Budget Committee - Regular Meeting

I drive this morning. But, if we are all here

Yes. Supervisor of all business assisting. Okay.

Again, my apologies. Okay. With that, should I call us to order, Chris?

Let's do it.

Okay. Let's do it. Alright. It is Thursday, 08/28/2025. It is 09:10AM, and we are gonna call to order our special meeting of the budget committee of the Monarch County Board of Supervisors. We have, I believe, three locations for our meeting today. The Schilling Place, it looks like Saffron Room at Schilling Place in Salinas, Broadway Street, the district three supervisor offices in King City, the district four supervisor offices in Marina, and our Zoom location where most of us are actually calling in from. We will call to order our meeting and ask if there are any additions or corrections to the agenda today.

There are none.

Alright. Well, that was easy. Is there anyone with us for public comment for items that are within the purview of the committee but are not otherwise listed on the agenda today?

And no public comment in the conference room, and I don't see any hands raised on Zoom.

Okay. Well, we always welcome public comment, and it's a great way to share your thoughts about and engage with the committee. But with that, we'll move on to approval of our action minutes from the meeting of May 21.

Good with me.

Okay. Any public comment on action minutes from May 21? Not seeing any hands raised on those.

No public cost.

Okay. We can then move on to our consent agenda. We have what is this? Looks like items two through Six. Two through six for consent updates, and there are staff reports included on the agenda for for each of those items.

And the board just a couple items. The board of supervisors did receive an update on the Monterey County sales tax that was measure AA. And I believe there were some last minute updates on the amount that has come in or is projected to come in on that that were verbally updated yesterday at our board meeting. So we'll continue to receive those updates and some direction that was given at the board meeting. And other than that, is there any public comment on the consent agenda? Seeing none, I

I did have brief comments if I could, madam chair, on Go three

ahead.

Yeah. So on three and five, I just wanted to thank staff for the sales tax update. I thought that that was really informative, especially given the broader economic picture and the call out of specific things like, John Deere RDO and their sales, specifically seeing kind of a push through ahead of the tariffs and not expecting that to be a long term trend. So, yes, there was a significant increase, but especially that call out not to expect it ongoing was important to me. The other was an item five on the Nativity Medical Center key capital project report.

Just wanna call out for everybody here. I know we hear a lot from community about the challenges with emergency rooms across the county, and there is included in this report an update on the new mobile emergency room that's gonna be installed at Natividad. And so just wanted to call that out as something that's been planned for and a big change that's coming in a positive direction for Natividad Medical Center. And with that, happy to move consent or give my consent on consent, however you wanna get that done.

Your consent on consent. I'll I'll second the consent on consent, and I think we can move right along. We have

a we have a hand raised, Moria. We do. Yes.

It looks like it's yours. B o s Marie oh, sorry. Oh. Never mind. Okay.

I can't see the hands raised.

It's Moria Moria Lama Tain.

Uh-huh. Oh, Moira. Yes. Yeah. Perfect. I can see the hands raised now. Thank you. Thank you. We had a public comment from Moira. Thank you.

I am sorry. I was a little slow finding the button. I was wondering on

the sales tax update.

Will that be going into the general fund?

So we typically don't do engagement on public comment, but for the sake of answering questions, I think it's a good question. We did it is a general fund tax. However, the board direction that was given yesterday is that we want to, at least for the the current year, the direction was given that those dollars will be held and then spent on some very specific priorities for road improvements beyond the typical road fund priority above and beyond the typical road fund priorities and also go into parks and parks investment, and there was a list of other priorities. I can I can send you the report, Mariah, from Michigan?

I'll I'll I'll look it up on the legislature. Thank you.

Yeah. For sure. So exciting. And then that will be revisited on an annual basis.

Excellent. Thank

you. Yeah. It's a good question. And another hand just came up from Rupa Shah. And this is public comment on our consent agenda, to be clear. Rupa?

Yes. Good morning. I was trying to push the the button for the, yes, camera. Just wanted to clarify that the sales tax update report provided includes the general sales tax as well. So if the board is interested in the measure AA revenues and tracking of that information, that would be separate. Yep. Thank you. Yep. Alright. Thank you.

Thanks. Alright. Any other public comment?

No. Their hands raised.

Alright. We'll close that and move on to our scheduled item our first scheduled item, which is number seven, update from the health department clinic services bureau on conversion of a stand alone clinic on the Natividad campus to intermittent inter intermittent clinics.

Good morning, supervisor. I would ask you. Supervisor Lopez, county officials, members of the public. My name is Prashant. I'm the bureau chief for Clinic Simpsons Bureau, and I'm joined by Melchior Garcia, who is a finance manager, Elsa and Jimenez, who is the health department director.

Back in April, we went to the board of supervisors to seek approval to convert four of our Laurel campus clinics as an intermittent clinic to one of our parent clinic, which is a neuro clinic. And for the sake of simplification, as an FQC, we get paid by the visit. It's called the PPS or prospective payment system, and all our clinics have different rate. We were in a situation where our PPS rate for my major cathode clinic was very low, around 220 or $230 per visit. And early this year, we were able to successfully renegotiate a higher rate for a needle clinic around $540 per visit.

We had an opportunity to convert some of our clinics and assign that clinic to the higher PPS rate clinic, and we reached out to DCS and the state with that proposed a proposal to convert these clinics to the intermittent status. We are happy to report that the project is almost complete. DCS, Two departments of DSCS worked on this project, the ANI, the audits and investigations department, and provider enrollment department. And we received the confirmation from DSCS on August 15 that our project has been approved. The new rate for this clinic has been updated in the provider master file.

And early this week, we released the claims, which we were holding. Approximately $9,000,000 of claims were released, and we should receive those revenues in next three weeks. So moving forward, those clinics are functioning at forty forty hours per week as a intermittent clinic to neuro clinic. And we have resumed billing, and we will now receive those reimbursements at a higher rate. Mentioned in the board report, in this fiscal year and moving forward every year, we are anticipating anywhere between 18 to $20,000,000 of additional revenue due to this project. Happy to answer any questions or comments on on this. Thank you.

Thank you. I and we'll go to our supervisor Lopez first.

Yeah. Thank you, Prashant. You know, in reading this report last night, I only had one question that kinda sprung out of me. The way the report was written really talked about May. Right? And it talked about numbers coming in from May and those being held. So my question is about June, July, August. Right now that we're moving forward, are we already seeing those reimbursements at the new five forty one level, or are we anticipating those to have to go through some sort of reassessment and then increase as well? It was just the way the report was written that felt a little

unclear. Thank you. That's a great question. So DSCS requires that once we start the process for intermittent, they they advise us to hold the claims until the project is fully approved. So effective date was five five for the intermittent clinics. And and so once the DSCS approved us and they informed us that the new rate has been effective in the system, we started releasing those claims. So moving forward, from May up until now, all all those claims will be reimbursed at a higher rate of $541.

So we're always in about a four month arrears, three month arrears in terms of that time frame. Is that a good assumption? No. I see no churn on it.

We will be in a three three weeks sort of, like, a time frame. So we get once we submit the claims, we get reimbursed in two to three weeks. So so in next three weeks, we will get paid for all the claims from May up until it August. And then we'll forward we will start our regular AR cycle. We send the claims, and we get paid in two to three weeks.

Perfect. That's the only clarity I needed. Thank you, Prashant. Thank you.

But if I if I may, I had my hand and then I lowered it. Good morning. Elsa Jimenez. I just I wanna commend the staff for the level of effort they had to input into this and to be able to get our our rate approved, our adjusted rate approved, and then our intermittent clinic status. It was not an easy feat.

