Assembly Budget Subcommittee No. 6 on Public Safety

Alright. We'd like to call assembly budget subcommittee number six, to order. Good afternoon. Today, we'll be covering all new May revision proposals for each relevant department. All public comment will be taken at the end of our last item, and each person will have up to one minute each for public comment.

We will not be taking any votes today. Presenters are listed by their department, so please state your name and role before you speak. Please keep your remarks within the allotted time communicated to you by my staff. We will also hear from LAO, who will provide a general budget outlook. We'll move to issue one.

We'll move to issue one with Judicial Council, legislative analysis offices, department of finance. But before that, we'll start with LAO.

Thank you. Drew Soderborg, Legislative Analyst Office. So I'm gonna provide just a few comments on the overall budget structure. My comments are derived from this report released by our office, which you should have a copy of. While the governor's proposed May revision budget is balanced for 2026-27, and 2027-28, the planned expenditures in each of those years exceed the planned revenues.

The budget is only balanced because of reliance on one time resources like reserves. In other words, there is a structural deficit. The presence of these structural deficits despite the robust revenue growth the state has experienced is a warning sign that the budget is not on firm footing.

We have three recommendations to help the legislature put the budget back on firm footing, specifically maintain the amount of ongoing solutions proposed by the governor, make a $20,000,000,000 discretionary deposit into the budget stabilization account, and set aside $4,000,000,000 to pay for new borrowing. Taken together, these would, options would require the legislature to identify $24,000,000,000 in additional general fund solutions relative to the governor's May revision.

Practically, our recommendations mean not approving any new spending. That said, should the legislature identify that some of the spending is a particularly high priority or an urgent need, we recommend that if it approves it, that it finds dollar for dollar, reductions elsewhere in the budget in order to make room for those proposals.

That is why today you will often hear us say that you should weigh given proposals against your other general fund priorities because should you approve them, you need to make reductions elsewhere in order to put the budget on firm footing. Happy to take any questions or move on to the next.

Thank you so much. Any questions from the dias for LAO? Alright. We'll move forward with our first, issues.

Go ahead.

Yes. Good afternoon, mister chair Zlatko Theodorovic from the Judicial Council. I'm here to present the May revision proposals in brief. I know the agenda already has them all outlined. I wanna sort of highlight a few for you.

I wanna first say that the the chief is supportive of the mayor revision and appreciates the the investments that are continued from the governor's budget into the mayor revision and the additional proposals here in particular. The language access item, for the the courts, the the need for additional interpreter service is critical, and this funding on a two year basis will help us while we're evaluating the needs going forward.

Appellate court security, again, a continuation of that issue, also is an important item to ensure that our appellate courts are, secure. We do offer a backfill to, reduction to a backfill to the state court facilities construction fund based on, improved revenues to that fund. And finally, there is a an extension of a, the mandate for installation of lactation rooms in our courts.

Given the lack of funding, the extension of the mandate would would provide, I think, both the budget process and us the ability to revisit the, funding in future years.

Thank you for that Department of Finance.

I'm going to divert to LAO to make the comments and I'll respond.

LAO?

We have comments on two of these proposals. On the language access in the California courts, we don't have concerns with the proposal. We recommend you approve it. However, we also recommend reporting language that would be due on 01/10/2028, requiring the judicial branch to provide options for containing the increase in cost of court interpreters.

According to the branch, court interpreter cost have been increasing because of a lack of civil servant court interpreters. So we'd recommend that this report include options on how to recruit and retain civil service court interpreters and any other cost containment options that the branch can, identify with respect to interpreters.

With respect to the state court facilities construction fund proposal, given the improved revenues into the fund, we think that you can make the reduction in general fund, backfill of $10,000,000 ongoing to achieve more general fund, solutions, And doing so would leave the fund with a minimum fund balance equivalent to that proposed by the governor over the next decade.

Thank you so much. Department of finance?

Henry Ng, Department of Finance. Just on the note on the SCFCF backfill, Just given that the, the revenues fluctuate year to year, we support keeping in place what we have in the budget for the backfill just to avoid any disruptions to the judicial council's planning, processes. The budget cycle also affords opportunities to make adjustments to the backfill, notably in the fall, the government's budget. And again, here at the, and again at the, the May revision.

And then in in regards to the language access reporting, I want to note that existing reporting requirements for court papers do exist.

But we are happy to take a look at at the language or reporting requirements, that the legislator may have in mind.

Thank you so much. We're gonna back to the dias. Any questions? Comments?

I guess it's time for me to talk

Senate member Lackey?

Yeah. I'm highly, highly frustrated by this judicial branch dissemination on a number of fronts. First of all, the fact that, our judges are in year 19 of a freeze on their salary. Is that acceptable? That'd be my question.

Apparently, it is. Is there a reason why that's acceptable?

What's that?

Without comment on your question, the judge just maybe provide a little bit of history.

Some explanation. How about that?

I'm not gonna speak to what is in or not in the budget, Assemblymember, just the method by which judicial salaries are adjusted. There have been times in the past where there have been, separate adjustments, but otherwise there is a statutory process, that provides an increase, when state employees receive an increase.

But I do know, and I'm here to that the chief has identified judicial pay as an important priority, and I think we would be looking forward to working with the Department of Finance, the governor, and the legislature on any future issues there.

Okay. And I have a question for Department of Finance on this number of judges, especially in my whole twelve years here, I've seen San Bernardino County be in deficit not by one or two or three or four or five. 30. Three zero. That's supposed to be justice.

Help me understand why this isn't improved. I mean, it's not the first time I've asked.

Henry Ng in Department of Finance. So to respond to your question, although the May revision doesn't include additional funding for judgeships, the governor did sign SB 75, which authorizes additional judgeships, but that is subject to appropriation. So the the May revision still maintains the $30,000,000 to build up the courtrooms and a $24,000,000 for the facility modifications to accommodate the 23 additional judgeships funded in 2022-23. We're still monitoring those projects with the judicial council in the implementation of those previously approved judgeships.

I know it's really not fair to put you on the spot, but this is my only opportunity to ask somebody why this is such an injustice that has remained for such a long period of time. I mean, we have I represent part of LA County too. We have more than 30 judges in excess. What justification is there for that? I it's such an injustice to San Bernardino County that there's not a sense of fairness in that balance.

There's gotta be some way that that could be mitigated, but yet every time I bring this to the attention of this group, I get crickets. And especially by the way of response, I don't know what it takes. It's just it's completely unfair, imbalanced, and it's a frustration to read truthfully. And, I just wanted to express that. I don't expect an answer because I'm not gonna get one because it's not your fault.

But please pass the word on that it's getting to be tiresome. I'm leaving this place. And I pray to God that someone else can move the ball because this is an injustice that deserves attention. That's all I got right now.

Well, thank you so much, Assembly member Lackey, for raising those issues that we also share, those concerns. Assembly member Schultz.

Thank you very much, mister chair. I'll be brief. Appreciate the presentation. Agree with the recommendations from the LAO.

And just wanted to amplify the member from Palmdale's concerns. One of the things that I'm hearing from the judicial officers that I have contact with is that we have vacancy rates. I've looked at the latest report from May 1. I think of over 60 in our superior courts across the state.

And what we are hearing is that there are real issues, retaining, qualified jurists. So that might not be something we can fully tackle in this budget cycle, but I just wanna echo mister Lackey's point that we have to tackle it eventually. Because when we don't have enough qualified judges on the bench, we're talking about real access to justice issues. So, if there's more work that could be done this year, fantastic. If not, we really need to start talking about longer term solutions.

So thank you all very much.

Well, thank you, so much. I just have a couple questions, regarding the trailer bill for lactation rooms, in the courthouses. Do we have an estimated cost, what it's gonna be to finish, the full out construction of those rooms?

Yes, we do. It's $31,900,000 is what we've reported to complete the remaining lactation rooms installation.

And that would get them all completed?

Yes.

Thank you so much for that. Department of Finance, you agree with that number?

Henry Ng, Department of Finance. So we work closely with the Judicial council. And yes, we the prior budget acts have provide investments to work on lactation rooms. And we do agree that there may be additional facilities that need lactation rooms being compliant. So we're working with Judicial Council monitoring that and engaging that timeline.

Okay. And then we heard the dollar amount, $31,900,000 to finish that construction. The next item that I have a question on, we had hearings here with sub six dealing with remote hearings with the courts. And the last time we we dealt with this, there was a proposal that came forward from administration, to us. So are we looking to see a proposal come forward?

How are we gonna deal with the remote court proceedings that we had a hearing on? We spent a lot of time bringing out the facts and issues.

Yes. Henry Ng, Department of Finance. So the May revision does not include trailer bill language to extend remote hearings. But what it does do is still maintain the ongoing $1,600,000 to to maintain that existing infrastructure. But at this time, the budget does not include trailer bill language to extend remote hearings.

But it's your understanding that by including that $1,600,000 that it actually would allow those remote court proceedings to continue?

That's correct. If trailer bill language is put out there to extend.

Okay. If trailer bill language is put out there.

That's right.

Which, again, it came from the administration the last time. So we're not gonna see trailer bill language come forward from that way. It has to somehow come forward.

That's correct. It wasn't put into the May revision. So this something would have to be to work through.

Well, thank you so much for that. Now we'll move on to issue two. We have board we have a question?

I'm just. I would just like to piggyback on that whole thing. Why do we have to wait for additional trailer language? Help me understand the reason why it wasn't in the May revise.

Henry Ng, in Department of Finance. So the May revision is just a proposal, and we we are looking forward to working with the legislator to put together a final budget. But it wasn't ultimately included. It may be.

It's a high priority by many that are on, at least by me that lives in these rural areas. We've got to have that help.

That's all I got.

Alright. Thank you. Any other comments, questions from the dias for this panel? Alright.

Thank you so much. We'll move to issue two, Board of State and Community Corrections, Legislative Analysis Office, and Department of Finance. Go ahead. Department of Finance.

Good afternoon, Chair Ramos, members of the subcommittee. Anthony Franzoia with Department of Finance. I'll be taking the lead on presenting the two issues in the agenda for the Board of State and Community Corrections or BSCC. The first, the Missing and Murdered Indigenous Peoples Grant Program. This is $10,000,000 one time for BSCC to continue the progress of prior MMIP investments.

As discussed in this subcommittee during the April 13 hearing, there's clear demand for future investments, given, the interest in prior MMIP grant cycles. And just to note, this proposal is recognition of that demand and the discussions during that hearing. At a high level, thus far, there's been three cohorts with approximately $35,400,000 in total grant awards. Thanks

Caitlin O'Neil with the Legislative Analyst's Office. The legislature will wanna weigh funding for this priority proposal against its other general fund priorities. In addition, we would just note that to minimize general fund costs and or to provide ongoing stable funding for this program, the legislature could consider working with the administration to assess whether the Tribal Nations Grant Fund could be used for the program in the including whether statutory changes might be necessary.

Anthony Franzoia, again, Department of Finance. I would say the administration stands by using general fund resources for this purpose. We would be very hesitant to substitute the Tribal Nation Grant Fund, for a couple reasons. I think one, currently, if tribes so choose, they have the ability to direct TNGF resources, to MMIP investigations, for a number of other reasons. I think direct and that's directing, if we were to do a fund swap, directing tribes to use TNGF or MMIP.

Again, that just makes the administration a little hesitant. That being said, this is a new recommendation. We still need to get a legal opinion on it, and we would also wanna want to run it by the California Gambit Control Commission. They're the administrator of the TNGF, so we think they should weigh in as well.

And then to go into the second issue, the Human Trafficking Vertical Prosecution Grant Program, this is also a $10,000,000 one time appropriation for BSCC to create a competitive grant program for district attorney's offices, again, to fund vertical prosecution for human trafficking cases.

The intent of this request is very similar to the organized retail theft vertical prosecution grant program from the 2022 budget act. And the reason this money is with BSCC is, number one, given BSCC's kinda grant making capabilities, but also their specific expertise, in doing vertical prosecution grant programs.

Again, this is a proposal that, the legislature will want to weigh against its other general fund priorities. And then we would also just note that in bringing this proposal forward, the administration didn't provide any information or data indicating that there's a need for human trafficking vertical prosecution resources at this time that can only be addressed for, through state funding specifically.

