Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services

The Senate Budget Subcommittee number three on Health and Human Services will begin. We'll start off as a sub sub for today. Good morning to the first May revision hearing. I'm very excited. I hope all of you are very excited as well. As always, we are meeting in the 1021 Building. I ask that the rest of my Subcommittee Members join us so we can establish a quorum. For those wishing to provide a public comment. Today's participant number is 877-226-8163 with an access code of 736-2834.

You'd think I'd have that number memorized by now. All right. Today we'll be hearing May revision budget proposals in two parts. Part A will begin with the Human Services proposals from the following departments. We have the State Council on Developmental Disabilities, Department of Aging, Department of Developmental Services, the Department of Community Services and Development, the Department of Rehabilitation and Department of Social Services. We will hear childcare items under the Department of Social Services at tomorrow's hearing.

Part B will then start, obviously after part A and will include health proposals from the California Health and Human Services Agency, the Emergency Medical Services Authority, Department of Healthcare Access and Information, and Department of State Hospitals. So we'll start off on, like I mentioned, the Human Services side. And we'll begin with issue number one on the State Council of Developmental Disabilities. I welcome you up.

Good morning, Madam Chair, Members, Ken DaRosa, Chief Deputy Director with the State Council on Developmental Disabilities. You have a few items for your consideration. The first is a technical request to increase reimbursement authority by $106,000. That will give the State Council an opportunity to spend a contract that it has entered into with the University of Southern California's Children's Hospital of Los Angeles to look at health care and access issues for people with intellectual and developmental disabilities. The other two items are reappropriations.

One is tethered to a grant we received from the Centers for Disease Control for vaccines and vaccine-related access. We are requesting a little bit more time to spend that as we continue to reach out to communities and provide vaccine access to them.

The other is an item we received from a nonprofit organization called the California Community Foundation for funding to purchase and distribute emergency go kits which will provide people with intellectual and developmental disabilities three days of necessary supplies in the event that they need to evacuate as a result of wildfire or if they need to shelter in place as a result of public safety power shutoffs. Happy to take any questions at this time.

Perfect. Thank you. LAO, Department of Finance.

Good morning, Madam Chair and Members. Mark Newton with the LAO. We're raising no concerns with these two proposals.

Kia Cha, Department of Finance. No additional comments.

Perfect. No additional comments on our questions on our outside. Thank you so much. We're going to hold this item open, move on to the Next Department and welcome Department of Aging up. Good morning.

Does it work now? I'll switch this. Oh, there it goes. Okay, great. Good morning, Madam Chair. Members. My name is Mark Beckley, and I'm the Chief Deputy Director for the California Department of Aging. Two of the Master Plan of Aging's five bold goals health reimagined, and inclusion and equity, not isolation address behavioral health needs of older adults. Since inception in 2021, Master Plan for Aging initiatives have addressed the topics of suicide prevention and behavioral health.

This request proposes $50 million in one-time General Fund to advance the MPA's behavioral health by investing further in trusted community partners that offer local behavioral health support to older adults with a focus on equity. The proposal continues the state's commitment to staffing a 24/7 emotional support warm line in multiple languages and builds on California Department of Aging's advocacy and public awareness role with a statewide older adult behavioral health stigma reduction campaign.

This proposal dedicates $30.3 million in competitive behavioral health grants to support local partners that work with the older adult community. Local partners may include home and community based service organizations, local area agencies on aging, caregiver resource centers, ethnic and cultural groups, LGBTQ plus organizations, tribal partners, faith-based entities, service providers, and others. The competitive grant program is expected to uplift trusted community based partners with specialized expertise in race, ethnicity, language, culture, trauma-informed care, and gender-affirming care.

The proposal also dedicates 4.5 million to fund the continuation of a 24/7 emotional support warmline in multiple languages and 10.5 million for CDA to lead an older adult behavioral health stigma reduction campaign. Finally, the proposal sets aside 4.7 million for state resources and six positions at CDA to provide support and oversight to local partners.

If approved, the funding would run for three years commencing July 1, 2023 and ending June 3 of 2026, and the split among the years would be 20 million in year one, 20 million in year two, and 10 million in year three. The Department will collaborate with the Administration to ensure all activities related to this proposal are in support of CalHHS Agency Behavioral Health Continuum and Roadmap, and recent Administration efforts to modernize the Mental Health Services Act.

CDA plans to convene a time-limited, one-time work group comprised of external stakeholders to include subject matter experts in behavioral health, geriatrics, gerontology, equity and cultural competence, people with lived and learned experiences, legislative and state government representatives, and others to advise on the initiative. And happy to take any questions on this proposal.

If you could go on to the second and third questions?

Absolutely.

Thank you.

There was a question in the agenda regarding the behavioral health support warm line and whether the warm line funded under the HCBS spending plan is the same warm line proposed in this BCP, and the answer is yes, it is. The funding for the warm line under HCBS expires at the end of this calendar year, so on 12 31st, 2023. Therefore, this funding certainly is needed to continue the warm line for the next three years.

The other topic that we're asked to address has to do with the HCBS spending plan initiatives. We are proposing to extend four of our initiatives. The initiatives are access to technology for older adults and persons with disabilities, the Adult and Disability Resource Connection Interoperability Funding, CalGrows, and nutrition infrastructure.

We believe that for the ATT program, the 42 participating counties that have signed contracts with CDA would benefit with additional time for them to start up their programs, enter into agreements with local technology providers in order to purchase tablets, service plans and training for local participants. For our CalGrows initiative, which is our direct workforce initiative.

We believe that the 78 contracts that were awarded as part of this initiative to local providers would provide program participants additional time to take trainings, to maximize the number of people receiving training, as well as the time needed for the participants to take the training necessary to receive stipends. For the nutrition infrastructure funding, I think this Committee has heard comments from Wheels on Wheels, California about the difficulty in securing certain equipment and transportation, such as vehicles, due to supply chain issues.

We believe that the extension will help them acquire more of the necessary equipment and vehicles. And then finally, for our Interoperability Fund, this fund is really intended to do a couple of things. One, set up a state data repository to help further the goals of the Master Plan for Aging, as well as a customer facing web portal. And we believe that the additional time will allow us to finish the design and scoping work necessary for these initiatives.

And I believe those are the questions we're asked to respond to.

Department of Finance. LAO.

Thank you, Madam Chair and Members, Ginni Bella, with the Legislative Analyst Office. On the Older Adult Behavioral Health Initiative, we are currently reviewing the proposal at a high level. We would agree that it aligns with the goals of the Master Plan on Aging.

That said, we do want to look at it more closely and ask some questions around how the specific initiatives were picked, how the funding across those initiatives was decided, and across the years, how the programs will be evaluated going forward, how quickly we could really get this up and running feasibly. And given the current budget conditions, sort of, and without prejudice to the proposal, what sort of health and safety risks is this sort of preventing? Or by doing this proposal?

So what is really at stake here? And finally, how will the local grant awardees be selected? So, just some questions we'd like to explore with the Administration. We just haven't had a chance yet. On the extension on the Home and Community Based Services spending plan, as the Subcommittee discussed several weeks ago, it's not surprising that some of these programs were slow to start. And so seeing this extension, we do see is a step in the right direction.

We're currently in receipt of the section letter that aligns with this request. So we're reviewing it, and some of the questions we're really hoping to answer is really just what is the most recent expenditure data for all of the programs within the HCBS spending plan? How were the programs selected that were chosen for the extension, and how do those projections look? How do we see the spending actually drawing completely down in the extended six months?

And are there other programs that are sort of on the cusp, but that could benefit from an extension too? Those are some of the questions we have as we're looking at it.

Thank you.

Department of Finance Hersh Gupta with the Department of Finance. Appreciate the comments from the LAO and nothing further to add to CDA's comments at this time. Look forward to continue working with the Legislature.

Perfect, thank you. I have a couple of questions, and I'll start off with the first one. I know you mentioned those four programs under HCBS that are going to be extended. My question kind of aligns with LAO. Seeing the request for the older adult friendship line was being funded under HCBS, can you walk me through just the consideration it was given for it not to be extended and thus come in here at a request for General Fund money?

Correct. So under the HCO spending plan, the amount of funding that was provided for the friendship line really would carry us through 12/31 of 2023. We would have had to discontinue the service effective January 1. If this proposal doesn't go forward.

Just confirming, all the money allotted for it is going to run out in December?

Correct.

Perfect. Thank you so much. My second question is, given this dire budget that we're in, and some of the priorities here in sub three you've heard, is things that are really going to put food in front of people's, at people's tables, help ensure that they don't fall into homelessness, just the safety net issues of it all.

So in seeing this request of 10.5 million for a media campaign, can you walk me through that, just like the dire need for a media campaign right now giving a deficit?

Yes, absolutely. And we understand the concern. I think there's a few statistics that we really look at when it comes to older adult behavioral health. One is that it's been a very under publicized issue. There's been a lot of attention paid to children, teenager, young adult behavioral health, and rightfully so. But we do feel that when it comes to older adult behavioral health, that is an issue that's been sorely neglected for several years.

And a key statistic that we always look at is there was a recent study by the California Healthcare Foundation's Health Policy Survey that reported that older adults 65 plus are the group that are least likely to receive mental health care compared to all other age groups.

So I think it's important that the word gets out that we really do publicize mental and behavioral health services for older adults. One that they're available, and that to reduce the stigma against older adults thinking to go and receive a behavioral health. So we think to really maximize the effectiveness of this money is to really get the messaging right, because we would hate to distribute grants to local community providers and not have people come to receive their services.

And, and you teed me up perfectly for that. The community collaboration section of this proposal, the community organizations within that grant, I'm thinking about community health workers, promotoras, that infrastructure already in the community organizations that would allow them to do that outreach that could then perhaps negate the need for the social media campaign.

Yes, I think that both can go hand-in-hand. I think that our local community providers are always happy to help us get the word out about services. But we also know that when we do these large media campaigns, and I'm just thinking about the COVID experience, typically funding helps for them to distribute pamphlets to receive different social media kits. We really think that this would be an accelerant to getting the funding out.

And we do understand that a lot of community-based organizations typically are pretty cash strapped, so asking them to do yet another thing could be challenging.

Senator, any other questions?

I guess I'm curious, as part of your scope of responsibilities, do you find that behavioral services are universally available to seniors around the state?

We do not, no. And that's a real issue. So that's why we think this funding will really be necessary. We know that there are certain community providers out there who do provide some level of older adult behavioral health services. We really want to encourage those providers to expand their services further. And so, yes, that's why we think the partnership is so important and getting together, collaborating with them to design these programs is so important.

Well, I commend the Administration on its efforts to not only build capacity in terms of infrastructure, but also capacity in terms of workforce development across the board in the behavioral fields. Probably for the first time in the almost 11 years I've now been here, this is a robust effort and that's an understatement. More is needed. And I think certainly the senior groups and those of you that work with them need to continue to emphasize the need for both infrastructure and behavioral health workforce.

Because if seniors are in need of behavioral health services, and I count myself as one of them, maybe not the mental health services yet, but I know 11 years here, who knows? We want to make sure that they're able to access the services they need. So thank you for what you do and appreciate. I look forward to progress.

Absolutely.

Thank you so much, Senator, we'll hold the item open. No further questions. Thank you.

Thank you so much.

We're moving on to the third issue and third Department I welcome Department of Mental Services up.

Good morning, Madam Chair. Nancy Bargmann, Director of the Department of Developmental Services. Starting with issue three, I'm going to go ahead the questions that are before us, we have three questions that are in the agenda on page eight. One is providing just a brief overview of the major changes in our proposed May revised budget and then we have two additional questions.

I'm going to go ahead and start on question one and I'm going to highlight three of the items that are on page eight that are the last bullets that are summary in the agenda. Then I'm going to turn to my colleague, Deputy Director Jim Knight to provide the rest of the responses on this issue. The question that is in issue one that was raised for us to address is the reappropriations that's proposed.

So we have a request to do a reappropriation of approximately let's see if I can get that number for you really quick. $10.7 million under community placement plan and community resource development. What we have every year is community placement plan dollars or community resource development to do three things. One is to fund new placements or services for individuals who are leaving settings that are developmental centers or other institutional setting types. The other is to be able to provide some assessments.

And then the third leg to that is under purchase of service is startup dollars. And the startup dollars are really intended to build capacity within the community to serve individuals. Community Placement Plan is for individuals who have highly complex needs. But the Community Resource Development is for individuals to be able to build capacity in the community to support what those needs are. Back in 2021, as we were all facing COVID, there's a lot of delays. There's a lot of delays in development.

We have approximately 27 million for startup dollars and in that 27 million, about just over $10 million was not expended. Much of that has to do with delay of development for residential homes. There's a supply demand delay because we were not getting supplies, construction supplies. There is delays in construction work. I think that was generally speaking in all development, both in commercial as well as residential.

So considering the input that we've had over the years from our Community and Housing Development Work Group under our DS Task Force, one of the leading things that they have shared with us that is a priority is housing, housing, housing. We are very fortunate this year in the funding for 22-23 that we were able to approve seven projects for multifamily housing.

And what we also had a number of other housing projects that we were not able to fund that was available because we had other priorities that Regional Centers had listed. So the proposal is to reappropriate these dollars to fund six additional multifamily housing. By doing so, we would be able to achieve close to 200 units out of the 13 different projects. And so that's the proposal that we have before you.

Additionally, just real briefly on the Regional Center Operations Policy update, there's prior initiatives and policies, and Budget Act actions for enhanced service coordination. That's a reminder is that this is a low to no purchase of service. Those individuals who have low to no purchase of service, the caseload ratios were reduced. We had also funded under the Performance incentives reducing caseload ratios for those that are outlined in statute under Medicaid waiver, as an example.

And then lastly, when we changed the eligibility for Early Start, we had some funding for Service Coordinators. This proposal is to actually adjust the salary that we had in those prior assumptions to put it into the state-level salary as opposed to what we had identified in those Budget Acts. And then the last item was on Start Training. This is just doing no additional teams but to fund the administrative portion of those services. And Deputy Director Knight will go ahead and go through the other items.

Yeah. Thank you, Madam Chair, Committee Members. Jim Knight, Deputy Director of the Department of Developmental Services. So, going back to page seven there under issue item number three, the first issue is number 81 there, the State Operated Facilities Enhance Federal Funding. Want to address that in conjunction with a later issue, 91, from the Regional Center side. Really what this is, is that the Governor's Budget assumed that the extra financial matching dollars from Medicaid, that those were going to end in the current year.

There would be none in the budget year. These changes are reflecting that for the first two quarters of the budget year, there will be some additional federal match for state expenditures, albeit that they are decreasing in those two quarters. Next, and I'll get back to issue 86 and do that in conjunction with a later item as well, the Independent Living Services issue number 87. So this is an adjustment to the assumptions and the rate models. I know you've heard some testimony about that.

And we worked in conjunction with stakeholders to update the assumptions for the job classifications that we used as a salary match in line more in line with what the Independent Living Services are providing. So this is as it says in the agenda, our estimate assumes that that would take effect in January, assuming that there'd be federal funding. And then the ongoing cost, once at full implementation, beginning in 24-25 would be $60 million increase. Provisional eligibility for children who are ages zero through two.

That's issue 89 in the agenda. So recently, we did change eligibility or implemented this provisional eligibility criteria for children that are ages 3 and 4. And if you recall, the need that we were seeing then was, and we have seen over the years, is that when children move from Early Start, which ends when children turn age three, at times it's very difficult to make the ongoing determination of the developmental disability for ongoing lantern and services. So sometimes we would see a gap in services.

People would leave Early Start, not receive Regional Center services, and then come back at age 56 and beyond. So we implemented this provisional eligibility criteria for ages 3 and 4. Now, when we approached the Centers for Medicare and Medicaid Services to get approval for federal funding for this group, their question was, well, what about for kids who are younger than that?

Why would there not be a less stringent criteria for those that are zero through two in addition to 3 and 4, which would make federal funding then because of those concerns a challenge for us. So this proposal is to expand that provisional eligibility criteria to children that are birth through two. And so really, what it then would result in a net savings, as it says here, allowing us to access federal funding for services provided to kids who are already in the Early Start program.

It does not change the number of children that we are serving in total. It would just be that some of the children that are eligible for Early Start would also meet the provisional eligibility criteria as well. Next issue the caseload and utilization adjustments for the May revision.

As it says in here, these are some relatively typical adjustments that we do when we look at updated expenditure trends when we come to May, and also, as it's referenced here, because of some of the changes in the spending plan for the American Rescue Plan Act, there's some technical shifts there as well. Then going on to page eight, the minimum wage adjustment.

Again, this is just a slight adjustment based on updated expenditure trends for the cost of the minimum wage adjustment that's set to take effect in January of 2024. And when we get to the home and community services allocation, the adjustment, and I know it was touched on a little bit in the previous panel as well, the Administration is expecting or is going to extend the expenditure period for a number of initiatives that were reflected in that plan.