And, now we'll be able to hopefully be able to recover more of our actual cost of operating primary care clinics. And I just wanted to remind the budget committee as we articulated back in May when you all gave us a direction to be able to implement that, we will be over general fund last fiscal year because of the, our inability to be able to bill and receive revenue for services delivered, the last part of the year. But as Prashant just indicated, we're in the final stages of getting approval of our ability to be able to submit claims, and we should be receiving that revenue shortly thereafter in the next thirty to sixty days. And so then, we'll work with the budget office as that means of of repaying the general fund for our overage in fiscal year twenty five.

That's significant. Also, thank you for reminding everyone of that, and I think it, is appreciated, and especially given all of the budget realities and challenges that we're facing. So thank you for that. And for all of the work that goes into just submitting for these the the the the changes and the the rate the the pay the payment rates. It's it's significant. Thank you for the update. Did you have any other questions, Chris?

No. That was the only one. I think I'm ready for public comments, see if there's any. Thank you.

Great. We'll open it up to public comment or any other comment from our our our county team who's with us today. I'm not seeing any hands raised on either side, so we can bring it back to the board. Milford, did you have a comment, Milford Garcia? I saw your hand raised at one point.

No. I was just gonna elaborate a little bit on the Okay. On the visits that we're gonna bill out, but Prashant answered that question already. So

Fantastic. Mhmm. Alright. Wonderful. This is good. Okay. But if if I if I I'm I'm happy to move this forward and approve it. Does this need to come to the full board for for approval, Elsa, or are we I'm just pulling up my my details here.

I I don't think it needs to go back to the full board, and then, you know, I I looked to the budget committee to see if we even need to come back here and present an update in in in the coming months.

If I could, madam chair, just given the environment and everything that this particular effort has got garnered in attention from the board, perhaps it would be best just to ask for that a memo be sent to the full board just because it has been highlighted for us as a whole, and I think it'd be good for them at least to be aware. I don't think it needs to be a timed item at the board or even consent, but just letting them know that you've met that bar that you set for yourself and your team. You guys pulled off this incredible feat. I think it warrants a memo to the rest of the board.

That's a great great idea. I support that.

Okay. Great. And we can definitely do that, and I would want to have the cash in hand when we send that memo just to confirm that we've already been made whole. So it'll probably be a little bit, if that's okay with, you, supervisor Lopez, that we submit the memo once we've received the cash in hand.

Only if you do a jumbo check presentation to yourself, then I'll I'll just kidding. No. Yes. Absolutely. Good work.

Okay. Thank you.

Yeah. That sounds great. Wonderful. Thanks, Elsa, and thanks, Prashant, and thanks to the whole team. Alright. So we'll receive I don't think we need an action. We'll receive that report. Thanks for the update. And we can move on to item number nine, which is to receive an update on the enterprise resource planning the ERP replacement project.

It's actually number eight, supervisor.

Oh, I'm looking at an old agenda then. Okay. Sorry about that. So this is, I guess, number eight. I will change my agenda look then. Okay. Number eight. Received the n m okay. Sorry. Received the NMC Medical Center financial report on the fourth quarter.

Great. Good morning, supervisors and attendees. The following is financial results for the fourth quarter of fiscal year twenty twenty five, comprising of April through June, of of, of the quarter. The comparison is the the actual the actual quarter against the budget, you know, where revenues percent or, you know, dollars. All the expenses also exceeded budget by 8.2 or $8,500,000.

So altogether, where revenue that were higher than than expenses by $4,300,000, over the last, you know, fourth quarter. Where where did, you know, all those numbers, you know, come from? Patients that stayed on a inpatient you know, for inpatient services were actually fewer than budget by 5% or six patients per day. On the other hand, patient needing, inpatient services were higher than budget by 5% actually, by 3.6% or 82, additional admissions. On the ancillary services, imaging services, you know, making up from radiology, MRI, ultrasound, and nuclear medicine, you know, were higher than budget by an average of 15%, while also clinic visits, both specialty clinics and primary care visits were higher than budget by twenty three percent.

On and also a significant increase on trauma visits, both inpatient and outpatient cases. Actuals for the quarter were 5% higher than the forecast, budget. So overall, again, revenues, exceeded expenses by $4,300,000 over the 2025. And altogether, for the fiscal year, we're happy to report that the, the results, you know, a the the budget, you know, was was was balanced, you know, where revenues, exceeded expenses on the on the forecast by $11,400,000.0, while actuals, it came up to $1,900,000. Again, revenues higher than expenses.

And that concludes the report for the fourth quarter and the year to date financial results.

Thank you. Thank you for the report. We'll, go to Chris.

Daniel, just, no questions. Just a continued appreciation. I know we talk about trying to keep costs affordable for our residents. And when you see a budget come in so close to where you actually bend it, I mean, the size of Natividad's budget to be that close is really something that's impressive. And then year after year, you hit it nearly on the head. So I know that there's fluctuations throughout the year, but this result, I think coming in this tight and making sure that we're keeping costs as low as possible for our customers while providing incredibly amazing service at a level that I don't think any other public hospital in California is meeting is, impressive. So good work. Thanks for your comments.

Supervised. Thank you.

I I guess I do have a a couple of questions. I think watching the as we head into so this is sort of our quarter update, and and we came out of the Alliance for Health meeting yesterday where where so many of our residents in Monterey County are are Medi Cal members, and we're looking sort of historically at a a a reality where 25% of Monterey County residents were uninsured, you know, just just ten years ago or just just over ten years ago and realizing or a little more a little more. I guess the time moves to clearly, but prior to the Affordable Care Act and realizing that we're maybe headed towards a a reality that that may look more like that that historical that what what what we looked like historically and and all of the other changes that are associated with with HR one and and and what that what that may what the impacts of that may look like. I recognize this is our quarter report. But thinking about sort of moving forward, some of the key data points that I know we've always watched at Natividad are the the distribution of sort of who receivables are coming from and what the the timeliness of payments are with those receivables.

And so that last paragraph in the staff report around the that that are let's see here. That we only have such a small number of receivables that are over a 180 old, I think is one of those data points that that I'm looking at. And then also what what percentage of our receivables are actually coming from from Medi Cal or or Medicare. And so I think one of the questions that I have for you, Daniel, to that to the sort of larger point as we look at our quarters and we watch our quarterly reports, knowing that we're headed into these these sort of changing times. And you have a dashboard that we also watch.

But what are some of those dashboard numbers that you think are gonna be critical for the larger board and for the larger community to be understanding and watching over time that are gonna be the indicators of of of of of concern so that we can be aware of those concerning indicators before they become crisis indicators. We're telling the larger story of HR one and all of the the and and when you when you hear the the the impacts that that are coming over the next five years and ten years, if if if this all plays out as we expect, it is it is enough to make your stomach drop. But as we watch it play out quarter by quarter, I think it's gonna be important to have you know, what are the what are the five things that that are that all of us need to be watching so that we know and we can see it we can see the impacts in lifetime so that we know locally when to be acting or or we can be we can see very specifically how these impacts are playing out in our local at our local hospital and what questions to be asking.

So Yeah. I hope that was clear. And so asking you as you bring the quarterly reports back to us, if you can maybe identify what are three to five key indicators that that our Monterey County community can be watching at the TIVOT ad, as as as critical factors or critical numbers.

Mhmm. Yes. Thanks for the question, supervisor. I ask you. I I think irrespective of, you know, what's going on with the big, you know, beautiful bill, you know, throughout the years or every month, you know, indicators, you know, that are important, you know, to us, you know, has been in the uninsured, you know, the Medi Cal, you know, business.

What what in in a conceptually, this is what is called in our business, you know, the payer mix, the the types of, you know, patients that come through our system, you know, with the different types of, you know, insurance. And the reasons for that is because, every, the the largest, you know, five insurance groups, you know, they pay, you know, differently. But in the in this situation that we're gonna be facing over the next, you know, few next few years, the most, you know, important indicators is gonna be, you know, how many Medi you know, business we have. And very likely because of all the sit situations and events that are occurring, you know, with deportations and people dropping off, that Medi Cal portion of our business very likely will drop. And it is an important or key indicator, you know, to notice that.

