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

Good morning. We will now begin Senate Subcommitee number three on the Budget for Health and Human Services. This hearing will take approximately two hours. Welcome everyone for coming. We will have four Department that will be up for discussions today.

California Health and Human Services Agency, California Health Facilities Financing Authority, Emergency Medical Services Authority and the Department of Healthcare Services. We will solicit public comment after completion of all of the presentation items within the agenda, at which time the public may comment on any of the previous items.

We will begin with our presentation from the Department of California Health and Human Services. You may begin when you're ready.

Good morning Chair and Staff. My name is Debra Cooper. I'm an Assistant Secretary with the California Health and Human Services Agency. I'm going to provide a quick overview of our agency and the departments we oversee. The budget staff has done a really great job summarizing in the agenda, so I hope to not repeat too much of the same information.

As you all know, our mission is to work together with counties, cities and communities as well as our public, private and faith and educational partners to make California a healthy, vibrant and inclusive place to live, work and play.

The work throughout this agency is guided by five priorities which are building a Healthy California for all integrating health, housing and human services strengthening social well being, equity and economic resilience advancing the well being of children and youth and building an age and disability friendly state for all.

We do all of that through our 12 departments that we oversee which are the Department of Aging, Department of Child Support Services, Department of Community Services and Development, Department of Developmental Services, Emergency Medical Services Authority, Department of Healthcare Access and Information, Department of Healthcare Services, Department of Managed Healthcare, Department of Public Health, Department of Rehabilitation, Department of Social Services and Department of State Hospitals.

We also do that through the five offices that we oversee directly at agency which are the Center for Data, Insights and Innovation, the Office of Law Enforcement Support, Office of the Surgeon General, Office of Technology and Solutions Integration and the Office of Youth and Community Restorations. The latter two of which you will hear in the next panel. For a budget year across all Cal HHS departments and offices, our total budget is $296.1 billion. Of that, 83.7 billion comes from the General Fund.

Of the state funds, 54.7% are attributed to Department of Healthcare Services, specifically MEDI Cal, 18.2% for the Department of Social Services, 9.8% for the Department of Developmental Services, 6.1% towards realignment funds and 11.3% for all other expenses. There are a total of 3,765 positions throughout the CALHHS Departments and offices.

As for the CALHHS specific budget, we have a total of 1.2 billion total funds, 260 million of which come from state funds, which is a mix of General and special funds. There are a total of 554 positions at CalHHS, the majority of which 417 fall under the Office of Technology and Solutions Integration.

I will conclude there and say again that this is just a broad overview of the activities at Cal hhs. We look forward to continuing to engage with you all over the next couple months, diving into each of our departments and offices work. I'm happy to answer any questions and provide follow up information as needed. Thank you.

Thank you. Any comments from LAO?

Ryan Miller LAO Nothing to add but available for questions.

Shelina Noorali Department of Finance Nothing further to add.

Thank you. So we can Any comments from any of my colleagues? Then we will move on to issue two Office of Youth and Community Restoration Overview and Juvenile Justice Realignment Block Grant Formula. You may begin when you're ready.

Thank you. Good morning. My name is Katherine Lucero and I am the Director of the Office of Youth and Community Restoration, also known as OYCR. Thank you for your interest in our office and the projects that we manage and implement as a result of SB823 and subsequent legislation.

I'm here today with my Deputy Director, Alani Jackson and I will refer you to her for budget related questions. We are also expecting Ahmed Nemer to join us with our Ombuds Division and he is the second in command as Elisa Hartz. Our Ombuds person is out of state on a family emergency.

As you are aware, OYCR is not a regulatory body. However, OYCR is the only state governmental agency that solely focuses on the health and well being of incarcerated children and youth, children and youth on probation, and the children, youth, families and communities impacted by the youth justice system.

We are policy leaders and Ta providers to promote a health based healing approach to justice systems, interventions for children and youth who violate the law when they are age 12 through 17 years old and in rare cases for children under 12. The Subcommitee has asked us to respond to a series of questions.

I will now refer to Deputy Director Jackson to go over the budget that we submitted.

Good morning. So you all did a wonderful job in the write up of our budget and so I also don't want to repeat, but I will just offer that oicr we are a single office within the California Health and Human Services Agency. In addition to our OYCR Leadership.

There are five divisions within OYCR Data and Research, Health Policy Ombudsperson Operations and Grant Program Support and Systems Change and Equity. Our office is made up of 37 positions of authorized positions General funds at 19.5 million title two funds for admin is 790,000 reimbursements that are for actually DOR.

I know I had submitted DHCS but it's actually a DOR reimbursement of 10 million for a total state OPS of 30.3 million.

Our General Fund is 208.8 million of which 12.2 are titled to federal funds issued across 12 grantees and local assistance of 221 million bringing our total proposed OICR budget to 251 million.3 and I know part of number one also goes over our key activities Ombud's recent assumption of Juvenile Justice Grant Administration.

So we will move to key activities and then hit all of the rest of the points as part of Number one.

Other OYCR Key activities that we wish to highlight today is our Youth Employment Initiative in partnership with the Department of Rehabilitation where we have entered into an an IAA to receive $10 million for three years from the Department of Rehabilitation to provide services to incarcerated youth to identify those who qualify for DOR services and then provide workforce development coaches upon their release from incarceration.

We have I believe nine counties participating in that initiative. We also have our Ending Girls Incarceration Initiative where four counties are being funded to look at robust diversion activities for girls and gender responsive youth, recognizing that over 50% of girls are arrested and detained for status offenses and misdemeanors.

We also have our Capacity Building initiative with the Sierra Health foundation which includes Justice Serving Network Development that are now setting up 33 CBOs to be paneled and credentialed for enrollment into services with Medi Cal.

We have a less restrictive program grants granting 11 counties funding to build a continuum of care to step kids from syts to the community. That's our less restrictive program grant program. We have a very detailed educational health agenda which includes literacy intervention specifically in the juvenile court setting.

Because of the success of the pilot that we had in San Diego, this effort will now be expanded to three counties. In addition, OYCR is supporting the expansion of the Prison Education Project PEP into the Central Valley and established a new Reintegration Academy at California State University, Fresno.

OICR is also working with California Community College Chancellor's Office to support the restructuring of Rising Scholars Network, working with Project Rebound and underground scholars, CSUs and UCs respectively to create pathways for four year degree opportunities so students who are incarcerated are not limited only to associate degrees.

It wasn't uncommon that youth in DJJ would leave DJJ with two or three associate's degrees and we're hoping that if youth are in long term incarceration that they can leave with four year degrees.

The Educational Health Module of OYCR website is the most comprehensive collection of data related to all juvenile court schools across the state including academic performance outcomes, specific school based information and resources for students attending juvenile court schools.

OYCR hosts an education Advisory Committee monthly to provide an opportunity for juvenile justice educational health partners a place to share best practices and problem solve obstacles. We work to elevate educational opportunities for students in detention settings. We also have a Youth Advisory Board that has formed 20 youth currently who are formerly justice impacted or currently incarcerated.

We are currently managing over 50 contracts and numerous Ta requests from both CBOs and counties. We did submit a written response for the Ombuds Division and if you have anything specific that you would like to ask me about that written document or if you'd like me to go over it, I'm happy to do that. Anything specific?

Can you provide a quick overview? Sure. The Data summary for the 2024 numbers we had 296 complaints. 156 complaints have been closed. We declined to investigate. 8425 findings were unsubstantiated, 21 were substantiated, 18 no findings, 4 were inconclusive and 2 were referred out.

The Ombuds Division did 84 visits and also sent out over 5,000 Youth Bill of Rights posters and 40,000 Youth Bill of Rights brochures. The Ombuds Division answered approximately 2,500 helpline calls, so that was in an outward bound.

The 2024 data will be in our legislative report that is going to be delivered soon along with the 2022 data, the 2023 data and and some of the 2025 data. The contacts to the office we had 173 youth complaints in 2024123 General complaints. The race and ethnicity is documented.

112 of the complaints came from our Hispanic youth and families. Also other General complaints come from staff attorneys, educators. In the other category, African American black complaints were 69. Multiracial were 46, white Caucasian was 39 and then there was a series of other calls. Less numbers of course. The gender identity of the youth were significantly male.

Only 51 were female, 22 preferred not to answer that question to transgender. We also have broken that down by age and complaint types and then the source of the complaints. The complaint types are anywhere from food complaints, excessive force, denied visits, denied calls, conditions of confinement, and that. Those are the types of complaints. I also.

We've also listed for you the counties that had complaints and the findings for those counties in 2024, and that was in the written documents as well. I think what's significant to recognize is that complaints are coming from all over the state. It's just not our larger counties like LA and San Diego.

Our Ombuds Division takes great care in investigating complaints they think need to be investigated. And that can take a number of days, depending on how well and how soon we're able to get documentation, look at files, look at videos, that kind of thing. Again, complaint issues and types are listed for you.

And the highest complaint category is abuse and punishment, and then staffing, family engagement, medical health programming, and incentives, and that is available for you in writing. Any other questions or do you want me to delve into that more? I also have Ahmed Nemer here with the Ombuds Division, if you have.

Yep. Have a seat. So I think what we'll have you do is go ahead and answer all of the questions, and then we will ask you our questions at the very end. Thank you. Okay.

The next question relates to the fact that we recently assumed responsibility for all Juvenile justice grants, and I would like to report that they have all been successfully transferred to OYCR from bscc. We have been collecting data by issuing templates, holding office hours.

We've been collecting data, analyzing data, reporting data, and continue to do any required reporting for the grants that we took over, which are JRG, the JCCPA, YoBG. We have also been administering the Title II grants. So I'm going to go ahead to the next questions and leave questions about the grants, if you have any, until afterwards.

Your next question is to describe oycr's proposal for the JJRBG formula revision. How does this address the mandate to develop the formula in a way that improves outcomes for youth?

The formula improves outcomes for youth because the formula no longer focuses on a factor that is based on how many youth are incarcerated, such as the 2018 DJJ number.

But it focuses on giving counties enough resources for the number of youth between the ages of 10 and 17, for the number of youth adjudicated for 707 offenses, and for the number of youth who committed those offenses but were not placed in an Sytf, and the number of youth who are placed in the less restrictive programs from an SYTF.

The new factor replaces the 2018 DJJ number and builds in the concept that less restrictive programs are part of the youth's continuum of care when the youth has one committed a serious crime but does not need long multiple year incarceration and two when the youth is committed to an SYTF but can spend part of their baseline commitment time in a less restrictive program which includes safe and secure placement in the community.

This new third factor which is the LRP factor in the formula does move the infrastructure towards alternatives to long term incarceration when it is safe for the community and in the best interest of the youth. This was a key part of SB823.

The manner in which we have a ramp up in the formula revisions shows allows for counties to prepare for the LRP continuum of care which also ultimately benefits the youth. In our juvenile justice system.

We are hoping for sustainable alternatives to the secure youth treatment facilities that are well designed in partnership with key government stakeholders as well as community based organizations.

That is why we have invested 15 million in grants to 11 counties and continue to look for ways to support counties and communities in the building up of these less restrictive program alternatives. The third question is Please address concerns that have been raised by stakeholders about the Administration's proposed JJRBG formula.

Specifically, how will the formula distinguish between LRPs that are based in the community versus LRPs attached to halls, camps or ranches? At this time the formula does not differentiate between LRPs that are Title 15 governed and those that are in the community not covered by Title 15.

However, our AB169 data does differentiate so we will know how many youth are moved from an Sytf to a title 15 versus a community based less restrictive program. B.

What is the intention of combining two factors, the number of eligible youth not committed to an SYTF and the number of youth transferred to an LRP into one component of the formula. This is not either or. The recommendation is to count both youth not committed to SYTF and youth transfer to the lrp.

This is to promote not using the SYTF if a suitable disposition can be made as an alternative to long incarceration and overall long term exposure to multiple years of incarceration for a youth who has committed a 707 crime and to also provide an incentive to step down to a less restrictive program after they have been committed to an Sytf.

So it's two different numbers. In the past counties used ranches and camps as a DJJ alternative. When I was on the bench for 22 years. One of the things that our county continually tried to do was develop alternatives to DJJ by creating things like ranches and camps.

