Assembly Budget Subcommittee No. 5 on State Administration

Good afternoon and welcome to our Assembly Budget Subcommitee five hearing today. This hearing will cover the Department of Housing and Community Development, Business, Consumer Services and housing agency, and the state treasurer's office. Housing affordability is one of the biggest challenges confronting California today and an issue I have long advocated for. In my time in the Legislature, I've seen firsthand the impact that housing affordability has on my constituents and on all of our communities.

We are defined by our ability to ensure that every individual, regardless of their background or circumstances, has a place to call home. Addressing housing issues decisively is one of the most vital things our Legislature can do. Additionally, it is imperative that we not only address the immediate housing needs of Californians, but also focus on prevention.

By investing in innovative solutions such as pilot projects for rent subsidies and funding for transitional housing, we can provide individuals with the support they need to avoid homelessness in the first place. Speaking of homelessness, quote, and this is a Sharon Quirk Silva quote, we are solving homelessness by dying. People are dying their way from the streets. Thousands of Californians in Orange County, over 50 people a month die on the streets of Orange County, one of the wealthiest counties in the State of California.

This is unconscionable and we have to do better. In a slim budget, we will have to make unavoidable cuts, but all cuts are not equal. And this budget hearing today is to focus on getting your information, your testimony, but also using data and information that we will find to help make these hard, hard decisions.

Finding new approaches, such as utilizing HHAPP funding funds to establish competitive grant programs tailored to Fund the construction of small scale housing solutions like tiny homes and transitional units on campuses on faith based lands, would invite solutions from organizations and municipalities across California. Again, it is everybody's responsibility, every city, every county, every jurisdiction, to do something. The answer of we can do nothing is simply not acceptable. Pushing homeless from one city or county to another is not acceptable. And we have seen this pattern.

Three articles that just came out today, homelessness in California. The audit has some important information that we need people to not only read, but understand. Some programs are working better than others. Another article just this week in Orange County's homeless shelter program. Broken. Is it broken? Just this week in voice of OC in Orange County and another one from calmatters. It's now significantly more deadly to be homeless. Why are so many people dying?

Many of us who work in this space don't need to read this article. We know why they're dying. If you're out on the streets, you're going to die 10 to 15 years earlier than your peers that are housed. It's simple. We have to get people indoors and off the streets. Many of our approaches not only differ, not only offer immediate relief, but also provide pathways to stability through transitional housing, thereby preventing individuals from slipping further into homelessness.

Our approach will shape the trajectory of Californias for generations to come, impacting social equity, public health, economic stability, and more, by ensuring we allocate our budget resources to the best options we can empower Californians to succeed. The hearing agenda is available on our Committee website, and physical copies are available outside of the hearing room. A few housekeeping notes this is an in person hearing with all panelists testifying in person. We will take questions from Members of this Subcommitee after each item.

So again, I'll repeat that we're going to have public testimony after each item. It's a little bit different than we've done in the past. Public comment is limited to 1 minute for each person testifying and will be taken in person. If you are unable to attend this hearing in person, you may submit your comments via email to assemblybudgetra.Gov. With that, let's call the roll.

[Roll Call]

And before we start the hearing, let me allow my colleague to make any comments.

Thank you, Madam Chair. Thank you, everybody, for being here today. I think for the work of this Subcommitee. I've been regrettably looking forward to this hearing here today because of the information we're receiving from our draft budget. That does not sit well with me. I'm going to preface it and just, you know, I know we have a lot of presenters here today, a lot of information to go through, and I don't believe that any one of these presenters also feels that these might be good ideas.

They might, for some perspectives, be some of the best that we can, knowing we have to have a balanced budget. But for, given that we all here, I think uniformly that addressing housing and homelessness is the biggest issue that Californians want us to do up here. It is very hard to reconcile how we're supposed to do that with less.

It takes a long time to produce affordable housing units, and it takes a long time of upfront investments to be able to lay down that the guarantees are going to be there to access those funds so that ultimately everything pencils out and they can break ground. We have been doing more as this, and we should celebrate that. We have been reviewing that through Subcommitee seven, through that accountability measure, to look at our housing programs.

We have been through my own policy Committee with the Assembly Committee on Housing and Community Development, examining new ways to be efficient and more effective with the way that we address housing solutions and address homeless services.

But the absolute gutting and reversion to this level that we're seeing right now for housing programs not only would set us back, if this is where we're going to finally end up in June, but it would take years to be able to restart and reinvigorate the level of commitment and investment and activity that the state has been able to facilitate. The housing units that we have been able to produce, the number of service workers that are out there doing the hard work on the grounds.

So this isn't just about a one time cut for me. This is a fundamental change in how we are prioritizing through our budget what California's commitment should be, and I just wanted to lay that out as the outset. Now, I know we have a lot of material to go through. I think it's important that we have a very thorough overview of some of these proposals, and I think I'm going to be having a number of questions.

But I think the central theme is what have been the most effective ways under the budget to date through these different programs to be able to address housing outcomes and homelessness solutions. So I'm looking forward to each one of these panels, and I'm ready to engage. Thank you.

Thank you. Both of us have bills to present in other committees, so we will do our best to make sure one or the other of us is here. That being said, we will begin our issue one, governor's January budget solutions. That's on the agenda, page two. Let's start with our first issue, and we welcome you to the table here. Please introduce yourself as you make your remarks. .

Hello Andrew March with the Department of Finance. So, as the agenda notes, the Governor's Budget includes approximately $1.2 billion in General Fund solutions for housing. Since 2019, the state's committed approximately $5.2 billion to affordable housing programs. So in light of these cuts, that would leave approximately $4 billion since 2019 has been committed to affordable housing programs. The agenda goes into further detail on the specific reductions, and I know we'll get to some of those throughout the agenda. Happy to take any questions on any specific reductions.

Thank you.

Thank you. Madam Chair, Ginni Bella with the Legislative Analyst Office. As you just heard, over the last several years, the state has allocated a significant amount of discretionary funding for housing and homelessness programs. The Governor's Budget, given the budget challenges we're facing does include a package of solutions totaling 1.2 billion across about seven programs in the Department of Housing and Community Development, which you'll hear more about today.

That funding was, for the most part, one time discretionary augmentations that would have expired otherwise, but the proposals really accelerate that expiration and then reduce the amount of the allocation overall. As you start your work on the budget, we think you should think of the governor's proposal as 11 package to begin that thinking. But ultimately, the Legislature, you have an opportunity to craft your own set of solutions.

It will take a combination of reductions, revenue increases, borrowing, and also drawing on the reserves to put that package together. But again, the governor's proposal is one starting point. But this is an opportunity to really hear from the Administration, and we think the questions laid out in your agenda that really get to the root of what was the reason for the reductions proposed, and are there other areas that you could potentially pull back one time? Funding is a really good starting spot.

Thank you. Did you have any comments? No. All right, just to make note, we will have a separate panel on reach 2.0 and the housing navigator programs, so we'll wait for any discussion on that. But for the Department of Finance, how did the Department of Finance determine which programs to cut and delay? And what metrics did the Department of Finance use to make the determination for the cuts?

Yeah. So generally the proposed reductions are to programs that, or to funding that hadn't already been included in a notice of funding availability. So to Backtrack, the Department of Housing and Community Development provides funding through notices of funding availability, which are essentially notices that their applications can be received. Now, for a pot of funding, the funding that's included in the Governor's Budget for reduction is funding that hadn't been included.

So it's not funding that was actively accepting applications, although it may have been included on a, on the notice of funding availability calendar, but the application period was not open yet for those programs.

I don't understand. I'm not maybe answering her question, but I'm not sure that I heard what went into the decision making as far as reducing this program by that amount, the next program by this amount, how did you really, I mean, each one of these programs contributes either singularly or in combination to the production of affordable housing units across our state, and they more or less are going to have a certain level of impact to produce units that otherwise wouldn't exist because the deal fell through, the money was not there. So how did you decide which programs to cut and by how much to cut.

So generally, there wasn't a specific methodology that was used to determine it was that this is an effort to balance the budget. So these are available funds that were available to be proposed for reduction.

So pardon me if I'm being a little rude with my characterization, but what I'm hearing is that we just threw a blank number out there. We just said we're gonna cut all of it. We're gonna cut 75% of it. We just, we had nothing to base on a decision on.

Generally, it was the funding that was available in 23-24, 24-25 that was proposed for reduction. So except for a few examples. So, for example, in the infiltrat infrastructure grant program, there is a portion of funding that remains, and for the multifamily housing program, there's a portion of funding that remains, but generally it is the entire appropriation from 2324 or 2425 and ongoing. In certain programs, a portion is a.

Generous, I think, word to use. How many housing units will not be constructed because of these reductions that they all were in the final adopted budget.

So the Administration doesn't have an exact number of units that would not be constructed or foregone because of this funding. It's difficult to determine exactly how many units may not be created, although we do acknowledge that there would be fewer affordable housing units created because of the reduction in funding. However, some of it depends on other funding sources becoming available. For example, in the Bay Area, there's a discussions about an affordable housing bond. So there may be other sources that come in and backfill some of the lost state funding.

To a very little degree, that might be true. And of course, we're having conversations around our housing bond as well. As you were evaluating some of these recommendations, I assume you'd had conversations with Department of Housing Community Development.

Yes. I mean, so generally, this is the administration's proposal and the Governor's Budget. So this is.

Yes, but they didn't provide you an impact or an outcome on which to base the decision.

So I think it and the Department of Housing Community development can definitely provide any more color to the answer. But generally we don't predict how many units will be created. When this funding was committed to in the 2022 budget, largely, there wasn't an expectation or a projection of how many new units would be created with this funding, just knowing that there would be new units created. A lot of it depends on sort of the market for affordable housing and what projects are being received and applying for funding in those programs.

I would like us to do that. And I've mentioned this in fiscal years past because we've got enough of our own information now that the state has been ramping up investments over the last five or six years, that we can start to measure how much this $100.0 million contributed towards and based off of our own experience, could then begin to predict how much is at risk, is not going to happen for the crisis that we know we need to address.

And I fully appreciate that we have the larger fiscal challenges that we have and something's got to give, but it's on us, like you said, to be able to have a counter proposal that will do least harm. But it does feel like this is incredibly broad in its decision, decision making without any study or input about what the outcomes or the impacts are going to be.

And I think that that is short sighted of our commitments to our communities to be able to stay as best on track as we can with meeting the housing investments that we know that we need to meet. And I know that through our other Subcommitee work, we've had both the LAO and I think HCD with some information about how many units.

I've seen those tables have been produced based on both the adopted and the budgets from previous years and a very, very good estimate about how much those have gone towards how many units. So, and when, as you, as the Administration has been reviewing some of this, have you had consult with those in the development industry to get their perspective on which programs a or b are more or less effective? Or has this completely been something, you know, internal in the way that you've been able to develop this proposal?

There have been conversations with numerous stakeholders throughout the, you know, since the Governor's Budget has been released. I would say the effectiveness of a specific program depends on what the measurement is and sort of what the program is designed to Fund. For example, for the infrastructure grant program, there's a calculation that's used to determine how many units were assisted, although that funding itself doesn't necessarily go to support an affordable housing unit.

So the relative effectiveness of programs, and there may be different priorities amongst different stakeholders depending on what type of projects the developers create.

So I've had conversations with some of those, and when they're reviewing the January draft, you know, they say of all of these different proposed reductions or changes in the different programs, the one that's most important is the state Low income housing tax credit allocation. In practice, that one has been the most effective at getting the projects to pencil out and to break ground. And so that was completely slashed from $500 million down to zero.

And that's what those who do the work on the ground are telling us is the most effective thing to be able to make, to progress on new housing starts. The second one was the multifamily housing program, which was, I see, you know, a $250 million reduction doing quick math, approximately three quarters, 80% reduction based on the enacted budget. And so that's where this feels a little scattershot in how we are making some of these decisions.

Even if we had to say in totality that we have to absorb $1.0 billion somewhere here, it just isn't. I'm not convinced yet that we've done our homework to be able to say that we have allocated everything in a way that is going to do as much as we can in housing outcomes. And I'd like to hear more as this budget, you know, process goes forward towards the May revise and towards our enacted budget.

I think, Madam Chair, I think that's my only observations, because I don't know what else to really prod into here. Everything is pretty much eviscerated in this area, and we've got to find other solutions to be able to help maybe stave off some of these reductions and build back some of the budget in there to continue the work that we need to do. Thank you very much.

And to echo my colleague, and we're a very small two person Committee, and when our other colleague, Assembly Member Patterson, joins us, we would be three, but still very small, but weighted with some of the most significant cuts, as was noted in opening comments, a huge infusion of dollars over the last five years. And now, of course, because of the deficit, now pulling those back, as the opening comments suggested, we will be hearing about some of these programs.

But as the Governor put out his initial budget, were there other programs that weren't in the NOFA category? Because you mentioned that, in essence, these programs hadn't been rolled out yet, and I agree that it's easier to cut something that isn't already activated, although we do know that there's a few that there were already work done that weren't cut, and what would those programs be?