And the reason for that is because as the Medi Cal membership drops, it means, you know, that, you know, our revenues our revenue revenue base is also gonna drop. At the same time, you know, even though people will be losing, you know, Medi Cal, you know, coverage, they still need, you know, healthcare, you know, services. So the other part of it is gonna be the the percentage of uninsured, you know, business, you know, the Nativity that, you know, will start, you know, seeing. And obviously, you know you know, we expect that that number, you know, will increase as unfortunately, and hopefully not to the levels of, you know, back in the, you know, over a decade ago. And part of the reason why that is significant, that indicator as people come in for services because it's critical to them, but they don't have insurance.

You know, we are obligated, of course, you know, as they come in through our ER in providing those services, and it is a cost that the county Nativity that, you know, will bear at no no, you know, no compensation or reimbursement. The third indicator also is the government funding. There has been many discussions already from Washington DC. The the the various areas, within the government funding, which currently we receive about close to a $100,000,000, how much of an impact is going to have in that bucket of dollars that, you know, Washington DC, you know, is targeting. And, of course, the last the the last piece of it, which is now unique to, you know, our business in the hospital, but I think, with any any business, you know, is the cost or expenses or cost, you know, for every patient that come through our system, you know, whether or not, you know, that cost per unit we can continue to, you know, manage.

What one of the good things, I guess, that we have right now is, you know, we have about a year or so, you know, to realign our business, because most of these cuts and changes, while gradually, you know, will move towards those things that we just talked about because of the of the impact, you know, from the big beautiful bill. But at least, you know, we have, you know, fortunately, about a year at the most of reprieval, in order to realign our business, you know, to the to what the future is gonna, you know, is gonna look like. In our organization with, you know, Chad and the and the administrative team along with management team, we started, you know, working, you know, towards that goal, in preparing, you know, this organization to to be in a better situation, whether it's reduction of services from programs or somehow manage, you know, the expense side of the equation. Because as you know, the revenue side of it, you know, will, at this point in time, change unless midterms, you know, unless there's a there's a from a political side, unless in the the midterm midterms elections, you know, is significant significant different than what it looks like right now, and and it has an, an immediate impact to what's been when to what has been recommended at this point in time in terms of all the cuts that everyone has, you know, heard, through the have heard, I guess.

You know?

Yeah.

So, anyways, hopefully, I was able to answer your question

Yeah.

Supervise Ranski.

Yeah. I think it's I think it's a it's a clear answer, and I think we're all talking about it here. And I guess what I'm looking for is, like, maybe just in in the report if there could be just called out and Sure. Like, a dashboard with some you know, just so that so that we can all be watching and and and with some kind of way. But, yeah, thank thank you. Alright. And I think this is also just a report, so we'll open it up to public comment for any public comment on this item. I'm not seeing any hands raised, but we will

No public comments.

Great. Thank you. We'll receive this report. And now move on to our thank you, Daniel, and thank you everyone at Natividad for for navigating and keeping things on track. I will move on to item number nine that I announced earlier, the ERP update.

Good morning, chair Askew and, supervisor Lopez, county staff, and members of the public. I'm Eric Chatham, chief information officer for the County Of Monterey. I'm going to introduce, Michelle Karim, our ERP program manager, who will walk us through the report out on our ERP replacement, project update.

Askew Lopez, colleagues, and constituents.

We're not picking up your mic well, Michelle.

Oh, no. Maybe.

Only there was someone in IT. Right, Eric? Just kidding.

I think there are some microphones in that room that pick up better than others. We've learned that.

Still can't hear you, Michelle.

Now we can't hear anything. Is there any audio in that room? Can anyone hear us?

I think she's working from I think she's working from her local desktop in the room.

Don't think she's in the room.

Okay. Got it. Moving to a better okay. Maybe

we come back to that item, supervisor.

Okay. Let's do that. Let's come back to item nine. We're gonna move on to item number 10. We'll go to our biannual I think it's this is item number 10. Make sure I've got it right. Item number 10 is to receive our biannual financial report for the information technology department for 2425. Is that you, Eric?

Yes. That's that's me. Thank you. Thank you, supervisor, Askew, supervisor Lopez, Eric Chatham, CIO for the county of Monterey. This is our year end estimated budget report. Rocio, is it possible to bring up the appendix or the exhibit that was attached? Thank you. Thank you very much. This is a little easier to walk through than the than the verbiage. So once again, overall, just to to start at the bottom and work our way back from the top, you know, our year to date, what we expect is what our our current under run for the for the year is about 1,270,000.00.

I will start at the top, though, just to kinda give a description of how we got to that number. Our budget for, operational expenses was about 11,460,000.00. We came in our actuals were actually hired about 13.35 for a variance of a negative balance of of 1,890,000.00. This is primarily due to, changes in our hardware maintenance and our software licensing and support costs and some of our utility and radio site cost increases. And a large portion of this is non budgeted customer purchase request, which is what you'll see farther down below, which is where we additional revenue shows up coming into the organization.

We do it basically, it's pass through cost where we purchase things, our expenses go up, but then it's recovered when the organization, reimburses us for the product that we purchased for them. Our internal, expenses for CIP, we had $1,700,000 for capital improvements. We came in at 1,680,000.00 for savings of approximately $20,000, with our total expense at the year end variance being a negative, 1,870,000.00. Salaries and benefits of a budgeted at $20,580,000 came in, lower at 20 about $20,000,000 for a savings of 561, thousand dollars. This is primarily due to savings due to unplanned vacancies.

If you look at our department, county income line, we budgeted at eight point, four approximately 8,400,000.0. Our actuals came in at about 10.3. This is primarily due to ERP reimbursements, increases in the fee structure, and the non budgeted customer requests that you saw in the above, which created our, overage in our expense line item. And then when you move farther down actually, I'm I can't see it on my screen, so I have to look up here. Apologize for looking up.

Our so with that, you know, our our year to date appropriations budget, we came in slightly higher at 661,000, and then we have external revenue that comes in from outside agencies outside the county that generated about 6.1 $612,000, giving us a total of 1,270,000.00 under run GFC. And I'm available to answer any questions.

Great. Thank you, Eric. And this was for the our twenties was for the year that just ended, the calendar year that just ended?

Yes. It is.

Yeah. Thank you. Chris will take it to you first.

No questions. Just appreciate the report and coming in under budget knows. Well done. I think as we come back to item nine, we'll we'll see additional ongoing challenges, but appreciate it.

Hello, everyone. Can you hear me now?

We can. So we we went to item 10, so we're gonna go back to item nine in just a moment.

Okay.

So bear bear with us. Yeah. Okay. Yeah. Thank you. So yeah. And so I'm I'm pulling up my my notes again here. Got it. So, yeah, is there any public comment on this item? I'm not seeing any hands raised.

No hands raised.

No hands raised. And I just I'll I'll just add. I think, Eric, I think that, you know, managing managing sort of across all county departments, you are in this unique position where your team works sort of touching the entire county and problem solving in ways that you're you're you're you're this umbrella agency serving serving serving serving all of all of all of our all of our county departments as a as a as a as a customer service agency for for everyone. And it requires it requires a a very unique set of skills from your team and from and from and from your your leadership position. And we really appreciate you doing sitting in that setting the culture for how that work it happens.

And it's been really great to see the the the culture that you've created to get that work done and how how that work happens. So thank you for that. Thank you. And and it's a complex budget to manage in in in navigating those dynamics as well. So yeah. Thanks.

Alright. Thank you very much.

Awesome. Is there any public comment on this item? Do we do that one yet? I don't see any hands raised. So I will receive this report and move on to our next item here, which I believe will go back to item number nine, is our ERP update.

My apologies. Can you guys hear me okay now?

We can hear you now. Good job pivoting.

