Good afternoon, everyone.

Good afternoon, good afternoon.

Today is Monday, March 16th.

It's a little after 3 p.m.

We're going to call our meeting to order.

This is the Board of Supervisors for Alameda County Budget Work Group Special Meeting.

And I'll ask the clerk to begin by roll call, please.

Present.

Work group member Tam.

Present.

Work Group Member Marinishi.

Present.

Work Group Member Santas.

She can't be here.

Oh board members.

Board member Ford, Andrea Ford.

Board Member Gathaway.

Okay.

Board Member Dixon.

Board Member Brian Ford.

Present.

Board Member Melissa Walk.

Board Member Daniel Willesimet.

Board Member Marcus Crawley.

Board Member Daniel Donald Frazier.

Board Member Peter Masiak.

Board Member Keith Snodgrass.

Board Member Beth Hodez.

Board Member Fred Sahakian.

Board Member Martinez Patterson.

Board Member Taylor Aston Nielsen.

That was it.

Yes.

I understand the meetings being recorded so people can always watch it later if they're not here in person now.

But we have a quorum.

We'll proceed.

Yes.

And I just would like to welcome everyone, especially members of the community who are here to participate and uh to observe our meeting today.

And I would like to say that we do welcome members of the public to make public comment.

We do have that on our agenda.

If you're in person, we ask that you would fill out a speaker slip.

And if you're online, we do welcome your participation remotely.

For that, the clerk will now provide brief instructions on how to participate remotely.

Detailed instructions are provided in the teleconferencing guidelines.

A link to the document is included in today's agenda.

To view an automated translated transcript or listen to an automated translated audio of the meeting from English into multiple other languages, please utilize the wordly link in today's agenda or the QR codes posted throughout the room and select your preferred language from the drop-down menu.

If you're joining the meeting using a computer, use the button at the bottom of your screen to raise your hand to request to speak.

When called to speak, please unmute your microphone and state your name.

If you're calling in Dow Star 9 to raise your hand to speak, when you're called to speak, the host will enable you to speak.

If you decide not to speak, notify the clerk when your call is unmuted, or you may simply hang up and dial back into the meeting.

When called, you will have two minutes to speak.

Please limit your remarks to the time allocated.

Public comment will generally alternate between in-person and online speakers as determined by the president of the board and subject to overall time limits.

Thank you.

Thank you.

Um, I will say welcome uh everyone on behalf of myself, Alameda County Supervisor David Halbert, representing District One, also this year president of our board, supervisor Lena Tam, District Three, also the other member of our work group, budget work group.

This is an annual event.

And with that said, I'm going to turn it over to our administrator, Susan Moraneshi, who will guide us through today's proceedings.

And uh would you uh introduce the introductions?

We're gonna ask our um budget work group members first to introduce themselves and then quickly for the members in the audience since we do have a panel that will be speaking with you so they know who's in the room.

I'm Susan Moranishi, the county administrator.

Um Andrea Waddle, Chief Assistant County Council.

Melissa Wilk, her control uh Rasley Today with the county administrator's office.

Hang Tran with the county administrator's office uh if Brian Ford, Chief Probation Officer, Daniel Gusimber, Public Closer Director.

Ursula Jones Dixon, Alameda County DA.

Fred Sahaki and President Alameda County Management Employees Association.

Andrea Ford, agency director of social services.

Anika Chowdhury, interim director for Alameda County Health.

Let's let everybody introduce themselves.

We're gonna introduce the panelists when we get to the panel.

So maybe we can just start with the public members.

You are here.

Everyone in the public, care to introduce yourselves?

Say hello.

As you can see, we have a um broad and diverse group of our departments, department heads and staff, members of the community, members of each of the district staff.

So this is indeed um an important meeting.

Later on, you will have the opportunity to meet panelists that we have assembled experts from around the state of California in the areas of um health and human services and social services and government relations, and the executive director of California State Association of Counties.

We're going to have a wonderful panel discussion.

But before we do that, we're going to have a presentation from our county administrators uh office.

As we do, I would like to mention, I think everybody understands it's pretty clear, you can't uh wake up today without knowing that we are in unprecedented times.

Our counties are under pressure from multiple directions as we go deeper into our local budget development.

There is also considerable activity in Sacramento.

I would add to that also the federal government.

We have a lot of moving parts as we put together this forward-looking budget.

We do this every year this year.

Um, no different than other years, other than unprecedented times with a lot of pressure.

Today we do have a panel of experts.

As I mentioned, they lead professional associations throughout the state under the umbrella of our California State Association of Counties.

You will hear from the panel later.

At this time, I would like to turn the meeting over back to our county administrator and her team for an economic and state budget outlook.

Thank you, President Howard.

So we're gonna provide just a brief overview in terms of the economic indicators as well as the state budget to frame the panel discussion.

Rasley Tadeo from my office will be making that presentation, and then we're gonna turn it over to the AC Health Director, Anika Chaudry, and our Social Services Agency Director Andrea Ford to introduce and moderate the panel discussion.

Thank you.

So good afternoon.

Again, I'd like to start off by sharing this year's budget development process, because as I mentioned, um, we are going through a period of significant volatility, both economically and politically.

Um first looking at the real estate trends within our county, which remains an important local economic indicator.

According to the State Association of Realtors, in January, the median price in the county was 1.12 million, which is a 5% decrease from December, and down 2.6% from a year ago.

January home sales are down nearly 40% compared to December, and up about 2% from a year ago.

The rate of unsold inventory is up 115% compared to December and down 13% compared to a year ago.

Median time on the market was 17 days from the month of January, which is down 10.5% from the previous month and the same as a year prior.

So overall, there's low inventory continues to keep prices high and out of reach for many trying to enter the market.

Foreclosure filings are up 32% year over year as of January 2026, which is the 11th straight month of foreclosure activity rising, though overall levels remain well below historic peaks.

Just a few updates.

So the Federal Reserve Board is scheduled to meet later this week.

Uh at their last meeting in January, the central bank left interest rates unchanged.

The February jobs report saw a loss of 92,000 jobs, which is a significant shift from the 126,000 gained in January.

I will also point out that previously economists expected 60,000 jobs to be gained in February.

The unemployment rate is 4.4%, which is largely the same from January.

And we have seen um significant volatility in crude oil prices.

So we saw a spike close to 120 a barrel, which has since decreased.

Prior to these large swings, it was closer to 70 a barrel.

So I'd like to add a few key points about the tech industry.

So Amazon confirmed plans to cut 16,000 jobs globally in 2026.

Over 750 of those jobs are local.

UPS, which is winding down its partnership with Amazon, announced plans to cut 30,000 jobs after limiting 48,000 jobs in 2025.

UPS also plans to further deploy automation automation.

Pleasanton-based workday announced it will be cutting roughly 150 East Bay jobs, moving resources away from human support and toward revenue generating sales and AI development.

Last April, Workday eliminated 617 Bay Area jobs.

Additionally, Oakland-based FinTech Company block is cutting 40% of its workforce, which is 4,000 employees.

Other notable cutbacks in the tech industry this year include Google, Meta, and Pinterest.

So counties face various pressures, sometimes competing with one another, often with limited resources.

Illustrated here, address some of the financial and policy pressures counties face, including our own.

Some of the financial pressures include rising costs with increased service demands and unfunded mandates.

Policy pressures include federal priorities and limited abilities to raise revenue.