Anthony Franzoia, Department of Finance. Just to quickly respond, The United States does have a demonstrated, issue with human trafficking. According to data from the National Human Trafficking Hotline, there are almost 12,000 cases of human trafficking reported in 2024. And, again, those are just reported cases given the power dynamics at play in human trafficking, the real numbers are probably much higher in both the nation and in California. And according, again, to the human trafficking hotline, California represents about 14.5% of the total cases.

So we think there's a demonstrated need for state resources to combat this problem. And open any questions.

Thank you so much, for your, presentation. Next, on Board of State and Community Corrections.

Hi. Good afternoon, mister chair, members. Aaron Maguire, I'm the executive director of the BSCC. Just here to answer any questions that you might have. And along with me is, Colin Curtin, our deputy director of our grants division.

Thank you so much. Back to the dais. Any questions, comments from the dais? Assembly member Schultz.

Thank you very much, mister chair. Thank you everyone for being here. I had a quick comment and a a question and a comment. MMIP grant funding, appreciate the LAO's perspective that we obviously have to weigh every investment. But I think this is one we absolutely have to make and just want to again appreciate you, mister chair, for your constant advocacy about the importance of this issue.

Fully support this being in the final budget. The second point, I was heartened to see the financial commitment from the administration to the vertical prosecution program. As the administration well knows, this was the subject of legislative directive in Assembly Bill 379 last year, which I was a lead author on. So it this isn't a gotcha question. I'm just wondering if you can elaborate rather than investing it with OES, which was the legislative intent when drafting the bill.

Could you walk me through what technical expertise you believe that, BSCC has that makes it a better home for administration of the grant program as opposed to OES, which the legislature overwhelmingly approved?

Anthony Franzoia, Department of Finance. I'll give an answer, and then I can kick it over to my colleague, Colleen, for kind of the department specific side of things. Number one, BSCC administers a wide range of grant programs, so I think they have a demonstrated expertise, not just in vertical prosecution grants, but grants of all kinds that's dealing with both federal and state funds. And number two, as I mentioned during my opening comments, they do have specific experience with vertical prosecution grants.

Although that was for organized retail theft, a different kind of crime, but I think the experience helps.

But Colleen is happy to add anything that she thinks is relevant.

Sure. Colleen Curtin, deputy director of grant division at BSCC. Yes. Through the through the organized retail theft vertical prosecution grant, our research team has worked very closely with the grantees in developing metrics to measure the outcomes over the past three years. If we were to administer this grant, we would anticipate collecting metrics around the number of human trafficking cases filed, the number of human trafficking cases charged, and the number that would be prosecuted using the vertical prosecution model.

So we're we're ready to take this grant on. We've learned a lot, as I said, from the ORT vertical prosecution grant, and happy to answer any questions.

Thank you. The last comment I'll make, mister chair, is just that I appreciate that. And certainly, we wanna have this grant program be a success, and and maybe BSCC is the proper home for that. We just ask for, increased collaboration with the legislative branch and hammering out the details of the program. As you know, it's an issue that we're all incredibly invested in, and I think will continue to be so for years to come.

Last thing, mister chair, I misspoke on the last panel. Just wanna mention, I was talking about judicial vacancies, I think it was over I said over 60 superior court vacancies. It's 50 superior court vacancies, 60 if you count the appellate vacancies.

So just for the sake of being accurate, wanted to throw that out there. Thank you.

Thank you so much. So member Lackey? I got nothing. Nothing. Going once.

Thank you so much. And thank you, Department of Finance for highlighting the $10,000,000, one time funding for missing or indigenous women in grants moving forward. We did have a hearing on this topic and we had a lot of voices come forward and show that the need is is great. There was also discussion of prior grants coming to an end in three years type deal.

And so we were wondering on the discussion that's there. And thank you again for May revise, including that $10,000,000, was there also talk about any ongoing funding to make sure the infrastructure that's being built for missing or indigenous women where the state still remains number five of all states in the nation of of not investigating those murders. Was there discussion about ongoing funding to hold that infrastructure that's being built in the capacity moving forward?

Anthony Franzoia, Department of Finance. The May revision only contemplates one time resources, but if ongoing resources are a priority for the legislature in in this specific area, we're happy to have that conversation as the budget deliberations continue.

Thank you so much, for that. As now, we're gonna move to, issue three. Department of Justice, Legislative Analysis Office, Department of Finance. And I'm not sure who's gonna go first. Alright.

So this will be right. Alright. Department of Justice.

Good afternoon, Chair Ramos and members of the committee. My name is Ashley Harp, assistant director of fiscal services at the California Department of Justice. I will provide a brief overview of specific DOJ may revise items today and will be available to respond to technical questions. The first proposal, is the, antitrust litigation. The governor's May revised budget includes limited term special fund resources through 2029-30 to support additional positions and external contracts to investigate and litigate complex antitrust cases resulting from reduced federal enforcement efforts.

Specifically, 14,300,000 in 2026-27, decreasing to 10,500,000 in 2029-30. Historically, antitrust law has been one of the most bipartisan areas of law with many large antitrust lawsuits led by the US DOJ or the Federal Trade Commission, with state attorneys general taking on specific and more limited roles in these cases. However, the historical level of collaboration has recently diminished requiring California DOJ to step in and enforce the antitrust laws to protect California consumers and businesses.

This proposal seeks the necessary resources to pursue this new unfunded and critical litigation work. The second proposal is for, the department's Medi Cal fraud and elder abuse program to support federal grant, spending.

The governor's May revised budget includes 46 positions in 2026-27, and ongoing, and 16,200,000 consisting of 12,100,000 in federal trust fund authority and 4,100,000 false claims act fund authority, which is required for the state match for the grant. To allow the department to fully utilize the federal grant awards, which supports the department's work in investigating, enforcing, and prosecuting healthcare provider fraud and abuse of the Medi Cal program. The third item, that we will, provide an overview for is the completion of organized retail criminal enterprise investigations.

The governor's May revised budget includes a one year limited term appropriation of 2,200,000 general fund to support the completion of 27 existing cases within the department's criminal law division related to organized retail theft. The budget also includes provisional language, which workload and which will allow for the department's expenditure or encumbrance of this 2,200,000 through 2027-28.

The, the last item is for, the victims of consumer fraud restitution fund, and it is a request for trailer bill language, requesting a continuous appropriation from the fund. The governor's budget includes this proposed trailer bill language, which will continuously appropriate funds from the victims of consumer fraud restitution fund based on the available cash beginning next year, 2026-27, to allow for timely restitution to victims of consumer fraud.

AB 1366, from 2023, established the fund to provide restitution to victims in cases brought by the attorney general. The fund is supported by disgorgement recoveries and can only be used for victim restitution. However, DOJ currently lacks appropriation authority to distribute these funds to victims. As a result, when funds are available, restitution cannot be distributed timely.

As of the current year, '25-26, DOJ deposited 1,200,000 into the fund, but cannot disperse it absent in appropriation. Continuous appropriation will effectuate AB 1366 by ensuring timely payments to victims. It allows DOJ to use existing and future funds without delay and aligns disbursements with court ordered restitution rather than aligning them within the budget cycle. With that, I will hand it over to our partners at LAO.

Drew Soderborg, Legislative Analyst Office. We have comments on three of these proposals. First, on the anti litigation funding, we have no, concerns with the proposed expenditure of 7,100,000 from the antitrust account to support this workload as that account has sufficient resources. However, we are concerned with the 7,100,000 in expenditures proposed from the unfair competition law fund. In January, the fund was projected to have a $1,900,000 fund balance at the 2026-27, meaning that approval of this proposal, barring any other changes, would push the fund into insolvency.

Now earlier today, the Department of Justice did provide an updated fund condition for the unfair competition law fund, suggesting that the fund could support these expenditures.

However, its ability to do so is contingent on the state's general fund repaying an a $130,000,000 loan that was made in past years. And that doing so would limit the use of those dollars for other general fund priorities. Accordingly, we recommend rejecting the funding proposed from the unfair competition law fund without prejudice unless DOJ is able to demonstrate that the fund can support those expenditures without requiring repayment from the general fund. Turning now to the, completing organized retail criminal enterprise investigations.

This is one of those proposals that, again, we recommend you weigh against your other general fund priorities.

Finally, with respect to the continuous appropriation from the victims of consumer fraud restitution fund, we recommend not approving a continuous appropriation from the fund because that limits legislative oversight. This is because continuously appropriated funds eliminate the need for the administration to come to the legislature to ask for changes in appropriation. However, we are aware that DOJ reports that the amount of revenue deposited in the fund is very difficult to predict, making it difficult for them to ask for the right amount of authority.

To address this, you could approve provisional language that would allow the appropriation authority from the fund to be adjusted thirty days following legislative notification. This would preserve legislative oversight and give DOJ the flexibility it's seeking to pay funds to victims.

With that, I'm ready to turn it over to our partners at Department of Finance.

Helena Petricico, Department of Finance. In response to the unfair competition law fund comments based on current revenue projections, expenditures, and scheduled loan repayments, the fund will remain solvent in the budget year and ongoing even with the approval of the antitrust request. The first loan repayment to the fund is scheduled in 2728 for the amount of 100,000,000. Regardless, the administration will continue to monitor the fund condition of the unfair competition law fund.

On the second, item for completing organized retail theft, criminal investigations, the proposed the proposed resources would allow the division of criminal law within DOJ to complete the existing 27 organized retail theft cases by maintaining dedicated attorneys, investigators, and support staff to investigate and prosecute these cases.

This proposal does not address any new workload. And lastly, for the victims of consumer fraud restitution request, given the variable and unpredictable timing of settlements and restitution payments, the proposed continuous appropriation authority provides the operational flexibility necessary to administer the payments and avoid delays. Similar funds for other departments are structured in a similar way and are continuously appropriated.

Thank you so much for your presentations. We bring it back to the dais. Any comments or questions? Assembly member Schultz.

Thank you very much, mister chair. Just a clarifying question for DOJ or anyone can answer for that matter. I just wanted to confirm. So when we talk about MediCal fraud, well, let me step back. So we have Medicare, which is a federal program.

My recollection or understanding is that it's the Federal Government's responsibility for investigating fraud under that program. Is that right?

This is Jennifer Euler for the chief assistant attorney general. I oversee the division of Medi Cal fraud and elder abuse, and that is absolutely correct.

Okay. Thank you, and thank you for being here.

So then we have Medicaid or we refer to it as Medi Cal in California. And I just wanted to confirm, DOJ's jurisdiction is over the Medi Cal providers, not necessarily the Medi Cal patients, at least under the the Bureau of Medi Cal.

Absolutely.

It is over the Medi Cal providers, and I just lost my train of thought. It's over the Medi Cal providers and those not the beneficiaries, and it is over. Also, we don't deal with setting policy that so that lets the fraud out the money out the door. We just do the investigations and prosecutions.

Okay. Great. Thank you. No other questions or concerns. I know there's a separate proposal going through health subcommittee, but I just wanted to clarify the scope of today's proposal.

Thank you, mister chair.

Thank you so much. And just a on clarification on the 1,200,000 for the victims of consumer fraud restitution fund. Was it said that we need the trailer bill language in order for the appropriations to go through for that those funding?

So the requested trailer bill language will provide for a continuous appropriation of the funds. So there would be no proposed appropriation. It would just be the language that would allow for the continuous appropriation of the resources in the fund.

That would expedite the delays that that we're seeing?

Yeah. To to disperse the money to victims.

What is that delay that we're seeing now? The urgency.

Yeah. So we're not able to spend the money in the fund without an appropriation, without a legislative appropriation currently.

Alright. Well, thank you, so much. And thank you for your presentation as now we'll move to issue four. CDCR, LAO, Department of Finance. Thank you so much.

Okay. Good afternoon, Chair and Members. Madelynn McClain, CDCR, Director, Division of Administrative Services. And with me, I have Duane Reeder.

Duane Reeder, Deputy Director, California Correctional Health Care Services.

Bear with us as we have many items and a lot of individuals, to cover those items. So we will be oh, I'm sorry. Yes. Yes.

Go ahead.

Okay. Yes. Thank you. We'll go ahead and start with the BCG contract.