For the Department of Developmental Services, that's all the initiatives, with the exception of the information technology projects. So for the updating, the fiscal system and the case management system, we're expecting all those expenditures to occur as scheduled, but we have requested additional time for expenditure on all the others. So Social Rec and Camp, the rate reform, Coordinated Family Supports, and the others that we had in there.

And I know that there's a lot of questions on the mechanics of that, and we're happy to meet with staff and work through those details on exactly where they went, because it is just, quite frankly, a bit complicated. Not just because of the changes, but also the additional federal funding that we considered when we looked at these as well. But at a high level, the main changes that we see for the ones that are impacted or under this Department.

We do because of the pace of the Social Rec and Camp expenditures. So we have lowered the estimate of the total that will be expended even with the extension, as well as the timing for the Coordinated Family Support. And we used in addition, we increased the amount in the plan that will be funded with the rate model implementation.

And so one of the reasons why you're seeing a request, if you will, for additional General Fund for Coordinated Family Support has to do with moving some of those expenditures for the rate adjustment into the current year to take advantage of the higher federal match that's occurring now. As opposed to, even though there's going to be an increase in the budget year, it's not as much as it is in the current year.

So again, happy to walk through separately all those details with you all and do recognize that it is very complex. I think we've addressed the questions but happy to address any others that you have.

Just quickly reviewing. No. We'll turn to LAO.

Yes, Madam Chair and Members, Mark Newton with the LAO. Excuse me.

We're reviewing all of these proposals and generally not raising any questions or issues at this time. But we would like to comment on two of the issues though on the Independent Living Services rate issue. Our office has done a lot of analysis on the rate reform sort of issue and prior analyses have found that the original rate for Independent Living Services is sort of inappropriate for the services intended to support.

And thus we think that this proposal, this rate fix is consistent with the Legislature's intent for DDS rate reform. So we would be supportive of that. In terms of the General Fund augmentation for the Coordinated Family Support services proposal, as the Chair mentioned, there's a very, very high bar this year for General Fund augmentations given the state's fiscal situation. This would be a case where we would recommend rejection, but without prejudice for the merits of the proposal. But given the state's fiscal situation. Thank you.

Department of Finance.

Christopher Odneal, Department of Finance. Nothing further to add at this time, Madam Chair.

Thank you so much. My first question is, you know, I tried to understand the complexity of the dollars and I saw some of the numbers pulled from the Social Rec and Camp and pulled from the Coordinated Family Support to further Fund the rate reform. So why do you anticipate a lowercase number for the Social Rec and Camp component?

So we'll talk about it more in the trailer Bill section in the next issue. But I think we've talked about it before too. There has been as we kind of restart things like with social rec and camp and even the Coordinated Family Support. The ramp up has been slower than we anticipated and part of that has to do with identifying providers.

Or the lack of understanding at the Regional Centers that it's available.

Well, Director, do you want to?

Yeah, I'd be happy to. Thank you, Madam Chair. As we have kind of had conversations, this is a really important proposal for the Legislature, for the Administration and certainly for our community is Social Rec and Camp. Part of the ramping up certainly had to do with the fact that when we had Social Rec and Camp in the past, prior to the Great Recession when it was eliminated, that it wasn't HCBS compliance at all times.

And so one of the areas that really needed to be focused on how do we develop those resources that is inclusive into the community. We also did, as the Chair noted, that we had some Regional Centers that had additional policies that really created some barriers to accessing Social Rec and Camp.

We've been addressing those very strongly with each of the Regional Centers, modifying that having them go back and retrain their staff as to the accessibility to social reckon camp, making sure, as one example, that you don't reduce respite when you authorize Social Rec and Camp and really having an understanding of the benefit and the purpose of what it is. As noted in issue four, one of the trailer Bill items that we have proposed in issue four is participant directed Social Rec and Camp.

We have found that families being able to self-direct their resources really is a phenomenal way to be able to address barriers to accessing vendored services. This particularly is true within communities who are struggling to identify other resources. Lastly, I'll just say where this is a benefit is that when we look at being able to do parental reimbursements, many families don't have the upfront dollars to be able to do the parental reimbursement.

So having a participant directed using the FMS, then we would be able to not put that burden on the families who have maybe struggles socioeconomically. So addressing finding other strategies to address and being able to support the initiative that was intended in prior budget acts.

Thank you so much. And then going back to the Coordinated Family Support services, this one, if you could clarify for me, there was funding there from HCBS. Are we taking everything out and putting into the rate reform? Are we leaving some and then the request here is to supplement or is it a complete wipeout and that will be dedicated to that?

No, it's not a complete wipeout. There is a reduction based on the timing of the kind of the revised timing of the rollout. So the amount that is left in is the amount that we would expect to expend under that program through the extended expenditure period.

How dire would it be in your opinion, the Department's opinion in putting back that money into Coordinated Family Support services and pulling it out from the rate reform? Let me rephrase. So funding the allocated funding from HCBS for the Coordinated Family services, some of that was pulled into the rate reform right? To increase that. And therefore 10.8 million is being asked from General Fund to supplement what's being taken out from federal funding.

How dire do you think the situation would be if that money would go back to the Coordinated Family services?

So Christopher Odneal, Department of Finance so when we're looking at Coordinated Family Support services, the 10.8 million that is requested, General Fund is what we're estimating as the half year cost of an annualized cost for this program. And so under the HCBS spending plan, Coordinated Family Support services, we had always anticipated that this was not a program that was a General Fund commitment before it was in the HCBS spending plan.

So this, absent any General funding for this program in 23-24 the pilot would end in March of 23-24. So what we're doing, along with the other adjustments in the HCBS spending plan, is proposing to make that program whole through the end of the fiscal year.

So that as we continue to assess and look at data that's coming in on utilization in that service, that there potentially wouldn't be a gap in services next year if we determined it was appropriate to continue funding the service, if that helps.

But there wouldn't be a gap right now. If we continue utilizing the funds of HCBS, there wouldn't be a gap until the next fiscal year. Right? I mean, there's enough funding that HCBS that was dedicated to this to push it all the way through the six month extension. Correct?

Now, actually, Kia Cha, Department of Finance so the HCBS funding for Coordinate Family Supports never took the program to the end of the next fiscal year. It was only funding through March of 2024. So I think what we've done, and I think maybe important to point out, is that in a way, we are supplying some of the General Fund savings or some of the arbor dollars that we're shifting to rate acceleration in the current year.

That kind of drives some of the General Fund costs because we're achieving the General Fund savings in the current year by fully funding rate acceleration with HCBS Dollars, but because we shift it. So, like, for example, for Coordinate Family Supports, the funding for that one quarter beyond December 2023, right, that has been shifted to fund rate reform acceleration. And that's because we want to just maximize the enhanced federal fund that we can receive in doing that.

But in doing that, we do need to kind of make Coordinate Family Supports or provide them that quarter of funding that we've shifted. And I think because HCBS funding never really carried that program to the end of the fiscal year, we are adding a little bit of General Fund. But I think it's important to note that between the two fiscal years, you're seeing General Fund savings that's going to offset the General Fund increase that we're asking for.

And in fact, I think there's a net General Fund savings after the offset. but again, without trying to get into the weeds, complicated.

Kinda lost me there. Okay, so the funding in HCBS, it's in there until March only for this program? Yes?

For HCBS. Yes. The funding that we had in our HCBS spending plan only covered family supports to March. Yeah.

And sorry to clarify, Madam Chair, too, the funding for Coordinated Family Supports in the HCBS spending plan contemplates spending that money over the course of the spending plan timeline, which transcended different fiscal years. And so part of what's going on is some of the money is being spent in current year on Coordinated Family Support services. And so that's what we're trying to address with this proposal.

And is this going to be, do you anticipate this being because you said before it was a General Fund. It was funded through the General Fund?

I'm sorry, no, to clarify, this was not. Some of the DDS programs like Rate Reform Implementation and Social Rec and Camp were General Fund commitments initially that we swapped out for HCBS. Coordinated Family Support services was always a pilot that was in the HCBS spending plan and never a General Fund commitment prior.

So after this allocation of point, you'd have to come back to extend the program again.

Correct. And we're currently assessing the program as it's ongoing.

Okay.

Questions.

Thank you. Thank you, Madam Chair. Thank you. I do applaud what you guys did with the independent living centers and making sure that their rate increase was brought forward because they were excluded last time. And I apologize for being late. I apologize for being late. I'm also a grandmother up here and I had a 15-month-old last night. But I don't know if you covered the Employment First.

Back in, I think, 2014, west Chesboro introduced a piece of legislation to fund the Employment First program for those with the IP that want to do work. And back then, it was like 14% of the people who the DD, that community was employed. I want to know if that program is still being funded. If so, how much and what's the percentage of the rate that the people are being employed in that population, because my understand that we've invested millions of dollars and it's gone down.

Thank you Senator Grove, Nancy Bargman, Director of DDS. I'm more than happy to provide some additional information. Employment is very important and it's a priority for Developmental Services. And looking at some of the initiatives.

Just real briefly, some of the things that we had in the Governor's budget and prior to budget acts is that we invested in our quality incentive measures in employment to be able to give providers incentives to increase the number of participants in employment and then also to build the skill development of the staff that are within the service providers. The rate adjustments, I don't have all the detail, but happy to provide that to you for those initiatives and those rate models that support competitive integrated employment.

The other thing we've been doing is working also with State Council and other partners and having our work with our colleague at Department of Rehab a lot of collaborative work on grants. We have $10 million annually in grant funding for employment. We also have work groups that are identifying priorities to be able to do that. And while it may not be part of the May Revise, I would be more than happy to schedule some time for us to brief you on some of those efforts.

I would really appreciate that. I looked at some data that showed since that policy was passed, that legislation was passed, and West Chesborough was in the Assembly with myself and others that are now in the Senate. And then now you just mentioned another $10 million of grant funding that you're working collaborative with. With who are you working with?

Department of Rehab. We both each have $10 million for improving access and for competitive integrated employment.

Okay. Because my understanding is back then, I think it was in 2014, it was a 14% of the population was employed. We made it an employment first policy. And I was curious and so you're saying there's no funding within that here in the May Revise for Employment First.

In prior budget acts and much of the other initiatives we had prioritized employment. We're in the process of implementing many of those changes and so we were able to address many of the other areas in which we needed to continue to focus on initiatives. Doesn't mean that we're not committed to it. Very committed to it. Employment is I even said to a few of my staff this last week, I said this year is all about employment. So we definitely have a laser focus on employment.

Good. And to follow up on the chair's question, I didn't follow and I apologize. Took her a second go around to get it though. The $10.8 million or the money that you're getting that funds the parents support reimbursement services right now it's coming from the Federal Government, correct or not?

The coordinated family supports is through the American Rescue Plan dollars. It's a pilot. It's a brand new service model that in response to our community really asking for what is like supports for families that are living. An adult who is living at home with their families and multigenerational families, typically similar to somebody who's living. So service access and equity and making sure that we're addressing many of these issues has been a priority.

And families who have their adult family member living at home have less access to certain services and supports. This pilot program is really giving us an opportunity to take a look at a supported living-like model that supports the families. It's a very whole-person approach, really looking at the individual and supports but also connecting to oftentimes you have aging parents and aging family members who are also needing support.

So making sure that the local area on aging that there's those connections and that we're able to support the whole family and person through this model.

So that program you said was due to end in March of 20, what?

So the funding, so we had funded it through the American Rescue Plan and our May revised proposal because we do want to maximize the opportunity with the other initiative of the rate adjustments to be able to get the federal match, which is a significant match.

But we also want to make our proposal is to continue to be able to have the funding so we can have another full 12 months of the pilot, so we can see if it's meeting the expectation that we had intended to be able to support those individuals and family members.

Do you have any metrics in place now to see if there's expectations or at least they're on track for the expectations that we want to make sure that they achieve? Because I get it. I have a friend that has a 24 year old, somewhat mid level, high functioning, down syndrome young man and I've known her for years. But one of the things we're both hitting 60 and she's like, what am I going to do? And if there's not somebody here for Garrett.

So I think it's important. And she's just one family out of thousands of families that we have in the state. I just happen to know her personally. So is there any metrics in place to be able to see if these programs are working? And are we allowed to make adjustments to these programs if they're not working? And where are we getting the data from?

Is it from the parents, the people on the ground actually using the services, or somebody from some office, someplace that doesn't work with the community?

Great question. One of the benefits of doing this pilot is also taking the input that we've heard from the community about wanting to have things standardized. So we've standardized all the vendorization for this particular pilot. We also are front loading. Like, what are the outcome measures? And it was done through a very engaging with our community, with those with lived experiences and family members, a lot of focus groups to say what is it that we can measure to really see? Is the impact really occurring?

The example that you're giving is a perfect example of saying, is there connections that are being made to others? Because there's the life planning. That is a sensitive topic, but making sure that there's supports to be able to have those conversations that are really important, that will give family members peace as well.

Okay, thank you. Thank you very much for that. Thank you, Madam Chair, for the leeway.

Just give me some time to think of another question. I'm wondering because I think this is like the second or third time you said maximize the opportunity with the rate reform right, to pull down. I'm wondering why with that mentality, we are only extending it six months versus the full year we're allowed to.

I think in this specific instance, the enhanced federal funding that's available to the federal Public Health Emergency is in a phase down currently. And so I think right now it's around 5%, but it's going to phase down through December.

And so right now it's a higher drawdown if we use resources in this quarter for rate acceleration versus if those dollars were to be used later in the fall where it's lower enhanced federal funding or even into calendar year 2024, where the enhanced federal funding has been phased out entirely.

Okay, thank you. Perfect. No other questions on this. We're going to hold the item open and move on to issue number four. Go ahead.

Thank you, Madam Chair. I'm going to go ahead and just provide we're going to kind of go a little bit out of order on the questions, if that's okay with the chair. I will go ahead and touch on question two, four, and five.

That's on page 11 of the agenda with the first item, the questions asking for the rationale, extending the remote option for IPP, and IFSPs through December 31, and then how we would determine additional extension for flexibility in the future and then are we engaging our community and we continue to engage with our community. Regarding many of the flexibilities that were implemented during the pandemic. One of the areas within the pandemic is that we had opportunities to do amendments to the waiver.

So it's called the Appendix K that allowed us to be able to draw FFP to those flexibilities in addition to the remote meetings under for IPP, which is the individual program plan that's done typically annually and then the individual family services plan. We also had flexibilities for remote services, for day program, for transportation, some other items such as behavioral health and all of those are in the waiver are ending at the end of November.

And so where we thought November was kind of an unusual time to kind of do an ending, looking for a clear date. So December 31 was the date of ending all of those flexibilities, giving the Regional Centers and the families time to be able to move forward. We had addressed many of the other remote issues in prior initiatives and taking a look at how we could expand tailored day services and flexibilities.

So recognizing just making these changes without having other flexibilities was important, certainly talking to our stakeholders. One of the concerns that families have shared in this area is that they want to be able to have some remote services. Many of them do because they want to be able to have their support systems, advocates and others to be available. Certainly don't want to not have that available. And we can always still have remote access for those who are not in the geographic area.

But as a social worker, I think I've shared this before. I just really find the value of in-person and making sure that individuals and families we're trying to build a relationship between families and the Regional Centers and having Regional Center staff that go out to the family homes, have that time with them, provide them that support, is of great value.

But also seeing how we can make sure that if a family wants to have somebody present, if they can't be there, having remote access would certainly be an option that we would welcome and support and work with the Regional Centers to assure that that would be available. The next item is question was on item four is that what are our goals for standardizing statewide procedures? There's a number of questions that are included in here and I'll really try to touch on each of those for you.

So when we take a look at kind of the goal for standardizing, there's several things. One is really the equity lens we have heard from our community the challenges when you go from one Regional Center to the next, whether you're going through intake or if you're going to trying to access services, but also by service providers going through vendorization, that there's different procedures and sometimes policies and how implementation is occurring.

So the standardization and looking at kind of key things right now, making sure that we're standardizing it, really is touching that goal, to be able to improve the experience of each individual, no matter what Regional Center in the state that they're working with. The other is oversight. It allows us to be able to provide more consistency in our oversight because we're going to have consistent data.

We're going to be able to really know that, for example, on the intake and assessment, that if we have a standardized procedure and approach, the forms are the same for families right now, the experience for families that are going on a website may be different than another Regional Center. So we'd be able to standardize that and then we'll be able to have the data.

We'll be able to tell from the point that a family contacts a Regional Center to the point that they actually have an assessment or eligibility that we would have that information the other than looking at vendorization. Same thing when we take a look at vendorization, standardizing it to make sure that as we're trying to build our provider network, we are really trying to do that. I also want to expand our provider network that's reflective of our community.