Oh my goodness. So I'm gonna turn off my video for now, and then I will turn it back on once I'm done with my presentation.

Great. Thank you.

Michelle, do you need me to share the presentation, or will you be doing that?

Nope. I'm actually pulling it up right now. Okay. Alright. Thank you for your patience, everyone.

Good morning, Chair Askew Lopez, colleagues, and constituents. I will jump right into this. So starting with our status summary, last December, we went live with our APM budgeting module. It was utilized to create our this fiscal year's budget, and we are also able to generate our budget book directly from the Oracle, system, which is a significant improvement. In addition, the team is also gearing up for this upcoming budget cycle.

We continue to meet on a weekly basis, and then we're also looking at process improvements for this upcoming budget cycle. From a human capital management perspective, the team is still working towards a January 2026 go live. However, it is on watch. There is a significant amount of work that remains to be done between now and over the next few months, the most critical being that we can achieve an accurate payroll. From an enterprise resource planning perspective, you know, the last change order for, was to extend from this past July to next July, so that is currently on track.

We're completing our fourth round of system validations. And in addition, we've made some significant progress, related to gaps that were raised early on related to accounts receivable workflow and enterprise contracts management. This past, we ended our fiscal twenty four, twenty five fiscal year under budget, a little over 600,000. However, having said that, with the extension of ERP to next July, we are projecting an estimated, funding overrun of $2,600,000. Our risks, again, as I've mentioned earlier, are upcoming HCM go live.

We do continue to experience challenges on both fronts on the vendor and and county side. We've had some attrition on the vendor side, and then, you know, some of the county staff is still required to, you know, balance project and operations. Moving on to our overall timeline. Again, we are working the team continues to work hard towards the January 2026 go live. However, we have several critical deliverables that need to be achieved between now and then.

The most critical is our payroll. If we can't pay our, pay, our employees correctly, then nothing else matters. We need to achieve successful system integration and user acceptance testing, and we also need to have a successful data conversion. If for well, let me step back here. So we have established go, no go criteria.

So we do have a check-in at the November. And if that passes muster, then we move on to complete our UAT testing, and we'll have a second and final check-in after our user acceptance testing to determine if we're going to be able to meet that date. The team definitely understands the importance of trying to meet that go live date, you know, due to the budget implications. Because if there are delays beyond, January, it could potentially impact that ERP, go live in July depending how how many more months we would have to extend. And what I was gonna say there is although, you know, we understand the importance and the budget implications tied to that, we also wanna ensure a a quality implementation.

We do not wanna sacrifice or cause any negative impacts to to the county operations. From a resources perspective, as I mentioned on the first timeline, you know, we we still do have some challenges with some of the key staff that are required to support both the project and operations. Even from a departmental perspective, departments and most of, the department impact has been related to the the ERP phase. They do not have dedicated staff to support the project. So just as an example, with the recent round of valid validations, which we refer to as our conference room pilot sessions, a lot of them had to support, you know, fiscal year end tasks or weren't able to engage or participate as much as they would have liked to.

One of the improvements I want to mention related to the core team staff, so ITD, CAO, auditor, controller, and HR, is as of, last month, the dedicated resources are reporting to a colocation site, and it has significantly increased more real time collaboration and communications. I I also mentioned so the system implementer on their site has also been experiencing some attrition, and we've lost some key key, you know, functional leads on the Graviton side. So that results in a loss of, you know, some of the project history and county business process knowledge continuity. The the below graphics represent what provide a summary breakdown of the costs by the departments for last fiscal year. And then on the right hand side, we just have a snapshot of what the estimated county resource costs are going to be for this fiscal year.

From a planned versus actuals, perspective, I've listed here the major contributors, to the change order force. So there there was a significant increase due to the vendor implementation services, the Oracle licensing, and our most significant cost is related to county resources. And then there's also some spillover into the fiscal next fiscal year to support the ERP post go live efforts. Having said that, we are projecting a budget shortfall of about 1,900,000.0 this fiscal year and an overall budget for a shortfall of 2,600,000.0. This is just a burndown of the monthly expense the expenses.

And with the budget shortfall, we're expecting that to occur in March. So at some time before that, hopefully, no later than January, we would need funding approval to proceed. This pretty much concludes my update. So action requested is to receive the update. I have noted we need approval, by January, but, really, the plan is to provide this committee an update, in either November or December to provide an update on the go, no go decision for January.

That concludes my presentation. So I will now open it up to questions and turn my camera back on.

Great. Thank you, Michelle, for the update and the clear visuals to go along with the update. I think I'm gonna start on this one just opening up to public comment. If there's anyone from the county or public that's with us that wants to share additional thoughts or feedback, We'll we'll hear from you first. And I'm not seeing any hands raised, so we can bring it back to the the board.

And I I'm gonna ask a couple questions. Just in terms of the the go live, and this is, I guess, there's a couple different pieces of this. There's the the the the work that that the ERP team is doing on the decision making for for the go live. There's also some pretty radical impacts to the county budget and functioning of of a of a not go live at this point. And so I guess maybe part of the question is, how how is the how are those being factored into the the recommendation or your recommendation, the ERP team's go recommendation for for a go live, not go live?

There's the reality of is the is this system ready to go or go go live? But also the the implication of of a knot if it's not ready to go, there are some some very real costs and realities that that we would be facing if that wasn't the case. Who's who's working on that that team to make make those recommendations?

I can jump in real quick, Michelle, and you can just correct my numbers because I'll be directionally right, but slightly off. So if you know, we we have our go, no go, criteria set up, you know, and and a big portion of that is we have to before we can go live with HCM, you know, we have to be able to run a a gross and a net payroll for every individual within a tolerance level, and that tolerance level is, I I do believe, less than a dollar per per any issues. The every month we move, the criticality becomes it then potentially impacts our rollout of the ERP component of it. So by moving you know, it's not a month to month type of movement, but the more we move HCM out, the farther out ERP potentially goes because you've got, competing resources for both products to to roll them out. So, you know, we're that's why we're keeping a very close eye on this because we also have time windows that we wanna try to fit into because ending at a year end or a calendar year end are the best times to cut over on financials so you don't have to balance two sets of books, if you will, and try those get more complicated.

So with that, if I recall, Michelle, I think we're and you can correct me. I think if every year, if had we to push out for one more entire year, we'd be looking at somewhere close to $4,000,000 additional.

Yep.

At a minimum, yes. Okay. Got it. So missing so missing a a one of those go live windows is a and you're saying 4,000,000, and I'm just gonna assume that it's probably some randomly significantly more amount than that because it just seems like it always is. And and so the so those are the factors that are being already factored into, and everyone's aware that these are these are valid And and the and the loss of staff along the way and the fact that you've already talked about attrition with people who were critical to the process. So all of that is everyone's well aware of, like, there's a lot riding on hitting these these milestones.

Yes. Every every year that we have to extend, you know, we're we're already running on a product that we're on a maintenance only support type of model, so we can't our existing product is, you know, something we've gotta look at that we're running on today, our CGI product. If we have to extend, we also look at our our implementer who's now having to extend all their staff for additional years when they potentially, you know, we get at risk there because if they have other new projects that come on board or things like that, that limits. And then our own staff, just the, you know, making sure that we have continuity with our own staff and getting back there getting them back to their full time jobs within the different departments. There's you know, we look at all these different moving pieces when we try to calculate this and then licensing costs, things like that that then get extended and duplicated because now we're carrying both our CGI product and our Oracle product for yet another year, which runs at about 1,200,000.0, $1,300,000.

So those things are what we calculate into these overages. So that we're we're this is why we've got so much intensity right now trying to hit our HCM date and getting that correct and getting that right so we can move to the ERP component. And extensions, you know, we're looking at things of, you know, what are the monthly in incrementals versus yearly incrementals as well because some of these things, we can we can not have to pay a full year. We can pay for from monthly perspective. But our real big key is making sure that we can get payroll done and get our go, no go criteria done by our October deadline.