The 2025 Budget Act included estimating savings targets as a result of the anticipated contract with the outside efficiency consultant. CDCR was selected to participate in this review. As part of the high level analysis, the administration identified savings estimates of $125 million in 25-26, $480 million in 26-27, growing to $635 million in 28-29 and ongoing. These savings targets were revised in the 26-27 Governor's Budget, and again at May Revision, to reflect the near completed work of the consultant and CDCR.

The revised savings, or results, are reflected in three areas: workforce optimization, workers' compensation and regional return to work staffing model, and third party procurement.

For the workforce optimization, the analysis focused on headquarters programs for CDCR, Division of Adult Parole Operations, Division of Adult Institutions, and Human Resources. For CCHCS, health care focused on business services, medical services, and nursing services. We reviewed the revised role of headquarters based on evolving needs and streamlined managerial capacity to reduce layer depth and improve span of control. The result was a reclassification of certain positions and the elimination of approximately 137 positions across these programs.

The majority of the positions are vacant, and the remainder will be eliminated through attrition.

The positions were identified for elimination through review of current processes and identification of streamlined decision making to achieve greater operational efficiency. It also recognized that investments in technological solutions allowed workload to be consolidated, and as a result, organizational shifts were also included as part of this effort. The second component was related to workers' compensation and regional return to work staffing model. This analysis resulted in the proposal that will be discussed today, which recognized inefficiencies with a decentralized process and higher than standard caseloads.

The request provides resources to implement the first phase of the regionalization of workers' compensation staffing and caseload processing. Savings are anticipated to be generated through more focused case processing and return to work planning, reducing annual fees charged by the State Compensation Insurance Fund and payments to individuals. The third area of focus was third party procurement.

CDCR purchases hundreds of thousands of items every year, the majority of which are through the California Correctional Training and Rehabilitation Authority, commonly known as CalCTRA, formerly known as CalPIA.

The analysis reviewed purchasing across the entire department and identified targeted areas that were of the most value for success. The consultant completed a detailed analysis and specification review of these items from other vendors and compared those to items produced by CalCTRA. For the categories reviewed, food, laundry, clothing, and furniture, a like for like item may be less expensive than CalCTRA. In other cases, the manufacturer's specifications from CalCTRA were different, affecting the price.

CalCTRA and CDCR will work to retool specifications of like items to reduce overall cost of goods purchased where applicable.

Additionally, the consultant reviewed the current contract for the health facility maintenance performed by CalCTRA staff and compared the scope of work to required mandates. The analysis determined that the frequency and type of cleaning could be adjusted, which resulted in a reduction of the total number of staff needed to complete the clean. The savings amount reflects a reduction in total contract costs. And with that, we are here to answer any questions.

Orlando Sanchez with the LAO. As part of the BCG contract, I'll be highlighting one component of it. They identified savings in parole specifically tied to workload associated with the parole services associate classification. They identified that the majority of this workload is obsolete, meaning it's no longer needed or can be absorbed within the department's existing resources. Accordingly, the administration is proposing to reduce about 65 of those positions and repurpose the remaining 44 positions for other workload related to reentry support services.

Under this proposal, each parole office would retain at least one of these positions for the newly assigned workload. This would reduce funding by about $9 million on an ongoing basis as part of the BCG contract. We recommend modifying this proposal. Given that the department found that the existing workload for these positions is obsolete, we recommend eliminating all of those positions. In addition, we recommend rejecting the remaining positions that the department plans to reassign to this new workload that they've identified.

The department did not provide enough justification for how those positions would improve reentry services or what gaps they would fill. We estimate that under our recommendation, the department would create several millions of dollars in additional General Fund savings. I'll hand it over to my colleague, who will discuss the BCG contract more broadly.

Caitlin O'Neil with the Legislative Analyst's Office. In addition to the parole positions that my colleague just spoke about, the administration is proposing to eliminate various other positions throughout the department as part of this overall savings effort. However, it hasn't provided detail on what specific positions it's proposing to eliminate, why it believes those positions are not needed, and what the service level impacts will be, if any.

In addition, it hasn't fully explained how it will change the contracts with CalCTRA, and what kind of service level impacts that might have, if any, as well. So we recommend directing the administration to provide this detail so that the legislature can fully vet these changes.

In addition, the May Revise assumes $100 million in ongoing annual savings beginning in 27-28 as part of this overall effort, but it hasn't yet indicated how it will achieve those savings at this point. And based on past experience with unallocated savings targets, the state has fallen short of them, and that just ends up contributing to future budget problems. So at this point, we recommend the legislature only budget for savings where the administration can clearly articulate how they expect to achieve those savings.

Alyssa Cervantes, Department of Finance. So we disagree with the recommendation to eliminate all parole service associate positions. These positions and duties are being repurposed with a renewed focus on community reentry. And while they've always assisted with those efforts, this will now be their primary duty, and this allows parole agents to focus more closely on their supervision responsibilities. Happy to answer questions on any of the other pieces.

Well, thank you so much. We're going to bring it back to the dais to talk about any questions or comments on the BCG contract that was presented. Then we'll move forward in the other proposals and presentations. Assemblymember Lackey?

Obviously, I have the most glaring question. Why is there such, I mean, the actual savings versus what we were anticipating is less than 20%. It's pretty stark, pretty stark. And I'm just trying to figure out the explanation. Do we have answers as to why there's such a disparity between the projection and the actual savings?

Projected savings, by the way. I mean, it's enormous.

Absolutely understand. And part of the reason is because when the original savings targets were estimated, it was based on a point in time, high level analysis that was done without digging too deep into all of the different areas. And so as we did that work with the consultant, a lot of things we had already started to do with the department.

And so it reflects the work that we've already done plus an adjustment made for decisions that went into the original estimate that were no longer able to be achieved.

I just wonder how optimistic some of these projections are. I mean, even on the right column where we have actual projected savings, is there reason we should have confidence in that?

So those reflect the near completed work that we've done with BCG, and we agree with those savings. And those savings targets have been put into our budget and reduced from our budget.

The $100 million has been, we're comfortable with that. Is that what you're telling me?

I'm comfortable with the amounts that were listed. The $100 million is in the out years. It's not in the near term. And that primarily, it

That scares me even more.

I understand. That primarily reflects a placeholder and a commitment from this department to work with the administration to find savings elsewhere. Part of that will be review and analysis of contracts that we currently have. As you may know, we have thousands and thousands of contracts within the department. One of the things that we're looking at is a clarification of scope of work and deliverables to ensure that those contract vendors are providing the services and goods that we have asked of them to streamline those processes.

Another thing would be to look at where we can leverage a statewide contract. So for example, shredding. Everyone has to shred, every institution has documents to shred. So instead of having each institution do their own contract, we would have a statewide contract with a regional model where multiple vendors would be able to bid on this statewide master contract so that they don't have to go out and get their own contract.

So those are the things, and leveraging IT solutions to streamline processes.

Okay.

That's why the savings for the $100 million don't start until a couple years out.

I get it. Thank you.

Thank you so much. Senator Schultz.

Thank you very much, Mr. Chair. My first question is to Department of Finance. My understanding is there's a full list of recommendations that the Boston Consulting Group came up with and provided to CDCR. Is that list going to be made available to the legislature before we complete our budget process?

Well, we don't have that here today. We can work with you on what we're able to share. Some of that is deliberative as part of a contracting process, but we can work with your office on what we can share publicly.

Certainly. And I can't speak for any other members of the committee, but I can tell you that as we approach the deadline by which we constitutionally must approve the budget and send it to the Governor, I'm not comfortable voting on a budget without all the information.

So whatever you can share, as the administration can share, I would ask that that be shared through Assembly leadership with our budget staff and teams so that we can have an understanding of which recommendations were adopted or accepted and which ones were not. And then, of course, I would just echo some of the colleagues from LAO. It's great to see all these cost savings measures that have been identified, but there isn't really a lot of meat on the bone.

I can't really tell a lot of detail of what that looks like, and so it's hard to sit in judgment of whether we think it's a full and comprehensive proposal or not. So any information that could be brought to us by week's end would be very much appreciated as the timeline starts to speed up from here. So thank you. The second question I have is perhaps best suited to the department, but again, anyone is welcome to answer.

Without getting into too much granular detail, are the recommendations that the Boston Consulting Group formulated and came up with,

are these concepts and suggestions that you hadn't thought of before that had not been developed in house or otherwise identified?

I wouldn't say that we hadn't thought of them before, but it was a, they went about it in a way that we hadn't done before, nor do we have the time or expertise to do. So for example, with the third party procurement, they were able to pull every spend category, look at contracts for the last several years, and bucket things out in a way that we just didn't have time or a solution in which to do that.

So while we recognize that we could have savings from contracts, they helped focus us and did that deeper level analysis that we were not able to do. Okay.

I think also they had comparables to the community. So a lot of the contract costs, they did do comparables to outside vendors and compare those costs to some of the state contract costs and trying to narrow those margins.

And thank you both for that. That does help. And then the other follow-up I'd have on this topic is, without getting into incredible detail, I understand there might be things that can't be publicly shared yet. But were there any concepts that came up from this consulting group that were novel to the department that had not been thought of before? Just broadly speaking, top line.

Generally, I wouldn't say completely novel. I think, again, it's the approach in which they took for those concepts that we had not thought of before.

Alright.

I appreciate it. And where I'm going at, and I'll spare you all because I know these other questions, is I think that maybe getting some of the information that I've just mentioned would be helpful to me. From Department of Finance, it would help answer the $20 million question on the minds of many of my constituents when they ask, well, what did we really get for $20 million?

And it sounds like there is certainly some benefit derived, but again, it's difficult to answer that question without detail of what was suggested, what was put on the table, and what wasn't. So I think that information will be very helpful. The last question that I have, I'm just going to throw it to the panel because you all may have slightly different answers.

But considering that the May Revision includes $400 million in proposed new spending, are we saving anything at this point from the work that BCG has done? And as you think about it, I'll try to give you a little more context because that's fair. So it's my understanding that the May Revision is about a billion dollars more than last year's May Revision. So spending is going up, and we're going to talk about that in a moment.

There's a lot of things that I like in the proposed budget, investments that we should have made a long time ago.

But the point I'm making is that those substantial investments, in my view, don't mirror what we're seeing with a lot of the rest of the budget where we're talking about significant curtailments in services provided. So I guess that's the thing I'm having this cognitive dissonance around: this is a substantial increase in spending for things I do fully support.

But at a time when we're talking about trying to balance a budget where you're talking about severe reductions in health care, human services, housing, can you help me make that make sense to me so I can explain that to my constituents?

Certainly. I mean, the Governor's Budget, the May Revision, does reflect an increase of approximately $1 billion from last year. However, that is primarily driven by employee compensation costs, which would be salary, benefits, retirement rate adjustments, and those targeted investments in those budget change proposals that you have before you today. Additionally, there are population change adjustments that are in there. So all of those components make up, it's not just one thing.

Again, we are thoughtful about what we put forward. We want to continue on with the mission of the department, and these proposals reflect our highest priorities to do that.

I will say that's why the BCG savings has that $100 million in the out year, to reflect our commitment to continue to look at our spending and target areas, use the things that they had provided to us as a road map for future reductions without having to use the consultant, to use the work that they had done for us. So that was very beneficial.

Thank you. Good afternoon. I think on the health care side, you know, we're obviously dealing with a new receiver. We also have the existing receiver who's hopefully coming to a sunset at some point here. So we're trying to just address some baseline deficiencies to correct our budget

and so we have an appropriate budget moving forward post receiverships, and we're addressing the issues they've identified.

Okay. And I apologize, if I could just make one more comment. Please, please. Our budget has been reduced. I think there's this misconception that our budget just continues to grow and grow.

And on its face, if you just look at it, that is, it is true when you look at the pure numbers. But through prison closures, facility deactivations, and various efficiencies, our budget has been reduced by over $1.6 billion in the last several years. And so the main driver of the increases, again, are those targeted investments in rehabilitation and health care programs and employee compensation costs because the job that our staff do is very difficult and stressful, and they should be compensated.

Certainly. The last, I don't know if it's a question or just more of a comment as we continue with discussions this year and moving to next year because that'll be here before we know it. I think part of where maybe some of the cognitive dissonance comes from is, you know, generally speaking, we're seeing declines in state prison population, and now we're seeing some substantial new investments.

