 Thank you. Good morning, everyone. It is just a little after nine, about 10 minutes after nine on June 21st, 2021. We are having the opening session of the county budget sessions for the 2021. Mr. Mayor, I'm muted. I'm muted. Am I muted now? You're, no, that was an echo. It is just a little after nine, about 10 minutes after nine on June 21st, 2021. We are having the opening session of the county. Is it, is there an echo now? It may have been my fault for streaming in another window. Okay, so we'll start all over again. Is that all right with everyone? Okay, well, that's what we're gonna do. Welcome, everyone. It is about just after nine, 10, on June 1st, 2021. Monday, we are in the first day of our 2021.22 budget session. We will be going through the morning and possibly the afternoon. Clerk, please call the roll. You're on mute. I am? No, the clerk's on mute. Okay. Okay, there we go. Too many stop buttons. Supervisor Koenig. Here. Friend. Here. Coonerty. Here. Capit. Supervisor Capit. He is here. Supervisor McPherson. Here. Thank you. You have a quorum. Thank you. We will have a moment of silence and a pledge of allegiance. Is there any board member that has a comment on it before we go into a moment of silence? Okay, we just have a moment of silence and then a pledge of allegiance. Okay, we will now have the pledge of allegiance. I pledge allegiance to the flag of the United States of America and to the Republic for which it stands one nation under God, indivisible with liberty and justice for all. We will go to item number three, consideration of late additions, revisions and deletions to the consent and written agendas. Mr. Plaschus, do we have any additions or corrections? There are no corrections and no late additions. Okay. All right. We're going to move into the opening remarks by the County Administrative Officer on the 2021-22 budget. Mr. Plaschus. Okay, thank you very much. Good morning, Chair McPherson and members of the Board. I am pleased to submit to you today for your consideration over this week the proposed 2021-22 budget, including supplemental materials. While we would normally be in the first year of a two-year budget cycle due to the continuing challenges of the pandemic, the budget only covers one year in this document that was submitted to you. The proposed budget was created prior to the finalization of the Federal American Rescue Plan Act of 2021. And as such assumes a 50% reduction in furlough hours in order to achieve a balanced budget. However, there is a supplemental budget that includes the elimination of all furlough in fiscal year 2021-22 through the use of ARPA funds. Let me see if I can get the, yes, there we go. And then if you could go to the next, I'll go back one slide. There you go, right there. Okay, briefly, this is our agenda today. Over the course of this week, key departments will be making presentations focusing on a departmental overview and emerging issues as we begin to emerge from the pandemic. Members of the public will have the opportunity to offer input to the board during public comment periods each day. The documents before you include the CAO's proposed budget, the supplemental budget, which reflects adjustments since the publication of the proposed budget, the unified fee schedule, the continuing agreements list. Last day and concluding reports reflecting changes to the recommended budget made during budget hearings will be presented to you on June 29th. All of the budget documents are posted on the county's website and on the online budget tool, EasyGov, which is available at sccbudget.com, that is sccbudget.com. I can go to the next slide. The proposed 21-22 budget continues to reflect the priorities of the board and the values that the board as reflected in our strategic plan and maintains the standards of fiscal stewardship, which your board has prioritized over the last years. These include increasing reserves to meet the board's goal of 10% of revenues for reserves. We continue to work towards reducing our future pension interest costs, including the use of pension obligation bonds, and we have been controlled employee growth increasing by staff by only 49 positions, primarily temporary emergency positions in the Health and Human Services departments. This is an amazing fact that our staffing levels today in 2021 are still less than staffing levels in 2008, which was before the Great Recession. So we have yet to get to where we were more than a decade ago in terms of number of staff. And yet we are providing many more services. We also continue to make progress and deferred maintenance issues. In fact, we're gonna seal the leaky building at 7-1 Ocean, which your board will be approving soon. We've made improvements to our jail. We've improved the well at Roundtree and we're redoing roofs and many of our facilities. So we continue to make progress in terms of addressing our deferred maintenance issues. And I'd also like to thank the board in this because you have played a key role in your very conservative, yet thoughtful, fiscal stewardship of the county budget. Because during these times of challenge, we have had reserves to meet our needs when we needed to. And you've also taken actions in the past and you continue today to reduce our future pension costs, which are one of the main challenges facing local government. We go to the next slide. With the board and staff support, the county has staggered the introduction of four initiatives over the last two years. We have a strategic plan to set our overall direction and set overall priorities for the county. We have a two-year operational plan and budget to create and finance our priorities. We have Primo, Santa Cruz, a continuous process improvement effort, which is ingraining improvements as part of our everyday work life. And we have performance measurement as a tool to measure and progress and report progress across all of these initiatives. In the next slide. The 2019-2021, which is a two-year operational plan, ends this June and contains 180 smart objectives for achieving the county's strategic goals. And you can see on the screen some of these smart objectives which are aligned with our strategic plan. The county is on track to complete 70% of our objectives within the two-year timeframe, which is an amazing accomplishment given all that we have been through in the past year. Performance measurement is a tool to measure and report progress across the county with the goal of providing the community with data that spark questions and ideas as we move towards achieving our overall goals. During the pilot phase of this initiative, the county established community impact measures through a collaboration with DataShare Santa Cruz County. And we completed five public-facing program dashboards and provided training to over 200 of our staff on the principles of results-based accountability. As performance measurement moves forward in the coming years, it will integrate as a measurement and reporting standard across the county's strategic plan, our operational plan and Primo Santa Cruz initiatives. Continuing to develop public data that strengthens community and enhances opportunity. This is a great accomplishment of our staff. We are on the forefront among county governments in California in our reporting through performance measurement and our public dashboards. I wanna congratulate our staff on their efforts and the board for supporting these efforts over the past years. Next slide. Now I'd like to review a few of our accomplishments during the past year. This year has been one of many challenges. And I want to acknowledge the extraordinary efforts of our board of supervisors, our staff, to respond, adapt and learn in order to carry out our commitments to the community. First week responded to the COVID-19 pandemic. Our health community responded to over 16,000 cases of COVID-19, which unfortunately included over 206 deaths. This response encompass testing, patient care, specialized websites, vaccination and daily information to keep the public informed. County staff also moved to remote work. Many services were transitioned to online delivery options and additional health and safety precautions to protect the health and safety of the public and our employees. We also faced the CZU complex lightning fire, which burned over 1,000 structures, including 950 homes. In addition to the immediate response effort to combat the fire, fire recovery efforts included the establishment of the Recovery Permit Center for dedicated rebuilding resources for fire victims, coordination of debris removal, preparatory work for potential debris flows over the winter, a specialized website and the establishment of the long-term recovery group for community sport and myriad public outreach meetings. All of this was done as a result of direction by the Santa Cruz County Board of Supervisors, which assisted us and directed us to form the Office of Response, Recovery and Resilience or OR-3 in December of 2020. Despite these major challenges to our fiscal and staff and resources, operational excellence was maintained as evidenced by the realization of 70% of our operational goals being achieved. Just to reserve, I'd like to just go over some of these accomplishment. We achieved a 20% reduction in our county carbon footprint due to the implementation of the Central Coast Community Energy. Central Coast Community Energy. We implemented neighborhood court restorative justice programs implemented by the district attorney. We increased by 50% the number of low-income seniors and disabled single adults on CalFresh. Leo's Haven was completed the construction of Leo's Haven. Personnel reduced the time to establish eligibility lists for county hires by over 20%. We replaced 10,000 linear feet of sewer mains, reduced water use by 10% through improved irrigation practices and increased medically assisted treatment services by 75% to over 230 unique patients by our health services agency. We also completed restriping of 50% of county roadways and we also implemented our five dashboards for performance measurement and reporting to the public. Go to the next slide. So now let's talk about the return to the new normal. And this quote by David Hollis applies very much. In the rush to return to normal, let us use this time to consider which parts of normal are worth rushing back to. While we can reasonably envision the end of the pandemic, the COVID-19 crisis as well as recovery from the CZU lightning fire continue to impact our budget. In the current environment, we are mindful of the persistent hardships on our residents and the budget recognizes the county remains in a period of transition. The precise path forward and the long-term effect on our county contain uncertainty. For this reason, the budget before you takes an approach that is both conservative yet supports critical services, infrastructure with flexibility and creativity. With this budget, we also recognize that new trends will drive future budget decisions and we lay the groundwork to be adaptable for potentially unprecedented impacts to come. To that end, I'd like to discuss three critical components of our new normal work environment. First, our changes to our economic development strategy. Second, the forthcoming unified permit center. And third, the post pandemic remobilization and the role of remote work for a county government. Next slide. Economic development, while budget constraints during the pandemic required the elimination of our economic development office. Economic development activities are still a vital part of our strategic plan. Working in collaboration with the workforce development office of the human services department, economic development activities are currently concentrated on COVID and fire recovery efforts and are coordinated by the county administrative office. Next slide. In response to the pandemic and fire emergencies economic development efforts have most recently concentrated on supporting local economic vitality. This model represents the type of activities that have occurred this past year to bolster our local economy. We implemented over a million dollars in small business grants, including grants up to $15,000 for 92 businesses. We managed the restaurant recruitment and assisted human services department in the RP process for the Great Plates program. We set up a program at Santa Cruz Community Credit Union for stimulus tech caching for persons experiencing homelessness. Our economic partners, including the chambers, business associations and trade organizations provided resources to share with our business networks. We began the discussion on funding and implementing a revolving loan fund for struggling businesses, which included a grant from the Economic Development Administration Proceed Capital. The grant was funded at $2.6 million and we are working with other local jurisdictions to implement. And finally, we participated with the Economic Recovery Council. Next page. Our economic development strategy has contributed to a number of significant wins for our local businesses. There has been a business expansions. Even in this very difficult time, Beckman's Bakery relocated from Seabright to the former Ledger site, which included an expansion and will eventually house more than 100 employees. The Boulder Creek Main Street program continues to thrive after hiatus due to the pandemic as working on electric vehicle charging stations and septic batch treatment plan for the community. And new businesses are located in the county, including REI, the Point Market, Rooster's Ice Cream and Healthy Ocean Seafood, opening during these very challenging times. Economic development also played a key role in the 17th and Capitola Project, which has broken ground and includes affordable housing and medical offices in the Live Oak area. This piece of prior redevelopment land owned by the county will now provide much needed affordable housing and jobs and needed services, such as healthcare and dental care. Next page. Our economic developments efforts are being courted out of the county administrative officers, office, including Alisa Benson, Barbara Mason, and including the Workforce Development Center in the Human Services Department headed by Andy Stone. Next slide. In December 2018, the CAO's office, Planning Department and Public Works Department embarked on Primo Pi, a continuous improvement effort to improve the efficiency and efficacy of the permitting processes. And the first series of analysis under performing technology, multiple review cycles, you can go back to the prior slide. And unsynchronized collaboration across departments were found as contributing factors to delaying permits and increasing costs for those seeking to build in the unincorporated area. As a result, the concept of a one-stop permit center or unified permit center was born with an eye towards building a better customer experience. While certain process improvements were created, such as the electronic plants submittal portal, many ideas were put on hold as staff responded to the pandemic and fire emergencies. Next slide. In FY 21-22, the Planning Department, Public Works Department, along with Environmental Health and the CAO's office will work to create version 1.0 of the Unified Permit Center. The strategy will focus on key components aimed at increasing the transparency of the permitting process, reducing the number of review cycles and improving the overall customer experience through process and physical space design. And you can see that we are going to work in the slide towards improving technology, a customer focus to focus groups, and we are going to redesign our space by co-locating cross-agency permitting staff in a single physical location. You can go to the next slide. And this is our plan. June through October of 2021, we will be assessing customer focus groups, developing preliminary space plans and identifying staff and technology needs to meet customer service demands. By November of this year, we will solicit cross-departmental input, development standards for best practices of workflow, create preliminary metrics and key performance indicators and also begin space reconfiguration. Finally, in January of 2022, our goal is to finalize the permitting space reconfiguration, purchase new technology and create public outreach messaging, including a website improvements. Next slide. Our third grade effort this year is with regard to remobilization. As part of our response to the COVID-19 county offices, we're rapidly redeployed to our remote work environment. As we work to normalize operations post-pandemic, I believe that maintaining remote work as part of our overall human capital strategy will provide significant benefits to the county. Next slide. Our remote remobilization plans include the continuation of remote work as an option for many of our employees. Through several internal surveys, a review of available research and data collection. Currently, our employees are working remotely on average of over three days per week. The benefits to the remote option include a reduction in both miles traveled, commute time saved and fewer daily car trips, including less traffic congestion. By continuing a hybrid work environment with an average of two days per week or 50% of our employees, we will save over 4.8 million vehicle miles and reduce daily car trips by more than 1,400. Those are really astounding numbers. We will reduce 1,400 car trips per day by continuing in a hybrid work environment. We also will save over 1,900 metric tons of carbon emissions annually. Just to put that in context, this equates to emissions savings from over 219,000 gallons of gasoline and provides the environmental equivalent of carbon sequestration of 2,400 acres of forest per year. And besides improving our carbon footprint and reducing car trips, we also are improving our work-life balance for our employees. Employees ranked their productivity as 4.29 out of five. They say that they're able to maintain their productivity at that level with over 89% agreeing that remote work has been productive for them. Also, 79% of our employees agreed or strongly agreed that remote work is empowering and remote and ranked that communication between their team and leadership has been maintained. Most importantly, employees rated their work-life balance as 4.5 out of five as a result of remote work where they can spend more time with their families and less time commuting on the road. Finally, with many jurisdictions ordering their staff back to work full-time with no option for talent work, having the ability to work remotely expands our recruitment pool and provides incentives to attract top talent. Next page. This is our remobilization to a hybrid work model plan. Moving to a more long-term remote work policy requires thought and planning. To that end, I have directed departments to assess their business needs, evaluate which positions are best for remote work and develop remobilization plans for our return to work. In addition, I've asked them to assess their future needs in the long-term, including the impact of remote work on space needs and configurations. These plans will be submitted for review by the CAO's office and approved by myself. All remote work employees will be required to sign a remote work agreement. In addition to this, the remote work policy committee will be looking to add updates to our current remote work policy. This long-term commitment to remote work in a hybrid work environment will yield new benefits and will also require us to continue to learn and adapt as our operations evolve. Next slide. We also continue in our budget to respond to changing needs and implement the board's values as espoused in our strategic plan. Next page. We are making major organizational changes to respond to the board's priorities. The proposed budget includes investments in the community, including in the new public defender and office of response, recovery and resilience, the three year housing for a healthy Santa Cruz County framework to reduce homelessness, public health response to the COVID-19 pandemic and continuing, which will continue in the near future and restoration of the focused intervention team, as well as the South County Service Center to be located