Okay. And that 4,000,000 that you just mentioned is inclusive of all of those those costs that you just, threw out. Yeah. Okay. Alright. Supervisor Lopez, thoughts, comments, questions?

Yeah. My only thought is kinda other side of that coin. Right? So far, this system has helped identify big issues. And it's how how much longer do you allow that, you're right, to persist?

And so for me, the continued pressure to keep us on the timeline we need so that any other issues that need to come to light come to light as soon as possible so that we can address them. And I know that a lot of that comes because of the work that Eric and his team are putting in right now. Really appreciative to Michelle, and I understand the challenges you faced so far to get to this point. But to me, this is a necessary investment given what we've discovered so far and the transparency pieces around it for both the workforce, the public, and everything else. So reading the report, seeing how we've used this already to create the budget book, do all these important things that are critical functions for the county in terms of maintaining our key service and the transparency around it, I'm worried about the 2.6, and I don't believe that that will be the end number.

I mean, even the way the report is written, it alludes to that not being the the end number. It's just sort of where we are today in terms of that overrun. So any ability to get that down will draw additional appreciation for me and and really an applause. But as we move forward, still believe that this is perhaps the most critical project being undertaken by the county at the moment. So thank you for the work that you're doing. Again, I'm it's not without worry or consternation around the project itself, but there is an appreciation there at the same time. So please keep going.

Yeah. Alright. Thank you for your comments.

Yeah. And I you know, just to raise a little bit, I think you you raised a really, really good point, and it's one that I've been, I think, trying to also balance because there there is a there's a there's a very real cost that comes with not getting this right. And and it is a balance that I think we're trying to walk. And the fact that we've that in the implementation of this, it's it's it's it's it's raised it's raised some transparencies that have allowed us to fix things that we didn't get right the last time. And and so there there's a cost to the county with and to our employees with not getting with not getting things right.

And and we we owe it to our public. We owe it to our to our employees. We owe it to to everyone to to to get it right and not make mistakes along the way. And so the cost in my mind, there's also that balance of there if if it if it comes down to the cost benefit of requiring it an additional year and the cost of an additional $4,000,000 for a year is gonna save the county significantly more because of we're we're gonna ensure that there aren't mistakes that end up costing us more in the long run. Like, I hope that we can just be have a really transparent open conversation about what those true risks are and what those true benefits might be.

And so I think you heard Chris and me saying, like, we we want we wanna know, like, keep us informed as to what you're really seeing and what where we're really at. So we're saying push hard, and we wanna see that, like, we need to get this done. And also, like, not at the cost of future, you know, boards who have to sit here and fix problems that we created because we were pushing too hard just to simply complete something for the sake of completing it. And don't know, Chris, if I'm speaking for you in those words, but that's what I what I think I'm hearing both of us say here today.

Yeah. I think that was really close. It wasn't exact, but, you know, that that's what we're saying is bring us that balance and inevitably personally, as I shared earlier, I think we're gonna have to bear that cost. Right? We gotta see this through, a big picture. I think the open conversation around it, given the issues we've already found, is gonna be important. So let's keep this going. And, I mean, at the end, I I don't think we've seen the end of what the potential costs are or the potential issues that will arise. But in that, I think we're, at this point, middle of the stream. Let's see it through.

Right. Yeah. Thank you both.

Thank you. Right. And I think this is just an update. Thank you for keeping us posted. I don't know if there's a memo that could go back to the full board as well. I think it's important that the full board's being kept apprised along the way as we move forward. So yeah. But thank you.

Yep. We'll take that action. Thank you, chair.

Okay. Cool. Thank you. Okay. So moving along, our next update, we have three more items, and it is 10:00. Our next item is, receiving a report on the Mental Health Services Act fund balance.

Yes. Good morning. That would be me, Fabrizio Chombo. Good morning.

Thank you for joining us. Good to see you.

I'm here. Yeah. So, Chirasky, good morning. Supervisor Loper Lopez, members of the public. So as I stated, my name is Fabrizio Chombo. I am the working out of class assistant bureau chief for the health department's behavioral health bureau. And with me, I have our finance manager, Nick Cronkite, and our account, Isaura Samora, who and we are here to provide you with our semiannual update on MHSA. So let me have a short presentation. So let me share my screen here, and, hopefully, you're able to see it. Okay.

So we're gonna go back to fiscal year twenty three, twenty four. It's gonna kinda close the loop on that. So we provided in January, we provided preliminary fiscal year twenty four figures noting that our annual revenue and expenditure report was yet to be submitted and approved by Department of Health Health Care Services. The figures you see before you are the actual figures where revenue exceeded our budget by $2,800,000, while actual expenditures exceeded our budget by about $422,000. So this left us with an increase in our fund balance of about $2,300,000 from nineteen point two to twenty one point six.

We're also happy to share that no funds were reverted to the state in fiscal year twenty three, twenty four as there was $1,200,000 in PEI funds that were at risk if not fully spent. Moving on to last fiscal year, these are preliminary figures as of the June. But the one thing that we can note is that revenue exceeded our budget by a lot, $14,900,000. This was mainly due to the two year true up where we essentially received about $70,000,000 as a true up from fiscal year twenty two, twenty three, and we did make an effort to align that increase with expenditures. Expenditures, and so our fund balance was reduced by approximately $3,400,000 from the beginning balance of twenty one point six to eighteen point two.

And we don't usually do this, but I wanted to take the moment to highlight a couple of notable projects that we funded in with MHSA dollars during fiscal year twenty four, twenty five. So first, we have our Rainbow Connections, which is a five year 7,800,000.0 MHSA innovations projects project designed to interconnect youth serving systems with community based organizations to provide human bridges that cultivate environments of support, inclusion, and belonging for LGBTQ plus youth across home, school, and community settings. The board's four HS committee received a presentation on this project back in June. And then we also used some of the MHSA capital facilities and technology funds to fund the renovations of our Pearl Street access clinic. We had a ribbon cutting back on June 12.

And then going back to boring numbers, fiscal year twenty five, there was approximately $4,500,000 in p e a PEI funds that were at risk of reversion. But keeping in mind that MHSA uses the first in, first out method. The funds were spent as part of that $47,000,000 expenditures that we showed in previous slide. So funds won't be reverted. And then just kinda going into the current fiscal year, which is also the last fiscal year under MHSA before we transition into BHSA.

So far, we have projections of approximately $31,300,000 in revenue and 31.5 in expenditures for a projected ending fund balance of 18,000,000, and we'll share more details at our January presentation. And this concludes our update, and we are here to answer any questions you may have.

Thank you for the report, Fabricio. Is there any public comment on this report, which is to which is to update for us? I'm not seeing any hands raised. And I don't have any questions, but thank you for the report. Supervisor Lopez, questions, comments?

Yeah. The each one of the in in the report itself, each one of the reports that we're looking back at true ups over the years have this really important line, which was no dollars are expected to be reverted, and that is what I wanted to focus on as I say thank you for that work. And as we forward, acknowledging that this item is on quarterly because of a concern back when MHSA was under attack and was changed. Obviously, we lost that battle. Glad to see the numbers continue to come in over expectations.

But my question, I think, to the chair is, can we maybe have an agreement to go away from quarterly and go to either, twice a year or annually depending on your comfort given the fact that we're under a new regime and having to probably come back constantly to share with us that things are still good is getting awkward at this point even though we enjoy seeing you, Fabrizio.

Thank you. If I may, this used to be quarterly. Now it's semiannually. So we're on we're only doing it, twice a year.

Okay.

Yeah. And it actually raises a point and a question that I I would love to be able to and I think we've asked to have it agendized at a future meeting. I thought it was gonna be on today. But just a review of sort of what are the policies and practices for how items get agendized for this committee. Generally speaking, there doesn't seem to be a a clarity for staff around what items have to come to budget committee before they can move forward.