With that in mind, I'd like to point out that nearly two-thirds of the county budget comes from state and federal resources.

So with that in mind, we'll move to state and federal outlook for today's meeting.

We have several guests joining us for a panel discussion.

So I would like to hand it over to the interim director of Alamady County Health, Anika Chowdry to introduce our panelists.

Thanks, Rasley.

And as our panelists find their name tags in their news seats, I will go ahead and intro them.

So we've got starting with my left here, Graham Nows, who is the CEO of the California State Association of Counties.

Next to him is Michelle Gibbons, who's the executive director for the County Health Executives Association of California, followed by Carlos Marquez III, executive director of the California Welfare Directors Association.

I see how many times I have to say directors in this thing.

Laura Lane, who's joining us from the California Association of Public Hospitals, and Michelle Cabrera, who's the executive director of the California Behavioral Health Directors Association.

So thank you all so much for being here.

Andrea and I are going to tag team those a little bit.

Thank you, Anika.

Again, Andrea Ford, agency director for social services.

Welcome to our team, stained panelists.

I have the first question for you.

Let's start with a few minutes from each of you on what you're seeing in terms of current challenges facing counties and the anticipated impacts on local governments and their residents.

I will start with Carlos, followed by Laura, Michelle Gibbons, and then lastly, Michelle Cabrera.

Thank you, Andrea.

Push them up.

Okay, great.

It's great to be with you, Carlos Marquez, on behalf of the County Welfare Directors Association.

I just wanted to start by rooting us in some statewide impacts that you all are familiar with.

But as we learn more from the state about the efforts that they're making to try to maximize automation, both in terms of exemptions and also the compliance side of work requirements.

The story around who's impacted and how many people are impacted statewide continues to evolve.

First, on Medi-Cal, 2.8 million current enrollees who are part of the ACA expansion population, will ultimately be left to the county eligibility workforce to either exempt or support through compliance manually.

And for CalFresh, about 950,000 CalFresh recipients will require some assistance from the county eligibility workforce, either again on the exemption side or the income verification or compliance side.

The reason that's important is because we do have a key tool at our disposal to try to maximize program retention even in this environment.

Obviously, we know from all the literature and all the states that have implemented work requirements and the six Bay Area counties here in California who've implemented them in the context of CalFresh, that the only purpose for work requirements is not gain full employment, because we know that the impacted populations are largely working or unable to work, but to push people off of social uh services.

But even in that environment, we know that we actually do have some latitude in to exempt people from said work requirements to exempt them from some of these procedural hurdles in the first place.

And that's going to ultimately fall to the eligibility worker.

They're going to have to apply a discerning ear and a judgment to ultimately certify and document the appropriate conditions or life circumstances that might be limiting an individual from being able to ultimately meet these requirements.

And so our counties are preparing consistent with that harm reduction framework.

This framework is ultimately coming from our state associations.

The California Department of Social Services has issued guidance in December that I continue to call a harm reduction document.

The only problem is that it's not funded.

It has multiple layers of opportunities to place CalFresh recipients within different safe harbors if you apply the exemptions appropriately, but it doesn't pay for the doubling of the work.

On the Medi-Cal side, the Department of Healthcare Services doing incredible work, really exploring to the maximum extent possible how to automate redeterminations, verify exemptions and income verification.

They believe that about 40% of the impacted ACA expansion population might be addressed through that automated set of interventions.

But that leaves the 60% that will rely on the county eligibility workforce.

So what our counties are doing in terms of readiness and preparation right now, and a lot of this is really only on paper.

A lot of innovation on paper.

I want to really emphasize that even in this environment, there's an incredible wading into the breach, so to speak, by our county leadership and their staff.

Nothing is funded on those papers on those plans yet, but counties are doing incredible work.

Number one, there are a number of counties that are looking at reclassification of their existing uh work functions.

This work, in order to screen and review exemption available exemptions properly, you're gonna need to have a more case management or social work like function.

So the transition from task base to case management based work is going to be really important.

Number two, counties are looking at re-imanaging some of their data sharing agreements with their managed care plans.

They're looking at how the to leverage their provider networks to ensure that there's, for example, hotlines available for a doctor to be able to call a county in real time if they have a client in front of them who Medical has lapsed to essentially try to bridge that gap.

There's incredible work being done with regard to work fare and standing up CalFresh employment and training programs so that we can work with our public and private sector partners to ensure that we can appropriately place people who actually do have to comply with these work requirements.

And then most importantly, um for you to remember the county eligibility workforce is ultimately going to be left with the most complex cases.

So after we're done automating and redetermining the rest of uh of the impacted clients in both programs, the folks who are left are the folks who don't have a data footprint.

They are folks who actually may not have any other interaction with eligibility systems or public social services outside of either SNAP or Medi-Cal.

They often are homeless.

We know that 25% of CalFresh recipients are homeless.

We know that 82% of unhoused people are on Medi-Cal.

Um, but only 24% of homeless people actually seek or have access to mental health counseling.

So it's the folks who are not going to have a data footprint, who, if we do not adequately fund the eligibility work necessary to capture these folks from falling through the cracks, they will lose coverage.

And when they lose coverage, it's obviously a human travesty by the individual and at the community level.

But we also know that because of so many state priorities that are really built on the interweaving of Medi-Cal financing, a lot of those state priorities will also collapse if we can't retain as many people in Medi-Cal as possible.

Thank you, Carlos.

I'm Laura.

Afternoon, Laura Lane, on behalf of the California Association of Public Hospitals.

So we're a trade association that represents the 17 public hospitals, um, hospital systems in California, most of them in um highly populated areas in the Bay Area.

Um, of course, Alameda Health Systems is one of our members.

Um, but really kind of the focus that I'll kind of address is kind of public hospitals generally and kind of what we're seeing.

Um as we kind of come off of HR one.

And so, as Carlos alluded to, you know, the scale of federal changes is really worth kind of naming honestly.

Um, HR1 passed last July made significant reductions to federal funding in Medicaid, what we call Medical here in California, probably the most consequential changes that we've seen in a generation.

It shifts the cost from federal government to California, um, and then to the public hospital systems.

And depending on how the state implements these cuts from California to the counties and the public hospital systems, we're going to see a significant reductions in services, potential layoffs, uh potential facility closures.

It cuts Medicaid matching funds, it reduces state directed payments that help bridge the gaps between low base rates and the actual cost of care.

And it places the new administrative burdens on enrollment that Carlos just discussed.

We're still working through kind of what this means in practice.

Guidance is still coming down, but here's the kind of picture of kind of what public hospital systems are facing.

I think we start with the structural deficit.

Um Medi-Cal rates are so low that they do not meet the cost of care currently.

So we're starting with the structural deficit of about 1.5 billion dollars annually.

And then we start to layer on kind of everything that's happened, both federally and at the state levels.

So changes to UIS coverage, which will go into effect this year at the state level.

Um for all systems in CAPH, we're looking at approximately 150 million dollars in reduction because of that.

And then we start to layer on more changes.

In 2027, if our 1115 waiver is not renewed, there'll be more cuts there, approximately 827 million across the state of California.

And then so we start to then layer on what happens when eligibility checks and income verifications are needed.

And so we're adding on additionally about 500 million because of that.

And so as we kind of look at the implementation of HR one, all of the state changes coming in and kind of the what's impacting our systems.