in Watsonville and targeted investments, which are previously specified by the board. All of these initiatives will be implemented during the next budget cycle and we appreciate the board's support for these major reorganizations of county government. Next slide. We still have many challenges ahead of us. We will have to adapt and adjust to these changes. These include increases in cost for our healthcare and our employee retirement costs that we will continue to have to adjust to projected deficits due to our costs increasing at a higher rate than our revenues will increase in the future. And we also need to continue to address equity and inclusion within our county government and within the services we provide to the community. So in the future, we will continue to work on these issues and this concludes my opening remarks and I would now like to return to the presentation over to our budget manager, Christina Mallory. Thank you, Carlson. Christina, before you make comments, I'd like to make some brief opening remarks as well. I know they're shared by the board of supervisors. I want to thank our CEO, Carlos Palacios, for years ago having the foresight for us to establish strategic and operational plans so we know what our targets are and let's go and move it. As you can see, we have adjusted and we have been very aggressive in carrying those out and it's very successful at it. And I think this is optimistic but feasible outlook and today's $880 million budget gives our community hopes that will continue to recover from those twin emergencies of the pandemic and the CZU fire and amid these unprecedented challenges, we are seeing unprecedented state and federal relief to our county government, not just in the form of reimbursement but in significant new funding for homelessness, housing, transportation and other core services that have historically lacked appropriate investment. And for that, we owe a deep gratitude to our members of Congress, President Biden, Governor Newsom and our state elected officials. And we also acknowledge that the county's conservative and fiscally responsible approach to handling our budget was very instrumental in positioning us to stabilize as we move forward. And thank heavens years ago, we made a commitment to build up our reserves. I don't know what we would have done if we had not built that up to the 10% level and we have to make another effort to do that again in the coming years. I think the CEO and all of the county staff and labor partners in every department for did what was necessary to keep our financial ship afloat while at the same time working hard to respond to the community's need during the pandemic and the fires. But I'd like to note that in every staff report in today's agenda, the CEO and the department directors repeatedly expressed their appreciation for county staff and how well they serve the community during one of the most trying times in the history of Santa Cruz County. To our county employees, thank you for everything you did for your dedicated efforts, your time consuming efforts, your kindness and compassion that you put out there for people that were deeply in need and we still have a ways to go but thank you for doing everything that you have. So I'm eagerly in all of the county staff work, ethic and professionalism, and I'm just thankful for the opportunity to work with each and every one of you in the county and on the board of supervisors and in every county department. With that, I would then want to pass it on to Ms. Mallory, our budget director that this is going to be her last budget presentation where you still can't talk her out of not retiring but well, you have been just a tremendous asset to the county of Santa Cruz for so many years and your detail and shall I call it simplified or direct explanation of the budget is really phenomenal and it's much appreciated. I can't tell you how much we do appreciate that and I know some people will have questions today during the budget session. I'll go to you to see if we can answer them quickly and some issues. But to you, thank you for everything you've done. That's just you're a star of the show. Ms. Mallory, go ahead if you would present the budget. Thank you very much, Chair McPherson. So we'll continue with the budget overview and I wanna thank Carlos for those introductory and a great overview of our strategic plan and our objectives and the board's priorities. So I'll be providing you a general overview of our fiscal year 21-22 proposed budget in addition to some of the supplemental materials and highlights the proposed budget recommends and recommits ourselves to strategic investments based on our shared values that have helped guide us through these difficult times and allocates funding constraints with the vision policies and priorities established by the board. Next slide. Here you can see our budget hearing schedule for the next few days. Today, you're hearing an overview. We'll also be focusing on general government and health and human services and you'll hear from some of the larger departments within health and human services directly. They'll be providing some presentations for you and then tomorrow we'll hear from land use and community services. And Thursday, we will hear from public safety and then we'll come back. We'll summarize everything hopefully for you by Friday so you'll have a chance to look at that over the weekend and then we'll have last day reports and the concluding actions on next Tuesday afternoon on the 29th. We'll take all that information and summarize it for the board after the auditor closes the books in July and that will be presented back to you for the final adopted budget in September. Next slide. So here you can see an overview of our budget dashboard as we emerge from the pandemic and COVID-19 related costs begin to decline. The proposed budget represents a 13% reduction in spending from the prior fiscal year, primarily from the completed capital projects and road repairs from the 2016-17 winter storms. And while the proposed budget, the general fund budget has about $603 million represents a 3.1% reduction, primarily from the decline in the emergency response costs. The budget funds an additional 56.6 positions, primarily temporary positions added mid-year 2021 responding to the COVID-19 pandemic for health and human services. On June 7th, your board was provided supplemental budget requests, were provided in the amount of about $45 million. This is primarily for the expenses approved funded by the American Rescue Plan of 26 million in addition to the elimination of the remaining 50% of the furlough in the amount of about 10 million, which will be effective July, 2021. Next slide. Here you can see the 21-22 recommended revenues for all funds by budget category of 817 million, plus an additional 64 million in fund balance from other funding sources for a total financing of $881 million to fund the county's expenditures. In addition, the supplemental requests include an additional $43 million in revenue, primarily from FEMA, Cal OES, and the American Rescue Plan, and some grants and other minor increases. The largest share of revenues is within health and human services at 41%, which includes large allocations of funding from the state and federal government. The budget was balanced by increases to some fees and charges to offset increased costs where applicable, increases in tax revenue, primarily property tax growth, and recovery anticipated in sales tax and transient occupancy tax or hotel tax, and then use of available fund balance, which is our budget actual savings from the prior year, which we've estimated about $13 million. There's been various cost decreases related to some non-essential costs where applicable, and we have unfunded a few vacancies that we don't need at this time. There's some use of some one-time funds, but we're being very mindful of that. And then, of course, we're using the American Rescue Plan funding to help us with some of those gaps. Next, we're gonna examine on the next slide the sources of funding. Here you can see a breakdown of the sources of revenue. Intergovernmental funding is mostly the state and federal funding makes up 40% of the funding followed by charges for services of 26% and taxes of 24%. Taxes include the county share of property taxes, about 13 cents on the dollar, sales tax, cannabis business tax, and the transient occupancy tax or hotel tax. Next slide. This chart represents what percent each budget category contributes to the expenditures. The 21-22 proposed budget for all funds is about $881 million, with supplemental requests of an additional $45 million, primarily incorporating the elimination of the furlough and the emergency response costs. The largest category is health and human services at 42%, followed by land use and community services at 24%. This is primarily a STAWS quote budget with a continuation of operations with some small augmentations where revenues show signs of recovery and with the continued primary emergency response estimated to end hopefully by September, there will be some continued response by health services ongoing for several years. Overall, the distribution between the categories of government have remained about the same year over year. Next slide. Here's a breakdown of the expense categories with the majority of costs included in salaries and benefits at 40% and services and supplies at 35%. Other charges primarily include funding to other agencies and our community partners to help provide services to the community. Contingencies is at 1% of expenditures, which allow during the year for budget adjustments for any unanticipated costs and revenue shortfalls as needed. And this served us really well this last year we had a 1% contingency and because of that we were able to have the funding within the budget to respond for the local match to the CZU complex lightning fire. Next slide. And here you can see a breakdown of the countywide staffing we're funding a little over 2,400 positions which includes an increase over the prior year of about 56.6 positions. And primarily those were limited term emergency response positions that were added mid-year by your board to respond to the impacts of COVID-19. The supplemental budget requests funds and additional 60 positions, primarily about 48 positions limited term through September related to the emergency response which were added by the board earlier this year. And then there are a few additional positions that have been added as we begin to recover and increase revenues are available. Next slide. Just as a reminder, I wanted to give you an overview you've seen this before, the COVID-19 impacts and the solution. This is sort of our big summary picture. It includes an allocation of the $52.9 million we're now receiving and we've received half of that just recently from the American Rescue Plan that has filled the county's deficit in order to provide our emergency response. Resources are now estimated at 152.5 million to offset the costs and the revenue losses of 156.4 million, leaving a very small gap of 4 million which is estimated to be funded by some of our homeless funding that's available and provided for some grants to help us with our shelter and care operation. Next slide. So just as a reminder, your board approved the American Rescue Plan in April and we're providing you monthly updates but this is an overview of the funding and the board approved uses which include funding for 2021 which your board's taken action on already and the supplemental budget includes an item to add the additional funding needed for 2122. The county is, as I said, receiving this funding over two years. We've received the first half of the funding and it's offsetting the gap that we first saw earlier this calendar year. And unlike the CARES Act, the American Rescue Plan funding was designed to allow us for reimbursements of our revenue losses which is helping us fund some of the gaps in our other operations and helping us eliminate the furlough. It is estimated, you can see there that 24.6 million is primarily for the COVID response and the mitigation costs through September. Our preliminary estimate of our general revenue losses that are eligible for reimbursement was about 21.9 million and then we had some special revenue losses within health and public works and also coming from the gas tax of about six and a half million and that makes up the almost $53 million plan. So we have set aside some funding within the American Rescue Plan to offset any anticipated additional costs related to the emergency and when we are monitoring our FEMA reimbursements. And as I mentioned, we are eliminating the staff furlough beginning in July and we're making some small investments in infrastructure as funding is available. Next slide. So since the general fund makes up 67% of the county's total budget, I like to take a moment to focus on the general fund revenues. This chart represents what percent each revenue category contributes to our general fund. The 21-22 recommended revenues include almost $593 million in revenues and the supplemental request includes an additional 41 million, primarily related to the emergency response funding that we're receiving. The largest funding for the general fund comes from intergovernmental revenues, which is 48% and that's primarily our state and federal funding for grants and funding primarily for our mandated services. The next largest category is taxes, as mentioned earlier, which is primarily our property tax, in addition to the share of sales tax that we get to keep locally and our cannabis business tax, our hotel tax and our locally approved sales tax measures. And then we have a variety of licenses and permit fees and fines and assessments. Our use of money is in one of our revenues that has not recovered since COVID, that's our interest investment earnings, which is still in decline. Next slide. So this will give you just a brief overview of the general fund's most discretionary revenue. So we think of that as our general purpose revenues. It only makes up about 27% of the total general fund revenues. And this includes, it gives you a summary of what revenues were like before COVID, about 163 million. And then in the adopted budget in 2021, it was about 153 million. That was our revenue losses that we had estimated, but we did a little better than we anticipated sales tax did better. So we are estimates for the current year, about 160 million. And then we estimated for next year, mid-year, we thought we'd have about 158, but things because things were picking up, now our proposed budget reflects almost pre-COVID estimates of 162 million. And I think the way things are going currently will anticipate that things could be even a little better. But overall, we're seeing an increase of about, budgeting an increase of about $8.9 million compared to 2021, which represents almost 6% growth and reflects almost the full recovery pre-COVID. And as mentioned earlier, the only thing that's lagging still, we anticipate that we'll lag and take a several years is we're not sure TOT will come back completely to the pre-COVID growth that we had anticipated or hopeful. And the investment earnings are still lagging. We anticipate those will be low for a few years based on our past experience. And we'll monitor revenues closely and any adjustments will be made as part of the adopted budget once the property tax role has been finalized by the assessor in July. And as mentioned, we're continuing to see some growth. So we anticipate some improvements to those numbers. Next slide. In this chart, you can see how the county uses those general purpose discretionary revenues and the prior your fund balance savings to make what we call the general fund contribution to each general fund department, which is the difference between the department's expenditures and the department's specific revenues or charges for services. And we call this the general fund contribution. So in this slide, you can see a breakdown of 174 million built into the proposed budget based on the available discretionary funding from revenues and fund balance that are contributed to the various government categories. Public safety makes up the largest share of 92 million with a reduction of almost 2% from the prior year since our public safety revenues have increased. Health and human services make up the second largest share at 34 million. And in the supplemental, the CEO recommends eliminating the remaining 50% of the furlough from the additional increased revenue from the American Rescue Plan, which will increase the general fund contribution to about 180 million. Next slide. So it is important to remember that prior to COVID, the county anticipated future budget deficits of anywhere between 4 million and 17 million. And this really depends on how quickly our revenues grow and how quickly our costs grow. Our expenditures have a tendency to grow faster than our revenues. And here you can see a picture of the five year forecast provided in the proposed budget, which shows deficits now of anywhere between 4 million and 12 million a little better. The general fund financing includes available fund balance and general revenues. Anticipated in our best case scenario to grow at an average of anywhere from three to 5% from 167 million to 190 million. And that's the black line there in the slide. And the general fund uses shown in the blue line on the top is the department net costs. And that also includes debt service, our contingencies and our contribution to reserves, which is one of our uses of the general fund contribution. It's expected to grow also at an average of three to 5% from 167 million to 202 million. And of course we mentioned earlier that the furlough is eliminated in this scenario in 21-22. So by 24, 25 it is estimated that the ongoing general fund deficit could be as high as $12 million depending on the expenditure and the revenue growth. The county is looking at additional revenue and cost saving measures to reduce the ongoing deficit, such as increasing our local sales tax or hotel tax in addition to the savings generated from the refinancing of our pension costs with a pension obligation bond while interest rates remain low. Next slide. And here gives you a summary of our history of our general fund reserves. As you can see prior to COVID, the county had doubled its reserves from 29 million in 1314 to 58 million in 1920, resulting in stronger financial stability for the county's general fund and improve the county's credit rating to AAA. As a result of the financial impacts of COVID-19 and the revenue losses anticipated, the county used $13 million or 23% of the general fund reserves to balance the 2021 adopted budget, leaving 7% of total revenues in reserves below our target of about 10. It is imperative that county restore these reserves over the next five years in order to be prepared for that next emergency. The 21-22 proposed budget includes funding to increase the general fund reserves by $3 million for a total of 8% of the proposed revenues. With the large increase in emergency funding included in the supplemental requests, the percentage of revenues is really closer to seven and a half. Since revenues continue to improve better than estimates, it is likely we can increase reserves further at year end to achieve at least 8% of revenues to make progress towards the 10% goal. Recommendations will be included in the concluding actions on last day of budget hearings and a final summary will be provided to the board in September after the books have closed and the auditor finalizes the adopted budget for the board's approval. Now I'd like to turn it back over to Carlos. Thank you. Well, federated has made a significant difference this year in order to present you with a balanced budget. It is critical to remember that this is a one-time financial infusion of funds. Looking ahead, there continue to be challenges and opportunities which await us in the future. Next slide. You can see that our employee costs continue to increase. These include most significantly our healthcare costs and pension costs. In the past, the board has taken action to address these, including implementing new pension formulas and also authorizing the