I will now call to order the Santa Cruz County Board of Supervisors budget hearings. Clerk roll call please. Supervisor Friend. Here. Coonerty. Here. Rappett. Here. And McPherson. Here. And Koenig. Here. Thank you. You have a corn. Thank you. And for the record is June 21st, 2022 at 9 a.m. Begin with a moment of silence and pledge of allegiance. Is there any member of the board that wishes to dedicate this moment to anyone? Yes, Mr. Chair. I'd just like to dedicate it to Laura Segura, who recently passed away an absolute fierce advocate for social justice and equality. Always respectful, but never unwavering in her outreach and advocacy on behalf of those that had less. Our community is definitely missing somebody pretty large today. She did so much for South County and the entire county. So I just wanna make sure that we acknowledge her in our moment of silence. Thank you. Mr. Segura, in our hearts, please rise for the pledge of allegiance. I pledge allegiance to the flag of the United States of America for which it stands, one nation, under God, indivisible with liberty and justice for all. We have any additions, deletions or revisions to the agenda today? I do not believe we do. All right. Then we'll begin with item four, opening remarks from our County Administrative Officer Carlos Palacios. Okay, well, thank you very much, Chair Koenig and members of the Board. Very exciting day for us in a way, it's like hitting the finish line, but on the other hand, it's like starting the race. So our staff has worked very hard on this budget. And so we're pleased to present it to you. For your consideration this week, the proposed 22-23 fiscal year budget was released on April 29th, and it now includes the supplemental recommendations released on June 7th of this year. Over the course of this week, key departments will be making presentations focusing on their departmental overview, opportunities and successes. Members of the public will have an opportunity to offer input to the Board during public comment periods daily. The information included in within our proposed 22-23 budget includes the CAO's proposed budget, the supplemental budget, which reflects adjustments since the publication of the original proposed budget, also the unified fee schedule and the continuing agreements list. Also the so-called last day reports will include final concluding actions, reflecting changes to the recommended budget made during budget hearings and will be presented next week on June 28th. The online proposed budget has been updated to include the recommended supplemental changes to the proposed budget. And as an additional resource, a budget in brief and a supplemental recommendations document are included within the budget's document library. Next slide. So this is kind of an overview of how we are guided by the budget. You can see that on the left side, we really do focus on financial stewardship, the Board over the time I have been here in the decades before I came really focused a lot on being a very responsible fiscal stewards. And that has paid off for us over the years. So we've kept that as the goal for us. We also know that the operational plan and the strategic plan are our North Star guiding us in development of the budget, which reflect the Board's priorities. And then things happen, right, beyond our control. And those are some of the ongoing challenges that we face on the right side. So this year we have a $1.03 billion proposed 2223 budget, which includes appropriations for special districts and enterprise funds and the $683 million general fund budget. We have presented to you a balanced budget and we continue to actively manage the budget to increase reserves to a projected 10.8% level by the end of the coming fiscal year. So we're very proud of that. I know that you should be as well because we used our reserves to get through the COVID emergency. And therefore we were correct to have built up those reserves. And in this budget, we are restoring them back in our plan to 10.8% by the end of this fiscal year. We also did another thing with this year. We'll talk a little bit more later, which is we issued pension obligation bonds, which will save us over $61 million over the longterm in our pension costs and $2 million, approximately $2 million in the coming fiscal year. We also have controlled our position growth within the proposed budget. We've increased funding position, funded positions by only 21.8 positions after you take out the 40 positions required to open the County Public Defender's office. Of those 21.8 new positions that we're funding in this budget, only 10.8 positions are within the general fund. And even with these increases, the County's authorized staffing is just 3% over our 2008 level before the Great Recession. So if you go back to 2008, all the way to now 2022, we've just added 3% of new staff. And that has come at a cost in somewhat and that are in many ways, our staff are very challenged with having to do more with less. As we look at the challenges that we are faced with, one of the significance we face continually is unfunded mandates from the state of California. The most significant one we will face in the coming year is that mandate to establish a care court. Care court, the goals which we agree with are to provide new services, new options to individuals suffering from severe mental illness. We totally agree with the goal. However, at this point, the bill establishing the care courts in the legislature does not provide new funding for counties to implement this mandate. And we're not sure how we can do such a big new mandate without new funding. And it also does not provide a timeframe to gear up to implement this new initiative. The care court initiative, if it is approved by the state legislature will have significant impacts on county council. They will have to add staff. Our public defenders office, which we're just establishing will also be severely impacted. We'll have to add staff, behavioral health will also be impacted, public guardian will also be impacted all at this point to date without any new funding. So anyway, with that is an example of the continued challenges we face from the state of California and unfunded mandates. As you know, the economy now is problematic, high inflation over 8%. We haven't had this kind of inflation since the 70s. And we are gearing up for a potential possible recession in 2324. I think there's a consensus of economists. If you look at, if you survey all the economists, they say six out of 10 now are predicting a recession within the next year. So that is something we need to be mindful of and careful with. We also are challenged with FEMA reimbursements. We spent more than a hundred million, I believe is in the $150 million range responding to both the COVID pandemic emergency and to the CZU fires. And we are now trying to get reimbursed for those costs from FEMA and it has been difficult. Let me tell you, FEMA has not responding to our requests to process our claims in a timely fashion as often indicated and denied claims. And that is putting us in a cash flow issue as we come into the fiscal year because we need to get those claims processed. We will continue to advocate with them and we may need to contact our legislative leaders for assistance because that is a very severe challenge that we're facing. And then last, we also have concerns with insurance and liability as our society continues to be very litigious, as awards continue to grow very high, insurance and liability costs are rising significantly. And so we are going to have to meet that challenge in the coming year as well. And those are all things that we are faced with that we don't really have control over. Next slide. The other issue that I want to bring up has to do with our local workforce. And this is a factor that we are facing as a county government and in fact, all businesses and all local governments are facing. You'll see that a recent workforce investment board report indicates that the county's labor force participation rate has been at a steady decline since 2015 to today. And you see that since the pre-pandemic peak of June 19, the county-wide labor force has declined by 8.3% reflecting a loss of 11,983 potential workers. This is on top of a decline, which we have never seen before really, in our population in the county, which has decreased by 3.2% as reported by the State Department of Finance in May 2022 population estimate. So we have seen a decline in overall population, but most significantly a decline in the number of workers. This is affecting the agriculture industry, the hospitality industry, manufacturing industry, healthcare, and now it's affecting us as we can face challenges in our search for workers. And of course, one of the main factors in this issue is the lack of housing, the lack of affordable housing that continues to plague California and our area specifically. Okay, go ahead and go to the next slide. I'm proud that the general fund budget prioritizes investments in essential county services and supports our aging facility and infrastructure needs. As detailed later in these budget hearings, this budget provides substantial financing for our public safety operations, including supporting new commitments and supporting ongoing commitments that were approved within the last budget year. The budget fully staffs the new public defender's office and also provides new staffing in our district attorney's office, stabilizes our county's health system, including significant investments in the health services agency and supports the creation of a unified permit center and the integration of the former public works and planning departments into the new community development and infrastructure department. You can see on the slide, just some of the investments we are making, including juvenile hall and county detention upgrades, park improvements, public safety, communication networks, including our record system and our radio systems and also other facilities. Even with these investments that we are making in this budget, we are unable to keep up with investments to adequately finance required costs of our facilities and infrastructure. In 21-22, we completed a capital improvements report which estimated that we have over $300 million in unfunded deferred maintenance on our facilities. And so as we go forward, we have reason to be proud of the success because we are investing in infrastructure but we also know that there's a big unmet gap as well. Next slide. So why do we have a unmet gap in our unfunded deferred maintenance and other issues are staffing so forth? One of the issues that we really wanna emphasize is the systematic underfunding of Santa Cruz County compared to our pure counties and also even the cities that we are in the same county with. It's important that people understand that much of this relates to just history and it's kind of a random event when Proposition 13 was approved in 1978. It froze property tax levels, rates at that moment in time and some governments had relatively high property tax rates. Others had relatively low property tax rates and it froze them at that time. Santa Clara County, for example, had relatively high property tax rates. San Mateo County, Marin County. Santa Cruz County on the other hand had relatively low property tax rates in 1978. So just by random event of when Prop 13 was implemented, we were kind of frozen in place at a low property tax rate as a low property tax rate counting. We only get 13 cents on the dollar of property taxes paid within our county. So just to give you an example and illustrate what this means, if we had the same per capita property tax revenue as our pure county averages. So our pure county are counties that are similar in size and demographics to us. We know that we would have $455 million additionally to what we have now. If we just had the same per capita revenues as other counties that are near us, our pure counties, we would have $455 million in additional revenues to spend. So in other words, our general fund is now $683 million. If we had the same per capita revenue as our pure counties, we would have over a billion dollars to spend. It's hard to imagine what you would do with $455 million in additional general fund money. Well, other counties are doing it. They haven't. The state average, if you look at the whole state average for counties, we would have $128 million more in general fund money. And if you just compare us to Monterey, county of Monterey, if we just had the same per capita revenue as them, we would have $79 million more in general fund money. What about our cities? We are in effect the largest city in the county. We have almost 130,000 people living in the unincorporated area of the county that look to the county for municipal services. If we had the same sales tax as our per capita sales tax as our counties, as the cities in our county compared to Capitola, which has always had a lot of sales tax, we would have over 62 more million dollars to spend. Even Scotts Valley, if we just had their per capita sales tax, we'd have $14 million more to spend. So it just shows you that with the challenge we have in that we're providing both municipal services to the unincorporated area and then county-wide services to the 270,000 people in the whole county, while we have a much lower per capita funding rate than both our peer counties and both the cities that are surrounding us. Next slide. Despite that, we have achieved a lot of successes and I will say that I'm very grateful for the commitment of county staff. We have gone to extraordinary lengths as we emerged from the COVID-19 pandemic and the CZU Lightning Fires. And now we have undertaken new challenges, including playing a key role in the formation of the Paro Valley Healthcare District. I'd like to thank the board for their support of the legislation to form that district. Also the county has provided to date over $5.5 million towards that, saving Watsonville Hospital. In addition, we're on track to spend another half million dollars in in-kind staff support. Also like to thank especially Senator Laird for his leadership in establishing the Paro Valley Healthcare District. That has been a huge lift over the last year for staff. We're very proud that we're on track to save that hospital and return it to local ownership. We're certainly not free of worry yet, but we feel we're on the right track with that. Another huge success and this is really amazing and something I thought I may never see in my lifetime, which is the success of the funding of the Paro River Levy Project. This has been going on for more than 50 years to try and get that project over the hump. And to see this year, not only did we get the $400 million construction costs fully funded from federal and state sources, but we also had the voters in Watsonville approve any property tax assessment to pay for the ongoing maintenance. And that was approved by 79% of the voters. Pretty amazing to think of all that has happened. I lived through the 95 floods and 97 floods. I was the city manager at that time. I know how devastating those floods were to not only the agricultural community and the business community, but also to the populations who live near the river. And so to see this project come to this point is an amazing achievement. I'd like to congratulate the board for your support on this as well as a supervisor friend and supervisor Caput for your leadership. And I know that both of you have truly worked very, very hard on this project. And Mark Strudley and Matt Machado as well from our public works department, especially for all the work that they did. We have purchased the South County Service Center. This will be a really nice achievement for the county to provide more equitable services across the county and also provide