFI-AM’s John and Ken Show.

“What people have to appreciate is, the key to the ability to arrest [homeless people] and clean up our streets…is the ability to have an empty bed that can be filled by somebody who’s homeless,” Spitzer said. “I need the south county folks to come up with a solution in the area.”

Nick Gerda covers county government and Santa Ana for Voice of OC. You can contact him at ngerda@voiceofoc.org.