And so as we kind of look at the implementation of HR one, all of the state changes coming in and kind of the what's impacting our systems, you know, by 2032, when HR1 is fully implemented, public hospital systems across California could see up to five billion dollars in annual loss, which is significant.

It's something that we can't cost cut our ways out of.

It's something that, you know, there's going to need to be a great big beautiful bailout to accompany the great big beautiful bill.

Um, you know, these are the moments that we are all planning for.

We know that the patients that we serve who are no longer on Medi-Cal will continue to show up, but they're gonna show up sicker because they haven't had the preventative care that they need, which is gonna be more expensive, which is going to lead to additional uncompensated care costs.

So the indigent care costs in our counties are going to go up.

County public hospitals are often the designated and sometimes the exclusive provider for these programs.

And so when Medi-Cal contracts, the demand on these programs is going to go up, and the financial strain that's gonna fall on these institutions is going to be significant.

So this is the dynamic that we kind of want to start this conversation with that these coverage decisions at the state and federal level have a direct impact locally and on our local budgets.

And I'll close there.

I think I'm next.

Uh Michelle Gibbons, I'm with ChIAC.

And so we represent local health departments across the state.

And so there's kind of two key areas of focus for us.

It's the indigent care side, which I haven't had to talk about in quite some time, and we'll talk about it today.

And then there's also the public health focus.

On indigent care, a lot of people aren't really even familiar with it because we haven't really had to have our programs as robust as they were prior to the ACA.

So when the Affordable Care Act came into place, there was a population that became eligible for Medi-Cal.

And so essentially a lot of the county indigent programs either dwindled or they um kind of dismantled their infrastructure.

And if they did continue to serve individuals, it was above and beyond the mandated areas of service and the mandated eligible populations.

And so the impacts of HR one, HR1, let's just be clear is taking the air out of every room.

It has been uh a huge thing to contend with and is really impacts across all of our systems, but then also other partners that aren't represented here today that are not part of the county.

And so when you're talking about HR one, it's really hard to keep people's attention on key specific areas of impact because everybody is just so overwhelmed with the HR one as a whole.

And so for counties, one of the areas that I would like to uplift is the impact to our indigenous care programs.

So I won't rehash kind of what HR1 is doing in terms of eligibility.

Everything my colleagues have said, I will just say did 02.

One thing I would uh highlight, however, is that the Department of Healthcare Services recently put out that with all of the efforts, out of automation, eligibility workforce, also thinking about um some of the exemptions that folks will be able to qualify for, there's still a bucket of folks that they're anticipating could fall off.

So they've kind of dwindled all the exemptions down and they have about 1.4 million individuals in that bucket.

And so if you just take a third of them and say, okay, let's say a third of them fall out, that's still upwards of 400,000 people.

And from a county cost perspective, we've created a range that said if you go from a third of those people to going to county indigenous or all of those people coming to a county indigenous care program, that's people-wise 400 upwards of 400,000 up to you know 1.3 million.

But from a cost perspective, it could be anywhere between 2 billion and 5.5 billion just from cost to counties.

And you're like, that's a lot, absolutely.

Um, but that's what we're contending with, and that doesn't include the cost to rebuild or to expand what you have today in order to account for the infrastructure.

So in some counties, they don't have the staff anymore, they don't have the facilities, they don't have you know any of that infrastructure, the medical supplies, the equipment and all the things that you need to provide services to people.

And so counties are grappling with, okay, how do you restart that?

And then even in a county where you do have some of that infrastructure, you may not have enough, right?

You have you might serve a population today and might need to expand that population.

And so you may not have enough of that infrastructure.

And so that's going to take a considerable effort.

It also, if I'm just being very transparent, is happening in a time where uh a lot of my membership, I will personally say, has turned over.

So you have directors who have not ran an indigent care program, and that is another thing to contend with at the county level and a level of expertise that and a lot of sharing of information that's happening across counties.

And so that's going to take effort and workload, but also you know, strategy on how do you do that and what is the best structure to have.

I would also say that the state did this thing where they never let the counties just stay with money, right?

So they said, okay, we're taking ACA is happening, and a population of folks that you once served in your indigent programs are coming to Medi-Cal.

So we're going to take some of the money that you used to get 1991 health realignment.

We're going to redirect those for other state purposes.

And so they took a significant chuck of our money every year.

They redirect annually a portion of those dollars, but that's actually not the biggest hit.

The bigger hit is that they slowed the pace in which our health realignment revenues grew.

So it would have grown, let's say at 52% or 53% every year, and now we are only getting about 17%.

So over time, it just adds on.

These things compound year after year, which means that counties aren't even in a position to resume.

It's not like just undoing the annual redirection.

It's really that they have structurally given us less money.

And so we're really behind that starting point today.

And that is a huge concern for us.

The other thing I just mentioned too is that the cost of doing business pre-ACA versus post-ACA, let's just think pre-2014 to today is significantly different.

That landscape is different.

Healthcare costs have increased significantly, and then expectations have increased significantly.

And so here is where I would just pause a moment to say when we say indigent care, people might hear that as health care coverage and other things.

That is not what an indigenous care program is.

It is not healthcare coverage.

It is not coverage to all populations that might be losing coverage in Medi-Cal.

It does not include coverage to the undocumented population.

It's also not a full set of services.

It is actually in most cases very episodic care to make sure that somebody is stabilized essentially and not suffering or in risk of dying over their condition.

It is, we see people when they are at their sickest, is really what indigenous is.

And I think that's going to be hard for people to understand because they've been so used to healthcare coverage and in Medi-Cal, which is quite different.

So I think that's a big area that counties are really facing in terms of budget constraints, public perspective and expectation, and then resources really at the county level and the lack thereof.

I would just be remiss if I didn't talk about public health for a minute.

And I like to tell people because I saw it in a New York Times article, and I'll never stop quoting it until it stops happening, which is that the cycle of funding public health is neglect, panic, repeat.

So we neglected the public health system for quite some time.

And then COVID, you know, the pandemic thing that happened.

Then all of a sudden there was an infusion of federal dollars into public health.

And then they're also a state dollars that was infused into the public health system.

It actually did a phenomenal job because COVID wasn't the only thing in the past 10 years or five, six years that we've contended with.

It's been measles outbreaks, there's been uh dengue, there's been bird flu, avian flu, and you see that that did not turn out the way that it could have in our in our state, which has been a really great thing.

And it meant that we had resources that could actually address the challenges that we were seeing.

And unfortunately, the COVID era funding is expiring.

And then in addition to that, the federal government decides on a regular basis.

It seems to just pull additional grants.

So they are terminating grants much earlier than they otherwise would.

And in public health, it might people might say, well, you're just not spending it.

Well, public health departments have had to think about okay, I have this much funding and it lasts for this many years.

So how can we maximize those funding that funding to get through all of the years?

And so when they pull or terminate a grant prematurely, it's essentially taking a year or two of that funding away.

And so health departments are having to shrink faster than they ever anticipated.

And my big concern on that is our communal disease capacity at the local level.

And then you marry this with the fact that people will be uninsured.

And now you have folks that may not have gone to the doctor when they first felt the illness, but they could be contagious and now they are spreading disease in the community, and now you don't have the same workforce level at the public health department to help address that and do the disease investigations.

And then later on, that at the state level, uh, the administration decided to not fund four public health information technology systems that actually help your health departments to do their work much faster.