better offices and better services to the community down there. We hope to open it in 2023. And then just one example of what we've done with affordable housing, we've done a lot. But one example is a live folk housing project which will provide 57 affordable units. This was a county led project, formal farmer redevelopment site for the county. We actually did the project management that brought the project about. Especially like to thank Julie Conway, Suzanne Issey, Peter Detlef who showed the leadership on bringing that project about. And it's really an example of great success and hope for future goals as well for what we can do with affordable housing. Next slide. The county collaborated with Santa Cruz Community Ventures on a project called the Santa Cruz Like Me which is an effort to look at the county's representative bodies and recognize the value of a representative government and ensure that the diversity of the government reflects the diversity of the region. The county has completed this study with community ventures and is now working on strategies in the coming fiscal year to address variances and opportunities for improvement that are identified in the report. The Board of Supervisors in October hired the first public defender, Heather Rogers. The new public defender's office has been a four year process. A lot of work for our staff, especially thanks to Ms. Rogers, and Nicole Coburn and Sven as well because they have done a ton of work in bringing about this project and the doors are set to open on July 1st. Really a tremendous success. We've also, one of the goals I had many years ago when I first became a CAO was to create a new department of community development infrastructure to merge public works and planning and create a unified permit center. We have done that this year. This will help us to attain our goals in affordable housing, reliable transportation and sustainable environment by integrating public works and planning and forming this new community development infrastructure department. We will be able to collaborate and coordinate our efforts and land use both short-term and long-term and also to focus on more customers for self-focused services and efficient permitting. I also wanted to mention again, the pension obligation bonds, almost $2 million savings this year because we did that, more than $68 million over the long-term that we'll save. And then this year we had successes in leading the construction of our new libraries. Felton, La Selva Beach, Boulder Creek library projects were completed. The Live Oak library construction is nearing completion and the Aptos library just broke ground on construction and construction. Next slide. These are some of our operational plan successes that are derived from our strategic plan. And you can see the various things that we've done, implementing our goals that are outlined in the operational plan. Can go ahead and go to the next slide. And these are other successes we've had in implementing our goals that were outlined in the operational plan. Right, next slide. Our county budget manager will discuss some of the financial challenges we are facing together, including the danger of entering into recession. As the new year evolves, we will face other challenges to sustain investments and successes that we have temp based in the past. We really want to update our operational plan in the coming fiscal year. We look forward to the opening of the South County Service Center and this next fiscal year, the development of a master plan for the Freedom Campus, supporting the construction of the Power River Levy project as it gets underway. And also I'd like to thank our county departments, our department heads and our budget team that both produced this balanced budget but also simultaneously launched what we expect to be an award-winning interactive online budget which is integrated with our strategic plan. Thank you very much and that concludes my remarks. Thank you, CAO Palacios. Are there questions or comments from members of the board? Yeah. Supervisor McPherson. Yeah, thank you, Mr. Chair. A tremendous presentation. This is my 10th budget session, the county budget session and I've never experienced more challenging times. And I'd just like to say a few things for all of our employees and the county's department heads who have really gotten us through the most difficult times that I can remember in the last decade. I'd like to thank our budget team and as we're gonna hear from in our IT staff and on the new online budgeting presentation, I think it's easy to navigate and a number of helpful tools that make the data easy to compare from year to year. This year's budget really represents a great deal of leadership and partnership between our CEO, department heads and our own labor force with our county employees. Considering the challenges we have faced during the last two years, it's amazing we're considering a budget that offers the kind of investments we are making without having to make any significant cuts has been mentioned with the hospital, the center down in Watsonville. It must be said that we have a perfect storm of fiscal challenges this year, I believe, in Santa Cruz County that really require us to be very disciplined with our spending and protective of our reserves which have been mentioned. And that's very encouraging news to hear. Thank heavens we had those reserves in these last three years that we've gone through. We have a low return on tax revenue from the state from our taxes as was mentioned and a higher than average population that does live within the own corporate area that require municipal like services. It's a high demand on housing and with a very low inventory and a local economy that is especially dependent on tourism and the tax revenue it provides. On top of all those systemic issues we've had two years of pandemic response to fire recovery expenses. Some of which have not yet been reimbursed by the state and federal government. And it's really concerning about the state's practice. We have really received some great reserves or revenues from the state, but unfunded mandates is not a nice term in my estimation and we have many of those. So I'm glad that our county measures B and C for transit occupancy and the single use items that passed and they're looking strong that they will pass from the June 7th election. We need those tax measures to help us address these gaps that we're facing. And I want to once again thank our county administrative officers Carlos Plosius for his cautious but ambitious budget and for our budget team that put it all together. I look forward to the departmental presentations this week that are going to take place and hearing more about the great work that our departments do under some very trying circumstances. And especially I want to thank our 2700 employees about half of which in the human services and the health services departments are represented in those two departments. The sacrifices that they have provided and the great service that they really provided for over these two difficult years just outstanding and I can't say enough about it. I wish we could have each and every one of them here to say thank you and to give them a standing ovation. So we're a small county but we accomplish a lot to our terrific and because of our terrific and hardworking employees. I just want to give them an extra pat on the back as I know each and every supervisor does. We got through a terrible storm, not a perfect storm but storms and we're not out of it yet but we're moving ahead onward and upward. So I want to thank the budget team, our CEO and our county employees for everything that they have done in these last two or three years and look forward to some promising advances as we move ahead. Thank you. Thank you, Supervisor McPherson, Supervisor Caput. Thank you. Thanks a lot Turtles and Mark for actually putting in front of us a pretty good budget. It looks good and quick questions. I don't expect in-depth answer on any of them but the AAA bond rating, how does that help us? That helps us get lower rates when we have to borrow money, do we get more money when we actually cash in also? Yeah, the primary benefit is that we get better interest rates when we have to issue debt. And so that's a very positive thing and it helps us with our financial management of the county. And so the rating agencies speak highly of us. They speak about the board's conservative fiscal management of the budget and the fact that we have done a very good job of getting through the CCU fires and the pandemic and that allows us to get better and cheaper interest. Okay, is there any higher rating than AAA? I think that's the highest. Okay. And then general reserves, you mentioned 10%. Money-wise, is that about $50 million or how much ballpark figure? Chair Caput, our reserves, our total general fund reserves are 71 million right now but as you'll see in the slide that I'll be sharing with you, that number is reduced significantly when we start thinking about the money that's set in there for health services agencies to serve the Medi-Cal population. So including our reserves is a substantial amount for the Medi-Cal population. Okay. And then it says on the general fund we're actually spending less, about $5 million, is that correct? Yeah, I'll be happy to go through those details a little bit more in a few minutes, but yes, our general fund budget is actually $5 million less than it was last year. Some of that is attributed to the one-time funding we received from FEMA, excuse me, from the ARPA funds and the disaster funding. We had increased costs for emergency response but we also received some increased funding. On the whole, our revenues and expenditures are down a little bit in the general fund. So you're correct, we're $5 million less than we were last year. Sure. And then with the labor force, we're actually have a few extra open positions but they're not being filled. Is that one of the reasons why we're spending less on the budget because we have a position that's open but nobody has filled it yet? It certainly depends on the department and as the departments will tell you over these coming three days, you'll probably touch a little bit on their staffing and vacancy rates. For example, in the sheriff's office, if they have vacancies in patrol or staffing in jail, that triggers overtime costs. So a lot of times those costs are made up in other ways and some of our charges for services areas if we're short staffed to be able to serve our community, our client, our patients, we often have to contract out for a higher cost. So it's not always the savings but there generally has been a higher level of vacancies across the county in these last couple of years. That's true. And if you go around, that's true for private business and public, people are not filling the open positions that are out there for people to work. So anyway, and Carlos, you mentioned the Pujo River, $400 million state and federal funding. It came down to a vote on the local residents that are in the benefit assessment zone, which means they were in the floodplain. They voted overwhelmingly to approve $1.2 million a year maintenance fee. We've been told that that's one of the highest percentages that a vote has ever passed by different people that have worked with trying to get assessments passed in the state of California, 79% yes, 21% no. I want to also thank the staff for really looking out for South County. We've got the South County Service Center is in progress. And a quick question on the Watsonville Hospital is it bunching forward a little bit? I know we do have a looming shot block. Maybe can we extend the August 31st or are we getting some money? We have two big milestones we're approaching. One is the state of California is potentially going to give up to $20 million to the purchase of the hospital that's in the budget potentially. So we have to wait and hear at the end of this month or they were going to get the 20 million from the state. Even with that $20 million, we're still short 15 million approximately towards the final purchase. We're doing everything we can to do fundraising. The deadline is August 31st to close the sale. I don't think we should assume that that deadline would ever be extended. So we just need to make it and we just need to get it done so we're working as hard as we can. And I'm hopeful that we will raise that final gap before the deadline and purchase. You bet. Okay. Now, Chair Koenig, maybe we should go right into the budget manager's presentation. And then after that, we could potentially take public comment. Okay. And the last question, pension bonds, obligation bonds. How was real quick? How is that different than about 10 or 12 years ago when I first got on the board? We're saving money somehow. Is that because we've realigned the whole pension process? Yeah, we have done that. We have reduced future pension costs because both the board adopted a second tier in retirement. So the board did that. And then the state of California also adopted a third tier for new employees of reduced pension costs. And then our pension obligation bonds are in effect refinancing the debt we have on the unfunded liability we have for existing pension costs. So in effect, we refinanced it at a lower interest rate and that's how we're saving funds. You bet. And just a quick reminder, about 12 years ago, the state of California, there were numerous cities and counties that were facing bankruptcy. And a big problem at the time was pension obligations, people that were promised one thing and the money seemed to not be there. So that was a big problem we have addressed. And I think the board of supervisors looked closely at that and worked very hard on it. Thank you. Anyway, that's about it. Good. Thank you, Supervisor Caput. If there are no further comments or questions from members of the board, we'll move to a presentation by our County Budget Manager, Marcus Pimentel. Thank you, Chair Koenig, members of the board. I am Marcus Pimentel, your County Budget Manager. Thank you for giving me this opportunity to present to you this really phenomenal 22, 23 proposed budget. I say phenomenal from the perspective of the challenges it was to build a balanced budget with instructions that we gave out last fall to departments to be austere. We felt uncomfortable with the direction the economy was going, we were nervous about it. Certainly when January came around, we got even more nervous. But I was very thankful for the direction from our CAO, Carl Sposios, who was firm with saying we need to be very mindful in developing this budget and what turned into being a very austere. And I like your words, Bruce, a cautious but ambitious budget. I'm gonna take a side note for a second that happens to be my daughter's 21st birthday. Wherever she's at, happy birthday, Kirsten. Well, I didn't expect that. I hope at the end of my presentation, I joke sometimes I used to have a nickname PowerPoint Pimentel. There's one time I had a slide deck that went over 80 slides. I'll keep this one briefer than that. But over these slides, I hope you to leave you with an understanding of our forecast, where we have our opportunities, and where we see our challenges. And some of those include our reserves from the perspective of as we see a higher risk of more climate-driven economic disasters and other events, we need to be mindful of are our reserves sufficient to be responsive as well as some of our other unfunded liabilities that we have out there. We wanna address those. And I suspect in partnership with the Auto Controller, we'll be bringing back some discussions during 2223 on how we might further strengthen our position. What I am the warm-up act for today is reviewing the county's general fund overview, but then later providing a real