We don't want judges to just say send kids to the SYTF when there's a suitable alternative.

So we want to make sure that we're not creating some sort of a structure that incentivizes that this is aligned with the with that effort only now it would be an SYTF alternative disposition for a 707B offense instead of a DJJ alternative.

OICR did not want to create a system where it appeared that we were favoring placing all youth in an SYTF before they would access an alternative like a less restrictive program.

We wanted to make sure that we were also acknowledging the diversion from the SYTF by including that 707 adjudicated population being steered away from an SYTF to an alternative. To do so would otherwise cause a reverse incentive how does the state track county spending of JJRBG funds? Specifically, are counties fully spending their JJRBG allocations?

The state does not track whether counties fully spend their JJRBG allocations, and there is no statutory requirement for counties to report actual expenditures, provide budget detail, or submit financial closeouts.

Counties are required to submit an annual plan to OYCR that includes a narrative description of how they intend to use the funds to address a specific area of need for the realigned youth.

While this information provides insight into how counties intend to use their money and their strategies and service priorities, it does not include verification of how funds were actually used.

Funds are disbursed annually by the Department of Finance based on the statutory allocation formula, and this occurs independently of whether or not OYCR has reviewed or accepted a county's annual plan. So the state has no visibility into whether the funds are fully spent, partially spent, or unspent. How are counties spending their JJRBG allocations?

While counties don't list expenditures line by line, their plans show that the JJRBG funds are being used to support facility upgrades, mental health, substance use treatment, education and vocational services, and evidence based program like cognitive behavioral therapy. Many counties also report investing in mentorship, credible messenger programs, and training in trauma informed care.

A number of smaller counties are using funds for regional contracts to place youth in neighboring facilities when local options aren't available. Our office does keep a running list of every single county and how they are spending the JJRBG funding. We often get calls from counties asking what's allowed? How can the money be spent?

And so we like to have an inventory of how counties are spending their money. And we like to also have a broad interpretation of that so that we're encouraging counties to spend the money on services directly for youth and for their services and for their housing. Those are all the questions that we were sent.

But I would, I don't know if anyone else at the table has any remarks on this question. Thank you so much.

Any comments from LAO DOF? No. Senator Menjevar, I saw you looking.

It's such a favorite topic of mine. I have a billion questions, Director. So let's start, and I hope my colleagues will indulge me here. I'll start with one of the. I'll start from the bottom talking about the tracking funding and so forth.

I'm wondering, though, if we don't know how counties, if we don't, if we're changing the formula and we don't have a way to look at how much funding is being spent, spent or not spent, how can we then adhere or fulfill the promise of the intention behind this?

If we're not able to support positive youth development because the counties aren't spending the money, are we then failing. I'm thinking about or other halls that are, for example, Los that are in State Defiance right now. Are we automatically just going to give them money? We were asked, BSCC told them to shut down. Are they automatically going to get money?

My understanding that the current statutory construction. That would be, yes,

That is a complete failure on our part to give a location that has been asked to shut down automatic funding that will leave no trust in government. What is the point of BSCC? What is the point of asking these facilities to shut down if we're going to automatically just give money?

That goes against the whole intent of the realignment. I think if we're going to change the formula, we need to account for these dollars. We do that for any kind of state dollars, or we should be doing that for any kind of state dollars. Are we just.

We're under the scope right now because we can't account for how we spend our money for homelessness. This is the same thing. We're going to have this vicious cycle. How do we know we're being successful if it's just sending it out?

I do appreciate the breakdown that further helps to incentivize, but I think we're doing a big disservice not to the youth, but to our taxpayers and not really ensuring that if the money is not being sent, what's another way we can reallocate those funds? The whole point is for counties is not to sit on that.

On that funding, on the breakdown of the last incentive or the last category of youth not placed in SYTF or transferred from SYTF to lrp. I heard your reasoning to that. I'm wondering, though, you know, from your experience on the bench, there should be an incentive, right, for judges to not transfer to Sytf.

But by grouping the incentives together, I would feel. Or maybe I'm assuming probation doesn't need to do anything if judges are going to take the load off of me and help us get to this incentive.

What incentive do I now have as a probation officer to have step downs or put my youth in a step down location if we're going to meet our quota by just the judges in breaking them down, in breaking them apart?

Because there should be an incentive for judges and there should be an incentive for probation officers in breaking them down. Judges can meet their quota and probation officers still have an incentive to step down. Because again, I don't, I don't need to do anything as a probation officer if I just need to depend on you, a judge.

So thank you for that question. Judges depend heavily on the recommendations of probation. In a courtroom, you have a DA, you have a defender, you have the probation who is looked at as the reasonable mind and not as an advocate for either side. Judges then get recommendations after every.

The judge takes jurisdiction and then gets recommendations on what to do with the youth. So there's a high turnover on the juvenile court bench and judges rely heavily on those recommendations. It's very much, I would consider it teamwork.

I mean, I would look to the probation recommendations, I would look to the fact that they did a social history, thorough background on the family, on the youth, and they would be telling me what works for the youth, what is the best direction for this youth. So I understand that ultimately the judge always makes the final decisions.

But there's a huge partnership between the probation Department and the judiciary in juvenile court. The probation Department actually makes a recommendation on what disposition is best. And it's very unusual for a judge to go against it. It's often common for a DA to object or a defender to object.

But again, I think it's not just a judicial decision to have a youth diverted from an SYTF or a youth to step down because the probation Department is making those recommendations and they are heavily counted on.

And even in those scenarios, and thank you for further clarification. Even in those scenarios, we're incentivizing just the prevention, which is great, but then forgetting about the youth inside and not basing any or giving any carrots for the youth inside so we don't have to focus on the youth inside.

If we're preventing, which is great, removing, we don't send them to Sytf, but then by default we're forgetting about the youth inside and that removes the lens of the step down ability.

I get where you're coming from, Director, but I still think we're just putting the entire carrot on the prevention, which Again, I always fight for, but we're forgetting about them. Additionally, not all LRPs are created equal and you shared that in your remarks. But we actually have data. You pointed to the data that we have.

If we have data of the different kind of LRPs, why can't we then embed that kind of separate LRPs in the formula? Because an LRP attached to SYTF is still an Sytf. It's still. The surroundings are still the same. Why should we incentivize people for moving someone from one building in the same location to another building?

Maybe different services, sure, but it's still an Sytf and they're not all the same. Then what would incentivize me to actually move someone to a real lrp? Why would I do that if I'm going to get the same funding?

I think that this is a, this formula that's been proposed is a starting point and that this is an iterative process. And we have, as you know, we did many listening sessions with both advocates and probation and all of this was brought to our awareness. And you make very valid points, Honorable Senator. And I think that what I would like to say about that is that we continue to take that in and I, I think that.

I know you can't. No one can commit to anything right now. I know you're just listening to some of the concerns that we're bringing up and I appreciate you jotting down, jotting down those notes.

And I know this is the first time you're coming to us to present this new formula and we have a couple of months, but it goes by in a blink of an eye. I'm hopeful that by the next time and in the may revise, we do have critical changes. This is a great start, Director.

This is a great. I'm really excited about how we're changing this formula for the better. There are some tweaks that we can just cross this to the finish line to really get at the systemic changes of the lives of these youth and not depend so heavily on some of that still antiquated approaches here.

One other thing is that we're using data from 2018, that's six years ago. And when this is going to be implemented, it's going to be nine years. We have data that we just collected from counties last year, if I'm not mistaken, or two years ago. That's accurate numbers.

I'm wondering why are we using outdated numbers or data versus more recent numbers that give us an accurate amount more closely to how many youth we have and where they are.

My understanding is the only factor that stayed static was the DJJ number and that the DOJ number was updated annually, which is the 707 adjudic. I still believe that there are concerns from advocates that that is not an accurate number.

Which one? The most Recent or the 2018?

The most recent DOJ number of 707b's that are adjudicated because we took out the DJJ 2018 number in our new formula recommendation. But then there's this adjudicated 707 adjudicated number. My understanding is that that is updated, but it is still not a number that the advocates believe is accurate.

And they would prefer that we use the AB102 number, which we are getting to our offices annual until the AB169 kicks in, and we'll get it twice a year. I do have our data expert here and I wanted to check with him, Christian, is that accurate? Okay. And Christian is saying thumbs up. So the DOJ.

So the 2018 numbers, we're continuing to get that annually.

Hi, sorry, this is Shelina from the Department of Finance. So I can see where the confusion is, but the data source is the JCPSS data, but the language proposed said that it's annually based on the most recently available data. So we do get updated data from the JCPSS system to issue the allocation.

Okay, great. Thank you so much for that clarification. Appreciate that. What is the rationale for pushing this out until 2027?

As indicated, we had the listening sessions. There was a request that we not do this quickly because, for example, this budget year has already been planned by the counties. So they did not, you know, they wanted some stability. They, the counties also wish to have stability in rolling out the programs.

And so we, we talked about how long that would take to roll out, you know, what would be comfortable. And so we land the fact that this year and next year would remain static, but going forward we would start to incorporate the LRP data. So it was trying to meet the needs of all the stakeholders.

Some stakeholders saying, please, we need to count on something. We need stability. Other stakeholders saying, we really need to build in the reform work of SB823 by looking at LRPS. This was us looking at how to do that in a manner that was a rollout instead of a cliff.

Counties are asking for a little bit more time.

Yes.

Okay. Okay. And okay. And by then, I'm hoping they're going to be phenomenal caretakers of our youth if they're asking for this extra time, I just want to point, and I said this already, Director, about the tracking. And I was just reminded that even the audit recommended that we track the funding.

You know, I've been very critical of my county. I mean, we sat on $88 million in LA County. What happens with that money? Do they continue to sit on that? So I really think there needs to be language. One, that we track this funding and two, language that doesn't look at this formula as static forever.

Like this is the permanent formula. We need some language in here. Respectfully, Madam Chair, through the Chair, that allows for us to reevaluate this formula because this area is ever changing. If we're looking to do the end incarceration of girls, do we then need to adjust this formula if we've reached that milestone?

So I think there should be language that changes or reevaluates and that tracks funding. I'm going to stop right now and turn over to my colleagues for any additional questions.

Thank you, Senator Mengavar. Senator Grove.

Thank you, Madam Chair. I just so appreciate my colleague from the LA Bay Area, but not exactly in the LA area. Sorry. So I'm going to check off funding, I'm going to check off the 88 million that I wanted to ask about for LA County and if they keep the money.

And I'm going to check off two more things. But I do have a couple of questions regarding that weren't asked by my colleague who is very good on this particular subject. In this issue. I have concerns with the Governor's Budget.

And I want to know, as someone who sat on the bench for several years and has the experience in this area, do you think that by squeezing the probation departments, right. They're going to have limited funds to service? Do you think that there's an intention or that it will result this.

Either it's intended or that it will be a result of the way that this formula is going down, that not adequately funding probation departments would send a message to the courts that only violent offenders would be put to low level settings.

And if we're not funding probation and we send violent youth offenders to low level settings, do you think that is something that will be, I guess, forcing the courts to do that?

And the reason why I say that is I think that district attorneys and what I've heard from the probation officers, district attorneys and judges will stop sending juvenile offenders to secure facilities, that they'll go to more low level facilities.

With your years on the bench, do you think this restructuring of the funding formula, not funding the probation Department will do that unintentionally or intentionally if you think it's intentional.

Well, the funds are still going to the probation Department. So I guess I'm a little puzzled by thinking that they're not.

So the probation officers have raised serious concerns of the Governor's proposal that the new formula will eat up their base operations. So they'll get, they'll get less money for base operations, that they won't be able to deliver services to the impacted or justice impacted youth.

And so when you look at things, I mean I've been here since 2010, so you go back and think why would they try to do that? Like what's the purpose of that?

And so my question to you, is it intended or unintended that reducing the cost for probation officers to do their job for impacted justice, impacted use, is it going to send high level youth offenders to low level security, you know.