issuance of pension obligation bonds. We also have some projected deficits. The board has taken action in the past to increase our revenues and we continue to look at new revenue opportunities in the future. We stopped to recover from the emergency including the COVID pandemic and the fire, CZU fire, and we have responded to that with OR-3 and will respond with our Unified Permit Center. We need to do something about how we're gonna remobilizing with the new normal and we are recommending that the board continue with a hybrid remote work environment for county employees. There also have been issues with service delivery, uneven service delivery across the county and we have been resolute with the board's support in having an equity focus towards all of our goals and including opportunities to provide equal access and opportunity such as our new South County Service Center. Next slide. Thinking back on this challenging year, there have been many accomplishments for which we are proud. In spite of the pandemic and a devastating fire, the county adapted to a new normal and provided effective and efficient services to the public we serve without interruption. As a result of the sacrifices of our residents, our employees, the termination of our local businesses, we are well poised for a new year of recovery and a sustainability. The development of a budget is shaped by a number of factors, most importantly by the vision and the priorities of the Board of Supervisors, the county's financial principles and capabilities and the needs of our residents. Forecasting revenues and expenditures in these uncertain times is difficult and requires we work with imperfect information. As we have learned this past year, budgeting more so than ever must be adaptable to the face in the face of unpredictability. We are therefore fortunate to have the guidance of our Board of Supervisors, the dedication of our county staff and the collaboration of our community. Our collective strength and the resilience we will allow us to meet every new challenge and serve our community. We're very excited about the budget we are preparing to present to the Board and look forward to budget hearings in the days ahead. That concludes my remarks. Thank you, Mr. Palacios. I appreciate that very succinct as it can be, but straightforward presentation by Ms. Mallory. We thank you for all your hard work and your adjustments that you and everybody else in your department and the budget team had to go through in this very, very, really pressing time and a changing time. Thank you for those presentations. Now we will go to public comment on the, anybody from the public can have two minutes to speak on an item that is on the consent agenda or the regular agenda if you're unable to address those issues later in the day. We will, if you make a presentation on something that is not on the agenda, we will not be able to respond to it immediately, but we would take, open it to public comment. Anybody, is there anybody that would like to have public comment, Ms. Cabrera? Yes, I currently have one speaker for public comment. Thank you. Sir Cagno, your microphone is available. Hi, is this the time to talk about item number 10? No. Okay, then I guess I'll give up my time and come back. Unless you're not able to speak to it later in the day. No, I can speak later. Thank you though. Thank you. I think there are no other speakers for public comment. All right, we will now move to item number seven, action on the consent agenda. I just have a couple of comments. As chairman MacPherson, we still have the auditor, auditor controller, trash or text collector presentation. Oh, for the budget, I'm sorry, I moved ahead. Yes, go ahead. Thank you, Mr. Cluster. The opening remarks from our auditor controller, treasure or text collector in any other department that's not clearly identified, I guess, in Santa Cruz County. Mr. Cluster, or is it? Good morning, chair MacPherson, members of the board and members of the public. Edith Driscoll, auditor controller, treasure or text collector. As you begin your budget hearings, I appreciate the opportunity to speak to your board regarding the county's recent bond sale and the county's reserve position. Last week, the county successfully issued our TRAN, our tax and revenue anticipation notes. You recall, these are short-term 364 day notes issued annually for cash flow purposes until the bulk of the property taxes are later received in the fiscal year. Because of the slow repayment of FEMA eligible costs this year, this cash flow bond is even more critical than usual. The $48.5 million bonds sold at an interest rate of 0.1% or one-tenth of 1%. This is an extremely low rate which reflects the county's interest, the current interest rate market. It also reflects the county's current high short-term ratings issued by the rating agencies of Standard & Poor's and Moody's. When we go to the market for financing, we meet with both rating agencies and ask them to review our county's fiscal health and rate it. As the county's controller, I welcome the opportunity for such a review of our credit quality and financial outlook. Again, this year both rating agencies continue to assign the highest rating available to the county for short-term financing. Short-term financing only looks at the county's ability to repay the debt within one year. As the CAO mentioned this morning, your board should be acknowledged for strong fiscal policies which led to these ratings. However, along with the strong short-term financing news, I need to provide that both rating agencies reported concerns about the county's fund balance and reserves. Standard & Poor's stated our credit challenges were expected drawdowns of reserves through fiscal 2021 and the county's ability to maintain structurally balanced operations and limit reliance on reserves is critical to the credit profile of Santa Cruz County. Moody specifically questioned our reserve levels as too low for our rating and stated in their written report that we were at risk of being downgraded. The county needs to consider these concerns as the county will be issuing long-term debt in the next few months to purchase the Westridge property. I am also very concerned that our fiscal activities in the next year will impact our long-term rating bond rating. As the budget reflects, as a result of the fiscal and financial impacts of COVID-19, our county withdrew $13 million, almost all of our general discretionary assigned reserves to offset the revenue losses. Even though the county has a plan to restore reserves over five years, I think we should consider additional increases to reserves, such as from any unanticipated savings at year end. In conclusion, I believe it is imperative that we rebuild our reserves as quickly as possible and consider upgrading our reserve policy. I have included a letter related to reserves in your board's last day packet. I will also be coming back to your board in the fall with additional analysis of our reserves after the fiscal year end close, after June 30th, 2021, as well as proposing modifications to our current reserve policies and limits. This is the end of my comments and I'm available for any questions. Thank you. Thank you. Is there any questions from board members? Mr. Chair, I don't have a question. I do have a comment. First, Mr. Iskall, thank you for the brief presentation. And also I'm in complete agreement of your analysis on the reserves. I look forward to the last day discussion of this and some of the ways that we can improve it. Quite frankly, without the work that we had done, both through yours and Mr. Plasios's leadership and encouragement a few years ago, we would have been in a much different position during the pandemic. So it's clear that these will continue moving into the future and this is why we do what we do with respect to the reserves. So I absolutely agree that we should work to rebuild them in that way. I appreciate your recommendation on that. Thank you. Thank you. Any other board member who would make a comment? Yeah, if I may. Go ahead. Thank you. I was just gonna say, yeah, thank you for the whole staff and everybody. And also I remember two years ago, we were talking about increasing the reserves and we were all for it. And never did I think we would date it as quick as we did. So what I'm saying is that I'm very pleased that the board and the staff and everybody, the CAO and Edith, you also were on board for increasing the reserves. And again, I guess it caught all of you off guard too. I didn't think it would be happening so fast. Thank you. Thank you, Supervisor Caput. Any other comments from board members? Yeah, I have a question, which is we're obviously seeing this increased deficit year-over-year as a result of pension and health costs. There has been pension reform and I'm wondering when we start to see the benefits of that in our budget and then how does that translate into our long-term planning around reserves? And if this is a five-year problem, it's one thing. If it's a 25-year problem, it's something else. And so I wanna just sort of understand what you're seeing out there with these trends. I think that's a two-part question. One part I will answer and one part I will redirect to the CAO's office if I could. Regarding how it affects reserves, that's part of the analysis we hope to do in the next month or two that will be coming back to you hopefully in August or September, giving you a really more in-depth picture of where we are now post COVID. We're in a new fiscal world post COVID and I agree we need to look at those concerns. The CAO's office has been taking great strides in looking at pension costs and spoke with your board earlier this spring regarding pension obligation bonds. And so I think if I could, I would like to shift that question over to the CAO's office as they led that analysis regarding pension costs and pension obligation bonds as a tool to try and contain some of those costs. Yeah, thank you, Nita. I think that's correct. I mean, despite the fact that we have made some structural changes that we bargained and some of the changes that have occurred legislatively around pension costs, we've been able to maintain some of those current costs but we haven't made huge progress on the unfunded liability. And that has a lot to do with the trying to catch up on the investment losses from the prior years. And so even though initially we increased our overall funding within the plan, we haven't been able to maintain that. So I think with the pension obligation bonds that the board is considering, we will be able to make a huge shift and change in our overall pension costs that will be ongoing, that will offset some of that deficit in the future. And the other thing is that the, if I could say the projections that we asked for from CalPERS show that costs continue to increase according to their projections for the next decade, basically, and then they kind of level out for the next five years or so to about a year 15. And then gradually they start decreasing and that's about 20 years out. And then they decrease significantly over time. And that's when all the pension reforms start really taking effect. So there's some future board and future CAO 20 years from now that's gonna have a huge surplus of funds. But for the next two decades, basically, we're showing next decade increasing costs and that's what we're having to deal with. Then it'll level out for a while and then it starts actually decreasing. And the pension obligation bonds is helping us to address that issue of that increasing costs over the next decade. Great. And just to be clear to any listeners out there, the investment losses that Christina Mallory talked about are not ours, they're CalPERS. And we've done our best to very sustainably and from a reduced risk point of view, manage our investments. So thank you. So it is a decade long problem that we have to manage. Thanks. Thank you. Any other questions from the board members? Mr. Plosper, did you wanna go to the overview? Any further overview before we go to the consent item? Yes, there will be an overview by Ms. Mallory who will do an overview of the human health and human services budget categories and the general government categories. And then after she finishes that, then we'll go to public comment and then action on the consent agenda. Got it. So Christina, I'll turn it over to you then. Yeah, I believe. The health and human service budget category. Yes, and I just have a very brief overview for the board prior to looking closely at the health and human services budget presentations. So I mean, go to the next slide, Stephanie. So just to let you know, to give you some perspective, the health and human services section of the county's budget represents about $369 million in financing or 41% of the county budget providing funding for health services, human services, core investments, and child support. Next slide. Here you can see an overall summary that shows the revenues, primarily from intergovernmental revenues that come from state and federal funds. And overall the financing is decreasing by 5.7% primarily from the decline in the emergency response costs and the offsetting funding, human services offset increases related to the continued operations and the elimination of the furlough. And you can see overall, they have a small decline. Next slide. This chart shows the general fund contribution changes for health and human services. The increases in the general fund contribution is about one million with net increases primarily related to the cost of eliminating the furlough after the state and federal funding is provided. In addition, the proposed budget and supplemental request includes increased funding for core investments, our community partners, by eliminating the 10% reduction which occurred in 2021 due to the impacts of COVID. Next slide. This chart shows the overall expenditure summary for each of the departments for health and human services of more than $22 million includes adding 46.6 full-time equivalent positions primarily limited term for the emergency and funding three additional positions from increased revenues. The supplemental requests in this category are about three and a half million dollars for a net general fund contribution increase of about a half a million dollars. Health and human health services agency and human services department comprise more than 97% of the expenditures in this category. And now I'd like to turn it to the, you can conclude that. That's our health and human services. And now we'd like to move to the general government overview ever so briefly. Next slide. So here you'll see the general government financing of about $106 million in financing which represents about 12% of the county budget providing funding for risk management, information services, general services, the auditor controller, treasure tax collector, assessor recorder, county clerk collections, personnel, the board of supervisors, county council, the county administrative office, cannabis licensing, and a contribution to AMBAG. The county is self-assured and risk management maintains reserves for claims for workers comp, unemployment, property and liability which makes up why they make up 48% of the total. And they're the next largest chunk there is information services, which is 17%. And you can see they're relatively small each of the general government departments. Then the next slide, you'll see the financing summary and the list of the financing year over year and the breakdown for each of the departments primarily from charges for services and other revenues of 56.8 million and other fund balance primarily in the risk funds of 27.7 million and 21.7 million from the general fund. Overall, the financing is increasing by 5.2% primarily from the increase associated with the status quo operations and the cost of eliminating the furlough. Next slide. And this chart here shows the general fund changes overall by department, the category includes the general fund contribution increase of about 2.7 million with the largest increase you can see there for county clerk elections, which is about one and a half million due to the reduced revenue in the upcoming year from the non-presidential election and the reduction of some of the one time funding provided by the state. So this is normal every other election cycle we have an increased general fund contribution. And the next slide. We'll show the general fund, general government expenditure summaries by department overall they have a 5.2 million increase and includes adding two full time equivalent positions and funding two additional positions for an increase of four positions. This includes three positions for information services of which two are transferred from public works as we continue to consolidate information services staff within the information services department. Risk management comprises almost 50% of the expenditures which include as mentioned earlier the funding for the claims reserves for the various risk management funds. And you will be receiving a last day report to talk a little more specifically about the risk management funds in particular the property and liability fund. We found ourselves with some increased claims and we'll be asking for the board to make some additional contributions to that fund to shore up the reserve. And that concludes my opening remarks on general government and health and human services. And now I believe you can go to the next item on the agenda. Mr. Blasio, is there any other comments that we should have before I go to the consent agenda? No, that concludes our comments and so you can go on to public comment as the next item, item number six. Yeah, and item number six, we did ask for public comment earlier and one gentleman wanted to comment on, I think was item number nine or 10. Is there any other public comment out there that anybody wanna make public comment at this point? I have the same commenter. Okay, so we can move on to item number seven, action on the consent agenda. I do have a couple of comments on the consent agenda. This is in regard to 16 departments or categories in county government. One that we've just heard from is the auditor controller, item number 14. I do appreciate the five year repayment plan to our general reserves. I do agree with auditor controller, Edith Driscoll that the county may need to consider more aggressive approach to rebuilding the reserve fund but we'll hear more about that in the fall. But thank you to everybody in the county who allowed us to build up that reserve in the first place and now we have to get it back in place. And it's a difficult thing. There's so many needs out there but the realistic view budget-wise to have a reserve, we've seen the necessity of it in this last year. Item number 18, the CAO's budget. I think this is a great opportunity to highlight again the amazing work of our CAO, Carlos Palacios and his entire team. They've been fantastic in adjusting. There's been a lot of uncertainty of what's coming from federal or state agencies and how we adjust that. And some departments had to make some terrific adjustments to allow us to provide the services to a lot of people. The accomplishments that they were identified in the proposed budget list is only really a handful of the achievements as a county experience because of their leadership on many fronts we were able to stay ahead of the game or keep up with what was needed, so to speak. It can't be overstated either how our CAO and his team demonstrated flexibility and creativity in the real problem solving skills during 2020 in the first half of this year, the 2021 fiscal year. We are in a strong position in many ways to tackle the months ahead as we look to expand our services in the South County, especially with the purchase of the Marine Center there, establish the public defender's office, continue to address the homelessness issue. That is in this county and every county in this state and throughout this nation. And to add to the housing stock and help our families recover from the terrible fire that we had. I do want to thank the entire CAO team and in particular went to acknowledge the great work of our new office of response, recovery and resilience to read the