brief overview of all of our general government departments that are included in the budget hearing, but are included in consent. And then I'll be setting the stage for your two presentations today from the Human Services Department and the Health Services Agency. Thank you all of this. Today opens up our budget hearings over these next several days. We will be reviewing the departments for Health and Human Services, as well as providing an overview of all the departments that are on the consent agenda. Today, those departments are within our general government services area. Tomorrow's land use and community development, community services day. And we're also having the Office of, OR3 Office of Recovery, Responsible Resiliency present tomorrow. And then we'll conclude on Thursday with public safety. Or since they conclude, we'll conclude this week's hearings and then we'll continue the hearings to next Tuesday in the afternoon to conclude all of our budget actions, including the unified fee schedule presentation and the concluding actions to approve the budget. We'll then come back in the fall, as we do every year to present to the board the final form of the adopted budget that will then be transmitted to the state that I scheduled for September 20th. As I mentioned before, this budget was built with the premise we saw some cautionary signs ahead. And this was around September, October, November of last year. We've seen those signs become more alarming and we'll talk about that in a little bit. But from the positive perspective, we were able in those very austere moments, hold our funding to, yes, we've added 61.8 positions in the general fund, but of those as CAO Palacios mentioned, 40 of those are to stand up our public defender, 11 of those are within our internal service fund. So on the whole, 10.8 across our general fund was just quite an incredible low amount when contrasted against the demand and services and the requests that are out there. Our overall are proposed expenses and the 1.03 billion dollar budget is down 3.7% as are our revenues down 4%. This is a similar theme when we see the general fund budget. In the last couple of years we've received a lot of one-time funding to support our emergency response and we're starting to move away from emergency response back into normal county operations. On the left is just a summary of our budget broken down by the major funds. You see that the general fund is the largest component of the county's fund structure. I do apologize for the size of the font here. That was something I should have thought about a little bit more as I presented this, but these are really graphical presentations of those total $1 billion in expenditures countywide or a countywide budget. What this is illustrating is that within our help and human services they remain consistently the largest place where we invest our budget allocations at 48.8% for the 22, 23 year land use and community services consistently around that 25% mark there in the second category. That includes the consolidated community development and infrastructure department that includes the former public works department and former planning department. Why land use is so large share and why it'll be so small later on is when you pull out the public works department a lot of their funding is federal state funding for roads and facilities as well as some of their enterprise funds. So at the countywide level, land use is a big component but when you look in the general fund much of those costs are removed away. The pie chart on the right illustrates our costs in a different view. How do we spend our money within departments? And probably not to the surprise of anybody who don't build widgets. We provide services, the bulk of our costs are our salaries and employees. What is a little bit different than city land is many of our while salaries employees that costs are largest at almost 38% for the 22, 23 budget. We also have a large amount of professional service partners that help us deliver services across our county spectrum and those are largely in the health services area and human services. So while salaries and employee benefits are large at that 37.9% of our total budget, services supplies is also equally large at 33%. And a big chart, a big driver in that is are those partners who help us deliver services. These percentage allocations have remained reasonably consistent over the last decade. Flipping into our revenues, moving on to our revenues, helping human services is the largest revenue generator both from an intergovernmental, federal state revenue perspective, but also from charges for services and delivery of services. As compared to their expenditures, there are about 40% of expenditures and about 40% of revenues. And that's also routine and normally typically recover most of their costs either through federal state claims as well as charges for services. From the revenue perspective, our second largest categories are county financing and that's just another way of saying our tax base including our county financing, our property tax of vehicle license fees sells taxes. That is our second largest revenue source, 180 million, 18.7% across the entire county. On the right side, drilling down to where does the funding come from? Where does it originate from? I mentioned the federal and state, our largest share of funding for the county is 45.7% from federal and state revenue, largely moving and flowing through road funding, but also our health and human services departments. Charges for services, that's our client delivery services, whether it's a permit center or clinic fees, those are our second largest revenue source where funding comes from 24, almost 25%, $239 million. I'm gonna slowly move away from the countywide view because we end up spending most of our time in the general fund. That's where you have the most challenges but also a lot of our opportunities are designed. But I do wanna paint the picture of the 2,700 staff that Bruce and first and you referred to and they've done phenomenal work over these last several years responding to dual emergency events. Health and Human is our largest service providers and directly our largest staffed areas, 1,350 people reside, funded positions are in those departments. The second though is our public safety and together these are almost three quarters of all of our staff are in health and human services in the public safety departments and justice departments. Together that's almost 2,000 positions. I think it's 1,998.9 positions. One more positions there'll be even 2,000. So that's where we, you've seen, we've talked about where we invest our money. A lot of our budget goes to health and human services and where we invest our positions, health and human services and public safety and justice. And that speaks to what CEO Plosio said, because we're limited in our resources because we have some systematic underfunding we really try to focus our resources on those pure mandates that we must deliver on. So I'm happy to move us away from Countywide and really where we spend most of our time most of our discussion is in our general fund. Chair Caput as you noted already our general fund has been reduced this year both expenses down by 5 million and revenues down by 9.4 million. A lot of that is driven by the one-time end and demobilization of our COVID response and the end of our CZU fire response. Not the end of the resiliency and the recovery of those events, but the direct cost perspectives. It goes without saying that we are concerned about our future, not from a perspective of how will we get there, but we know we will. But we have gaps in our forecast and those gaps have been consistently there. When we look into our out year of 2526 we're still facing about a $10 million funding gap and that presumes maintaining those very minimum service levels that we talked about prioritizing funding in our public safety and justice and our health and human services departments. We don't have a lot of other programs that are easily scaled down or shifted. So it's harder for this County of our size and our limited size compared to other counties to adjust and adapt and downsize. But what this chart tells us is without other funding sources, without other help or without continuing, we're forced to continue to be creative with bridging those gaps and often we've had to bridge those gaps and reductions of services. So just know that our mandate is to present to you a balanced budget. This year's budget is a balanced budget and we will continue to present to this forward balanced budget in the future, but there may be some hard trade-offs and some hard choices ahead should this forecast remain. What is not included in this forecast are the assumptions from revenue increases from the June ballot measures, but we also haven't quite quantified the level of impact and the timing of when the next recession will hit. So this forecast will change in the coming months for sure. When looking at our general fund, it's similarly structured and balanced. The percentages you see here, half of the general fund is for salaries and benefits, 26% is for services as flies. That's been very typical of our County. There are no alarming changes or trends in these numbers, but what you see when you look at, not where we're spending on money, but what programs and services we're focusing on, again, within the general fund, just like Countywide, Health and Human Services is our largest department where we invest most of our discretionary and most of our revenue resources are for supporting the Health and Human Services. As I mentioned to you before, when we looked at Countywide, community and land use was our second largest, Countywide budget, but when looking in the general fund, that drops all near the bottom. And that's just a reflection of the removal of a lot of the public works operations, the road maintenance, the road investments and the enterprise funds within public works are not reflected in the general fund. So the second largest general fund investment is in our public safety and our justice programs. Moving into our general fund revenues, there are often a lot of questions about, our assumptions and increases in taxes and I'll talk about that in a few minutes, but also about the slide that we've talked about when we talk, try to distinguish between total county or total general fund revenue and discretionary revenue. And very simply, we try to get to a point of looking at our total general fund revenue, in this case, $663 million, backing out a lot of those direct funding from federal and state and direct charges that departments will provide. So essentially if they're a business unit, they're direct revenue sources and we get down to net revenue that comes from largely from our tax base. So we have about $182.8 million proposed in the 22, 23 budget that would be discretionary revenue that is prioritized and historically prioritized to help sustain our operations and how that's shown graphically is in this next chart. We see that of that 182 million of discretionary revenue, nearly 104 million goes to support a public safety and justice programs. As you can imagine, those programs often have some, they certainly have some federal and some state supports, but they're not fee-driven. They don't charge for services. So they require a large support to sustain their operations. Health and Human Services have commitments of up at $39.5 million, while most of their operations historically have been balanced. We do pledge and are there to support those departments should they have shortcomings in their budgets. But you can see that a lot of our general fund discretionary money goes to supporting our pure mandates or our delivery of public safety and justice services.  And while sometimes they're either criticized for being too conservative or maybe often you don't hear it being too aggressive, we strive to have our projections be reasonable and credible. And what this chart represents is our largest forward general fund tax basis compared to last year's budget and this year's budget. And we have to own the choices that we made in developing last year's budget. You can put yourself in the timeframe of January, February, March of 2021. The pandemic was heavy. We were just, we were still understanding the impacts from the CZU fire in the fall. And we had high concerns that the economy was going to be impacted for a longer period of time with sales and reduced sales tax and reduced visitors. Thankfully what we saw is by the summer of 2021 and into the fall of 2021, before the next surge hit we started to see strong recovery of our sales tax base. Now as we look back, we can confidently say our sales tax base and our TOT base has recovered to pre-pandemic levels. Are they thriving at 10, 15% growth patterns? No, but they have recovered to their pre-tax level. So what this chart illustrates is where we had the budget last year for our property tax vehicle license fees and what we're seeing in the increase in this year's budget, 5.6% increase in property tax knowing that we've had recovery and reimbursement from the state from some of our losses from the CZU fire and assessed values. Vehicle license fees continue to be steady but we've seen the strong recovery of sales tax and transit occupancy tax back to a pre-pandemic level. So that's great news. And that's strengthened our bottom lines. But as I'll talk about, I always have to mention we do have concerns, sales tax is very dynamic source. We get data almost on a monthly basis. And it's the first place where a consumer driven economy nearly 70% of our GDP is based on consumers. So those as inflation continues to go up gas prices and everything else. And as the employment market worsens and employment rates might rise, the first sign we'll see is sales tax shrinking will be an indicator that something is going wrong. So we're going to continue to watch sales tax very closely. It's an early arbiter of what's to come but we are concerned about out years growth in the next two or three years in sales tax. Almost to the end of this little presentation, wouldn't be doing justice of keeping this board immense credit and CEO Clausios and the leadership team of this county. They've built up the reserves to $71 million in the general fund. That's a remarkable level, a 10.7% of reserves and that's to be rewarded. Sitting in on very numerous of our bond rating calls. We get a lot of accolades for how fast we've recovered from the pandemic and built back up our reserves to that 10% target level. The place where we have more work to be done is when we look within those reserves and we've known this always to be true. A lot of that big chunk of that is reserves pledge to serve our Medi-Cal populations. So to the point when we need to use those reserves and serving our Medi-Cal population whether it's expanding services or developing new facilities such as the freedom master plan, we have to start thinking about a life with reduced health services and Medi-Cal reserves and what that life would look like today if that money wasn't there is our reserves would drop to 6.2%. That's a hypothetical they're not at 6.2% but if we fact factored out those reserves we'd have about a 6.2% reserve level and it's compared to payrolls that would cover us for 2.8 payrolls. Those are very alarming numbers from a fiscal perspective given our high risk of climate and proximity with the ocean and other earthquake events. We have higher risks than many other counties. So it's to our benefit to start thinking the long term about how we build up our reserves is included within these reserves our emergency response reserves. They're not a different pile of money. It's all in the same place. So we've got some additional work to do and I'm confident we'll get there