So there are a number of programs that aren't necessarily subject to the notice of funding availability calendar in that way, or the multifamily supernofa, as HCD can speak more to it. But there are a number of programs that were, for lack of a better term, the funds are awarded over the counter. So a first come, first served basis.

Those programs include, just off the top of my head, the portfolio reinvestment program, which helps to preserve Low income housing units that are at risk of losing their affordability or at the end of their affordability covenant cycle. And then the infill infrastructure grant program, the catalytic portion of that also is subject to that. Those are the two largest ones that come to mind.

I believe the Department of Housing Community Development there up here can provide some more context to additional ones, but I believe those are two of several.

All right. And as we go through today's hearing, we'll talk more specifically about a few of those programs. With that, we're going to go ahead and call up. Thank you very much. Any other questions? Okay. We're going to go ahead and go to item number two on our fish. zero, sorry, we changed it. We are going to do public comment just on this part. If we have any public comment, just.

Thank you, Members. Mark Stivers for the California Housing Partnership. Since my comments are General, I'll come up now. We at the housing partnership are believed have done a calculation and we think that the budget cuts proposed by the. Thank you, Mark Stivers with the California Housing Partnership. I think we'll speak to the overall housing budget rather than those particular items.

And we at the partnership have done a calculation based on what we think the impact will be of not only the cuts to the current year programs, but also the not renewing the funding in the budget year. And we believe that that will be about 6400 fewer affordable home units that we will be able to build in California.

We currently have a pipeline of about 50,000 units that are shovel ready to go, and those will just be stuck and waiting in queue for some period of time. We also believe that that reduction in state resources will have about a one for one impact on the loss of federal resources as well. We are currently leaving 4% federal Low income housing tax credits on the table. They are there for the taking.

If we have state money to make those projects otherwise whole, and we will, if we do 6400 fewer units, we will be leaving about another $1.6 billion of federal resources on the table. As we look to the budget, anything to fill the gap is important, but our highest priority is for the Low income housing state tax credits, and not just this year, but hopefully locking those in for a few years. And also the multifamily housing program and on the homeless side, which we'll talk about later.

I think the HAPP program, obviously, we need to kind of keep those resources flowing as well. So in any event, thank you for the comment, the ability to comment generally. Thank you.

Thank you. 1 minute.

Andres Amidas, on behalf of all home, just wanted to briefly mention our concern of all the programs either taking reductions or revisions from all homes perspective. The one we are most concerned about is the reductions to the multifamily housing program. As Mister Ward mentioned, you know, this being one of the ones with the greatest applicability overall. We just feel like this is the program that can benefit those most at risk of falling into homelessness. So wanted to state that sentiment. Thank you.

Thank you.

Madam Chair Members. Rand Martin, on behalf of the AIDS Healthcare foundation and its healthy Housing Foundation program, I just want to point out, regardless of what your ultimate decision is in an enacted budget, we need to make sure that the money is being spent more effectively. And we implore the Legislature to sort of sit on the Administration to make sure the money is being spent well. So, for example, in the last round of the multifamily housing program, the awards totaled about $70 million.

A little over 400 units were created. That's not many units where we're spending that much money. We need to find better ways to spend the money. And if you end up with less money this year because you have to make the cuts, then we have to be, it's going to be even more important to make sure we spend it wisely so we can maximize the number of units that we can get out of the money. Thank you.

Thank you, Clifton Wilson. On behalf of the mayor of the city and County of San Francisco, London Breed in opposition to the proposed cuts to the affordable housing programs. And then in particular, we hope that there is money left over in the budget for multifamily housing program, the Infill infrastructure grant program, and the foreclosure intervention housing preservation program. Thank you.

Thank you.

Honorable chair and Members, Amy Hines-Shaikh with Wildcat Consulting, representing the California Community Land Trust Network. The California Community Land Trust Network respects the very difficult position that you all are in with this difficult budget time. We have the position that we would like no further cuts beyond what the Governor had proposed and definitely allocate the money that the Governor proposed to get out. But we just want FIP to appear in the prospective years as a budget line item moving forward.

I'm kind of kidding, but kind of very serious that we need at least $1 to stay in the prospective out years. And that is a win because that means that we are a line item in the budget and we can fight for more funding in another day and that program just doesn't disappear off the face of the planet. Thank you very much for your consideration.

Thank you.

Good afternoon Holly Fraumeni De Jesus with Lighthouse public affairs speaking on behalf of Eden Housing today and Habitat Free Community California. I want to echo the comments from our partner, Mister Stivers, in support of all the programs that are essential and these are devastating to eat it in other nonprofit providers, but also especially not just the tax credit program, but the preservation programs and the funding for preservation. We are a nonprofit that is 50 years old and many of our properties are 50 years old.

And we take pride in the fact that we keep these units decent and fabulous from the moment they walk in to 50 years later when our tenants are still there. So really important to support those preservation dollars as well as all the other essential programs. And then last but not least, on behalf of Habitat for Humanity Cal home, we can answer your question. Assemblymember Ward 2000 units are what is at stake if that cut of 156 million stays in place for Cal home.

That program was zeroed out. That cut is disproportionate to all the other rental program cuts that the Governor proposed. So this is the only program, the only program in the State of California that produces a new owner occupied unit for Low income households throughout the state. We have 32 affiliates in the State of California in 42 counties throughout the State of California. Please restore at least a portion of those cuts and do not eliminate that program. Thank you.

Thank you.

Good afternoon, chair and Members. My name is Galen Dobbins. On behalf of the California Coalition for Rural Housing, I will be aligning the majority of my comments with Mark Stivers from the housing partnership, but also specifically, a lot of these programs are absolutely necessity, excuse me, necessary for rural farmworker tribal like ag communities. And the loss of these programs is going to be just absolutely devastating. These communities oftentimes do not have the amount of philanthropy, the amount of other housing organizations in their communities.

So when we take these programs away, largely we're going to be looking at these programs, ceasing all activity in their communities. It's I urge you to try and restore as much funding as you can. I know these decisions are incredibly difficult considering the budget situation, but please consider it. Thank you.

Thank you.

Good afternoon, Madam Chair and Members. Graciela Castillo-Krings here on behalf of Enterprise Community Partners and California Housing Consortium, really appreciate the leadership role that the Legislature is taking. The Governor is proposing to cut 1.2 billion, as you know, in addition to the 500 million in tax credits that are not going to be provided. That if that moves forward, absent any other funding source from General Fund or a bond, will devastate the thousands of units that are currently in the pipeline to be built.

And it is simply just something we cannot do. This has been, over a number of years, providing additional units for the people that are the most neediest in our state. We are finally making some good progress. This is not the time to stop the funding. So thank you so much for your leadership. I know those cuts are not proposed by you. Thank you.

Thank you.

Good afternoon, chair and Members of the Committee, Sosan Madanat, W strategies here on behalf of UnidosUS and California Community Builders, I'd like to echo the comments of my colleagues ahead of me and really thank you all for your leadership and preserving the funding.

That money is incredibly important, valuable to these organizations, and we want to allow for increasing homeownership access so I'd like to, you know, reiterate the comments by my colleague Holly on the Cal home funding, and that's incredibly important to increasing access to homeownership. Thank you.

Thank you.

Honorable chair and Committee Members. I'll be short and sweet. Nicola DeLuca here on behalf of NPH, City of Oakland, City of Berkeley, strong support of the MHP program. So grateful for whatever you can do to restore as much funding there as possible. Thank you.

Thank you. All right, we appreciate those comments, and we're going to go ahead and move to our next item. Issue number two, regional early action program 2.0, or reap as some people call it. It is on the agenda, page seven, and we'd like our witnesses to introduce themselves.

Good afternoon and thank you for the opportunity to speak. I'm Maura Twomey and I'm the Executive Director of the Association of Monterey Bay Area Governments.

Good afternoon. My name is Kome Ajise. I'm the Executive Director of the Southern California Association of government.

And I was going to go ahead. Yes. Sorry.

I'm so sorry. I'm Meghan Kirkeby. I'm our Deputy Director for housing policy at the California Department of Housing and Community Development.

Welcome, everybody. Thank you and good afternoon. I'm here to tell you about the damaging impact of proposed budget cuts on the Association of Monterey Bay Area Government's 10.1 million regional early Action Planning grant program. Governor Newsom's proposed fiscal year 2425 state budget, released on January 102024 included a concerning reversion of $300 million of funding for the regional Early Action planning program, also known as REAP 2.0.

This represents half of the program's total funding statewide, as well as a 50% cut to Ambag's Reap 2.0 funding. These cuts put more than 23,000 affordable housing units in the Ambag regional alone. At risk. Since the inception of the program in July 2021, AmBag has worked with state, regional, and local partners and stakeholders to develop and implement the REAP 2.0 program focused on accelerating housing production throughout Monterey, Santa Cruz, and San Benito counties.

In the summer and winter of 2021, AmbaG provided input to the state on the REAP 2.0 program framework as HCD and other state agencies developed the draft guidelines for the REAP 2.0 program. In the summer of 2022, HCD approved AMBAg's advanced application and Ambag requested 10% of its REAP 2.0 funds to conduct the required outreach and engagement to develop our regional 2.0 program, including workshops, surveys, and community outreach.

During the summer and winter of 2022, Ambag engaged with local jurisdictions, stakeholders, and Members of the public to collect input on housing funding needs and developed a regional REAP 2.0 program as required by the statute and consistent with the state guidelines. In the spring of 2023, Ambag developed regional reap guidelines for eligible agencies in our region. AmbaG conducted extensive outreach and engagement, including public workshops and meetings, to gather input on the draft program guidelines and evaluation criteria for our local, subregional and competitive ReAP programs.

In the summer of 2023, Ambag issued a notice of funding availability for regional ReAp 2.0 to eligible agencies. Applications were due in August and were evaluated in September of 2023. In the fall of 2023, the Ambag Board of directors approved 24 awards to cities, counties and transit agencies for various affordable housing projects. Ambag executed contracts with all ReAp 2.0 awardees and work on ReAp 2.0 projects was underway by the end of the calendar year.

Subsequent to these regional awards, Ambag requested funding from HCD totaling $6 million. In November of 2023, this request was approved by HCD staff and was in final review for payment when the Governor's Budget reversion was proposed in January 2024. Since that time, HCD has rescinded approval of our REAp 2.0 payment request and informed us that they cannot authorize total payments greater than 25% of our ReAp 2.0 allocation.

Although a revised invoice was submitted and approved in early March today, we have not received payment delaying reimbursement to our regional grantees. AmBag was forced to notify our project sponsors to delay or stop work on their Reap 2.0 housing projects since we do not have funding available to reimburse them. We urge the Assembly to restore or delay our Reap 2.0 funding to another budget year rather than cutting the program by 50%. AmBag has been working on the ReAp 2.0 program for nearly three years.

All of our projects are underway and we want to build the more than 23,000 affordable housing units our region desperately needs. Thank you. Thank you. Next.

Thank you chair and Member Ward. Again, my name is Kome Ajise. On behalf of SCAG, really thank you for the honor of being here to share SCAG'sexperience with Rig 2.0. This is a transformative program and quite frankly, it's the upfront investment that Member Ward was talking about. In July of 2023, HCD awarded the final package of Reap 2.0 to make $246 million to SCAG. By January of 2024, we had sub allocated 192 million of these funds to 100 projects across Southern California.

The REAP 2.0 funds have also leveraged in the process that the 192 million have leveraged about 130 million in federal, state and local funds to a tune of about $360 million total, that we have really ready to go into housing production and strategies to implement sustainable community strategy to reduce greenhouse gas emissions. At the time of the January budget announcement, SCAG had already received $8.6 million in reimbursement on the REAP 2.0 funds.

By March, which is last month, SCAG had submitted a second request for 53 million for the REAP 2.0 work. In total, we have requested $61 million in REAP 2.0 funds from HCD as required by state guidelines. As mentioned by my colleagues, we conducted the stakeholder outreach. We hired consultants to conduct targeted research in priority communities such as regional tribal governments. We created a program to reflect that outreach and we hired staff.

We sifted through hundreds of local applications for the best projects that would meet our housing and climate goals, and subsequently, we have entered into mouse with project sponsors to cover at least a quarter of those projects that we have selected. With the Governor's Budget announcement, however, SCAG had to issue issues top work order on all Reap 2.0 projects in our region our hundred projects are all over Southern California.

240 accessory dwelling units adus in Orange County would have been made possible by $4 million in Reap grants to the Orange County Affordable Housing Trust. 1500 new housing units made possible by a $15 million Reap grant for the expansion of the North Hollywood Transit center would also be in jeopardy. 679 affordable housing units made possible by a $5 million Reap grant to the Gateway Cities pre development loan Fund in southeast Los Angeles is also in jeopardy.