So by being able to standardize practices of vendorization and making sure that the training is available for service providers and doing outreach to service providers so that they can understand the process, so we can build our provider network as well. And then lastly, community engagement. We have often heard from our community that who's getting information and how are we getting information. If there's a new directive, a new policy, what is the information that's being received and then how is that being received out to the community?

But also then the Regional Center is hearing from the community any of the issues and challenges that they may be facing in receiving those new services such as social rec. So the community engagement plan is to have the Regional Center submit to the department on an annual basis, a plan that would be reviewed and approved to make sure that it's a really engaging plan. So again, we can have some consistency.

Certainly DDS is going to be doing more webinars and stuff, but we still really want to value the benefit of the local community and being able to make sure that Regional Centers are also doing their outreach. Then the question is, is it mandatory? Yes, it would be required that these standardizations would be mandatory.

And then yes, we would continue our work with our stakeholders to be able to receive input, certainly would see opportunities for them to give input on the structure of it, but also to respond to kind of the standards that would be set. And then lastly, just again highlighting the importance of maximizing the equity and how is that going to reduce disparities. We do see that standardization is really going to help.

We also see that that additional oversight, but the quality of data is going to be informative. But as I said, and noted that I really do believe that expanding our provider network that represents our community is going to help give experiences of individuals, of those individuals and their preferences. The last item is on question number five regarding the department's proposed Trailer Bill language for complex needs residential program.

This program, our Trailer Bill, is soon to be released and the question here is kind of what is the information that would be included in it? We already have our acute crisis service, STAR, which is in statute. We do have the parameters that are outlined in it. Largely we modeled that. So we took a lot of the protections and a lot of the requirements under STAR.

So I'm just going to highlight maybe some of the differences between what was in statute for STAR to our complex needs. One is defining the complex needs for eligibility, so it'd be duly diagnosed to be for individuals with IDD and co-occurring mental health diagnosis. The difference would be going from a 13-month cap. So right now STAR is for 12 months with one opportunity for a 13th month, and then the individual has to transition to an alternative service option.

We're seeing that more and more individuals are really pushing that last day and not having the best transition plan that is really important because of the complexities. So we're proposing 18 months on this model, but it's in increments of six months. We would still have to go and do certain actions before we would be able to extend it and have to be approved by the Department Director.

It also has additional protections as far as notifying the Office of Client Rights through DRC, so the same protections that are under Star would still be under the complex needs. Lastly, it also provides additional supports through stabilization and behavioral health treatment. So those are the things that we're looking to be able to have included in the trailer bill. And so I'll hand it over to Deputy Director Knight.

Thank you. And I'll go through the rest of the trailer bill and the other questions. So, going back, top of page 10, the proposed trailer bill for parent participation for behavior intervention services. Currently, statute requires parents participate in behavior intervention services. This proposal would take that requirement to an encouragement of parent participation rather than a requirement, and that is in line with how the Medi-Cal operates and their requirements for the receipt of these services as well. Next, the rate study update for family home agencies.

We have historically set the maximum rate for family home agencies to be in line with the cost of services provided in the community care facility. This change would be in line with what we've done recently when we established rates for smaller. So as it says, here four or less individuals in residential facilities. And then the rate study also has rates for smaller homes.

So we're just bringing this change would be in line with setting that maximum amount in line with the smaller residential facilities instead of the larger which it's smaller, but the per person cost is higher because there are less people. The next is the extended suspension of the family cost participation in the annual family program fee. And I know that there are some questions in the agenda about this as well. So as it says, the trailer bill would extend that suspension.

So we would not do any assessments for these fee programs or the cost participation programs through the end of the calendar year and in addition would request directive authority. And that would be to implement recommendations that have been informed by an extensive stakeholder process that we've gone through working with people, receive services, families, regional centers and others on their recommended changes, potentially to restart these programs. And you'll see when that plan comes out, we are working through that.

Some of the recommendations changes for streamlining and also potential suggestions have come up. Whether that'll be part of what we do as part of our plan or not, not sure, but trying to identify what is the use for the funds that are collected through the fee program. One of the questions in the agenda was what is the kind of the revenue that we generate with that? Before the annual program fee was family program fee was suspended, it was roughly $1.0 million per year.

It varied from year to year, but it's roughly $1.0 million was collected. The family cost participation just is not a fee. That was where depending on the income level of the family, that the family would be required to purchase a portion of some services, in particular respite. So that was not a fee that we were collecting. Again, that would result in expenditures that did not occur for the regional center since that the suspension has been in place, those expenditures would largely be in.

The trends of the expenditures that we're seeing now. Next is clean up on the final rule, the home and community based settings final rule. We do currently have authority to address in advance of regulations any changes that need to be made to meet those federal requirements that we've talked a lot about here. But also what we've talked about too is that the person centered service planning is really at the core and at the heart of meeting these requirements.

And then this cleanup would point to the section in the Federal Rules that deal with person centered service planning as well and give us directive authority to meet those in addition. Expanding participant-directed services for social recreation and camp we touched on this a little, so I don't want to repeat everything that Director Bargmann said, but one of the other benefits of this is that we talked about there's just different types of providers that people want to receive these services from, let's say cities and counties and those types of things that at times are very resistant to going through the vendorization process with the regional center.

So that this would also allow for more access to different types of providers who are not your typical regional center providers. Going back to the spirit really of social recreation and camp to be more integrated with other services.

The Federal Education Grant Funding Distribution, currently the Federal Grant for Education Services comes through our department, even though some of those funds then ultimately are used by the Department of State Hospitals. This kind of splits that up now so that we can more accurately reflecting kind of how they're used and then access to generic services. There's another question in there. We made a similar change a couple of years ago for the Early Start program.

But this is to clarify for regional centers that they must pay for services, medical and dental services, if there is a delay in getting those services. And that would include during times when there is an appeal for those services, whether that be to Medi-Cal or private insurance. So, happy to take questions on any of these.

Turning it over to LAO offers.

Madam Chair, members. Mark Newton, LAO. We're reviewing the language, no concerns to raise at this time.

Any additional comments?

Christopher O'Neill, Department of Finance. Nothing further to add, Madam Chair.

Thank you so much. Director, first I want know thank you. We had a very robust conversation on the regional center oversight and a lot of the feedback there. I really do appreciate it being addressed here, especially with the directive authority. So I want to say thank you for that work and continuing to work with the stakeholders on that.

So one of my first questions and I also want to thank you on the language for the complex needs residential program in providing some direction, the timeline and so forth. Just a quick questions on clarification on that. Can you clarify? We're not using existing buildings within Fairview, we're building new buildings on that compound or ground if you will.

Yeah, the final decision to build out there still not final, but we're definitely exploring that as a good option next to, as I had noted, Harbor Village and being able to be part and we were really appreciative of Will and Vivian from Disability Rights joining us out there and walking through because it's really important that they see kind of the vision if we were able to kind of land that as an opportunity correct. It would not be existing buildings, it would be a ground-up build.

Perfect. And then within the trailer bill language, is there anything related to the maximum beds that it's going to be there are going to be there.

Yeah. I'd have to look back. The intent is because it's based on what is within our budget authority is no more than five individuals per home and three homes. I'd have to just verify the exact language to say if it clarifies it specifically in trailer bill or if it's driven based on our budget authority.

Okay. I would be interested in seeing if we could put the specific five beds per home of those three homes. Deputy Director, in talking about the family costs program, can you speak a little bit more about the discretion? I'm not sure. Maybe I missed it. That last part in the question on the discretion the department has to further extend it and what would be the cost of extending the fee suspension?

Yes, I apologize. I did not address that in my remarks. So, no, we would not have further discretion to extend without changing statute.

Question.

Thank you. I know next week we have our votes only. And so this is like my last opportunity to be able to ask these questions. So I do apologize. I want to go back to the Employment First program because I think that's so vitally important, the pride that they have to be able to go out and have a job and take their lunchbox and go perform a job. Right. Whether it's,

Senator, I just wonder if we could stick to the questions of what's in front of us.

Okay.

I know we dived into our oversight.

I know. So the only question I have, I have a series of questions, but since I'm going to be limited with that the sub-minimum wage bill is going to be put into place. Is there a concern that a lot of these individuals will be displaced on a job? And if so, what are you doing to track them and make sure that they have opportunity to continue to work?

Thank you, Senator. So with the sub-minimum wage and the timing that would I think it's in 2025, there's been a number of initiatives to be able to support individuals, to be able to transition from their existing setting type that includes sub-minimum wage. We have an initiative that's on a career pathway and we're already starting some of that initial work and identifying that support.

So it'd be somebody, it'd be a provider who could go in and support the individual to be able to explore their different options for employment, for college. This includes not only those that are in work activity programs, but those that are just graduating high school and really having those opportunities.

So we're really focused on making sure that we're working on those supports to make sure that individuals have those choices and to be able to not some of the concerns that the community has said that they're going into day programs and not having meaningful days. The pilot that we're using on the career pathway is a very person centered approach, making sure that somebody's working very closely with the individual. We are working in collaboration with state council. We're working with the community.

We've also had some staff go out and make visits to providers because this is a really important point and we do want to be able to advance employment while we're exiting out of minimum wage.

I appreciate that. If you have any data that shows that that's successful, I'd really like to see it. I know my time is limited because it's not on the subject matter that's before us, but I think that with SB 639 being implemented, my big fear is that a lot of these people are going to lose their jobs.

And I know we're doing a backfill kind of thing where grants, employers can apply for a grant filled program, which is like a backfill to the sub minimum wage type thing. But I have a huge concern over that. So if you could provide me data that shows that what you're doing is working and that we are going to increase employment first instead of allowing these individuals in this population to not be employed.

And I know maybe not ever provide in some cases not all cases, but in some cases not be able to provide for themselves, but to have that esteem of having a job. And I thank, again, the chair for the leeway.

Thank you.

Deputy Director, I had two other questions for you on the access to generic resources. Can you clarify, is the intent to repeal the appeal process?

No, it's not to repeal that. It's to clarify that while that appeal is going on, that Regional Centers can pay for those services.

Can you educate me a little bit more on the process of getting to repealing that appeal process? And maybe that's giving the barrier that causes a lot for families, the appeal part?

If I could. So if I think I hear the question correctly, it's like, what is the problem we're trying to fix? And the fact that there's existing law that says for the payer of last resort or utilization of generic resources that the families there's some clarity that going through the appeal or asking for funding through their health plans, Medi-Cal, you know, that those plans would fund it.

So giving examples, medical care, dental, otpt speech, this is what the focus is on for this proposed trailer bill language change. And there have been delays for families of being able to get a letter back from their health provider to say, yes, we will fund, or no, we won't fund. And then the appeal process, it just depends on how long it may take. And so we have heard that there's been lengthy times.

So again, this gets back to our standardization of wanting to make sure that regional centers are approaching these decisions in a standardized way. So the proposed trailer bill actually provides the clarity to say that if a decision is not made within a certain period of time or that evidence is not provided, that the Regional Center will pay for those services, will have the authorization in the IPP, and be able to pay for those services.

And that decision is made.

Correct.

Is there language that says how much time they have to wait?

Yes, the language, I don't know if it's updated just yet, but we are updating that language.

Perfect. Thank you so much. And my second question, if we can go back to the Family Cost Participation Program. After your response, the department has no discretion to extend it. I'm wondering I know we're still getting some feedback from the stakeholders, some recommendations, when there's going to be implemented, thoughts behind as we're implementing this new process. What would be the cost to push this into the next to the end of the fiscal year while we're hashing.

With the question for the cost, is that what you said?

Yeah. So if we have no discretion and this is supposed to end in December 312023 and we're still obtaining the stakeholder feedback and recommendation that are going to be implemented, the cost, if you will, to the state in extending this to the end of the next fiscal year in order to hash everything out.

Right. I think I did mention that the revenue that the state was getting before was annual on the annual Family program fee was about $1.0 million on an annual basis.

And on the stakeholder recommendation, what are some of the recommendations that they've suggested and which of those are going to be implemented?

Thank you. So there's several, I apologize, I don't have that in front of me right now, but several of the recommendations that were made was based on the timing, the support, the explanation to families, even looking at some of the level of federal poverty levels. So there's a number of recommendations that were made, and we're happy to provide you the summary of that report. And since I don't have it here with me today.

I appreciate that. Thank you so much. If you could also send also which ones are actually going to be implemented?

I would not know that right now, and that's because we would want to circle back with our stakeholders to say, okay, based on your recommendations, this is the plan before a directive would be sent out that we would want to engage our stakeholders again.

Thank you, Director. Seeing no other questions, we're going to hold that item open. Thank you so much for joining us. Move on to the next department. Community Services and Development.

Morning chair members. I'm Jason Wimbley, Chief Deputy Director with the Department of Community Services and Development, and thank you for the opportunity to brief the committee today on our department items included in the May revision. The first is a technical adjustment to revert the unexpended balance of local assistance funding under the 2022 California Arrearage Payment Program, also referred to as the 2022 CAPP.

The 22-23 State Budget Act appropriated 1.2 billion in California emergency relief funds for the 2022 CAPP program to reduce energy bill arrearages incurred during the COVID-19 pandemic relief period by residential energy customers. Under the program, CSD distributed 647 million in CAPP assistance to 33 energy utilities, eliminating the past-due energy of approximately 1.4 million residential customers. The Governor's January budget identified 400 million in 2022 CAPP local assistance funding for reversion, which was a point-in-time estimate as utilities were actively dispersing funds.

The May revision identifies an additional 149.4 million in unexpended CAPP funds to be reverted to the General Fund, which is based on actual application requests and disbursements. The second item is a request for the reappropriation of greenhouse gas reduction funds for the Low-Income Weatherization Program to extend the liquidation period for the additional year to June 30, 2024. Over the course of his existence, LIWIP has been funded with various tranches of funding, each with its own parameters and expenditure and liquidation time frames.

The specific fund appropriation that the department is seeking one additional year of liquidation of authority for came from the Budget Act of 2019 with a liquidation period through June 30 and committed to the LIWIP multifamily components; which funds solar PV and energy efficiency upgrades for multifamily, low-income, affordable housing to reduce energy costs for low-income residents and affordability of these properties, while at the same time reducing greenhouse gas emissions.

Supply chain issues cause many of the projects to experience construction delays, prompting construction schedules to be extended and completion dates to be pushed to the next fiscal year. Because LIWIP centers are not paid until the projects are completed, the additional year of authority will allow the program to honor its funding commitments to these programs, I mean, to these projects. This concludes my overview, and I am happy to take any questions.

Thank you so much. LAO, any comments?

Thank you. Angela Short with the Legislative Analyst Office. We have no concerns to raise with these proposals regarding the proposed additional reversion amount. We would just note this is in line with what we expected to see and, as noted in your agenda, would help address the state's overall budget problem. As such, we have no concerns, but happy to answer any questions. Thank you.

Thank you so much. Department of Finance? Any additional comments?

Kia Cha, Department of Finance. No additional comments? Thank you.

Thank you. See nothing else. Thank you so much. We're going to hold the item open, move on to the next department. Welcome up Department of Rehabilitation.

Good morning. Is my-my microphone is on. Good morning, chair members. Good morning, members. Joe Xavier, Department of Rehabilitation, here to speak on our item. The agenda does a really good job at describing what the item is. I'll just provide a couple of emphases. We're requesting an increase in our authority of $180 million, 60 million over each of the coming three years. These dollars have already been matched and are already available to the state of California. The allowed inallocable use of those dollars remain the same.

It will enable the department to continue to enhance and advance our programming and our services, to continue to outreach both our adult and our student populations, and certainly target interventions for more marginalized populations, such as foster youth, youth, and youth in the juvenile justice systems.

And then, of course, it enables us to support students that we're serving to become our consumers, unless they exit high school with a family-sustaining wage, which is, of course, always good news, and then ultimately getting them connected with the employer into the employment outcome. The other item that we were asked to speak to is our traumatic brain injury HCBS funding. The funding is not on the extension. We fully believe that we will be able to expend those HCBS dollars for TBI within the established timeline.

So glad to take any questions that you have.

Thank you. LAO, any comments?

No concerns with these proposals.

Department of Finance?

No additional comments. Thank you.

No other questions. Short and easy. Thank you so much.

Thank you.

Moving on to the next, I'd like to welcome Department of Child Support Services.

Good morning. David Kilgore, Department of Child Support Services Director. The items before you indicate just an adjustment from what was discussed in the original Governor's proposal. The implementation of arrearage federal pass-through is shifted from July 1 to April of next year. That results in an increase in General Fund revenue of $70 million. The additional two items that you have on there are just the budgetary adjustments we need to do to make the county's whole with this change in implementation date for the Arrearage federal pass-through.

Thank you. Madam Chair, members. Ginni Bella with the Legislative Analyst Office. We view this as a technical adjustment that aligns with the updated information about the implementation timeline.

Any comments?

Department of Finance?

Kia Cha. Department of Finance. No additional comments. Thank you.