of making sure we're resilient and sustainable in the long term. Finishing with the down news as we often do I do promise I'll finish on an up note. Since World War II anytime the yield curve has inverted it's been a predictor of a recession coming and what that means is bond rates typically if you're investing the longer out you invest the higher you yield you buy a 10 year bond. They're gonna somebody's gonna hold your money for 10 years so they give you more interest. What happened in March is that yield curve went shorter where short term money was more expensive than out long term money. You actually lost money by going out 10 years. That's a very unusual occurrence and every time that occurrence has happened within three years has been a recession since World War II. It's not a driver of a recession but it's an indicator of some really concerning times in the market and certainly since March we continue to see inflation going up as CAO policy has indicated. Economists are now the majority of them are predicting a recession in the near term. So we're thinking in terms of our next budget instructions and to continue to monitor the 22-23 year should the recession get it's no longer if we think it's when and then how long will it be and what will be the impact. Will it be in 22-23 possible? But definitely in the next two or three fiscal years it's very likely we'll have a recession. Now thankfully this economy in this county has been done a very phenomenal job of being very diversified in its revenue sources. It's tended to weather recessions reasonably well as compared to some of our companion counties in the central valleys. But yet we do have challenges in our systematic underfunding and it limits our ability to be responsive and resilient through disasters. But I do want to finish on a high note. It's really quite impressive. I'll admit to, I've been in the county for since just August of 2019 and the amount of work that this county does is incredible compared to the staffing level and the funding level that it has. When we've been doing some peer review over this last year and a half and talking to other counties and the time it takes for them to complete projects like those that CEO Glossius talked about would have been generational five years, six years, 10 years. Now the Power Valley Levy project is one of the generational projects but that's not because of a lack of our work. It's been a lack of federal and state funding but we've done some phenomenal work and we continue to do phenomenal work every year doing unheralded work that is, for me it makes me really proud to work here and I'm proud to be part of this team. I've loved the strategic plan that we've developed. I love that we have an operational plan and I'm a big fan of seeing how our budget will drive and support the operational plan going forward. I'm concluding my opening remarks. We'll go on down into reviewing and laying the groundwork for today's budget hearings but I want to finish with just where Carl Glossius ended. It is remarkable when you talk about our successes that we built an online fully interactive, fully confident budget in the time space that we did using all the in-house staff. We did partner with OpenDepth to provide a budget system behind the scenes but this was a phenomenal budget built to be long-term integrated within our strategic plan, within our operational plan and updated frequently. We've never had a budget that dynamically changes. I showed you the stacks of different versions of our budget that we take to get to be adopted and now it's one version. You'll see the proposed budget, you'll see the changes marked as supplemental. You'll eventually see changes marked as last day and then the changes for the adopted. We're really proud of the work that's been done. It's quite impressive on the first release, the quality of it and the capacity and the capabilities of it. So we're only thrilled and excited about the opportunity it has for these coming years. So with that, I want to thank ISD and our CO team and Carlos Flosius and this board who've allowed projects like this to happen despite our limited staffing and resources. That concludes my opening remarks and then I can just jump right into the chair's discretion just doing a quick preview of the hearings for today. All right, thank you, budget manager Pimentel. Are there any questions or comments from members of the board at this time? All right, seeing none. Then why don't you go ahead and give an overview for today and then we'll take some public comment here. Chair, I believe we may be missing slides. We may need to run and grab those. It will just take a moment. My apologies. I could offer all the data I present to you is in the consent agenda. It's in the online budget. I can provide a narrative. This is meant to be just a few minutes of brief overview and then we can turn the floor over to human services and health services. And I apologize. I should have coordinated to make sure we are set up on that, my apologies. So within the consent agenda item are our general fund, general governmental departments. A lot of our general services departments, the audit controllers office, the assessor's office, the clerk of the board, the clerk of elections, our office, the county administrative office. In total, I'm gonna give you a big number, 115.2 million in total operations. But when we back out and just focus on the general fund, the general fund portion of that budget is just about $41 million and that's not a just, but that's a lot of services that are provided at a $41 million budget. There are as disclosed in the consent agenda items for each department. Each department has its own budget report. There are only a modest amount of changes within the general fund departments. Largely, there's been some staffing increases, no programmatic changes. The public defender is a big change this year but that's in our public safety departments. Where you will see the increases in those reports are in the county administrative office's department in the assessor and the audit controllers department and in information service departments and GSD. Those four departments have changes that have increased general fund needed contributions about 15% and that's still pretty modest. And where you see those increases is in the county administrative office. We've taken on the sheriff's investigator auditor program. So that is a new budget compliment that's in the county administrative office. We've also invested back in our economic development, increasing a principal planner position from three quarter time to full time to support economic development and other special projects and general services. Some very boring but exciting work for me to think about in all of our team. We'd like to see more focus on our backlog and deferred maintenance. So they're bringing on a custodial position of facilities worker and management position to help with some of our backlog in our general services. ISD as you've demonstrated in our online budget are investing in two application specialists that will help us be more responsive to departments needs across the entire county. And then our auditor controller, it's less of a increase in more of a reduction. Some of their revenues from some prior debt financing to fund their systems are no longer there. So those are the big changes. There's nothing overall notable. They're proud of them. They're proud of their budgets, but on the whole, their status quo is in those few changes I've talked about. Mr. Chair, that's where we're waiting. I might just make one of the things that hasn't been mentioned is another great, had great foresight from our CEO is development of operations and strategic plans that was inclusionary in getting county employees and the general public involved and getting a well-rounded picture of where we are, what we're gonna do, how we want to do it in a matter of operations and strategy of how we want to move forward. That was a really critical element in getting us here to look forward under some difficult emergency situations that we've had. So in development of that strategic plan and the operational plan was really critical in getting us where we are now to keep our eye on the ball and move down the field. So I think that was a great foresight by our CEO and again, the county employees who participated in it was invaluable. So very much appreciative. Thank you, Supervisor McPherson. And I'll own this slide that was just if I kept going with my slides, they would have continued and I was thinking there are different presentations from my apologies, but just finishing off the general government, this chart represents the number of positions that are in total in those various departments and the green shaded are the increases. So the general service and information services had three positions and two positions respectively, again, very modest operations. Where I wanted to preview is our health and human services and then end with you with the recommended actions for today. Again, this is just meant to be a preview of what's to come. Yeah, move me to the next slide. Within health and human services as detailed in the overall presentation, there's our 423.5 million dollar budget. Health at 238.7 million and human services at 173.9 million. Also included in health and human services are child support services. They're effectively status quo. Their funding is derived from a state funding formula and there are no changes other than an unfunded position this year. There's also our core investments and that item has been deferred. It's on consent, it's at deferral. That item was heard on June 7th and will be discussed again on June 28th, next Tuesday. So there's no action today to be done with the core program. Move me ahead. Within the funding support that the general fund provides for these departments, these numbers may be seen large, 21.8 million for human services and 12.7 million for health services. Typically these departments do perform better than that. These are just a budgetary total budget for total costs versus generally a little bit on the conservative revenues. Generally those departments do not depend on very large general fund contributions but we're there to help sustain their services should they be needed. From a perspective of what the change is, this is the change chart of our general fund contributions to those departments. And what I want to explain and why I'm showing this particular one is while it looks like health and human services received considerably larger general fund contributions than the allowed budget for 2021-22, their increases from last year's budget are driven by one time funding that came from FEMA and ARPA that brought down their contributions last year. So when we look year to year, their last year's numbers started lower arbitrarily because of FEMA and ARPA funding. So when we normalize for that, they're actually status quo with their general fund contributions. As far as positions, that's where you see the biggest changes in these departments helping human services. The health services agencies are largest department 752 positions, funded positions. They're requesting the increase of 21 positions and those positions are all across HSA as various services supporting clinics, supporting behavioral health but also in response to preparing for the reforms out of CalAIM at the state. Human services shows a reduction of 27 that is not a reduction in force as a reflection of within human services were COVID shelters. And over the last year, there was always a plan to demobilize the shelters. Late in 2021, there was an extension period to get us another six months of funding. That funding ends in July. So there's been a long plan to demobilize those shelters 51 positions that will no longer be needed come July. So that's a big reduction in their positions. Otherwise they are investing in increasing and their ability to serve our community as times get worse, their demand goes up. There are nearly 17 positions being added to the social services to help strengthen their ability to be responsive. So that finishes with my recommendations for today and I'll gladly go silent and let the departments finish this day of public hearings. We ask that the board consider any public comments and then take action on the consent that we open the public, the budget hearings and consider the regular agenda budget presentations by human services department and the health services agency that we think continue the budget hearings to tomorrow, June 22nd and that these budget hearings will ultimately conclude on next Tuesday, June 28th that effectively concludes my presentations and my apologies on some of the technical stuff that was my own shortcomings and forgetting where my slide decks were. Thank you, Juliette. Thank you, budget manager Pimentel. And we'll now proceed with action on the consent agenda and that's items nine through 24 and we'll begin what's up. I was just going to say, sir, we'll begin with public comment on the consent agenda. So if you have any comments and you're here in the room, please approach the podium. Two minutes, great. My name is James Healy Whitman. Santa Cruz County is just one of 3,200 counties in the United States about the consent agenda items. I think it's items number nine through 23 on the consent agenda item number 12, which has to do with AMBAG. AMBAG stands for Association of Monterey Bay Area Governments. It's actually a secret invisible government that you don't hear much about. If I have time, I'll talk about a December 12th meeting, which is very important. It has to do with water and people asking questions because the various state agencies aren't even talking to each other and they're not listening to the needs of the cities. So about agenda item number 12, it says that the budget was like a little bit over 32,000. The difference a little bit over 32,000. So there was a net gain of $56. That's really odd. Going back to some of the things that the COA stated and that's Carlos Palacios of note before 1915 Board of Supervisors and City Councils were taken over by the COAs and the city managers.  