And again, I'm not criticizing the goal and the intent of trying to make some of these investments, but I think, one, a member of the public could reasonably wonder, we're spending more at a time when, generally, our population in prison is declining. So how does that make sense?

Or maybe a better way to think about it is, at what point do we reach equilibrium? We raise the standards to where they should be, and then we start to see spending sort of level out.

So if you don't have the answer today, that's fine, but just something I think we should all be bearing in mind because that's certainly what I'm hearing from folks that are in the know and watch these hearings and are looking at it, and it doesn't make a lot of sense at first blush. I mean, yes, when you get into the detail, I understand there's some reasons there.

Very last thing I'll say, Mr. Chair, and then back to you, is I just want to echo, again, some of the sentiments from my colleague from Palmdale.

You know, what we were promised originally, $635 million in ongoing in out year savings, is about 18.2%. That's where we land ourselves today with $116 million. I understand that sometimes you set out with a really ambitious goal and you fall short, but this is about a half billion dollars that we're falling short. I mean, we had very laudable goals of trying to curtail spending, and we're falling incredibly short.

So I guess my one suggestion, frustration, but suggestion to this administration is, projections when you're doing financial calculations can be challenging, but a half billion dollar swing is just, it can't be explained to me.

That's what I guess I'm really frustrated with. That is a substantial shortcoming. So thank you, Mr. Chair.

Well, thank you so much for that. Along the same lines, the projections for the 2025 Budget Act, I'm just using 2025-26 $125 million updated savings, 2026-27 $42 million, 2026-27 proposed $250 million, and then in the May Revision, $82 million. We could go on and on. Part of my question also is, with the 2025 Budget Act, those dollar amounts and the potential proposed savings that was there, was that presented by the Boston Consulting Group or who presented those numbers?

That was a collaboration between the Boston Consulting Group and the administration at that time.

Okay. And so then we get to the updated savings, 2026 May Revision, that is sorely reduced. So between the Boston Consulting Group and the collaborative that is going on discussing that, when did that actually become relevant, or did people start to understand that that might not be met? And was that in some of those recommendations that you're talking to that hasn't been released yet?

I think a portion of it, obviously, it happened over a span of time over the last almost year that we've been working with the Boston Consulting Group. A portion of it is we had lofty goals of looking at several different areas of CDCR's budget. And as we got into each one, I don't think we all fully understood the amount of data and information that went into each one and to develop all of these proposals.

So a portion of that was eroded as they weren't able to look at every single item that we had proposed that they look at.

I mean, you have to understand the position that this is putting myself in and with my colleagues. I'm not just here, but throughout our caucus and the legislature. Being proposed millions of dollars of savings, and it's not equating out to that. And yet, when those recommendations are being asked, some can be released and some would not. But we need to start to understand, when did that decision start to get away from getting down to 2028-29 ongoing after that?

Right? So we sold a bill of goods that gave a lot of promise and hope. And now we're seeing those numbers drastically changed, to ongoing from $635 million to $116 million. So the Brant, and the Boston Consulting Group, and those that are collaborating with them, when they found out about how the disparities will be, I think that information could have come our way so that we could better be equipped to handle the questions that will still be coming our way.

So any information that you can share from those recommendations, we'd like to see it all, but we understand the legalities that are there.

But one of the big questions, if you could paint that picture: who presented these savings, this hope of ongoing funding, and when did that change? And when was the approach to the legislature going to be brought into the fold rather than seeing this right now within the budget and the revise that's there?

Yeah, I will say we have been having conversations as late as this week on some of these numbers. So it was not, you know, a decision that was withheld for a long period of time. We tried to make updates at Governor's Budget with what we knew at the time. But again, we had a couple more months of deliberations since then with the Boston Consulting Group.

And again, you have to understand the frustration that a lot of our colleagues in the legislature is feeling about this. Seeing so much promise and then seeing it not coming to fruition. And knowing when that debate was happening, when the realization was there. There also was a statement from CDCR

that there was a point to where it was aware, or known, that no longer that way you would be able to achieve that savings. So again, diving into, when was that notified? When did you know that you weren't going to be able to achieve those savings?

And where was that feedback back to the legislature so that we could all be on the same page?

Again, we work collaboratively with the administration on this. And so it was at the appropriate notification times, the Governor's Budget and May Revision, because we were still working through those processes. Again, we are still, we are not even complete. We are still, we have a couple areas that we're still finalizing, and so it's ongoing, very in-depth and detailed work that has taken time. And while we have communicated with the administration on that throughout the process, it's not, we didn't know six months ago.

It's, as we have been notifying you through the appropriate budgetary mechanisms when we have been able to do so and when we know we have changes.

Well, thank you. And hearing the frustration from the Members here on this dais could trickle to the Members within the legislature itself. So please help me with the information that's needed to understand when we realized that we weren't going to be able to meet those savings projections that were basically sold to the legislature, and how that deliberation moved forward. And as much of the recommendations from the Boston Consulting Group, we would like to see it all. However, we do understand the legalities of it.

Any other questions on the Boston Consulting Group?

One more. Thank you, Mr. Chair. Not a question, but just a comment to echo what you just said. I just want the folks from CDCR and the administration to know that when I go out in my district and I talk about the work we're doing in the Capitol, I talk in granular detail. I talk about the investment of $20 million to find significant cost savings.

So when we do see these substantial shortfalls in what was promised, the reason I'm asking for this information, and I think my colleagues are, is because I have constituents that are high information that are going to ask these questions. So getting that information helps us convey it to our colleagues and back to our communities that are paying attention to what we're doing here. So thank you, Mr. Chair.

Thank you so much. Any further questions on this topic?

No. We've sent a message.

Well, thank you so much. You can proceed with your presentation.

I'm going to invite one of my colleagues up to do the population overview. Sorry. We will have a bit of musical chairs here with

Okay.

Good afternoon, Mr. Chair and Members. I'm Cathy Jefferson, Deputy Director for CDCR's Office of Research, and I'll be speaking about our Spring 2026 population projections. So to predict future populations, CDCR utilizes historical trend data, including data on court commitments. The Spring projections are an update to the Fall 2025 projections, which we provided through June 2030. The estimates include actual data as well as the estimated impact of legislation, policy, and process changes through 12/31/2025.

We are expecting a net five year decrease of 5.9% for our institution population and a net five year decrease of 9.7% for our parole population from June 2025 to June 2030. The Spring projections continue to reflect net five year decreases for both the institution and parole populations due to the ongoing effects of prior population reduction measures. The Spring projections trend slightly above the Fall 2025 forecast due to higher estimates for Proposition 36.

However, the core methodology that we use for Prop 36 impact remains consistent with the approach we took in the Fall. The revised projections show a higher degree of impact compared to the Fall based on actual admissions data that we collected through 12/31/2025.

The long term impact of Prop 36 remains uncertain, but CDCR continues to monitor the data, and we will continue to update future estimates as we receive new information.

Thank you.

Thank you so much.

Caitlin O'Neil with the LAO. We continue to find that the state could close a prison within the next few years, and so we recommend directing the administration to do so as soon as possible to reduce ongoing costs by over $100 million annually depending on the prison.

Department of Finance?

Hey, Anthony Franzoia with Department of Finance. I would just note the administration is not recommending closing an additional prison as part of the 26-27 May Revision, but we'll continue to assess the needs of the adult institutions as well as trends in the overall adult population.

Thank you so much for your presentations. Bring it back to the dais. Assemblymember.

I have a question that I don't know that anybody here can answer, but I see the reduced number of people being sent to prison, but a lot of it is because we're sending them to jails. And I wondered if we're counting that, how many people that used to be sent to prison are being sent to jail facilities. And you stay in those jail facilities way more than a year. It used to be a year, but now it's way beyond that.

So I just wonder, do we have a grasp on that disparity? Because I think it's an important one.

Anthony Franzoia, Department of Finance. One thing I could draw that may answer your question is, the state does track the amount of people that would have come to prison but are subject to county supervision now, and that's done via Prop 47 in one method. And we do a calculation of, or, I mean, CDCR does the calculation of, again, how many people would have come to state prison under that scenario.

We use a marginal cost, and then we basically fund the counties for kind of those state savings that would have otherwise occurred, costs that would have occurred at the state, if that helps.

Yeah. If there's some way I could get some of that information, I would really appreciate knowing what those numbers are.

Thank you so much. Any other questions, comments? Thank you so much. Please continue.

Thank you so much. Okay. We will go back to the items. I'm going to cover a few of the items and then turn it over to my colleague, Mr. Reeder. So Item 1 provides $100 million General Fund to address increased workers' compensation costs.

These include all claim payments as well as associated administrative fees. CDCR receives an annual adjustment for workers' compensation costs, which is typically included in the Governor's Budget. However, due to the work with the external consultant, that adjustment was moved on a one time basis to the May Revision. That calculation is based on an estimate using actual costs for the first several months of the fiscal year, adjusted by a modified average increase year over year.

While the adjustment reflects a reduced amount, this is consistent with previous adjustments as the cost increases are generally provided for custody, parole, and health care institution positions, medical institution positions only.

The total cost identified includes cost for all claim types. So it's other programs, headquarters, incarcerated person. So the overall cost is everything, and what we're being funded for is a portion for that piece. Item 3 provides resources to support reactivation of two housing units within Facility 3C as a single celled honor housing unit for Level 3 participants. The unit will be a behavior based program, which will include normalization efforts where they can live in a supportive environment and enhance their rehabilitative journey.

CDCR continues to normalize the correctional environment for purposes of fostering real rehabilitation, improving safety, and focusing on the health and well-being of both incarcerated persons and staff. This program is voluntary and provides an opportunity to participate in a behavior based collective community where responsible behavior is rewarded. The population will be encouraged to develop more autonomy with more control over their rehabilitative schedule as well as their medical appointments.

Each participant will have the option to live in a single cell assignment, removing the negative impacts and potential conflicts typically associated with sharing a cell, a small confined living space. The overarching goal is to improve outcomes through a comprehensive approach that emphasizes reentry, reduces trauma and stress, enhances rehabilitation, as well as increases the health and well-being of both staff and incarcerated persons.

The total cost for this proposal is offset by reduction of deactivations at other institutions, making it roughly a net zero transaction in the near term. Finally, Item 4 provides resources to support the implementation of AB 247. AB 247 provides incarcerated firefighting hand crews with a pay raise commensurate with the federal minimum wage of $7.25 an hour while on an active fire incident, increasing from the current pay of approximately $1. There are approximately 1,800 incarcerated persons assigned to fire camps.

And as a result of the hourly increase, CDCR estimates that some individuals will meet the threshold for income tax withholdings.

CDCR does not currently have a mechanism by which to calculate and withhold taxes from incarcerated person pay, and this request will leverage functionality that exists within our current system of record to develop an application to complete pay calculations and collect tax withholdings, provide pay stubs to incarcerated, and generate W-2s for tax filing purposes.

Finally, Item 7 provides resources to comply with AB 778, which requires CDCR to achieve a goal of ensuring at least 60% of the agricultural food products purchased each year are grown or produced in the state. As part of the 2025 Budget Act, the department was provided $15 million one time to implement this bill, providing additional time for us to complete our analysis.

Generally, this cost increase is to support getting to the 60% threshold, and those resources will be used to increase the daily feeding rate to $4.96 per day.

Okay. For the health care, oh, sorry.

Jump? Are we going back and forth?

Oh, I thought we were supposed to do them all. I'm sorry.

Alright. Before we switch over to mister Reeder go ahead, LAO.

Caitlin O'Neil with LAO. We have recommendations and comments on a few of these items. The first is the Corcoran Honor Dorm, which is issue three in your agenda. And we find that while the idea has merit, the details are not fully fleshed out and could change, as the throughout implementation. Also, the department hasn't articulated a clear plan or set of metrics for how it would evaluate the success of the program.

So if the legislature decides to approve this proposal, we would recommend adopting provisional language requiring the administration to provide progress reports and a plan to evaluate the program. The next item that we have recommendations on is issue four in your agenda incarcerated firefighter pay. The proposal includes provisional language that would require CDCR to submit quarterly updates to the Department of Finance.