expertise and laser focus on that team has been invaluable. I know that some people are getting a patient, but I do appreciate their patience as we recover. I think it's worth mentioning also our county clerk's office and how successful they were in this last year's election. County clerk, Dale Pellerman just retired some months ago. She was a phenomenal county clerk for many years of this county. And she, we can feel very confident that her chief deputy, Trisha Weber who is now county clerk, will carry on that same professionalism as we can anticipate some changing election laws. At the federal level, it appears that are possible. And I have very much high confidence that whatever those are, we will have a turn election turnout unlike any other that's happened last year in this county. And I appreciate again, Dale Pellerman's professional leadership throughout the years and look forward to Trisha Weber carrying out that in the near future. And the general services budget, in prior remarks, I expressed my deep appreciation for the hard work of all the county staff and doing the critical work necessary to get through the recovery from the COVID and the CZU fire. And a special note, I wanna call out the general services department which ran at the emergency services command center in response to the CZU. There were daily calls that were made to try to see how we could address and recover as quickly as possible. The dedication of that general services department, the work ethic and the calm demeanor that you had and the interagency coordination, day in and day out for months made a difference for our community. We still have a ways to go but it was a privilege to witness firsthand how well the county handled the various levels of this emergency. I think most of us had no idea how complicated that work was until we experienced it and this hard work continues as we speak. We have some way to go but thank you to your coordinated effort and your professionalism. We were able to get on track to recovery as quickly as possible. There are any other board members want to comment on any item on the consent agenda? Yes, Mr. Chair, I do have some things. Thank you for your introductory remarks on this and I'll be pretty brief on it but I do wanna go through some of these departments just to acknowledge their work. I mean, the auditor, controller, treasured tax collector just spoke for a minute but realistically during the pandemic it was wonderful to have a steady hand throughout that entire process ensuring that we could still continue along with our budget manager and our CAO ensuring that the operation still continued from a budgetary standpoint. The office of the county council I don't think people recognize how much work during the pandemic needed to be done on the legal side both from the health directors and ensuring also during the CCU fires that everything was handled behind the scenes while they were behind the scenes department a lot of the work that they did made a significant difference to the community during that time and they should be appreciated as well. I also share your great appreciation the CAO's office and would also like to add some appreciation for the clerk of the board. I mean, this was a pretty unprecedented time moving us to all virtual meetings and I think that we've done a remarkable job ensuring that the public had access not just to the board but to its county government and we were able to maintain operations from a legislative standpoint and that's a no small part due to the work of the clerk of the board's office. Moving forward information services or ISD or technology world they played a huge behind the scenes role in both getting information out during COVID including all the web based information that we had but also ensuring that we could have the technology for remote based meetings and remote employees. And one thing that Israeli talked about I mean, we are facing as you know in local state and national government and nonstop attempts to both undermine and attack the technological systems and the reason you haven't heard about it at the local levels because of the work that these that that team has done to ensure that our systems are kept safe. It's an ongoing issue and it's something that we as a board need to ensure that we continue to invest in. On item 22, which is our personnel team I echo the chair's comments about our remarkable and resilient workforce and also like to acknowledge that we know that it not only was this last year tough we know people are tired and we know that across the board especially in a lot of local governments we're seeing burnout and challenges among employees and so we want you to know that you're seen and you're heard and you're loved and you're respected from the board and this community. It's been a remarkable year and a lot was asked of you and a lot is gonna continue to be asked of you but we're all on the same team here. We wanna make sure that you know that we absolutely support you and appreciate your shared sacrifice not just financially but in the unbelievable amount of hours that you put in to ensure that frontline services continued to be provided. Thank you, Mr. Chair. Thank you. Any other board member want to have a comment on their consent agenda? Seeing none, are there any comments from the public? There are no speakers from the public to this item. I might point out that just as an example that we see that every dollar counts I think the difference in the ambag budget of the Association of Monterey Bay or Governance is $2. So we really keep our eye on these things. Every dollar counts and I couldn't believe it. We said, hey, there's a difference of $2 in this. I think it's $34,000 or $35,000 budget. So boy, keeping right on top of it. Okay, I will entertain a motion to approve the consent agenda. Mr. Chair, I'll move the recommended actions. Second. Second by Coonerty. Please call the roll. Supervisor Koenig. Hi. Friend. Hi. Coonerty. Hi. Caput. Hi. McPherson. Hi. Thank you. Motion passes unanimously. Okay, thank you very much. We will now move to the regular agenda item number eight to consider approval of the 2021-22 proposed budget for the collective of results and evidence-based or core investments and set aside, including any supplemental materials and take related actions as outlined in the reference budget documents. And as recommended by the County Administrative Officer, we have the 2021-22 proposed budget on pages 157-58, the 2021-22 supplemental budget on pages 47 to 50 of the supplemental budget. Mr. Morse, Randy Morse is our Human Services Director and I do believe that Emily Bolly may be making the presentation. Good morning, Chairman Fursten. Am I coming through okay? Yes, thank you. Okay. Yes, you are correct. Myself and our Deputy Emily Bolly are here. This is actually the first of two presentations by the Human Services Department. So I'll just make a few introductory remarks and then you are correct. I will turn it over to Emily. So I just wanna say good morning to you Chairman Fursten and the Board and also the many County colleagues who are watching this has been one heck of a family year for us County employees, including you as our Board and also to the community that is watching today. We have two budgets that we present and as somebody who's only been here for a little under a year and a half, I respect the legacy of this Board and CAO who for over 30 years has asked the Human Services Department to be the administrators of your general fund money, which is now called Core and formerly it was called Community Programs, money that is under your Board's discretion to invest in community-based services to our community. So that will be the first presentation by Emily. There will be a pause. We'll turn it back to your Board for questions and comment and then Chair McPherson-Yielden, I'm assuming kick it off again to turn it back to me to give the Human Services Department presentation. Before I turn it over to Emily, I do wanna take this moment to just capture the spirit of what I consistently hear from your Board and our CAO and mirror that. And that is just to take a minute to recognize, thank and appreciate many people who make things like a budget presentation from one department work today. And I wanna start by piggybacking on a comment you shared, Chair McPherson, when the CAO presented. And that is to recognize that Christina Mowry, our budget officer is retiring. Sorry, Christina, but I do wanna take a minute to say as somebody who's only been here a year and a half, the Human Services Department and the core budget are always very political, they're very complicated. I was told by my predecessor, Ellen Timberlake in my very first meeting, you better get a relationship with Christina, she's amazing, you have been nothing short of that and your support, your collaboration, your vision, your thought partnership during this incredible year, I think have made sure that Human Services could serve this community in ways the community will never understand thanks to your budget technical skills. And I just really wanna thank you and we will miss you. And this is your last budget season. So thank you deserve that recognition. Thank you, Christina. I also wanna say thank you to the Human Services Department budget team. They have spent an unbelievable year underwater. I do wanna say thank you to Supervisor Friend who commented that there is an exhaustion amongst the county workforce. And I think finance offices in particular and a few others have really struggled through this year with multiple complex budgets and challenges almost weekly. So I wanna thank the finance team who has done tremendous work this whole year including the work to help build up this budget that we're gonna hear today from First Emily and then myself. To the HSD employees, I'll say a bit more to you all but thank you, you've been nothing short of heroes this year. I have the easy job of presenting as does Emily. You do all the work. So thank you. And then I'm gonna end with saying there's another person retiring this year. And with permission, I have been allowed to take a minute to recognize Emily Bolly. Emily is the deputy director of the Human Services Department. She will be presenting next. Emily has been here over 31 years. She is retiring the end of this year. And because this is a budget presentation I wanna make sure the community and your board knows that we actually had a vacant admin services director position and Emily in addition to all the extra work we had to do helping me settle in as a new director carrying the weight of all that history also directly supervised the finance office and the work you have done, Emily has been nothing short of brilliant. We're gonna miss you. Glad we have you for a few more months but wanna take a minute to recognize you and thank you. So my final comment and then I will turn it over to Emily who will share a PowerPoint and say some comments about the core presentation which is the official item next. I wanna take a minute to make sure your board and the community know that the core presentation what is not being presented today because that is also more important than what is being presented. We, Emily and I will be in front of your board in September for a study session to talk about the core program and what is gonna be the second time ever that we have an RFP procurement process for these public funds. At that study session in September we're gonna talk about all the questions and comments that the community and your board might have about the policy issues, the budget issues, how much base funding we have, the framework for that RFP. We are not talking about any of that today. We are simply talking about carrying over the fourth fiscal year to next year which is the fifth and final fiscal year and as the CAO office has shared to restore those cuts that were made to make the program back to where it was. That is simply the presentation today, the formal presenting the budget for your approval. But I wanna repeat, we will be back in front of you in September. We are working with community members about all the questions they have so that when we're back in front of you at that study session, we hopefully can have a proposal that your board can support as does the community who's very concerned and cares a great deal about how these public funds are used. So with that said, I'm gonna turn it over to Emily, our deputy director. Hope I didn't embarrass you too much Emily, but you deserve it, take it away. Thank you, Randy and good morning, chair members of the board. I will share my screen for the presentation. Just one second. Can you see my screen? Not yet, not yet, not yet. Okay, let me try again. Don't have it yet. Okay, let me use our error on a Monday morning. Is it showing now? No, it is not. I can go ahead and show if you just let me know when to advance the slides. Okay, let me, I got this, let me end it. Need will be important, there we go. Okay, Stephanie, thank you. So again, good morning chair members of the board. I am here to present the fiscal year 21-22 budget for the collective of results and evidence-based investments, more commonly known by the acronym CORE. Next slide, please. So this morning's presentation includes a brief overview and context for core investments, a review of the operational plan achievements for the three objectives related to CORE and the proposed fiscal year 21-22 core budget. Next slide. So I'll start with some background and context for core investments. Next slide, please. In fiscal year 16-17, your board approved a transition from the historical community programs funding model to the core investments model for funding safety net services. The core model identifies collective results and promotes the use of evidence-based practices and outcome measurement. The vision of CORE is that Santa Cruz County is an equitable, thriving, resilient community where everyone shares responsibility for ensuring the health and well-being of all people at every stage of life. Over the last four years, CORE has evolved into a broader movement where funders, service providers, policy makers, and community members are working together to achieve collective results. Enhancements to the core model have been completed in phases and in partnership with community stakeholders. The core conditions for health and well-being seen here on this slide have been adopted by the board and are aligned with the county strategic plan focus areas. These conditions of well-being have created a framework for aligning initiatives, funding priorities, strategic plans, programs, and practices. Next slide. This slide shows the timeline over the last two years with respect to the core and set-aside agreements. In November of 2019, your board approved aligning the set-aside procurement with the core RFP and extending the existing set-aside agreements through June of 2021 to align with the extension of the core agreements that was approved in December of 2018. In May of last year, due to the impacts of the pandemic, agreements for both core and set-aside were extended through June of 2022. Since we were before your board in February, we have begun the engagement process with funders and nonprofits to get their input on the development of the core RFP framework. And as Randy mentioned, we will return to your board with recommendations for the RFP in September and release the RFP in October of this year. Next slide. Next, I will review the achievements for the three operational plan objectives related to core. The work on these objectives has been led by our core consultants, Nicole Young and Nicole Lezen in partnership with community stakeholders, including the core steering committee. Next slide. The first objective was the development of an online menu of results associated with the core conditions. As you heard from Nicole Young when we presented to your board in February, the core results menu was launched in data share in October of last year. The menu is intended to be a tool for creating common language and greater alignment among funders, policymakers, service providers and community members. It allows users to connect population results to more specific strategies and program outcomes. The results menu also supports the broader movement towards understanding and addressing inequities. Wherever possible indicators highlight disparities by age, race or ethnicity, geography, language or any other equity dimensions for which data are currently available in data share. Next slide. The next objective was the development of an online library of evidence-based programs, practices and policies associated with the core conditions. As its name suggests, the core model strives to invest resources in effective programs, practices and partnerships that contribute to achieving community-wide goals and long-term impacts. Towards that end, the promising practices database in data share contains over 2,000 vetted programs and practices and is searchable by topic, geography, target audience and degree of available evidence. The core consulting team has worked to make the existing database managed by Healthy Communities Initiative more locally relevant as it provides a consolidated tool that can be used by both funders and grantees. Next slide. The final operational plan objective related to core was regarding technical assistance opportunities sponsored by both HSD and HSA. As of March, 2021, 51 technical assistance opportunities had been provided to over 1200 participants from agencies and the community organized by the core consulting team. Topics range from the practical, such as how to use Zoom and access local resources, to deeper conversations about racial equity, environmental justice and community resilience. Technical assistance continues to be provided and to ensure equitable access to these opportunities. All sessions have been bilingual with simultaneous interpretation provided and materials translated into Spanish. Next slide. Now I will review the proposed budget for core for fiscal year 21-22. And as again, as Randy mentioned, fiscal year 21-22 is the final year of the current core and set aside agreements. Next slide. The fiscal year 21-22 recommended budget for core investments reflects the restoration of the reduction applied in fiscal year 2021. The total recommended budget is slightly over 4.4 million and is comprised of 4.185 million in base funding, $70,000 in dollars in carryover for substance use disorder services and $150,000 in set aside funds. The base and carryover support 41 agencies and 67 programs and the set aside funds 17 agencies representing 17 programs. Next slide. And before I end my presentation, I want to acknowledge and thank our nonprofit partners for their work to provide safety net services and for how they responded, adapted and collaborated to support the community during the COVID-19 pandemic and the CZU lighting fire. I also want to thank our core consultants, Nicole Young and Nicole Lezen for facilitating engagement with community stakeholders, including the core steering committee to develop and continuously approve upon the core model. This concludes my presentation. And at this time, I asked that the board approve the proposed budget for core investments, including supplemental materials. Next slide. Thank you. And I'm happy to answer any questions that the board may have. Thank you very much, Emily. We're not gonna let you, we're gonna try not to let you retire either, so on. We'll keep working on it, but I don't know if it's gonna succeed. Thank you very much, Mr. Morrison. Do you have any other comments? I was gonna get some comments from the board. Did any other follow up? I mean, really this is the health and human services. We're starting our budget sessions with departments in the toughest jobs where you're working with people facing some very, very tough times. So the worst of times we can remember in this county. So again, I can't emphasize the importance and the thankfulness that you have had showing some real serious, nice consideration and being compassionate with the people we're trying to serve in Santa Cruz County. Do you have any other comments, Mr. Morrison? I have a couple others myself, but go ahead. Do you have