You guys act really well. Some information I think is odd that I didn't have my exact notes with me was talking about the care court and where the funding, where's that funding gonna come from? Within the past six weeks in this room, $7.5 million were given to organizations that would act as interlaced before law enforcement to help people who were having issues. That same day in the city council, they were given over $14 million for very similar types of services where they have already spent $2.3 million. So there's some inequities with that. I have questions about thank you. Supervisors McPherson, Friends, Tonig, Coonerty and Capit. My name is Sarah Leonard. I'm from MH Can of Santa Cruz. We were completely defunded in the core decisions that were just made. When I had the regular session with the people at core before we turned in our proposal before it was even written, I was told that we were unlikely to be refunded. I was told that by one of the core people at core. To me, that was clear that a decision had already been made and we hadn't even turned in a proposal yet. I also asked for ADA consideration in that I who wrote the proposal I'm a person with schizophrenia. I'm a person with autism and a person living with bipolar and PTSD. If we were in another county, I remember that part of the, if we were in San Mateo County, the peer organization would be receiving over $4 million. If we were in Monterey County, the peer organization would be receiving over $20 million. Santa Cruz County has for a long time not seen our value, I think, as much as you could. And I wish that in the future, you would do that better. I know that some of you have been very supportive. Supervisor McPherson and Caput and Coonerty and your new Mr. Connick, so I don't really know. But we do provide valuable services and we stayed open throughout the pandemic. We provided support to the population throughout the pandemic and when at the heart of the pandemic, people were not showing up to work in the locked wards. The employees in the locked wards were not showing up and we had a subcontract in there. We were providing three to four workers a day in the locked wards and we were the only ones there. So we have really throughout the pandemic, we have been there, thank you. Thank you, Ms. Leonard. Hi, my name's Anne Skechley. I am a peer of MHCAN. I've never been to something like this before, so I don't know how to be all cool about it, but anyways. But I struggle with, not Skechley, Skechtoaffective Disorder, OCD, Acute Anxiety Disorder, learning disabilities and AVD. I've come a long way from being hospitalized when I was 17, 18 to haven't been hospitalized since then at a psychiatric unit. I actually work through MHCAN at Telecare, Psychiatric Behavioral Health Unit and I'm a peer support specialist there. And MHCAN has helped me grow as a person. I've been going there since 2002 as a peer and I really think we help a lot of people in our San Cruz County. We help a lot of people, we provide showers, we provide a meal from the people that donate to us. I'm sorry to cry, but Sarah and MHCAN have helped me so much grow. I'm also a caregiver because of that. We're a very supportive community and I just wanna say please consider funding us as much as possible because we humbly ask that, thank you. Thank you, Ms. Skechley. Hi, my name is Blair Boratius. Hi Blair, could you just get a little closer to the microphone so everyone online can hear you? So my name is Blair Boratius. I am a peer at MHCAN also. Because of MHCAN, MHCAN has helped me a lot as well. I have several disabilities and complex PTSD. And without MHCAN, I would probably still be on, living on the street with no electric wheelchair. And these people have been so supportive. I ask you please to consider restoring core funding to MHCAN because although it's great that we're helping a lot of homeless people, we need there to be a bridge, a place where people can get showers before their jobs like I did, where they can get food and breakfast while they're still out there. Because getting house still takes time no matter how much money you throw at it. There needs to be support for people who are struggling with mental health issues and various things like that while they're working to get themselves housed. We provide so many essential services to people that I think it would be doing the whole community a disservice if we ever did get funded or defunded. And I just want you to know also that as somebody with physical disabilities, MHCAN is the only place that I have ever gone that did not treat me differently for being in a wheelchair. Thank you, that's all I have to say. Mr. Chair. Thank you, Mr. Chair. Thank you, Mr. President Pearson. I know we're going to have the Human Services Department make its presentation today. And I think most people know, but I want to make it clear that we're not going to be making a decision on the core allocations until a week from Thursday on the 28th, but we welcome your comments now. But just so you're not anticipating a decision, there's a appeal process that we're going to find out more about tonight or tomorrow on the Board of Supervisors. So I just want to make that clear, but please you're welcome to make your comments. Please proceed. Hi, my name is Helen Bradley. And everyone I really appreciate you calling me Miss Helen. I'm 77 years old. And I've been going to MHCAN for a long time. And if you hadn't been to MHCAN even to this moment, that I'm standing here, I don't think I would really be alive. I have a little sickness going on with my body. And thanks to MHCAN, it gives me something to do. I don't have to just sit around in my house. I have a place to go to. And also the one for MHCAN, I just wouldn't be standing here because I was the type of person that didn't communicate with people. And thanks to several linens, and this lady named Mayo, they brought me out of the darkness into the light. I'm in the light now. And I thank them for that. How you doing?  I don't know how much longer I'm gonna be here, but I pray to God at the length of time that I'm here, I will still be able to attend MHCAN. Please don't cut them off. That's all I have to say. It's a beautiful place. It keeps me, I'm not lonely no more. I don't do without anything. Thanks to MHCAN, I have a place to go to during the daytime. Thank you. Thank you, Ms. Bradley. You're welcome. My name is Lily. I'm from here from Santa Cruz, born and raised in Santa Cruz High. I've seen this town make a lot of changes. I originally came into the mental health system through Victims of Crime in Monterey. I had a diagnosis that took me out of the workforce and left me with severe panic attacks. I came into MHCAN in 2021. I would sweat profusely. I would turn red. I would shake. I would walk around with an ice pack.  And they loved me and they gave me chance after chance when everyone in my life no longer did. I got sober. I have permanent housing now. I am of service to my community and I'm doing really well. And that's because of MHCAN. I think it'd be a real disservice to Santa Cruz County to not refund this program.  I don't think I would be standing here. I think I probably would have killed myself before now, especially with the pandemic, which has isolated so many of our population.  And this place has kept us safe. This place has kept us healthy. And I strongly urge you guys to please consider finding funding and not necessarily defunding, but not refunding the core program that MHCAN has been funded through. It's helped a lot of us and saved a lot of our lives. So thanks, you guys. Thank you, Lily. Hi, my name's Bonnie McCall. Hello, Board of Supervisors. My name's Bonnie McCall. I'm fifth generation Santa Cruz. And growing up here, I've seen all kinds of things. I've seen the people every day that are on the streets over the years. I support MHCAN. I wish you would consider funding them through the core project. They provide necessities. They provide vital necessities. It's a very necessary program in the community. They provide showers, food. They have a kitchen where people can come and make their own food, laundry. We have transportation to and from appointments, doctor's appointments, grocery shopping, bringing people to the center. It's very vital in our community. And I see the difference. It's made a difference in my life. Thank you. Thank you, Ms. McCall. Hi, my name is David Medeal. I moved here about 14 years ago and was referred by my doctor to MHCAN. I've been a part of MHCAN for the last 13 years. I've seen it up, I've seen it down. And right now we're just cruising along. And now we heard about the court rat being defunded. And I just see it's a travesty to all people that go there. Thank you. Thank you, Mr. Piteo. Hi, board members. Hi, board members. My name is Brandon Wampool. I'm originally from Orange County. Orange County has a diverse people for mental health. But since I moved to Santa Cruz about 10 years ago, I've noticed that there's a great care within the facilities of these people. People are very well taken care of. I've also think that the city members also take care of us very well. I have nothing to complain. The only thing is that I would hope if we can get refunded. Other than that, I completely satisfied with this county. Thank you. Thank you, Brandon. Hello, board of supervisors. My name is Sylvia Beard-Blan. And please fund MHCAN through the core grant. It has saved so many lives, mine being one of them. It's not just a place for the homeless to come and eat, shower, and take care of their bodies. But we also provide programs for us to learn how to live, how to live, how to maintain our stabilities, how to learn our triggers and work within society. MHCAN gives us that place to learn who we are and to value ourselves to be in society. Thank you all. Thank you, Sylvia. Good morning, board of supervisors. My name is Deborah Hightower. I came to MHCAN as a peer in about 2017. I'm now an MMA worker, medical authorized activities. And I see that MHCAN has essential programs and group meetings for people in the community, the homeless and the mentally ill. I'm asking you to please fund MHCAN through the core grants. Thank you. Thank you, Ms. Hightower. Hi, my name is Ann Marie Banuelos and I, too, am a member of MHCAN. My diagnosis is bipolar and PTSD. But I, too, believe, honestly believe, MHCAN is an asset for a population in Santa Cruz here for a variety of things. MHCAN promotes healthy minds, recovery, things that we struggle to obtain for ourselves. That is, for me, personally impossible by myself. So without people like Sarah Leonard and fellow members of MHCAN that I've come to know and meet, I'd be by myself right now. And that is not the place where a mental health person needs to be under stress. And, you know, so thank you for listening. Thank you, Ann Marie. My name is Ken Mengen. I know supervisor Greg Kappeth, he's a friend. He knows my story. I write letters. I write poetry. I stumbled upon MHCAN. I live in Watsonville, but I'll take the bus to go to MHCAN. I have one word, but summarized it as family. Thank you, Ken. I'm not going to be long-winded. My name is Trey John Spinner, and I am here on behalf of MHCAN. It will be greatly appreciated if you could put some of that money to the side for us so we can continue providing the resources needed while also assisting the community in growth. Please and thank you. And again, my name is Trey John Spinner. Thank you, Trey John. Good morning to all of you. I moved to Santa Cruz over two years ago and not too long ago, if it wasn't for the staff at MHCAN, I wouldn't be standing in front of you today. They need the funding that they're asking for to help people that without MHCAN would more than likely be found somewhere deceased. That's just plain and simple. They're kind-hearted. They do whatever they can to help the community as well as the people that are, and they just need the funding, and I really hope that you give it to them. Please and thank you. Thank you, sir. Good morning, Board of Supervisors. My name's Breonna Delgado, and we ask that you provide funds to the core grants so that programs such as MHCAN can be funded this year. Thank you. Thank you, Ms. Delgado. Hello, my name is Rachel Wilson, and I'm here on behalf of MHCAN. We would like you to consider the core program to fund us. We do so much for the community, and it's such a great organization to be a part of. Thank you so much. Thank you, Ms. Pelson. Good morning, Board of Supervisors. Excuse me. My name is Ernest Davis. I've lived in Santa Cruz for 22 years. I'm a cousin from San Jose, you know, over the hill. I was born and raised over there. I was fortunate to live in a nice community, a nice home. I went to a good high school and schools. So I moved over to Santa Cruz and I started volunteering for UNICEF and worked at River Street Shelter, provided donations, services, my handyman services. I feel that it's important for every city to take responsibility to be there, to help the mental health community, because we all are part of this society here, and we each got to do our part. We cannot ignore certain things. I feel that MHCAN was born out of necessity out of the belly of Santa Cruz, and it's not going to go away. And as my new, as a drop of water in a bucket, you know, the reverberations of this facility is needed. I feel that it's not going to go away anytime soon. It will remain here in Santa Cruz, and it's a mental health community within the community of Santa Cruz. It's just there, you know, we need your support.  I would hope that you guys would keep on funding the core fund, and we appreciate you so much. Thank you. Thank you, Mr. Davis. Hello, my name is Laura Chatham, and I wanna thank you all for the hard work that you've done to put together this budget. I just have two things that I don't understand. I'm on the County Mental Health Advisory Board, and I also did, was the volunteer coordinator for the first two years of the pandemic for Food Not Bombs. And I just wanted to ask, in the wake of what is happening on the streets, we all know that more funding for real on the ground services, such as psychiatric counseling, emergency response and stabilization facilities are badly needed. We hear that the funds are available, and yet it seems that organizations like, that are providing these services like MHCAN, are being perhaps cut, and I don't understand why that should be at this point in time. The second question I have is, as a member of the Mental Health Advisory Budget Committee, why weren't we, I was never not informed that there was the court committees going, meetings going on, and I wanted to know why we were not informed or consent regarding the cuts so that we could advise. There's one more thing I'd like to say is that last Saturday I was called to the clock tower. I spent the afternoon trying to calm a man who was having a mental health crisis. I am not trained to do this. I'm a retired high school math teacher. But there was literally no services available. Dominican ER no longer helps stabilize people. Thank you, Ms. Chatham. Good morning, Board of Supervisors. My name is Eric Drake, and I'm a native from Santa Cruz. Born on the West side, I've been living here for like 60 years. And I'm gonna say MHCAN was a lot like what you are. And the police officer in the back. We all serve the community. We all serve in the same hand.  