So you guys might remember during COVID, there was that the IT system that said basically, like, hey, you might have been around somebody that had COVID, symptom check yourself and let us know.

Well, we use that for other diseases, and so that's one of the systems that they wouldn't fund.

Now that's manual work.

That's the health department staff calling you and saying, Hey, have you been around anybody?

Okay, and who are the 10 people you've been around?

Okay, and then who were the 10 people they've been around?

And it's a huge uh manual workload.

And so I will say that in addition to HR1, some of the actions that this federal administration has taken to uh stifle public health funding and cut it prematurely, and the lack of new dollars being invested into the public health space is going to have a detrimental impact to our communities.

Thank you.

Good afternoon, Michelle Cabrera.

I'm the executive director of the County Behavioral Health Directors Association of California.

And we also are a trade association.

We represent the leadership of the county behavioral health agencies throughout the state.

And just a quick word about the county behavioral health safety net.

The county behavioral health serves as a Medical Health Pont contracted directly with the state of California.

So our members have health plan responsibilities, have to follow the Medicaid final rule, ensure timely access to medically necessary services.

And somewhat like our public hospital partners, County Behavioral Health manages these plan functions in a very different way than our Medicail managed care plans, where they get a per member per month.

County behavioral health gets earmarked state sales tax or vehicle license fee and the millionaires tax and uses those sources to draw down federal match.

And the reason why I share that detail is it's really key and crucial to understanding kind of the big picture of what county behavioral health is dealing with.

Our funding is not tied to how many medical beneficiaries we're required to serve or how much those services cost.

Everything from care court to reforms to our conservatorship system or LPS payment reform, so how we draw down those federal dollars from Medi-Cal, and um and a significant expansion of new benefits in Medic Health.

The vast majority of these initiatives in county behavioral health relied on restructuring or leveraging existing county resources.

So the vast majority of them were counties.

You can use your dollars differently and maybe pull down some more federal financial participation under Medi-Cal.

Things like our BHSA reforms and LPS, the conservatorship laws in California from day one, which was in 1967, have never had state funding attached to them.

So really popular with the legislature to pass reforms in LPS because they don't have to pay for it.

BCHIP is another one of those major new initiatives.

It's the behavioral health continuum infrastructure program.

And through that, the state, I have to acknowledge, first invested a significant uh number of state general fund one-time revenue that they got in the pandemic, and then under proposition one, state obligation bonds to build out new treatment facilities primarily, although there is a set aside for new housing attached to Prop One.

And what I want you all to understand about these BCIP grants is that they go to yes, counties, but also to community-based organizations and even for-profit providers, and they're intended to primarily serve the Medical population and the safety net populations, but imagine it's like getting a toy for Christmas, and the batteries are not included.

So you, the county, need to then pay for the ongoing services, and they're not those cool chargeable toy.

No, you got to go out and buy the DuraCell every time it you know runs out.

So counties are really worried about how are they going to sustain the one-time infrastructure investment in buildings and exciting ribbon cuttings over the long haul.

There's also been an emphasis on a lot more accountability, transparency, scrutiny, but also state direction in how counties are spending the dollars.

So with proposition one, we will be fully implemented by July 1 of this year.

And that's going to take what we typically get through the millionaires tax and really rearrange the deck chairs to in order to make room for that new responsibility for county behavioral health to set aside one-third of that funding to pay for housing, largely rental subsidies.

Okay.

In Alameda County, in order to make room for the housing money, the county's going to have to cut roughly 53 million in existing mental health services and programs.

These are largely prevention, which moves to the state under Prop One, as well as some of your wellness centers, peer programs and some children related services.

So the state under proposition one is really trying to get counties to focus on the deep end.

But as we're cutting prevention, as HR1 cuts Medi-Cal benefits, and we have less of an ability to draw down that federal match with the existing resources we have.

This will all come together as a perfect storm, right?

And as the state is attempting to implement quality initiatives and improvements in county behavioral health, like they said they we want you to do evidence-based practices with your BHSA dollars.

This is a good thing.

But I want you to imagine a mom, a single mom who's trying to shop for her family, and she's used to going to sprouts, and she has a little like extra money set aside, and she can go to the community garden sometimes and spend money there at the farmers market.

Well, the state comes in, imagine the state is CalFresh in this example, and it says, no, no, no more sprouts.

We want you to buy only the highest quality food.

You must shop at Whole Foods.

And you go, whoa.

Is Whole Foods really that much better?

Um, but I definitely am not going to be able to buy as much food anymore.

So now I'm going to be getting Whole Foods quality, the good brand name, but a lot less of it.

And the public is not expecting this.

The public, when they hear about Pop One, they think a lot more money for counties.

It's the same money or less, right?

And they think we're going to get a lot more new.

No, we're going to get different.

We're going to get Whole Foods instead of what we used to do.

I speak in metaphor to try to avoid jargon, but please feel free to, you know, jump in with any questions later.

But anyhow, point is counties are really being given a really difficult jigsaw puzzle to put together.

How are they going to maintain those medical entitlement responsibilities as health plans contracted with the state?

And also at the same time let down their local community partners by saying this beautiful thing that we built over the last year, 20 years with MHSA needs to go away now.

And there's really nobody else that Calvary is not coming in because HR1 has devastated so many of us.

We agree with how California wants to approach this, but we have between now and June to see if the federal government is going to issue additional guidance.

And that could compromise us.

So I know we need to move on.

I'll just save the rest for my next uh set of questions.

Thank you.

Great.

First, thank you for the opportunity to join you all.

I really appreciate it.

I'm Graham Canal.

So I'm the CEO of the California State Association of Counties.

So that means I have the great opportunity of representing all 58 counties and the 296 county supervisors and including Supervisor TAM and Supervisor Halbert.

I want to take a step back for a second and think about how the political structure works and the fiscal structure that comes down to counties.

The system that works best is when the federal and state government determine what gets done, they get to define the priorities and who does the work, and then leaves it to counties to figure out how that work gets done.

And when that occurs, and when counties have the resources, the authority and the flexibility to do things in a way that makes sense in their community, we all win.

The challenge right now is that there has been an unparalleled attempt by both the state and the federal government to shift both costs and responsibilities to counties.

And so some of that does dictate how the work needs to get done at the local level.

Some of it rips away the funding that is that has been used to deliver those services.

And this is not unique to California.

This is happening in every state in the country.

But what is unique to California and about four other states is that there's an attempt to further um destabilize a number of the programs that communities rely on.

And those are across the board.

So some of them deal with programs that my colleagues and those that they represent deliver.

Some of them are in completely other areas of county service.

And California is most certainly targeted along with a few other states as it relates to that.

And so then even if the dollars that you are expecting ultimately flow, they flow after your services have been disrupted.

Those who are delivering the service may not have been paid.

And so that's before we even talk about HR one and what the impacts are related to that.

And so I I want to also reflect on I've been involved in nearly every state significant state policy or fiscal change that has impacted counties since 1999.

None come remotely close to what we're talking about related to HR one.

None of them.

And that's where we're at, where we are at related to HR one and what the impacts are.

Now I uh we did bring um packets, so these lay out the impacts that many of us worked on together.

Um and so that's an attempt to just level set here's what the reality is for the state.

Uh and ultimately counties can only deliver services that are funded by the state and the federal government.