Facilities DJJ was not robustly used. Those were the most, you know, we, we sent kids there that generally had committed homicide or attempted homicide, very violent crimes where there wasn't an, a carceral setting set up in the county that would be long enough. Most counties have at the most a one year rehabilitation program.

Those are the ranches in the camps. By incentivizing LRPs, it is the same population that is supposed to be served through the realignment it's contemplated in the statute. Less restrictive programs are contemplated in the statute and the money was to go to custody and services.

So I guess I would say that I don't believe this is cutting away the baseline that these dollars are still going to probation only. There will be a very small percentage that is based on their use of alternatives to the Sytf. And keep in mind that alternatives to DJJ were already robustly used in my county that we sent maybe 33 kids a year.

But during when it was, I don't know if you remember Senator, but there was a time when DJJ was very expensive and so counties weren't sending as many kids and then it became less expensive so counties began to send more kids. So I guess I'm not seeing that as an, you know, an issue.

I don't think anyone's trying to undermine county probation departments. There's also these kids should be followed if they are going into the community or if they're going to a ranch or a camp instead of an SYTF, that money should still stay with probation and for the care and supervision of the youth.

Now if they go into the community to a less restricted Program like a Halfway House, for example, is what we're seeing. I believe that the money is still intended for that purpose. And there's a great deal. There's millions of dollars that are going out every year to the counties to serve the realigned population.

Okay, thank you for that. And again, I'm not accusing anybody of making it intentional. It's either intentional or unintentional. And we don't go through that.

Senator, it's the same amount of money that we've been sending. It's no decrease in money whatsoever. So the same amount of money since the realignment will continue to go down to probation. And probation is lead at most of these facilities except the community support ones.

So if, and I appreciate that, I do, I appreciate that and I know this is your subject, but I've been meeting with probation officers that feel like this is going to detrimentally affect their ability to perform their job for these impacted or justice impacted youth.

And we should ask them then why are you sitting on $88 million?

Well, I'm not the county is.

That's what I'm saying. Like that's money for probation to use. Probation sits on the councils that determine how the money is used. And they have the ability to say, we're going to use this money here and they're not spending the money.

Well, that's going to. Through the chair. I apologize, Madam Chair. Through the chair. That's where I focused on. And I don't think that we could dug down deep enough into the $88 million or resources that are allocated that, that don't get spent.

So how many justice impacted youth were affected because they didn't get the treatment, they didn't have the security that they needed in these facilities? And I want to go a little bit more deeper on the dive of 173 youth on those numbers. So I want to go into that territory.

But my understanding is from the probation officers that have come in to talk to me again, they were not LA County probation officers. They were more rural counties. And you know, their issue is like, we're out of money, but yeah, and they're going to decrease. This formula decreases. But LA sitting on $88 million.

And then the question I also had that my colleague covered was, you know, you have a facility that's directed to shut down and you're going to send them money. And to me and to the average Californian or a reasonable person in California, that makes zero sense, like zero cents.

We have directed this place to shut down because of what's going on in that facility. And we're going to send them money. They get a percentage of the pro rata share of the allocation, which. Why is that?

Hi, this is Shelina from the Department of Finance. So statute mentions that finance issues the allocation. And currently there is no statutory requirement to withhold funds or receive in the annual plans that are submitted a thorough explanation of the expenditure. So there is no statutory authority for finance to withhold funds.

So that's just absurd on our part. So I apologize for that because we should have some type of something. I mean, what happens. I mean, we sat here a year ago in this same Committee or Budget Committee hearing and there was drastic abuse in a particular facility. And it's just absurd to me that there's no authority for you to withhold money from those people who are abusing kids or anyone.

Yes, we hear your concerns. And again, you know, this is our proposal as the Administration and you know we're open to working with the Legislature as we go through the budget development process. But I also wanted to add one comment that two of the variables remain the same as the original formula.

So we still have violent and serious offenses and the youth population. So I think the administration's perspective is that we are continuing to provide a stable source of funding for county probation and as Senator Menjevar said, that the net allocation remains the same in statute. It's the 208.8 million. So we're not reducing the amount of money.

We're just keeping two variables the same, adjusting the percentage and then providing an incentive to utilize lrps.

So I think the point is, I think that if you keep that many the same, it's been the same for how many years?

Well, the Statute does have two provisions that allow the 208.8 to be augmented by a county floor and growth commensurate with 2011 realignment. So that 208.8 million. Yes, 2011 realignment, that was the public safety realignment. So there is a growth factor that is applied to the 208.8 million. So that is also laid out in the formula.

So the. Yes, the 208.8 is a baseline, but it is also adjusted one to provide counties with a county floor if they are not receiving a part of the 208.8, but also to provide to growth as well.

Please tell me that those numbers for growth are not based on a 2011 realignment.

No, no. I can pull up the statute specifically.

But I think what you're saying is the law allows for growth.

Yes, but not based on 200 or 2011 numbers. No current numbers. Right? Yeah. The law and pensions and resources and hiring individuals. Okay, so it's increased.

Yes, sir.

Yes.

Orlando Sanchez with the Legislative Analyst Office. The growth factor that's kind of built into this baseline is based on realigned revenue. So this is based on sales tax and vehicle license fees. So whatever growth there is in that section, some of that is then used to create this growth for this realigned population.

So these, these, these impacted just youth. And the probation departments that serve them are attached to vehicle license fees and a percentage of resources. When people have their vehicle license fees renewed.

Right.

And sales taxes and sales tax. And so if all of that goes down, these dollars go down.

And I think that is why we have the 208.8 million baseline and a county floor. Because yes, with revenue projections, things are, things fluctuate. And so that is why the proposed formula still has the 208.8 as the baseline.

So if, to answer your question, if those go down, there'd be no growth. So a county would get the same funding that they got the prior year.

Exactly. How long has that been going on? Has the county got the same funding? County's getting the same funding for the prior years.

There's been a time frame, there's been a ramp up of the formula since the closure of DJJ and the full realignment. So in its first year, counties were getting a set amount for, based on the number of youth or wards that no longer went to djj. And that's been ramping up and it's reached full implementation now. And as of 24-25 that's the first year of the growth. So prior to that, counties were getting less than the 208 million that they're getting now.

So just because, you know, I know we each represent a portion of this state, especially on this side, there's 40 of us, so roughly a million people each.

To realign a state operated organization, you know, it was state operated and throw it to our local counties without the proper funding to make sure these youth are taken care of, they get the proper services. I mean, I hear your heart sitting on the bench all those years. I do.

I know you were a judge, but I hear your heart. And I bet you were one of those people. And I'm just throwing this out there that looked at the impact of that child's life. Like, were they impacted by foster youth? Were they trafficked? Were they, you know, what caused them what trauma in their life?

I mean, I really. I think there's a very small percentage of kids that wake up one day and go think, I think I've got to commit murder.

I think there's things that happen to them throughout their life that we fail them in as a legislative body by not providing protections or issues that affect them in their daily life. So I hear that from your heart. You know, I could be wrong, but I just, I am just saying that.

But there's got to be something out there that allows us to provide us or the counties or where we designate the funds or where you designate the funds to address these impacted youth, no matter how they're impacted.

But again, the people of the State of California have spoken with Prop 36, and they don't want violent individuals out in the streets. So it's a balancing act. And I realize that you have to do that, and I realize that we have to do that.

And I'm not talking adults that go through process, but I'm talking about these youth. So we're focusing on youth. The $88 million, are you. Is there legislative.

Is there something out there like where we can pull that money back because they're not spending it and give it to people that are spending it in the proper way to impact youth or there's no nothing in the statute. So what are they going to do with the 88 million?

And you're just going to add to it right this year, and they haven't even spent that to. And what's their failure rate? I mean, if they're. If I'd like to know those numbers and you don't have to give them to me now, but if they are sitting on $88 million or any county is sitting on any type.

There's 58 counties. If you have counties out there that are sitting on a substantial amount of money and they are not providing youth. And I'd like to specifically know, based on the cases that you guys have investigated. Let me get back to that number. Sorry. Here it is.

I'd like to know, out of abuse and punishments, how many complaints came out of that county that's sitting on $88 million, how many of those 53 cases, I mean, I'd like a breakdown of that so we could see if they're not spending money to protect these kids, which is causing this issue for them to be punished for whatever reason.

I mean, I've read stuff where they were forced to eat a pat of butter at dinner. No kid wants to be forced to Eat a pat of butter at dinner, of course you're going to get mad and throw a chair and then to be locked up or isolated, that's ridiculous. So I want to know.

I do want that in a separate. I do want that. I want that information because I'd like to go over that. I'd like to find out what counties are not using the resources that we give them to make sure that these kids have a successful outcome. With this experience.

We will do our best to get you that information, Senator and I. I know we have our ombuds deputy chief here and we will see what we have so that we can correlate those numbers.

I know that we don't know how much, say, let's just say San Diego has, you know, 70 complaints and half of those are excessive force. We don't have any way of knowing how much money they've spent or not track it. You guys don't track it. We're not.

There's nothing in statute that allows us to track how much is being spent. We can tell you what they tell us they spend their money on in.

Their annual plan so they self certify they spent this money. But there's no. And the Auditor just did an audit.

There's no itemization. There's no, no,

it's a grand total.

It's just a, it's just a summary of, of the services they provided with the dollars. It's not necessarily like an itemized budget of costs.

So being in the minority party, I'm looking at my two colleagues and this is something that needs to be fixed.

We also don't have any data on recidivism, so we don't know if their programs are working or not because there's no statutory mandate for recidivism.

I would like, with the chair's indulgence, I would like to give you that. I would like you, any of you, to give me the top three things that are going to make this system work better for our impacted youth. Tracking the dollars would be one. Right.

What's something else that needs to be in statute that would help you, help us, help you make sure these impacted youth have the services that they need?

Well, I think understanding outcomes is important. What does that mean? How well their program is. Yeah. So outcomes, goals, outcomes.

How well their programs. You can't just say we're doing sip and paint. How did that impact the youth? Right. Like, how impactful are these programs?

And then ultimately the recidivism. We did track that at DJJ. I won't say it was 100% every year, but we did have the notion that it was about a 70% recidivism rate. And that was part and parcel of why we moved to the realignment. But we don't have any such ability to track that at the 58 counties.

Okay. So. And then is there anything else that you could think of that would help you guys, help us help you make sure that these youth are taken care of? And I am again, I sit on rules and I interviewed Ms. Johnson.

I think her background in the social services piece of this is going to drastically change how this Department operates. And there is going to be. What I love about her most is she's very well balanced.

So I don't think we're just going to have somebody in there that's going to release everybody because, you know, the flowers are blooming. Right.

She's going to do effective planning and making sure that there is some type of compassion with individuals who have been just as impacted or socially impacted by the way that they were raised or what happened to them.

But there's also going to be an accountability where if you do these things or do these things, no matter what happened to you, we'll help address that. But we're going to address that inside a secure facility.

So you don't do that or have a negative impact on our constituents in the State of California who deserve to live in a. In a crime free or a safe environment. Okay. So I love. But that just started. So I'm very hopeful with her. Is there anything else you would like to add? We have those three. Is there anything else?

I think we should more closely track dual status youth, youth that cross from foster care to the juvenile justice arena. We don't have a clear way of tracking that.

Wow.

And then we also need to include youth who offend sexually. The treatment. The professional certifications need to come under the California Sex Offender Management Board. Currently, it's not a requirement. Right. For every county to provide this kind of treatment. No. And so we have.

We know that some youth are being committed to carceral settings but not receiving the treatment that was so well designed and had a 3% recidivism rate at DJJ. And most youth are rehabilitatable who commit youthful sex offenses. And they are not predatory. They are usually opportunistic. And it's also often familial based.

I mean, there are cases that that's not the case and those are the extreme cases and they should be accordingly treated. But for the vast majority of Our youth who are committing youthful sex offenses. There is not a standardized treatment modality, and in some cases there is no treatment. So that there is.

The California Sex Offender Management Board released a year end report, which I have a copy of if anybody wants to see it, and there are specific recommendations to bring the CASOM guidelines for youthful sex offenders back under the California Sex Offender Management Board so that those treatment providers can be certified and so that counties have a really clear idea of how youth can be rehabilitated who have committed those offenses.