I do recognize what we're dealing with in the budget, but the way I looked at this is like $70 million off of the backs of so many of our vulnerable families. And that's the upsetting part of it all here. To balance our budget, we shouldn't turn to our most vulnerable families. I'm wondering, I've asked this question before here, just the timing of this delay of the pass-through being implemented to adjust or to balance our budget here.

Is there any guarantee that this is actually going to happen in April 2024?

Yes, we are on track for April 2024. This was not a change to balance the budget. This was simply an inability from a technical perspective, to implement it by July 1. That was the earliest we believe we can get it done is April of next year.

Okay. Thank you, Senator Roth? See no other questions. We're going to hold the item open and move on to the next department: Department of Social Services. Director, you might be the only director I've memorized name for you.

I feel honored.

Glad to be with you. Good morning, Madam Chair and members. Kim Johnson: Director of the Department of Social Services. I'll start with issue eight and just give you an overview of our overall caseload across multiple programs that's included in the May revision. For CalWorks, the May revision includes 6.4 billion total funds in 23-24, which reflects a decrease of 282.1 million from Governor's Budget. That decrease is primarily due to a slower growth projected in the caseload.

The caseload is projected to be 340,743, which is 5.4% lower than the Governor's Budget. For CalFresh and CFAP. The May revision includes $3.2 billion and 1.1 General Fund for CalFresh Administration, which represents an increase of $723.9 million, including 233 million General Fund from the Governor's Budget. The increase reflects higher costs associated with the administrative rebase methodology, which I'll speak about in just a moment.

Higher monthly average caseload growth than previously projected and our CalFresh caseload is projected to be 3 million, which is 7% higher than the 23-24 Governor's Budget. The May revision includes 101.7 million General Fund in 23-24 for the California Food Assistance Program which reflects an increase of 25.9 million General Fund from the Governor's Budget.

The average monthly caseload is projected to be 43,600, which is 12.6% higher than the Governor's Budget. For SSI/SSP, the May revision includes 11.4 billion total funds, 3.6 billion General Fund in 23-24, which reflects an increase of 46 million total funds compared to the Governor's Budget. The increase is due to a higher average SSP grant and a slightly lower decline in the projected caseload offset by a lower SSI grant and a lower COLA percentage.

The average monthly caseload is projected to be 1,108,625 which is an increase of 0.5% compared to the Governor's budget. For IHSS, our In-Home Supportive Services program, the May revision includes a $22.4 billion total fund, 8.4 billion General Fund; which reflects an increase of 1.9 billion total fund, 603.3 million General Fund compared to the Governor's Budget.

Due to the growth in the projected caseload cost per hour and hours per case, the upload caseload is projected to increase to 645,217, which is a 0.5% increase compared to Governor's budget. And then finally, as we turn to Child Welfare Services, the May revision includes a $9.6 billion 1 billion General Fund, which reflects an increase of 311.3 million, 61 million being General Fund from the Governor's budget.

The increase is due to the extension of the enhanced federal matching funds for the foster care and adoption assistance from June of this year to December and growth in projected local expenditures for the realigned adoption assistance. A revised automation cost for the CWS Cares, in alignment with the Special Project Report Six, which we'll also speak to, and the inclusion of the CalSAWS interface within the CWS care system.

The average monthly adoption assistance caseload is projected to be 85,569, which is a 0.4 increase from Governor's Budget. The average monthly foster care caseload is projected to be 50,103, which is a 2.2% decrease from Governor's Budget. And the average monthly Child Welfare Services caseload is projected to be 117,525, which is a 1.1% decrease from Governor's Budget. And finally, the average monthly kin gap caseload is projected to be 18,179, which is a 0.4 increase from the Governor's Budget.

The committee also asked about the Safety Net Reserve, and I will defer to my department colleagues, Finance, for that question, for that answer.

Hi, Jenean Docter, Department of Finance. For this, I'd like to defer to my colleague, Justin Freitas.

Justin Freitas, Department of Finance. I think the question is just the validity or value of whether the department or administration is proposing that cut. So I'm going to read a little bit of what the actual statute says for this. So the Safety Net Reserve is intended to be used for the purpose of maintaining existing program benefits and services for the Medi-Cal and CalWORKS programs during economic downturns, when program costs may increase due to economic conditions.

Given the 31-and-a-half billion shortfall statewide, a partial withdrawal, the administration believes it is necessary to address some of the increased cost in MediCal and the CalWORKS program. The state is facing revenue volatility, and this will help deter any potential solutions or reductions in those two programs. In combination with the proposed MCO tax, this proposal will help the state maintain CalWORKS and medical services levels while eliminating the need for program reductions.

And we're still projecting or proposing to maintain a 450 million reserve in that budget as well for that fund.

And then the final question in this issue area is in reference to the department's case CalWORKS caseload projections and some differences potentially with the LAO for the Department of Social Services. Our CalWORKS caseload is projected again, as I referenced, it's a decrease from Governor's budget, but an increase overall from year to year. And again, to the extent that the data shows that caseload shifts upward in the coming months, we would make necessary adjustments to the caseload as needed.

LAO?

Thank you, Madam Chair. We will be looking at caseload across the portfolio of Department of Social Services programs, really checking the reports we have on actual usage against the estimates. It's something that we always do, and we always take very seriously. It's also even more important when we're working in tight budget times with these larger programs. Even estimating differences of a percent or so can equal a lot of money specifically to the CalWORKS program.

We are in our early stages of really looking at the administration's estimated caseload, and we are feeling like ours are a little bit different, a little higher than theirs. But we've sent some information on our methodology to them, and we'll continue to work with them to better understand theirs. This has been a particularly hard caseload to pin down the last couple of years. Estimating caseloads is inherently challenging. And for the CalWORKS caseload, over the course of the last couple of years, it's been even more so.

So it's something that we're going to be looking at. On the Safety Net Reserve, we would just note that using these funds now means that they will not be available to support core programs in the future when the budget condition may worsen. So that's something to consider as you go forward. We are also continuing to look at the language to ensure that we understand that the proposal is in line with legislative intent.

Thank you. If you could come back, sir, please. Thank.

Let's dive in a little bit more into this Safety Net Reserve withdrawal. I know you read me the statute of it. Could you dive in more into how that's going to be put back into CalWORKS and Medi-Cal? Because that's the only way we're allowed to use this.

Hitting the button. I apologize. It's been a while since I've been up at this dias. So you're looking specifically for, like, a one to one?

$450,000,000. Where are we going to see that invested?

You're seeing it in the overall budget for the caseload associated with CalWORKs and Medi-Cal. So it's when the caseload and everything is calculated and the estimated cost, we took into consideration everything across the board for the Governor's Budget and May revise. And what that's doing is it's allowing for us to not result in any reductions in any other areas as well. Instead, it's about fungible funds, right. General Fund in general.

So when we're seeing needs of increased caseload in CalWORKs and Medi-Cal, we need to increase those costs or expenditure authority for the departments. And this is one way for us to assist with that rather than doing reductions in other areas of the Medi-Cal and the CalWORKs program to cover for those increased caseload costs.

My first go ahead here. Can you paint me a picture of what would it look like? What would a reduction look like? Is it the fact that we would no longer be able to sign people up for CalWORKs or sign people up for Medi-Cal? What does that look like?

You would end up seeing some reductions overall in the overall budget for the program. What we can do is we can follow up with your staff with some more additional information, if that'll be helpful.

I guess maybe, Director, if you help me out here, what does that look like? If we don't have $450,000,000, does that mean CalWORKs recipients will get less or no more people can sign up for CalWORKs?

I am grateful that we are in a proposal in the mayor revision where we're not talking about reductions to this caseload, we're talking about funding it. I mean, again, obviously there are components of all of the funding across CalWORKs, everything from what we pay for the County Administration to what we look at for the grant increase, which I'll reference in just a moment.

So there are many ways in which the totality of funds for Cal Works are actually supporting our families experiencing poverty in California but also the work that the counties do to support. So we don't have a proposal for reductions on any of those areas at this point. And again, glad to if the Legislature wanted to have more conversation of what that would look like, we could follow up to discuss.

And Chair the good answer, without going too much into details, the Medi-Cal program is also expanding too, right? So what you could potentially see are delays in that expansion or the ability to expand some of those given if we don't have some of these resources to cover some of those costs.

So what would happen? You brought it up, and that was my next question of we're having these grants we're going to have next year, I believe. And what if we don't have the funding for that next year?

The particular proposal for a CalWORKS grant increase comes from the Child and family sub poverty account, a different Fund establishment, a mechanism by which we have created and established between the Administration and the Legislature over time to be able to look kind of wherever our revenue picture sits. What's reflected in the sub account can then identify what we're able to do in terms of how much in terms of the grant increase.

So the funds are essentially separate in that fund, and we've done that intentionally to, again, try to address support for.

So that fund would be enough for the grant increases?

Based on the administration's caseload projections? Yes. So, again, those are separate funds. They're not state General Fund. To be technical on it, like if caseload were to increase in the years out more than we've projected, of course General Fund backfill would be necessary for this. But the administration's proposal right now for that child and family poverty sub account is projected to be able to cover this grant increase and previous grant increases without any General Fund need.

And we're looking at that case, though, because we have different numbers from different entities. Great. It escapes me. Senator.

Thank you, Madam Chair. I'd like to focus on the second part of question number two, and maybe you've sort of answered it, maybe not. And that's the impact of drawing down the Safety Net Reserve. And what condition does this leave the Safety Net Reserve if the state's economic outlook continues to worsen in the next budget year and future budget years? So let me start with finance. What is the projection for not this budget year.

We know what that is at 31.5 billion currently deficit, what are you projecting for the out years?

I don't think I have the information for a complete picture of the entire budget for what's going out, but.

It's been published somewhere, I just don't have it. I don't have it in front of me. I don't know whether it's worse than 31.5 billion. It seems to me it sort of improves over the next two, but it's still a deficit. Right?

So I'm happy to follow up with you and your staff on that. To attempt to answer part of your question here is that the overall May revision took into account the out year cost, and there were challenging decisions to make to help maintain a full budget and not run into that deficit.

No, I understand. My question is, if we drain 450,000,000 out of the Safety Net Reserve, leaving 450,000,000 to cover contingencies, are you anticipating that the MCO tax is going to make up the difference so that we don't, in the current projections, we don't have to tap the remaining 450,000,000 or to make I was taught to ask one at a time, but I'll just throw them all out there.

Or if it's not, is the 450,000,000 going to be sufficient to cover the next two budget cycles which where they anticipate some level of deficit? And if not, then what do we do?

So I definitely will need to follow up with you on your question related to how the MCO tax is projected to impact everything, given that it's in a different policy area than my colleague and I usually work on. So I can follow up with you to see what that projection is. But what I can say is that a lot of these things were taken into consideration when developing the May revision.

So the Administration feels confident that with leaving 450,000,000 still in the Reserve and with all the other reserves that are available and the projections of cost, that this shouldn't result in the situation that you're referring to or that you're asking about. We should have enough funds we're projecting going forward for this, that this withdrawal the 450,000,000 to help cover these CalWORKs and Medi-Cal costs will still allow for out year protection with the 450,000,000 that's being left in the Safety Net Reserve Fund.

Well, I apologize for asking a detailed question. I just think it would be important, I think, for the Budget Committee to know what the plan is. Because I'm sure that somewhere in the bowels of Finance, somebody's done the projections on what given the current State of the economy and the experience, collective experience that the Department of Finance has had in dealing with these recessions over time, you can probably project, at least in the ballpark, what the deficits are anticipated to be and proposing an MCO tax.

We probably can project what the revenue from the MCO tax will generate and how it's used will be used in the state budget. We ought to have an idea of whether there's going to be 450,000,000 left in the Safety Net Reserve in two years or not. And if not, what are we going to do about it? Right.

And we can follow up with you. Like I said unfortunately.

No, no, I understand. I'll accept that response. I just want to throw that out there that we are thinking about it and I know you are to so.

Yeah, thank you for the question.

Thank you.

Thank you, Senator.

Yeah, that's top of mind as well. Right. I think LAO mentioned to that should begin into a worse economic downturn. I'm going to go back to the question I had on CalWORKs because I think I'm going to rephrase it a different way. I recognize the 10% that you mentioned in the increase, but right now they recently got a 10% right now and it's on a trigger for next year? Is that also coming out of that special fund?

That's a great question to help identify the difference. So traditionally in statute, pursuant to AB 85, there's a maximum payment increase anytime the Child Family Poverty sub account has enough funds to cover that ongoing. The temporary 10% that you're referring to is complete General Fund. So that's projected to cover for General Fund. The Administration is not proposing in an out year that that's fallen off our assumptions is that that's going to go on. However, we're going to redetermine that pursuant to statute in 24-25.

Yes. I apologize for the 24-25 budget to make sure that or to determine whether or not revenues will support that ongoing. But for this May revision budget and the Governor's Budget, the assumption is that it's ongoing.

So we're good right now until June of next year.

Yeah, there's no solution assumption with that grant increase. It's assumed that it'll be going forward and then we'll reassess during the 24-25 budget year.

Okay. LAO, do you have anything to add to that?

No, I think I would just add on to Senator Roth's point about kind of out your projections and just put a note in that our office is currently working on our projections of the Administration's budget and we'll be releasing kind of our big picture look at it, but at a high-level. We are anticipating, just looking at revenues, that revenues will put us in a worse picture by January of around 6 billion at least.

So just also something to keep in mind on that, I think going back to the grant increase in CalWORKS that comes out of that realignment funding, that automatic grant because we are anticipating a higher caseload than the Administration. We do have concerns that that account will be able to afford the grant increase being put forward and we see it as really a General Fund pressure because of that higher than the Administration estimated caseload for us.

Thank you. Seeing nothing else. We're going to hold that item open. Move on to your next issue, issue number nine. Thank you for coming up.

Thank you again, Madam Chair Members. Kim Johnson, Social Services. So in terms of the CalFresh and nutrition programs included in May revision, I will start with the California Food Assistance Program expansion conversation we've had in this Committee related to our implementation date. So we are continuing and as we've noted, very excited about the ability to implement this expansion for income eligible individuals aged 55 or older.

We have further developed our policy and program instructions and outreach and enrollment planning and in collaboration with all of our partners, have been able to complete a further detailed analysis and refined our anticipated timeline for the expansion. Programming can begin concurrently with CalSAWS and CDSS anticipates automation to begin in July of this year.

As such, we have revised the estimate for implementation with benefit issuances beginning October 1 of 2025, which reflects a nine month adjustment from the original implementation timeline and is 15 months earlier than the January 1, 2027 date that we discussed in the January Governor's Budget proposal. The nine month difference from the original timeline is attributed to additional time needed to develop unanticipated forms and policy guidance and to prepare for pre-enrollment, which we anticipate will begin in September of 2025.

Also Summer Electronic Benefit Transfer Program our Summer EBT we also referenced in this Committee prior again, we are excited to partner with the Department of Education to implement summer EBT beginning summer of 2024. The May revision includes $47.0 million, 23.5 of which is General Fund for outreach and payment system automation costs to phase in the EBT program. It will provide $40 per month in summertime food benefits to children and households that qualify for free or reduced priced meals.

The phase-in approach beginning in summer, as I referenced, will automatically enroll 4 million students who qualify for those meals, and that brings about 480,000,000 in federally-funded food benefits to California. The Department of Education will confirm eligibility for summer EBT by developing an application for students not already enrolled in free and reduced price meals and provide the final eligibility list to the Department of Social Services annually.

The Department will distribute the benefits by mailing EBT cards to eligible children, as well as providing customer service support to recipients for General questions, PIN setup, and issuing replacement cards. And the Department will work directly with the EBT vendor annually to ensure all summer EBT cards are mailed to eligible children going forward.

So again, we're excited to launch that new initiative, building on what we've learned through the summer EBT, the EBT issuances prior pandemic EBT prior county CalFresh Administration rebase also a conversation we had we did have a requirement through the enactment of AB 207 to look at the methodology used to budget Administration for CalFresh. We reconvened with stakeholders and had a county workgroup, had a 50 county survey, and engaged with many on this new methodology.

It has yielded a May revision proposal that has an additional $406.5 million, 159.5 of which is General Fund, to reflect this revised budgeting methodology. And I'll talk a little bit more about that just a second. But this is an 18.6% increase when compared to the current methodology and again want to appreciate everyone's efforts with us on looking at this revised methodology.

Federal reimbursement of food benefit theft and again, the Federal Consolidated Appropriations Act of 2023 mandated federal reimbursement for SNAP food benefit theft, and federal law also retroactively instituted federal reimbursements for SNAP beneficiaries defraud by Skimming and Scamming beginning October of 2022 and extending through September of 2024. Prior to this federal law, California was reimbursing victims with State General Fund, so this policy allows for the federal reimbursement for a portion of these costs.