And so as an example, in nearby Santa Clara County, they passed a five cent, five, eight cent sales tax measure to try to offset some of the reductions in HR1.

So that's awesome that their community can do that and they approve that.

At the same time, they just made multiple hundreds of millions of dollars in reductions to the very system they're trying to save, which is to highlight that there's no way any county in the state can come close to mitigating what the impacts are because the scale is just too big.

We're talking about the core of the healthcare system in the state of California.

That's mammoth.

Um, and uh it cannot be held up by counties, it cannot be held up individually by hospitals, um, and it cannot be held up uh individually by um the rest of us here as well.

And so that's the context that we're trying to work through.

And we can we can talk about some solutions, um, and so we can we can do that, but ultimately it is to the federal and the state government to fund these priorities so that communities can survive.

And the impacts that occur are not just to those who are the least among us that are struggling and that are gonna get booted off of food off of CalFresh or off of Medi-Cal.

Um, when that happens and the stream of revenues goes away, so does health access to those who are insured, and so it impacts all of us.

Um, and as my colleague uh can share relative to the public hospitals, um, it's true, whether public or private, um, if you lose the revenue sources that are coming in to fund those who can who have the least ability to pay, um, you also lose, you're also losing revenues that sustain the hospital so it can open its doors, uh, and so that folks can not don't have to rely on the emergency room in order to have what would otherwise be basic care, and that's coming.

Um, that is coming to California, and there's only so much that can be done to mitigate that, and we need to do all of it, and there is opportunity in this community and in this county to do as much as possible to best protect um the the community that is here.

And the same conversation is attempted to be had in every other county in the state.

But it is a monumental challenge that we are seeking to solve.

And we're not going to be able to do it without some pretty severe impacts happening in communities.

And that's just real.

And so we can talk about solutions and we should, but I also want to make sure we're level set on what our political reality is.

And things from the at the federal level are not changing any time in the next few years.

And so we need to understand that context that we're that we're in and the need for the state to step up in a way far beyond what it's been able to do before.

So it's bad.

Yeah, things are things are rough.

And thank you all for sharing that from your perspectives.

I mean, I think we heard a lot about the interconnected pressures and reality of, you know, if one domino falls here, a whole bunch of other things happen here.

And oh, by the way, we have a mandate to do all of those things, right?

And so as we think about you know how we balance that, um, interested to hear from you all both about solutions and sort of what's the landscape in Sacramento and you know what are the conversations that are happening there.

Um, are there any advocacy strategies that are landing or resonating with with decision makers?

Um, and then you know, also a little bit in terms of strategic advice for counties.

Um, so you know, many of the things you all have shared, we're also having to uh deal with here on the ground, right?

Like we've got some very near-term cliffs that are happening for community organizations, and we don't know what's going to happen in the next couple of years.

Um, so it's kind of a big mix mishmash of a question, but who wants to take it first?

And in the interest of time, if you can be brief but informative, that would be great.

I'm happy to start us off.

Yeah.

Um, I will be brief and just say I think the budget landscape in Sacramento is a hodgepodge of everything because everybody's coming to them on a daily basis to talk about how HR one or some other policy is impacting their you know, ability to provide services or to do something.

I think there is a and and this will also play into my my perception on how the county should approach this, which is I think there is this tension between, you know, nice to have, wish we could have and must have.

And I think from a county perspective, you know, and that's at the state level, but I think at the county perspective, there's gonna have to be some of that conversation again.

Uh, budget deficits or when budgets are declining or strained, it is going to make room for some really tough conversations.

I will say that I think some of the impacts of HR one won't even fully be realized in the budget year, but it will have a domino effect in the years to come.

And so thinking about how not to solve for it all in one day, but also what the impact on the years ahead will be and how to plan for that, and also hopefully how to plan for a day where things change again and some of these services that maybe have to go away or be paused could be rebuilt.

Um, and how to think about what the community needs are, you know, from a broad perspective.

And and again, just from a public health side, thinking about some things are not quantifiable, right?

Sometimes it's hard to where you don't have a patient or a base, you know, public health saves a lot of money downstream, but sometimes it's hard to really think about.

So even thinking about some of the preventative things that help uh downstream but are perhaps not easy to quantify initially.

Um yeah, so I have a revolving landscape in in Sacramento, and um one day there's uh you know multi billion dollar deficit, and another day revenues are up by the same amount.

So very volatile.

It appears like we're not gonna get uh uh, you know, we're not gonna make our way out of a structural deficit, at least it doesn't appear that way anytime soon.

But there may be some significant even one-time funding.

And so I think it's a real question about uh how you socialize the legislature on solutions as as soon as possible.

Um, I think one thing that has been resonating, and and Graham's right, the reality is we cannot escape the fact that there will be harm resulting from the implementation of HR one no matter how responsibly we implement.

But I think one thing that resonates is if we if we really want to maintain the whole person social determinants of health model of care that we've spent 10 years developing in California, if we really want to stick it to the federal government, then we need to do everything we can to make sure that we prop up the system that requires them to pay their fair share, and that's retaining people in Medi-Cal.

So when we go upstream, and we believe that starting with fully funding the eligibility workforce will actually pay dividends, but it does have its limits, as Michelle said.

There will be people who fall off.

But that argument, that upstream, that cost-effective argument is working.

The idea that over the last 10 years, that eligibility workforce has enrolled a million more people in CalFresh and 4.6 more million people in MediCal, but not for free.

We got an augmentation to our CalFresh allocation.

We got a 50% augmentation to our Medi-Cal funding in order to do that work, I think resonates.

And on the CalFresh side, it's really important to note.

We know that when families can't eat, we have increased involvement in the child welfare system.

We know that when folks can't eat and they have to pay for food instead of rent, we end up exacerbating our homelessness crisis.

And obviously, that lifespans shorten if people can't eat.

Emergency room visits increase.

So those in those arguments are resonating.

And then the final thing I would say is we have some promising acknowledgement from the administration from the Department of Healthcare Services that county eligibility on the Medi-Cal side is underfunded.

We think it's underfunded by 230 million and by 2,000 eligibility workers.

We don't know if they're going to agree, but at least they've acknowledged that they agree that there's underfunding there.

We are not getting the same assurances or acknowledgments from our friends at the California Department of Social Services.

And so that's very concerning.

And to a comment that Michelle made earlier, about 60 to 70% of the legislatures in California have been there for less than three years at this point.

So a lot of the work that we've been doing is educating them as they've kind of come into office.

So we we're doing education and we're also looking at solutions where it's like, you know, right now we're looking for the hospitals are looking for a down payment, is what we're calling it on kind of what we need to move forward.

So looking for a one-time investment this year of $500 million to offset some costs for private for public hospitals.

But that will grow.

And I mean, I think in the packet, um, Graham included our chart of doom that we've been educating folks with, and I kind of alluded to it in my comments before, where it, you know, the impacts start now and they cascade.

Um, and so definitely, you know, taking this moment to educate folks to know that we need a partnership with states so that our folks, McCounties, feel like we're all in this together as we're moving forward, and that you know, we're gonna need some systemic changes as we move forward.

So, you know, making sure that folks stay on coverage, making sure that the hospital doors stay open, that there aren't the longer wait times, that there aren't the like changes in coverage.

Um, and making sure that you know we are there to serve the people.

And so bringing those people stories and that person focus, I think is a really important way that you know solutions can be brought.