Different departments have different practices. And I think it's been really confusing for staff to know what what has to get put on budget committee versus what can go straight to the board versus what can be consent. So I think getting having a conversation and and putting some clarity around what is the really, what is the purpose of this committee and what what what do we what do we want to be doing with our time here so that we're clear for for the for the for the entirety of the the county. So I think it would be worthwhile to just sort of review overall what what what our expectations are. So, hopefully, we can have that conversation at our next committee.

Good deal. Okay. Alright. Well, thank you, Fabrizio. Well, I'm well, keep up the good work, and we'll we'll get updates. It's whatever determines time we see you again next.

You.

Alright. Okay. I thank you for the part. Next up, we have our twelve, I believe it is, to receive our report on our semiannual expenditures and case load data for Department of Social Services. Good

morning, supervisor Root Askew and supervisor Lopez. I'm Becky Cromer, finance manager for Department of Social Services. And, Rocio, could you let me share my screen? And I have a PowerPoint. Thank you.

So I'm here to, present on the semiannual caseload and expenditure report. And this actually will give you a review of actually our entire year for fiscal year twenty five in comparison to fiscal year twenty four. This is general assistance. And I also put up, last report I gave, I decided to go back and pull the kind of pre pandemic year so we could just see that look back. And, of course, with GA, we have, we're back stronger than what we were prior to the pandemic, and we're up 30% in county cost.

Well, caseload cost. I'm sorry. Caseload 30% increase from the prior year. Expenditures were up 27% in comparison to last year, and I did have to go to the board to, increase our appropriations at the end of the year and, to cover those costs. And it has the increase we did factor an increase into our budget for next year, and, we'll watch this closely.

We plan to come back in a few months, specifically on general assistance program. We're relooking at some of the parameters and if there's ways to bring the cost down in this program. And so you will see me back in probably a few months. Going on to CalWORKS, yours we're seeing a 7% increase in the caseload, from the prior year. And, with expenditures, it's right there with the increase, also.

With CalFresh, we're looking at, there's been a 7% caseload increase from the prior fiscal year. And I think with this program, we're just continuing to monitor some of the recent immigration policies that are happening at the national level. And so, there can be, we'll watch this closely, but there probably will be impacts to our caseload. Moving on to Medi Cal, we're seeing a a 2%. It's a very slight decrease from the prior year.

And, we did have an uptick, when we compare, the first six months. Our last six months of the year did increase, but when we look at year to year, and these increases are looking at each month back and forth between the two years, we're we just have that slight decrease. And, again, we're monitoring, the recent immigration policies at the national level. In addition to ending several of the Medi Cal waivers that went into effect June 30, With those, it increased the automated redeterminations, which is an impact to our workers in their caseload. For IHSS, traditionally, we always continue to see an increase.

I saw a slight decrease in June, but when we look at the overall increase from year to year, we're up 8%. The costs are up 16%, and that is basically because, at the beginning of fiscal year twenty five in July, we gave them a 35¢ wage increase. And then we also had a minimum wage increase that went in January of 50¢. So that's kinda driving why and then, of course, the increase in hours drives these costs up. With out of home care, we continue to see, our caseload, decrease.

And, unfortunately, we also see an uptick in our expenditures. And the reason being is that although we're seeing, less kids coming into our care, the kids that we do have in our care have some significant acute needs, and, the funding doesn't cover that. So our county share of cost has been going up. Just, with our close of fiscal year '25, our county share of cost increased $4,200,000. And we did cover that with our, 2011, sales tax realignment.

And, we have estimated, that increase in our upcoming budget, but, unfortunately, we're just, we're just watching that very closely. And then in summary, when we closed the fiscal year, you know, back in July, I had to come to the board to increase our appropriations in both the CalWORKS and the GA program. Although we had significant, county share increase in out of home care, we were still within our appropriations, and and we did cover those increases with our realignment. And that ends my presentation if you have any questions.

Thank you, Becky. Can you go back to the Medi Cal active caseload slide? Yeah. So when you were describing it, you were talking increases, but all of these percent changes look like they're decreases. I just want to make

sure I

wasn't misunderstanding what you were saying.

Oh, so the you know, this is kind of a semiannual report. So, really, the January through June did have an uptick compared to the first six months. But when you're looking at these percentages, it's comparing this month to the prior year,

which is kind of how we have to do it given the type of county that we're in. So we don't we're not comparing year to year. We're comparing, like, month to month over time. Yeah. Because we do have we have, like, winter workload where we see

an uptick at certain times, and so we do that comparison. But

Month over month over month from your years past. Yeah. So we look at wanna make sure, though. So if we're going month over month year over over the past years, it's it's we are seeing a decrease in our enrollment for Medi Cal already. Yes. And do we know is that due to people choosing to at this point, it's not because anyone has become an eligible. Anyone has fallen off their eligibility. It's simply because of people not reenrolling.

So I see my director, mister Franks, is on the call. Would you like to jump in on that?

Or do we what if yeah. What information do we have about why those those those changes are occurring already?

So thank you, supervisor Askew. Great question. We are continuing to really look closely at our data. One of the key indicators that we've been following recently is our application data. And what we've seen since July is about a 24 reduction month over month year over year per month in our applications for Medi Cal and as well as CalFresh.

So now while that is a reduction in applications that we're not necessarily seeing that reflected in our actual caseloads because that won't occur then for some time before we start to see that reduction in applications translate into a reduction in caseload.

So it's a 24% reduction in new application?

Correct. New applications. We're also

started when you say this year, you say July. That's July 2025. '5? No.

July 2025 compared to July 2024, and August 2025 compared to August 2024, we're seeing about a 24% reduction in new applications.

Okay. Okay.

We're also tracking those that are voluntarily denying their coverage. And so but but we're still really looking into that data.

Okay.

We are seeing a slight uptick in people who are contacting us to discontinue their benefits.

And that is happening. There are people contacting the department to discontinue.

That is correct.

Yeah. And one of the things that we talked about at the Alliance for Health yesterday was the realization of people and the the Alliance was saying, you know, we're seeing sort of the same percentage of numbers that there's a I'm gonna get the the the the phrase wrong, but the number of those who are are undocumented Medi Cal enrollees is declining at the same rate as our documented Medi Cal enrollees. But the and recognizing that in Monterey County specifically, we have mixed status families. So while you may have a parent calling to disenroll themselves as an undocumented enrollee, they might also be disenrolling their child as a documented enrollee. So you wouldn't necessarily just see them disenrolling one member of a family one member of a of a one person in the family.

You're gonna see the entire family. So the numbers may be difficult to to understand, and it may not just look like one thing because we are this, you know, more complex set of of of family units. So

Thank thank you for bringing that up because that's why we are taking our time and really digging into the data because it is complex in its nature. It's it's not just a one for one thing. It's it's our families are unique and complex, and we have a lot of mixed status households.

Yeah. And I think the other thing that I just think it's important, as we talked about data data points to be watching as it impacts our county budget and just the the financial wherewithal, the financial impact to the larger county, the CalFresh active caseload data, the Medi Cal active caseload data. This this is indicative truly of funds that come into our health care system overall. So when we see a 2% or a 5% or trending decreases in Medi Cal enrollees in Monterey County, we're seeing our uninsured rates start to rise. We're seeing less people having not just access to health care, but we're seeing less revenue and resources available for the health care system overall.

That's that directly impacts the county health clinic system. It directly impacts the county health system health department. It directly impacts our behavioral health system. It directly impacts it directly it's sort of one of these proxy numbers to our county budget. And same thing with the CalFresh caseload.