The May revision includes $75.7 million total funds 42.9 of which is federal funds and 32.5 General Fund for budget year for associated costs. For activities related to replacing those benefits, 2.2 million is related to the automation changes, 30.3 million total funds for the administrative activities and additionally 43.2 million total funds, 12.3 of which is General Fund for replacement of the actual stolen benefit. And this is essentially the offset of General Fund with the additional federal dollars that are coming.

I also just want to note May revision also continues to include $50 million total funds to improve EBT card technology. And again, beginning in May of 2024, EBT cards are set to be issued with the Chip Tap Pay Technologies, which improves fraud protection over the magnetic technology that currently exists. Also related to the Work Number contract, the Work Number is a third-party employment and income verification service that county welfare departments use to make CalWORKs and CalFresh eligibility determinations.

Due to a recent state requirement to reduce paperwork burdens for beneficiaries, our county partners are turning to the service more often, resulting in a higher usage. Because the vendor charges based on usage, the cost for the services have increased. So the May revision includes a total of an additional $11 million in ongoing to augment that contract. CalFresh oral notice of work rules.

The May revision includes $9.7 million, 3.4 of which is General Fund for CalFresh County Administration to comply with federal guidance required to county departments providing a comprehensive oral explanation of the CalFresh Work Rules to work registrants able-bodied adults without dependents or ABAWDs and CalFresh participants eligible for CalFresh employment and training. This new policy is expected to begin in November of this year.

BenefitsCal Enhancements their May revision includes $3.0 million, 1.5 of which is General Fund to replicate features of GetCalFresh.org in benefitscal GetCalFresh.org was a statewide online application assistance tool which is currently estimated to sunset in 2025. By that time, BenefitsCal, which is the CalSAWS statewide application portal, will be available and is expected to offer the same level of client service and ease of access as GetCalFresh.org.

And finally, your second question is saying a little bit more about the CalFresh County Administration methodology. The new methodology updates funding for applications, both those that are approved and denied, expedited service time frame constraints, variance in required activities associated with specific populations, and required administrative activities performed by specialized workers. The methodology utilizes an updated, fully loaded CalFresh eligibility worker rate and also has some additional funding for ongoing case management and intake.

And again, the caseloads for each population will be updated annually with the methodology to be reassessed triannually. I believe that's the end of those questions.

You do that with one breath. LAO, any comment?

Just on a couple of items on the Move update of the California Food Assistance Program expansion. We're working to better understand what changed, to allow this more accelerated timeline, and then also whether there are certain benchmarks that the Administration will need to meet in order to make that ultimate timeline, and whether the Legislature would like to consider ways to be kept up to date on meeting those benchmarks so that we really can have oversight on this process. On the administrative rebase.

We are learning about the new proposal. And one of our questions that we hope to learn more about as we start to work with the Department to understand it is how it addresses kind of maybe some key lessons. Learned from other administrative process rebases that we've had, such as in CalWORKs, that that administrative funding process we've learned is not as sensitive when you see really very quick increases in caseload or really quick decreases. So how does this process address those types of things?

So those are what we're hoping to learn more about.

Thank you. Department of Finance. Any comment?

Jenean Docter, Department of Finance. No additional comments? To add on the points covered by the Department, we concur with the remarks made by Director Johnson.

Great. Well. Thank you, Director. After a tough conversation on Safety Net, starting off with two positive things on CFAP starting two years earlier, I know that was one of the things in the previous meetings we talked about and then the Summer EBT really excited about that one. Just one question for me. On the oral notice of work rules, are we telling everyone or just those who are eligible?

Sure. The oral notice of rules is going to be specifically focused on work registrants, the ABAWDs population, and those eligible for CalFresh ENT or employment and training. Those are the populations that would receive that.

Perfect. Senator Roth? Seeing no other questions. Perfect. Thank you. Hold that item open and move on to issue number 10.

Okay. And this is again Kim Johnson, Department of Social Services. Thank you. And again, coming back to CalWORKs. In the proposals here as referenced, the May revision includes a 3.6% increase to the CalWORKs Maximum Aid Payment. Our MAP levels effective October 1 of 2023. Again, in the Governor's Budget, that was 2.9, so we're glad to see that even higher in the May revision proposal.

It's estimated to cost $111.2 million and again, is funded entirely by that child poverty and family supplemental support sub account of the local revenue fund. Just to give you a sense of what it means for families, the increase will bring the nonexempt map level from $1130 to $1171 per month for a family in an assistance unit of three residing in a high-cost county.

So about a $41 increase from the current level and equates to 57% of the 2023 federal poverty level for the same family size and 47% for the family size, one greater than the assistance unit. And again, since April 1, 2019, the state has increased, together with the Legislature and the Governor has increased the monthly CalWORKs MAP level for an AU of three by 49%. So again, continued improvement in this area.

The trailer Bill Language that's proposed here is just to effectuate the grant increase. As it relates to the single allocation partial reversion. The 2021 budget allocated $1.82 billion for the CalWORKs single allocation. And of course, again the single allocation is used for employment services to support clients and administration of the CalWORKS program. The Department projects counties will spend 1.48 billion of the allocated funding from 21-22 leaving 334.4 million as unspent funds.

So, as a solution to address the state's budget deficit, the May revision proposes to revert 280,000,000 of unused General Fund from the 21-22 single allocation on the earlier time frame, rather than waiting what would have naturally occurred in June of 2024. Of the 2021-22 allocation, 54.9 million will remain available for counties to claim. So there still is some room there, they have some more time to claim and there is some funding associated with that.

We will absolutely engage with the County Welfare Directors Association to determine precise amounts and we do not anticipate the early reversion having any impact on client supports and services. As it relates to CalWORKs family reunification, automation and county administration funding.

This is again a great also policy change that's providing continued cash assistance to parents whose children have been removed from the home and placed in out of home care with the idea that we're looking to stabilize them to support the reunification of that child in that household. Their May revision includes $3.8 million General Fund for Automation and county administration to implement this continued cash assistance as required by Assembly Bill 135. For the CalWORKS County staff training, racial equity and implicit bias.

That is a reappropriation request for $10 million of the 2022 Budget Act to continue the development of county staff training on racial equity and implicit bias. And then finally, the CalWORKs exemption for guaranteed income payments. This trailer Bill Language is simplifying the administration processes for jurisdictions who want to implement guaranteed income where they currently have to make a request for the Department to review and approve. It would simplify and allow that those guaranteed income dollars would not count against the CalWORKs grant amount.

Also, the Department has applied for some additional federal funding should we be successful in that application. We want to ensure the allowance for tribes to apply for any expansion to guaranteed income. And so that's what the program is proposing the trailer Bill Language is proposing to do.

Thank you. LAO, any comment?

Just a note again on the grant increase. We will keep you updated as we continue to work with the Department on our caseload estimates and our assessment of whether or not the sub account can afford that level of grant increase. On the single allocation reversion, one of our questions was just answered about how much would additionally be left in the single allocation after this reversion.

So to us, it does raise some broader questions about the single allocation and the unspent funding, but that's something we will work with on a longer term with the Department.

Thank you. Department of Finance, any additional comments?

Jenean Docter, Department of Finance. Nothing more to add. We concur with the Department. Thanks.

Seeing nothing else. We're going to hold the item open. Move on to issue number 11.

Thank you. Moving on to In-Home Supportive Services again, Kim Johnson, Social Services and the first May revision proposal want to just lift up as what we've all been talking about in many different spaces of addressing inequities in our system. The May revision includes $60.7 million, 27.9 of which is General Fund ongoing for the elimination of specified IHSS minor recipient provider eligibility requirements to better serve IHSS program's minor recipients and their families.

This proposal impacts current authorized cases that are unable to hire a provider due to the parent eligibility rules for minor recipients. After determining eligibility for IHSS, social workers are required to assess parental ability and availability to provide IHSS care to their minor children. Under current rules and regulations, a parent may only become a paid provider for their child if there are no other suitable providers available and the parent is prevented from full-time employment due to the care needs of their child.

These rules are complex and can result in the unattended consequence of neither a parent nor a non parent being eligible to work as an IHSS provider. With this change, IHSS minor recipients will have the ability to choose their provider without additional requirements in alignment with adult IHSS recipients. Removing these minor recipient provider eligibility rules will ensure that all minor children have access to their provider of their choice like other IHSS recipients, and again address that disparity that has existed.

So again, happy to bring this forward as a proposal. In the May revision, the Committee asked the timeliness of being able to implement. Upon enactment of the legislation, the Department will provide instructions and guidance via an all county letter to counties. Counties will need some time to make adjustments and changes to existing cases. Thus, the Department anticipates changes to utilization of hours to begin in the fall of this year. The Committee also asked about the impact of this proposal on County Administration.

There will be impacts on county Administration. However, this change actually greatly simplifies these cases because the county social worker no longer has to additionally analyze and determine if the prospective provider is eligible to work for the minor recipient. The May revision does include 4 million total Fund in 2324 for counties to implement this proposal.

And then finally, as you've already discussed the HCBS program earlier on the agenda for us and for the applicability of the IHSS Career Pathways program, the Administration again is proposing to extend the deadline to fully expend dollars for select programs to September 30 of 2024. We would extend the IHSS Career pathways program to provide six additional months of training opportunities to new and existing program participants. Classes would be extended from December of this year to June of next year.

The remaining three months will be used to process payment to program participants and vendors. So the Department will be in line with the cash out of the door requirement of September of 2024. Program participants will be eligible to be paid for their time spent in training and will qualify for incentives during this additional time. And the extension will specifically ensure that IHSS providers have more time to complete a specialized career pathway and have more ability to earn and claim the six month incentive.

IHSS providers will be able to earn the six month incentive for classes being taken through December of this year if the provider works for six months through June of 2024.

LAO?

Thank you. On the minor eligibility language, we would just like to learn more about the utilization data for minors. So we will be asking some questions around that. We also want to better understand the actual language proposed and to see if there would potentially be any unintended consequences of the language or whether it's narrowly crafted it to really target the population it's intended to target. So something we're taking a closer look at.

Thank you. Any further comment Department of Finance?

Aanam Khan, Department of Finance. Nothing further.

Nothing further on my end. Issue number 12.

Thank you, Madam Chair, Members. Kim Johnson, Social Services. This is really a technical cleanup for SSISSPP. The Department proposes statutory changes to increase the SSP portion of the SSISSP grant as proposed in the 2023 Governor's Budget. Unintentionally, we did not include this trailer Bill proposal as part of the 2023 budget. So the Governor's Budget includes $146,000,000 General Fund in budget year for the grant increase effective January of 2024. And this increase continues to be reflected in the May revision.

Thank you, Madam Chair. We had concerns with there not being any language in January. We've reviewed this language and it looks to do the trick.

Perfect. Any further comment?

Aanam Khan, Department of Finance. Nothing further.

Nothing further on our end. Moving on to issue number 13.

Thank you, Madam Chair, Members. Kim Johnson, Social Services.

This is why I've memorized your name. Because you spend most of the time up here.

Glad to be with you. We do a lot of wonderful things and grateful for the opportunity. So there is a question in this section around an overview of our Child Welfare Services and California Automated Response and Engagement System, or CWS CARES and I'm going to have colleagues join me and skip that. We'll go come back to that component next, but I'll speak to some of the other investments in this space.

Behavioral health, community-based organization, networks of equitable care and treatment, also now referenced as BH Connect that Healthcare Services is currently administering. So the May revision proposes to shift the implementation date to January of 2025. The revised implementation date will impact the child and family teams component of the waiver, shifting some of those costs from budget year to budget year plus one.

The May revision includes 3.6 million total funds, 2.7 of which is General Fund for County Workforce Training and Readiness Activities to support the implementation of those child and family teams for family maintenance cases compared to the Governor's Budget cost on the May revision decreased by 14.5 million total funds.

Also, in terms of a reappropriation request and child welfare training, the Department requests to reappropriate $7 million for the child welfare training program to fiscal year 23-24 due to capacity and staffing challenges faced by the vendor and the nature of the contract development and implementation processes. And so that's again, the reappropriation request.

Also for the Adoption Facilitator Program Fund, the Department proposes a technical change to the budget Bill to revise the Fund title from the Adoption Facilitator Program Civil Penalty Fund to the Adoption Facilitator Program Fund and to correctly cite the statutory references state and federal kinship guardianship assistance program are KinGAP program alignment and technical clarifications.

The trailer Bill Language proposes to ensure KinGAP eligibility is in alignment with recent law and policy changes, including court-authorized placement changes made pursuant to laws enacted by Senate Bill 354 and appreciation to Senator Skinner. It also includes technical clarifying amendments to remove outdated and unnecessary language, including references to the CalWORKs program and its associated requirements, as well as income and property limits for eligibility. And then finally, I will turn to my colleagues to speak more to the CWS and CARES.

Hi. Adam Dondro, Director of the Office of Systems Integration with California Health and Human Services Agency. Before I start, I want to give this one justice. I didn't know if you'd like to address any of those prior items before I take us off on a somewhat tangent on this item.

Go ahead.

Okay, excellent. So the CARES project is replacing the existing legacy child welfare system. That system, built in 1997, remains the largest child welfare system in the country, with over 30,000 users. So this is a big deal. This is a major deal. I want to give a little bit of background that got us to where we are now because it's been a long process.

The system itself is a partnership with Social Services, my office, OSI, the Child Welfare Directors Association, and in collaboration with 58 local child welfare agencies and tribal partners. The existing system is not compliant with state or federal requirements. It's not able to meet our programmatic needs, and it needs to be updated, and we've been working on that over the decades. In addition to the existing core system, our users have added additional functionality outside the system to meet some of those gaps.

Our intent with this project is provide that centralized core system that meets the needs of our county partners, who are providing their services to the children and families around the state. The core functionality of the system is going to provide a whole lot of benefits. When we do that, we need to align everything. Where we're at this year is we're finally providing you with the baseline that's needed to monitor that progress in SPR Six.

Last year, we were working through changes we highlighted in SPR Five what would be coming today, before you we have that proposal with everything that has the path forward. The SPR and this BCP that aligns with it was based on in-depth analysis and negotiations with our vendor partners to determine cost and timeline. It includes updates to the scope, the process, our interactions with the counties in partnership there, and all of this was vetted with an independent third party advisor.

Instead of just talking to the vendors and saying, what do you think it's going to cost? We had an independent third-party who compared our estimates, the vendor estimates, the county's input with similar complex projects that they've seen across the country based on empirical evidence to validate that these numbers are accurate for what it's actually going to take to deliver this functionality to our users. The approach that we're proposing is two versions being delivered.

First, version one would be delivered in October, October of 2026, and that would allow us to retire the existing system. Stop funding, stop making updates, get all the county users onto that new functionality as soon as possible.

18 months later, in April of 2028, we'd implement version two, which would build upon that core functionality of V one, expand on capabilities such as advanced analytics, continued implementation of interfaces with external systems and child welfare contributing agencies, and would be tied specifically to federal CWIS compliance as required to achieve our federal funding levels. The revised project cost for the total project is $1.7 billion, excluding CARES life costs, and there's some critical large buckets within that that are important to understand. That number.

First and foremost, $250,000,000 for county and tribal participation. This isn't a typical bucket you would see in our projects, but for the critical functionality, our users have to be engaged at every step of the process in designing, building, testing, and we have them as our partners by our side at every step of the process so that funding is critical.

We have 225,000,000 for implementation and stabilization costs, and I'll talk in a moment about the new implementation model that we'll be using specifically to focus on child safety. We have 150,000,000 for data infrastructure, a somewhat unique component we've built into this platform to allow us to maintain autonomy, to leverage and utilize that data for analytics, to be able to evaluate the programs and the way that we're operating.

We have 200 million for salesforce licenses and 180,000,000 for maintenance and operations ongoing, so there's a lot that breaks down into that number. To get to this point, we've done a lot of work. First and foremost, we've onboarded our vendors. We have contracts negotiated so that for the first time we have a holistic view of what the ongoing costs are for this project that align with the people who are actually building it in partnership with the state.

And as I mentioned, that independent advisor was critical in those negotiations and making sure that we had it aligned with how we needed to be. The second piece is that we did a pilot demonstration project of a small piece of functionality to test out our processes, our communications, leveraging the counties to be there at the places they need to be to provide their expertise. And what we have before you adjust for all the things that we learned during that process.

Some of those key things that we learned that we think are critical to the success of this project is adjusting the scope. With that input, we've amended the contracts to specifically include roles and responsibilities for the vendor, the county partners and the state to make sure that there's clarity on who is responsible and accountable for which pieces. That includes enhancing the system integrator responsibility for our primary vendor.

This didn't exist under the old model and we've determined that it's critical to be able to hold that vendor responsible, as you would on a typical project for delivery of the whole system. Even though we have multiple vendors responsible for different components, we have a greater emphasis on user feedback. As mentioned, with that funding for our county and tribal partners. And then in particular, the implementation has been updated. Originally, what was proposed was a nine month rollout with small groups of counties, piece by piece.