Okay. And I appreciate that very much. We have this and people can go back to the recording of this as well, but I wrote them down. I just want to confirm because it is making me sick to my stomach. You're telling me there's no way to track dual status youth?

Somebody who was ripped out of the arms of their parents at no fault of their own because their parents were, I want to say shitheads, but I'll get in trouble for that. And they went to prison or whatever, and these kids are ripped away from their home.

They're put in the trust of the State of California, which assigns them to some kind of foster care system. And there are good foster care families out there, but there are a lot of horrible foster care families out there.

I mean, when we did human trafficking, we found several foster care families that were trafficking their foster care child. You know, so that data is overwhelming. So you're telling me there's no way to track if they've been in the foster care system and now are in the juvenile justice system?

To my knowledge, and I feel like I would know because that was such an important thing for me as a judge and now as the Director to find those data points. And I have talked with UC Berkeley, that tracks does the child welfare tracking for the State of California. And I've asked them to include that in their work. But to my knowledge, nothing currently is being tracked.

So I think that's a complete failure for our youth. It's not their fault they're in this situation. It's because they don't have custodial parents or grandparents or whatever. It's not their fault they're in this situation.

And to have that happen to them and us not even be able to have the data to try to cross reference that, to protect them, to see if that got them to the place where they're in right now. I mean, that definitely needs to be fixed. I know I'm running out of time.

I see the chair pushing that. I want to break down And I want an explanation like there's 296. I guess that would go the on specimen. There's 296 complaints. 156 were closed. What does that mean closed? Not relevant. Whether non determined, not substantiated.

All of the above. All of the above? Yes. We investigate the complaints. Either we substantiate, unsubstantiate, no finding or decline to investigate or inconclusive as well. We have many categories for after we investigate the complaints. And those 296 complaints, the one that we closed the varies between being unsubstantiated or substantiated.

Does a complainant like in rules when we investigate complaints and we make a determination, the complainant and the respondent both get a letter. Do you guys provide a letter to the family or the child or whoever makes the complaint that says we investigated this? There was this, this, this was not substantiated. And then they have the right to appeal that or it's just done because you closed it.

No, we required by the statute to provide the written document to the and the chief of the county as well. And we do that mainly for the youth. We don't provide them the letter. We talk to them over the phone. Because all the letters goes to the youth opened by the. By the Department. We talk to them and explain to them what happened.

And my last question that I want to ask is or that I can ask, I guess I have a lot more but abuse and punishment, when there was a comment made and I'm trying to find it, I wrote it down that talked about the abuse or. I.

Apologize, there was a comment that was made and it talked about the abuse or the restraint or whatever. The comment was like give me some examples of those. Like 53 abuse cases. What is the definition of abuse?

I mean I have my own definition of abuse and I'm sure my colleagues should do but what's your guys definition of abuse?

Use of force against the youth. Use of what's use of force?

Holding them down, prone position, locking them in a facility. Like what is use of force? What is an example?

Use of force mainly is the hands on. When they restrain the youth. You put hands on them. This is the use of force. Okay, so use of force. Yes, the pepper spray.

Pepper spray. In what cases do we pepper stay 12 to 15. I'm just asking 12 to 17 year olds. 15 year olds.

I don't have the breakdown for the. How many of these abuse and punishment are pepper spray? How many, how many of them are.

And you don't know how often that takes place. Is it a daily occurrence?

Not all the. Not all counties are the same. Some counties, they don't use pepper spray at all. Some counties.

What counties use pepper spray? Pepper spray?

I can say San Diego, Louisiana.

Yeah, most counties use it. Seven counties. I believe it's seven counties that don't, but most counties do. And then the counties that have the most, a lot of kids. And. May Sonoma county use it? No. And Santa Clara does not use it either.

So. And then I guess, and I promise. Madam chairs, my last question. Out of 58 counties that you guys deal with, what county do you think?

And based on the information that you have, any county, what county do you think is the very best at making sure these youth are taken care of, rehabilitated, and brought back into society? And what county do you think is the very worst? And I'm not trying to call out counties. Sonoma. Sonoma is pretty high up there, right?

Could you stop? It's my question. And the only reason I'm asking is that what I think we should figure out, and I'm asking for, like, future legislation. Like, we should model what works. We don't need to reinvent the will and give somebody $88 million. It isn't going to spend it, but. And we don't need to. I'm just trying to say, if you had a county that was the best, which county would it be? And what are they doing differently that other counties are not?

But how could I not know if you can answer that question, if you're not tracking the data in terms of recidivism? Because when you're talking about how well a county is doing, it's not only how are they treating the youth inside, but also are these youth not okay?

That's a fair question. But with the data you have now or the data you have now, like, what would you say and what do you think they're doing right, that would help model other counties?

I mean, what I'd like to say is that counties all have strengths, okay? And then. And then there are. Then counties have, you know, have points where improvement can be made. There are some counties that have gotten awards for their programming, like San Luis Obispo County.

So we could probably get you a more educated response so that I don't miss anything that needs to be highlighted. But I think also in the Ombuds Division report, you're going to see a breakdown of where the complaints came from and whether they were substantiated or not.

So I gave you some raw numbers, but there's going to be more detail so that there may be a better sense of the fact that some of these complaints are resolved very quickly. So there's no investigation. Because most counties are very willing to work with us and resolve because they don't want. They don't want complaints. No.

And they want, I mean, the folks on the ground that are working with the youth every day. I mean, I can honestly tell you most of. Because I have been to every facility myself and I know our ombuds visits annually because of AB505. But these kids are with people who care about them. Absolutely.

And, and who, you know, gosh, everyone from chefs to nurses. There's a lot of goodness happening. But I think that there are some counties that have some model programming, you know, counties that have really great incentive programs for the youth.

So I just, I wouldn't want to say, you know, such and such is the best county and everybody should. Especially since numbers matter and size.

It's an unfair question and I apologize. I wasn't thinking that long. I was trying to figure out, like my colleague mentioned, homelessness. We've invested 24 billion or more in homelessness. And it's gotten worse. I mean, I pass 300 homeless people on my way an 8 mile drive from where I live up here to the Capitol.

It's crazy, but. And it's just gotten worse. And most of them are old and, you know, people of color and these young women and, and we spend a ton of money on them. And what I don't want to do is I don't want to. I don't want to fail these kids anymore. I don't.

But I don't want to fail the public that wants to be safe either. And so there just needs to be better tracking of what works, what doesn't work, where the money's going, because we can't, we don't know where the money. $24 billion went in the homeless. Right. So. And I'm not trying to throw another issue into it.

I'm just saying that we just have to do a better job because these kids are our future. So sorry. Apologize. Thank you, Madam Chair for your indulgence.

I want to thank both of my colleagues. Definitely want to thank the panel. I think this is a very, this is a topic that, you know, we're very much interested in, very much invested in.

And I think you can see that given the amount of questions and the amount of time, this may even need to be just a hearing to hear more about the data portion and what's happening once you have released some of the reports. So I won't belabor most of the issues.

I am very concerned about the inability to track the funding and the inability to hold counties accountable and the ability to have that funding come back if it's unused. And, you know, I understand that you all have stated there's no statute that allows that. However, we put statutes and budget trailer bills all the time.

And so I'm puzzled by the fact that we have an audit that talks about the fact that we have a county that has, you know, 88 million and only. And less than 10 million of that has been spent.

I'm very troubled by the fact that that same county has been told to close one of their facilities, and they have not. I'm very concerned about the children that are still in that facility right now that has been deemed unsuitable for the confinement of youth.

And for us to sit back and say, well, we don't have a method to fix it, and yet we're getting ready to do a budget trailer Bill that you want us as a Legislature to agree to is extremely troubling.

I don't know if I can support something that creates a formula to continue to give these entities funding without there actually being language in there as well that would discuss tracking, oversight and the ability to pull some of that funding back, along with the ability to say, if you're not doing what we ask you to do to keep the youth safe, then you don't get that funding.

I mean, to say that you don't. That you can't do anything right now is not true, because we see that kind of language in budget trailer bills all the time.

My colleagues have mentioned the fact that we have an unfortunate history of giving money out to try to solve a problem, and those problems have not been solved, that is homelessness. I would be very. It would be very challenging for me to support something like this where we know there's a problem and yet we're not fixing it.

And you want us to vote to continue to have this problem occur and you wait for us to do it in some other fashion. So, you know, I just want you all to know that as you go back and you revise this language, because there is power that you all have that you use all the time.

And I do think that this is a just place to use that power when you present us with the final language that you want us to all support. So thank you so very much. I know this has been a very long portion.

But there are a lot of concerns, a lot of questions because we care so very much about our youth and we want the purpose of this program to actually be seen and come to fruition.

So the fact that we're not even tracking recidivism rate is just so crazy to me because how do we know that we are truly doing right by these youth? So I thank you all so very much for your time and for take for answering all of these questions. We will now move to the next issue.

That was just issue number two of the first item. But issue number three, is it enhancement resource shift to CalHs.

Okay. Sorry to start over. Good morning, Committee Member and Madam Chairwoman. My name is Tony Tran. I am the Assistant Deputy Director of IT at Department of Public Health. I will be speaking on issue number three, IT Enhancement Resource Shift to CalHHS.

The California Department of Public Health, CDPH, is requesting to shift 381,000 General Fund to the California Health and Human Services Agency, CalHHS, in 2025-26 and ongoing in lieu of continuing an interagency agreement currently used to provide funding for two positions established for CalHHS through the Information Technology, Data Science, and Informatics Framework for a 21st Century Public Health System budget change proposal.

The California Department of Public Health Center for Health Statistics and informatics, CHSI received 33 authorized positions through the Information Technology, Data Science, and Informatics Framework for 21st Century Public Health System budget change proposal.

Two of the authorized position, one Information Technology Specialist 2 and one Information Technology Specialist 1, were intended for the California Health and Human Services Agency's Office of the Agency Information Office, OAIO. The position authority was permanently transferred to CalHHS, and funding has been provided by CDPH and via an interagency agreement to support the position. The current IAA ends June 30, 2025 and CDPH requests to permanently transfer funding for the two authorized positions to CalHHS. And I believe there was a question. I'd like to answer that here in writing.

In addition to, in regard to the two position, in addition to six ongoing projects and eight project planning efforts that the resource currently support and oversee, they are embedded with the Future of Public Health team as they work to create an enterprise services model for supporting program technology needs to migrate legacy application to the cloud using a platform based approach and to create effective data solutions. I am available for questioning if there are any.

Thank you so much. Anything from LAO or DOF? Seeing no questions here. Thank you so much for your presentation. We will now move to the next issue. Early Childhood Policy Council and Whole Child Initiative Carryover. And you may begin whenever you're ready.

It is on? Okay, perfect. Good morning. I'm pleased to be here. I'm Dr. Lupe Jaime-Mileham, Deputy Director of the Child Care and Development Division at California Department of Social Services, and I will be speaking to item number four. As far as some background.

The Early Childhood Council, which we reference as the ECPC, was established in law to advise the Governor and the Legislator on statewide early learning and care policies, including planning of, implementation of, and evaluation of the Master Plan for Early Learning and Care.

In reference to the question that was in the packet, the budget change proposal requests the reappropriation of 752,000 from previous year unspent funds for fiscal year 2025 through 2028 to continue to support the current deliverables of the ECPC, which mandates examples coordinating facilitation of these meetings. It also includes the Council and two advisory councils, which are families as well as early care and education workforce, tribal assistance and stipends.

The processes of stipends and of course the importance of continuing that so we have access and voices to eliminate barriers from the Council to participate. And finally also producing a year progress report in regards to the Master Plan of Early Care and Education and the accomplishments and areas we need to continue to focus on. With that, that concludes my overview, and at this time I'm open to any questions.

Thank you so much. Anything from LAO, DOF? Senator Menjivar.

I'd like to actually hear from LAO. We have a lot of working groups, and sometimes we have similar working groups. In this space, we have a lot of working groups on child care. We have a working group on child care rate reform. What, if any, have we looked into the duplicate work and potential savings and not having all these different work groups?