I think we so often talk about, you know, economic development in terms of, you know, visitors and sales tax and TOT revenue as benefiting the larger economic spending in the county. But we don't talk about, you know, SNAP benefits in the same way. But we know that the individuals in our county who rely on public assistance and receive their CalFresh card, they're spending all of those dollars that come into our community directly in the communities here, and those monies then circulate. So the loss of SNAP benefits in our county, the loss of Medi Cal benefits flowing into our county, that's all loss of dollars that flow right back into our county in some of the communities that that need those dollars circulating most. So I think these are really important and critical data points that we especially need to be tracking now more than ever.

And so I just wanna say thank you, Becky, for having them. I know we've asked to have them on this on this budget committee, but thank you for bringing them forward. And I think, you know, to the degree that we've got them on this report, thinking about ways that we can bring them forward more and make them, you know, prettier or, you know, how do we communicate this so that we really are telling the story of how how Monterey County is impacted and how our residents are going to be impacted in a way that it's not just those who are directly impacted, but how it's how the larger community is impacted by what's happening. So with that, get off of my pedestal and I'll pass the floor to Chris.

Yeah. And I'll just add one point to that. Obviously, we're the producers as well for so much of that food that the dollars end up getting spent on. We know that through the Double Down Bucks or Cal Bucks, whatever program is, you know, being marketed. But in those forms, it's our local producers who are benefiting as well. And so the impact to our region, I think, is even further on show. And so any ability to capture that data and put it out into the community, think, is a meaningful approach to show folks what, big decision impacts. What seems like little decisions at higher levels have big impacts here at the local level. So I'll I'll get off that box there and say, I'm good with the report. Thank you for that.

I think it's important to keep these trends in mind, especially with the reductions in, positions that were put forward last year, by Roder in the budgeting process. And so I think all of those things, right, are are of making sure that what we're putting forward is as clear as possible to community in terms of what the need of the department and community is, and these numbers help tell that story. So, again, a continued appreciation for Rod and his leadership in making the tough decisions at social services. I don't I want don't want you to think it doesn't go unnoticed. Thank you.

Thank you. Alright. With with that, I don't think I went out to public comment on this one. So we'll go to public comment on this one. This is item number 12. Any public comment? I'm seeing no hands raised. We'll close public comment. Thank you for the report, and we'll go to our final item for today, which is to receive our biannual oops. Final report from the assessor accounting clerk recorder.

Good morning, chair Askew Rudaskew and chair Lopez, department heads and members of the public. I'm here to present the biannual report on behalf of the assessor clerk recorder, a summary report for the local assessed valuations for the county of Monterey, and summary of the county clerk recorders for fiscal year 2425. On June 30, we successfully closed the 2425 fiscal year assessment role. But as many of you know, this role closing came with many challenges, tough financial decisions that impacted those staffing levels to meet the general fund, contribution vacancies, staff on alloy, leave of absence on both our on all offices. The last application of the last last wage studies or findings that they gave us before the fiscal year.

And the union negotiated increases that impacted the staffing levels and what we the capacity of what we could do and couldn't do. Consequently, ended up with a large carryover, but nevertheless, we successfully completed and did come out with some increase some good news. The assessment role, as many of you may know, is is comprised of the secured assessment that include land and improvements, ag properties, commercial, industrial, and residential properties. It also is comprised by the unsecured assessments such as vessels, planes, accessory interests, personal property, fixtures, etcetera, and exemptions as well. For 2425, the assessment role prepared by the assessor in accordance with revenue and taxation code six zero one.

The total that we actually were able to enroll was BRL 96,500,000,000.0. That's resulting in an increase of 4.61%, a little bit from last year of billion dollars a little bit under the projected 5% that I had given out in early January. We are currently at 2,645 properties under Prop eight, which is a temporary reduction of properties compared to last year of 2,114 that's increased by five thirty one, still not too bad considering the market conditions. Reduction these reductions are of assessed valuations under property Prop eight are temporary and are renewed reviewed annually until the factor base value or or the Prop 13 value as everybody knows that is, again, lower than the market value and it's reinstated. One of the other things that we saw as part of this valuation assessment enrollment is that we did see the jurisdictions each jurisdiction increase surprisingly, and as you'll I don't know if you had an opportunity to look at exhibit a, but we did have, an increase all across the county and the different jurisdiction, which is good news for the the city because it gives them, the revenue that they may need to operate.

On the clerk recorders side, we projected little bit over $2,000,000 but to be projected to collect 2,600,000.0, but only collected about 2,000,000, which basically left us with a deficit of 641,000. However, we were able to mitigate that deficit with existing vacancies on the, assessor side and also on the clerk side. Documentary transfer checks that were collected, this year were 3,700,000.0 compared to last year's 3,400,000.0. So that's an increase of 347,640 52. Compared to last year, was a $155,001.48, so that's an increase of a 192,504 for which is which with revenue that went to that the county.

Despite the decrease in recordings, the staff still continues to be busy in the clerk recorder's office with working with the restricted covenant modification project. We completed phase one on June 30, which comprised of reviewing, redacting identifying, redacting documents that were reported in from nineteen o nine to 1977. We actually there was estimated about 11,500, but only 6,941 actually required reduction before recording to remove that, through in the gold language that is found on some of the recorded documents. Phase two of the this project will be we're in the process of beginning, and we hope to begin it this year. And then there's that that will be comprised of reviewing and redacting documents from recorded from 1978 to present.

And then the last phase is basically all the old handwritten documents. So we'll we'll be focusing on phase two this year. The recordings do continue to decline. I mean, although the market is still not real weak, it's still pretty pretty strong. We did begin a new service last year, which is the civil ceremonies.

And this year, you know, as I reported earlier in the year, were able to actually generate 90,400 of that service that we provide to the to the community. And it's a it's a very popular service, and it's it's a very gratifying service that we offer. So we really thoroughly enjoy it. This year, we're we are hoping to this fiscal year, we're hoping to generate a greater amount of revenue that will help us actually fund one of the vacancies that we had. So we hope to generate well beyond a 100,000 as of many as the board approved on as of July 1, our fees have increased for this ceremony.

So, hopefully, with that and the other services that we're providing, we'll be able to report a little bit higher revenue next year. As I stated, all the jurisdictions basically did receive an increase, notably, City Of Marina because they have a lot of ongoing construction still. There's like there's like about six different subdivisions that are being built and sold. So therefore, that's where a big chunk came in. City Of Carmel, as you know, just because of the nature of the value and the pricing that they have.

San City last year, they were on a negative, but this year, they show an increase of 1.85%, which is good. Greenfield increased quite a bit due to some sales of greenhouses, and King City had a good increase. And I'm still kind of working on trying to identify the growth, where the growth solid that also grew quite a bit due to, again, new construction subdivisions that are happening there. One of the other factors that I touched on last year was the Moss Landing plant, Vistra, and I'm sure because of the revenue or that comes in from from those unsecured assessments. I reached out to Vistra, but I have not really heard to from them back in terms of what the total loss is there.

What I do know is from directly from the North County fire chief is that only one of the because there's three assessments right now. Currently, we have about about $11,000,000,001 billion dollars in assessed valuation one of the assessments is 448,000 that is that was identified as being damaged I like I said, I have yet to receive the the final confirmation from VISTA, so I'm waiting for that. But I wanted to let this board know that that's that's coming because that will be impacting the next lien date of 01/01/2026, which will be for next this coming fiscal year. So, as I stated, we did have quite a few challenges to meet this role closing. We continue to hire hiring challenges, but we are working on that.

We had to unfund two appraiser positions this year just to meet the general fund. Graciously enough, the board actually was allowed us to continue to keep them on the budget so that we don't have to go back and just fight for them. So I'm grateful for that. We did end up with a very large backlog of 3,000 events that carry over due to the staffing challenges. We do have four vacancies, and two of them are appraisers, two of them are auditor appraisers, and those are very difficult to fill across the state, continue to be difficult to fill.