This is how we typically do our large projects in partnerships with the counties, largely because from a technology perspective, it's much less risky, right? It's a smaller group of folks, less data being transferred over, and you can make updates as you go. But in this particular instance, in partnership with our vendors in the counties, we determined that for child safety, this wasn't the right approach.

You would end up with county workers living in two systems, some data about a child or family in one system, not in the other system. In one county that's rolled over to the new system, they may have it in the new system, but when that child goes to school in the other county, it would be in the old system and you would have people missing information that was critical for the child's safety. So in this instance, we've updated it to an all at once statewide rollout.

To do that, however, we need to reduce the technological risks that go with that. So we've built in a production pilot that a few counties will come on board ahead of time. They will live in two systems, but the old system will remain the system of record with everything being entered there. But it will allow us to see any gaps in our training, any gaps that need to be fixed in the system and address those before going with that statewide rollout.

So we think that change, though an adjustment in the timeline and cost, was critical for child safety. So all these things, we believe, have set us up for success with the project. In addition to enhancing our ability to provide accountability and oversight to see how that progress is moving along, one of the key pieces to that accountability is that the old model used technical increments. This was a code-based measurement system that was really based on time.

What we've moved to is milestones-based, where we have the actual functionality of the system built into milestones and delivered along the way. So that when we say a component is completed and we're going to provide funding to the vendor. We have actual value that can be measured and tested by the county users as opposed to just some arbitrary amount of time that's passed in code that's delivered.

This will enhance our reporting and our ability for us on the project and for all our oversight partners to be able to track and monitor it. Lastly, the key piece is really about that county and tribal engagement and I'd like to pass it to my partner with Department of Social Services.

Thank you and good morning. Selena Chow Chief Operating Officer at the California Department of Social Services. So I just want to provide a little more detail about that county engagement and tribal engagement model. The project scope includes some pretty significant updates on how we will engage, communicate and how we will make sure that the system users really have a solid adoption model for the new system that we're developing.

It's referred to as the Core Constituent Participation Model, and we have about 37 counties that are participating in that, as well as 2 IV-E tribes that help serve our Child Welfare Services programs. So they're involved in the co design and the Iterative process to provide feedback. We definitely recognize that that feedback is important to make sure that the counties and tribes are involved in the various milestones.

They'll have opportunities to work hands-on in the system as we're developing it and provide their feedback in terms of confirming its usability. And do the features work well and how will it work to serve all of the different processes that they have in the counties and the various service areas and special programs that we have through the child welfare system.

One of the important considerations is also increasing communication, so really having more transparency around how we look at the user feedback and triage it and work with the designers to determine what we are able to accommodate into the system.

We do have about five new CDSS positions in the BCP request, and those will be focused on supporting the engagement with the counties to really understand external systems and come to an understanding of what's supportable in the scope, how can we avoid duplicate entry and make sure that we're able to meet federal compliance? And what can be decommissioned once we get to the implementation of CARES, we really want to make sure that the system works for all 58 counties and the tribes.

And with that, the May revision includes 23 million, 11.5 million of it is General Fund, and this would be provided to the counties and tribes as an Upfront funding allocation. We've learned from recent years that without having some certainty around the upfront funding that is going to be invested to help with county operations, it makes it really difficult for counties to really participate and engage to the level that's needed, especially as we're entering this very pivotal moment of this project.

So this funding will help in terms of their operational planning readiness for the project and it will be tied to the particular project milestones that we have. And we will be working closely with CWDA, the counties and the tribes on the methodology on how that funding will be distributed to the counties. I also want to point out interfaces, CARES will require interfaces with other systems.

So I see that in the agenda we have pointed out the CalSAWS system and we do have a foster care eligibility determination interface that is going to be developed so that there can be bi-directional exchange of information between the two systems. Currently we have information that exists in CalSAWS for eligibility determination and payments, and then we have case management, placement and provider information that will be in CARES.

So this data exchange would really get the necessary information over to CARES so that it can be a comprehensive system that would comply with the federal requirements. And what the feds are requiring is that the IV-E Agency must use a single automated function for all eligibility determinations. So we have to get the information over to the CARES system.

The budget includes 25 million for this bi directional interface and that is in addition to the 7 million in General Fund that we've previously budgeted, of which 3 million General Fund is included in the budget year as well. And all of this automation for the CalSAWS and foster care eligibility determination system will help alleviate a lot of the manual processes. Right now there's a very paper intensive process for determining eligibility and tracking all the placement changes.

And sometimes that results in some of the IV-E payments having discrepancies overpayments or underpayments in a given month because of the delay or lack of availability of information because of the manual processes. And so these interfaces, there's another interface also as mentioned in the LAO analysis regarding financial management and that entails how counties will get reimbursed for costs for administrative and assistance claims. So all of these different interfaces, they have their own timelines, their own roadmaps, they're in various stages of either development or migration.

So we do have those reflected in version one of the implementation for 2025, but we do recognize that there's a lot of thoughtful planning that needs to still take place to make sure that the time frames and the roadmaps align for each of the interfaces with the CARES system.

Thank you so much. Before we move on, we need to take a recess until 1:30. We have to go to caucus now, so we'll be back at 1:30, and then we'll ask the questions.

Okay.

Thank you. Just to be formal the Budget Subcommittee Number Three on Health and Human Services will recess until 1:30.

Yes. Brian Metzker with the Legislative Analyst Office. We find that the recently approved CWS-CARES project documentation does provide a clear project baseline, cost, schedule, and scope that can help the legislature and others monitor the project's progress toward completion. The project baseline, as was mentioned, is the delivery of a new federally compliant system by April 2028, at a cost of $1.7 billion, which half of that is state funding. However, this project has been in development and implementation for over a decade, with project expenditures exceeding $300 million.

Therefore, we caution against the approval of any additional project funding without more legislative involvement in and oversight of the project. Continued lack of progress on this project could put federal funding at risk and further delay the implementation of legislative and other changes to child welfare programs and services. We recommend the legislature take several actions to ensure progress towards project completion continues on time and within budget.

First, we recommend the legislature adopt trailer bill language that clearly defines its goals and planned outcomes for CWS-CARES, including both definitions of project completion and success; clear direction from the llegislature removes any uncertainty about the project baseline and direction going forward and sets up criteria to help the Legislature monitor project progress. Second, we recommend the legislature add on to and modify the provisional budget bill language that's been proposed by the administration for this project.

The proposed language withholds about 20% of the project funding pending a determination by the Department of Finance that quote verified satisfactory progress has been made towards project completion. It does not define satisfactory progress, however, and similar language proposed last year was not used because the percentage of funding that was withheld was too low. Therefore, we recommend the legislature define satisfactory progress using the proposed trailer bill language so that the administration, the legislature, and project staff can measure and verify project progress going forward.

Furthermore, we recommend the funding that is withheld be increased to 35% to ensure the legislature has an opportunity to verify satisfactory progress. Third, we recommend the Legislature consider additional oversight tools. Currently, monthly progress reports and quarterly briefings are provided to the legislature. However, the history of the project shows that that is not enough.

One option is monthly oversight meetings between our office, the project, the Department of Technology, and other relevant parties to review monthly oversight reports from the Department of Technology and independent verification and Validation staff: those are folks that focus on the technical aspects of the project. Another option would be to request the participation of the state auditor to evaluate annually whether the project is making sufficient progress towards completion. According to the baseline that's in the latest SPR.

And lastly, the legislature could direct the project to improve the level of detail in its reporting, such as by including measurements of project cost, quality, and schedule from the project's independent advisor. In some, the administration's project plan looks promising, but this is one of the costliest and most complex projects in the state's IT portfolio. The Governor's May revision proposal presents an opportunity for the legislature to increase its involvement in and oversight of this project. I'm happy to answer any questions.

Thank you. Department of Finance, any additional comments?

Hinnaneh Qazi with the Department of Finance. Just a few notes in response to LAO's comments. So the Administration shares the mutual goals related to working towards success and sustainability of the project. We would note that we do believe that the funding held in provisional language as part of the May revision is an appropriate amount based on project spending and projections. We would also note that there is significant existing reporting that the project currently provides.

And so we're also happy to work with the LAO and the legislature to think through ways to improve the existing reporting efforts as well. And then last but not least, regarding any additional statutory changes or provisional language, we can't commit to any changes at this time, but we do look forward to discussing in coming weeks.

Thank you. I'd like to turn over to Senator Roth. I know.

Thank you, Madam Chair. And I'm sorry I missed the presentation. It sounds like you may have covered some of this, so you feel free to yell at me and I'll move on to the next one. How much interaction are you having with Caltech, with the Department of Technology on this project? I'll give you my background. I've chaired sub-four for six years. Unfortunately, I had the 21st Century Project. I had fiscal, and there probably were other ones. And so my trepidation is beyond measure here.

So Department of Technology, are they an integral part of this process? So you're using that project lifecycle?

Correct. Yeah, we've gone through the project lifecycle process. They're involved literally on a weekly basis. We work closely with them. The special project report that outlines this approach was carefully worked through. This was not something the project created and then handed over to Department of Technology. We worked closely with them to make sure that we were addressing concerns that they had. As they monitor this from the same perspective.

One of the problems, as I recall it's been a long time in the past, had to do with vendor selection and the ability to properly vet vendors and to determine whether vendors had a prior track record that was positive as opposed to negative. In fact, in at least one case, the vendors had negative track records. I'm sure you're familiar with all this.

Indeed.

In this particular case, the vendors, and I understand they're numerous, have they or any of them had experience on prior successful projects in other states?

Yes, absolutely. I know the instance that you're referring to, and obviously, it's a common one. We believe that we were able to go through the process for procurements in a good way. We believe that the vendors are very strong and capable, having delivered other large complex projects, also working on other CCWIS projects across the country.

So they were familiar, they've worked on projects like this having to do with the social services.

Absolutely.

The other problem that we saw, and I thought there was sort of a state policy against these all-in, all-encompassing projects on a go-forward basis, and that the decision had been made by Caltech or the Department of Technology to break up projects into chunks. So if one failed, it was a $50 million failure as opposed to a $1.5 billion failure.

And I'm thinking about the 21st century project as opposed to, I guess fiscal, although there's some debate on that, but at least that was in chunks. And yet this is going to be an all-in-everybody at-once, 58 counties, which is probably even more complex than just working with state departments and agencies, isn't it?

I don't know if I'll answer that last piece. It's certainly complex. So, there's not a policy on taking the Agile approach. It's certainly something we look at project by project.

We were certainly strongly encouraging it back about four or five or six, whatever the last time was, I was touching these things, encouraging that because there's no testing really. So you flip the switch, and when you flip the switch on a big project, and it doesn't work, then you're on the front page of the Sac Bee or in the LA Times.

Yep. So we did actually start this project long ago using that Agile methodology, and we ran into a few problems. One, the state's ability to be a system integrator of something this large and complex with that many vendors. And where we landed with those lessons learned is a bit of a hybrid approach to try to get some of those benefits that you're speaking to.

So the all-at-once rollout was speaking to the implementation, but what you're speaking to is part of why we're doing version one and version two in that as quickly as possible, we want to get the new functionality in the hands of the county workers. That's what version one does. Additional functionality to comply with CCWIS comes in version two. And the reason it's those bigger chunks instead of smaller ones is the intricate interweaving of those different modules and components.

And so when we worked with the county welfare workers and the CWDA in talking through that approach of iterative delivery, it wasn't the user's desire. And that's really the point of Agile, is meeting the users where they are and getting them the functionality for them. They exist in those modules all at once; delivering small components and having to live across different systems created issues for them where they were losing track of where different information was, where was this family being tracked.

And so, in partnership with our county and tribal partners, this was the approach that we came up with that allows it. And most importantly to the point about testing because we fully agree that's critical, what we do is just like in an agile module. I spoke to the milestones that we're using now with quantifiable value. This is a usable increment.

While we're not putting it out there for workers to use in the field because of those complexities we do actually deliver it to our partners for testing in a sandbox where they actually use it as they would in the field, identify issues so that we can make those fixes before it gets rolled out. So we are still getting that benefit of real user input and testing incrementally as we move along the way.

Well, I will say that in the old days, because it was the old days, one of the problems was the state was listening more than probably it should to user and user input. Instead of designing a system that worked in these prior iterations, which I admit is not HHS, we tried to design a system for the users, and that was the problem. So let me ask one final question. I don't want to dominate the questions.

When this system is rolled out in what did you call it? I call it chunk one. What is it?

Version one.

Version one: everybody has access to it; what happens if it doesn't work? Is there going to be a backup system running?

Well, the existing system wouldn't be retired until we had a stabilization period to ensure that it's working.

So do you have dual input then?

No. So it would require us to go back. It would be a big deal, and that's why we've built in one of the testing as we go, right? So when we go live, not only will we have tested each functionality independently, we also, my project director is going to kill me because I've forgotten the term we use, but we have long term-testing as well.

So not just the individual but across each milestone as we build it, we test the interactions between them, and I mean we, from a system perspective, the county users directly to use it as they would. So we've done all of that along the way as we go to ensure that we've identified any gaps and then additionally with the rollout, the training that goes with it, the monitoring of the full system testing we've built in several months as part of the implementation.

Once that build is done, we don't finish and the next day implement it. We've got a period for training, testing, and review, all of which before that actual go-live happens.

And again there's commonality among the 58 counties. We're not designing special things for different counties.

That's correct.

And then, just one final time, you mentioned this in your presentation; the reason why we didn't pick three counties or four counties and say, here's the system before you take the other one down, let's see how it works, is?

Is because when you do that, you have to be working in two systems. And so the data for those that are working in the new system will only be there, and the folks who are working in the old system won't be able to see that in their system. And so therefore, if an individual crosses county lines, the caseworker is not going to know where to find that information.

And you've taken care of this by keeping the old system up and running in case there's a problem.

Correct. But what I will say is that because of the risk of that statewide rollout, we are doing a production pilot where a handful of counties will be duly entering very burdensome, but for a short period of time, they will live in both systems. They will input all of the data into both systems so that they don't create that risk to child welfare, but they are able to functionally in production, utilize the new system, and identify anything we've missed before we go statewide.

Well, we can always check with the controller to see how that works out because I'm sure they're still doing the same thing over there. Unless things have changed, is it a $1.7 billion project?

That's the total over the course of the whole project.

And that's how many years?

So that will end up being 14 years.

It'll probably be higher.

We are committed to sticking to these timelines.

Anyway, that's enough questions for me. Good luck.

Thank you.

Since I only have 18 months left, I'm sure I won't get to see much of this, but I'll be reading about you, hopefully not in the newspaper. Thank you, Madam Chair.

Thank you, Senator.

Thank you, Senator. Adam, I know the Department of Finance responded to some of the recommendations that LAO put forth and mentioned that you don't believe there should be an increase in the withhold, and you will perhaps think through the existing reporting framework and further collaborate there. But Adam, can you speak on the other recommendation, just your thoughts there on monthly oversight meetings, the annual audits, and clearly defining the goals and the completion success?

Yeah, we welcome the conversation to work through those items. Absolutely. I came in just short of a year ago as director, and one of the things I focused on most in preparation for SPR-6 and having this baseline that we can all track to is the accountability: how do we running the project and all of you as oversight have visibility that this is actually working right. Given that you've been through this too many times on this project and others. How can we give you that confidence?

How can I have that confidence? To sit here. And so I think in terms of talking about what's in those reports, we welcome that conversation to take the improvements that we've made on the ability for all of us to monitor that, making sure those are built into the reports. We already provide regular reporting. Happy to talk about if a meeting is a helpful way to do that. Happy to look at the existing language to enhance definitions.

We want to do it collaboratively, so we make sure that we're defining it in a way that aligns with what we've mapped out and not requiring changes but still in a way that gives you what you need for your role.

Yes, sir.

Let me just make a request. The one thing that frustrated me in looking at all these IT projects that I can't even remember, some of them I'm sure, is I would always ask, including we had the State Bar, what does the After Action Report say? Because I want to read it. And when I asked that question, I got these blank looks.

You know, I come out of the military if you do it, if we spend $1.7 billion at the end of it or if it terminates before the end, for some unfortunate reason, somebody has to do a report to explain what went wrong. We don't do that very well in the state of California. And so I'm hoping, although I won't be here, that someone tracks that, tries to track the problems that occurred during the course of this project, and writes it down somewhere.

Because the other thing we found with the 21st Century Project is people come and go. And so when you ask someone, Why did this happen? Someone sitting right where you were or are, they said, I wasn't here. Well, who was here? Well, I don't remember. And that's a problem on projects this large. When we're spending this much money, we ought to be able to track what went wrong and what we could do better in the IT arena.

And maybe the California Department of Technology, they've got great leadership and have had over the last several years. Maybe they've got that nailed down. But that's just my request to you, as a soon departing member of this institution. Thank you. Thank you, Madam Chair.