Thank you, Senator. Ryan Miller, LAO. I think I'll have to take your question back to some others in the office who have followed the issue a little bit more closely, and we'll follow up with you and your staff.

Okay. I just, Madam Chair, just personally, you know, looking at these things and how do we cut duplicate work and just flow back into General Fund? That's it.

Thank you. Thank you so much. And before we move on to the next department, there is an error in our agenda. California Electronic Visit and Verification Resources is actually under the California Health and Human Services Agency, and so we will hear from them now. You may begin whenever you're ready.

Good morning, Madam Chair, Honorable Committee Members, Senator Menjivar. I'd like to thank you for your time today and the thorough write up that your staff have put into today's agenda. My name is Michael Muth. I'm with the Office of Technology and Solutions Integration, or OTSI.

OTSI serves as the project manager for the California Electronic Visit Verification Program and Project. And I have my colleagues here today from the Department of Health Care Services, Department of Aging, and Department of Developmental Services who are part of this request. With your permission, I'll go in and address the question. Okay.

Just for a little background on CalEVV. So it's a multi departmental effort between DHCS, DDS, CDA, Department of Public Health, and Department of Social Services, and then obviously OTSI. CalEVV originated from a federal mandate which required all states to implement EVV for Medicaid funded personal care services and home health care services.

Touches 173 jurisdictional entities, over 5,000 provider agencies, and their numerous caregivers, and then approximately 200,000 recipients of care. CalEVV is currently in the maintenance and operations phase, which has allowed it to receive both federal system certification as well as enhanced funding at a 75% participation rate. And then leading into the request.

To ensure that California continues to meet its federal program compliance as well as its funding, CalEVV is focused on continuing to meet improved key performance indicators that are that are tied directly to that. So this proposal is a multi-departmental proposal requesting two main things, a funding shift and then also four resources in this next fiscal year and ongoing.

And so the four resources requested, two for DDS and two for CDA, will address the increased workload for program compliance, including training and outreach to providers, anticipated increases in EVV claims, and overall activities required for and to maintain federal compliance.

And CalEVV, I should also mention, has already received federal approval for these resources in our most recent federal request in December of 2024 for enhanced funding at that 75% rate. And then the other part of the request, that funding shift is actually to properly reflect the fund composition. So we received 90% in system development implementation.

We've now moved into the 75% range, so it's to adjust for that. And then before I pause and open it up for questions, I do also want to say on a personal note that I am very proud and honored to present in front of all women's panel. And then also the contributions that each of you make. Also Senator Grove, SCR 38 as of last week, and others. And just the inspiration that you provide to the girls, young women, and all the others that I know want and will follow in your footsteps.

She just heard your end to that. So that was perfect. Senator Grove, he was singing your praises. Senator, that was 100% true.

So with that I'll pause and open up to questions.

Thank you very much for that. I really appreciate that recognition and acknowledgement of all of us here up here. Any, anything from LAO? Anything from DOF? Any questions? Well, thank you. We will now move to the California Health Facilities Financing Authority, and they can begin with their overview whenever they are ready.

Oh, it's red. Okay. Good morning, Madam Chair and Members of the Committee. I'm Carolyn Aboubechara, the Executive Director of the California Health Facilities Financing Authority, also known as CHFFA. So a little overview of CHFFA. It was established in 1979 to improve healthcare access in California by providing financial assistance to public and private nonprofit health facilities throughout the state through bonds, loans, and grants.

CHFFA is governed by a nine member board including treasurer, the State Treasurer as the Chair. We have a little handout being passed out with all the programs CHFFA has. And so we have approximately nine active programs to 21 different types of health facilities ranging from hospitals to clinics to mental health facilities, developmentally disabled adult day and dental clinics. I'm going to do a brief overview of the nine programs and then pause before we go into one of the programs in more depth.

The first program, the Bond Financing Program, provides access to low interest rate capital markets through the issuance of federal and state tax exempt conduit revenue bonds. There, hospitals and clinics and health institutions can get lower cost of their large capital financing needs from investors who buy the bonds and not have to pay federal or state taxes on the income from those bonds.

The second program is we have the Health Care Expansion Loan Program 2, which provides 3 to 4% interest rate loans of up to $2 million to small and rural health facilities. And this is mainly for infrastructure, buildings, equipment, and furnishings. We have a subset program of that program which is the 2025 Emergency Wildfire Help Loan Program.

We did a $2 million set aside where we provide 0% interest rate loans to small and rural facilities of up to $500,000 for acquisition, construction, renovation for those affected by the 2025 wildfires. We have the Children's Hospital Programs of 2004, 2008, and 2018.

These are three voter approved ballot measures totaling approximately $3.2 billion to children's hospitals in California for infrastructure, buildings, equipment, and furnishing costs. And it's to improve the health and welfare of critically ill children in California. We also have the Specialty Dental Clinic Grant Program.

This provided General Fund allocations to award grants for the purpose of supporting the special health care needs populations in California. And happy to report, hopefully today, at today's board meeting, all funding will have been fully awarded. There was just 200,000 left. All the other money was awarded last month. And then we have the Non-designated Public Hospital Bridge Loan Programs. There was 1 and 2 of the two parts to this program. Both were 40 million each.

These provide zero interest rate loans, two year loans to non-designated public hospitals or district hospitals that are affected by financial delays with a transition from the public hospital redesign and incentives in Medi-Cal program, Prime Program, to the Quality Incentive Program, QIP program. These loans were required to be paid back in two years, and the loans are secured by Medi-Cal reimbursements. Then we have the Distressed Hospital Loan Program.

This program, CHFFA has partnered with the Department of Health Care Access Information, and it was designed after the one I just mentioned, the Non-designated Public Hospital Bridge Loan Program, that provides interest free cash flow loans for six years with an initial deferment payment deferral period at the beginning.

And these are to financially distress, not for profit, and public hospitals or for a closed hospital to reopen. And happy to report Madera Hospital opened last week. We also have the Investment in Mental Health Wellness Grant Program and the Investment in Mental Health Wellness Grant Program for Children and Youth.

There was General Fund allocations provided toward counties to improve access to mental health crisis service, to the development of infrastructure buildings towards crisis residential treatment facilities, crisis stabilization units, mobile crisis support teams, and family or peer respite care facilities.

And then the last program, we're going to go into more detail on issue two, which is our Community Services Infrastructure Program, which is a jail and prison diversion infrastructure program. And there's a reappropriation request in issue number two. So I can pause there before I get into that to see if there's any questions on any of our programs before we go into the issue two, which is the Jail Diversion Program.

Senator Menjivar.

First, your fit is amazing. Second, I am so excited. The Dental Specialty Program, I remember last year how much we fought for this. So I'm, great job, really thrilled to see all the money has gone out.

Yes, we're all excited. We're excited to see them become implemented. So. Yes.

So quick question for you under the Distressed Hospital Loan. I do see that some of the hospitals are up for their first payment this May. Are there any, have there been any conversations, any concerns about hospitals actually being able to pay back this loan?

So this statute, when it was approved back in 2023, allowed for for loan modifications and forgiveness. So we've been working very closely with the Department of Health Care Access and Information on developing a loan modification application, which we developed, signed off by Department of Finance, and we got the CHFFA board approval in the January board meeting.

It was an application that consists of a two step process. Step number one, if a hospital is unable to make its first payment on the first payment deadline, which they start in May of this year, they will be able to request a 12 month extension of their deferment period.

So when we issue a loan a six year loan. Every loan gets an 18 month automatic deferral period where you don't have to make any payments until the first day of the 19th month. And then we are, we just offered in January of this year, they can extend that deferment period by an additional 12 months. So that process is in place.

After hospitals apply for the 12 month extension, the second step would be partial loan forgiveness of 12 months of debt service. So that's in the future. But as of now I can say we've received eight applications from eight hospitals that want to receive the 12 month extension. I think most will be taking advantage of that right now since it's being offered, and we're in the process of getting those approved. So so far in this program, everything is good.

Thank you.

Thank you, Madam Chair. Just to follow up on that, because I did have a question. Is it on a case by case basis? Because sometimes a full statewide status or a full statewide program doesn't work for different areas. Specifically, I have a hospital in the High Desert area that was ready to close. The 5.5 million that was given on the Financially Distressed Hospital Loan Program was just a life saving mechanism. They ended up having to shut down their labor and delivery and their standby emergency room, which is just crazy.

But because they operate within the military base, the largest research and development arm of the entire United States military. We were able to secure some resources from the federal government, but that's not in the basis alignment for the community hospital. So they have rules they have to follow. But because they were able to secure your one time funding, that put them out of the request for the loan because they were a couple thousand, couple $100,000 over because they got federal funds, that eliminated them out of this process.

But if this doesn't get forgiven, then we're going to be back in the same situation with no maternity ward within, you know, a four, you know, two and a half hour drive, no cardiac, no, you know, any of that service. So is it done by a case by case or is it just a blanket standard across the state?

It is on a case by case basis, and I'll definitely take that back. But how we've developed it, we've been working with the Department of Health Care Access Information, obviously Department of Finance as well. And we've set criteria in the guideline, you can call them guidelines, that we approved in January of this year.

But first of all, after step one, every hospital that is still in distress will get a 12 month extension. Then step two, they would have to apply for a 12 month forgiveness. So there's going to be about four years of payments on these loans for every hospital. Four years of payments.

So they can apply each year for four years for the forgiveness for that year. So it's kind of an incentive for hospitals to try and turn around their operations before the loan is forgiven. If we just automatically forgive, things might not turn around. So it's giving them an opportunity to turn around their operations. And if the situation hasn't improved, they will be able to be considered for that forgiveness. But it's not a blanket forgiveness. It will be on a case by case basis. There's a lot of parties that are going to be involved in the decision.

And the point, the procedures are not to put a hospital back into distress, it's to relieve them. So if hospitals are doing well and can pay back the loan, we will take that, take the loan back. But if they're not, we're not going to be in a position to putting them back in distress. And I think we got that feedback when we were developing the criteria with the team.

Thank you. No, thank you very much. And that was my fear, is that we would be right back in the same situation before we approve the loan. And again, I know that like in south part of Los Angeles and other areas of the state, specifically the Central Valley, it's a high Medi-Cal reimbursement rate.

The Medi-Cal reimbursement rate is so low it's hard to recap those dollars, especially if you have a low private pay insurance population where you can't offset some of those costs. So I appreciate your thoughtfulness in taking all of that into consideration. Thank you.

And you may proceed.

Okay, so for issue number two, this is regarding the Community Services Infrastructure Grant Program. This program was established in 2016 and funded in 2017. It was a one time competitive grant program for CHFFA to administer.

It's intended to create and expand community alternatives to incarceration by expanding access to jail and prison diversion programs and services for those with mental health illness, substance use disorders, or have suffered from trauma through the creation and expansion of mental health treatment facilities, substance use disorder treatment facilities, and trauma centered service facilities for justice involved individuals.

The program is funded from the General Fund with $67.5 million to be given to counties for infrastructure projects, meaning buildings, equipment, and furnishings, and all funding was awarded by CHFFA in four funding rounds. We had 1.6, about $1.7 million for administrative costs. And all those costs have been relatively spent to date.

There are 14 active projects, and as of today, 10 projects have been completed in eight counties that are expected to serve 1,048 clients or justice involved individuals. And these are a year, 1048 clients a year. And four projects are still in progress.

For three counties we have dispersed a total of $42.8 million of the 67.5. And over the years there are a lot of numbe,r a number of challenges all the counties had faced, including not in my backyard issues, NIMBY issues, permitting issues, construction costs increasing issues, labor shortage issues, Covid delays, restructuring of staff, and the selection of service providers to actually provide the services.

The disbursement deadline in the budget for now for the program is June 30, 2025, which means, according to our processes, all the remaining projects have to become open and operational and be fully dispersed by that date, which is only months away. This program was already reappropriated once in the Budget Act of 2021.

And the the proposed reappropriation extends the encumbrance deadline to June 30, 2028, which allows a buffer for the counties with existing grants in case any hiccups or delays occur again or challenges along the way since they're very close to the finish line, and if funding remains by then or forfeited by these counties, they will revert to the General Fund. So happy to answer any questions on that program.