Up to 10,000 new housing units would be made possible by a $5 million REAP grant to create an environmental remediation housing acceleration Fund at La Metro to assess and remediate surplus transit sites for affordable and mixed use housing development. And finally, this is just one of the final examples. 203 new units will be made available by a $6.1 million ReAp grant to the Soboba band of Luceno Indians in Riverside County to construct a stormwater drainage, which would then enable them to build these 203 new units.

These hundred projects are real. They're ready to go. In many cases, the work has actually already begun and our region needs them. We're asking you to keep this in mind that we are already obligated on the Reap funds beyond the cuts that have been proposed. And so we were beyond the. No. First stage. And so we're going to.

We're asking you that you consider that as you review these cuts going forward, please help us to continue this work, which we believe is transformative not only on the housing side, but also on the climate side, because that's the intent of the ReAp 2.0 program. Again, thank you for the opportunity to be here. We'll be glad to take any questions.

Thank you for your testimony. I'm quite perplexed as, and again, this is not a showdown between, you know, the Governor or the Department of Finance or the LAO, but it was mentioned that some of the funding that was determined to be cut under the housing budgets would be projects that hadn't been pushed out, nofa type of programs.

But under these REAP programs, it's very clear that they've done extensive work for, for quite a few months, maybe even longer, that we're looking at hundreds, if not thousands of units, and also drawing down federal funds. So I'm trying to understand how Reap .2 was put on the list for the significant cuts, but also because money has been expended to contractors, to materials to get out to the communities, all this. If you could speak to that, please. Yeah.

So, as noted, the reduction is 50% of the entire program, so there's no additional guidance or language around sort of how that funding is treated. However, if this becomes part of the June budget, that is something that the Administration will work on with the Legislature as far as how the reduction is prioritized. When looking at this program, it was noted that there was significant amounts of funding that hadn't been obligated or committed by local jurisdictions.

And admittedly, there may have been some delay in when the January budget was released and when this was being evaluated in the fall. Through the fall budget process, however, the Department of Housing and Community Development has done extensive outreach with various local jurisdictions to determine where they're at in their expenditures or their obligations. And I know my colleague can speak more to that process and the extensive outreach that they've been doing.

So generally, that was the thought process behind this funding is still maintaining a large portion of the funding of $300 million, but trying to balance the budget in the larger picture.

Can HCD speak to the difference between reimbursement programs versus other programs and speak to the lag of awarding contracts? But then the reimbursements that may have lagged behind?

Yes, absolutely. Just to answer the first part. First, reimbursement programs. This is how we've always done grant programs, planning and grant implementation programs. When you're doing such a big allocation, it's been a partnership between us and the allocated entities. So it's really more than just an award for a specific topic. This is a very large allocation to some based on population. Set out that allocation. The regions, we give them 10% of that funding upfront.

And one of the things we did to actually speed up things was to make one standard agreement for that upfront planning piece of their allocation, as well as the later part, so that they wouldn't kind of have to come back and recontract with us. But the work we did with them to get to approval of those awards was about a partnership in looking for a plan on how to spend those money. And we are incredibly proud of the work that came out of that program.

And the only, the fact that this is on there, I think is just evidence of the troubling budget challenge we're facing. But in terms of the reimbursement piece with the grant programs, that has always been the way, because this is.

Important for us to verify that these funds, we didn't just put them out the door and then sort of lose track of them, that we say these are sort of eligible uses. You go forth with some level of flexibility, you come back, you show us that, you demonstrate that you achieved that goal, and then we reimburse you for that funding. And that's just sort of been the historical path of our planning, grant and implementation grants.

And I think for good reason to the state and the sense that it's a protection to make sure that those funds are spent on eligible uses in an effective manner.

You can see the concern, though. Yes. All right, so one question for Mister Comey, if you don't mind me saying that you talked, you gave a number of federal funds that you were able to draw down. Can you repeat that number?

It's a hundred. And we have 129 million in federal, state and local sources. So there are different sources of funds that combine to that. I don't have. We can get you the specific breakdown between the various levels of close to 130.

So I want us to note up here the impact when we're not able to, in essence, draw down federal funds either through the tax credits or in the case of matching funds or so forth, because then we would definitely be leaving dollars on the table. And I know we want to bring down as much as we can from the Federal Government. Any other questions?

Thank you, Madam Chair, thank you for the presentation here today. I guess I wanted to dig in a little bit more, because on the last issue, we had been told that you were making decisions that unfortunately cut programs that were not addressed or not impacted by nofas. So why didn't that sort of seem kind of internal guidance? It doesn't feel like that was at play here on this issue.

Given that you're beyond NOFA, there's a lot of other work that's been committed by our local partners that. Now, are you on the hook for that? If you're not, if thresholds have not, have already been above your 25%, have already been expected, so we're leaving our local partners holding the bag, and we're counter to how we were making decisions on other programs. I guess I'm trying to reconcile this. Could you explain further?

So generally, the approach to the reductions was for funding that hadn't already been issued. In a notice of funding availability, this program is a little bit different. Although some funding was awarded on a competitive basis, a large portion of this was based on an allocation, which is why there's a delay, sort of when the funding was awarded in 2021 to when the applications were fully developed. And originally this funding was federal funding.

So originally it was $500 million of federal funding, $100 million of General funding, with the expectation that the funding would have been encumbered and awarded by June 30 of this year. Several years ago, through stakeholders, there was a request that the federal funding was not flexible enough and that there was a request to swap it with General funding. And that's what the Administration did, to provide more flexibility to the. To the local jurisdictions, to provide them additional lead time as well.

So that doing that extended the timeframe by another two years, recognizing that it was taking a little bit longer to get this funding out the door. So in the fall, when this program was being evaluated, there was, it was noticed that there was a significant funding that was still left unobligated, and that's why it was targeted for a reduction.

Was it unobligated from your perspective, the state's perspective, or the CoG's perspectives? Because it sounds like they had been making obligations, just not yet seeking reimbursement.

So unexpended funds, and I will, yes, unexpended, not uncommitted. But I think an important piece of that puzzle is that, well, Nate to my colleague, I think he would share 300 million is still an extremely large investment into this important space. And I think that's probably part of the consideration, but also where we are looking at in terms of these reimbursement requests, the minute that we knew what was going on, we did communicate to the grantees.

And part of what you heard from my colleague at Ambag is ambag is one of the regions that is sort of ahead of the game there. And that we have track that they are ahead in terms of being ready for that reimbursement request. And that is not yet something that we're seeing across the board. So we did see a bump after we reached out to grantees in terms of reimbursement requests, but we still aren't in.

We aren't in the neighborhood of, say, 25% of the reimbursement requests statewide yet. And so we do have regions that are in different places from one another. And that's an important piece of the puzzle for my team to be tracking right now is, hey, give us all the information you can. Let's really try and understand, you know, between obligation at the HCD level, we have these very intense, you know, laid out plans for each of the regions right between. Between there and getting to reimbursement.

Where is everybody at? And we're trying to collect that information so that we can inform you all as to the next stage. Should this budget cut remain where it is, should it move to a different place, we're gonna have to work with the grantees, and I think we just need as much information as we can in order to help everyone make informed decisions on that matter. But, yes, I think that's where the situation is. You do have some regions that are ahead of the game.

Not everybody is there yet, and there's lots of reasons for that. So I don't want to undermine anybody. They absolutely had more time on deck to be putting in reimbursement requests, but from where we're sitting, we still aren't at, you know, we're still finding out where everyone's at. Cause there is a step between the regions obligating and then putting in their reimbursement requests, of course, but we still aren't in the neighborhood of 25% in terms of seeing reimbursement requests.

Okay. Appreciate that. From maybe a statewide aggregate, and you acknowledge that there are regions that have exceeded that now are really, you know, on a full stop position because they need to figure out what they're going to do to, you know, not drag themselves further into risk or debt. Yeah, a couple of things here. So one, you know, I think this moment has really shined a light as how we can maybe think together about the reimbursement process itself.

I've been a long proponent about making sure that as we're making appropriations as decisions and we're locking something in a budget, that we are getting those funds as close to the community as possible so the work can get done in as quick as time is possible and responsible. And I know why we are use a reimbursement process. And the way that we do is because we want to make sure that we're getting what we said that we were going to get through that grant process.

There has to be a little bit more kind of trust and a little bit more flexibility, I think, between the work that others are doing because that gets to my next issue. It takes time, and I mentioned this in my opening comments, to ramp up and to really start to get things not just put on paper that's going to get out the door.

And we know eventually it's going to take six to 18 months to get down to you, but they got to start to do the work on their end. So now fast forward to where we are right now. It is incredibly alarming that this one line item here is invoking as much immediate work stoppage that we're seeing. And part of that I think, is because of the process and maybe the numbers itself that are put forward here.

And so however this shakes out between now and June, we've got to work on this process as well. So it's not so disruptive in good years or in bad years. And there's a little bit more stronger connectivity between the state and our local partners.

Sir, if I may just add something, because I think that's an important point. The lag time and the reimbursement process I think should be noted. And we've worked really well with HCD on this program, so we're very comfortable to work with them. But when we sub allocate at the funds to our cities and counties, they're busy doing work. And so they have to then send bills to us that we aggregate to then send to HCD for the reimbursement. So you could see the lag.

And what has happened in the stop work process is we have a lot of jurisdictions holding the bag on expended time that can be compensated right now because we just don't know how much we're going to get reimbursed totally from the state. And so we've had to basically stop work. And that really creates some inefficiencies in the process.

Right. Well, let me restate that and correct me if I'm wrong. So let's say we found a miracle and we're able to fully restore this and correct actions going forward. Just the action of stopping that work and then trying to restart it again is going to make any of these projects more costly in the long run.

Absolutely.

So it, yes, it's disruptive, like physically disruptive, but I think it's also not a smart fiscal decision to proceed in the way that we did.

I want to commend the work that our councils of government have done under reap from Sand Diagon, San Diego, which I represent through Skag and all up and down the state, thousands of units that have been produced or in pipeline to be able to produce many are now at risk, but also doing so in a way that we know is climate smart, which is exactly where we want to go in a pattern of future development, being able to. For the state support.

Thank you for the education today as well about history, federal sort of now like moving forward to more of state investments, which I'd support is to the extent that we can, because that's exactly your kind of two birds in 1 St here, that you are not only supporting housing units, but doing so in a way that is responsibly developing it and linking it to transit investments. So I am encouraged by the outcomes that we've been able to see to date.

And this for me isn't just a housing question, but it also is impacting infrastructure and other community development, the future of community development needs that we have here that's a little bit more broad brushed. So I would pay special, close attention and maybe hopefully through, you know, some, some earlier action that the better that we can particularly address this issues.

So we stop the disruption that we're experiencing this winter and this spring and we sort of get to a place of surety about what we have to work with in the immediate and then address maybe the long term budgetary capacity going forward. Thank you.

Thank you. And I think between both of us vocalizing in your testimony, it's been probably apparent that this seems to be a program that I fully support. I've interfaced with SKAG mostly being in Southern California. But I know one of the things that we hear often as state legislators is from our local municipalities. We don't want to see mandates or don't leave us holding the bag.

And in this case, it very much could appear that way if we don't do something to rectify this and that trust amongst agencies, whether it's HCD, governor's office, metropolitan planning organizations or even the state is an important relationship. And this certainly is going to ring the alarm that we, we've followed the instructions given and now we're all on red alert to stop what we're doing. And not only is it alarming, but it's going to cost us money.

So I think that being said, we appreciate any final comments? Final comments. Then we'll go ahead and open it up for public comment. Thank you so much, everybody.

James Corless from the Sacramento Area Council of Governments, the greater six county Sacramento region. Want to align myself with the comments here. Our Reap 2.0 is critical to implement our climate goals, the state's climate goals and our sustainable community strategies or scs. We have used those Reap 2.0 funds where local governments, 26 of 26, are under contract to do water sewer utility upgrades to unlock 8000 units of housing. They've stopped work. They are we are not creating those housing units, we are not creating those jobs.

We are not building the infrastructure and we have also used it to leverage an application to the US EPA for Inflation Reduction act money 90 plus $1.0 million grant, just women with our Reap 2.0 is local leverage, so it's very real and thank you for your support.

Good afternoon, Madam Chair, Members of the Committee, Kiana Valentine with Politico group in opposition on a number on behalf of a number of clients in Tulare County, they are building or have already built and people are living in 240 units that support low income families, low income seniors and unhoused individuals with wraparound services. In Merced county, they are using the funding for transit oriented, multifamily affordable housing development around the future high speed rail station. In Coachella Valley.

There is over 6200 units of affordable housing that would be supported by this money. In addition, millions of dollars into active transportation connectivity projects and additional planning efforts to help unlock additional infill housing. In Sonoma county, it would support 1500 units of affordable housing and other VMT reducing projects and transit connectivity. Finally, in Ventura County, they would be using their REIT 2.0 allocation to support planning and other activities around farm worker housing. Thank you very much.