any others? No, but I'm here to answer any questions the board or public comment as well. Thank you. I just, again, I want to thank the human services department staff for our nonprofit partners and the community for providing these essential safety net services. I'm pleased that we're able to provide a 10% increase this year with our supplemented budget, I should say, because those services are really vital to our community. When we instituted the core funding process, we had many goals in mind and some of those, the most important elements were assisting our nonprofit partners to improve their administrative operations and funding and fundraising and to align with the county's strategic goals and its operations plan. We anticipated this would take a few years and with the progress we've made so far, there's more work to do. And I see that there's a good plan and a place to improve the core framework and the tools for all concerned and we will get into more detail of that as you discussed in the fall. Any other comments from the board before we ask for public comment? Any comments from board members? Seeing none, do we have any comments from the public? There are no members with their hands raised in public. Okay. I'll move to approve. Supervisor Cap moves to approve the core budget. Is there a second? Would like to set that? Second, Coonerty. Coonerty, please call the roll. Supervisor Koenig. Aye. Friend. Sorry, we couldn't hear you, Supervisor Friend. Still muted, but I see that you're confirming. Is it still muted? Nope, we can hear you now. Thank you. Aye. Thank you. Thank you. Coonerty. Aye. Caput. Aye. McPherson. Aye. Thank you, motion passes unanimously. Thank you. We'll go to item number nine to consider approval of the 2021-22 proposed budgets for the Hunt Human Services Department, including any supplemental materials and take related actions as outlined in the reference budget documents and is recommended by the County Administrative Officer. We have the 2021-22 proposed budget on pages 187 to 205, the 21-22 supplemental budget, pages 61 to 64. And we have Mr. Morse, the Department head to make a presentation. Yes, and I also have Emily Bollie. Can I ask Ms. Cabrera is my screen share working? Yes, we currently see your screen. Okay, second time's a charm. So I do have Emily Bollie here with me, who as I said in my introductory remarks gets a lot of credit for her work in helping make sure this budget was put together here. So yes, Randy Morse, and I will be giving the presentation of the Human Services 21-22 budget for your board's consideration. I have three topics I will be covering. First, the operational plan achievements, and I'm gonna use the opportunity to talk about a few more achievements that the Human Services Department made this last unprecedented year. Then we'll go through the formal budget proposal for review and then end with emerging issues. So for operational plan achievements, as I said, looking back on this last year, I would remiss if I only narrowly focused on those operational plans and our success in achieving them given how challenging it was for our department to continue to provide safety and that services to the community during this last year of crises and our department's role in managing multiple emergencies. So I'm gonna walk through these three categories with the highlight on the slide on the top here, just to recognize the motto of the Human Services Department, capturing our dedication to making a difference. And I believe that we have done so this past year, thanks to the work of our staff and our partners. So I'm gonna start with the operational plan achievements. We had 16 in addition to the ones that were mentioned by Emily for core, but the 16 that are not core related, 88% of them were completed, 14 of the 16, which is quite impressive given this past year. And the two that were not were completely because of COVID, one was withdrawn and one was adjusted. I wanna take a minute to highlight what that means to give a reference just by highlighting one, what the impact is on the community of some of these operational plan achievements. So I'm just gonna pick the topic of food insecurity and make a reference that human services throughout California who administer the CalFresh program have been advocating and fighting for a decade with advocates in the state legislature to make an adjustment in CalFresh eligibility in California that until a couple years ago due to an active legislation made low income seniors and disabled single adults ineligible for CalFresh. And it's a whole long story that took an active legislation to undo and reset and make this population eligible. So in response to that, given for decades, these populations knew they were ineligible for CalFresh, there was a concerted effort in Santa Cruz County and elsewhere to do a lot of outreach and partnership with the community to reach this newly eligible population. And so our operational plan objective was by June of 21 to increase by 50% those who were enrolled in this category. And if you look at the chart on the right, and again, this is just highlighting one of the many, the 14 that we achieved, we had a target to hit that 50% of getting to 6,520 enrolled and we have far surpassed that. We reached that mark a year early and we have over 8,300 enrolled just to give you one example of what an operational plan achievement looks like for us. So the next is I wanna take a minute to talk about continuity of operations. We are a department of over 500 people. We are the second largest operating department in this community. And though we are large, we like all departments in the county had a very complicated year. And I wanna start with the importance of us focusing on the health and safety of the clients we serve and the health and safety of our own staff, which was very, very complicated under COVID. And in particular, given the federal and state mandates that govern our work that still, despite some waivers that made our work complicated and we had to adjust, still required a lot of work in person with all these safety measures in mind. And there were two factors that led to our workforce being depleted during this past year. And one is, as I will get to in my last comment on our achievements, we deployed over 30 employees to manage the COVID shelter system that we were responsible to serve in addition to extra health hires. And further, we had approximately 10 to 12% of our staff at any given point in time in the year, particularly early in the pandemic that were on approved leave caring for their children, caring for family members adjusting to kids being at home and remote learning through school. So despite those challenges, our department rose to the occasion, did make a difference and continued to deliver much needed services to our community. And I just wanted to take a minute to show this quick picture. One of our values is operational excellence, a value of the county. And this picture is to first highlight in the large circle. This is the administrative functions of a human services department. And there were so many adaptations that our administrative staff that often are not seen. They're sort of invisible behind a curtain. They're sort of the engine, if you will, that keeps our car moving. Did tremendous work to adjust during COVID and the fires with the depletion of staffing that I just mentioned. And I just want to take a minute to highlight a few. One is our IT department. We are the only department that has a decentralized IT, though we do work with the county IT. Overnight adapted to help our staff work remote, which had tremendous technology changes. We had to get new equipment and it also had a profound impact on our help desk who had double the amount of technologies to support. We also had a training department who had the overnight shift to ensure that we still had staff could train and adjust to the new laws and the new regulations. And we still hired during the pandemic and had to create online virtual training systems. And last, as I mentioned in my thanks to the fiscal department, I want to double up on my thanks to them and also our contracts unit who literally took on double the volume of work that we had to manage this year without additional staff to take on the extra financing and contracting tie to the emergencies that we handled internally. All of this administrative engine is what supports the external facing operating divisions, the employment and benefit services division, which includes our workforce development board that our CIO mentioned who did all kind of work during this last year, enrolled new people into publicly public funded services, our housing for health division that as you know, was stood up this past year and helped many unsheltered and move the three year plan forward. Our family and children services division who continue to provide investigation support and return children home in a virtual court environment and our adult and long-term care division who continue to help do investigations of a growing number of complaints that elders were in harms waving, isolated, our IHSS program who helped people stay in their home in our vet's office. There was just an unbelievable amount of work that was done this last year that I want to take the moment to thank the human services department. This is not often the face of what happened this last year because of the emergencies, but we kept those safety net services going as a major achievement during this past year. And then finally, what has been getting a lot of attention I think deserving of a quick comment, particularly because when I get to the budget slide you will see all the money that we had to manage to help manage the shelter and fire functions that we managed in human services. We not only had a major role in partnership with our EOC and many others in the fire response and the fire recovery, but we also had a major role in food insecurity and of course the COVID shelter system that we ran. So first with fire, I just want to highlight a statistic that I think is very astounding. We had over 6,000 community residents housed in state sponsored hotel programs that were administered by our department and the EOC. And we also had over 30,000 meals delivered to those who were sheltered during the fire during the fire response. And we had a whole volume of extra work that was done during the fire recovery. I also want to highlight on the issue of food insecurity. Our CIO, Mr. Palacios mentioned the Great Plates Delivery Program, but there were many, many other programs that the Human Services Department administered internally and in partnership with the community. And that actually led to over 11 million meals being served to this community because of the food insecurity. And that breaks down by a number of meals that were delivered through Second Harvest Food Bank and other partners that we helped work with to get FEMA funding to them through a local match they provided. We also had over 1,000 seniors served and Great Plates Delivered, which led to over 400,000 meals. And we had over 2,000 shelter guests who received over 400,000 meals in our shelter system. So a tremendous amount of effort to address food insecurity during this past year of crisis. And then finally, as you know and we've had a chance to share with your board before, we had the COVID shelter system. And I wanna take this opportunity to recognize that we hired over 250 extra help staff. And as a department of just over 500, that almost was a 50% increase in who we added to our family. They're all extra higher and some limited term hires who were the backbone of administering the COVID shelter system. And I wanna take a minute to thank them and also recognize that their term is coming to an end as the funding ends and we demobilize the program. I wanna take a minute to highlight just what the impact of this is by letting your board and the community know we received a number of letters from guests who are in our shelter system thanking us, but we also had a number of employees, both extra help and county staff were very moved by the experience of working in the shelter system. So I just wanted to read a small excerpt from one unsolicited letter received from a guest at one of our shelters saying, from the bottom of my heart, I thank you. You didn't have to take all of us in, but you did and it's helping people. At the end of the day, you all were angels to me along my journey back to a new home. And this was one of the fortunate guests in our shelter who was there temporarily and was able to get herself set up to return home and sent a letter to us of thanks. And this highlights one of many, many letters that we received. But also I wanna take a minute on the right. We also had a number of staff, a few county staff and many of the staff who we hired who made comment to us and this one is a letter who said, this actually changed their career focus, having this opportunity to serve the community in this way. And one staff wrote, it was amazing finding my passion and this changed my whole career objective. After in the county being an extra help hire working in our shelter systems, I got a job as a case manager working with transitional housing for formerly incarcerated women struggling with addiction. So this just highlights a little bit of the impact we had on the community, but also the staff who helped serve the community. So with that said, I'm gonna transition to the second part of my presentation, which is the formal budget proposal. I wanna recognize for community members, sometimes budgets, which are just a lot of lines with a lot of numbers. It's hard to understand what does this really mean? So I wanna start with this slide to tell a bit of a story before dropping into a few budget slides. The budget given our mission to make a difference in this community and serve the most vulnerable is really a tool to accomplish that mission. In this picture, I think hopefully highlights for your board and the community, a few important points. So first, like the health service agency who are presenting next, the human service agency in California is mandated to deliver services at the county level, but the vast majority of what we do is legislated, governed, the rules are created and the budgets are set at the federal and state level. And this picture of a budget pie chart shows that and breath it to life. 89% of the budget we are proposing to you of $161 plus million is from federal and state sources. Only 11% is general fund under local control and the vast majority of that 11% is mandated local match to draw this federal and state money. So in practice, what is being presented to you from a human services department is a request to adopt and approve this entire budget, but it's really this local match requirement to pull the federal and state money that governs the programs we run and the rules that govern the work we do that come from the federal and state legislators. On the right, I think this is a very impressive piece of data that shows you the impact we have on this community. The human services department serves approximately 86,000 residents and that is predominantly in our CalFresh and MediCal programs but spread out amongst all of our programs which is approximately one and three residents. So that is a tremendous impact that we have that this budget that your board is hopefully going to adopt helps one in three residents of some community. I also wanna highlight that 27%, which is approximately 42 million of this budget is direct client payments. And just to let you know what that means, that is a term that is approximately 2700 in-home supportive services providers get paid a wage and some of them get benefits to go along with that wage to serve over 3000 in-home supportive services clients. And these are low income MediCal clients who, but for this in-home care that we pay for that is part of this budget, these are vulnerable, disabled and low income adults who would otherwise be living out of their home. There is also approximately 190 resource families and relatives who care for foster children who get direct payments to compensate for that care. Over 650 adoption assistance payments which pay for families who have adopted children from our foster care system to help support them with the care of their adopted children. And then approximately 4,000 Coworks families and approximately 200 general systems clients per month. So added up all those statistics are about 27% of the budget is money to help support those services. And then I wanna end before turning over to the actual slides themselves. We are in a fortunate position with some tension. Fortunate that despite what we worried a year ago would be a very difficult budget for health and human service safety net programs. We have some very promising state budget news and federal news. The tension is we are bracing ourselves for a number of community members who we worry could fall into harm's way or into poverty pending what happens going forward. So the promise is with some concern. But what this promise means in particular I wanna highlight to your board into the community is the state budget which has a lot of money that's gonna be approved hopefully and go into effect July 1st. Is money that we are preparing to have to apply for grants or one-time funding sources or new allocations that we will have to be in front of your board again in late summer or fall when the state makes clear how much money Santa Cruz County human services can have and we'll bring that money back to your board for consideration to hopefully supplement this budget and even strengthen the safety net further. So the first budget slide I want to highlight that our budget is a very complex set of budget streams that come in from the federal and state government and I'm gonna share a few of them after this just to give a window to that complexity. We have to track all of these. They're held in separate indexes, which I'll highlight and they all bundle into this master budget dashboard that you have in front of you. What I would like to highlight and that you will see this mirrored in the CAO's budget presentation there is actually a 13.4% reduction in revenues and that is predominantly due to the one-time cares and FEMA funding that the human services department managed and as that money goes away so does our revenue go away. The second I want to highlight is at the bottom that we do have a modest increase in staffing and as the CAO said the majority of this increase in staffing was tied to some limited term staffing due to some limited one-time money that we have to help continue next fiscal year with some of the emergency services and then a few modest increases to staffing in our general budget. Social services dashboard this is essentially our administration. The money that we receive, you can see here that approximately 100 million of it goes to pay for administration and that is for our staffing and for our contracts. You can see the revenues are actually up about 10% and that's thanks to federal and state actions going back to that first slide and then you can also see that our general fund contribution goes up over a hundred percent and that is almost exclusively due to the elimination of the furloughs and the general fund contribution the human services has to contribute to eliminate those furloughs. Next housing for health as your board knows and as a reminder to the community who might not have tracked this the former homeless services office administered in the CAO has transferred to the human services department last November so now that is in our next fiscal year budget. This is where the lion share of the revenue reductions come now that we have to manage this budget 89% reduction from 30 million last fiscal year to down to 3 million next and that is because so much federal and state money was infused in California to help shelter the unsheltered and those at risk of contracting COVID and that money goes away and that 89% reduction gets aggregated and leads to that 13% reduction in revenues that I mentioned earlier and I do also wanna highlight at the bottom that we are also increasing the staffing to 15 and that's predominantly limited term staffing on