So we would simply recommend requiring that the legislature receive a copy of those updates as well so it can stay, up to date on implementation of the bill. And then just a a comment, kind of for your consideration is that the Appropriations Committee analysis for this bill identified costs of 1,000,000 at a minimum to develop a payroll system.

There was, as far as we understand, some uncertainty at the time of what would be involved in doing in or what would be required from an administrative perspective. And so to the extent the legislature finds that the actual cost of implementing this bill are too high, it could consider reassessing the policy. For example, it could look into providing higher release allowances instead of higher hourly pay for people who served in camps, in that that might not require the same payroll processing.

Moving to food costs or the food premise, which is issue seven in your agenda. Another just another comment for consideration here or awareness is that the Appropriations Committee analysis for this bill identified an unknown fiscal impact likely in the millions of dollars across all state institutions that purchase food products.

And so to the extent and this bill or this is cost costing CDCR around 10,000,000 to implement, or at least that's the this is the primary driver of of the proposal, is the requirement to have California grown food comprise 60% of institutional purchasers, food purchases. And so to the extent the legislature finds the actual costs are too high, it could consider reassessing the policy in light of new information about these costs.

Thank you so much. Department of Finance, if you could comment on those items in the proposal up to item seven, then after mister Reeder goes finishes off those proposals, then we'll go into that part of it. So we'll break

it break it up. Anthony Franza with Department of Finance. I'll provide comments on issues number three and number four. So for issue number three, court in state prison honor housing. The administration does not believe adopting provisional language is necessary given the department's previous experience with honor housing and a handful of institutions.

The The department does plan to track various metrics, including but not limited to rules violation reports, including the types of violations, for example, violent versus nonviolent incidents. If there's a decrease in grievances and allegations of staff misconduct from the incarcerated population in the honor housing unit and conducting surveys for both the incarcerated and the staff on the housing unit. That said, regarding the LAO's recommendations for specific reporting requirements and metrics, about what to measure.

The administration is not necessarily opposed, but we need to have further conversations about the specifics there. And moving on to issue four, incarcerated firefighter pay.

Because AB 247 took immediate effect in October 2025, recommending to explore new options at the administration's opinion, with fire season rapidly approaching may be counterproductive. We stand by the request that has been put forward.

I would just note that the administration proposed this particular BCP at May revision rather than the governor's budget because the department needed more time to consider the numerous complexities involved in implementing, $7 or 7, dollar and 25¢wage, per hour for the incarcerated population, namely how to properly withhold taxes. Then I would just note that, there's no other state that is currently paying incarcerated individuals at this race. There's really no handbook for it.

So CDR is really developing this really from the ground up. And, again, just to speak to kind of the appropriations process, I would note that that estimate, again, was a minimum of a million dollars. Not an excuse. The appropriations process moves fast, and I think the or the department was working with the best information it had at the time.

But, again, as it dug into the bill in a more in-depth way, over the summer and the fall, it was realized that, again, the the BCP, those resources are really what is needed to get this off the ground. And I'll turn it over to my colleague for other comments.

No additional comments, but we're here to answer questions on, issue numbers one and seven.

Thank you so much. Bringing it back to the dias on issues one through seven, and then we're gonna finish up the proposals after that. Sorry. Yes. Yeah.

If you wanna save them for all of the proposals. Questions where you Yeah.

Yeah. If that's alright with you, mister chair,

that's good. I mean yeah.

Thank you, mister chair.

Mister Lackey?

I'll be quick. I my concern is about this $100,000,000 increase to workers' comp. Is there any kind of mitigation measures to try to reduce that that cost? I I mean, that's a pretty big pretty big impact on on the budget situation. I just wondered if it's safety related.

There's also a liability issue concern for the inmates having injures injuries and and suffering difficulties. I I just would like to know more on that aspect of what's really triggering that that increase because that's a pretty good increase.

Again, that just it reflects again the increased costs associated with the the rate of pay part primarily because the rate of pay is higher, and so we have do have to pay for additional if their pay goes up, then their, the amount that we pay for the claims does does increase a little bit. It is something that we're continuing to look at. That's why we do have that other proposal that is included in the, May revision specifically around the regionalization of the return to work coordinators.

And so part of the work with the Boston Consulting Group was looking at going away from a decentralized model and and putting all of the that work at at one location. And it'll also allows ask for additional positions to reduce case loads to an industry standard.

Right now, our return to work coordinators have over three seventy cases per individual, which means they're barely able to process. They they they meet their statutory requirements to open the case, do the appropriate filing, but they're not able to actually work the case. And by work the case, that means engaging with the employee to, for return to work planning, working with, state compensation insurance fund to get those claims moving.

And so all of those components are designed to again to get the employee back to work as soon as they are they're physically able, which will reduce costs over the long term.

Yeah. I'm familiar with that. But so are you telling me that this is mostly a reflection of inflation and and not necessarily number of injuries?

No. There are our claims have increased over over year over year. There have been an increase in claims. We are still able to close several thousand claims every year. To the extent we identify areas common areas of commonality, we do work with the institutions and our facilities folks to try to address those those needs.

Again, our facilities funding is very limited, so we don't have an opportunity to do full scale changes. But where we see we work with the institutions and the facilities group to try and identify if there's a specific need in that area or we're seeing certain claims, several claims for for a certain area or facility. Is a is a very dynamic situation. And again, it's a twenty four hour job, which requires a lot of

a lot of opportunity. Patrolman. I understand that issue very well. Thank you.

Thank you so much. Go ahead, mister Reeder.

Thank you, chair. We need to go back to item six real quick. So I'll cover that. And that's the And this is one time funding is for contracts and educational supplies to enhance the menopause education for the staff and female populations at the female institutions. CDCR has an aging female population, and this will benefit patients and staff on the challenges of menopause.

Orlando with the LAO. This is a proposal we recommend you weigh against your other priorities. If the legislature chooses to approve this proposal, we recommend providing the department with more direction on how to spend these funds, given that the proposal currently has few details.

Thank you. Department of Finance?

No further comments at this time. But happy to answer questions.

Thank you. Please continue, mister Reeder.

Okay. I'd like to move on to issue number 12, the mental health receiver staffing. The request is for 26 positions and twelve point six million and twenty six twenty seven, 26 positions and forty six point eight million and twenty eight twenty nine and twenty six positions and thirty nine point three million and twenty nine twenty. And this funding is to support the staff bonuses, the receiver office costs, and staffing for hiring and retention expand hiring and retention.

And also, we're hoping to expand the use of internships and additional training for our Clinicians.

So this proposal will be covering those areas.

Thank you so much. Alio?

Orlando Sanchez, Alio. We raised concerns with two portions of this proposal. First, we recommend rejecting $2,000,000 for the proposed legal affairs positions. These would process advocacy claims in the proposal. It indicates that such inquiries are a long standing element of this case, suggesting that this is not a new workload for the department.

Our second recommendation is on the proposed human resources positions. It is our understanding that as part of the receiver's action plan, there is a planned assessment on whether the state currently has enough HR positions, to hire sufficient, mental health staff. However, through this proposal, a copy of that assessment wasn't provided, to the legislature. Accordingly, we recommend adding provisional language that would require that thirty days prior to these funds being available to the department that this assessment be submitted to the legislature.

Thank you. Thank you. Department of Finance?

Alyssa Cervantes, Department of Finance. So the 12 positions for legal affairs and risk management, which are proposed to be funded by the special deposit fund of the first two years, are required to process advocacy inquiries. And while that is an existing process, it's being significantly expanded under the receivership. And so those duties can no longer be absorbed by existing legal staff. If these positions aren't funded, the state jeopardizes the timely conclude conclusion of the receivership.

Thank you. Please go ahead, mister Reader.

Oh, I only have one more comment to the LAO's recommendation. Only six of those HR positions are permanent. The rest are limited term. So as the assessment is completed by the mental health receiver's office, they they've only recently hired their their h r, expert in the last few months. And so that assessment will will be coming along with some other staffing assessments.

But those positions are limited term. And so if we need to adjust them or come back to make them permanent, we'll do that in a future proposal.

Well, thank you so much. Just reiterate that receivership is a court ordered receivership.

This is a court ordered receivership, sir.

Thank you so much. Please move on to the next issue.

Okay. So, next up, we have the mental health resource teams. And this proposes 3,600,000 general fund and 1,200,000 behavioral health services act funding and 18.9 positions in 2627 and 7 point 3,000,000 general fund and 1.2 BHSAF funding, which would be Ever Health Services Act, and 37.8 positions in 2728 to expand resource teams at our expand to nine resource teams across six institutions. We currently have resource teams at the prison California State Prison Sacramento, Salinas Valley State Prison, and San San Quentin Rehabilitation Center.

And those resource teams have shown to reduce rules violation reports, reduce self harm events, and reduce suicide watches, for some of our most challenging mental health populations.

So this is an expansion of those resource teams up to nine teams at six different institutions. The six institutions, five of them that have PIPS, which is our psychiatric inpatient facilities, which is our highest level of psychiatric care within the in the department. And then also the California State Prison of Sacramento, which has a very high EOP population.

Thank you so much, Alio.

Orlando Sanchez, Elio. To better understand, the outcomes of this proposal, we recommend modifying it to a four year limited term basis and requiring the department to report by 01/10/2030 on the outcomes from establishing these resource teams. The report should include the average rate, or vacancy rate of the added positions, a comparison of a change in violence before these positions were funded and after for rules violations as well on suicide watch hours.

The report would better position the legislature to assess whether this proposal merits ongoing funding and whether it's cost effective to continue, these programs at the selected prisons.

Thank you so much. Department of Finance.

The administration continues to support ongoing positions and funding for this purpose, and we're open to discussing reporting language with the legislature.

Thank you. Any other comments on that? Next issue. Okay.

Next up, we have the mental health crisis intervention teams, and this proposes 7,400,000 in general fund and thirty thirty six positions in 26, 27, and ongoing to pilot the use of crisis intervention teams at three prisons, two male and one female, to allow assessment of an emergency physically closer to the source of the stressor to allow staff to address concerns that could otherwise lead or have led to self harm or suicidal behavior.

These crisis intervention teams are being proposed to decrease suicide watch hours, decrease the number of referrals that are rescinded, and to decrease patient transfers among other benefits.

Thank you so much, LAO. Orlando Sanchez, LAO. We recommend modifying this proposal as well by changing it to a three year limited term basis and requiring reporting from the department as well on the outcomes of this, added staffing package. The report should include the vacancy rates for the added positions, the number of avoided referrals to higher levels of care that the are the goals of this program, and an estimate of the savings being generated from from this program, if any.

This report would also better position the legislature to assess the cost of the of this program and the effectiveness, and whether it merits continued funding.

Thank you.

Department of Finance.

Similar to the resource teams, the administration continues to support ongoing positions and funding for this purpose and, again, are open to discussions on reporting language of the legislature.

Any further comments? The only

thing I'd say is limited term can be challenging, especially over a three year window. We're only allowed to hire a resource for twenty four months. That's two years. And so you essentially have to kind of change over staffing, which can, you know, impact continuity of care as well as attracting, you know, staff typically look for permanent positions. They they tend to shy away from limited term.

So it it can create some, hiring challenges as well as continuity of care when we do limited term.

Well, thank you for that. But also the reporting mechanism back to make sure that it's successful and is doing what it needs to be. I think, LAO brought that component up also. So thank you. Move on to the next issue if you have any.

I

I'm seeing.

Oh, sorry.

I'm kinda jumping around here. So the next So

are we?

The next issue is the medical class medical classification model. And this is a proposed enhancement. It's roughly requesting 8,900,000 general fund and 60.6 positions in '26, '27 To address deficiencies in the model. Specifically, this addresses workload and licensure issues in the treatment trees triage areas, reception centers, on-site, off-site specialty appointment to support it based on volume versus per institution as well as aligning staffing to title two twenty two requirements for a skilled nursing facility at California Correctional Women's Facility.

So, essentially, the model, for some of our constructs is a one per institution model, and it really doesn't account for high volume, high workload institutions.