Thank you so much, Madam Chair and Members Julie Snyder, representing the Joint Association of Bay Area counties and Metropolitan Transportation Commission, opposed to the cut. As Assemblymember Ward noted, reap tackles some of the state's biggest challenges simultaneously housing, climate and transportation. This is the only source of flexible funding that regions receive to help with our SCS implementation and essential to hit our greenhouse gas reduction goals.

In the Bay Area, we're leveraging upwards of $175 million in various federal funding sources to multiply the impact of the state's investment. In terms of that impact, we're implementing two housing programs that will build over 1600 apartments that will house 14,000 households over the life of the deed restriction. We've hired staff, we've put out guidelines, and we've issued nofas we have three times the amount of applications as we have funding, and we were actually ready to issue awards this month or next.

So we've absolutely had to stop work on all of those programs, and we urge you to reject this cut. Thank you. Thank you. If you see me do this, it means wrap it up. Good afternoon. Chaired Members Carly Shelby, on behalf of the San Gabriel Valley Council of Governments, or SGV COG, representing over 2 million residents and 31 incorporated jurisdictions within the Los Angeles County region, we have concerns over this proposed $300 million reversion.

SGP COG has been awarded over $9 million in Reap 2.0 funds that will support the development of an estimated 150 new affordable housing units and provide technical assistance to support the development of additional housing units. This reversion could jeopardize bringing these projects to fruition. We respectfully request that in formulating the Legislature's counter budget proposal, you reject this reversion and support these funds. Thank you.

Thank you, Madam Chairman, Members Nick Romo, on behalf of County of Sacramento, urging you to reject the cuts to Reap 2.0. The cuts jeopardize dozens of critical transportation projects in our region. Thank you.

Thank you, Madam Chair and Members Consuelo Hernandez, on behalf of the City of Sacramento, I would echo SACOG's and Sacramento County's concerns. This funding is critical for us. We've got thousands of housing units that are contingent on both the funding and the additional funds that, that they will draw down. Thank you.

Sabrina Bradbury with the California Association of Councils of Governments. We represent all 18 mpos that are recipients of reap two funding. And so just want to reiterate from a statewide perspective that beyond just the Members who are present here to comment today, all of our Members have issued stop work orders, and so there's already been a lot of disruption. And as others have mentioned, this really is the only funding source that we have to duly address our climate and transportation and equity goals around housing. With that, we urge you to restore the funding completely. Thank you.

Good afternoon. Marisa Brown, the City of Citrus Heights, the center's tomorrow specific plan in the City of Citrus Heights, is a recipient of Reap 2.0 funding and would provide 2200 mixed density, a transit oriented housing for people in our community. And we request that you reject the cuts to this funding. Thank you. Thank you.

Good afternoon. My name is Linda Braunschweiger. I'm the CEO for the Housing Trust Fund Ventura County, as well as the housing land Trust of Ventura County. Unfortunately, Ventura County is number one now in the country for the least affordable housing. We received an award, a 5 million reap two grant, and we had planned to begin lending. Now that would have gone to also help support a partnership we have with the County of Ventura, our housing Land Trust, to identify land to be donated for affordable housing in perpetuity. As a CDFI nonprofit, short term affordable housing lender, the REAP grant would have gone to produce 656 affordable units by 2031.

It also would have generated multiple land donations, making permanently deed restricted affordable housing for 99 years. After years of housing under production in California, recent years have seen a return of affordable housing production. By leveraging millions of public and private dollars through organizations like mine, cutting housing dollars now will devastate the impact on our State of California. Please do not do this pause.

Thank you. Good afternoon. My name is Sarah Williams. I'm here on behalf of Century Affordable Development, a nonprofit affordable housing developer and affiliate of Century Housing. Last fall, we received notice from Skag of a $5 million Reap 2.0 award to capitalize our catalytic development Fund. After a competitive no for process, this revolving Fund is crucial to maintaining the momentum of our developments. We specialize in master planned permanent supportive housing communities across greater LA. Construction takes place in phases over years.

This Fund will build pre development financing gap by providing zero interest loans for projects that will house exclusively low income residents. The Fund speeds at the development timeline, getting us closer to construction and closer to bringing affordable homes online for residents in need. With a $5 million Reap 2.0 award, we would kick start six planned projects which will provide nearly 600 new homes in existing communities, complete with wraparound supportive services. Without REAP, these projects could languish in pre development, forcing residents who need these affordable homes to continue to await. Thank you for your support.

Good afternoon. Robbie Avalon here on behalf of the California Asian Chamber of Commerce, I just want to reiterate some of the points, Madam Chair and Mister Ward, that you had mentioned earlier. One, federal dollars for a lot of these programs and for housing. Two, this is funding that's attached to very real building projects that are ready to go and in many cases have stopped. But many could be shovel ready or ready to go with various degrees of readiness.

And then three, Mister Ward, I think, said it best where local governments that have prioritized housing and infrastructure, many of them who've gotten ahead for priorities for us in California, may be left holding the bag for if this goes through with funding cuts. So I urge you to maintain and continue the funding level for the reprogram 2.0. Thank you.

Thank you.

Madam Chair and Committee Members. I'll be short and sweet. Nicolo DeLuca, City of Oakland. We got an award in 22, signed grant agreement in 23 putting 10 million towards an affordable housing project in West Oakland. So any scale back clawback reduction which severely negatively impact that project, so hopefully we can reject it. Thank you very much for all your work.

Thank you.

Good afternoon, Committee Members. My name is James Allison with the Midtown Association of Property Business Improvement District, representing over 1200 properties and the hundreds of businesses in our district in midtown. This funding is supporting the construction of the Lavender Heights Water Infrastructure expansion project, which will serve more than 1000 new multifamily units, including critical affordable housing and commercial spaces that are entitled and moving through the building permit process.

The unprecedented decision to attract fully committed funds will result in the cancellation or considerable delay of projects needed to alleviate the crisis being felt in Sacramento and statewide. Please protect this vital funding and the projects it supports. Thank you.

Good afternoon, Madam Chair and Assembly Member Ward, Paul Gonsalves, on behalf of the cities of Palm Desert and Rancho Cordova, first, for this City of Palm Desert, this is about an $8 million cut for them. That $8 million was going to be used for improvements that would Fund 3300 shovel ready projects and another 1600 projects that are under review. So critical for the City of Palm Desert and getting in reaching the arena numbers.

Additionally, the city, Rancho Cordova, this is a $7 million cut for what they call their transit oriented urban hub, which is going to also include townhomes and multifamily housing. So for these reasons, we ask that you reject the governor's cuts.

Thank you, Madam Chair Members. Amy Brown. On behalf of the City of West Sacramento, we are also opposed to the cuts. We really appreciate the comments made by you, Madam Chair and assemblymember Ward. We are a part of the green means Go program administered by the Sacramento Area Council of Governments, the representatives behind me, so I'm not going to steal her thunder, but I will say on behalf of the city, in particular in West Sacramento, they've already matched 4 million in green means go funding with 1 million in city funds to implement an underground utility infrastructure and infill program. Thank you. Thank you.

Good afternoon, Madam Chair. Matt Robinson with Shaw Yoder Antwih Schmelzer & Lange on behalf of the San Mateo City County Association of Governments, we put a letter in for the record with our comments. So just to summarize them, we are opposed to the reductions that are included in the January budget and I would just echo the comments of Miss Snyder from the MTC region. Thank you very much.

Good afternoon. Bless shepherd, representing Placerville City, requesting that you reject this unprecedented cuts and this is critical for the Sacramento region to meet our climate and housing goals. Thank you. Thank you.

Good afternoon, Madam Chair and Assemblymember Ward, once again, Galen Dobbins. On behalf of the California Coalition for Rural Housing. We are one of the oldest Low income housing coalitions in the country, specifically working in farmworker, tribal and rural housing. REAp 2.0 was a fantastic program because it came with separate guidelines for rural and tribal communities, and it worked really well. It was considered a best practice. And because of that interest, we had 14 tribal applicants, of which six were awarded, which is fantastic.

Taking these funds away or eliminating this program is going to do nothing but deteriorate. Trust in these communities and urge you to reject these cuts. Thank you.

Good afternoon, chair Members. Jeanie Ward-Waller, on behalf of Transform, based in the Bay Area, we are opposed to the cuts to REAP. Thank you

Holly De Jesus Fraumeni Lighthouse Public Affairs here today on behalf of the, the San Diego Housing Commission, even though we're not the recipient of a reap $2.0, it is a really important resource to the region. And just I want to say on behalf of the Commission, the most important and critical program to the whole region and their biggest concern are the reductions proposed by the Administration to the tax allocation Committee. So please, let's try to restore those funds.

Thank you. All right. Any final comments appear from our Members? All right. With that, we're going to move to issue number three, housing navigation and maintenance program. It's on agenda, page nine. Please join us up here on the dais.

We have Andrew March, assistant program budget manager, Department of. He's here for the duration. We have Blair Huxman, finance junior staff analyst, Department of Finance. Ginni Bella Navarre, deputy of legislative analysis, LAO office. Simone Tureck, John Burton Advocates for Youth and Rosella Wilhelm JBAY Youth Advocate. All right, whoever would like to begin? Welcome.

Good afternoon, Committee Members, staff and chair. My name is Simone Tureck Lee. I'm here with John Burton Advocates for Youth. We represent a coalition of more than 100 organizations and public agencies that are deeply concerned about the administration's proposed elimination of the Housing Navigation and Maintenance program. This is a small state program, $13.7 million, that plays a critical role in helping us access $22.61 million million 1.0 in federal housing assistance for youth, leaving our state's who have left our state's foster care system.

The Federal Government makes special population housing choice vouchers available to youth up to age 25 who have exited foster care and even allows housing authorities to request these vouchers on a rolling basis to synchronize with the date youth leave foster care. Their vision is that no youth has to exit the system to homelessness. Requesting these vouchers requires a partnership between housing authorities and county child welfare agencies.

This partnership requires the county child welfare agency to provide or secure housing, navigation and supportive services for young people with these vouchers for a good reason. It's very difficult to turn your voucher into housing without that support at the age of, you know 21-22. We've historically seen minimal participation in these voucher programs because there has been no designated funding for these said services. The Housing navigation and maintenance program was expanded to explicitly serve this purpose.

Since counties have started using the funding for this purpose, we've seen a 54% increase in the number of vouchers for this population in our state. Losing this program would mean reversing that progress. Nearly half of participating counties recently indicated in a survey that they would halt requesting additional vouchers should this program be eliminated. And I want to clarify, earlier, there was discussion about sort of not eliminating programs for which NOFAs had already gone out or that kind of existing programs.

This program has been around since 2019. There is no pending NOFA. There's contracts across the state that are relying on this funding annually and more importantly, more than 1300 young people being served with this funding. Experiencing homelessness as a young person is the single most likely pathway to chronic adult homelessness. The per person cost of the Housing navigation and maintenance program is about $10,200 per year.

This is at least four times less than the $42,000 California spent last year per person on homelessness, so it's really a smart fiscal investment to prevent homelessness among young people before they experience it. Please preserve the housing, navigation and maintenance program. Thank you.

Thank you. Hi, my name is Rosella Wilhelm and I'm 21 years old and I currently receive services that are funded through the housing, navigation and maintenance program. I'm here to ask the community to preserve funding for this important program.

To help you understand why this is so important, I'd like to share a little bit about my personal history. As a newborn, I was placed into the Sacramento children's receiving home because me and my twin sister were born with drugs in our system. Unfortunately for my sister, this left her permanently disabled and non verbal. We were both initially adopted by the couple who had adopted my mother. But after years of neglect and physical abuse, I was taken into foster care system at age 17.

As a result, I aged out of the foster care system with no permanent connections even to my twin sister. I lost my biological mother when I was 21. My biological father is still alive, however, has struggled with substance abuse for the rest. For the zero my God. I'm sorry for the most of my life. You're doing fine. Thank you. You're fine. I'm determined to live my life differently than my parents. This starts with safe, secure and stable housing.

When I turned 18, I chose to remain in foster care, which is allowable until turning 21. I worked and attended school at American River College. I was able to secure a one bedroom apartment, but because I didn't have guidance during this process, I had very limited income. My apartment complex was not safe. There was drug trafficking, human trafficking, and I didn't feel safe being outside my apartment after dark. When I turned 21, the monthly payment that I was receiving in foster care system stopped.

This decrease in my monthly income came at the time when my job was also decreasing my hours and I was months behind on rent. I began to realize that I could not navigate all of this on my I didn't have any family to rely on, so I had to take my. zero, sorry. So I had to make my housing situation work, unfortunately. Fortunately, a local organization called Lutheran Social Services was there to help me navigate this situation.

They helped me get out of my lease and move to move into an apartment that was more affordable and safer. They helped. Then they helped me apply to for for a federal housing choice voucher.

Without Lutheran social services, which Sacramento county funds through the housing Navigation and maintenance program, I would have not known to apply for a voucher and never would have been able to navigate this process on my own, which requires a ton of paperwork, personal documentation, preparation, and more to underscore how complex this can be. We recently learned that the studio I'm renting, I can't use the voucher because the rent doesn't fall within the affordable threshold.