some of those funds that your board already approved with the housing way for a unit of county people the merging of the CAO staff and also the integration of some staffing your board already approved that we are moving into the budget this year from actions last year. As I mentioned, there are a number of budgets that we manage. These are sort of the mighty engines that could very small but we are responsible to track them separately. We do manage the veteran services office a very small office of four people. And as you can see, this is predominantly funded by general fund because if we only use the less than $100,000 I don't know if we could even have a full position so thank you to your board and the history of supplementing that so that we can have an effective veteran service office and similarly the workforce development board that's managed in our WIOA budget. You will see here that the budget this is a 100% federal funding and also federally regulated and that was mentioned by the CAO does tremendous work in this community, especially during the challenges of the economy we faced and that we're facing looking forward. And then finally entitlements I already mentioned earlier that a large portion of our budget approximately 42 million funds direct client payments and this is that budget called entitlements. So I'm going to end my presentation with highlighting a few emerging issues. Human services departments are always because we are so dictated by federal and state actions tracking not only local expectations of our local elected official and CAO but also keeping an eye towards what state and federal policy is looking like in the future and I'm gonna highlight six that are six that we're tracking very closely. So first as has been mentioned by our CAO in the presentation but I wanna remind your board in the community in California there is a state mandate that human services manage what's called mass care and shelter during a disaster. That's why we managed the COVID shelter system. And I will say as somebody who has worked in County Human Services Government for 25 years we had a major pivot point this last year from doing table talk exercises preparing for possible disasters and occasional small ones here and there to going from those hypothetical exercises to having the two we dealt with this last year and looking forward mindful of climate change and the risk of fire that was presented to your board recently and the concern if we get heavy rains and the prospect of debris flow human services will play a significant role with our EOC and our new OR3 office to help with mass care and shelter. So we are organizing ourselves and positioning ourselves to move from table talk exercises to being prepared. So we have a lot of work to do and we're gonna consider this a new normal that this is something we have to manage constantly. As was presented in the CAO's presentation equity is certainly a word that we have to do a lot of work to move that to operationalize what that means. The CAO presented the importance of making sure Countywide that we pay attention to where there are inequities and the way we deliver service and I would say arguably for a human services department that serves the most vulnerable is often seen that communities that are low income communities of color, communities of all types sometimes do not have access to programs or not see services the way we would like. So we are taking this very seriously and have been doing a lot of work this last year and I wanna remind your board that you issued two directives this last year both of which the human services department is involved in one is you directed the health and human services departments to apply for the national GAIR initiative government alliance of race and equity and our colleagues at health and our department have applied or active members and we're looking to roll that forward and we'll be back in front of you in the future when we have some ideas for what that will look like and your board also directed the CAO's office to stand up an equity commission and the health and human services office are working with the CAO's office and some community members on that effort. And we're also doing a lot of internal work having some very serious conversations about equity and kind of doing a review of everything we do to make sure that the way we deliver services is equitable and if not what we can do about that. The third is the housing for health office. This is clearly one of the biggest crises in this community, the community wants more your board wants more in the CAO's office with your board support. And in close partnership with the health agency has agreed to shift this office to human services we're in our infancy we started in November and we will be back in front of you for a study session in August to give a presentation on all the work we've been doing under that three year plan your board adopted. The fourth is the California master plan on aging. If your board is not aware, I think it's important that your board track this and the community be aware that governor Newsom issued an executive order early on in his tenure when he was elected as the new governor that in preparation for an aging population and a safety net that is not well coordinated and hard to navigate nor prepared for the growth of the aging population asked for the development of a master plan on aging and that master plan which is a 10 year plan was released in January. So we have a lot of work to do and I just want to share a little bit of statistics to kind of put in perspective why this is so important. In Santa Cruz County alone, we are expected to see an 18, 18, 18% increase in those who are 60 and older in the next decade alone. And by the time you get to 2040, just so you know the number of older adults in our community has already surpassed the number of children under 18 in our community. And by the time we get to 2040, 30% of the Santa Cruz population is projected to be older adults with only 18% projected to be children. So we have a lot of people aging and in order to be prepared, we have a lot of work to do and the California master plan on aging creates a framework. I want to end on this topic by saying a master plan on aging can only be done in partnership between city and county governments and community. And it cannot be done alone by safety net programs like health and human services. Some of the most important work to be done in this master plan are things like roads and stop lights and stop signs and libraries and parks. So this is really going to take the full county, family, city and community to kind of make this plan come to life. The second to last is the Family First Prevention Services Act. This is a big acronym for yet another reform effort at the federal level for the child welfare system in the United States of America. This has not landed yet as an action by the state yet. The State Department of Social Services, our parent organization is in communication with the federal government about enacting this act. But what it is essentially is it gives California discretion to use money that previously was categorically restricted to only providing services to children in care with approval by the federal government and oversight by the state to consider putting some of that money toward prevention if it will pay for itself rather than waiting to use federal money to pay for children in care. So there's a lot of promise, a lot of budget questions and a lot to be done. And we'll be back in front of your board when and if we have an action to take on this. But this is something that is emerging of federal action or tracking. And then the last, hopefully your board and the community and people served by our public assistance program will never have to know what this word means. And that is only if we do this right in California. And that is CalSauce and that is short for California's and then Sauce is an acronym, statewide automated welfare system. The federal government mandated that California consolidate all of the computer systems throughout California that are used to manage public assistance programs. Clients who are enrolled in CalFresh and MediCal and CalWorks and general assistance, depending on what county you're in are in different database. And we are moving a new system called CalSauce Forward in California. It gets piloted in 2022 in Santa Cruz. It goes live in 2023. So there will be a tremendous amount of work that we will be doing behind the scenes with our technology people and our staff and the economic benefits division to prepare for this. And if it goes right, nobody will hear about it. But if it goes wrong, everybody shares about it. But there's a number of promising changes that are built into this upgrade. So this then leads me to my final slide, which is my formal request of your board to approve the budget as proposed, including the materials referenced listed below. And with that said, I close up my presentation with a deep thank you appreciation for a very amazing year being part of this family. It's my honor. And I welcome any questions or comments from your board of the public. Thank you, Ms. Morris. Thank you, Emily, for those presentations. Of all the county departments that needed to rise to the occasion of double emergencies, the Human Services Department was at the top of the list along with its work log, with emergency services, health services, and public works as well. And as we all know, housing is a top challenge here in the county, both in terms of availability and cost. I'm especially grateful that we now have a housing for health office managing our response to homelessness in a more centralized, properly resourced fashion than ever before. Individuals that are experiencing homelessness in our community as they are throughout the state and fire survivors as well really need our safety net shelter that Human Services has ramped up to provide this past year in order to avoid the spread of COVID and to recover from the CZU fire. Moving forward, I'm anxious to see how the housing for health staff is able to roll out the strategic plan that was developed with focused strategies over the past two years. I'm also looking forward to Human Services collaborating with community partners to develop and implement both the age-friendly communities initiatives, which we can see that the agent in our county is growing substantially, as well as the master plan for ageing. And we'll have that September study session to go into more detail on that. And I'm really looking forward to it. And overall, just seeing that the funding for these services is just nearly 90% state and federal. That's the good news and thank you for your help. The news of concern is that this could be one-time funding or the funding mechanism can change greatly and that's gonna have a substantial impact on what we can provide. I do have a few questions before I offer to other board members. We've had these very serious situations added onto homelessness with the COVID pandemic and then the fires. How is the Human Services Department staff doing in reviewing the applicant eligibility for the safety net services, the timeframe, or how are we doing in that regard? I mean, you've had a lot put on your plate in that, but how are we doing and reviewing the applicant eligibility? Thank you for the comments and your question. You're starting off with an easy one, Supervisor Rivers. Yeah, I do wanna say I have the privilege of being one of 58 County Human Service Directors and this is the topic of discussion across the human service sector. Whether like in Santa Cruz County and a growing number of counties, homeless service office has been transferred to human services. We're not the only one that's done this. There is tremendous concern about what the answer to your question is. We will be back in front of you as a department with the Housing for Health Division in August at the study session to give you the concrete numbers. We are having some movement of people being enrolled in what we're calling that housing wave and in particular getting some housing vouchers. And as was the discussion when we asked your board to approve that housing wave, the housing market is the challenge in all the high-cost communities. So we'll give you what those numbers are when we come back. We are seeing movement, but to the point of this presentation, being a department who is 89% dependent on federal and state funding, we cannot stop and only focus on the local three-year plan. We have to put as much energy and continued advocacy to the state and federal government for extensions of timelines, increased funding. And as I mentioned in my presentation, the governor has $12 billion of new state money to put out to communities that are not in this budget presentation. We're waiting for the state to adopt that budget and we will apply for every penny of that we can to come back to your board to be able to put more money into the system to help more people get housed. I do also wanna highlight, which I think some of your board offices know, those housing vouchers that we benefit from the Housing Authority do not limit people to be housed here in Santa Cruz County. So there is work being done and we can give updates on those specifics that for people who do have connections elsewhere where there might be housing available elsewhere, we can continue to work on helping people get housed and other communities where appropriate. So we can give you the details, but I share your concerns Supervisor McPherson and systemic issue that's way bigger than our community and one that hopefully will all work with the state and feds to help support a solution because we can't shoulder the answer alone despite the new office. So we will balance doing all we can and keeping honest about what we need more of. Yeah, thank you very much. And so are there any backlogs that we're able to, and you've answered this in some respect that we're able to turn around applications more quickly because of any recent funding or anything in particular that's helped us in that regard? Are there any backlogs or? If you're referring, are you referring to our general programs? Like, yeah, no, we were worried for that. We got a lot of waivers from the governor for our public assistance programs, our benefit reps and clerical staff to not focus on yearly renewals and instead to have a waiver of processing renewals and therefore to focus on new applications. And so we were actually able throughout this last fiscal year to be able to sort of keep up and at present we are not in any particular backlog of any sort of application. We were worried. We actually did not, we saw a big spike in CalFresh applications early on but we did not see across the state a big spike in CalWorks applications that we thought and that was predominantly due to some of the federal and state interventions around unemployment money that kept people from applying for CalWorks. So we're doing okay. And as you know, Supervisor McPherson, we have very good data systems and we are on course right now in those programs. Yeah, that's great. Any other questions from board members? Supervisor, just a little bit. Sure. Well, one I just want to thank your department for the hard work you're doing over the past year and we'll continue to do going forward. It's sobering that one third of our residents need your services. And it's a sign of the real challenges of our time and income inequality that we're seeing in especially in a high cost area like ours. And I look forward to continuing to work with you to address the major challenges in our community. And I think you have a remarkable caring and data-driven staff which is the perfect combination to have for what we have to face. Thank you. Any other comments from board members? Chair? Yes. Yes, thank you. Thank you, Director Morris for a fantastic presentation and all the hard work your department has done throughout the year of crisis. It's extremely impressive that you're able to deliver on 88% of your operational plan achievements as well as some of the specific numbers and rolling over 8,000 people in the CalFresh program, housing 6,000 community members during the fire. And of course, as you pointed out, it's really the human stories behind some of those statistics that I think really shows us how meaningful that work is. I know my neighbor during the COVID pandemic when she was signed up for the Great Plates Delivered Program that relieved so much fear and stress for her and just completely changed her life during this difficult period. So thank you. My one question for you is what investments can we make or assets can we purchase? As we look at some of this opportunity with the state money that we hope to receive or in new ways that we can undertake operations, what can we do that will ultimately set up, help us to achieve better outcomes year over year in the future? First, thank you for those very kind recognition. I appreciate that, Supervisor Koenig. Can I confirm as your question, when you say investments, are you talking about the housing work that we're doing specifically? Certainly that's a piece of it, but if there's other areas of the work where you see that we can make investments or purchase assets that will contribute to that, we'd love to know that too. Yeah, so I'm pausing to think about it because I filtered your question as about kind of in the housing and homelessness world. And as you know, we're talking with you because of your district. So I'll just start there. I didn't mention it in the presentation, but I think it's worth lifting up to the public. Part of that state funding, the $12 billion Governor Newsom, is to give some money to local communities to purchase facilities to help house the unsheltered. So there are conversations underway, specific to districts. And we do recognize your board's directive to try to keep those out of the city of Watsonville and Santa Cruz. So that's why we're in conversation with you for your district. We don't, we have a lot of things in motion. We don't have ready for public consumption, but that will certainly turn into a concrete answer to your question when and if we can apply for the state funds, when they're made available and we're doing a lot of work behind the scenes. And I apologize for being cryptic, but the citing issues are complex and we don't wanna raise unnecessary concern if nothing comes to be. So we have a lot of efforts underway to be positioned early next fiscal year to apply for some investments there. Supervisor Koenig, I could detail in more detail like every operation we have, we're always looking at how to balance one-time funding and ongoing funding. And I didn't get into this detail in the presentation, but there is a balance of one-time and ongoing funding. And the way we work in human services is when it's one time, we do sort of careful cautious investments to spend every penny, but we don't usually invest in things like staffing or costs that are ongoing. But when we get allocation increases, we do. So I would just say we're constantly tracking how much staff we need, how much we can invest in community-based contracts. And that's sort of the dance we're always through. I don't have a specific answer to your question off the top of my head other than the Project Home Key Program that we're working diligently to be prepared for. And we'll be back in front of your board probably at that August session to give more concrete examples. Thank you, yeah. I'm looking forward to hearing more about the Project Home Key stuff that you're working on. Any other questions from board members? Seeing none. Do we have any questions from the public? We do not. And just to clarify for the record, the majority of the attendees are staff or from local agencies. So we don't have very many lay folks on the line with us today. Okay, thank you. Okay, we'll return it. There's no public comments coming in. I'll return it to the board for motion for action for the Human Services Project Budget. Supervisor Caput, I'll make a motion for approval. Second. Supervisor Coonerty. Second by Coonerty. Please call the roll. Certainly. So that was motioned by Supervisor Caput, seconded by Supervisor Koenig. Supervisor