And so what we're proposing is to transition, the model to a workload driven model and workload factors into it. And so we can adjust it biannually based on workload and not just on just not having a set staffing on per institution. So you you have, for example, one are in for specialty off-site that are in. If she's at a high volume institution, she could be doing, you know, thousands of appointments. Whereas at your low volume institution, you may be may be dealing with half that.

And so these RNs need support in working with these community providers. When they are folks go out for specialty services, they have to share files. They have to share appointment information and such. And so these LPNs are gonna help coordinate specialty appointments at the facilities. And so we put we're we're just trying to add a little workload factor.

We'll adjust it biannually based on the markers identified in the proposal.

Orlando Sanchez, LEO. Similar to our previous recommendations, we recommend a three year limited term basis for this funding and for the legislature to collect information, better understand the outcomes of of these added positions, specifically whether the department can fill those. So the average vacancy rates and assessment of what impact they're having at those high volume facilities. And as mentioned, that would help the legislature determine whether this merits ongoing funding and it's achieving the goals it set out to do.

Department of Finance?

The administration is open to further discussions with the legislature on those reporting requirements. However, we continue to propose permanent ongoing positions and funding for this adjustment, for these staffing ratios as these were developed with the medical, receiver's office. And we will continue to support improvement and delivery of high quality medical care to the all CDs or institutions.

Thank you so much for that. Any other comments on this issue?

No. Not this time.

Do you have others to present?

I have another one. Alright.

You ready? Okay. What item? Oh, what's Which which one are you gonna present?

Oh, I'm sorry. We're looking at number 11. Okay. Electronic health record. So the department is requesting 2,200,000 in general fund in '26, '27, 2,200,000 in 2728, and 4,500,000 in 2829, and ongoing to provide resources to add artificial intelligent note taking functionality within CDCR's electronic health record system.

This will bring CCHG up CCHCS up to community standards. It'll increase accuracy of notes and allows the provider to focus on the patient versus note taking. This is a recruitment and retention strategy for our Clinicians and, will help help them be more efficient in their note taking and the health record.

Thank you so much, Elio. Orlando Sanchez, Elio. While it seems plausible that this technology will make improvements and create efficiencies, in medical records documentation, The department is not scoring any savings associated with those potential efficiencies.

Accordingly, we recommend approving it on a four year limited term basis so it could get up to a full implementation, and adding provisional budget language that requires the department to report, by 01/10/2030 on how often this technology is being used by providers, efficiencies or improvements that are being captured from full implementation of this, and any estimated savings from adding the artificial intelligence to, to to this medical record system.

Additionally, we recommend including the legislature in the reporting language that's proposed, that's that would capture quarterly progress up updates that are Department of Finance in its existing, iteration.

Department of Finance?

The administration continues to prove, propose permanent ongoing funding for this licensure as it will become part of the department's annual IT costs in the future. And we are open to discussing further reporting requirements with the legislature as well.

Thank you so much. Any other comments on this?

Not at this time.

Any other presentations?

I think that's it. Are

you sure?

I don't never sure.

You never should. And then for Orlando Sanchez with the LAO, while not directly a proposal, the May revision continues to provide 4,400,000, for the activation of a mental health crisis facility in Southern California That was provided in the 2526 budget. The department expected that to be, activated, as of, last year. It's being delayed about a year and then those savings are not being scored in this budget. We find that the, that they haven't scored these savings accordingly.

We recommend reducing the department's budget for 2627 by 1,100,000, when the facility would be activated in October rather than July 2026. And while the department may plan to redirect these funds for other purposes or priorities, the department should request funding for those other priorities separately from this funding.

Thank you so much. Department of Finance.

Anthony Franzoid, Department of Finance. The administration acknowledges, the LOS recommendation, regarding the CIM facility, and we're happy to and, normally, those costs would be captured in the housing unit conversion adjustment as part of our population process. But we're happy to work with the the legislature in the LAO to capture those costs as part of the mayor vision in the final budget.

Thank you so much. Any further comments? Bring it back to the time. Bringing it back to the dias. Assemblymember Schulz on all topics.

Thank you very much, mister chair. Okay. So I have a a few topics, but I wanna say out the gate that, obviously, I'm going to focus my questions on where I have concerns and maybe some disagreement. But I do wanna commend, the administration. There's some very good things in this budget proposal that I'm excited about from incarcerated firefighter pay to the menopause program.

Like, there's some really good investments. So though I may not talk about them, I don't want you to walk away thinking that I don't see the value in making those investments. And so thank you. So if I'm not talking about it, I may not have a problem with it. So that that's the road map.

I wanna talk about the population of CDCR and the prison closure. So I did I've been beating this drum all day, but we obviously have this substantial investment in this portion of our budget, $400,000,000. We have what I would categorize, speaking only for myself, is lower than expected, savings identified through the BCG contract. So my question to Department of Finance is, if you can walk me through why wasn't an additional prison closure on the table?

Because I I think it ought to be, and I'm not putting you on the spot to argue with you.

I just I I'm not sure I understand the thought process.

Thank you, friends with Department of Finance. I think one of the big reasons is there's already a prison closure scheduled, for October 2026, and that's, the California Rehabilitation Center in Norco. And I think part of the reason is closing two prisons in a single fiscal year or at least planning to would be a really big undertaking for the department.

And I think as the department and, again, CDCR can speak to this a little more accurate than I can, but as the department continues to close prisons, those decisions get more difficult because, generally, the population is more specialized. You know, it's higher mental health needs.

It's an aging population, ADA needs, stuff like that. And so, the ability to shift at the incarcerated population when an institution closes down becomes more difficult. I'm not saying that's the reason not to close prisons, just providing some context.

K. I appreciate that. And and look forward to continued conversations through our budget process on on that point. The next topic I wanted to talk about is is Corcoran and and the honor dorm program. And let me just say that having visited some of your facilities, I I have definitely seen the value and the importance of that program.

And in terms of finding ways to offset cost more or less, I think that was a very creative approach. So while I appreciate all that, this year and last year, chair Ramos has thoughtfully and and and craftily guided us through conversations about the importance of rehabilitation programs, and he has also brought attention to sexual violence and other violence in our women's facilities.

Before I go on, I think we would all agree that supporting rehabilitation and addressing sexual and other violence should be one of our top priorities in the budget process. The reason I'm bringing all that up is that despite $400,000,000 in new spending, disappointed that there was no funding identified in the May revision for the right grant or for other interventions to address sexual abuse. So I'm gonna ask my question twice because I I wanna give you a chance to think about it.

But my question, and it's not rhetorical, is is establishing an honor dorm at one prison to benefit, let's say, between seventy five and one hundred male inmates what we should be prioritizing now when we are all very well aware that we have a problem in our women's facilities? I don't think the intention is noble behind the proposal. Absolutely. And the honor dorm, has a demonstrated metric of success from what I've seen.

But if I'm being honest, it comes across to me as a little tone deaf in this environment, considering all the hearings that this committee has had on the topic, hearing horrifying experience of those who have been, abused, quite frankly, at the hands of some of our personnel and staff and in our facilities.

So, again, the question is, why should we establish an honor dorm over addressing what I would argue are more pressing matters based on everything I've heard? And anyone can answer that question. That's that's I'm really struggling with this one.

Understood. I I won't comment on the right grant portion, or the other investments. I will say for the Corcoran, three c proposal, again, it is cost neutral. And so we had the ability to, this is an evolution of our, California model. The dynamic security normalization.

We had an opportunity at this facility, and I can invite one of my colleagues up from the division of adult institutions, to provide more detail. But this allows us to get a proof of concept and see how this works in this small setting without any cost to the state. And that's that was our overarching goal. And again, it's the evolution of our rehabilitative model. And so there have been additional investments made in other areas.

And I will actually invite, deputy director, Kevin Hickson up to provide some comments on

Thank you.

That mic on one second. Hold on a minute.

Please proceed. Good afternoon, mister member or mister chairman and members. Kevin Aksen, deputy director of Facilities Support Division of Adult Institutions. Thank you for your question. Honor to to answer them for you.

I'll start with women's facility. Definitely in our our priorities, something that we're considering. As we looked at the honor dorm facilities at Corcoran, I was surprised to learn that CCWF currently has three of the same model. They have one building on each facility where they run the same model. So still priority for the women's definitely.

When we looked at Corcoran and establishing it there, it was actually brought to us by the staff members there. They were very pro with the idea when they brought it forward. When we evaluated it, thought it was a good idea. I went down and toured it personally. I was very surprised at how much the member the the staff were on board and how passionate they were to establish that model.

Thank you.

Before I go on, does anyone else wanna add any other comment? Okay. I I would just say again, I'm not my question is not intended to disparage what I think is a very good concept in Corcoran. But as we finalize this budget, I don't see nearly enough solutions to what we've been talking about for two years now.

And before long, we're gonna have some of these same people back before this committee next year, again, sounding the alarm about what they've been subjected to and asking what we're doing to correct it.

And I don't think that we've done enough at this point. So if y'all can carry that back, to your respective, corners, if you will. I I would really like to deliver more in this year's budget even if we can't solve it in completion, but to make more progress on that issue. I'm almost done with mister chair. Following up on mister Lackey's comment.

He asked most of what I wanted to say. But if you could just remind me on the issues of workers' compensation, what are we doing and what have we not yet done but are considering looking in the new fiscal year to help, mitigate the volume of those claims and and the exposure?

Again, certainly, the budget change proposal that is that is for the for your for consideration is one of those, targeted areas that we're looking at. Again, it's it's centralizing those functions, streamlining the processes, and allowing the staff that do work those cases to get individuals back to work earlier.

Again, we are digging deeper into that kind of core reasons for why claims are filed and I don't have an answer for you right now, but it is something that we are looking at because we that's part of the holistic view. So we are working collaboratively with State Compensation Insurance Fund, with CalHR, and with our own teams to try to look at see if we can find those commonalities.

Again, when BCG did do their work in this area, we had them, review and analyze claims across, all all claim types, and they were actually unable to see, to pinpoint a specific injury type or an injury from a specific facility or, that that we could really pinpoint and and address those those concerns.

But, again, these resources that we're trying to, we wanna get people back to work, and then address the core the core issue of claim filing.

Wonderful. Thank you for the refresher. The last topic, my last question is about the I'm gonna approach them all in one, but the various mental health proposals, there are a lot of really good things in there. I will note that, generally speaking, LAO's recommendation, as I understand it, is to provide limited term funding for those various proposals. And at first blush, it seems pretty reasonable to me, considering that many of the proposals are in pilot form.

And we wanna see the outcomes after we make the initial investment before we make that ongoing commitment. So my question is really to Department of Finance. Is that something that's agreeable to the department?

We're open to discussions on it. I mister Rader explained that sometimes they do have issues staffing limited term positions because they have to advertise them as limited term. So you may not get as much interest in those positions and they may go unfilled for longer periods of time. Whereas permanent positions, you know, they could always come back and say, hey, we only needed five of these. We're gonna redirect some of these to add more resource teams or crisis intervention teams at other institutions.

So that is also an opportunity. But these two in particular are priorities for the receivership, which is why they are included in her in her package here.

Okay, Thank you all very much. Thank you, Mr Chair.

Thank you so much. And as we, see, Mr Lucky makes it back for some comments. We'll go ahead and offer some. And my colleague, Assemblymember Schultz, mentioned that we had hearings within sub six on the on the women's prisons issue. We brought up liabilities.

We brought up cases. We had testimony from those that were prior members of of those atrocities towards them. And so seeing no funding, new funding for that, an issue that we see as an area that needs attention is sending a message at least to those that were on the dias during that time in the hearing with the women's caucus that with no new funding for programs in that area, are we really seeing this issue being taken seriously?

So I give you some time to respond to that. We'll have response from CDCR, and then we'll look towards the Department of Finance.

Certainly, again, I wanna acknowledge the things that occurred, at the institutions and they were atrocious and we don't take that lightly. So, don't want you to think that we do not. In this area, however, the the things that we have been focusing on and the women's institutions is training and staff engagement and working utilizing the contract with the sister warriors.

You know, there was a lot of discussion about that during that hearing and leveraging those conversations to get to change the culture and and work through those issues. So while there's no funding per se right now in the in the budget for specific items related to that, we do continue to leverage the things that we do have and and work towards additional outreach of the institutions.