There are so many rules and steps to take, and lutheran social services is helping me at every turn. They're currently helping me figure out the next best step, and they're going to see this through until I have stable housing I can afford with my voucher. For young adults like me who came through the foster care system, we don't have the parental or family guidance in times like these, not to mention financial support.

The housing navigation and maintenance program helps ensure that even though we don't have these supports, we don't end up homeless. I am determined to live my life differently than my parents. This starts with safe, secure, stable housing. Please help prevent homelessness among former foster youth by preserving the. Preserving the housing, navigation and maintenance program.

Thank you. You did a great job. Thank you. And we're really proud of you.You know, it hasn't been easy, but we're really proud of every step you're taking and the sport you have. Thank you. Assembly Member to Ward, do you have any questions?

No questions. I mean, it is significant. It's essentially straightforward, the impact that this has had, transformative and life sustaining. And I think to, you know, recharacterize. I think some of your testimony I know full well these early investments are both meaningful, moral, and helpful for those that are receiving this kind of help.

But from our larger point of view, are preventing chronic homelessness where things get a lot more challenging and costly on the state to be able to work on some of the support that an individual needs if they didn't have this early intervention. We're going to be able to support our foster youth as of one the most important things that we can do.

And, well, for, you know, a price tag of $13 million is meaningful for the 1341 individuals that have been benefited to date and more to come. But a drop in the bucket for what we are seeing, for the total resource that our state could provide. So thank you for this. Certainly sits very strongly with us and will take it under consideration.

I appreciate your remarks. I have a few personal privilege as the budget chair of sub five. Any of the items that are on our agenda, whether it's this hearing or any other hearing, we have now been contacted by advocate groups, others to have face to face meetings. And so in Orange County, I had a meeting with about nine social workers. And I'll just own up to the fact that sometimes you'll see something on the list and you'll think, okay, it's a hard budget.

You know, maybe in my mind, by reading the title housing navigator, I'll be honest, I saw that, and it wasn't related to foster. I was like, well, where are we going to find units if we're not even building the unit? So if we really have to make a tough cut, I wasn't necessarily opposed to it. Again, therefore, having a meeting is really valuable because nine social workers walked into my office, all women, and pretty much laid out the program.

And number one, I was shocked because it's much more expansive than what a title says. It is also, of course, keeping these individual young foster youth from falling into homelessness. But what really caught my eye, and they left it with me, and I actually wish I would have brought it. I do have it up in the office is a binder that is about this big.

Like, look at the width here of paperwork that these young individuals have to go through in order to attain not only these vouchers, but to stay housed. So I'm going to show you again about this big. And as adults with support, I guarantee about 90% of us in this room would not make it through these processes. They are extreme, they're lengthy. It would almost be like applying for a home mortgage. And it was shocking. So that's a whole other story. It's nobody's fault.

It's just what's been put in front of these individuals. Just to attain the voucher I attribute to veterans who are leaving service, and in order to attain their benefits, they have 26 steps, which several of them, they make it through, and then at some point, many of them fall off because it just is more and more and more. And then we say, why do we have homeless vets? So that being said, my mind was completely changed.

One of the social workers that showed up was actually retired, and she came on her own time to say, this is the program she had been really spending her last years before she retired and was very adamant that this would be a direct link for these youth to fall into homelessness if we were not to protect these funds. So with that, it was eye opening, and that's the jobs we do to gain the information we need to make these hard decisions.

And I will do everything I can to protect these funds. I know we have a tough job ahead of us, but it was, and I'll be happy to share that binder with anybody that has all the paperwork if anybody wants to see it. Cause I've shown it a few times. Cause I was just. I don't know if you've seen that. It was just shocking. So do we have any other questions? Any other comments?

Andrew March, Department of Finance. So we would just like to note that this funding is in addition to other funding that's at the Department of Housing. Community development for foster youth for the transitional housing program supplement is roughly $40 million. General Fund ongoing. Both of these programs are discretionary programs in statute.

It's noted that obviously these are up to the Legislature to include in the budget each year, and that despite this being a flexible pot of funding for counties, there are other sources of funding that counties can utilize for this, although it would have to be at the direction of the County Board of Supervisors to utilize that funding.

So, for example, the building homes and jobs trust Fund provides ongoing funding to counties and cities, and this is an eligible use of that funding that counties would have to then take proactive steps. So it would be really a prioritization of existing funding that counties and cities have. If this funding were not included in the budget does not necessarily mean that there would be no funding that the state provides for counties and cities to supplement the foster youth vouchers.

Really good point. And I, without calling anybody out in particular, would just note that we have a responsibility to, I think, raise a certain level of floor that guarantees that all Californians are going to benefit from foster youth, are going to be able to formally foster you.

They're going to be able to benefit from this, and by doing so, relying on backfill from other more General purpose funds doesn't provide that guarantee, I guess, and something we'll look at, but I appreciate that, you know, we might have some flexibility out there. I would be more comfortable if we were at least raising the floor for some minimum guarantees for these purposes.

Last question, maybe LAO or Department of Finance, and I know we haven't even moved forward with it, but Prop one was just voted upon. Do we know if there is any funding in there for a program like this, particularly for foster care?

I don't believe so. However, the services component of Proposition One is not in my expertise, but we can follow up and get back to you.

Any last comments? Well, we appreciate, you did an excellent job. We appreciate you being here. And with that, we will bring it open to public comments on this item. Thank you. And again, 1 minute or under. And for those of you who haven't been up to the mic, you can pull the mic up or down according to your height. Welcome.

Hello. My name is Dana Boswano. I'm a young adult with lived experience. I flew here today from Los Angeles, California. I'm also a former youth Commissioner for district three. I come in support of continuing to Fund the housing navigation because I'm a direct recipient of the support services that were allocated by this funding, and because of that, I'm now housed and stable and able to continue to pursue my dreams and my goals.

And I just say that I hope that you listen to the people and the necessity of having this funding, especially for former foster youth, when we're stripped of our community, of our parents, of the people that are supposed to guide us in life. This is the job of now, the government and the county to help support us and guide us to live healthy, long lives.

Thank you. We're really proud of you. Thank you for coming.

Good afternoon, Madam Chair. My name is Ella Holman, and I am the current housing navigator maintenance program supervisor in Stockton for Spearnet. Formerly, I was a life coach for these former foster youth for 10 years. So obviously I'm waist deep in this, and I know this is a hard decision for you guys to make with these funds, but if I'm on the other side and I see the outcome of what those funds do have a very big impact on these youth lives. So when you see that housing navigator maintenance program line item, please don't reject it.

Thank you.

Hello, my name is Elijah Walt Banks Watson. I am speaking for espiritnet out in Stockton, California. I just wanted to really reiterate, as you guys know, there's a high suicide rate with all the foster care youth to come outside the system that don't have a place to turn to, like the generous navigation center and other places locally within the counties surrounding California. And it will be very lucrative just to make sure that you guys keep on pouring into committees and organizations and nonprofits and llcs such as the ones that surround us today is making a difference.

Thank you. Good afternoon, Madam Chair Member, Assembly Member Ward Martha Guerrero, representing the Los Angeles County Board of Supervisors, who echoes your position to reject the proposal to cut the funding. Appreciate your insight on the social workers.

As a social worker myself, and also advocating on issues like this in my past days when I was much younger, but, you know, you understand the hard work it takes in order for us to be able to deliver the important, you know, stability for our foster youth and youth in probation, exiting out of the system and preventing homelessness. But that, that's the reason why it is a priority for the Board of Supervisors and appreciate that our LA County delegation has also listed it as a priority.

Thank you. Thank you. Hi, my name is Georgia Sackett, and I've experienced eight years in the foster care system. I am a student at Butte College, and I'm here to ask the Committee to preserve funding for the $13.7 million housing navigation and maintenance program which is proposed for elimination in the Governor's Budget. This program again does serve over 1300 former foster youth and with the federal housing vouchers, keeping youth housed while leveraging 22 million in federal housing assistance.

As a former foster youth, this program has allowed me to pursue my college career, full time college career, while having my first, stable placement, living alone. And not only has this program helped me be successful, it's also helped me level the playing field and giving me a fighting chance to be correct, productive in this society. Thank you. Great job. Well done. Thank you.

Hi, my name is Jasmine and I experienced foster care systems since I was two years old. And I'm just here basically to ask you to preserve it because it does help a lot of kids. I mean. Thank you. Thank you for coming. You think this would be easier on my third try?

Hello, I'm Jackson. Hello, I'm Jackson, and I'm here with inspiring scholars. I am a college student and I work in many advocacy positions.I am a foster youth and have been in the system since I was nine months old, which is 20 years now, and I've experienced every challenge a person could only see in a nightmare. I work with other foster youth and I know that the youth I work with in Butte County need these programs and they are critical for their success. Therefore, I stand against cutting or underfunding these programs.

I believe that housing maintenance and navigation program has helped me strive to be a strong advocate and successful student because without the assistance they provided, I wouldn't be working towards my masters in social and behavioral sciences. In just a few weeks, I will be 21 and if I don't have a secure FYI voucher, I don't believe I'd be able to live successfully. Instead, I'd most likely be facing homelessness and trying to find any way to survive.

I have siblings who are systematically impacted and are young, therefore will likely be impacted by the system for more, many more years to come, and I'd hate to see budget cuts be the reason they can't succeed. Thank you. Thank you. Great job.

Susanna Kniffen with Children Now also urging you to reject the proposed cut to this program. We are legally responsible for these children and youth and they should always be our priority, even in a difficult budget year. Thank you.

Hi, my name is Sarah Thompson and I aged out of the foster care system entering when I was four years old. I am a student with the Butte College inspiring scholars and I am here to ask the Committee to please preserve this housing navigation and maintenance program. Budget cuts that end up this way are things that ended up, that helped aided.

I ended up homeless because of budget cuts like this and had to endure a number of different things that you'd rather not listen to so please help us and people like us get the resources that we deserve. Thank you. Hi everyone. My name is Mia and I have been in the foster care system for seven to eight years and I am also with Butte College, the inspiring Scholars program. I'm here to ask the Committee to preserve funding.

Programs like this have helped me find a stability in my life in the foster care system and also be more successful in life and have guidance when you don't have parents that you can run to. Thank you.

Hi, my name is Mara Chand and I'm a student at Butte College. I am a former foster youth and I am currently homeless. I am here to support keeping the housing navigation and maintenance program. I am asking you to think about the lives of all of the current and former foster children who are counting on you today. Please think of your under deserved and overlooked community. You all have a place to go home tonight. I do not.

Good afternoon, Madam Chair and Committee Members. My name is Eddie Aguilar. I'm an advisor at you community college and I'm here to also urge the Committee to maintain funding for the housing navigation and maintenance program. As someone who has personally experienced foster care, I understand the challenges and uncertainties that many foster youth have faced, particularly when it comes to housing stability. I was also homeless when I was in care or, well, actually, after I graduated high school.

This program is vital to over 13,1300 former foster youth by providing federal housing vouchers. In my capacity as an advisor, I have worked closely with students, have witnessed firsthand the impact of housing stability on young people. It's disheartening to see youth on the brink of dropping out of cash simply because they're unsure of what housing options await them after the exit. The THP program the reality is stark. THP plus in Butte County has only 10 available beds. In Shasta County, none.

And the waiting list for the one in Butte County is over 50 people. Many of these young adults fall through the cracks and become homeless, incarcerated, are unable to return back to their education. Shockingly, with only 3% obtaining a BA and 10% of any degree of any kind, it's evident that more that support is urgently needed. We cannot afford to let these young, promising minds slip through the cracks.

Programs like the housing navigation program are not just providing shelter, but they are about investing in our future's youth and empowering them to become leaders of tomorrow. Therefore, I employ you to recognize the critical importance of this program. Thank you.

Thank you good afternoon, Committee Members. I'm Jen Rexrod, here on behalf of California Alliance of Caregivers, here to ask the Committee to please preserve the funding for the Housing Navigation and Maintenance program. Thanks.

Thank you. Good afternoon. My name is Tami Di Paolo. I'm here on behalf of Orangewood Foundation down in Orange County. I was part of that meeting. Thank you for meeting with us. And I'm here to ask that the Committee preserve funding for the Housing navigation and maintenance program. Thank you.

Good afternoon, Madam Chair and Members. Danielle Bradley, on behalf of the California State Association of Counties, just want to echo comments. We are in opposition to the proposed elimination of the Housing navigation and maintenance program. Thank you.

Thank you. I see no other public comments, any last comments, comments from anybody up here? All right. Thank you very much for your testimony. And we will now move to issue four. Federal financial assistant support staff. It's on agenda, page 11. And we're going to go ahead and let you introduce yourself.