Absolutely perfect. Thank you so much. That is our last questions on these item. We're going to hold it open and move on to issue number 14.

Thank you.

And we're going to establish a quorum first. Consultant, if you could?

[Roll Call] We have a quorum.

Perfect. Director?

Okay, thank you so much, and good afternoon again, Madam Chair and Members. Kim Johnson, Department of Social Services. So you have a number of issues here for the May revision that are all kind of supported through our Office of Equity within the Department. I'll touch on a few of the specific proposals and then kind of group the reappropriation items together at the end, the first being our Southern Border Humanitarian Support and Rapid Response Program Augmentation Proposal.

And just again, I want to note that since 2019, California has supported immigration needs and humanitarian assistance for migrants' process and release by the Federal Border Officials in California and border communities. These services successfully supported over 370,000 people through a collaborative model that also supports border communities. Last year, California successfully advocated for additional one-time federal resources to support services provided by local governments and NGOs.

The May revision continues California's support of these humanitarian efforts with a $150 million investment and a focus on sheltering services for vulnerable populations, including families with young children, people who are medically fragile, and particularly vulnerable individuals, including LGBTQ plus individuals, older individuals, and individuals with disabilities.

With the end of the federal COVID-19, Public Health Emergency Funding for border operations will be transferred from the Department of Public Health to the Department of Social Services with a transition to a pre-COVID funding and partnership model with services led by local providers. Notably, we all know we are facing a very challenging budget situation. We're also scaling down the pandemic-era services with the end of the state of emergency. So again, despite the deficit, the May revise includes that $150 million.

I would just also note that together, the administration and legislature have invested over $1.2 billion to date, again since 2019. And again, note that we continue to work with the Federal Government, which is responsible for immigration policies and processing that rely on these migrants sheltering in border communities. Also on your agenda, I will go to services for survivors and victims of hate crimes. The Governor's budget includes $40 million General Fund to support services for survivors and victims of hate crimes.

The May revision adds an additional $10 million General Fund for the program, for a total of $50 million to support community-based organizations to provide services for victims of hate incidents. A technical adjustment is also requested to be made to the budget bill to update the funding identified for this program.

And then I'm going to go over to the trailer bill language very briefly; this is the Revising Tribal Dependency Representation Program methodology in California; parents and children as parties in a juvenile dependency proceeding have access to publicly funded legal representation. However, despite tribes being a party to Indian child custody proceedings, California has not historically extended access to publicly funded legal representation to federally recognized tribes.

As such, these tribes have encountered barriers when attempting to exercise their right to intervene or participate in proceedings which has led to poorer outcomes for California tribal children and families. So, in recognition of this problem, the 2022 Budget Act included ongoing funding to assist tribes with funding legal counsel to represent eligible tribes in a California Juvenile Court proceeding.

Our implementation of the effort of this new program, the department realized that current law requires any adjusted allocation of funds to Indian tribes for tribal dependency representation for juvenile matters above 15,000 per eligible tribe to consider the number of Indian children, foster care or prospective adoptive placements through the Juvenile Court. The departments perform some data and research and discover there's no reliable data source to capture this information. Further, our government-to-government consultation with tribes indicates that this methodology requirement is unfair and did not take into account that most tribes desire to receive an equal distribution of funds left over for reallocation.

So therefore, the department's proposing to amend current law to strike out the methodology requirement when determining the reallocation methodology to fund tribes' access to dependency council, and then you have seven items under this issue area in your agenda that are requests for reappropriation for various initiatives and programs.

I'm happy to read those through, but unless they're all outlined there from on page 26 of your agenda, but happy To answer any questions about those

No need to read them through. Okay, thank you, Director. LAO, any comment?

Thank you. Good afternoon, chair members. Angela Short with the Legislative Analyst Office. We'll be continuing to review these various proposals in the coming days, but we have no immediate concerns to raise for the committee today. Thank you.

Thank you. Any questions on this end? Great. We're going to hold those items open. And Director, move on to your last issue.

Okay. Issue 15 is the description of the Administrator Certification Section Training. So this is a trailer bill proposal where we are proposing to modify the initial certification and continuing education training requirements for the administrator certification program to continue to offer online training options that were available throughout the COVID-19 pandemic under statewide waivers. During the pandemic, all training requirements could be met online.

With the end of the state of emergency, prospective and currently certified administrators of various adult facilities must complete an initial certification training program via department-approved live in-person training. In addition, administrators seeking recertification must meet the 40-hour continuing education requirement by completing at least 20 hours of in-person courses. Current Department-approved vendors cannot provide department-approved courses via live stream that are required to be held in person.

So the online option has created efficiency, is more effective and more equitable in terms of providing those required trainings to administrators.

LAO, comments?

Yes. As noted in your agenda, this trailer bill language is not yet available for review. So we are not able to provide any comments today, but we will be sure to communicate with the committee once that becomes available. Thank you.

Thank you, Department of Finance.

Hinnaneh Qazi, Department of Finance. We would just note that we're planning to post the TBL today. No other comments.

Thank you. That was my question. Thank you, Director, for joining us. That concludes part A of our agenda. We're going to do a consultant swap over here and go into Part B.

I'd like to welcome up the California Health and Human Services Agency starting up with the first Department on California Emergency Medical Services Data Resource System: CEDARS.

Make sure my mic is on. Sounds like it is on. Good afternoon, Madam Chair and honorable committee members. My name is Lorna Eby, and I'm the Deputy Director for the Office of Systems Integration and I will be presenting to you today, and I'm joined here by Ricard Trussell, who is the chief of Administration for the Emergency Medical Services Authority. And I'm here to provide a brief overview of today's request.

The Office of Systems Integration requests 665,000 in expenditure authority for fiscal year 23-24 for three positions: to provide project planning, contract management, and various project support services for the Emergency Medical Services Authority. This proposal supports project planning efforts for the Electronic Physician Orders for Life-Sustaining Treatment Registry project known as ePOLST, and it provides technical support and contract management of the California EMS Information System, known as CEMSIS.

These positions will also ensure that dependencies between ePOLST, CEMSIS, and the California EMS Data Resource System project, known as CEDARS, are addressed and managed. The positions requested are as follows: one information technology manager, one who will act as the ePOLST project manager, one who will serve as the ePOLST project management support analyst and one who will serve as the ePOLST project information technology specialist. Three, that will act as the technical lead for CEMSIS.

Funding for the ePOLST project was provided for in AB 133 and approved in the 2021 budget act as a one-time appropriation of $10 million through June of 2024. The ePOLST Registry project is currently in stage two of the California Department of Technology's Project Approval Lifecycle, Or PAL Process, and OSI Anticipates submitting the stage two alternatives analysis for approval by the end of May 2023, with a PAL completion date targeted for June of 2024.

AB 133 also requires that ePOLST be integrated with, or a component of the CEDARS solution. Funding for CEMSIS has been requested by EMSA for fiscal year 23-24. CEMSIS is a secure and centralized statewide database for collecting data about individual emergency medical service requests, patients treated at hospitals, and EMS provider organizations.

I would like to highlight as part of this presentation that the positions in this request are distinct and not duplicative of resources previously requested by OSI and the fiscal year 23-24 CEDARS BCP, which was previously presented to you earlier this season. These positions for ePOLST and CEMSIS will be dedicated to those efforts. However, they will also help support a unified and defined strategy and coordinated planning efforts between ePOLST, CEMSIS, and the CEDARS projects. And with that, I will pause, and I welcome your questions.

Thank you, LAO, any comment?

Ryan Miller, LAO: we have no concerns with this proposed Department of Finance.

Department of Finance?

Department of Finance, Nina Hong: nothing further to add

Nothing further. We're going to move on to issue number two and hold that item open. Thank you.

Sorry. Good afternoon, Madam Chair and Members. Brendan McCarthy, Deputy Secretary for Program and Fiscal Affairs with Cal HHS. I'm presenting the Health and Human Services Innovation Accelerator Initiative. This is a $10 million General Fund one time investment that we are proposing. The problem that we're trying to address with this is that there are innovations that happen in the healthcare world, for example, new drugs or new devices or new models of care.

And oftentimes they are sort of slow to trickle into the safety net system, meaning our public hospital system, our clinics. And so the fact that these new advancements are slow to get there, we worry, widens disparities and inequities in the system. And so what we're proposing here is to use this investment to translate new research and innovation that is happening into practice in the system and also to scale up efforts.

So, for example, there may be a very good pilot project that happens somewhere, but it's very small. How can we expand the use of what comes out of that pilot more broadly in the safety net system? That's what we're trying to do. And so, as I said, it's a $10 million total General Fund. There was $1 million in the Governor's Budget. So this would, at the May Revise, we're adding another $9 million to start this effort.

What we would hope to do is partner with outside entities, such as philanthropy. The idea being that one, we could potentially leverage outside funding sources to make this state investment go farther, but also bring in expertise from philanthropic partners about new models of care and new practices in the healthcare system that then could be disseminated more widely.

We anticipate identifying some key areas to look at, for example, diabetes, morbidity and mortality, or maternal and infant health and outcomes, and then to look for projects or models of care, et cetera, that we can use to address those particularly, as they have disparate impacts on our safety net population. So that's, in a nutshell, the proposal, and I'm happy to answer any questions.

Thank you. LAO.

While the sorts of challenges that the Administration is speaking to and that were laid out in the Governor's Budget summary may merit consideration, our initial understanding was that the Administration was not planning to submit a BCP in support of the proposal. So we wrote an analysis that listed a number of questions that we understand that the Administration is working on responding.

But in particular, I think we're looking for at least a demonstration of how the funding would be used, how it's not duplicative of other efforts within state government, why the agency is the right place for this. We understand as of this morning that the Administration is planning to follow up with some written materials for the Legislature. So we will evaluate those when they become available and update the Subcommitee should they change our assessment. But I think the bottom line is that absent a full justification and certainly in light of our office's assessment of the overall budget condition being worse than that which was estimated in the May Revision, we would recommend rejecting this proposal.

Thank you. Department of Finance, any further comments?

No, nothing further right now.

Great. Thank you. Is it Brendan?

Yes.

Thank you so much. Brendan, yeah, I mean, I have a lot of concerns with this. I mean, it's, you know, you mentioned models of care to address some of these disparities. In the past couple of months, we've been listening to a lot of proposals and investments in a lot of programming from various departments that are looking to address this.

We've heard stakeholder proposals on extending the postpartum benefits up to a full year, proposals on bringing access to doulas to the community, proposals that are brought to us because there's been research done on these already that these are models of care that, in fact, do address the disparities that we're seeing in a lot of the areas that you brought up.

I'm concerned as to why not further invest $10 million in the programs that we've already created and programs that we've seen are successful, and why create a whole new initiative to address some of these issues, especially in a time that we are in a deficit? $10 million maybe not a lot for the fourth largest economy in the world, but $10 million for my district is a lot of money that would be directly go to our constituents in California.

And so I'm just concerned as to, I'm not seeing the difference of why investing in this versus other departments and programs already exist is necessary. That's where I'm at right now. Senator Eggman.

I think I would just concur. It's a great idea when times are flush. I don't know if it's such a great idea when we're on a downturn, and we'll be potentially looking at cutting back on our core programs. So I don't know if it's time to think about innovation at this time.

I don't know if you have anything to respond to that.

Well, certainly, Madam Chair, and we share the Subcommittee's concern about the state's fiscal situation. That's why we propose here what we think is a modest investment here. But understand that the fiscal situation and the hard decisions that lie ahead. And certainly we do not want to duplicate existing efforts of our programs like the Black Infant Health Program and other programs that do good work.

We're just more thinking about are there things out there that our state programs and our safety net providers aren't aware of and aren't taking up because it's new innovations that haven't trickled in yet. But it's not our intent to duplicate the work of those important programs. It's more to help those programs by expanding the tools available in the safety net system.

Thank you so much. No further questions. We're going to hold that item open, move on to issue number three.

Thank you, Madam Chair.

Hello. May I start? Yep. Okay. Thank you, Chair, Madam Chair and Honorable Committee. I'm Katherine Lucero. I'm the Director of the Office of Youth and Community Restoration. I'm here to speak about issue three, Progress Review Hearing Technical Clarification. As you are aware, the secure youth treatment facilities are the most restrictive settings that are being created for the DJJ in anticipation of the DJJ closure and the realignment of youth who commit the most serious criminal offenses to the counties. In fact, all counties are using their juvenile halls as their designated secure youth treatment facilities. In most cases, these are small carceral settings where youth 14 to 25 live, have meals, attend school, and do recreation.

Under Welfare and Institutions Code Section 875, a judge can decide to move a young person from a secure youth treatment facility to what's called a less restrictive program if the young person has made substantial progress with their rehabilitation and if the program is consistent with youth rehabilitation and community safety. The statute provides that the purpose of a less restrictive program is to facilitate the safe and successful integration of the young person into the community.

This is also consistent with research and data that aligns with adolescent brain development and supports treating youth differently than adults when it comes to accountability and carceral practices. Examples of less restrictive programs are halfway houses such as those used by Amity and ARC, the Anti Recidivism Coalition, a Camp Ranch, a community residential or service program such as Pine Grove Youth Conservation Camp, and the California Conservation Corps throughout the State of California.

Welfare and Institutions Code 875 also provides that all young people who are committed to an SYTF come before a judge every six months for a progress review. At each of those review hearings, the judge hears evidence from the probation department, behavioral health education specialist, and others to evaluate the progress. On the basis of this information, the judge can keep the baseline commitment, or the judge can offer a deviation from that commitment up to six months. That's at every six month progress review.

This reduction is beyond the day for day credit that the youth gets for being in that committed carceral setting. It's an incentive for youth to do well and then get time off their baseline commitment. This trailer bill clarifies that if the young person is placed in a less restrictive setting, the judge will continue to have those six month review hearings, and the judge will continue to have discretion to reduce their baseline commitment up to six months.

As indicated, the current language, or maybe not indicated, but the current language is not explicit, and so the trailer bill language inserts including any term spent in a less restrictive program pursuant to subdivision F of 875. There is confusion around the state. There are attorneys advising their clients not to go into a Pine Grove setting or a Conservation Corps setting because then they would not be eligible for those earned incentivized credits off their baseline commitment.

But that's not true for the whole state because there are other parts of the state where the defenders and the judges and the stakeholders believe that it does apply. So we are wanting this to be a uniform application. We think it's a clarification, and we would ask that it be supported. And I'm, of course, here for any questions. I also have Alisa Hartz with me, counsel for OYCR, who can also assist as she drafted one of the original memos.

Thank you, Director. LAO, any comment?

No concerns.

Department of Finance.

Nothing else to add right now, thank you.

Perfect. Director, I mean, very supportive of giving credits to the youth when they're doing in the less restrictive spaces. I'm just wondering, some youth, like a youth in my district, is never going to get this opportunity because he died of an overdose at a juvenile hall. I'm just wondering if anything you can give me.

I have the opportunity, you're right here in front of me. In the investigations with OYCR and all the things that have been happening this year with our youth from DJJ going to our county halls. What are investigations looking like into just the mistreatment, the deaths, the overdoses and so forth?

Absolutely. I do want to acknowledge the extreme tragedy of our youth lost at Nidorf. It has been a difficult week, and to grapple with, to the extent that we can prevent things like that happening in the future, we are completely aligned. We are actually going to be out at Nidorf on Friday, and I know that counsel will be accompanying our ombuds person. What we're seeing in that facility, we are not seeing throughout the state.

There are approximately 60 outstanding complaints, most of them, a lion's share, is from the facility that you're talking about, and it's around facility adequacy, programming, education. We are seeing minimal complaints from the other 57 counties and nothing that matches what is happening, sadly, in your district. We're not a compliance body. We are a technical assistance and connector of resources, leader of policy on evidence based practices, gender honoring practices, culturally respectful practices.

We are offering on a daily basis to be in LA. We have met with the defenders, probation, the DA. We have met with some of the Board of Supervisor staff. We have a meeting planned with the new Chief Strategist of Juvenile Justice in LA. So we are touring the alternatives. I did want you to know that, with the help of our technical assistance, we have been successfully able to place 48 youth in less restrictive placements in LA. Not coming right from DJJ.

They've been placed in the community. We understand there's 17 more kids pending to come from LA, from DJJ, and the stakeholders are all working very hard to make sure that those youth are placed in environments that are vibrant and healing and trauma informed. Everybody is concerned, and we are in touch with everybody in the different pockets of the stakeholder system.

Thank you. Man, I wish I could join you on Friday's visit. But, just really briefly. I don't want to take too much time. Counsel, you're going to be going with the Ombuds person. What's that looking like in terms of just the role of the Ombuds person? Was assigned through my predecessors to just have this oversight. Are we missing the gap somewhere in this oversight of what's happening? Or Director, if it's more appropriate for you to answer.