I don't think it's a good idea. I, you know, separate from ADD, HDD, and mental depression. All through my life, I was pushed all the way through school. I didn't know how to read and write. When I got into the 11th grade, I challenged the principal of Harbor High School. I told him, I'm gonna sue. He don't let me go to college and learn how to read and write. The person who runs the community like a, you know, the SARB. She didn't want to taught me how to read, and she got a master's degree for me. And she ran all the city schools after that. But see, people just don't care. Not everybody got love. But this organization right here, nothing but a love best. And what you do is you grow. And they helped to pull me out of myself and take responsibility for what I was hiding in myself. And I'm thankful for that. But if you do need the money, I'll sue the motherfuckers. Thank you, Eric. All right, seeing no one else here in the chambers that was to comment, is there anyone on Zoom? Yes, Chair, we do have speakers via Zoom. LS, your microphone is now available. Thank you. Good morning, Leah Samuels here from Human Care Alliance, a nonprofit coalition and leadership organization. I don't have the skills of your staff who gave a comprehensive presentation today in my background's legal. I'm not a fan of changing the roles as you go along. So I struggled thinking about my comments. I believe in a trustworthy system of checks and balances on a process to make changes. That said, the budget process is a little different. Part of the process is that you have discretion in making the final decision. There isn't time to comment on the details, but I think the budget has money to move a little bit more to core. Please consider the purpose of the funding, a local movement to achieve equitable health and wellbeing in Santa Cruz County using a framework that is collective impact, result-based approach that is responsive to community needs. The community needs to be able to rely on some essential services. Please look at the budget as recommended. Ask yourself, not who got the money, but will residents be able to access needed services they've relied on? From someone, I propose the answer is no. Please find some money. There's wisdom in a rainy day fund, but this is beyond previous years. And while that's smart, I suggest that if the budget passes as recommended, it will be raining on a lot of people. And that rain spreads as a defense attorney and dependency attorney. Lack of services leads to an increase of crime and harm to children. And that's gonna cost you more money in the long run. Thank you so much for your time. Also please consider the county could lose significant federal funding with the current budget. And we need all the dollars that we can get. Thank you. Thank you, Ms. Samuels. Well, your microphone is now available. Hello, my name is Carol Bjorn. And yeah, it's really heartbreaking to hear all these stories. And there's a pretty easy, at least one solution is to really look at any bureaucracy you all have and get rid of that bureaucracy. To me, the best example of that is the County Office of Education. So for example, every school district in this county has a board. The Harle Valley Unified has a board. There are eight members, eight trustees on that board. That's an administrative level for that school district. So why do we need a County Office of Education on top of every single school district in this county? What is the budget? How much are we paying for the County Office of Education? They're not adding any value to the education of the students. They're not in the classroom teaching. They're not making a difference in the students' lives. The test scores are not higher. Also, I hear constantly, when I attend meetings, teachers that are underpaid in this county. And it's just heartbreaking to see you all considering completely defunding services that are in the trenches serving people that make a real difference like MHCAN. Yet, you're continuing to fund bureaucracies like the County Office of Education. So please take a very hard, long look at that entity. Honestly, it's not needed. Everything they're doing could be done at the school district level. I do believe the people at the boards of all the school districts are completely competent. They can take information from Sacramento and disseminate it to their school district. There's no need to have a County Office of Education dictating what every school in Santa Cruz County does or does not do. That would be a lot of money saved that could go toward a real need in this county. Thank you, Ms. Bjorn. Mr. Chair, I just want to clarify that the County Office of Education is an independent body, has trustees that are elected throughout the county. We do not have oversight of that function, which in general addresses special need students and so forth. But just to make it clear that the County Office of Education is not under the purview of the Board of Supervisors. Thank you for that clarification, Supervisor McPherson. We have no further speakers, Chair. All right. Well, then, I will return it to the Board for Action. And also just to reiterate, we are not taking action on the core funding today. I do want to thank everyone who came to speak, especially those of you who are not used to speaking in public. So thank you for your bravery in sharing your comments with us today. Any member of the Board that wishes to comment on items on the consent agenda? Mr. Chair, I'm sorry to take up so much time. Again, I want to just on item number, the CAO's budget, just want to thank the CAO for everything it's done on some of these special projects that we have that are forward looking. Really very, very important for us to move forward with the budget that we have. On item number 23, if I could have, for the public's benefit, I've got a couple of communications on the contingencies budget, general fund contingencies. And I want to ask our CAO and budget manager to explain the difference between the general fund contingencies and the overall reserves that we've talked about in terms of how we utilize them. I think that needs some clarification, if we could. The contingencies are not reserves. They're appropriations that would draw down reserves if we use them. They're an allocated budget authority that gives us discretion to respond immediately to emergency events or other needs like that. We also have within contingencies, we've had to increase our contingencies in this year because we have some known costs that are not yet able to be quantified in the budget that are quite substantial that we need to include in the budget so that we would have a balanced and credible budget going forward. Two of the things that were mentioned, reimbursements that haven't come through for us, that's one thing probably that could apply to and unfunded mandates that in this core, that's really a concern. It should be for all of us. We don't know if the state is gonna fund it, but it's not unusual for those so-called unfunded mandates to come down to be implemented, to the programs to be implemented by the county, but not funded by the state. And it creates some emergency financial situations that we have to address. Thank you, Supervisor McPherson. Any other comments or questions for members of the board? Mr. Chair, I'd just like to briefly make a couple comments on items on consent. The board, some years back moved to a consent calendar. We used to have all of these items individual, but, and it is definitely more efficient, but sometimes that we're missing and making comments about some of the great work that these departments are doing. I wanted to acknowledge a couple of departments on today's consent calendar, in particular the County Council team, our County Council, Jason Heath is outstanding. And I recognize that it's not a very forward-facing department for many people in the community, but without them, we wouldn't have done as well as we did throughout, not that we're out of the pandemic per se, but throughout the pandemic, the leadership that Jason and his team have taken on the hospital purchase, the leadership that our land use attorney Daniels is wet and some others have taken on some of the recent land use revisions and all that state housing code changes. And then there's others within the team, Jordan and Melissa and some others that have been working on ensuring public access for trails and some other issues that we have throughout the counties. I mean, really, these are people working behind the scenes, but just doing nothing but the public good. And I just wanted to acknowledge County Council, one thing that I believe is that the council can be both an EL and an IL and the fact that they are always counseling us on the appropriate approach, but also helping guide us to a longer and better outcome.  And I recognize that Supervisor McPherson made an acknowledgement at the CAO's office in their budget, relatively small budget in the scheme of things, but we need that entire team to really steer the shift. The innovation and the changes in culture overall have been outstanding over the last few years and it's a really great team. There's a lot of talent and people that I'm looking forward to as time goes on, taking additional leadership roles within Santa Cruz County and the organization. And the clerk of elections, we had a transition of a long-term county elections person. Now we have Trisha Weber. We had a seamless election this last time. I mean, maybe not the turnout that everybody in the world was looking for, but it was a seamless election that's not seen across the country necessarily. I think that sometimes when there aren't problems, we don't take the time to acknowledge all the hard work that's happened behind the scenes. I know that Supervisor McPherson, who served in a statewide level in this capacity, can tell you if it weren't for these at the county level, if it weren't well functioning, we wouldn't have the type of democratic process that we have. I'll just close on information services and look, I mean, we've done more, I think on it, and then there's the technology fund further on. We've done more on our technological advancements in the last 12 months, and then we've probably done in the last few years, and I think that there's been a lot of transition there, but there's a lot of competing interests within that department of a lot of pressures from the Greater Silicon Valley area of innovation, and they've always been able to, A, keep us safe. We're under constant attack from outside forces, even at the county level, as you can imagine, but they've also been able to retain top talent that really helped this county innovate and provide the outward facing. The work that Mr. Pimentel was talking about in the budget, all this takes an internal team to do that kind of work, and so an acknowledgement on that. Thank you, Mr. Chair, for those comments. Thank you, Supervisor Friend. Any other comments from members of the board? All right, seeing none, does any member of the public wish to comment on the consent agenda? I guess we did that already, if that's right, I'm sorry. All right, and then at this time, a motion would be appropriate. I'll move the recommended action. Second. Motion by Supervisor Kinnerty, second by Super... Sorry, my supervisor, for Kinnerty, second by Supervisor Friend. Any further discussion? Seeing none, clerk roll call vote, please. Supervisor Friend. Aye. Coonerty. Aye. Chappett. Aye. McPherson. Aye. And Koenig. Aye. The consent agenda passes unanimously. Thank you. Then before we move to our regular agenda on item seven, we'll take a short recess until 1055. Now resume budget hearings for the Santa Cruz County Board of Supervisors and we'll proceed with item seven, although first to clerk roll call, please. Supervisor Friend. Here. Kinnerty. Here. Chappett. McPherson. Here. And Koenig. Here. Chair, you have quorum. Thank you, Your Honor. Do you see Supervisor Chappett coming now? So we'll just give him a few seconds to join us. All right, then we have resumed. Supervisor Chappett, are you present? All right, we'll take that as a yes. We'll proceed with item seven to consider approval of the 2022-23 proposed budget for the Human Services Department, including any supplemental materials and take related actions as outlined in the reference budget documents and as recommended by the County Administrative Officer, representation on this item. We have the Director of our Human Services Department, Mr. Randy Morris, Assistant Director, Kimberly Peterson and CEO, Analyst David Brown. Take it away. Okay, thank you, Chair Koenig and Board and members of the community listening. As Chair Koenig stated, Randy Morris, Human Service Director, honored to be here with our Deputy, Kimberly Peterson to my left and our CAO Budget Analyst to my right who for the community who does not know this does a tremendous amount of work behind the curtain, Dave, in helping all things budget and all things Board action. So it's really nice to be sitting next to you. So I present this budget. In front of you today is a almost $174 million budget presented from the Human Services Department and as was discussed earlier a number of times and as passed in the Consent Calendar, what is not in today's presentation is the $4.8 plus million of our core budget that is intentionally not in today's presentation because that is being deferred as passed by your Board earlier to be bundled with the core presentation next week. So the full budget and policy issues and decisions can be made all at once next week. Before I begin this presentation, I just wanna take a moment. This is my third budget presentation. I've been here two and a half years and like many human services directors, I am one who professionally promoted through the ranks delivering direct human services in County Government, California, but have never directly supervised or worked within a budget office. So having been here two and a half years, every year that passes, I just more deeply appreciate the incredible work of our Human Services Department Fiscal Office. And I just am coming to understand more and more how much work they do that goes unrecognized. So this budget in front of you today is due to the hard work of the HSD Fiscal Team and Kimberly and I just have the pleasure of giving the presentation. So thank you to the HSD Fiscal Team for all of your work to help us give this presentation. So you'll see on the right of the slide that this is our agenda. We're the first department giving a presentation today and this is the first year ever as discussed earlier by our CAO and our CAO budget manager that we will start with a department online overview. That will be provided by Kimberly Peterson, our deputy. And the purpose of this is to really invite the community, your board and your staff to really look at this new exciting tool that works to demystify the complexity of these budgets and then really invite the public to sort of look more closely at what's in our budget. We are a big complicated budget and anything we can do as public servants to make it more understandable to the community the better if this is your taxpayers money being put at work to help this community. After Kimberly is done giving an overview and walking through some of the online tool will be turned back to me and I will go over the proposed budget. I will particularly then spend some time highlighting some significant federal and state and local changes that impact our budget and our policies. We then have a couple of standalone slides to talk about one of the most visible divisions in human services and that is the housing for health division because all the work we're trying to do as a whole county family and community embedded in the human service department to address the vexing issue that is very complicated and that's homelessness and unstable housing in our community. We're then gonna close out with linking some of our successes in our operational plan objectives. Despite COVID and the complications and vacancy rates we have made some good progress in our operational plans and wanna end intentionally with those positive notes and then close out the presentation by requesting your board to approve the recommended actions of our budget. Before I turn this over to Kimberly to go through the online review I wanna take this opportunity to share my almost three decades of working in county human services, a few reflections that I've had working with community, with advocates, legal and lay, consumer groups, elected officials. It is a really complex endeavor to explain a county human services budget and say how does $174 million turn around and help people? And so I just wanna share three things that strike me. Hopefully these items are helpful to sort of digest and hear what we have to say and make this meaningful. The first is I wanna talk briefly about something called leverage. We are unique in human services along with health and a few other but the majority of departments that bring a budget forward to a county board of supervisors in California are bringing forward local general fund money and saying please board approve this general fund money and distributed this way. And there's a tremendous discretion of the county board of supervisors how to purpose that money and how to prioritize within competing priorities.  