Madam Chair Members. Matt Schuller. I'm the Deputy Director of Administration at Housing and Community Development. This item is a workload proposal. We're asking for 10 staff to augment our division of federal financial assistance to do work on federal programs in a variety of capacities that are outlined in the proposal. Currently, that unit is under staff relative to similar multifamily efforts in other divisions. So it's pretty straightforward.

I mean, I will note that this money is federal trust Fund money that is associated with the Administration of the Programs. It doesn't involve any spend of General Fund.

Thank you. Any questions, any questions from our Members here? I don't have any questions either. Do we have any public comments? Seeing none. Thank you for your testimony. Very straightforward. Thank you. Okay, item number five, permanent local housing allocation program Administration. Did we just do that? Yeah.

And again, Madam Chair, again, providing testimony on this. Matt Schueller with the Department with Housing and Community Development. This is a very similar proposal to the last issue in terms of being staff augmentation. We're asking for four positions to do work on the permanent local housing allocation program. Over the roughly the last three years, we've doubled the need got of basically every workload measure.

So there's definitely a need to augment the staff for a variety of reasons, but primarily to provide additional technical assistance to awardees and potential awardees, and really to do disbursements in an even more timely manner to get that money out the door to the people that need to put it to work. Again, like the federal proposal, this money is associated specifically with this program within the administrative cap for that program doesn't involve any General Fund spend.

All right. Any questions? But don't do any more giving out awards if we have to pull them back. No, I don't have any questions. Thank you for that. Any public comments? See, none. Thank you. All right, we're going to go to a whole other part of this hearing, which would be business, consumer services and housing agency, Housing and Community Development Department.

And we are going to have new friends from the governor's office and housing. And we'll go ahead and let the panelists introduce themselves and make comments. You guys can go first.

Kaily Yap Department of Finance

Chris Hill. Department of Finance.

I'm Meghan Kirkeby. I'm our Deputy Director for housing policy at the California Department of Housing and Community Development.

I suppose I could have taken that seat, but I just like Meghan Kirkeby so much. I'm Meghan Marshall. I'm the Executive officer for the California Interagency Council on Homelessness.

All right, Department of Finance, if you want to go ahead and let us know what you are cutting.

The Governor's Budget maintains $1.1 billion General Fund for round five of the homeless housing Assistance and prevention program. However, to maintain a balanced General Fund, the Governor's Budget does propose to defer $260 million in hap round five funding from 2023 to 24 to 202526. The Governor's Budget also proposes to revert $100.6 million General Fund in administrative set asides for the various rounds of HAPP and for the family homelessness challenge grants as General Fund savings.

Because these funds are not required by the administering departments, the Department of Finance is prepared to answer any questions the Subcommitee Members may have. Thank you.

Thank you. Ginni Bella with the Lao we have no concerns with the reversion of the 100 million for administrative functions in terms of the delay of the 260 million General Fund. It's our understanding that really also is aligning with the prediction of when that funding would be needed. So that would be, I think, a key question to explore today as you chat through this issue.

All right. Thank you. Any other comments before Assemblymember Ward?

No. Thank you. As somebody who was formerly the chair of our CoC, I know very well the improvements that we've made today, chap program, and the reliance that both our Cocs, our cities and our counties have come to know to be able to do the work, the hard work that they're doing out there. And the work is certainly getting harder. The need is certainly stronger. No problems, I think, with some of the administrative set asides, but by delaying monies from the 2023-24th fiscal year.

Forward, one of the things that I saw, I think, in the governor's January draft was that there was no guarantees, I guess, for the subsequent fiscal year that we were going to be continuing hap funding, and things have not gotten better. We know we need to sustain many of these programs. We certainly have responsibility to look at their effectiveness.

But I have seen improvements on our local cocs and local governments to be able to produce some of the outcomes that we're expecting across a variety of programs and local programs and functions that are delivering on these services. So I'm wondering if there's any comment about the status of that.

I see that you're going to maintain the funding for fiscal year 24, but again, this issue about needing to predict ahead and ramp up and provide certainty for the funding in some of the out years, what's the status of that? Through what I had seen in the.

January draft, Chris Hill, again with Department of Finance, as my colleague and as Elio noted, we are proposing to maintain the entirety of the HAPP five funding Administration and the Legislature mutually agreed to as part of the 2023 Budget act. And in terms of any future funding for HAPP, the Administration did signal in, we released the Governor's Budget, that we're prepared to work with the Legislature to examine ways to possibly leverage additional funds for future rounds of homelessness programs similar to HAPP.

But that's going to depend upon the fiscal situation and a myriad of factors. And so we did make that commitment, but that's still sort of to be determined right now, and it's going to depend on revenues and various other things. So we're not really prepared to say anything more on that point at this juncture.

Okay. Well, I said what I needed to say. I guess that certainly I appreciate from a local perspective the prediction, predictability of some of these funds coming forward in future years, the planning that we need to go into to be able to develop and account for some of these programs going forward generally.

I know there's been an issue across all these programs, and even those issues we touched earlier of the need to have sort of multi year commitments because it does take so long to be able to plan forward and eventually contract out and deliver on what we're trying to Fund. And I think the same is true here for the HAPP program. Question for whoever can tackle this on the delay from fiscal year 24 to, I assume this is fiscal year 25 of 260 million of General Fund.

Are these, I don't want to get into the same problem that we have with the REAP program, but are there funds that have been accounted for, I guess, are COCs or local governments expecting that allocation there for which they are going to seek reimbursement in an upcoming time period by making this Fund delay, are we putting any of those at risk?

No, I'd be happy to take the first shot at that. And then my colleagues from the departments can flush out anything or correct anything. I mischaracterize, but we do not believe this will have any programmatic impact whatsoever.

The way the funding is going to flow out for half the first tranche of the $100 million goes out probably within the next few weeks, and then the localities have to commit, have to obligate 75% and spend 50% of that amount before they can leverage the other half of the funding. So we think that the way that's going to play out in terms of timing, it shouldn't be impactful and that the money should be restored in time for them to actually be able to use it.

Okay, that's encouraging. Thank you.

Yeah. Can you tell me how the HHAPP recipients are using their funding for prevention? Because now we're getting into the weeds. When we say reap 0.2 or we say h hap, the public doesn't really understand. So if we can get a little context. Thank you.

Megan Marshall from California Interagency Council on Homelessness. Again, we have a Hap annual report that is coming out for publication in short order at the end of this month. And so very happy to share the results of the final report with this Committee and others.

Can you just give us some examples right now of how jurisdictions are using the funds they receive or apply for?

I can say the bulk of our eligible applicants are utilizing dollars for interim housing. Prevention is an area, as I'm sure you can understand, Madam Chair, very, very delicate in terms of research and prediction analysis. And so we will have, as I said, a more robust report at the end of this month.

So when you say prevention, what are some examples that jurisdictions might use those funds for?

So, HAPP, the definition of eligible populations has slightly changed over the five rounds of HAPP. HAPP five is the first round of this funding type that allows for a more broader definition of an eligible population for prevention. In prior rounds of Hap, an eligible population would have been identified as someone who would have needed to prove that they were going to lose their place of residence within 14 days. And so there's some nuances across the rounds of HAPP based on legislation.

Just to add to that, though, Megan Marshall's team does put together a pretty robust guide on sort of eligible uses round by round, and we can share that with the Committee. Megan has it here. But the round by round, what each of those eligible uses are. And so, you know, we can get into detail of sort of which rounds they can spend on which uses, but it has been increasing in terms of flexibility and prioritization on permanent over the course of the rounds.

So anybody can answer the question here, because one of the areas that not only myself but other colleagues have voiced me, particularly through this budget deficit, is how do we, of course, address homelessness but prevent homelessness? So whether it's prevention in subsidies for somebody to remain in their rental or so they're not evicted, because we know once individuals are evicted, it's that much more of a climb out to get them back housed.

Whether it's, I will tell you again, being in this role, sometimes people forget up here we go back to constituents, and right before thanksgiving, we had three individuals who told us in Fullerton that they were going to be evicted right literally the week before thanksgiving. So myself individually, was trying to scramble around to find out where are emergency funds for somebody who's in that scenario.

And it was difficult, although we did reach out to the county supervisors, we reached out to the City of Fullerton, even faith based groups. And in the end, we were able to make some connections with, with Caloptima, but nobody was able to kind of have cash assistance for, say, a one month, two month period. So are there any programs right now in hhap that you know of that are doing that?

So again, Madam Chair, the bulk of our grantees are expending on interim housing. So focus on getting the folks who are currently on the street into some sort of, whether it's shelter or permanent housing, there has not been a lot of attention paid. In terms of prevention. HAPP has and continues to be a one time funding source with local jurisdictions able to decide for themselves what their local needs are.

And so the HAPP plans that exist currently are based off of local leadership's determination that this is where, based on the eligible use categories, this is where they are prioritizing those dollars.

But just to add to that, so rapid rehousing rental subsidies are very clear. They're actually the number one eligible uses that are sort of listed for all the HAp grantees.

And so this is mostly just a signal to your question is, I think one of the places Megan Marshall and myself in terms of this transition have been working on is how do we be more proactive with our grantees in sort of making recommendations to, to them about where they spend those dollars and providing additional technical assistance to help them start those kind of programs.

And so right now, we have been, the program has been very hands off in terms of these are eligible uses, go spend as you see fit. But we can move into a posture of being a lot more proactive of, hey, we notice you have remaining dollars. Here are some things that your partners are doing. Here are ideas you could be doing. Here are sort of models you could be using.

And, you know, I think it is going to look like a different crisis in every single region, and there are going to be individual pieces, and we want to maintain that flexibility. But add also accountability and additional support to the table. And so I think those are some of the shifts you're going to be seeing in terms of the program.

Transitions are a little bit more handholding in terms of, hey, did you notice you have these eligible uses and really making that sort of clear and transparent so people know how much funding is left from HAPP one all the way through HAPP five.

I appreciate that because I do think whether it's nonprofits, whether it's local municipalities, sometimes they read something and they're not reading between the lines. So whether it's rental subsidies, whether it's emergency funding for eviction, but I know we had this conversation quite a few years ago, which was rv parking. Could homeless funds be used for rv parking or safe parking overnight? That type of. And I was even looking at doing it. Well, I actually did do it. Piece of legislation didn't get through.

But my point is, there was a lot of information in the local communities like, zero, you can't use those funds for that, even though we kept saying it's flexible.

And you can, I think you spelling it out and maybe even doing some education on that in big, bold letters can offer that flexibility that some cities are not reading into, because we, not just my office, but many nonprofits have the scenario where somebody's showing up school districts, other entities, where they need help now, and they can't, we, we can't just send them to HCD. That's not, the timeliness of this is not going to work.

We need like a turnaround that's going to be within days to prevent some of this. And so I think the funds are really valuable. I know that they've been used to keep people housed or get people who are unhoused housed, but having that flexibility. Is really important,

If I may just add. So the document that Meghan Kirkeby and I are sharing at this point in time is a side by side for all of the rounds of hap. This is the document that the Cal Ich team, which will, in short order become the HCD team for these, these respective programs refers to consistently. It's how we support our grantees in terms of making those local decisions based off of local data where they would like to invest their half allocations.

But with this transition underway, there is a space for Cal ICH, and I know we have a subsequent agenda item that we can speak to this a little bit more, perhaps, but Cal ICH will be moving into the space of proactive technical assistance provision for jurisdictions, not just in receipt of these dollars, but for the entirety of the state's investments in housing and homelessness, which includes colleagues at CDSs, DHCs, Cal Vet, et cetera. So this is a space that Cal ICH is very excited to step into for this next fiscal year and for the years to come.

Well, we thank you for that, because there's just an ongoing stream of not just HCDs, but communities, cities, school districts, counties that have to be able to access the information, access the Fund and be able to use it and pivot when things change. Because this, I mean, we talk about homelessness as if it's always been here, but we're really in the infancy as a State of not only acknowledging the problem we have, but addressing it.

I mean, I started at the State Assembly in 2012, and I can tell you it was not the top priority, homelessness and housing. I was on City Council in Fullerton since 2004. We were not talking about this at all. So when you look at just the last five years more, we know it's been long time in making, but cities, the state addressing it, it's actually been a pretty short timeline. So we've learned a lot of lessons and we'll continue to learn more.

But for the limited resources, we have to do the best we can to execute what we can with that, I think. Any other comments on this, any public comments on this item.

Holly Fraumeni with Lighthouse public affairs here on behalf of the San Diego Housing Commission, and we support the preservation as much of this program funding as possible. We want to thank the comments and be sure the concerns that were raised by some Member Ward about predictability and the delays. But anything we can save on this and preserve is very important to support homelessness in the region. So thank you.

Madam Chair. Andrea Ramirez, on behalf of all home as well as the City of Oakland, grateful for the maintenance of the 1.1 billion for round five. But of course, very deeply concerned about the administration's proposal with the lack of round six funding. Do want to really commend Committee staff's work on this program over the years. As mentioned, it's been refined, it's got gotten better and better. It's been much more impactful over the various rounds.