Koenig. Excuse me, Koenig, thank you. Thank you. Friend. Aye. Coonerty. Aye. Caput. Aye. McPherson. Aye. Thank you. Motion passes unanimously. Thank you. We will now go to the final budget item of the day. I think we will keep on going. It's 1130. This will probably be a long discussion, but I think we'll just keep on going. Item number 10 to consider approval of the 2021-22 budgets for the health services agency, including supplemental materials and take related actions as outlined in the reference budget documents. And as recommended by the County Administrative Officer, we have the proposed budget for 21-22, pages 159 to 186. The supplemental budget pages 51 and 2. Supplemental budget also in page 53 and 54, 55. Well, I guess it goes to page 60 for supplemental budgets. So we will now hear from our health services department. I think that Mimi Hall, our health services director will be presenting this along with many others who will have her introduced as we go along. Thank you, Chair McPherson. Good morning. I'm Mimi Hall and I'm the health services agency director for the County of Santa Cruz. Are you able to see my screen? Yes. Okay, great. Thank you. Always hard to see what the audience is seeing. Before I begin today's budget presentation for your approval, I wanted to start out with expressing gratitude. Gratitude to your board for your support, your kind words and your actions of appreciation for our staff and for your leadership throughout this past year. Gratitude to our County Administrator, Carlos Palacios, for his unwavering leadership that was steered by the County's vision, mission and values and carried out always with a great degree of compassion and kindness. I wanna thank Christina Mari who has been mentioned before that this will be her last budget season with us and we are so incredibly grateful for her abilities. She has a firm grasp on the complexities of County budgeting and funds but she doesn't just assure compliance with these. She makes sure that our budget allows us to achieve our mission as a County. And also our CEO's analysts, Sven Stafford, our HSD partners who we rely on. I wanted to thank our HSA budget team, especially Jessica Randolph, Director of Administrative Services and Chief of Fiscal Services, Christine Williams who carry the bulk of our budget preparation each year and all of our division directors. Every single one of our division directors have been deployed to either the COVID or fire emergencies or both and they have really, really put in an incredible amount of service this year. Finally, I wanted to say that we're incredibly grateful for the employees of HSA. They are our most valuable asset and without them we wouldn't be able to serve the community in the way that we have been. And the last heartfelt thank you goes out to our departmental partners, our community partners and each and every community member. We couldn't have gotten through the last year and maintained our position as one of California's counties with the lowest rates of death from COVID, serious illness from COVID and the highest rates of vaccination as well as vaccine equity without everybody collectively doing their part. And so for that, I'm incredibly grateful to all of you. So today, these are the things that I'll be going over. We'll be doing, I'll be providing an overview of our operational plan achievements, our 21-22 budget proposal. We will be doing a report back as an agency on the Harbor Veterinarian Building, which is a capital improvement project that has been on our list for quite some time. And then finally I'll wrap up with reviewing some emerging issues. I wanted to note that this photo, this picture that I used for this slide it's a photo that is supposed to exemplify balance. And there has been, I've worked as a public servant and in health services as an administrator for many, many years. And there's never been a time more than now, not even the 2008 recession and the recovery from that that we've had to be focused more so than ever on balancing ourselves and focusing on a really strong foundation so that we can get back to providing the core services that we need to do. And I'm grateful for my years of experience and I'm grateful to be serving this community. Okay, so on to our operational plan achievements. You know, our health services agency vision is very similar to the county's vision overall which is a healthy, safe and thriving community for everybody. In terms of our operational plan achievements despite all of the challenges that we have experienced this year we were able to initiate 95% of our operational plan objectives. 82% of them are either completed or started on time and understandably 45% of them have been impacted at least somewhat or severely by COVID. One of the things that is not lost upon me and I wanted your board to be aware of is that of course the entire county gathered together to respond to COVID-19 and the CZU fire. I wanted to provide in a number of standpoint how that impacted the health services agency. For the CZU Lightning Complex Fire Emergency Response our agency deployed 120 individual staff who have created nearly 10,500 hours of service to that deployment. For COVID just for the last fiscal year 2021 we had 308 staff deployed for almost 150,000 person hours. So in total, that represents 428 staff of our budgeted 615 that were deployed sometimes for quite some time to emergency response and nearly 160,000 hours of paid work and 4,500 hours of uncompensated over time. So this was just a huge, huge impact to our ongoing services. The way that I described this to our last department operational center briefing was that the 428 staff represent about 70% of our total budgeted FTE for the entire agency and the number of hours that we have provided not including the uncompensated overtime is the equivalent of 76 full-time employees working all year long. So I really wanted to both commemorate our staff who have worked so hard to keep our community safe and well but also note that what an impact it has had on their ongoing daily work and what we had to do necessarily to save lives was divert our attention from the core safety net services that we provide. And I will say that it was well worth it and we wouldn't do anything differently. And now looking forward to fiscal year 21, 22 we have a lot to do to recover. So in terms of recovery, we know as a health services agency that we have to move far beyond COVID emergency response recovery or even continued fire response or recovery. Our entire landscape has changed. The health status of the people that we serve has really, really been impacted. We have widening equity gaps and disparities. We've got a wave of regulatory and policy changes that are coming down the pike. And while these are firmly rooted in an attempt by our state to improve MediCal and be innovative in advancing outcomes for a MediCal population, those changes are going to have some service delivery, operational and financial, finance system impacts to us at the local level. So we stand here poised and ready for this recovery but acknowledging that our agency has been hit really, really hard and will continue to be balancing COVID-19 continued emergency response being a supportive partner in the county's fire response and also resetting and re-imagining the services that we provide with a changing delivery system, service delivery system. So next I have our budget proposal for your consideration. Before I go into our budget dashboard, I wanted to talk about the guiding principles that we use. And as part of our strategic plan, we have these five guiding principles for how we operate and these guiding principles also serve as those north stars for our budget. So according to our strategic plan, we will continually be mission driven, guided by the county mission vision and values as well as our own agencies as a guiding light for the work that we do and what we work towards. As Director Morris from Human Services had mentioned, we have mandates that govern our work. It would be wonderful if we could use the dollars and use our time and our energies to provide services and meet some local priorities that maybe are outside of our mandates, but really we have to work first and foremost from the mandates that are given to us as a public health services agency from the federal and state government. Thirdly, we know that especially in times of limited resources, we have got to prioritize the retention of essential health and safety services which are often parallel with the mandates that we have as a public entity. And equity lens, no time, no time more so than the pandemic has taught us how important it is to use that guiding principle of incorporating equity across all of our programmatic and our funding decisions. And finally, because we do house the public health jurisdiction for our county, we strive to always use data to inform our services, our actions and our recommendations. So this is our proposed budget as it appears in the budget book for your board. And I'm going to advance to the next slide that just gives you a more clear dashboard of what this looks like. So our total revenues and expenditures are total financing for the health services agency for fiscal year 21-22 is $203,630,137. And that is a slight increase just over 2% from fiscal year 2021. You'll see that our total staffing has increased. A lot of the staffing was added mid-year in fiscal year 2021. And several limited term positions were added as a result of additional dollars for COVID response. So our total funded staffing for 2021 which includes our supplemental budget requests will be 633 and a half total positions. And moving along to department revenues. So our total revenues are 203 million, just over 203 million. And you'll see that the way our health services agency is organized, we have charges for services. And those charges for services are reimbursements that we bill for the services that we provide primarily in our clinics services are federally qualified health center clinics as well as our behavioral health division. Much in more than half of our budget is intergovernmental funds. And similar to HSD, those intergovernmental funds are federal or state funds that come to us to implement our mandates. And these other services are primarily grants that we receive and nearly every grant that we get is deliverable space. So it's a grant to achieve a certain outcome or provide certain activities. One thing that I wanna note is that our general fund dollars are something that we absolutely rely on because in order to some of our charges for services and our intergovernmental funds rely on a local match. So for example, our drug Medi-Cal organized delivery system met much of our mental health services. Those all require 50% local match and our sources are limited on how we can meet that match. And so we're incredibly grateful for and reliant upon county general fund to assist us in doing that. And really the amount of services that we can provide is limited in a great part by the amount of local match that we can come up with. As far as expenditures go, most of you are pretty familiar with the fact that in typical organizations or corporations, salary and benefits are typically a half to two-third of an organization's expenditures for health services agency. This is a little bit different. And it looks more like a third of our budget for salaries and benefits. And that's because half of our budget is the behavioral health division. And our behavioral health division contracts out a large portion of services, both inpatient services and community-based behavioral health services to contractors both in and out of the county. And so this will always be an anomaly for the health services agency just because of the nature of the work that we do. One of the things that we do provide as a non-general fund department are intra-fund transfers and a good portion of those intra-fund transfers that you see right here, about 9% go to support the cost allocation plan for the county as well as some of our other departmental partners. So this graph right here shows net county cost is the same thing as general fund. And what this shows is really that we have a changing trend in how our organization uses the general fund dollars that we get from the county. And so you can see this first bar in each group of these bars is behavioral health. And over time, our behavioral health division has needed more and more of what we receive in net county costs through the general fund. And that's a result of some pretty dramatic changes in what's happening in behavioral health services. And one of those changes is that we have increasing costs for inpatient and locked care services. We also have, as we have been really, really innovative in trying to expand access to substance use disorder services through drug MediCal ODS, that expansion also requires more of a local match. So this is where that match comes into play. But the other thing that I wanted everyone to note is that our clinics division, which is the next line, the, I guess it's kind of light blue or light grayish blue, is that in 17, 18, our clinics division utilized, probably more than 50% of the net county costs that behavioral health received. But over time, as we expanded the services that we have expanded our space and expanded our services, they are a revenue generating entity. And so you can see that they actually have negative net county cost or because they're earning revenue, they're actually contributing to the rest of our agency. So looking forward to the future, we know that one of the things that we wanna do is continue to capitalize on or maximize revenue generating services that not only help our budget, but actually serve more of our population. One final thing that I'll note about this net county cost is that our behavioral health division does have a federally qualified healthcare clinic within it that provides mental health psychiatry services. And one of our biggest challenges is keeping a full workforce in that area. We've been really, really challenged in attracting and keeping psychiatrists. So while that unit should be as revenue generating as the clinics division, we have experienced a lot of losses that were exacerbated by COVID and some of the changes that were required because of COVID that impacted access to care. So part of how we're going to address some of our shortfalls and our largest division, which is behavioral health, is actually by the report back that I have for your board on the Harbor Vet building. So for the past few years, we have been exploring the capital improvements to the Harbor Veterinary Building that is adjacent to our behavioral health building in SoCal. And one of the reasons is that we are trying to alleviate the cost of the incredibly high and rising costs of inpatient and locked care, primarily to entities outside of our county. And one of the ways that we believe that we can change the model or change that trend is to expand our Harbor Vet building. We had plans to do that this fiscal year and we actually put aside quite a bit of dollars to do that. And with COVID coming, we had no idea what our budget was going to look like, what our financial position would be. You'll recall we started this fiscal year as an entire county in a very dire position. And so we had scrapped any capital plans that we had had. However, in the governor's budget this year, $750 million in the governor's budget is being allocated in competitive grants to construct, acquire and rehabilitate real estate so that we can expand the community continuum of behavioral health and treatment resources. So we have worked really hard. Director of behavioral health, Eric Riera, has really, really what I believe will be putting us in the front of that competitive pack is he's already provided a service proposal for the programming and has already worked with architects. This is the drawing of the rendering that our architectural services has provided. And this is the existing unit right here. And this is the future remodel of the Harbor Vet building. And this preliminary design work and the cost estimates are well underway and we believe that that's going to give us a really, really competitive grant submission for this capital improvement allocation that's in this year's budget, in the governor's budget. The purpose of this expansion is to be able to increase our capacity for crisis care programs. And once we're able to do that, if we were able to get a successful application, it would lead to a major reduction in our costly inpatient and loft care programs. One of the things that I will note, you don't see it in the detail of my presentation is that there is a local match required and we have put aside $2.5 million that's been continuing in our budget for that local match and just wish us luck and thank you for all of your support in the letters that you've written for this project. Next, I wanted to talk about some of the emerging issues that we're looking forward to tackling. And some of you know that I'm a big Dolly Parton fan and my family came here in the 70s and I grew up watching the Mandrell sisters and the Dolly Parton show. But over time, Dolly Parton has not only been just a great entertainer, but she's been a really great philanthropist as well. And she is a champion of public health, not only in COVID, but also in early childhood education and other matters. And one of the things that she has always said is that storms make trees take deeper roots. And right now is the time that we, as a health services agency as part of the county has got to really, really get through this storm by deepening our roots. So what we have coming down before us is something called CalAIM. CalAIM is short for California Advancing and Innovating Medi-Cal. It's an initiative that was started pre-COVID. It was really meant to transform the Medi-Cal delivery system. It'll have some serious impact on how we deliver and provide behavioral health services, primary care services for our clinics and public health. It's also going to impact housing for health and our relationship with HSD because the goal is really to think outside the box of what is healthcare and address social determinants of health. And while that is an amazing lofty goal and we are all on board the concepts, it doesn't come without a lot of change. And we've been through so much change as an organization, as a healthcare system, that the next year or two of changes through CalAIM which are going to bring about delivery system changes, financing changes and perhaps requirements such as meeting volume requirements are really going to be taxing on us. And it behooves us to really stabilize and sustain our financing structures right now. Make sure that we have the capital infrastructure that we need to get through this massive innovation over the next two years, coming along on the tails of COVID. And one of the main things that we're going to have to focus on as a health services agency is investments in our workforce. So I think some of you as board members are aware that we have high vacancy rates in many of our positions. And now is the time that we really have to be innovative in how do we change that around? Because as you saw with a couple of slides ago with our net county cost, one of the ways that we're going to be able to increase revenues and expand our reach to serve our populations is going to be by expanding the services that we provide that generate revenue and that our services needed by our community. But when we can't be competitive in attracting not only just our licensed providers such as physicians and MAs and nurse practitioners but also a really competent bilingual workforce to local people who live in our community and represent our community. We are going to have not only a service delivery crisis but also a funding crisis. So it's something that we are heavily focused on this next year and actually the next two years. And related to that is the equity lens. We know, we've always known before COVID that who we serve is the safety net. Our populations who are most impacted by the economy most impacted by something like a pandemic and most impacted by everyday health issues across the continuum of health