REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 23, 2026
FROM
MARCUS DILLARD, Chief of Homeless Services, Office of Homeless Services
SUBJECT
Title
Budget Adjustment to Establish a Capitalized Operating Subsidy Reserve Using Encampment Resolution Funding for Property in the City of San Bernardino
d
RECOMMENDATION(S)
Recommendation
Authorize the Auditor-Controller/Treasurer/Tax Collector to post the necessary budget adjustment, as detailed in the Financial Impact section, to the Office of Homeless Services 2025-26 budget, to establish and fund a capitalized operating subsidy reserve in the total amount of $6,585,130 of Encampment Resolution Funding for the operation of permanent housing at 1386 East Highland Avenue in the City of San Bernardino (Four votes required).
(Presenter: Marcus Dillard, Chief of Homeless Services, 501-0610)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Promote and Fulfill the Countywide Vision.
Operate in a Fiscally-Responsible and Business-Like Manner.
Foster Sustainable Development Through Strategic Partnerships.
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). The Capitalized Operating Subsidy Reserve (COSR), in the amount of $6,585,130, will be funded by Encampment Resolution Funding (ERF).
The Office of Homeless Services (OHS) requests the following adjustment to its 2025-26 budget:
|
Fund Center |
Commitment Item/GL Account |
Description |
Action |
Amount |
|
6210002499 |
53003205 |
Public Assistance |
Decrease |
$6,585,130 |
|
6210002499 |
55305030 |
Operating Transfers Out |
Increase |
$6,585,130 |
|
6210002912 |
40909975 |
Operating Transfers In |
Increase |
$6,585,130 |
|
6210002912 |
53003205 |
Public Assistance |
Increase |
$6,585,130 |
BACKGROUND INFORMATION
San Bernardino County (County), through coordinated efforts between the OHS and the Community Development and Housing Department (CDH), is pursuing a comprehensive strategy to expand emergency shelter capacity and increase access to interim and permanent housing solutions to address homelessness countywide. As part of this coordinated approach, OHS has conducted outreach and engagement with individuals experiencing homelessness in encampments throughout the region, while CDH has identified under-resourced areas lacking sufficient sheltering options and advanced projects to rapidly increase housing capacity through capital improvement and adaptive reuse projects.
The City of San Bernardino (City) has been identified as a priority area for homeless intervention and housing, due to its significant unsheltered population. According to the 2026 Point-In-Time Count, the City has 737 unsheltered individuals, representing nearly 30% of the countywide unsheltered population. This concentration highlights a critical need for additional shelter beds and permanent housing resources. In parallel, OHS has been conducting intensive outreach and engagement efforts with individuals and families residing in encampments along the State Highway 210 corridor within the cities of Highland and San Bernardino.
To address these needs, CDH identified the property at 1386 East Highland Avenue in the City (Property) as a viable opportunity for conversion to permanent housing. The Property consists of an approximately 15,525-square-foot, two-story building with 50 units. The site, strategically located within two miles of downtown San Bernardino, is in close proximity to County services and community-based homeless service providers.
The Property has been acquired pursuant to a Purchase and Sale Agreement, Contract No. 25-425, which was approved by the Board of Supervisors (Board) on June 10, 2025 (Item No. 100). Rehabilitation of the Property will facilitate its conversion into permanent housing, with improvements designed to ensure compliance with all applicable health and safety standards and support long-term residential use. This acquisition advances a coordinated regional effort among the County, the cities of Highland and San Bernardino, and the Yuhaaviatam of San Manuel Nation to address large encampments along the State Highway 210 corridor and expand access to permanent housing for eligible individuals, including those with disabilities.
The ERF Program was established in 2021 by the State of California (State) Homeless Coordinating and Financing Council to strengthen collaboration among local jurisdictions in addressing unsheltered homelessness. The program supports efforts to promote the wellness and safety of individuals in encampments by addressing both immediate physical and behavioral health needs and facilitating pathways to safe and stable housing. ERF provides grant funding to local jurisdictions and Continuums of Care to implement innovative, scalable, and replicable strategies to resolve encampments using Housing First approaches. The program also promotes data-informed and coordinated responses to unsheltered homelessness. Through these efforts, ERF addresses the urgent needs of individuals residing in encampments while supporting the restoration of public spaces.
On April 3, 2024, OHS submitted a non-binding application to the California Interagency Council on Homelessness for ERF Round 3 funding. On September 27, 2024, the State announced an award of $11,000,000 to the County, subject to execution of a grant agreement. The Board approved the ERF Grant Agreement with the State Department of Housing and Community Development on March 11, 2025 (Item No. 28).
To ensure the long-term operational viability of the Property, the County will contribute $6,585,130.41 in ERF funds to support operating subsidies following conversion to permanent housing. These funds will provide critical financial support for ongoing costs, including property management and supportive services for residents. Committing ERF funds to support the Property will enable the County to maintain affordable rents for extremely low-income households, many of whom are transitioning directly from encampments, while providing services necessary to promote housing retention and long-term stability.
The integration of ERF operating subsidies with capital investments ensures a comprehensive, end-to-end housing solution that links encampment resolution efforts with sustainable permanent housing outcomes. This approach aligns with the County’s broader homelessness strategy by not only increasing housing inventory but also ensuring that newly created units remain accessible and service-enriched for the target population.
PROCUREMENT
N/A
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Suzanne Bryant, Deputy County Counsel, 387-5455) on May 7, 2026; Auditor-Controller/Treasurer/Tax Collector (Charlene Huang, Auditor-Controller Manager, 382-7022) on June 3, 2026; and County Finance and Administration (Paul Garcia, Administrative Analyst, 386-8392) on June 4, 2026.