Um, I'll just say that as far as the state budget in January goes, um, there was a proposal that was sort of tucked away, didn't get a lot of press or fanfare to shift responsibility for the brand new mobile crisis statewide medical benefit from the state to counties.

Um the state did not even have an estimate initially when they rolled this out in January for how much they were going to score in savings.

We have since learned that they estimate this will cost around 168.8 million.

So that's the amount that the state is going to shift over to the counties.

Some of our smaller counties in particular will absolutely not have extra money in the couch cushions to keep funding mobile crisis.

There are too few people, too few providers in those communities.

It would cost way too much.

So we're gonna see us rolling back if this proposal goes forward, uh, not just to sort of pre-mobile crisis levels of crisis response in the community, but unfortunately, because of some recent case law out of the state of Nevada, where um many law enforcement entities are choosing not to respond if a person's in a mental health crisis, we expect to see many more deaths by suicide as a direct result of cutting this benefit.

Um part of our strategy with the mobile crisis benefit has been to help educate our partners, one that this is happening because again, they did not announce this during the budget release.

One, that this is happening because again, they did not announce this during the budget release.

And then two to build a coalition of providers, counties, law enforcement who I think benefits greatly, as well as our hospital and other partners to say, you know, pennywise pound foolish state of California of all the new things that you've rolled out the last few years.

This is the one that you're trying to cut.

Like it's probably the least wise decision that we could make in this moment.

CBHDA also has an estimate related to the impacts of HR1 for county behavioral health, which is not included in the packet that you have.

So I will just say that we estimate that for fiscal year 26-27, county behavioral health will incur uh new costs of 224 million.

Um, and it will impact 27,000 individuals who we think will lose coverage.

And then uh for 27, 28, so fully implemented, we think HR1 is going to lead to a cut of 828 million or 89,000 individuals who will lose coverage in county behavioral health services.

And remember, these are individuals with um the most severe mental health and substance use disorder needs.

So we are definitely, in addition to all the strategies that my colleagues mentioned, also looking at ways that we can generate more efficiencies in our system.

We the state bless them.

You know, I feel sometimes like we are living in a 2023 reality instead of a 2026 reality, right?

It's like all these cool new things with the bells and whistles were really neat and it all kind of made sense and came together then.

But we've tried to take an approach of grounding ourselves in this here now.

What is happening right now?

Um, not trying to sort of doom predict all the worst case scenarios, but also not trying to be in uh be oblivious about what is actually happening.

And so we really need to work together to find ways to um cut reporting or other bureaucratic barriers that do not need to exist moving forward, so that we can make our services and systems operate most efficiently with the dollars that we do have.

I would just say budgets are a reflection of priorities.

The state of California's budget is certainly feast or famine, and actually currently the one-time revenue that is coming in well above the budget is all linked to AI.

And so interesting given the presentation that was done earlier about some of those very companies actually making cutbacks because the capital gains related to those to those that are involved in AI is actually what that's our greatest savior.

So we're hopeful for some of that.

But in a state where the general fund is over 300 billion dollars, you cannot reasonably say there is not funding to support health care and food.

And so there is funding to do it.

It's not easy, difficult decisions need to be made.

Um, and um perhaps this is where um some of the mandates that counties and others are subject to should fall away so that there's greater flexibility to focus on those things that are most important.

There are ways to get there.

And we um we look uh we look for those uh as we go through this.

Um it is six to nine and a half billion dollars every year.

HR1.

That's a massive amount of cost shift to counties.

And there was absolutely no mention of it in the January budget proposal.

Not one word in the state's initial budget proposal was referenced about what counties have to do related to HR one.

That needs to change.

Now, converse we're all having conversations with folks in the legislature and with the administration, and we will continue to do so.

Um, but the education is paramount so that folks understand the reality of what the picture is.

Um, and then I want to just to dispel a myth.

There's a framing around HR1 that if you add work requirements, then those who are not working are going to have to go and start working.

And that's who's falling off.

That's not true.

The vast majority of those who are receiving health care and food are working.

What HR1 does is create significant new barriers so that it is more difficult for those who are working to prove that they are working.

That's it.

That's all it's doing.

And so, and to do it more often in a way that does not happen in the private sector.

So, you know, the the those who are on there, they're not in salaried jobs where they can wink and nod during their lunch break and go and prove that they're working.

They have to take time off that is unpaid to then go and prove that they are working, which makes no sense whatsoever.

But that's the reality, what HR1 does, and it can be very difficult in order for those folks to remain on.

And that's what we're all trying to do is to ensure, and the county is trying to do to ensure that as many people stay on who we know are eligible as possible because the federal government has a promise that we believe should be kept for those who are eligible for these programs.

Thank you.

Um great final remarks.

Um thank you all for joining us.

We really appreciate your insights and all that your organizations do in support of counties and the communities we serve.

We'll take a few minutes to have questions from the audience, the budget work group members about two questions again in the interest of time.

Um so if you can think about or prioritize your questions, we don't we only have two.

Um so let's present though the panel with those two questions, and we can move towards our next segment of the agenda, Andy.

So from the from the FQH clinics, um opportunities to be able to find a system so that when we get out of this, we're better.

If I may jump in on this one, I mean, I again I think I mentioned it at the top.

90 plus new initiatives in behavioral health.

Our message to state lawmakers has been can we just chill?

Can we let the dust settle?

Can we implement some things first before we add new things?

And just remember that anytime we talk about transparency and accountability, that is double speak for new reporting requirements.

We the state is asking us to create brand new reporting for things that never existed before, and therefore you have to like build it from the ground up and for every new data point that they want.

That is a human being who's gonna have to generate a new data point, right?

So I've I've said recently we're in a data frenzy of sorts right now, where everybody wants the data, the data is cool, I get it, and we want to know.

We're in an information age.

We want to know.

And at the end of the day, we have to ask ourselves why, right?

I that is my favorite question.

Why do you exist?

Why does this data point exist?

What is the point of it?

What are we doing?

I want the state to prove to us as counties that they even can use the data that we're giving them effectively to tell a story, right?

I and so it is gonna hurt us in the long run if our workers and our providers have to spend so much time on documentation that they're not serving individuals.

We've kind of gotten away from ourselves a little bit, and I do think that is as soteric as this is, it needs to be a focal point for us.

Services over bureaucracy, right?

Getting back to business for us and getting back to the basics of helping people, which is why everybody gets into this work.

Yeah, I would say we do have an opportunity here, and the opportunity there are folks that are meeting right now to think about what should health care look like in five years and 10 years, and what are the steps we can take to get there?

And so that some of that work is happening, and some of us are are involved in that work.

Um we need a bridge to that, and we need a bridge to that that protects as many people as possible and preserves health care in the state.

And so we have to do both of those things, but we also have to get out of our own way.

And I I think there's a cultural opportunity to shift mindset to talk more and more about outcomes and hold us accountable.

And the US is it's counties, it's CBOs, it's everyone who is delivering a service that touches a public dollar.

Um hold uh hold us accountable for meeting achieving specific outcomes, but don't dictate the manner in which they need to be accomplished, because when you do that, it fails.

The more the federal and state government get involved in determining how something gets done, the more it fails.

And yet our current cycle is that the state and the federal government are doing it more and more, which is for them a rationale for more accountability when it should be a rationale to have some reflection and think about what are we trying to accomplish?