and behavioral health services. And so now is kind of like a call to action that we can't waste any time. And we've got to reset our practices and use that equity lens that we use throughout the pandemic and we've used for a really long time but really reset our policies, our operations, our programs and our funding. So that we, it's kind of like the quote that CEO Carlos Palacios, what's most important in the new normal now is the time for us to think about that. And equity definitely rises to the top of that list. I wanted to provide some examples of the gives and the takes that result in these emerging issues. So for example, we have, while our budget has increased slightly the needs of our community have dramatically changed as a result of COVID in part. So one of the things that we've done is as I mentioned earlier, a big part of our services and supplies budget are contracts to our behavioral health contractors. Throughout the past year and a half, they have had incredible challenges in just keeping people employed because of all of the impacts of COVID. So what we've done this year and going into next year is where we, as you know from a board meeting in your last board meeting, we're increasing our rates and we're increasing our rates so that they can keep their doors open and continue to pay a living wage to their employees. But when we increase our rates, that means that the amount of money that we have to come up with for that 50% local match increases as well. So we're actually having to come up with more money to provide a lower volume of services. And that's okay because we know that that's the reset that we have to do right now. And that's going to carry us into a really tenuous position into the next year. So some of the impacts that this has on us is that we've had to go without some things that are heartbreaking to us. For many years, we have provided funds to those who are medically indigent, meaning you're not eligible for MediCal, probably due to documentation status or other rare reasons why you would be low income and not eligible for MediCal. We used to provide the cost of the full care for these folks. But because we can barely meet our requirements for the drug MediCal population, we've eliminated that in this coming year. I hope that we can restore it mid-year if there are additional dollars either in the governor's budget or the legislature. But those are the types of gives and takes that we've had to do that are really, really difficult for us to swallow. Another example is we have funded shelter operations for a while. And it's not exactly the purpose of HSA to provide the cost of shelter services, but we've done that at the River Street Shelter. And this year, we're using those funds that we used to provide for shelter operations and using those for our core mental health services and coordinating with Housing for Health and our community partners to transfer those services where they belong in health and housing. So just a few examples of how we're trying to clean up our house and strengthen our foundation. So on to recovery. You're all familiar with our save lives roadmap. Save lives stands for slowing the spread of COVID-19, adjusting and adapting as we all have the last year and a half. Vaccinate and treat, which I can't even believe that the most heavy part of vaccination is actually in our rear view mirror, even though we have a lot more work to do. And now we're at the E, which is elevate our readiness for the next public health emergency and also to keep us safe from future emergencies, including the continuation of COVID. So how are we doing that? One of the ways is by how we're using the COVID funding that's coming down from the federal and the state government. And like much of the COVID funds, these are one-time funds. However, they're incredibly needed. So I just wanted to review briefly for your board how we've budgeted these funds. And our funds are typically, all the parts have different timeframes, but what we try to do is consolidate into a 2020, 2022 timeframe because typically it's a two-year timeframe even though they have different stops and starts. So I think the main takeaway from this table and the top of the table is what's budgeted in the budget that you are hearing today. And then the bottom of the table is what's not yet budgeted, but what we will be coming forward to the board for or it's budgeted elsewhere as in the County General Fund and not in the health services agency budget. But I want to draw your attention to the top half of this table. So I think the takeaway is that we have done a lot as a county and as a health services agency to invest in community supports. So for the various pots of funding that came down for COVID, our CARES CRF funding, our various COVID-19 grants to public health and the AAR, American Recovery Plan Act, I believe ARPA revenue that the County is receiving, half of those dollars, half of our total COVID dollars to date have gone to community supports. And when we say HSA salaries in revenue replacement, it really is we have projected revenue deficits for this coming year. And so we're grateful that our budget, county budget manager and our CEO's office has decided to cover our projected revenue losses primarily in the FQs, mental health FQ and the clinic FQs so that our agency doesn't have to bear the total burden of our projected revenue losses. In the future, we have HRSA dollars coming to our clinics. HRSA is the Health Resources Services Administration that oversees all federally qualified health centers in the nation. And our clinics receive 3.4 million dollars for direct COVID response. We have something called epidemiology and lab capacity expansion dollars. Those are 11 million dollars that we have yet to budget because we received so much money in 2021. So we'll be coming back to the board in August with a detailed description of how we'll be using those dollars after we submit our plan to the state. And then we requested as part of the County's ARPA dollars, 1.1 million dollars, $100,000 of that will be budgeted in the County overall budget for suicide prevention. We have been working in the behavioral health division on a suicide prevention plan and there's a suicide prevention task force. And what we're missing is funding, so this $100,000 will go a long way in getting a jumpstart in addressing suicide prevention as well as community information and education. The remaining million dollars is going to go completely to community supports, continuing some of the things that we're already doing, such as economic supports through a program called UndocuFund and other kinds of supports for our families and individuals impacted by COVID. So in essence, the takeaway is that we continue to invest about half of all COVID funding that we get in our community to support our community organizations and our most impacted communities by COVID. So what does this all tell us in terms of recovery? Our save lives has been an incredibly useful framework to help us navigate through this incredibly stormy pandemic and what we realize is that prior to the pandemic and we're going to be doing this well beyond the pandemic, we are mandated as an agency through welfare and institutions code through California code of regulations and health and safety code to prevent, mitigate and contain disease spread. And through save lives as an emergency response framework, we have been able to do exactly that. However, our work has always been about saving lives. We will always be here beyond the pandemic to serve those populations, individuals and communities who really don't have any other way of achieving the best life that they can without the services that we provide. So it's always been about saving lives for the health services agency and the budget that you see before you is a statement of our values that supports that end. I do want to note that I have come before your board with this colorful wheel called the Ten Essential Public Health Services and in the center of that wheel, the CDC just added in 2020 after many, many years of this wheel being out equity at the center of that wheel, which makes me so happy as a public health professional. But what that means is that the central tenant of all publicly funded services at the local level is that in order to serve everybody, we have to serve the most vulnerable and the most impacted first, not the easiest or the earliest to reach. And we will continue doing that beyond the pandemic. And it really is, I've said over and over that equity is at the center of everything that we do. It really is true. When we're facing these population health problems in order to protect everybody, we have to have the data and we have to have the partnerships to address those most impacted communities. So these things of individual risk factors, I know we're all telling you through the pandemic, wear a mask, wash your hands. These are all individualistic actions. There are things beyond these individualistic actions that many of our community members have no control over. Access to nutritious foods, exposure to carcinogens, maybe through your workplace and the kind of work that you do. Adverse childhood experiences, trauma and stressors due to poverty and other things. All of these things are profoundly shaped by cultural, historic and systemic forces and by inequities of race and class. And so as I said before, our mission has always been about saving lives and going forward, we know that we must do it. It is a call to action to do that with equity at the center of everything that we do. So today before you, I have the recommended actions to approve the proposed budget for the health services agency, including any supplemental material as recommended by the county administrative officer. And these are the reference pages as Supervisor McPherson, Chair McPherson mentioned at the beginning of this item. And I respectfully ask for approval of this budget that again is a statement of our values of how we serve this community. And finally, a thank you to everyone. This photo is, it's our appreciation kind of ending. It's noted and the wind down of the mass vaccination clinic at the county fairgrounds, which couldn't have been possible without so many community volunteers. So you can't see their faces because we didn't get their permission, but all of our volunteers gathered to be honored for their work. And that is the end of my presentation. I'm open to questions. Thank you for that very thorough and enlightening presentation. And challenging one is that too. It can't really be over stated how professionally the health services agency staff managed our county's response to COVID. In particular, I want to thank leadership of you, our health services director, Mimi Hall and our health officer, Dr. Dale Newell and our chief of public health, Jen Herrera too. But everybody in the department is to be really congratulated and thanks immensely for what they have done. I've gone the extra mile to protect our community as best to their abilities. Their jobs were particularly difficult in the face of the ever-changing state and federal guidance. I mean, it was one thing, one day a week and then another thing, another or not by the day. And as well as the concerns by the community about the impacts of closures and the economy, yet we fared better than many other counties in California because of the leadership of the people in your department and the partnership with the community health providers and our human services department that we just heard from previous to you. So as I pointed out in the staff report for this item, COVID showed us that as a nation, we really are not as prepared as we should have been for a pandemic and we really must increase our public health investments to better prepare for the existing challenges ahead. And as you said, equity is at the center of everything we do. We wanna make sure or see how we can better serve and inform people throughout the county of what is available and then we can provide that service. So thank you very much for everything that you have done in your department and everybody in your department. Is there any other comments from board members? Sure. Supervisor Koenig? Yes, thank you, Chair. Thank you, Director Hall. I think everyone in the county gained a new awareness of the health services agency over this past year through your tireless efforts. As you mentioned with over 4,500 hours of uncompensated overtime. And it was a harrowing time, but I think we can all look back with some relief now. What an excellent job you did in the art community, making us one of the counties with the lowest rates of COVID within the state and ultimately within the country. And really all I wanted to say was, I'm really excited to see some of these investments that we're making. I know it's not the most, it might not sound like the most exciting thing, but the fact that we'll be completing the HVAC system at the Emeline campus this upcoming year, which is really going to be allow us to expand some of those clinical services, which as you mentioned, can ultimately be a revenue generator for our county. I think that's really smart. And I'm looking forward to seeing that expansion of services at the Emeline campus, which of course such a great location, very centrally located. As well as the investment at the Harbor Vet Building, which is of course in the first district, also centrally located. And as your presentation highlighted, it's really important that we think about behavioral health services differently and how we make some investments in providing those services, given that they represent about 50% of the department's budget. So I was really pleased to be able to write a letter in support of the Harbor Vet Building to Congressman Panetta. Hopefully we'll see some funds from the federal government in support of that project and look forward to collaborating with you and the rest of the department on other ways that we can provide more behavioral health services locally rather than sending those dollars out of the county. Any other comments from board members? I'll be brief, Mr. Chair or Director Hall. I know that you've heard say a lot over the last year and what I appreciated about today's presentation was it should be a reminder back to the community and the board about the breadth of work that you do that's just beyond so much of the, appeared to be focused on COVID, but it's the expanse is so much larger than that. And the challenges of retention and workforce development are very real. I mean, it's hard enough to do this with a full complement of people and it becomes nearly Sisyphusian to do it with the amount of positions that you have as well as just asking people to work so many additional hours in a way that it is. So while I recognize that the board's flexibility on the budget is limited in the sense of how you and the human services department's budgets are structured with state and federal pass-throughs, I do hope that the community at large recognizes that it's one thing to have this workload, it's another thing to have this workload with a difficulty of retention as well as a difficulty of recruitment for a lot of reasons. And so you've taken the world and definitely a community on your shoulders as did Dr. Newell and others, Jen and others. And I feel like you held us up. You held us up for this last year and we appreciate that. We owe you a great debt of gratitude, but it's incumbent upon both us as well as state and federal leaders to ensure that you're not bearing this front continually just on your own shoulders moving forward. And I appreciate the presentation providing additional information on that. Thank you. Thank you, Supervisor. Another Supervisor is going to make a comment. Yeah. Oh, Supervisor Caput. That'll be all right. I'll lower the hands. Anyway, thanks a lot, Mamie. I'm sure this has been the last year and a half. It's probably been the toughest and hardest of your career. And it's been, I know it has been for us. We've gone through other crises in the past, but this past year and a half has been unprecedented. So thank you very much for your presentation. Thank you. Any other comments from the board? Board member. Any comments from the public? Yes, I have one speaker. Yes, go ahead. Surge Kagnu, your microphone is available. Hi, good morning members of the board. Great thanks to Director Hall for the presentation and for all of your staff who have struggled throughout the last year serving our community as well as struggling to care for themselves as well. My name is Surge Kagnu and I serve proudly on the Mental Health Advisory Board and on the Neighborhood Court's Restorative Justice Program. I speak these comments for myself and do not represent either group. I wish to speak on two topics. As Director Hall mentioned, the proposed budget reflects not offering indigent services. I believe this is referred to on page 161 as the MetaCruz program. Indigent members of our community include those who do not have insurance or do not qualify for MediCal such as the undocumented. Those in the gap between qualifying for MediCal or not being able to afford insurance as well as those who have had MediCal but have used their allotted days for inpatient services. It's unclear whether this will affect equity in residents in South County more than North County. Not offering mental health and substance use disorder services for our indigent community members will have unmeasured but significant community costs. More people on the streets suffering in crisis causing both social and health impacts. More negative interactions with the community leading to even worse community perception of those suffering from mental health and substance use disorder issues. More incidents with law enforcement emergency services and the ER increased misuse of our jail. More likelihood of overdoses and deaths for those denied substance use disorder treatment. The second topic that I wanted to mention was the 16 unfunded positions. Let him complete his point, that'd be fine. Thank you. The second point that I wanted to point out was the 16 unfunded positions in our budget. Their mental health client specialists for senior mental health client specialists and medical assistant and nurse and manager, social worker, deputy public guardian, a fee clerk, people in billing accounting and analysis and an analyst. There are costs of unfunded direct service and administrative positions. We have higher caseloads, higher workloads for existing staff, higher levels of stress for those remaining, higher job turnover, higher challenges in finding staff which Director Hall referred to on our inability to find psychiatry staff. They have the ones that are left have less time per client. They have less job satisfaction. They have less support for clients. They have less, there's less support and oversight for programs and in all, we'll have less out lower outcomes. I'm not saying that these are easy problems with easy answers. What I'm saying that within this budget or as soon as possible, our County needs to find a way to support our County staff and to serve all in our County who are in need. Thank you. Thank you very much. Any other comments from the public? There are no other speakers to this item, Chair. Thank you. Bring it back to close that and bring it back to the board for any actions. I'll move the recommended actions. Second, Director Koenig. Move my friend second by Koenig. Please call the roll. Supervisor Friend. Aye. Koenig. Aye. Coonerty. Aye. Caput. Aye. Ms. Fiercen. Aye. Thank you. Motion passes unanimously. Okay, that completes our agenda for today's item of our discussions on the budget. Before I move to close this and that tomorrow we will go to parks, planning, public works and plant acquisition. Mr. Palacios, is there anything that to be brought up that we should address before we adjourn until tomorrow? No, Chair. There's a staff has no further presentations today and we're ready for tomorrow's budget hearings to resume. Okay, so we will open that hearing at nine o'clock tomorrow morning with the parks department. Thank you and we will recess or adjourn until tomorrow's hearings on those departments. Thank you everyone and see you tomorrow. Thank you.