And those dollars are made in different legislative bodies. And that's at the federal Congress and Senate and in the state legislature and included in those decisions are much of the regulations and direction we get. So what's in front of you today is that full budget, including the 11.5% that is general fund and the vast majority of that budget is actually mandated match to draw that federal and state money. So it's a unique moment for a human services department to come to a county board to say basically please approve what the federal and state government tell us you have to approve to draw 88.5% on the dollar. And I just recognize in my career that's actually a unique moment that most county departments don't manage. The second observation is an extension of the federal and state mandates. I sort of had my aha moment some 15 years ago when I realized a lot of the community does not understand that there is reasons behind why such a large portion of county human services budgets are our county workforce. Federal and state regulations prohibit the contracting out of most of the service we run. We are directed to take that money that the federal and state government gives us and we are required to have that run through county workforce. We're prohibited from contracting out most of our services. So I share that because we often get asked why don't you contract out? It's more nimble if we deliver the service to CBOs and that's not a local decision. That's federal and state regulations that govern our work. And I just wanted to make sure people were that because I don't think a lot of people were and it clicked for me somewhere in the middle of my career. The final statement is my segue to Kimberly to oversimplify this complex budget. I recognize that most of the way the human service department looks to the community is not the way our budget is organized. And I'm going to give you two quick examples. Most of the way the community sees the way the human service department is run is how we deliver services to the community and they are organized in divisions. So we have a child welfare division. We have an employment and benefit service division. Dealers CalFresh and MediCal and CalFresh and more. And then we have adults and long-term care division programs like IHS and APS. So that's the way the community often sees us. But when you look in the budget the budget is intentionally organized differently to prepare for audits to take money that comes onto us and in ways that are called budget indexes. So these are two different languages. So I wanted to give you two examples that Kimberly will share. First is the social services budget index or budget division. That is actually a clustering of all the staffing costs tied to those three divisions. I just described and they get dropped into this one budget division called social services. So that looks differently when you look at it from a budget perspective. Second, you will see a budget index called entitlements. Those are the cash grants and money that we deliver to the community in all of those divisions like in the foster care division payments to foster parents into adoptive parents in the EBSD division, the cash grants under cow works and general assistance. And in the adults and long-term care division the in-home supportive services program that pays wages and benefits to in-home caregivers. All of those are clustered together in one budgeting index called entitlements. So I just share this with you as you now are gonna hear from Kimberly Peterson that when you look at the budget online you will see budget design, budget structures and it doesn't quite directly align with the way our org chart looks. And hopefully that framing will help. And then when Kimberly turns this back to me I will speak more about how our services are delivered to the community. So with that said, I turn this over to Kimberly who walks through the online guide. Thank you. Thank you, Randy. So what you're seeing here is the landing page of the human services department budget. Starting with our mission, we strengthen the community by protecting the vulnerable, promoting self-sufficiency, alleviating poverty and improving quality of life. Our motto dedicated to making a difference is embedded in everything we do. At the bottom of this page you can see that in doing the snapshot of our expenses and revenue, a main driver of the reduced expenses, revenues and staffing is the demobilization of the COVID-19 shelters and the associated pandemic related funding. We'll provide more detail on that later in the presentation. And scrolling down a bit further you can see the budget structure of the department as represented under the heading divisions. And as Randy touched on, due to the various funding streams for the human services department, the budget structure is distinct from the operational structure. Our budget structure is categorized as social services, entitlements, housing for health, workforce innovation and opportunities act, veteran services and new for us this year is public guardian. Our operational structure is how our staffing is organized and how we provide services to the public. And as Randy mentioned operationally, most of our services are provided under the umbrella of social services. Under social services, we have four main operational divisions. The first is adult and long-term care services which the public may identify as having a role in addressing elder abuse and facilitating and home support services. Adult services is also the operating division for veteran services and public guardian. Though each of those functions have their own budget category, their work is integrated into adult services. Second, we have employment and benefit services which the public may know as providing CalFresh, Medi-Cal and Cache Aid as well as employment support. When someone calls the call center, they are calling EBSD. The employment and benefit services division is also the operating division for the WIOA or Workforce Development Board which provides services to job seekers and employers. The WIOA also has its own budget category. And the third operational division is family and children services which the public may refer to as child welfare or protective services. And then lastly, we have administration and administrative services which is the administrative backbone for contracts, finance, IT, organizational development, quality improvement and planning and evaluation. Housing for Health is the only operational division that also has its own budget category though its work intersects with every other division. And entitlements is a unique budget category. It's the second largest budget category with zero staffing. And that's because as Randy mentioned, entitlements represents the cash assistance payments to a particular population. General assistance is Cache Aid for single adults. GA is a state mandated program but with zero funds provided for its administration. That funding is 100% general fund dollars and counties have discretion in how to design their GA programs. How to go Oracle Aid includes those Cache Aid payments for CalWorks clients which is eligible families with children under 18, foster care payments and payments to those in-home support service providers. So now let's transition over to look at personnel details. This shows the staffing across the entire department the chart on the left is a visual graphic of our staffing distribution by budget category. And as just stated at the start of this, budget categories are based on funding streams and are distinct from operational divisions which are how we actually provide services to the public. And you can see very clearly that the bulk of our staffing is under the umbrella of social services which includes that adult services, employment and benefits, family and children's and administration. Some of the services such as WIOA and public guardian are shown separately due to the budget structure but as previously stated, they operate within the other divisions. On the right of this webpage, you can view staffing by budget category or by job classification. It may stand out to you that there's a net loss of 27 positions in the overall budget. The decreased staffing is due to sheltered demobilization offset by increases to mandated services, housing for health and administrative infrastructure. And more details on our staffing changes specifically will be provided during the presentation. So then finally, we'll look at the budget details page. And on this page, the public can view the department as a whole or they can drill down by budget division to view details of each budget category. And then you can scroll down further on the page to where it says description of changes. And there you can scroll down to see details of the expenditures, revenues and staffing changes for the various budget categories. So with that, I'm now going to turn it back to Randy for more detailed information on the changes within our budget, including staffing changes. Thank you. Thank you, Kimberly and Dave for helping us toggle through that. And again, I just want to underline appreciation to the CAO's office for creating this tool and really welcome and invite the community giving us feedback as you look at this tool because it'll be an iterative process. And we hope that this helps you translate a little better and a little more detail with a little more transparency this very complex budget, which I will now pivot to taking a little bit of time to share in more detail. So this next slide gives a high-level overview of the major changes from current fiscal year to next fiscal year broken down by staffing, our expenses and our revenues and on the right, a bit of an in and out. So in the left column, you can see the sort of increases coming in. On the right column, you can see the things that are going out. And as Kimberly said and is actually mentioned by our budget manager, Marcus, earlier today, our major swing factor is we unlike most counties in California who ran a COVID shelter system, we ran those programs through our County Human Services Department, including adding staff to our department through first extra help and then limited term positions that were in our budget. And that's why the demobilization of the shelters leads to a net reduction of positions of 27. But what I will spend more time in later slides talking about is these in, these expansions, but when the net total is there is a more of a reduction than a gain, but I will walk through the gains in a little bit. This next slide is a summary of our supplemental budget. Our CIO, Carlos Placios mentioned in his introduction that this budget includes our supplemental items. This is a technical action in County budget, which is when the Human Services Department forwarded its budget to the CIO and it was made public initially. We after that fact because of new information that came in supplemented that budget with this action called supplemental and just wanna take a minute to make sure though disclosed to the public for those who watch closely what was submitted and was now submitted, these were the changes. These were three groupings of staff changes. The first as Kimberly mentioned in dialogue with the health service agency over the last actually two years we are transitioning the public guardians office from the health service agency embedded in the behavioral health division to the adult and long-term care division of the Human Services Department and that transfer includes seven staff that will now be moved into our budget. Just so the community is aware this was very intentional and thoughtful policy discussion with our healthcare partners. The public guardian office includes sort of two operations. One is the mental health courts and the other is the probate court older adults both of which those actions can lead to someone having their civil liberties temporarily suspended and then overseen by the public guardians office and it was seen as a much better alignment of services to have this office embedded in our adult long-term care program. The second change was housing for health. I wanna take this opportunity to thank my supervisor and our CEO Carlos Palacios who has such a great history of general government and understanding housing, affordable housing and he pulled a team of us together and the end result of that was an agreement to add one position to sort of work within the housing for health division to sort of really focus on grants and affordable housing issues for the population served in health and human services. So that action completed internal within the county family and we submitted a supplemental item to add one position to help focus on this very important work looking forward. And the last is child and family teams. This is a federal and state mandate of our foster care division that decisions super serious decisions confronting families when the foster care system is involved in a family's life need to be done with a team having inviting family and friends to a meeting facilitated by a professional. That function in Santa Cruz County was handled by the health service agency and we made a decision again in partnership with health to have that move within the child welfare division. And so those staff transfers are also part of the supplemental action to move those positions within the human services budget. So this is a bit of a complex slide which is diagnostic of the complexity of what we do. On the left column is a list of some major changes that are impacting direct services. And on the right column are a listing of sort of system changes that are impacting what we do. But I do wanna take a minute to share why we intentionally put this picture of equity in the middle. We are in a moment in time in our history. We just took on Juneteenth as a holiday that just passed for our union represented employees. We've had a lot of discussion about this. Your board has declared racism a public health emergency but these are all just words unless you really put to action trying to make sure that what we do in government is helping address inequities. But government longstanding has contributed to inequities. And when human services department does not do its work well, we actually can exaggerate, exacerbate and be part of the problem. If we do our work right with $174 million we have we can help move the needle in the right direction to lessen the inequities that exist in our community. So basically everything we do is from the lens of equity and we welcome lots of public dialogue about this and public meetings and our meetings with the community to make sure we are doing what we need to be doing. So with that said, I'm just gonna briefly go through this list. If you look on the left column, the first is aging and disability. Anybody paying attention to demographics actually worldwide in this country, particularly in California and certainly in Santa Cruz County the aging population is outpacing the children's population that just crossed a threshold when you look at the trend charts. So we have a growing population of older adults and people with disability in our community. And what we need to do about that is a very serious issue and an important mission for the human services department. So there are actually three actions occurring, major changes that are occurring. One I just mentioned, the public guardian office moving over. The second is thanks to the state legislature there were two act legislative actions in the adult protective services program, both of which led to expanded revenue and expansion in our staffing, which shows up in our budget. The first is a three-year pilot at the state called APS Home Safe, which was legislation to see if adult protective service programs in California, if given new money could when investigating a report of abuse and neglect over an older adult or a dependent adult, if they were at risk of losing their housing and becoming homelessness homeless, could this APS Home Safe funding be made available to help that person keep their housing? Santa Cruz County was one of the counties that was part of that three-year pilot and the legislature just made this permanent funding, expanded the funding and we are having an increase in our budget to expand that work, which is very important. The second is the state legislature extended who in California is eligible by