Yes, please. Sorry. Red is on. Okay, thank you for that question. I think this statewide Ombuds person for Juvenile Justice is a brand new thing. I think we're really ramping up over the past year. We're in the process of hiring additional field staff who will be really expanding the ability to investigate complaints.

Do you think, is it because it's just a one person thing right now?

There's two people. That said, the issues that are happening in LA are widely known. As you are aware, the Board of State and Community Corrections has also made findings around what's happening in LA. There's a lawsuit with a consent decree brought by the Department of Justice, the California Attorney General's Office. So I think there is certainly a really critical role for the OYCR Ombuds person. But the issues there are things that have been known for quite a while.

And so I think the Ombuds person, as the OYCR Ombuds person, will be able to really shine a light on issues in an important way, but there's a number of other entities that also need to be playing a role in resolving these really critical issues.

Okay, thank you. Great. Seeing nothing else, we're going to hold the item open and move on to the next Department.

Thank you.

Thank you.

I'd like to welcome up EMSA to go over issue number one.

We're ready. Hi. Good afternoon, Ms. Chair and Members of the Committee. My name is Richard Trussell, and I'm the Chief of Administration at the Emergency Medical Services Authority. As requested, EMSA will provide two brief overviews of our two proposals currently under consideration. Kim Lew, here to my right, she's our Chief of EMS Personnel, and she will provide the first overview.

Good afternoon. Good afternoon, Madam Chair and Members. The EMS Authority, also known as EMSA, requests to redirect 190,000 General Fund originally appropriated to support the implementation of the California Emergency Medical Advancement Project, also known as CMAP, to support planning efforts for the California Emergency Medical Services Central Registry, which is a system that tracks paramedic licensing, investigations, and legal case management, as well as accreditations.

The CMAP funding was included in the 2021 Budget Act to support AB 1544, which authorized the Community Paramedicine and or Triage to Alternate Destination Act of 2020. This proposal is cost neutral, and the redirection of CMAP funding will be utilized for the planning efforts associated with the replacement of the Central Registry System. With the enactment of AB 1544, licensed paramedics electing to be accredited in a specialty service of community medicine, also known as CP or Triaged Alternate Destination, also known as TAD, shall be required to attend the specialized training.

Although the current central registry system can record CP and TAD accreditations, it is limited in functionality to track only when the accreditation starts and ends. The system currently is unable to analyze or report CP and TAD accreditation status, or CP and TAD required training and continuing education as part of the initial renewal and reinstatement license process, which is a critical component of meeting the AB 1544 reporting requirements.

The central registry was designed to be replaced under the CMAP Project, and it was comprised of two independent solutions which neither are meeting that functionality. In 2021 and 2022, budget included three years of funding for AB 1544. However, the CMAP project was paused in August of 2022 due to delays in the regulatory process and the need to focus on other priorities, such as the things you've heard earlier today. Kansas, Epolst and Cedars.

As a result of the CMAP Project being paused, there is an available $190,000 in the 23-24 budget which will not be utilized and is being proposed to be redirected to fund the planning efforts associated with replacing the central registry. And that concludes my presentation. We are open to your questions.

Thank you. Will, any comments?

Will Owens, LAO. We have no concerns with this proposal.

Thank you. Department of Finance.

Shelina Noorali, Department of Finance. Nothing further to add.

Thank you. Nothing further. We're going to hold the item up and go to your second issue.

It's the appointment of Chief Medical Officer. That's one of the proposals we previously testified on. This is an amendment to that It's request $29,000 in General Fund. The additional funding is requested because departmental indirect costs were inadvertently left out of the original proposal entitled Appointment of Chief Medical Officer. That's it.

I have this issue very much engraved in my head. Okay, the third time we've talked about this, right?

Third time. Yes, ma'am.

Any comment?

No concerns with this proposal.

Department of Finance.

Shelina Noorali, Department of Finance. Nothing further to add.

Thank you. We're going to hold the item open and move on to our next department. Thank you so much.

Thank you.

I welcome HCAI, come up. You may proceed with issue one.

Good afternoon. I'm Vishaal Pegany, Deputy Director for the Department of Healthcare Access and Information. I'll be presenting on two items. The first is the proposal to reallocate funds for CalRx pharmaceutical drug procurement. Under this proposal, HCAI requests transfer of 2 million of General Fund expenditure authority originally approved in the 2022 Budget Act for capital infrastructure security for reproductive health clinics to instead support procurement of mifepristone or misoprostol through the CalRx program to ensure continued access to these drugs for Californians in need of safe and effective medication abortion. This proposal is responsive to recent federal court actions and build on last year's reproductive health package through supporting a state level emergency stockpile.

The resources would secure enough medications to support medication assisted abortions in the state during a one year period, including both a two drug regimen and the misoprostol only regimen. Lastly, I note that the state would only use this funding to stockpile medications should there be market signals of a shortage or disruption to the existing supply chain, and the funds would be used to procure either medication. I'll be moving on to the second item, which is the CalRx Naloxone Access Initiative.

Before I launch into the specifics, I want to briefly set the stage. As many of you are aware, California has experienced a sharp rise in opioid related deaths and emergency department visits due to overdoses.

Before you move on to issue two, I'm going to turn to LAO if they have any comment on issue one.

Jason Constantouros, LAO. No concerns with issue one.

Okay. Department of Finance. Any comment?

Joseph Donaldson, Department of Finance. No additional comments. Thank you.

Okay, I guess I'd just like to ask, and none of that 2 million was already approved for for clinics or clinics expecting that money because that's what was initially used for?

We've already gone through one award cycle for the clinics. So it was originally a $20 million allocation for the Capital Infrastructure Security Fund. 8 million has been awarded to 21 applicants for the first round of grant making. So it's just rediveverting 2 million from the remaining funds.

Okay, but that's 2 million for a potential if we need it, right?

Yes.

I was going to say, in the meantime, do we know if there's clinics out there waiting for infrastructure funding they thought was potentially coming to them? That is not now, if we divert 2 million for a potential use.

It's a great question. Scott Christman, Chief Deputy Director, Department of Healthcare Access and Information. So we still anticipate plans for a second cycle. So we were actually able to award to all applicants in the first round just about 8 million across 21. So we're actually going to redouble our efforts in marketing for that second cycle and still allow for room to possibly transfer the 2 million in the event that we need to stockpile medication abortion drugs. So great question, but we're excited about the second cycle, and we'll try to meet those needs of those clinics.

Okay, but this will stay a part of that allocation. It won't just be swept back into the General Fund.

That's correct. And we think, obviously, aligned with sort of the overall priority for reproductive health access, including medication abortion.

Thank you.

Thank you. So we're going to hold that item open, then move on issue two.

Sure. So Naloxone is an essential tool in combating the opioid epidemic, and increasing access to this medication is critical compared to injection forms. The nasal spray formulation of Naloxone has become popular due to its ease of use and effectiveness, and its ability to be administered by individuals without the need for medical training.

But the problem is that the price for both the branded and generic Naloxone nasal sprays remain artificially high, and this trend has been going on for several years, leading to access barriers and continued growth in overdose deaths. Today's market lacks access to low cost Naloxone nasal spray. Relying on the market to self correct is uncertain, underscoring the need to support development, manufacturing or procurement of a low cost option. Access to a low cost Naloxone nasal spray in communities across California will reduce ppioid related deaths.

This proposal seeks one time funding of 30 million in opioid settlements funds for the CalRx Naloxone Access Initiative. These resources would be used to support the development, manufacturing, or procurement of a low cost nasal spray product. The state's contribution would help fund the project, and the selected partner would carry out activities pertaining to research and development, including clinical studies, manufacturing, process development, the regulatory activities, including obtaining FDA approval.

And then lastly, a small portion of this request would provide additional resources to support HCAI with state operations to support the increasing workload of administering the CalRx program. These include three permanent positions to enable the CalRx program to support the Naloxone Initiative as well as expand to future target drugs. That concludes my overview, and I'm happy to answer any questions.

LAO, any comment on this issue?

This proposal is a special fund proposal involving Opioid Settlement Fund, and so this proposal isn't impacting the state's bottom line General Fund. We're also still reviewing this proposal, but we did want to flag two issues for consideration as you're thinking through this proposal. The first issue is that it's our understanding in discussing with the Department that this proposal is still somewhat conceptual. Some of the key activities are still being worked out by the Department.

For example, Department is still deciding if it will focus on procurement or more on manufacturing and development, and so those are some key activities that it's still weighing. We also understand in conversation with the Department that there's some uncertainty with the cost of the initiative, and so the initiative could come at a higher or lower cost.

The Administration states that it intends to manage that risk in its contract with the vendor, so the vendor would help manage some of that risk, but there's still some uncertainty here with the sort of resource need and the cost. The second issue we wanted to flag was regarding the three positions that you can see summarized on page 11 of your agenda.

We're working with the Department to get more backup on the positions. In some part just to ensure there's full justification for the positions, but also to understand the scope of the work involved in those positions. For example, we're trying to assess whether the positions are focused solely on the Naloxone Initiative or would be focused more broadly on administering the CalRx program. If the latter, then the Legislature would want to get more justification as to using Opioid Settlement Funds specifically for these positions. Thank you.

Thank you so much. Department of Finance? Yeah.

Joseph Donaldson, Department of Finance. No additional comments at this time. Thank you.

Great. Thank you so much. Department of Finance, I have a question for you. We had one request on moving out funds out of the Opioid Settlement Fund, and I asked if we knew how much was left. I'm seeing now a second request out of this fund. I'm assuming we have an understanding how much is in this fund.

For the exact amount I would have to get back to just because I'm not lead on that policy here, but we can definitely get back to you. I know for this specific initiative, we're requesting a 30 million for the Naloxone related to CalRx. But overall understanding of the fund, we can get back to on that with a more detailed answer.

Yeah, I'd really like to know how much we have here. Thank you. Anything else? Perfect. Well, actually, and I didn't catch your name, so I apologize, Deputy Director. If you could, could you respond to that second comment about the jobs and the scope of each position?

Sure. So there's three positions. One is a typical civil servant analyst level position that will help with program administration.

Or perhaps let me reframe, because that could be a lot. But are they going to be specific to managing the production of Narcan, or is this going to be overall for RX, CalRx?

They would primarily support the Naloxone Access initiative, but then they would also support the overall CalRx program as well.

Madam Chair, if I could jump in here. Matt Aguilera for Finance. The Department does have some base General Fund money in the CalRx program that, to the extent they're providing some of the work for that side of the house, they would be using their existing General Fund for that purpose.

Can you rephrase that for me? Sorry.

Yeah, so these positions, the work that they provide under the opioid umbrella that would be supported with these funds. Any work that's done on the base program would be funded through their existing General Fund resources.

So not what he said.

I'm saying

Because he just said the opposite. He just said that it would help with CalRx.

Yeah, but I'm talking about just the funding for the positions.

That was the question I asked him, and he said yes.

Yeah, well, I'm just trying to clarify. I think we're on the same page in terms of understanding that there's some existing General Fund resources that they have. So we're not proposing new General Fund to help support these new positions. These new positions would be funded from the opioid funds to do the opioid work. And to the extent there's any work that goes beyond that, that would be supported through their existing General Fund money.

Okay. I'm still with the fact that you said the opposite thing.

Yeah. I would just add the Opioid Settlement Funds are time limited, and the primary focus of these positions will be on that bucket of work. But eventually, those funds will expire, and we'll have to come back to the Legislature for additional ongoing funding for those positions.

Okay, thank you. We're going to... Seeing no other questions. We're going to hold the item open and move on to the next department. Thank you so much.

Welcome, Department of State Hospitals. You can begin with issue one.

Good afternoon. Stephanie Clendenon, Director for the Department of State hospitals. And I'm joined by Sean Hammer, our Deputy Director of administrative Services, and Robert Horsley, Chief Operating Officer for the Department. For issue number one, I will provide a brief overview of the Department, the State Hospital's May revision program and caseload updates.

The Department's estimated caseload as of the May revision is projected to exceed 9300 by the end of 23-24. With a total of 5724 patients across the state hospitals, 2590 in contracted programs, and 1065 in the conditional release programs for the county bed billing reimbursement. As of the 2324 May revision, the department requests to decrease its reimbursement authority by 27.4 million in 23-24 to align reimbursement authority with the current Lanterman-Petris-Short projected caseload.

This will bring the total revised reimbursement authority to 164.2 million, which more closely reflects anticipated reimbursements associated with the department's contract with counties to provide 556 beds for the LPs civilly committed patients and reimbursements for nonrestorable incompetent to stand trial defendants who are not transported and returned to the committing county within statutory timelines.

For the Department of State Hospital's Metropolitan Increased Secure Bed Capacity project, the department reflects an additional one-time savings of 3.9 million in current year, bringing the total one-time savings to 15.1 million in 2223.

At governor's budget, the department reported that the project was complete and two units had been activated to serve IST and patients, and three units were delayed because they were being used for COVID-19 isolation and to provide treatment for Metropolitan State Hospital's Skilled Nursing Facility patients while that building underwent a roof replacement and building repairs. And that project is estimated to be completed in July 2023.

This adjustment at May revision is due to a miscalculation in the savings amount at Governor's Budget, and there's no further reported delays with the project. For the enhanced treatment program, the department is reporting an additional one-time savings of 3.2 million in budget year, in addition to the 4.8 million current year savings reported at Governor's Budget. This savings reflects the DSH Patents unit activation delay associated with updated construction schedule.

At Governor's Budget, the department reported that it had activated the first 13-bed ETP unit at DSH Atascadero in September 2021 to treat patients who are at the highest risk of violence and cannot be safely treated in a standard treatment environment, and construction of the second 10 bed unit at Patton was underway.

Work continues on the Patton unit, with construction scheduled to be completed in December of 2023 and unit activation planned for March of 2024. For the mission-based review initiatives covering direct care nursing, protective services, treatment team, and primary care, at May revision, the department reflects an additional savings in the current year of 1 million for direct care nursing, 4.8 million for protective services, and 3.9 million for the treatment team and primary care mission-based review component.

Savings reported are due to delays and challenges experienced in hiring the new positions that were authorized. For patient-driven operating expenses and equipment at the Governor's Budget, DSH requested 20.3 million in current year and 20.5 million in 23-24 and ongoing to support the increased inpatient-driven support costs within the DSH system, which includes items such as clothing, personal supplies, food, laundry, medication and outside medical expenses. At May revision, the department requests an additional 2.5 million in current year and 6.1 million in budget year and ongoing.

This adjustment reflects the increased projected census in current year and budget year of the state hospital patient population. For COVID-19 response, as of the May revision, the department requests to decrease its Governor's Budget request for this item by 9.2 million in the current year one time, and 19.7 million in the Oops. I said that backwards.

9.2 million in the budget year, one time and 19.7 million in the current year to reflect adjustments in the COVID-19 infection control measures and practices based on the changes in protocols from the California Department of Public and Health and the Centers for Disease Control and Prevention.

For the Coalinga Intermediate Care Facility unit conversion, the department reflects a one-time savings of 2.9 million in current year for personnel services savings due to a two-month delay in the conversion of a residential recovery unit to an intermediate care facility unit. Due to the time needed to complete the fire suppression system repairs and subsequent regulatory approval. This conversion is now complete and the unit is operating as an ICF unit.

Lastly, for our caseload and estimate updates CONREP for our Conditional Release Program non-svp program, the department is reflecting a one-time decrease of 13.5 million in current year due to the activation adjustments for the Step Down transitional programs and the CONREP Fact Regional Program.

These adjustments included 9.2 million in one time savings in current year due to activation delays for the 78-bed Golden Legacy program, which is now anticipated to begin activation in June of 2023 and 1.8 million in savings in current year and ongoing associated with a 10-bed reduction in the ANA statewide transitional release program which the department is requesting to redirect the ongoing funding to fund a 10-bed increase in Canyon Manor in Northern California and we have a $3,000,000 one-time savings in the current year due to adjustments of the activation timeline and phase-in of the patient placement in the CONREP Back Program.

Happy to take any questions.

LAO, any comment?

Will Owens, LAO, we have no concerns broadly with the program and estimate updates, but we're available for questions.

Thank you, Department of Finance.

Nina Hong, Department of Finance. Nothing further to add.

I guess director, just a question. Just looking back on last year, how are our COVID rates in the facilities? I know we're talking about budget today, but one of the things was COVID, and I just know earlier we still had a lot of problems.

Thank you for the question. I would have to say that COVID is going to probably be with us for a while, as we know, and it will ebb and flow.

As the infection rates in the community increase, we see increases within our facilities, and as they flow and they reduce, then we see them reduce. We're fortunate that there's been substantial changes in the COVID protocols which really lessens the impact of that for our facilities. We have been able to move away from our admission observation unit, so we now can do admissions more regularly into the state hospitals, which is really helping with our "incompetent to stand trial" waitlist.