So we see that different proposals are being proposed for different prisons, different honor areas in the men's population, but we brought so much attention around the seriousness of the women's prisons and the treatment towards the women who are incarcerated in those areas. And making sure even at one point we talked about a seat post and putting that out there as far as a qualification. Here, if law enforcement run a foul, then their post certification could be stripped of them.

And so we even brought that up in the hearings itself of a seat post certification. And so not seeing funding in here, does that increase the liability of the state?

And we talked about earlier about a receivership that was court ordered. We wanna make sure that we're not heading down that road. One, for liability and ultimately receivership around this issue. Can you elaborate a little more on that or discussion?

So regarding the the sea post issue, so our we are not post certified because our peace officers are only considered peace officers while they are performing their functions at in the institution or a parole, in parole. So, while we don't follow that traditional process, I know we had did provide some information but regarding this. We do keep if anyone is terminated, those records are kept in their what we call their personnel files, official personnel files.

And so if one of those individuals, tries to go seek employment elsewhere, their, personnel files are reviewed and that information is kept in there for thirty years. So while we do not follow the traditional post, decertification process, we do have mechanisms in place for lawn outside law enforcement agencies to verify employment and whether or not they left on favorable terms.

During that hearing, the term C post came forward as far as a qualification for CDCR. Is that still the situation?

So it's it's it's a little bit confusing.

So much going on that people start throwing terms out there.

No. So there's if you look at pure acronyms, there's two posts. So there's Peace Post, which does all of the standards and trainings for

does

all the standards and has a certification process for all law enforcement throughout California. And that is a separate entity that handles that. So that's outside of CDCR. CDCR also has the Commission on Peace Officer Standards and Trainings, which ensures that all of our trainings and materials, and training, files, how we train, meet those standards that are set by post. So there are two posts but do have completely different, different missions.

If that makes sense. So While again we are not, post certified. Our peace officers are not post certified because they only perform their functions on peace officer functions on their job. Again, we still have a process in place for other law enforcement agencies to reach out and determine whether or not someone was terminated unfavorably. Additionally, if someone retires prior to that disciplinary action being completed, it still goes in their file as being as retired under unfavorable circumstances.

So every law enforcement agency is going to do a full background check. They're going to they'll have to fill out a personal history statement. Do look at tax returns and things like that, and they will see that they were an employee of CDCR and is incumbent upon them to reach out to review their, personnel files, which we ensure that they have an opportunity to do. We we don't not allow that.

Well, thank you. So is it safe to say that the seat post is really basically correctional post?

Yes. Yes. The commission on peace officer standard training within CDCR is, yes, is a CDCR function, and then there's post that is a statewide function for all law enforcement.

And so for the last two years, we've had hearings on the treatment towards women who are incarcerated in the women's prisons, Bringing awareness around that several discussion has happened. And so I'm saying that because it is a priority of this committee to ensure that resources are there adequate resources that are there. But it's also bringing awareness around it for liability issues towards the state of California.

We have had presentations on receiverships, and we wanna get a handle on this before we get too far down the road on those types of issues. Department of finance, you have anything to weigh in on this?

Anthony Franz, with Department of Finance. No additional comments other than what my colleague offered, but I would just say that as the budget negotiations and process continue, we're open to conversations about additional investments in the women's prisons.

Thank you, Alio. Anything on this topic? There's also another hearing that we had several discussion on, And that was around the right grant funding and those that the right grant continues to advocate and bring resources. And we've seen that that wasn't also part of it or increasing dollars for that. Is there a reason why that wasn't involved or included in the May revise?

And can you enlighten us on the deliberation around that? Because we're having hearings around these topics, but yet and we're these topics we're talking about are topics that are coming full forward. But we do want to as well as my colleague has said, there's a lot of good things that are in here in the May revise moving forward. But yet we had hearings on these just like we talked about, the projected ongoing savings with the Boston consultant group.

Here at the same time, we had hearings where members of the legislature brought these issues forward.

And we had hearings on them, but yet we're not seeing that translated into the the May revised budget, moving forward.

Ryan Weinberg, Department of Finance. The May revision doesn't include any funding to the right grant at this time. However, we, acknowledge the importance of that topic to legislature. We're open to having conversations about continued investments as we continue through the budget negotiations process. As part of determining what entered into the mayor vision, we had to determine kind of priorities for CBCI's budget, items that require investment in order for the department to continue operating on the twenty four seven basis that it does.

And so the current May revision does not include any funding to continue the right grant, but again, happy to continue that discussion through budget negotiations.

Thank you for that. And then if you could follow-up with us any information on the deliberation between the right grant and the the women's prisons issue, we would deeply appreciate it as we continue to advocate on both of those topics. So remember Lackey, you have anything to add?

No. I've I've been absent, so I'll just go.

Thank you, mister Lackey. And so I know there was a lot of proposals coming forward. We did have hearings prior starting off in the beginning of the year, and we see a lot of proposals coming at us now after the May revise and those things. We would we would like to see more time, when all these proposals come at us, like this because we're then we're running through the agenda the way we did. So I'm sure there's gonna be, further questions.

And those questions will be forwarded to CDCR and Department of Finance, through written, communication since we need a little bit more time to elaborate on some of these issues. And we're just hitting, again, that there is a lot of, favorable things that we see in the budget. However, there is areas that we've had hearings upon that we'd like to have continue to have dialogue on. So, thank you for that as now we move to oh, mister Schultz, you have another question.

Thank you, mister chair. Not a question. Just just one more comment or food for thought for the administration as we continue the conversations. Appreciate the logistical obstacles of trying to close two facilities at once, but I would be remiss if I didn't point out that we have done that even most recently as the twenty twenty twenty twenty one budget, where I believe it was DVI that was slated to close in '21 and then CCC that closed in '23.

So I just bring that up to say that it can be done, and it's more a question of why we are or not pursuing that course of action.

Aye, for one, would love to have a continued conversation about whether it makes sense to do so. But I just want to point that out, that I think it it it isn't it's a feat, but it can be accomplished if the political will is there. Thank you, mister chair.

Thank you so much. Is now we move on to Office of Emergency Services. May revision proposal.

Mister Swanson, you may begin. K.

Thank you, Assemblymember. I'm Eric Swanson. I'm deputy director of the, of finance and logistics administration at, Cal OES. There are these proposals, on your agenda. The committee consultant has asked me to focus on, five of these, and I'm gonna do it in a three groupings, if that's okay with the committee.

The first one we're gonna talk about issue five, which is the next generation nine one one, proposal. Then I'm gonna, get into the three grant programs, which are issues two through four. And then finally, we're gonna end with the southern regional emergency operation center, if that's okay. So, we're gonna start with NG nine one one. We're proposing a one time increase of 141900000 state emergency telephone number account or Cetna in two thousand twenty six twenty seven to support the implementation of the next gen 911 system.

This one time funding will support the deployment and transition, the architecture from a regional model to a unified statewide system. The new statewide architecture resolves existing interoperability challenges, creates one cohesive network with public safety grade resiliency, and significantly reduces operation complexity for our public safety answering points or PSAPs is what the acronym we use for that one. California's nine one system is funded through Cetna, and this proposal will not increase the state, general fund deficit.

Cetna is a surcharge on telephone lines in California that funds the legacy nine one one system and transition to NG nine one one. California's set in this fee is among the lowest in the nation and will remain one of the lowest with this proposal.

Among states that charge fees, only seven states had lower 911 state fees than California. This proposal reflects short term implementation cost to wind down the existing regional system, and we expect ongoing costs in future years to be similar to authorized expenditures in prior years for the project. We plan on updating our resource needs for the project in next year's budget process. With me today is Steve Yarborough, deputy director of public safety communications at Cal OES.

Thank you, for the opportunity to continue this important conversation around California's NextGen nine one one system. We wanna underscore that we've fully heard and understand the concerns that been raised during the recent hearings on this topic. Ensuring that California's can reach emergency services as reliably remains one of the highest priorities of our office. The one time funding that we're requesting, will do a handful of things. One is it'll begin the transition to a unified statewide system instead of the multiple disparate regional systems.

Two, it will maintain the services of the current regional providers while that transition takes place, and it will update the call handling equipment that the PSAPs use that is currently beyond its lifespan or life expectancy in many of those PSAPs. And four, it will ensure a modern, reliable system for the greater Los Angeles region prior to the twenty twenty eight Olympic and Paralympic games in providing a safer future for large scale events like that into the future.

As you'll recall, California is in the middle of transitioning the network from the regional architecture to the unified statewide architecture. The original design was well intentioned, but it did create four separate regional systems and a separate statewide backup. Over time, it became clear that these systems did not interoperate seamlessly as was intended and as public safety demands.

While the legacy system is still functioning today, it's undeniably aging. And with aging infrastructure, we all know the question is if is not if failures were occurred, but when they will occur. So this is precisely why we're moving forward with, the NextGen nine one one proposal here, and it's very critical that we do so. Pausing implementation at this stage would put the state at greater risk and run counter to the shared goal of maintaining the strongest possible emergency response system for the public.

To ensure transparency and accountability through this effort, Cal OES has asked the Department of Technology to provide independent project oversight, including routine budget and milestone reporting consistent with the state information management manual standards, which are routinely used for major IT projects.

Since our last briefing in March, Cal OES has finalized a bridge contract to continue operations until our long term provider is selected later this year. This step is a foundational move towards the permanent statewide architecture and is essential for the Los Angeles area, public safety and answering points ahead of the 28 games. This is an event, obviously, that will significantly increase the demand for services on the system during the duration of those games.

So we deeply value the partnership that the legislature, our local governments, and our public safety community has with this. Together, we share this responsibility to ensure that Californians can rely on a modern, resilient, and interoperable nine one one system.

We're committed to moving this vital work forward with urgency and transparency. And with that, we're available to take any questions.

Vice chair Lackey, we could either, pause here or I could run through the rest of the issues and we could do questions all at once, whatever the preference is. Okay.

Then do it.

Alright. The second set of issues relates to our grant programs. The first is the May revise includes 25,000,000 as a victims as a victims of crime act supplemental funding one time allocation. This will significantly alleviate the service level reductions caused by lower level federal funding available for these programs based on the current level of federal funds that we expect to receive later this summer or fall.

Secondly, the May revise includes 40,000,000 on a one time basis for grants in our California state nonprofit security grant program, which provides support for target targeting and other physical security enhancements to nonprofit organizations that are at risk for violent attacks and hate crimes due to ideology, beliefs, or missions.

And finally, we are requesting a 198,000 in state operations and 3,800,000 in local assistance for one time federal fund authority for a fourth round of the state and local cybersecurity grant program. This program awards grants to eligible entities to address cybersecurity threats and risks to information systems owned or operated by either the state, local, or tribal governments. So those are our grant issues. And our final issue, we were asked to focus on today relates to the southern emergency operations facility.

This request is for 11 positions and 12,500,000 general fund in 02/2001 in '27, '28, and 8,400,000 ongoing to open and operate the southern emergency operations facility.

Beginning in 2021 and subsequent budgets, the administration and legislature invested the design development of performance criteria and construction of a new facility for emergency and disaster response in Costa Mesa, which is at the site of the former Fairview Developmental Center. The Southern Campus is a 39,000 square foot regional office and emergency operation center.

The property will include 22,000 square feet warehouse, a maintenance shop, a radio communications tower, and related operability infrastructure, and capacity to hold a multitude of multitude of federal state and local partners for the highest level of emergency management coordination. The project is scheduled to be the complete and operational in 2027. This proposal provides emergency operations, building and facility management, information technology, and security for the new campus, and it should be fully operational for the twenty twenty eight Olympics.

So with that, I think we have run through the issues that we were asked to focus on. And we are available for any questions that come up.

Thank you so much. Department of finance or Alio Department of whoever wants to go first.

I'm Matthew Perky, Department of Finance. Nothing further at this time. We're just here for questions.

Thank you. LEO.

Hi. Heather Gonzales with the LEO. I'm going to start with the grant programs and where we are because those are the easy ones. With respect to state and local cybersecurity grant program, that is federal funding, so no concern for us there. We like to get that money back.