And do all the things that we are requiring meet that goal or not?

And so that's a really big cultural shift, and it's a huge political lift.

But if we're all talking together, there's an opportunity to reshape this into a different conversation because that has to happen.

Um that has to happen in a way where we can more efficiently deliver the services in a way that actually improves them for those who are trying to serve.

Thank you, Anna.

Appreciate everyone's insights.

Um you may have heard we we've gone through some issues with our Alameda Health Systems, the reductions in force, the workforce impacts from HR one, and obviously the community-based organizations have come to us about the impacts of proposition one.

Are you hearing that other counties are also experiencing similars and how are they dealing with it right now?

No, we're seeing um public hospital systems kind of throughout the state looking at the same challenges that Alameda Health Systems is.

Um reductions in force, um consolidation of services.

So for an example, Santa Clara County now has labor and delivery only at one of their hospitals versus different places.

Um Los Angeles Department of Public Health, um, they have closed urgent care on the weekends.

So it is only a Monday through Friday service now.

So everyone is kind of looking throughout their systems to address kind of what we're seeing and the cascade moving forward, but there are changes being made across their positive things being done.

I think we mentioned the the Santa Clara County tax um measure that passed in November, which covers about a third of kind of where their deficit is coming this year, but other counties are looking at similar things, so kind of looking at a range of different opportunities to address the costs and the the budget kind of deficits that are being seen and doing it in a way that is open to you know, making sure that people have jobs and the doors are open to for to provide care.

Uh within county behavioral health, yes, it's very similar actually.

Most counties are um oversubscribed on the housing funding already, meaning they had existing housing obligations either through full service partnerships in Mental Health Services Act or the new one-time behavioral health bridge housing combined with their obligations to the new housing that's being built, they've already spent the BHSA money, so that's all tied up for the most part in most counties.

Um, we are nervous about the sort of expectations on county behavioral health for housing funds ongoing.

There's not a lot of turnover.

Our folks tend to be disabled, therefore they're not you know earning enough to make California rent typically.

Um so that that's a tension everybody's dealing with, and then having to cut like a significant portion and find ways to maintain their core services.

What they're typically doing is some of those prevention programs, they're having to cut wellness programs, et cetera.

Counties are in some cases appealing to the managed care plan, for example, because if in the past county behavioral health was a safety net for Medical, it was also a safety net or a buffer for people who were uninsured or underinsured by either their Medical Managed Care Plan or commercial insurance, right?

So if you can't get what you need through your commercial insurance plan through your job, you might end up needing or wanting to come into the county.

And on the horizon, counties are needing to say no.

I'm sorry, managed care plan.

You're gonna have to do more on the non-specialty mental health, right?

I'm sorry, commercially insured individuals, you are going to have to go back to your insurance and ask them again.

But this is a very difficult situation for us because we have as our role and responsibility oftentimes the only life-saving interventions for people who are in acute crisis.

And so tough times ahead.

I was just in San Martin last week.

Um similar message.

I'm heading to Tulary and King's, same message, and it's true whoever you talk to.

Um, and that the impacts are not solely felt in this one area that we're all talking about because you only have so much general fund in the county.

And so there's no question that every corner of county operations is going to be impacted by what we're talking about because you only have so much general fund.

And so you have to do that which is mandated first.

Um, and so that means that some of the things that are mandated in concept or needed in your community, um, for example, public safety are harder to continue to fund at the same level when the federal and state government are forcing the county to redirect dollars to some other mandated cost shift.

And so there is the struggle about how do you balance what you need in your community locally with what you're being mandated to do by the federal and state government.

I think that sort of sums up the dilemma that we all find ourselves in.

So thank you all so much.

Really, really appreciate the time.

I'd like to thank our panelists and invite them to receive a parting gift, I think we have for you.

Is that right?

Okay.

And then uh we'll just though quickly move to item three, Alameda County budget update.

Is that our own staff?

Okay.

Great.

Thank you for that.

Um, so now we are turning to our own budget here within the county.

So just quickly want to go through um what our budget process is like and recap um the current year budget.

So um, so we kick off the process in December and begin discussions on the internal service fund programs.

Um, departments then begin working on their budgets and narratives in January and February.

Um, we hold work sessions and stakeholder meetings throughout the spring.

And the but the proposed budget comes forward in May with adoption happening in June.

So here's how we landed for the current year.

The fiscal 25, the fiscal year 2526 approved budget recommends a balanced budget of 6.1 billion.

Um, current general fund appropriations total 4.3 billion, which is an increase of 300 million from the 24-25 approved budget.

Um, and this budget supports a workforce of nearly 10,500 full-time equivalent positions, which is an increase of uh nearly 10 FCE from the prior year.

Uh here we see uh appropriations by major objects.

So salaries and benefits are the largest expense at over 1.7 billion, or which is nearly uh 40% of general fund expenses, discretionary services and supplies includes operational expenses as well as over 1 billion dollars in CBO contracts, non-discretionary services and supplies consist of internal service fund costs such as building maintenance, IT, and communications.

Other charges are primarily client benefits and other financing uses, includes debt service and intergovernmental transfers.

The county's three largest program areas are health, public protection, and public assistance, all of which are budgeted over one billion dollars.

Government programs are roughly 7% of the general fund, and together all of our program areas make up over 90% of budgeted appropriations.

The remaining amounts support capital projects, contingency, and non program activities, which is primarily for debt service.

Here we see financing sources making up the general fund.

And again, I want to say uh point out that state and federal revenue make up nearly two-thirds of our general fund.

The vast majority of the county's revenue is program revenue for which funds are mandated for certain programs.

And so discretionary revenue is really only 30% of the general fund.

So here we show the discretionary revenue by source.

So if we're looking at both the green and blue sections of the pie chart, they are property tax-based revenue.

So the majority of the county's discretionary revenue is property tax based.

So if we're thinking about that, 75% of the county's discretionary revenue is property tax-based, but the county only receives 15 cents for every property tax dollar collected.

This chart here shows the impact of the state's education revenue augmentation fund or ERAFT, the shift which began in fiscal 9293 when the state cut funding for schools and shifted property tax revenues from local jurisdictions to backfill the state cut.

So in total, since fiscal 9293, that's a total of 11.5 billion in property tax revenue that has not come to our county during this time period.

Here we see the various funding gaps that have occurred within our county since ERAF was implemented.

Just as a quick reminder, the funding gap for the current year fiscal 2526 was 105.7 million.

In total, the county has closed funding shortfalls totaling 2.6 billion since ERAF began.

Quickly want to recap the board's adopted maintenance of effort policy, which guides submissions that were represent year-over-year baseline changes.

So key aspects of the MOE policy are outlined on this slide and include known salary and benefit changes as well as operation internal fund adjustments.

Here's also a 4% COLA for eligible CBO contract adjustments approved mid year by the board, as well as alignment to the board's adopted vision 2036.

So some long-term obligations.

The county continues to maintain its triple A rating, citing our prudent financial management policies and practices, consistent budgetary performance.

Our other significant long-term liability includes over $800 million in unfunded capital and major maintenance needs.

So just to name a few of them, there are a few new ballot initiatives we're tracking, one of which could result in billions lost in property tax dollars.

The county's labor negotiation and workforce challenges can also significantly impact our long-term outlook, as well as rising insurance and health benefit costs.