Thank you. Any comments from LAO? Any from the Department of Finance? Seeing no further questions. Thank you so much. We will now move to the Emergency Medical Services Authority. They can start with their overview.

Thank you, Madam Chair and Members, for inviting us today. I'm Gabrielle Santoro, Chief Deputy Director of the Emergency Medical Services Authority, or EMSA. As noted in the agenda, we are asked provide a brief overview of EMSA's mission and programs.

So EMSA is responsible for the equitable coordination, administration, and integration of the statewide EMS system to reduce suffering and save lives throughout the State of California. The agenda does a good job of providing an overview of our major programs, but I'll go through each of those three.

The first is the Disaster Medical Services Division. In coordination with the Office of Emergency Services, the Department of Public Health, hospitals, ambulance companies, and other entities, we are responsible for the disaster preparedness, response, and recovery across the state, providing assistance to local entities, and disaster preparedness and response, including the deployment of teams and resources.

Our next program, it's noted as the EMS Personnel Division in the agenda, we'll refer to it as the Professional Standards Division. This division is responsible for the licensure, investigation, and discipline of paramedics statewide, as well as for establishing standards for training, certification, licensing, and scope of practice for EMS professionals. Third is the Quality and Planning Division, which is responsible for the review and approval of local EMS plans as well as requests for approval for providers.

It also provides oversight for specialty care programs, including EMS for children, trauma, STEMI, stroke and community paramedicine and triage to alternative destinations, and also includes the Health Information Exchange that manages the California EMS Information System and the POLST form, which is the Physician Order for Life Sustaining Treatment form. That concludes my overview, and happy to answer any questions. Thank you.

Thank you so much. Any comments from LAO? Any comments from the Department of Finance? Seeing no questions. We can move to, we can move to the next item. Thank you.

Great. Thank you. So for the second item, we've been asked to provide a brief overview of our 1BCP for Governor's Budget. Again, the agenda does a great job of providing providing an overview, but just noting that we are requesting General Fund expenditure authority of 676,000 in budget year, 766,000 in budget year plus one, and 676,000 annual ongoing in order to support costs for our headquarters lease as well as one time tenant improvement costs. And happy to answer any questions.

Thank you. Anything from LAO? DOF? Seeing no questions here. Thank you so much for your presentation. We will now move to the Department of Health Care Services.

I'm on. Great. Good morning. I'm Lori Walker. I'm the Deputy Director of Fiscal and the Department's Chief Financial Officer for the Department of Health Care Services. I will start us off on issue one, our civil rights compliance BCP. The Department's requesting 12 permanent positions, an expenditure authority of $2 million total funds.

As noted in the agenda, the Office of Civil Rights is responsible for civil rights compliance, equal employment opportunity compliance, and reasonable accommodation services. Recent litigation resolved in late 2019 has had significant impact on the current workload. The settlement requires the Department to develop written policies and procedures for investigating and resolving discrimination complaints within 90 days of receipt.

The OCR is required to review all Medi-Cal managed care plans and county mental health plan discrimination complaints and grievance determinations, noting the new reporting requirement drove an almost 1900% increase between 2019 and 2022, with only 41 plans, 41% of plans, and five out of 58 counties reporting at that time.

The Office of Civil Rights works with a significant number of external parties, including, to mention a few, 26 managed care plans, three dental managed care plans, and 58 county mental health plans. As well as approximately 15 million Medi-Cal members. Happy to answer any questions.

Thank you so much. Any comments from LAO? Department of Finance?

Just a quick, quick comment. I think given the what's happening and the closure of these kind of offices in the federal level, now more than ever it's really important to have this kind of support on our state in our state.

Thank you. Yes, I agree with Senator Menjivar. We can now move to issue number two.

Okay. Our Medi-Cal Administrative Activities or CalAIM Justice Involved Initiative BCP A little background. Most adults and youth entering or being released from California prisons, jails, and youth correctional facilities are eligible for Medi-Cal. Medi-Cal services generally are available only after an individual is released from incarceration.

State law, AB 133, establish a targeted set of Medi-Cal services that can be provided up to 90 days prior to release from incarceration. DHCS is requesting five permanent positions to establish and operate a Medicaid Administrative Activities Program, including obtaining necessary federal approvals and satisfying federal claiming requirements.

Medicaid administrative activities include but are not limited to outreach, facilitating Medi-Cal eligibility determinations, program planning, and contract administration. DHCS previously received federal approval for one time funding through the Providing Access and Transformation Health Program to establish a coordinated community re-entry process for physical and behavioral health services. This program will allow the transition of county and state participants from the one time path funding to an ongoing sustainable Medi-Cal revenue stream. Happy to answer questions.

Thank you. Any comments from LAO? DOF? Senator Grove.

Thank you. I may be asking the wrong questions because I don't believe that you guys are the people who do this. You run Medi-Cal, but you're not the person in charge. But I'm going to rely on you from Department of Finance. So the Department recently needed a $3.44 billion loan to make Medi-Cal payments in the month of March. What additional funds are needed to make it through the rest of the fiscal year?

I'll have to defer to a colleague of mine to answer that question.

Is that person here? Oh, yay.

And the only reason I asked that question to this panel is because I understand the people who really take care of this are not coming before us before we have to make that decision. Is that correct?

I think my colleague from the Department of Healthcare Services can actually take that question.

Oh, hi. Hi. I can help you. Yes, you're correct. On March 4th, the Department of Finance activated a $3.4 billion Medi Cal provider interim payment loan for the Department of Healthcare Services. We will be asking for an additional 2.8 billion consistent with projected current year shortfall identified in the Governor's Budget.

Okay. And that's just to get us through this fiscal year? Yes. Okay. And then is the department officially asking the Legislature for the 2.8 billion? That's the request. I believe they'll be coming. There'll be conversations with Legislature, the Administration. Okay.

Has there been an analysis provided to us as a Legislature regarding the $2.8 billion figure and how it was derived? The 2.8 is reconciled in our Governor's Budget, so the information is available. Okay.

I guess. What connection does the need for the 6.2 billion have for the implementation of health care minimum wage mandate with SB 525? Is there dollars going to be used to that because the mandated increase for minimum wage? Not that I'm aware of, but we can take your question back and come back to you.

Okay, thank you, ma'am. You have a wonderful day. Senator Menjivar.

I'm wondering what lessons learned from the Previous Administration of these systems we're going to take back and implement this, especially with the school approach, didn't go so well. How different are we going?

So what I would say is we will take the lessons learned from our existing programs. One of the challenges as we look back for the school based program is that program was established many, many years ago when CMS was maybe not as stringent on some of the requirements.

And so there was a little bit of more lax oversight. And so as that program operated, we got further and further away from some of the key require and we were moving forward and operating our program.

And then as CMS came through and started looking at some of these programs and instituting and providing additional guidance, we realized we were not in compliance through the years. And so we've had to make significant changes to that program in order to ensure that we are meeting those federal requirements.

Here we're starting off with clear understanding of what the federal requirements are in order to move forward so that we won't end up in those same situations.

So we have the lessons learned from all of the different programs on what works, what doesn't work, and can establish this program with those in mind, as well as being starting from a fresh program and not having to clean up ingrained practices that didn't actually meet federal requirements.

Great. With this morning's proposed cuts to cms, is that going to implement any of these kind of. Do we anticipate any changes that we need to do to our approach to these kind of programs that get guidance.

Or are you speaking about the reorganization of Health and Human Services? We're still evaluating. Our understanding is it does not have a significant impact on the operations of CMS directly at this point, but we are continuing to evaluate. We also just got the information, but we don't anticipate a need for changes at this time.

Thank you. Thank you. We can now move to the next item on the agenda. Population Health Management reappropriation.

The department is requesting a reappropriation of General Fund Expenditure Authority, up to $19.7 million in funds to continue work to establish the MEDI CalConnect population health management platform.

The reappropriation funds three contracts needed to continue implementation, including a prime vendor contract, a contract to provide technical expertise required to develop the risk stratification, segmentation and tiering algorithm, and a contract for project support services, project management, technical assistance and subject matter expertise to establish the Medi CalConnect and ensure risks are appropriately mitigated.

DHCS has successfully launched two out of five releases of the user releases, and we're on track for a third release this July. The reappropriation is crucial to ensuring continued progress towards releases three through five. Thank you.

Any comments from LAO, DOF? Just a clarification. You're asking for 19.7 or 19.8? I believe it's. If you round up, I believe it's 19.8. Thank you. We can now move to the next agenda item. Whoa. We did that one. We did, yeah. Great. All right. AB186, FNF S&F workload standards and accountability Sanctions.

Great. The department is requesting 14 permanent positions and expenditure authority of $2.8 million total funds with $0 from the general fund. This request is funded via the Long Term Quality Assurance Fund and federal funds. Resources are needed to implement and provide program integrity for two skilled nursing facility financing programs authorized by AB186.

The workforce standard program will provide an enhanced MEDI Cal per diem rate, including a workforce adjustment to facilities that maintain a collective bargaining agreement. The Accountability Sanctions Program authorizes DHCS sanction facilities that do not meet quality standards established by DHCS on a per Medi Cal bed day basis.

DHCS established this program effective January 1st and is analyzing current performance data related to the calendar year 2024. DHCS is requesting program monitoring, enforcement, audit and administrative hearing resources to be able to proactively monitor compliance, implement robust quality enforcement strategies, investigate complaints, and ensure facilities do process rights.

These audit resources will enable DHCs to produce a robust administrative record that can withstand and deter litigation in court while protecting facilities due process rights. Happy to answer questions thank you.

Anything from LAO, DOF? Not seeing any questions. We can now move to the next issue PACE Growth and Expansion.

A Brief Overview of the PACE Program PACE provides a comprehensive medical and social service delivery system using an interdisciplinary team approach.

In a PACE center, services are provided to older adults and PACE participants have to undergo level of care review to to be determined eligible, they must meet need a nursing home facility level of care to be able to live safely in their home or community.

At the time of enrollment, PACE organizations must receive approval by both DHCs and the federal Centers for Medicare and Medicaid Services to begin operations and provide services in a specified service area. They enter a three way program agreement with DHCS and CMS and also hold a direct contract with DHCS.

There's currently 34 PACE organizations operating across 27 counties in California serving approximately 25,000 Members. The PACE BCP is requesting 33 permanent positions and $6.3 million in total funds. Funding is through the PACE Oversight Fund which is funded through fees.

The department has seen both an increase in new PACE organization entering the market and we've seen them expanding their current footprint into new service areas. We've seen eight to 12 new entities or PACE expansion of existing organizations each year and the growth has been consistent over the last five years.

The PACE Fees TBL in terms of as we just mentioned, the steady growth of PACE organization has added substantial workload and existing DHCS staff that work on pace. There's been an increased workload to access and process applications that are related to new and expensive expanding organizations.

There's also been increased workload to maintain, operate and oversee the additional number of PACE organizations. DHCS is proposing to establish and expand fees of all PACE organizations to support specified workload functions related to application processing, site readiness reviews, annual maintenance and operations.

PACE fees that we are proposing are structured to only cover the cost of the Department's total program workload cost. The fee associated with the annual maintenance and operation is slightly less than 1% of the per Member per month capitation rate that is set by DHCS for PACE organization now we're happy to answer questions.

Thank you. Anything from LAO.

Karina Hendren, Legislative Analyst Office so we've heard from the CalPACE, which CalPACE, which is the Association that represents the PACE organizations, that the organizations have expressed concerns with the amount of the fee, specifically the fact that DHCS could set that amount at up to 1% of the organization's capitated rate.

Their concern is that the fee could potentially exceed DHCS's cost to administer the program. And we understand at this point that the ongoing level of funding needed to sustain this program and the activity supported by the fee might be uncertain at this point.

So in light of this, it might make sense to first establish the fee on a temporary basis before authorizing it as an ongoing amount. And if the Legislature is interested in pursuing that option, it could direct DHCS to evaluate the impacts of that temporary fee fee before then establishing the fee on an ongoing basis.

And if the Legislature and the Subcommitee are interested in that option, the LAO would be available to assist them in updating the trailer bill language to that effect.