definition for response from the adult protective services program that used to be 65 and older and is now 60 and older and with that increase in eligibility came additional revenue and added up these two APS expanded revenues add to budgets that are in our position with new state dollars. And the last under aging and disability is our in-home supportive services program. There was a $2 wage increase that went into effect thanks to action by your board and thanks to our CAO and human services that held some money aside to bring to the negotiation table with the union representing the providers. It is still not paying enough but it's actually now one of the highest paid wages in the Bay Area, thanks to your board's action and that wage increase. I will speak soon about changes to the Medi-Cal program but the in-home supportive services program is a Medi-Cal program and California has passed legislation to make immigrant undocumented individuals eligible for Medi-Cal, which is anticipated to make more people eligible for in-home supportive services. And last, we are tracking very, very closely of an important issue that currently is not funded if we're waiting to see how the state budget settles and that is an issue confronting all of California which is when a care provider scheduled to go into the home to help an in-home supportive services consumer when their caregiver cannot go into the home we do not have a very effective backup system in California. So there is legislation on the table to fund a more robust backup registry system and if that passes that will be a very meaningful change to help our very vulnerable clients in IHSS. The next item in the child welfare system, this is not getting a lot of tension given COVID and other issues but in the child welfare space one of the largest pieces of federal reform in the last decade is been passed. The state government is negotiating with the federal government how to enact this federal legislation and to oversimplify what this means. The act is called the Families First Prevention Services Act FFPSA that people are reading this and what this essentially means is currently federal funding for foster care or child welfare programs. You only get federal money if a child is brought into care and the more expensive care they are put into meaning the more distant they are from family care like a residential treatment program the more federal money you're given. If that child successfully returns home you lose that federal money. So this act actually creates an incentive for child welfare systems in the country to put their money more towards prevention and less of their money in the back end and higher cost care. So when and if this goes live in California we will have a very meaningful set of reform in the child welfare division throughout California and here in Santa Cruz. Coworks, thanks to our state legislature they and this is a very small and nuanced issue but one that is gonna lead to more Santa Cruz County residents being eligible for coworks and that is there was a increase in a very technical term in income deduction. So when people apply for coworks there is a whole regulatory process that's played out and the eligibility is determined and until this change you had a $90 deduction basically available and if you went above a certain amount you were ineligible for coworks. That has been increased fourfold to a $450 deduction. Small regulatory talk but what that means is more people in Santa Cruz County will be eligible for coworks. And when they were enrolled in coworks they then become eligible for a host of other federal and state funded programs like transportation, childcare, diapers, drug rehabilitation, housing, utility costs. So it's a very meaningful change that will increase who's eligible for coworks. The next local initiative Thrive by Three which was presented to the board a bit over a month ago a very celebratory energy with our first five our health agency, our nonprofit community and we have agreed under your board direction to expand who is eligible for what was Thrive by Three to Thrive by Five. So we will expand that work. The state legislature has added a lot of money which makes this more possible and we look forward to moving this effort forward next fiscal year. Medi-Cal, some very significant changes in Medi-Cal first is undocumented immigrant population very meaningful issue here in Santa Cruz County. California, due to California legislation has been expanding the immigrant populations eligibility for Medi-Cal and effective May 1st of 2022 just a few months back. Now anybody who is 50 and older who is an immigrant is eligible for full scope Medi-Cal and what that means in practice is before this change you are only eligible for something called restricted Medi-Cal which basically played for an emergency room visit and there was no funding to pay for preventative services and the services provided for community health clinics unless it was on the local general fund dime for the Medi-Cruz local indigent program. And effective in January, 2024 the state legislature has promised to make all immigrants eligible in California for a full scope Medi-Cal. So these are two very meaningful changes in the Medi-Cal program that will go forward this next fiscal year and beyond. And then the last one is the public health emergency led to a number of waivers in California and one of them in California was that all people on Medi-Cal were not required to submit paperwork to be redetermined to be eligible for Medi-Cal. Every year somebody on Medi-Cal has to go through a redetermination and that was waived for the last two years. We have about 20% of our Medi-Cal clients lose coverage during redetermination and during the last two years nobody lost coverage. So with the ending of the public health emergency this upcoming fiscal year we have a lot of work to do with our community partners. We've been working with the health improvement partnership, our local managed care plan to try to make sure that everybody on Medi-Cal does not get dropped during the redetermination when for the first time in two years they have to submit that paperwork. I'm gonna save the housing for health to some standalone slides next but tremendous amount of reform opportunities happening there. I'm now gonna switch to the right side of the slide and this is the most dense slide and I'll carry through the next set a little quicker. So system change, master plan on aging. Your board before the master plan on aging and action of Governor Newsom was passed already directed the CAO's office, the HSD department and our local nonprofit area agency on aging to work together to apply to be an age friendly community. That effort was embedded in Governor Newsom's executive order that said we need to take this demographic change seriously in California and prepare for this fragile safety net that needs to be better organized and better resourced by creating a blueprint called the master plan on aging. So we are working closely with our area agency and aging and human services with our CAO and with two board members, supervisor McPherson and friend who sponsored that original board direction to apply to be age friendly on standing up a governance structure in our county to move this effort forward. The next is the shelter demobilization that was mentioned many times. I just wanna highlight some really difficult figures to digest. We had over 1,000 shelter beds in Santa Cruz County. And if you remember the start of the pandemic over two years ago, it was thought we were gonna contact trace our way out of the pandemic. So the federal government basically threw a bunch of money in the country to just help people who are housing insecure or actually literally homelessness to get them in shelter basically so they would not contract COVID and the thought would be really quick. So two years later, this money came on in not to help people get into shelter and then move on to housing but just to protect them from getting COVID. That limitations of that money is a byproduct and quite a lesson learned of if you just put people in shelter with no services, you end up really stuck with what to do when you get to the other end and that money goes away. So those 1,000 shelter beds in the last of our shelters are being demobilized at the end of the month is translated until we are back to where we were before COVID which is under 400. And that 1,000 beds that stood up were two years of $50 million of funding which meant we had over $100 million of new federal and state money. And the harsh reality is that still did not effectuate what this community sees up to and including the encampment behind this building. So it is a lot more than having $100 million of federal money which we'll talk about later on the housing for health effort and how complex this issue is. Disaster preparedness, this community suffered through quite a tragedy with the fires. I wanna remind your board and the community listening that in California, the human services department and county government is responsible to provide mass care and shelter services. What has really surfaced is two things I wanna highlight about disaster preparedness that came out of the CZU fire experience and the many others throughout California that predated and have been since. Number one, human services department are mandated by federal and state law to provide disaster response to our clients and our capacity to provide disaster response to our own clients competes with our responsibility to employ our staff to provide mass care and shelter for the entire county. So that response to clone ourselves and do both has come up in state legislative discussions that we really need to fund county human services departments to be able to provide what we call continuity of operations and help all of our clients in the disaster get support on top of the mandate to help the community. The second is I wanna highlight what is called AFN, access and functional needs. California has recognized in the last five years of fires that the population most likely to unfortunately die in a fire or to not do well or to stain serious injury are people with access and functional needs are disabled clients, our older clients are people in wheelchairs. So we have a lot of work to do as a human services department and as a county to figure out how to resource ourselves well. Thank you to the OR3 office and the leadership of your board and the county for standing up OR3 and we have a lot of work to do ahead in disaster preparedness on these two points. The next is the Westridge office. We really look forward to having our South County staff which is a little more than half of our staff who serve where poverty is most organized our community in the Southern part of this community to be moved into a county owned building. We have an opportunity to consolidate our staff into one building and we are working closely with a number of people in the county to stand up the Westridge office as a meaningful piece of work and something we really look forward to if we can keep on the timeframe in about a year plus from now to have our staff move there. Second to last one is Cal Aime that was mentioned in our budget manager Marcus's presentation this essentially and I'll say a little more about this in the housing for health slides. This is a major piece of reform which is the way in which people who are enrolled in Medi-Cal get services in the community is mostly delivered by a local managed care plan and in our community that's the alliance. And so this is the most major reform effort for how Medi-Cal services are delivered in our community and we are working very closely with our colleagues in the health service agency and in the local managed care plan of the alliance to move this forward to best serve the clients that we serve in human services. And then the last is a major change in the state of California is our system that we use to provide services and keep in a database are 90,000 clients that are served through Medi-Cal and CalFresh and CalWorks is called CalWin and the federal government mandated that California consolidate from what used to be four systems to now two down to one called CalSauce. It's very boring government talk to people outside of this world but I have to tell you to move 90,000 people from one database to another where the tools and the engine helps determine who's eligible for what is a massive change and that we have a number of people in our department and throughout California who run human services gearing up for this change and we are scheduled to go live and shift to this new system during this upcoming fiscal year. So that was a lot but that is the nature of human services which we respond to these major changes. This next slide attempts to take what Kimberly presented when you were looking at the online tool and looking at the staffing changes and break them down by the operating divisions. The first is I wanna recognize the administration division and if I can just use a hopefully a simple analogy that will resonate with you. The human services department used to be a car of a certain size with an engine that function very, very well, very smooth machine. My predecessor and her predecessor ran a very good system and the administrative backbone of human services I call it the engine of that car function very well. The stress of the fires handling the COVID shelter system taking on the housing for health office and the staffing challenges we have and the vacancy rates that sort of our workforce issue throughout our country. It has really highlighted that our engine needs to be upsized. We basically are now gone from a car to a truck and we don't have the administrative engine despite the amazing heart and soul of all our administrative staff. And so you will see basically a right sizing in the budget to invest more in our contracts office or fiscal office or analytics office to be able to catch up and right size our engine. So I wanna thank our administrative staff who has been bearing the brunt of that undersizing and we appreciate the CAO's office supporting our request for a number of these positions in the admin office to be able to catch up and right size. Direct services divisions. I wanna start with recognizing employment and benefit services is not listed here. There are no positions in the budget and is that a byproduct of tracking federal and state funding? We actually have six unfunded positions for EBSD in our budget but they don't show up in the budget presentation because we're waiting to see how the state and federal budgets land. And then we will go forward and fund them as long as we have new revenue. In the adult and long-term care division mentioned the supplemental action of the public guardian. We mentioned the APS expansion and I do wanna highlight the one senior human services analyst because this position is being added to the division to help support our master plan on aging efforts and also to be able to work more closely with our OR3 division on the access and functional need clients in a disaster. So great appreciation to the CEO's office and my team for finding the funding to be able to add that capacity. The family and children services division is a combination of the transferring the child and family team functions and also the federal and state government added some more money to county child welfare divisions to expand investigatory capacity in our emergency response division. And then lastly in housing for health I'm gonna share a little bit more about the next slides and I just wanna end on this slide to say that program manager working title is the one that I talked about earlier where we added in the supplemental to have more capacity to apply for grants and to track grants and to work on affordable hou