And in that vein, I do want to reiterate just the comments that are on this page and that the loss of funding will result in an increase of homelessness across the state. Thank you.

Thank you. Appreciate.

Good afternoon, Madam Chair. Danielle Bradley on behalf of the California State Association of Counties, we are extremely grateful for the leadership of the Legislature, working in partnership with the Administration for the unprecedented levels of investment in homelessness over the years. In recent years, I should say HAPP specifically has provided counties, large cities and continuums of care a flexible way to meet the unique needs of their communities through supportive housing, interim housing and subsidies that have helped people maintain their housing.

Unfortunately, as discussed, HAPP is one time and even scarier. There is not round six proposed in the budget. Without ongoing funding of the current level of 1 billion, or at least an additional 6th round, we do risk losing the progress that we have made. But we appreciate the governor's comment in the budget that he's willing to work with the Legislature in addressing possible future funding. We recognize very difficult budget decisions must be made, but we just really don't want to reverse the progress that communities have made. Thank you.

Good afternoon. Kim Lewis, representing the California Coalition for Youth. And I won't repeat the comments made around the need for ongoing additional dollars, but particularly I want to talk about, appreciate the chair's comment at the beginning of the hearing around transitional housing and how important it is for our young people and that we need to make sure that the prohibitions on interim housing as it affects youth isn't continued and we need to get this corrected going forward on that and really appreciate your leadership to ensuring that our youth are served and connected and that problem solving, diversion, prevention work is very important when it comes to our youth and we able to support them to ensure that we can catch them early so they don't become our chronically homeless adults. So thank you.

Seeing no one else coming to public comment. Any last comments? Thank you. We know that you are doing some of the hardest work in the State of California. It's not simple work. It is work that is needed and we appreciate it. Thank you so much. All right. With that, we will move to issue number seven, transition of Cal ICH homelessness grant program. And we have some of our same presenters. And thank you and please make your comments.

Kaily Yap Department of Finance in accordance with the provisions of Assembly Bill 129, the Housing and Homelessness Trailer Bill for the 2023 Budget act that transfers responsibility for the Administration of Homelessness programs for the Interagency Council on Homelessness to the Department of Housing and Community Development, the Governor's Budget proposes to transfer 22 existing positions that support homelessness programs from Cal ICH to HCD.

In addition to these transferred positions, the Governor's Budget proposes to provide four new positions at HCD to further support their new responsibilities to the transferred homelessness programs. The Department of Finance is happy to answer any questions.

Where are you housed? Speaking of housing and how are you all going to fit?

So the 22 staff that are going to be transferring from the Cal Ich grant that represents the Cal ICH grants team, and they'll be moving over to my division at HCD, the housing policy development division, virtually housed all within what we call HPD, the housing policy development division we hire statewide. And Calich also has some staff that are outside the area. So, you know, it will be a hybrid, continue to be a hybrid group in that way. And then, you know, HCD is moving July 1 to a new office building for those folks that are in town. So you'll know where to find me.

So can we use your old building for housing.

Actually, on that note, Madam Chair, my current building is being slated for permanent housing. So Cal ICH currently occupies a suite at 801 Capital Mall, which is a state State Personnel Board building that will be demolished at some point. So Cal ICH, ironically will be homeless in short order and are looking for space just to make that plug.

Yeah, well, I do like the repurposing and I do like the hybrid, and I not sure what the Governor is going on all of the remote, but I would put a bit in that people have shown they can work very well from various different locations. But I'll stay on topic because it's a long hearing. And then now I'm going to get a little campy with you guys. All right, so with Cal ICH moving in with HCD, are we going to have the streamlining that we keep hearing about over and over and over?

And so, to be clear, it's not the entirety of Cal ICh that is integrating with HCD. There's still a tremendous amount of work that will exist, statutorily speaking, for Cal Ich outside of Grant Administration. It's the 23. Sorry, excuse me, 22 staff from Calich who will be transitioning along with the financial portfolio to HCD, but we will retain 43 staff persons at Cal AcH to continue on and the statutory obligations and responsibilities that Cal Ach has.

All right, any other comments, LAO? OH, I have a big question. And we noticed that in the governor's proposal that the encampment funding did not decrease, 350 million, I believe, or how much was it? Can you speak to the encampment funding.

Excuse me, Chris Hill, Department of Finance. Yeah, there's $400 million, I believe, in current year, for encampment resolution grants. And the Administration does propose to maintain that funding. And as I think my colleagues would attest at the departments that all that money has been committed and probably is going to be going out the door pretty soon, if it already hasn't.

And just to note that as part of this transition, to be as transparent as possible, we've added the Cal Ich grants to our HCD NoFA calendar. So that'll continue to be a way you can get access to when the awards are likely to be made. And so for those awards, our window one is expected by the end of the month. And then, you know, should there be unspent funds, then additional windows would be used. But it is likely to happen very quickly.

And can you explain what those encampment grants do and what they're funded for?

So, the encampment resolution Fund, over the years, has said that it will prioritize at least half of the available funding for encampments that exist on a state right of way in a community. Unlike HAPP, which is an allocation that's only available to coCs, counties and big cities, ERF is a competitive application that's available to cities of any size, to Cocs and counties alike. It is the only opportunity, truly, for cities.

You mentioned Fullerton, Madam Chair, for cities like Fullerton to apply for funds that can directly impact their local community, absent deep collaboration and commitments from a larger city or a county organization. But ERF specifically requires the applicant to identify a singular encampment within their community to have deep knowledge and engagement pre existing with that encampment, with the ultimate outcome being, of course, connection to permanent housing. I just want to make very clear, this is not a cleanup grant.

This is not an opportunity for jurisdictions to abate or to remove encampments. There is a requirement that we take very seriously for there to be a connection to interim and to permanent housing.

Because we have heard it explained, or I've heard it explained, as kind of like a California beautiful type of funding. And I know that there have been some cities that are wanting those funds to, in essence, clear a location. And then what kind of data do we have to show that once that this grant is attained and there is some type of clearing, that there is housing that's attained after that?

Because we have been told by some that these encampments are cleared, funds are used, but we don't have any data to show where do the people go.

So that's an unfortunate comment on the project. I will say that we do have data, but these are demonstration projects, and so these are multi year funds. So do we have data that's immediately available for the first or second quarter of ERF two, which was just fully awarded in this last fiscal year? No, we do not. However, I will say, and it's been just a little bit over a year since my appointment into this position.

For the first time in Cal ICH history, we have engaged with locals in a way, perhaps, that they've been unaccustomed to. We're aware of a number of jurisdictions that have been brought to our attention who are potentially using program dollars in a way that is not statutorily written. And so Cali Sah is proactively engaging with those entities to ensure that either those funds are returned to the state or that we offer deep technical assistance to resolve whatever the local need is.

So when an entity applies for these grants, are these measures clearly outlined and so forth?

They are. And again, ERF is a competitive application that goes through a multi step review process. And so we are very the inevitable award announcements. We're very confident that those entities are able to get those dollars one out the door as quickly as possible to address that particular encampment in their community, but that they are abiding by housing first, that they have local nonprofits or community supports around to ensure deep connection to services that are absolutely necessary to housing retention.

One more question. So this money is not being slated to be cut, and yet there's other programs like Reap, .2, others that have been mentioned today. What is it from the governor's office that, in essence, would protect these funds versus other funds?

I don't have a specialty in the housing portfolio, but I can just say from the homelessness perspective, the Administration felt very strongly on maintaining a focus on homelessness, given the current homelessness crisis that's evident before all of us. And that, coupled with the fact that these. They were deep into the process of awarding these funds in the grant application process. So there was a. There was no desire on the administration's part to cut this particular homelessness program.

Thank you. Do you have questions? I have to hand it over to you because I need to go present to Bill. I do appreciate all your comments. Thank you so much.

Thank you, Madam Chair. Happy to take over and keep this moving forward. Maybe not a lot of comments, because I did walk into middle of this. This issue. So I want to disrespect that I haven't heard the full presentation, but I'm certainly aware from my own experience and some of the background here that I'm not. You know, if we have to compare one to another, I'm less confident about the encampment resolution program relative to other programs.

And if this budget debate amongst ourselves is coming down to these things, some things are nice to have versus some things we must have, or at least are producing better outcomes. That's a factor that I'm having to weigh. And yes, we would very much like to have.

And I know exactly where, at least in my local area, a lot of these funds are being dispersed and supporting not just beautification of state owned lands or grants to local areas, but also the service workers that are doing the hard work and the frontline work out there to really engage individuals. And I know how difficult that is because of, ultimately, they have to get to. Yes. And it does beg the question, you know, and these funds and these programs don't necessarily satisfy.

Where are they going to? How are we producing more units on the back end? Because that is where we need to do a better job as a state. Just some guiding values I wanted to sort of lay out there, too, as I'm reconciling, you know, the trade offs that we have here. But I appreciate the presentation, and I think we need public comment on this item, unless there's anything further from the panel. Thank you. We'll take Members of the public on item number seven, if any are here. Okay. Seeing none. Thank you very much.

We will be moving on to issue number eight. This is the California Housing Finance Agency for an overview and program updates. Thank you. And with that we will have a personal preference on order. So maybe I'll just let you take it off with Department of Finance or I saw as gestures. Good afternoon. Chris Schultz, Chief Deputy Director of the California Housing Finance Agency. With me is Ellen Martiner, our Director of home ownership. Sure, go ahead, Ellen.

All right. Thank you so much. Well, good afternoon, Assembly Member Ward my name is Ellen Martin. I am the Director of home ownership for the California Housing Finance Agency here today to offer an update regarding Calhfa's dream for all and grant program. So the dream for all I'll start with dream for all. The Dream for all program is a revolving shared appreciation loan program that provides loans for a down payment to qualified homebuyers. The loan takes the form of a silent second mortgage.

When the homeowner sells or transfers the home, they will repay the original down payment loan plus a share of the appreciation in the value of the home. That repayment is then used to offer a commensurate level of assistance to help the next home buyer to purchase their first home. As many are aware, the first phase of the program, all funds were committed in about 11 days. The distribution of our loans was geographically diverse, with loans in 53 of the state's 58 counties.

The central valley had the most loans with 21%, followed by the Bay Area at 19%, the capital region at 16% and the Inland Empire at 14%. We also saw a major uptick in loans in harder to serve areas like La, San Diego, Orange County and the Central coast. The average age of our dream for all borrower was 36 years old and over 55% of dream for all heads of households identified as belonging to communities of color.

In terms of income, 21% of our dream for all borrowers earned less than 80% AMI and nearly 80% of our borrowers earned less than $150,000. With consideration to the vast oversubscription of funds that we saw for phase one, and in response to the statutory language in last year's budget trailer Bill, the CalhfA board has made some key changes for phase two of the program. So the first key change is in the loan delivery and reservation process.

So rather than the lender reserving the loan in Calhfa's system once the home is already under contract, we've implemented a registration portal that will allow our qualified borrowers to pre register, and then we'll be using a randomized selection process to select those borrowers that will have the opportunity to take out a dream for all loan selected recipients will then have about 90 days to shop for a home to get into contract and Reserve their loan.

So the second big change is to the eligibility criteria for the program. Most of our programs are for first time home buyers, and all borrowers on the loan must still meet the first time home buyer criteria. In addition, one borrower on the loan must be a first generation borrower based on phase two legislative requirements.

A first generation borrower is defined as a borrower that has not owned a home in the United States in the last seven years, and the borrower's parents do not presently or did not at the time of their death, own a home. A borrower can also meet that parental criteria if they spent any time in foster care as a youth. The next is geographic balance.

We'll use the pre registration portal to apportion funds to nine separate regions on the basis of each region's share of households in the state. And then finally, we've introduced several loan terms to target the funds to lower income borrowers, including lower income limits and $150,000 cap on the loan amount. In addition, we've established a 95% combined loan loan to value minimum, which means that borrowers can only bring about 5% of their own funds to the table for this transaction.

So the overall result of these changes is that the program can be more precise in its targeting of funds to those who need assistance, particularly those who have not benefited from the intergenerational wealth creating opportunity associated with homeownership.

In terms of phase two rollout, the preregistration portal opened last Wednesday on April 3 and will remain open until April 29 at 05:00 p.m. We will then be conducting the randomized selection process in early May, after which we will be auditing the first generation status of selected recipients and we expect to issue initial commitments to borrowers in early June. We're happy to work with Members of the Legislature to promote the availability of this program and to provide information to your constituents.

We've already provided social media toolkits, other program collateral to your offices, and we've also done webinars with several legislators. We'd be happy to discuss any other support that we can offer. So with that, I'm happy to answer any questions you have on dream for all at this time.

Thank you. Any other comments? Okay, see none. I appreciate the presentation here today and the offer to certainly spread amongst us for the upcoming period to get out to constituents. I don't have any questions. I did on behalf of our chair want to pass on an interest for her to receive more information.