Thank you. Anything from the Department of Finance?

Nothing to add. Thank you.

Thank you. Senator Menjivar.

Can you clarify the 1% up to 1%? Would the capitation fee increase to offset that?

So I apologies, I realize I didn't introduce myself when I responded last time. Lindy Harrington, Assistant State Medicaid Director with Department of Healthcare Services so we are proposing that we would set the fee to be no more than so we're setting that cap now at no more than 1%.

The cost of the fee would be added into or would be considered as part of the rate setting process. So you would see an increase in capitation rates to account for that additional cost for the program.

So is it kind of be like how we approach MCO tax?

It's not exactly the same, but it's the same type of activity where we look at the cost that the PACE organizations have in order to operate and that is a part of the capitation rate that's set annually and this cost would be included in that calculation somewhat making them whole.

I don't want to say it would fully make them whole because again you're setting the rates at a different time. But the intention is we would include and capture those costs in their annual capitation rate.

Do we know or have any understanding of the impact financially on newer current PACE?

So we have looked at based on self reported financial data from the existing PACE organizations On average, the profit that they're reporting is approximately 5%. So that will vary depending on the various organizations. But based on their self reported data, at this point we're looking at an average of about 5%.

Okay, and then can you clarify, if I'm reading this correctly, this the 33 positions are the total and it's going to fund those. Or what about the people that already work in this space? Is that on top of that is, is money going to be reallocated in the general fund?

So my understanding is the 33 are all new positions. These would be new positions and we would be looking to fund our full operations associated with the PACE program utilizing this fund.

So the money that we use to allocate the current staff for this would be reallocated somewhere else?

I believe so, yes.

Okay, so this is for the total.

Correct.

Do we know how much money maybe DOF we're using to fund the current amount?

Hi, Isabella Alioto, Department of Finance. In terms of the amount that could potentially be reallocated, given or assuming these new positions are approved, I would have to get back to you on that exact number, but that's something you can definitely look into.

Okay. Because I guess I just wondering if. Yeah, you know where I'm getting at. Okay, thank you. Last question I have for you is two part the uncertainty, the funding, but also they continue to grow. They're fabulous. I love PACE facilities. So what if we see more and more?

Are we going to come back in two years to ask for an additional raise in the feed or how long do you think this will last?

So our intention is that by setting it approximately the cap would be at that 1%. We'll evaluate annually the need for resources and as we continue to grow, we may need to come back for additional resources.

But because we would also be seeing increases in the revenue, we don't believe we would need to increase to come back and say we need to change that fee above that 1% cap. That's why we kind of have said it that way with that cap.

That allows for some room for some growth if needed, but not beyond that 1% level.

Okay, thank you.

Thank you. So I have actually also heard from the PACE programs in my area around the concern of the cap being up to 1%, that it could potentially exceed the cost that DHCS incurs. So what would in your opinion be the downfall if this change were made temporary as the LAO just recommended?

I think we're open to having those conversations. I think we see this as an appropriate way to fund this growing program. And by setting that cap, we're kind of creating that boundary that we would have to come back if there was any. But I think we're open to continuing conversations.

I think if we do not establish the ongoing fee and we provide those positions, there would be pressure on the general fund in the future to to support these positions.

But you don't see any downfall to kind of putting a temporary time period that we would do this and then be able to go back and see if saying up to 1% is accurate or if it's more than what's needed.

I think we're open to continuing conversations with the Legislature. We're continuing to have engagement with CalPACE as well to understand their concerns. We have another meeting with them next week.

Okay, thank you. We will now move to the next issue. Program workload okay.

The department is requesting 16 permanent positions and two year limited term resources equivalent to 11 positions. Expenditure Authority $7.8 million $2 million in General Fund Requesting resources due to ongoing workloads and the following programs. The California Community Transitions Demonstration Project was extended by Senate Bill 281 for an additional three years to January 27th.

CCT targets Medi Cal Members of all ages who have nursing level of care need, who have been in an inpatient facility for one day paid for by Medi Cal and who want to return home or to a community based setting. Current limited term positions expire June of 24 and DHCS is requesting position authority through this BCP.

The resources requested are 100% paid, federally funded and aligned with CMS's approval through money follows the person grant. Resources requested also include departmental administrative support in the areas of financial management, information technology, procurement and contracts and human resources.

And the BCP includes language to allow $1.5 million in long term care quality assurance fee funding, allowing the Department to develop a comprehensive value strategy for skilled nursing facility services. Funding allows for the use of a consultant workgroup contract to develop the volume value strategy.

The comprehensive value strategy will inform the reauthorization of the Medi Cal Long Term Care Reimbursement act for dates of service on or after January of 27th. Thank you.

Anything from LAO Department of Finance. Any questions? Thank you so much for your presentation. We will now move to issue item number eight, Home and community Based Alternative waiver and PACE sanctions.

Thank you. This proposal would provide state authority to DHCs to apply monetary sanctions to pace organizations and HCBA waiver agencies. Currently, the Department only has authority to lever administrative sanctions such as enrollment sanctions and contract Terminations. However, this can limit access to services for Members.

This proposal also works to align PACE on the HCBA waiver with existing states statutory sanctions and enforcement structure with Medi Cal managed care plans, dental health plans and county behavioral health plans.

Thank you. Anything from LAO, DOF? Senator Menjavar.

I'm not familiar with the other. The process. Is there a process to appear, appeal or contest a sanction?

So with the our proposal would have. That they would have the ability to appeal sanctions? Correct.

And then from my knowledge. Can you share if we have any stories, Are we hearing anything that is happening in these PACE centers that are brought us concern as to why? I mean, I think it's good everyone should be held accountable. Just wondering if there's something you'd like to flag for us that is happening.

So I think what we have found is we have identified, you know, some significant and repetitive findings with PACE organizations.

And in cases where there are consistent and repetitive findings that could impact Member health and safety are not being fixed through the corrective action process, we think this is the appropriate mechanism for us to have compliance levers available to hold them accountable.

One recent example is we identified significant and pervasive deficiencies within a PACE organization resulting in members not appropriately being referred for needed services, waiting over 180 days for specialist referrals, receiving referrals to incorrect services, services not receiving ordered medications or receiving the wrong medications, and not being picked up for transportation to appointments.

And these are just a few of the examples. In response to this, we applied an enrollment sanction restricting that PACE organization from new enrollments for over a year until the deficiencies were corrected. But this would provide us some additional levers that we can utilize.

Okay, thank you.

Thank you so much. We will now move on to the next issue area. Medi Cal Anti Fraud Special Deposit Fund.

Yes. Thank you. The Medi Cal Fraud Special Deposit Fund is a proposal to establish a permanent fund in order to manage Medi Cal provider payments withheld while a credible allegation of fraud is being investigated.

When DHCS places Medi Cal providers who have a credible allegation of fraud on payment suspension, the state controller's office intercepts payments and deposits them in a temporary special deposit fund. These monies are held in the temporary fund until the investigation has concluded, which can take several years to resolve.

If a suspension is not lifted, the withheld funds remain in the fund until the payment suspension is lifted. However, once the payment suspension is lifted, the funds are returned to the provider, lest any provider lists liabilities that exist which could include repaying general funds previously used to repay our federal partners.

Thank you. Anything from LAO, DOF?

I had a leftover question in the previous one. Sanctions are some are an option of a fine as well. Where are we going to put that into a special fund? Where is that going to go?

I believe we are proposing to put that. Do you know where the funds are going in? Our in our same fund that the Peace Oversight Fund.

Okay.

That we spoke to previously.

If for some reason there's a lot of sanctions and a lot of fines, can that offset the amount that is the proposed for the fee?

I believe that could be considered, yes. Okay. Thanks. Thank you. Not seeing any questions for that specific issue item number nine. We can now move to issue item number 10, implementation of chapter legislation.

Okay. The two chapter legislation BCPs are for SB 1131 and SB 1289. SB 1131 is a family planning the Department requests one permanent position, an expenditure authority of $160,000 total funds in budget year.

Resources are necessary for developing and implementing a new provider application process and all the requisite Administration and oversight functions such as providing direct enrollment, recertification of family PACT providers, operating clinics defined under SB 1131, updating provider orientation materials and establishing a pre enrollment compliance review process. SB 1289 is a county call center and data reporting requirement.

The Department requests six permanent positions expenditure authority of just over $1.0 million per year, $966,000 total funds.

Ongoing resources are necessary to develop new data sets on county call center metrics as prescribed in 1289 engage with counties and external stakeholders on reviewing definitions of data elements and reporting templates develop a method to include this new county data and existing monthly reports made to CMS and to develop a separate quarterly dashboard to be made publicly available to all interested stakeholders by May of 2026.

Happy to answer your question.

Thank you. Any comments from LAO, DOF?

Andrew Hewitt, Department of Finance in response to the question on the agenda regarding. The narrative descriptions for Department resources for. The implementation of the chapter legislation mentioned. Previously, I would like to note that. The Administration is currently working with the. Committee staff to provide that implementation information requested.

However, happy to answer any questions that the Committee may have.

Thank you not seeing any questions on this item. We will now move into the public comment section. I want to thank you all for your presentation today. If you would like to make a public comment on any of the items that we have reviewed today, please come to the mic to my right.

You will have one minute and you may begin.

Good afternoon or good morning Linda Way with The Western Center on Law and Poverty here to express our support for. Several non presentation items specifically related to Medi Cal share of cost reform. It was in the 2022 budget but was never implemented.

So we urge timely implementation of share of cost reform to ensure seniors and persons with disabilities are not expected to live off of $600 a month to access Medi Cal services along with over 80 organizations. In addition, along with 75 organizations, we request that housing support services become a Medi Cal benefit.

Housing support services help keep, get and keep people stably housed. And a Medi Cal benefit would scale up services, draw down significant federal funds as well as avoid costly acute services and address help to address homelessness in California. And finally, we support the community health worker equity request as well as the navigator funding. Thank you. Thank you.

Hi. Whitney Francis with The Western Center on Law and Poverty. We urge the Legislature to protect the state's historic investments in Medi Cal by preventing cuts to coverage protections, particularly by. Maintaining unwinding flexibilities and implementing continuous eligibility. For children's children ages 0 to 6.

The administration's projected savings from ending unwinding flexibilities in June 2025 will terminate coverage for 450,000 low income Californians not because they're ineligible, but due to paperwork barriers. This is not a true savings but rather a harmful cut at the expense of people's ability to access essential health care services.

Protecting these program is fiscally responsible as they reduce costly churn while ensuring continuity of care for low income children, adults and seniors alike. Thank you.

Thank you.

Madam Chair. Senator Menjevar, Terry McHale with Erin Reed and Associates. I'll be very brief, but I hope in my brevity that I don't lose clarity or urgency. Senators Optometry is not one of the groups that's getting this, this fall of money that we were talking about in earlier issues.

Today we are in a severe situation, a crisis situation. Optometrists want to provide care to the most vulnerable people in California. It's part of our moral structure. It's part of our business plan. But in 19, in 2024. In 2024, we were receiving $70.40 for a moderately complex deal protocol in the office. Today we receive $26.40.

It is unsustainable. It cannot work in a business plan. We cannot provide that for the people who need the care the most. And I'm asking, please that we spend some time working on making sure that those who want to take care of the most vulnerable are able to do it.

Right now, it costs more money to take care of someone than the money they get back in their office. And certainly as a Doctor, Madam Chair, you understand that can't work. Thank you very much.

Thank you.

Good morning, Madam Chair. Senator Mengivar, Yasmin Pellet on behalf of Justice in Aging in support of a number of the items for proposed investment including implementation of the Medi Cal share of cost reform which will stop older adults and people from disabilities from having to live on $600 a month in order to main their Medi Cal coverage.

We're also in support of the permanent extension of the unwinding flexibilities, the Medi Cal housing supports benefit and the rate increase for community based adult services programs. Thank you.

Thank you.

Good morning, Madam Chair and Members. Carly Stelzer on behalf of the California Behavioral Health Association, I want to urge the Members to prioritize funding for critical behavioral health initiatives. Sustained investment in community health workers is essential to ensure equitable access to community based services.