With respect to the VOCA and nonprofit security grant programs, this is another one of those instances, that would be where a recommendation is to weigh against other priorities as you heard my colleague mentioned during the hearing opening. We note the administration's request for VOCA is a general fund request, the same thing with nonprofit security grants given the state's fiscal condition. Any new general fund the legislature approves, for this proposal will come at the cost of other fund programs.

We would also note specifically in the case of the VOCA supplemental funding that the state does not have an obligation to backfill those funds. So, those are, that's where we come down on the grant programs.

With respect to Next Generation nine eleven, our recommendation is to modify the proposal that you've been provided. We support provisions that are designed to bolster the State's nine one one system to ensure that it is as strong as it can be in its current state, including the funding request for call handling equipment, as well as the request for support of the existing regional and legacy systems.

We do not oppose the funding for the bridge contract which is intended to transition the state to a statewide next generation nine one one system. However, we note that OES signed the bridge contract before the legislature affirmatively endorsed the proposed pivot to a state next a statewide next generation nine one one strategy, and while the legislature is still actively debating the best path forward for nine one one.

That such a major policy shift was made before the legislature concluded its debate and while the legislature is actively considering options to increase oversight of this project is concerning.

But again, we do not oppose the use of funds primarily because we see the bridge contract as contributing towards stabilizing the system. With respect to our recommended modifications, we present four for your consideration. First, we recommend the legislature direct OES to allocate funding to dispatch centers for call handling equipment on a priority basis. We've consistently heard of problems with dated and failing call handling equipment that has not been updated because dispatch centers have been holding off while they waited for a new network.

Updating call handling equipment is a key part of stabilizing the existing system and we agree with this use of funds especially for those dispatch centers with the oldest or failing equipment, which we recommend prioritizing.

Second, we recommend the legislature require OES to obtain independent third party project management oversight from the California Department of Technology or another independent vendor during project execution. The BCP currently states an intention to do so. We think that should be a requirement.

Third, we recommend that the legislature adopt budgetary language to prohibit state funds from being used for a permanent state wide nine one one network until it is received and evaluated the results of an independent technical assessment of the OES plan and an audit of the OES effort to date. This would ensure that OES could not move forward with a permanent system until the legislature has had a chance to fully evaluate it.

The budgetary provisions are particularly important because the BCP states that OES intends to move quickly to secure a permanent contract by this fall. This brings me to our fourth and final recommended modification and that's to ensure that the budget provides funding to the state auditor for costs associated with the technical assessment and audit. We estimate these costs could be a few million. And to the extent possible, we recommend these funds come from Cetna. That's my close.

I'm here for questions.

Thank you so much for your presentation, OES and Department of Finance and LAO. Bringing it back to the dais. Any questions, comments? Assembly Member Lackey, Vice Chairman.

Yeah. Very frustrated, of course, I think everybody is, with this failure of the Next Generation 911. And when I heard the explanation of it was well intended, we appreciate that. But that's far short of expectation. Right? I mean, $500 million failure. It's ironic the way it was communicated. And we're talking about a communication system.

We found out after the fact, truthfully, and a lot of decisions were made that we were not consulted. We were not asked or communicated with in the slightest. And so I, LAO's recommendations are fully supported by me. That's for sure. We can't repeat goofy mistakes. My goodness.

This is an enormous disappointment. As someone who was a first responder, I will tell you that's a pivotal system. You rely on that. And the 911 system is the connection and the partnership between community and first responders. If it doesn't function, we're in trouble. And I understand too, the communication centers are are very different.

And I think that's where a lot of the fumbles took place, as that was not understood prior to the commitment. And so I'm just I'm just asking that these recommendations be fully embraced that LAO has has brought forward so that we learn from what happened in the past is a very, very dismal performance. And I don't know who to denounce. It doesn't do any good to do that.

So let's just let's learn from our past. And let's make sure that we're communicating too, please, by the way. Sometimes these decisions might be well intended, but we see where that got us. And a big failure. And a big embarrassment, truthfully. And so I'm sorry to say that. I'm thankful that these recommendations have been crafted carefully, and I fully support them. And I hope that we can figure this out.

Thank you so much. Assembly Member Schultz.

Thank you very much, Mr. Chair. Thank you for the presentation. I'll only be asking a few questions on item five, so I don't have any concerns as it relates to the others. But did wanna especially thank the inclusion of item two, the VOCA supplemental funding. Understanding that while the state doesn't have an obligation, it certainly is essential funding. And I'm glad to see that ongoing commitment baked into the proposed budget.

So I guess the first question I have, presumably for OES, would be, is it the intent of the department to move forward with this proposal to move to a state system as opposed to the regional approach before the legislature has a chance to look at a third party analysis or fully weigh in? Is that OES's intent?

I wouldn't characterize it as moving forward before you have a chance or in spite of you wanting to have a chance. I think what our approach is to move to a statewide system. And so that's that's what we intend to do. Now it's not I think as, you know, as we described, it's not, you know, in lieu of, you know, working across with you on that.

And so I wanna make sure that I'm clear on this point. We have no intention of circumventing any kind of of working together or collaboration on this. And I wanna make sure we're communicating clearly. So, yeah, that's our intention.

Okay. Thank you. And I and I appreciate the answer, and I take you where you're at. I would just say that based upon the history of how we found ourselves today and based on the dialogue that I've heard, I have to agree with my colleague yet again in agreeing with the recommendations, all four, and especially number three, put forward by the LAO. So that's that's where I'm at.

I did have a few more just process questions for OES. Again, they're not pointed. Just help me better understand. On what basis does OES consider a system without backup to have sufficient redundancy? And what I'm really getting at here is we're obviously moving to a statewide system.

I see a lot of many positives to that approach, but it's gonna be different. It's not the same configuration of redundancies as having a regional approach. So I guess could you walk me through that process of how you determine sufficiency?

Yes. Happy to happy to talk about that a little bit. It comes up frequently, and it is a little bit counterintuitive, I think. But the idea is that the redundancy and the resiliency are, you know, sort of tied together within the system. So right now, if we have four regions, each that has a data center that, you know, controls the traffic, we're not envisioning going from four data centers to a single data center.

There will be multiple data centers in the future solution. So you know, we're not necessarily spreading them out to four different vendors, but we're including them in one cohesive solution so that we don't run into the problems where they don't talk to one another. So I think I hope that addresses your question. We're building in that redundancy, but into a single solution.

No. That does, and I appreciate the answer. And I guess the next question I have is, because the legislature is now part of the conversation, we're working together, we're having the conversation. But nonetheless, when the preliminary steps were taken to sort of move in this new direction, what kind of technical advice and assistance did OES receive to determine this could be a good path moving forward?

Yeah. So one of the first things we did after looking at the problems that we ran into after the first 23 answering points were transitioned onto the regional systems. We ran into those problems and said we can't keep adding more PSAPs and exposing them to these issues. So we pressed the pause button.

And immediately during that process, we brought on some industry experts to evaluate and understand what could be learned. Not just from the lived experience of those PSAPs, but also from some other states who have gone along and implemented a solution that was successful. So when we began this, we were early adopters and blazing a trail, first of its kind in the nation.

Since then, other states have gone along, and so that puts us in a position to learn from them as well. So I think, you know, learning from our mistakes and continuing to improve all along the way is is what we're doing right now. And so that's the approach we're taking.

Okay. Thank you. And my and my last line of questioning is just the flip side of the coin. As you were developing this approach, did you get any technical advice or assistance suggesting against moving to a statewide approach?

Yeah. I think there were there were many voices speaking into this analysis that we were performing, and not all of them aligned on a single solution that they preferred as an outcome. And so weighing out the pros and cons of each of the potential paths, the one we landed on was the one that solved many of the problems that we were experiencing here.

And it made a lot of sense in light of the nature of those problems that having one cohesive system rather than multiple disparate ones would hit directly at the chief problem that our PSAPs were experiencing.

Final question. And what would you characterize the chief problem of the PSAPs to have been?

So the interoperability between the systems and the fact that a dispatcher taking a call has to themselves, while they're dealing with an emergency call, try to figure out a piece of technology. Is this a Next Gen call? Is it a legacy call? Is it transferring appropriately? So all of those technological questions should not be at the front of mind for a dispatcher who's dealing with a call for help.

So that was the the chief thing is if we can solution this in a way that makes our main customer, which is that PSAP call taker, and our other main customer, the member of the community who's calling for help, making it easy for them, not necessarily what's easiest for us to, you know, design from a technology standpoint. We're here to serve their needs.

Great. Thank you all very much.

Well, thank you so much for your presentations. I have a couple questions around different topics. First, the the VOCA funding, 25 million general fund. This has remained a priority of this committee. So do we have any idea of the end result of what we're actually looking at?

I remember last year, we looked at some funding or looked at some different numbers towards where we're getting closer to the budget component. So do we have any figures of what we could potentially be looking at?

Yeah. I think we have a little bit better idea than we did last year. Although the fundamental flaw with, you know, how this is funded remains and that, as you recall, this is funded federally through penalties that are issued on white collar crimes. And that tends to be sort of a funding source that is volatile.

So in the last year, we did not, for the first time in a long time, we hadn't received word from the federal government of what our allocation was gonna be. And as you recall, the state legislature, the administration agreed on a $100 million figure to come up with a plug for whatever, you know, the gap ended up being. The gap ended up being a little bit less than that, and so we have some federal funds left over, yet there still is a gap.

So the gap itself, we estimate at this point now all we have is a preliminary preliminary notice from the feds on what they they think they're gonna give us in the summer or the fall. But we think with the federal funding that we have left over, both from the gap being smaller than we thought.

And also because there is federal funds left over from the existing programs at the end of the year if they don't spend it all. We think that the need is about 50 million at this point. And the May Revision proposes 25 million, which should alleviate, you know, a significant portion of that gap, but there is still a gap.

Thank you. And so we're anticipating 50 million. We have some funds left over from the federal aspect that are left over?

Yes.

Yes. Thank you so much. And again, that has been a priority of this, of this body here. Now, moving on to the 40 million one time general fund appropriation for the Nonprofit Security Grant Program. In light of what we've seen in Southern California today, How did we come up and land at that 40 million one time? Department of Finance?

Matthew Perkey, Department of Finance. So this 40 million was derived by considering amounts we had provided in the previous years, but also by considering other general fund priorities at this time since this is coming from the general fund. The administration believes this investment reflects a continued commitment for this program in times of great fiscal restraint with a wide range of competing budget priorities.

And in light of what we've seen today in Southern California, is there open dialogue to continue the discussion?

Yes. So we're happy to work with the legislature when crafting these budgets, but obviously, we have this, we put forward these numbers before the events transpired today. So happy to continue working with them, but for now, it's 40 million.

Thank you so much for that. Now moving on to the Next Gen 911 system. We had a a long hearing around this topic, so we're not gonna belabor on that. But I do wanna set some calmness to those that are hearing this discussion around 911 system. We wanna ensure the residents in the state of California, there is a functional 911 system. Can you elaborate and talk a little bit more about that from the local level and the state level type deal?

Yeah. Absolutely. So in terms of we talk a lot about moving to this new system, but we have a legacy system that's in place right now, and that will remain in place taking the old school technology that relies on copper wires and so forth to continue to answer calls. Similarly, we have in place right now the parts of the regional structured architecture of the Next Gen system that will continue to operate.

And we won't turn either of those off until such time as we've successfully transitioned and proven out the new Next Gen system that we're talking about. So we will always have a system where people can call 911 and have somebody answer that call.

And can you elaborate a little more on the on the structure itself, local level, state level? I believe in the hearing that we had a couple months back that there was a system in the local area, LA County, I believe, where the 911 system went out for a period of time. And then the state resources came in and solved that problem.

Yes. Happy to talk about that. So one of the components that we talk about with the 911 system is the network. And that's what we've primarily focused on here so far is the network. But there's another part of it. And this is the call handling equipment that takes place at each of those 450 ish public safety answering points.

And so Cal OES works with each of those. Those are all run by local government agencies. And so we work with all of those individual public safety answering points to make sure that they have funding for in a contract from which to acquire the call handling equipment that they use in their system.

So the particular issue you're talking about involved an agency that had older equipment that would be one of chief among the ones that we would want to put to the front of the line. And this proposal talks about call handling equipment or call processing equipment. So that's one of the ones that we would be putting into group a of ones that would need to be refreshed in terms of this.