I see the geographic distribution here for the California Dream for all program, but I think she's looking for a little bit more information about statewide distribution of the ADU grants and the Cal HFA grants. That's something you could provide at a later time. I know she'd appreciate it. Thank you. And then with that, is there any Members of the public on issue eight?

Holly Fraumeni Lighthouse Public affairs on behalf of Habitat for Humanity California. For years we've been working with the agency looking to try to find a program that could be restored to help with construction of new owner occupied housing for low income families. And we have yet to be able to restore some of the programs. But we are hopeful with recent conversations with the staff that we can try to restore some of those that have even offset some school impact fees in the past.

And we're still disappointed to see that the only new construction program at the agency is rental only. So we're hoping Habitat for Manatee builds multifamily housing, and we're hoping that we can explore and the Legislature could direct the agency to start working on intentionally to try to create a new production, new construction, new units for affordable home ownership for Low income families within the Calhfa. We love the dream for all program.

It's a great program, but again, it helps people just buy existing homes and does not do anything to help with the crisis, the production crisis that we're in. So again, thank you for your comments and your time today.

Great. Thank you. Thank you for your presentation. We're moving on to the Civil Rights Department to address issue number nine. Thank you. I'll let you begin.

Good afternoon. Adam Romero with the Civil Rights Department, and I'd invite my colleagues on finance to present this matter.

Blair Huxman, Department of Finance. The 2022 budget provided approximately 2.3 million annually for three years and limited term funding to the civil rights Department. 1.4 million of this allocation was for resources to decrease the wait time between complaint intakes and investigative appointments to one month and to increase the number of complaints secured successfully conciliated and settled by investigators. Approximately 883,000 of the 2.3 million allocated was to provide resources and training to communities facing hate incidents or other conflict over discriminatory practices.

And the Governor's Budget proposes to withdraw the final year of the three year limited term funding previously committed to the civil rights Department, given the current General Fund outlook for total cost savings of 2.3 million.

Thank you. Lao have any comment?

Ginni Bella with the LAO we have no concerns to raise with the proposal at the time.

Okay, thank you. I don't have any comments of my own. Well, actually, I do have one. I think the funds that we would be eliminating right now certainly would have an impact on wait times, on performance, and I'm wondering if that was fully eliminated, what might this do? I guess, for any of the ability to reconcile some of these cases that are before the civil rights Department, are there other resources or other sources of funds that you'd be using to be able to support some of the operation?

I can take that. Hi, I'm Jamie Gillette, Deputy Director of the enforcement division with the Civil Rights Department. Unfortunately, we don't have other funding available to help with that wait time. We're always looking for efficiencies in order to improve our processes. That's an ongoing effort, so we would hope to uncover some more efficiencies along the way. We're always prioritizing our workloads and our investigations in order to prioritize intake appointments where we can. Currently, we're receiving about 1300 intake forms per month, and that's an increase.

About two years ago, we were receiving about 1000 intake forms per month for complaints. And so our wait time is determined by how many intakes forms we're receiving by the public, how many staff resources we have. So there's a lot of variables. So the intake wait times kind of go up and down depending on those factors. But at this time, we think, you know, without these funds, unfortunately, we do anticipate wait times to increase.

Okay. That's something that we'll just take, appreciate, and take under consideration. With that, do we have any Members of the public on issue number nine? All right, seeing none. We appreciate your update today. Thank you. Next we'll be moving on to the state treasurer's office. This is issue number 10, and we look forward to your overview and presentation.

All right, thank you. Good afternoon, Committee Member Ward. I'm Natalie Gonzalez. I'm the Assistant Director of the centralized treasury and securities management division at the state treasurer's office. The BCP before you today includes two requests. Our first request is for additional funding due to increased costs associated with the use and support of the FIS image vision item processing software. This software is used to facilitate the STO's daily check processing activities.

The cost increase is due primarily to the shift from an on premises legacy framework to a cloud based architecture, and in addition, a change from a flat rate billing model to a volume based billing model. Our second request is for budget Bill Language, which will mitigate the challenges the STO has encountered with newer DGS purchasing requirements, and it will ensure that vendor associated procurements related to the treasurer's constitutional and legislative banking and investment responsibilities will continue uninterrupted.

The proposed language was agreed upon with DGS and is limited to a two year period. DGS has indicated that they're working on a statewide solution for these types of procurements, which should be implemented within the two year timeframe requested. I thank you for your time and consideration of these requests. We're happy to answer any questions you may have.

Thank you. Miss Gonzalez. Anything from LAO?

We initially raised concern because the proposal came with trailer Bill Language that we thought was overly broad. But as you can see in your agenda, they have revised that with budget Bill Language that is more narrow, and we have no concern with it at this time.

Conclusion? I think we're in finance.

Greg Bruss, finance. No concerns with the revised budget Bill Language.

Thank you very much. I don't have any questions of my own. I did want to note one question from our chair, really digging in to try to understand, will it actually take two years for DGS to develop some of the new policies? And what happens to this language if the new policy is developed in less than two years?

Sure. Well, we thought it would be prudent to include a two year sunset timeframe to allow DGS the time they need to formulate and implement that statewide solution. If they were to implement a solution sooner, this language, of course, would no longer be necessary, and we'd be happy to add language to clarify that issue in the budget Bill Language.

That would be encouraging. I think that she had requested, if you want to get back to her potential language to clarify that if the issues, the guidelines come within the next year, the exemption for two are years rule would no longer be valid.

Thank you for that offer. Any Members of the public on issue 10 say none. We appreciate your testimony today. Thank you. We're moving on to the California Able act board. This is issue number 11. Welcome you back to sub five and look forward to your presentation.

Thank you. Good afternoon. My name is Thomas Martin. I am Executive Director for Cal Able. This is my 7th day on the job, so that's my subtle way of asking you to go easy on me. With me, I have Anne Osborne. She's the deputy Executive Director for Cal Able. Very quick primer.

Calable is a tax advantage savings program for individuals with disabilities, similar to like scholarshare for college savings. The request before you today has two pieces, one is an extension of the loan repayment period for Cal labal to extend to the end of the 3132 fiscal. The year. And the second part portion of the BCP is requesting a waiver for interest due on the loan. So we have. I understand there's some questions that are presented. We'd be happy to provide more detail or respond to those questions. Anything you like.

Thank you, Mister Martin. Good job on day seven. Anything from LAO or finance? Okay, see none. My only comment on behalf of the chair, digging in a little bit to the surcharge for the accounts. How much is expected to be generated by the surcharge and when do you anticipate that that would end? For account maintenance?

Sure. So the. So the surcharges is an ongoing surcharge. So there's no. The State Administration fee is an ongoing fee. That's what helps Fund the program effectively.

So there's no end dates in mind right now. So for this fiscal year, the fee is going to generate a little over $300,000. That's going to grow as more accounts are added to the program. So the projection right now is that it'd be more than $1.0 million by the 28-29 fiscal year. Again, that's a projection, so it continue to grow from there.

Okay, thank you. The amount that we are seeking, we might waive. What would that come out to? And is that otherwise, from a budget point of view, impacting our General Fund? Sure. So that amounts approximately. Do you remember the exact amount? That's comes out to about 800. About $900,000 total across the lifespan of all of the loans between the initiation to 3132. Okay, thank you. I don't have any further questions. Are there any Members of the public on issue number 10 or, excuse me, issue number 11? Seeing none. Okay, thank you for your presentation.

We are moving forward to, I believe, our last item. And this is the Cal Savers Retirement savings board with issue number 12. Welcome and we look forward to your presentation.

Good afternoon. Thank you, Committee Member Ward. My name is David Teykaerts, and I am the Executive Director for Calsavers. Our request today is for $12 million in a General Fund loan in $2 million increments over the next six years to continue to roll out and grow the Calsavers Retirement Savers board program. With your permission, I'd like to take just a few minutes to do an overview of the program to set some context.

So Calsavers, formerly known as Secure Choice, is a first of its kind program that was signed into law in 2016 and officially rolled out in 2019. Calsavers exists to address the stark reality that millions of Californians are not on track for a secure retirement. In fact, half of Californians are on a trajectory for financial hardship in retirement, and the problem really compounds for historically marginalized groups.

The essential premise of the program is that workers, folks who have a job and a paycheck, are 15 times more likely to save for retirement if they have access to a savings and investment program through their workplace. That's the key premise. They're, in fact, 20 times more likely to save if that process is facilitated automatically on their behalf, meaning that they're opted into the program. So that's how Calsavers is set up.

Workers get access to a simple Ira style plan that saves 5% of their paycheck on their behalf, escalating 1% per year up to a max of 8%. The money is professionally managed on their behalf. For employers, for the business owners, there are no out of pocket cost, there's no employer matching contributions, and they don't have any fiduciary liability. And those are all the things that traditionally have kept, especially smaller employers, from offering retirement plans like 401s.

However, if they do prefer to offer a private sector plan, this legislation, this program does allow for that. In fact, we consider that a win. The whole goal is just to have more California workers saving for their own retirement. Just a quick note on some of our key stats to know about the size and growth of the program. So we're very close to having a half of a million funded saver accounts now. So 499,000 individual people in California have begun saving for their retirement.

We have accumulate, or those folks have accumulated $857 million in assets under management, which has more than doubled in just the last 18 months. So we're really sort of hitting our stride with the program now. It's a matter of economies of scale and building and compounding the growth. We have 135,000 businesses, employers that have registered, and nearly 50,000 businesses that have started facilitating payroll deductions.

So 50,000 businesses that before this program had no retirement plan in place for their workers now have one and have actually started moving money into real accounts. The average balance is relatively Low, $1,700 per person, but that's up 10% in just three months. This is a new program, so building and growing. In the budget change request before you today, we're requesting $12 million taken in $2 million per year increments over six years.

These funds are intended to complete the loan required to start up this program, we do consider ourselves still in startup. We are currently beginning marketing to the largest wave of employers, which we call micro businesses. Currently. Today, the mandate for this program is only for businesses with five or more employees by the end of 2025. So 20 months from now, it will apply to businesses with as few as one employee, which is another 440,000 businesses. So just an enormous amount of very small companies.

And we have a mandate to reach all of them in the next 20 months. And that's what this money will be for. This will allow us to Fund our existing staff, do employer compliance enforcement services through our partner, the Franchise Tax Board, work with our external consultants, produce marketing, administrative and overhead costs.

And the faster we grow the program, and this is sort of the main liner, the more savers we have saving more money, the faster we'll be able to be fully self sustained because we are exclusively funded by very, very small fees from the saver accounts. Just five basis points. The more people that we get saving more money, the faster we'll be self sustained and be able to pay back this loan. Happy to take any questions.

Thank you. Any comments from LAO or Finance? Great, thank you for first of all, the work that we're doing to grow this program. I can understand the value that it's going to have for today and future Californians to be able to save for their future something deeply necessary as more individuals are in need of retirement security. This is a fantastic option and certainly the Legislature is here in partnership to be able to spread the word, to be able to help people connect with this opportunity.

I have no questions of my own. Are there any Members of the public wishing to address this issue or any issue? One last call that was covered today.

That's my cue. Good afternoon, Mister chair. I'm Santosh C. Ram, representing the Stop Aapi hate coalition. The coalition tracks and responds to hate acts against Asian American and Pacific Islander individuals in the US. Since the start of the pandemic, we've had over 11,000 reports of hate acts nationwide, with the majority of those hate acts occurring right here in our home State of California. With over 4000 reports.

In 2021, the Legislature and the Governor prioritized in the state budget a means to address the racially motivated hate and injustice that was occurring in our community. Since then, we've worked closely and regularly with the California Civil Rights Department to address hate and harm in all communities, not just our own. Most recently, when there was the horrific mass shooting shooting in Half Moon Bay, the Governor himself called Stop AAPI. Hate and asked us to respond, and we did.

We mobilized and provided a rapid response to that community with language, access services, coordination of mental health providers, and even raising money for the affected families and communities. I know the state faces a huge deficit and hard decisions are in front of you, but the work is not done. Hate continues to be on the rise across many communities in California. Stop AAPI hate.

We respectfully request that our state funding be renewed so we could continue this work, and it could be administered through the California Civil Rights Department. Thank you for your time.

Good afternoon. Chair Martin Radosevich, on behalf of United Way of Greater Los Angeles, speaking in support of a $20 million budget request to Fund the LA County affordable housing Solutions agency, United Way. La was a sponsor of SB 679, which created La Casa as well. And we are also pleased to sponsor this request, which is being supported by La Casa as well. It would Fund some innovative pilot programs and really help expedite and roll out this agency very quickly, quickly and expeditiously as well.

And they are doing their own. They're actively seeking some. They're actively seeking some funding. So, anyway, with that, I'll wrap it up. Just wanted to highlight that request, and we did send a letter for it as well.

Thank you. See no other Members of the public wishing to address the Subcommitee. I want to thank our panelists, both with us and those prior, for everyone's testimony here today. We have a lot of hard decisions in front of us and certainly a lot to internalize about the impacts that we're having through these decisions with. That Subcommitee is adjourned. Thanks.