Restoring full funding to the ACEs Aware initiative will mitigate long term impact to childhood trauma, particularly in marginalized communities. CBHA also encourages the housing support being made a permanent Medi Cal benefit as we recognize stable housing is essential for behavioral health recovery.

Finally, we recommend an increased reimbursement for community based adult services to strengthen the care for older adults with behavioral health needs. Thank you.

Thank you.

Good morning. Peter Hansell here on behalf of AARP California. We are in support of the Medicare share of cost reform proposal. Also outlined in issue 11. The current requirements for share of costs for seniors and disability people on disabilities, I think we'd all agree are antiquated and very unfair.

They impose a burden on seniors and people with disabilities that does not apply to other beneficiaries. They discourage beneficiaries from accessing services that they need, including importantly long term care supports and services. They impose burdens on families. They also put beneficiaries at risk of adverse outcomes if they cannot access these appropriate services, including hospitalizations and institutionalizations.

So it's definitely time to reform it. We do recognize it was adopted as a reform in the 202223 budget, which was really great, but it has not been implemented. And we strongly urge you to adopt this proposal to move forward with this this year. Thank you.

Thank you.

Good morning, Madam Chair. Members, my name is Eric Dowdy. I'm representing the California Dental Association. First, I'd like to express our gratitude to the Legislature for its commitment to the specialty dental clinic grant program administered through Chaffa at the state Treasurer's office.

We are pleased to report that the 13 projects being funded now are readying themselves to serve special health needs populations across the state. The grant is truly historic and we thank you for your work on that.

Also, we urge the Legislature, as we move into uncertainty at the federal level, to protect the tremendous progress we've made to bring more dentists into Medi Cal Dental and increase utilization.

While dental is an optional Medi Cal benefit, much like the prescription drug benefit, all Medi Cal beneficiaries rely on this benefit to access their regular preventative oral healthcare needs. Medi Cal Dental is a crucial lifeline for 15 million Californians, making it the largest dental plan in the state.

The loss of this benefit would limit access to routine oral health care for many Californians, which would ultimately increase California's health care cost by over $400 million per year due to increased costs from patients who develop advanced gum diseases and from increased ER visits alone.

We cannot afford to repeat the mistakes of 2009, when the elimination of this benefit led to a surge in costly ER visits, the closure of dental practices practices and significant job losses. Thank you.

Good morning, Madam Chair, Members of the Committee. My name is Val Sheehan, and I'm the CEO of the California PACE Association, or CalPACE, representing 35 PACE programs serving 24,000 medically complex older adults in the State of California. I am here to.

Thank you.

Good morning, Madam Chair, Members of the Committee. My name is Val Sheehan, and I'm the CEO of the California PACE Association, or CalPACE, representing 35 PACE programs serving 24,000 medically complex older adults in the State of California. I am here to.

My main point is to say that we strongly oppose both the DHCs, BCP budget change proposal, fees trailer bill, and sanctions trailer bill, Everything that's up for comment. I have some prepared remarks, but given the department's comments, I feel compelled to rebut a few points, if you'll allow that.

Respectfully, I do want to call out one important thing. These proposals were not developed at all with stakeholder engagement vis a vis CalPACE or the PACE organizations.

We found out about it probably when you did want to point out on the 5% projected margin that the department pointed out, I want to point out that up to 1% of 5% is 20%. I'm sure none of us would want to take a 20% hit on any income that we have out of the blue.

And I also want to point out that 5% is an average. There are plenty of PACE organizations running below that. And in a 3% margin, 1% is 33%. So I just want to point that out. And then just to end, I just urge you again to strongly oppose and reject these proposals. Thank you.

Thank you.

Good morning, Madam Chair, and Members. Maria Zamora, President and CEO of the Center for Elders Independence, serving over 1300 PACE participants and 700 HCBA participants in Alameda and Contra Costa Counties. We strongly oppose both the PACE BCP and corresponding fee trailer bill as well as the PACE and HCBA sanction bill.

With regard to the fees, the proposed 1% capitation fee is excessive and threatens PACE's financial stability. Many PACE organizations operate with very thin margins and this fee could force programs into financial instability and adversely impact access to critical pay services on the sanctions.

PACE is already heavily regulated by the Centers for Medicare and Medicaid and DHCS and expanding sanction authority without justification only adds unnecessary administrative burden and risks program stability. We urge the Committee to please reject both proposals.

Thank you.

Good morning Chair and Members. My name is Kathryn Kelly. I'm the Director of government affairs with OnLock. And on behalf of OnLock, the founders of the PACE model of care and the over 2,000 frail seniors that we serve in San Francisco, Southern Alameda and Santa Clara Counties through onlock pace.

We also strongly oppose both the PACE, BCP and corresponding fees trailer bill as well as the PACE sanctions trailer bill. Regarding the fees, DHCS is seeking authorization to collect significantly more fees than the 6.2 million requested, raising concerns about the potential funds misallocation.

There is no clarity or reassurance that these PACE funded positions will remain focused on PACE in the long run. On the sanctions DHCS has stated that they lack the staff to effectively oversee PACE and yet they are expanding their enforcement powers. It is irresponsible to increase penalties before addressing their gaps in oversight.

We urge the Committee to please reject both proposals.

Thank you.

Good morning, Madam Chair and Members. My name is Jason West. I am the Executive Director of Central Valley Pace. On behalf of the program serving 513 participants in San Joaquin, Stanislaus and Merced counties, we strongly oppose both the PACE BCP and corresponding fee trailer bill as well as the PACE sanctioned trailer bill.

The budget change proposal and trailer bill Language describe different activities for DHCS staff, making it unclear how the proposed fees will actually be used. The TBL states fees will support applications, marketing and readiness reviews. But the BCP requests funding for audits, legal and administrative rules.

The inconsistency raises concerns about transparency and potential misuse of funds on the sanctions. The proposal allows DHCS to impose temporary management over PACE organizations, which is inappropriate. CMS deliberately excluded this measure from PACE regulations because pace's integrity, I'm sorry, integrated team based model cannot be effectively managed by an external state appointed entity.

We urge the Committee to please reject both proposals. Thank you.

Thank you. Good morning, Chair and Members. On behalf of Scene Health, a new PACE program serving Los Angeles County, we strongly oppose both the PACE, BCP and corresponding fee trailer bill as well as the PACE sanctioned trailer bill. The fee proposal destabilizes PACE at a time when demand for the services is growing.

It adds cost without clear benefit, jeopardizing care for California's frail elderly population. On the sanctions, DHCS has not provided PACE organizations with an audit protocol. Without a finalized audit guide, DHCS enforcement actions could be arbitrary and inconsistently applied. Regulatory clarity must come first before punitive measures. We urge the Committee to please reject both proposals. Thank you.

Good morning. My name is Leslie Von Esch. I'm a registered nurse by trade, been in the business for 40 years. I too am a PACE Director and I come here in opposition as well. And I represent actually a new PACE as well. I will tell you that. Talk about heavily regulated, definitely from CMS and DCHS.

But I represent Loma Linda University Medical center, so. So being the only faith based California owned hospital owned pace, we are also under cdph. We're also under joint Commission. We are also under regulations by magnet status. It does not make sense to add to that when we're providing the services that we heard so much about already.

Behavioral medicine, dental health. Actually providing services to bring participants into facilities to get access to care. So we strongly urge that DHCS work with us and create something that works for both of us. Thank you. Thanks.

Good morning, Members. Kenneth Wilkerson. On behalf of Northeast Medical Services Pace center, serving 190 participants in San Francisco county, we strongly oppose both the PACE BCP and corresponding fee trailer bill as well as the PACE sanctioned trailer bill on the fees.

We are concerned that if federal matching funds do not materialize, PACE organizations will be left carrying the financial burden threatening the sustainability of care. Regarding the sanctions. The proposed structure is designed for Medi Cal managed care plans and does not fit pace's unique integrated care model.

PACE should not be subject to ill fitting regulations and we urge the Committee to please reject both proposals. Thank you. Thanks.

Good morning Members. Megan Allred on behalf of San Diego PACE serving 3,000 participants in San Diego County and we strongly oppose both of the PACE BCP and trailer bill and the PACE sanction trailer bill because the DHCS budget wiped all of the current funding for PACE and replacing it with an entire fee based system just shows that we're balancing the DHCS budget on the backs of frail elderly and we strongly oppose that notion.

Thank you. Thank you.

Kelly Brooks. I'm here on behalf of the County of Santa Clara in support of the CSI grant reappropriation in the Cha issue 2. This is an important grant that supports the diversion of justice involved individuals from prison and jail settings through the purchase and rehabilitation of properties to serve this population.

Santa Clara County County has received this grant funding and would benefit from more time to move forward with additional project sites that won't be completed by the end of this fiscal year. Thank you for your consideration.

Thank you Members of the Committee.

Senator Menjivar, Megan Subers first on behalf of the California Professional Firefighters. We want to express our support for $5 million to the Department of Healthcare Services to implement SB 1180 from last year which would provide reimbursement for community paramedicine, triage, alternate destination and mobile integrated health programs to make sure patients can get connected with the services that need at the right time.

Secondarily would like to voice on behalf of the California Primary Care Association support for continued funding for health navigation services at DHCs for community health centers and the CBOs. Now more than ever it is important that these health navigators can be in the field and connect patients with the services that they need.

And then lastly, on behalf of the Los Angeles LGBT center would like to voice our strong support for the contingency Fund to make sure that services can be provided to for reproductive health and transgender services without funding.

If something happens on the federal level at the state level, these centers will not be able to continue to provide these services and it is immensely important. Thank you. Thanks.

Thank you Madam Chair. Kathy Sunderling Mcdonald for the California Pan Ethnic Health Network.

Here to support in the issues for investment the community health worker promotores health Representative increase this includes 5 million General Fund ongoing to restore the rate increase that was included last year year but was one of the rate increases that was eliminated due to the passage of Prop35.5 million General Fund one time to help support the development of an infrastructure and processes for the claiming this is still a relatively new benefit in Medi Cal and we're talking about a network of very important serving underserved communities but also at times not very familiar with the Medicare or sorry Medi Cal process.

And so we need to get some processes in place to help the benefit. It's really critical to ensuring that our underserved communities, communities of color and communities with potential language barriers are able to access the services that we need. Thank you so much for your consideration. Thank you.

Good morning. Tim Lynch on behalf of Sutter Senior Care PACE serving 560 participants in Sacramento county and we strongly oppose both the PACE BCP and the corresponding fee trailer bill as well as the PACE sanctioned trailer bill.

The proposed fee structure creates an unpredictable financial environment for PACE organizations, making long term planning difficult and potentially forcing cutbacks in the workforce. We already operate on the thinnest of margins and even the smallest change could impact our ability to provide services for the sanctions.

PACE requires a tailored regulatory framework, not a one size fits all enforcement model and this approach threatens the effectiveness of our PACE programs and we encourage you to reject both proposals.

Thank you.

Good morning, Madam Chair. Nicole Wortelman on behalf of the Children's Partnership, we're supporting several Items under item 11. First, California cannot afford to lose ACEs aware, the first in the nation program designed to identify adversity, respond to trauma and prevent toxic stress in children.

Conditions that cost the state $1.5 trillion annually and increased medical costs and lost healthy years of life. Currently eligible screening providers must take the ACEs aware training to Bill Medi Cal. There is presently no plan for DHCs to absorb the training module.

This means either no new Medi Cal providers will be trained and receive payment for screening or more likely the training requirement to Bill for ACEs screenings will be eliminated. If the provider training requirement is lost, we lose a structural means to ensure screenings are administered to families who have experienced systemic racism in a trauma informed manner.

Thank you so much. Yep, thank you.

Kathy Mossberger, Members of Committee I want to just talk about a couple of items for reinvestment. First, on behalf of Essential Access Health who administers the title 10 federally funding funding family planning program, we are asking for 15 million in backfill to help us to address that's what we're expecting from the Federal Government.

We support 350 health centers with these funds serve over 500,000 patients just last year and these are helpful funds to provide wraparound services. Medi Cal doesn't provide enough. Along with Family Pact, there are still holes in care so we are asking for some help from the state in this.