So we know that our pending litigation and settlements are always impacting our insurance costs, which is compounding compounded in addition to the overall hardening of the insurance market.

Global finances, geopolitical turmoil and the impact of climate disasters have the potential to do significant economic harm and the potential of an economic downturn is always a concern for counties as these periods are often when services are needed most, yet they are also typically times when we see a decrease in revenue to support those same services.

So here is where we are with the budget process for the current year.

So departments submitted their budget requests in February, and we are currently reviewing them.

We then hold our early budget work session next month when departments will present their maintenance of effort budgets.

And then the proposed budget will be brought to the board in late May, and then we hold budget hearings on final budget adoption in May in June.

Thank you.

Thank you for the presentation.

Any comments from department heads, Supervisor Tam, Susan.

Our next item is public comment.

Members in the room, first three, and then online back and forth.

Would the clerk please call the speakers?

We have one speaker, John Lindsay Poland.

Welcome, John.

For you, John.

We'll give you three minutes if you want.

John Lindsay Pullen with the American Friends Service Committee, of course, a very dire and sobering report this afternoon.

And I was very struck by one of the things that Mr.

Kanaus said about revisiting things that you see as obligations.

And one of those things I would see is the assumption of a maintenance of effort structure for the proposed budget, because it assumes that the same levels of services will be provided, the same level of everything will be provided.

There was very little mention, except for at the end for Mr.

Knell's mention at the end of revisiting public safety.

So this is where I want to uh give an example.

As you know, um about five years ago, the county signed the Babu consent decree, and that decree lasts for about five years.

In other words, it is about up for renewal.

That decree requires the county to hire or required more than 240 staff uh from the sheriff's office within the jail, a requirement that the the county has never been able to fulfill.

And if we uh look at the level of cost for someone to receive care in the jail or anything else in the jail, it is much more expensive than cost out in the community, even for people who are very sick.

And so uh I think it is a it would be a useful exercise for the county at this point, and I heard also um Ms.

Kerbera say look at these things piece by piece.

We're not gonna solve everything in the next few months, but look at it in pieces, and one of those pieces could be revisit the Pabu Consent Decree because the staffing was never realistic for the jail, ever.

And it's very costly, it's much more costly than what happens out in the community.

But one other thing I want to mention is that um there was a mention of B chip.

That that those grants for construction of you uh facilities that are badly needed also come with a commitment by the county to provide services in those facilities for 30 years, and it would be helpful for the county for the CIO together with behavior behavioral health to plot out how that is gonna happen, because it it's really not clear at all at this point, and those facilities are being constructed at this moment.

Um I think that's all I want to say.

Thanks so much.

Oh, uh, there is one other thing, which is really can we get these presentations onto the website before the meeting happens?

It would be so so good.

And we know you printed them out, so we know you had a digital copy before the meeting started.

Thank you.

Thank you.

We'll go into closing remote.

We have more speakers online, yes.

An online speaker, okay.

Hello, can you hear me?

Yes.

Um, thank you for your time today.

Um, it was a very interesting, if dire presentation.

Um, I really uh just want to say that when we are making considerations around funding, um, really remember the unincorporated area.

We are chronically underfunded, and while this is a countywide issue, um, the countywide spending system has really left us that live in the unincorporated area really in a tough spot because we don't get that extra municipal funding because the county is our municipal, you know, operator.

And so I really think it's important that when thinking about uh budgets that the unincorporated area is always considered as, you know, I think it's been said out there that uh we're about the third or fourth largest city if we were a city in Alameda County.

And so there are a lot of us that live here that lack representation in a municipal structure, and that leaves us really at a disadvantage.

So when you are thinking about um, you know, these funding allocations, making sure that the unincorporated area is not treated as that is treated like it it was like a city, because we deserve that.

And more importantly, with all these cuts that are coming, it is really so important to have a community uh budget input process.

These cuts are gonna affect us so much, and having the community have a voice in what we keep and what we might need to let go is gonna be not just important for us, but also a resource for the county to really understand what's working, what's not working, and could be let go, and what is really critical for us.

So yeah, those are my comments, and uh thank you for your time.

That was the last speaker.

Okay, we'll close public comment.

I would like to um thank our um attendees today as well.

Um I do have a question of uh staff.

We have these charts that show the pie charts, and one thing that I'm concerned about as we see the data and the percentage of the pie chart that's let's go back to the presentation.

If we could can we put it back up, just pick one of the pie charts.

So the property tax, that's a good one.

Or uh federal aid.

So you know, HR one and the changes that are being made and the shifts and costs and who's going to be providing what it's good that I know with that slide there that $644 million is federal aid, that's 15% of the budget.

But what is uh more important to me is that less than last year, greater than last year, the same percent as last year, because I can I can understand the change versus year ago and the impact of that to me is more profound than knowing that federal aid is 15% of our budget, both important, but to me it's more important to know did that change much, and with all the things going on change versus year ago, and and if everything is pretty static and the same and not doesn't change a lot, then maybe we don't need to know that.

But it feels like this is a year where it's important to know.

I think we can you know add some charts.

We certainly have the data to show what the growth or decline has been over time with our major revenue sources.

You know, we do that certainly on the expense side, and so I think we can do that on the revenue side as well, and we'll include that.

Growth and decline, yeah, that's a better way to say it.

Okay, the the dollar chart, I like be we see that as well, the dollar bill and how we only receive at the county level 15 cents of every dollar.

You can see where all the rest of it goes.

It's important for people to know that.

Okay.

With that said, we've had uh public comment, we've had our uh meeting uh in an effort to be more and more and more and ever more transparent.

I've asked our county administrator to describe from here on out the process for us completing our annual budget.

We take this very seriously, and it will be completed by the statutory June 30th, I'm sure.

But where are we going from here?

What's the next?

I think you saw the chart.

We're in the process of working with the departments on developing the maintenance of effort budget, which helps us determine what the funding gap is going to be.

Um, we have scheduled on April 14th the early budget work session with the Board of Supervisors.

We'll be scheduling the next budget work group meeting the following week, the week of April 20th, um, to uh go over our projected um funding gap, and then work will be underway to close that gap.

We know that the May revise will come out in early May, and we have committed to providing a proposed budget to the board uh no later than May 28th.

In fact, we've actually penciled in a work session on May 28th, and then uh we will be scheduling uh hearings with the Board of Supervisors in mid-June and with adoption by the end of June.

So um somewhat similar process to years before, but with a foreshadowing of when those dates are and also an accelerated schedule.

We're we're bringing the proposed budget to the board uh before the end of May, whereas we had done it before the first or second week of June.

So there'll be an at least an additional week uh in there, and we still need to meet the statutory deadlines and guidance in terms of the number of days between submission of the proposed budget and the commencement of the hearing.

So we'll be adjusting uh that schedule as well.

Thank you.

Supervisor Tim.

Um thank you, Chair Halbert.

I also wanted to add that uh Supervisor Miley and I uh serve on the unincorporated services committee, and we will also, as part of the community engagement process with this budget, um the community advisory, excuse me, the the CAO's office will be uh providing presentations and getting input to each of the municipal advisory councils um that are part of the unincorporated area and getting that feedback into our budgeting process as well, primarily through the departments.

Very good.

We're going to continue to be um uh more and more engaging with our public.

With that said, we've had uh our meeting, all questions asked and answered, public comment open and closed.

We are now adjourned.