However, these vacancies help mitigate the 614,000 deficit that we face in the recorder side, so that's good. And like I said, we were we are going to be able to fund one of the positions that we brought back to the clerk's side to make that that division whole with the civil ceremonies. And finally, what we could have further accomplished if we were able to fill all the additional two unfunded appraisal positions is we could have completed the backlog of those 3,000 events and potentially estimated added an estimated $909,190,000,000 based on the per supplemental of $330 per supplemental change, which could have added another $9,000,000 to the different jurisdictions and and and for their public service and their needs. And and potentially after added another 1% instead of being 4.61, maybe a 5.6 increase in the enrolled valuation to added to the general fund to the discretionary funding that we could have accomplished with a full staff. So with that being said, thank you for your time.

This completes my presentation. I'm happy to answer any questions.

Thank you, Marina, for your presentation and for all of the work that your team does to to serve our county and to all of our cities too. Supervisor Lopez, did you have any comments or questions?

Yeah. I I appreciated the presentation. I think there was more in the comments than was in the written report, and I really wanna focus on that last piece you just shared. To me, it feels like maybe we're leaving something on the tape. Right? And so my question is, given that, seeing that there's a potential $9,000,000 in additional funding left on the table, if we don't get it year over year, there's no true up. Right? How do we make sure we capture that? What do you need to get through that in a timely manner so that we get as much as we can into our local jurisdictions given the gaps that we're seeing?

Staffing so that we can get them prepared to process all those events timely because once they we can enter them later on, but as many of you know, these these events that that are are not entered timely, they become unsecured and uncollectible by the by the tax collection. So since it's twofold, so timeliness and then collection. But if we don't get them in within a certain period of time, then we can get them in, but then if they become an un in unsecured, if they transfer to a third party and become uncollectible.

So for me, that ROI is incredible. Right? One person, $9,000,000. I'd love to know more about that, and I don't know how we bring that back here or up to the full board because I don't wanna leave that on the table. I don't know how you feel about that, supervisor, ask you, but I think that's what I drew out of the presentation stuck in my brain.

Yeah. No. Definitely. I think I I caught that at the end as well. And I'd like, I I'm trying to understand what that $9,000,000 is, where it goes to, and wanted to follow-up maybe for a more in-depth understanding of of what for more information. So was gonna actually call call you after this and try to understand more information. Do you wanna explain that? Do you wanna I mean, we do you have ten more minutes?

Sure.

Talk a little bit more here?

These are this is based on on the outstanding workload that we have that potentially 3,000 supplemental that could be enrolled and subsequently brought into the the nondiscretionary funding with evaluation that is enrolled. But I need the bodies to be able to work these events timely with the staffing that I have. You know, each each appraiser has a designated area. And, you know, if I had the full staff, we can I can see that we can bring this? I mean, I couldn't promise everything, the $9,000,000, but definitely it is.

It is something that we can I can work with my staff and and show you the difference from having four less appraisers to having four full appraisers to show where this money is coming from and how it's getting there? But right now, I have I'm I'm working with the challenge of now filling two positions right now that are actually I am able to fill, and we have these two vacancies. If I had those other two vacancies, we can actually generate that and work those events. And I can come back and show you in, like, midyear where we were now, where we are in midyear based on this staffing.

And so when you say 3,000 so it's 3,000 supplemental. Those are property property transfers that have to be entered into the roles and the Correct. The the amount of change in valuation is $9,000,000 or the amount of additional property tax revenue that would be generated into the county and cities would be $9,000,000?

Correct. Potential supplemental being a bonus subsequently putting out for the lien date for the tax bill and collect it for the

So an additional 9,000,000.

Mhmm.

Okay.

So yeah.

Yeah. Interesting. Maybe that's something yeah. And I know we're as we start, we're already sort of headed into the next round of budgeting for I mean, we're we're we just we just closed this year's budget. So you and you said you have two vacancies that you're in the process of filling currently?

Actually, we just filled one. There there'll be refilled one and we the next one is we just hired and they'll be starting on September 8. So we are working really hard on that. And then the other two appraisers other two appraisers, those are work strictly and focused on the unsecured assessments. Those are a little bit hard to fill up statewide because of the specifics that they require for before they are eligible for the classification period. So we're working on those as well. Okay.

So

So maybe it's something that's worth, you know, circling back, checking in with and the CEO's team and our HR team and having an ongoing conversation to see where we're at with overall I think that I think we're gonna have to come back midyear where to review where we're at staffing wise overall. But this is one that I think we we need to we need to put on our list.

Yeah. I I wanna give that same support and say, you know, I think I I know the CEO's on with us, and I'd like to see that come back to the board as part of whatever the first true up opportunity is. If you could flesh out a little more what those figures look like and so we can get it in front of the full board and make a call if there's 9,000,000 sitting out there and you can true up those figures, let's go get it. And if we need to update the way the positions are created so that we're more competitive in that space and ask HR to prioritize that because, again, that's a lot to leave out there, not just for us, but for our city partners. Because I get that not all nine would come to the county, but it gets broken out to the different jurisdiction. Yeah. I think I think we need to prioritize that given what we're staring down the barrel at right now.

Thank you.

And I did see Rupa Shah had your hand up. I'm not sure where you are now on the screen, but if you had a comment or wanted to contribute to the conversation, we'd love to hear from you.

Yeah. Yeah. Thank you. Chair, ask you, supervisor Lopez. And I I I heard the same question in line of what both of you have raised.

The last comment supervisor asked you about the 9,000,000 in assessed valuation versus the revenue property tax revenue for the county. And so, typically, assessed valuation equates, generally speaking, typically, equates to 1% in property tax revenue. So if we are referring to 9,000,000 in assessed valuation, it would equate to 90,000 approximately in revenue for the county. But I wasn't exactly sure No. You know, about that piece.

I said, then we can, I think, get clarification on all those points? So, yeah, thank you.

I said 990,000,000, which equates to the 9,000,000.

Yeah. Thank you.

Okay. Thank you.

Great. Okay. Well, this was really helpful. I did also have a question, Rina, on the on the report, on the transfer tax, which was really helpful. And it's one of those things I've been looking at as we're trying to think about, you know, opportunities for for revenue and tying revenue to where priorities lie within the county. The on the exhibit b, the transfer tax that totals at $5,200,000. Mhmm. Is is is transfer tax restricted funding, and does it flow into the jurisdiction that it's generated? Can you just speak do do you have information about what the what the restrictions are for transfer tax?

I'm gonna ask my assistant, Alicia. I think she's on on

And if you don't have the answer, I didn't ask it in advance. I should have called you in advance.

That's go to the jurisdiction, but part of it goes to the county. And if you look on on the report

That one was exhibit b. Yeah. Thank you.

You see how it goes. The county got 3,700,000.0, and then the different jurisdiction, this is what they they received. But it doesn't go into our fund or the to the general fund. It just goes to the jurisdiction here. You if you noticed on that. Maybe Alicia can speak a little bit more about it. Alicia, if you're on. I'll have to get back to you on that one.

Okay. That's fine. And it is part of the question was, you know, there are some jurisdictions that have gone out and used additional transfer taxes to increase transfer taxes as part of how they're now funding programs for affordable housing to fund fund priorities. So I think Los Angeles specifically had transfer tax that their voters voted on, and they're using those dollars now so that properties that transfer that are over a certain amount of money, they've they've added a tax transfer tax, and those dollars are being generated to to to support homelessness services and affordable housing projects that they count that that they're happening in the in the jurisdiction. So it's one of those areas that we're just kind of trying to understand a little bit more about, I we can think about it.

Yeah.

I'm aware of some of the some some cities do do that, but I don't I don't know if any of them do here.

Yeah. No one's doing that here.

That one, actually.

Okay. Great. Well, thank you. And I think this is our final report. We did not go out to public comment on this, so we'll go out to public comment on this item, see if there's anyone who has additional thoughts or comments to add.

I'm seeing no hands raised so we can bring it back to this board. And I believe this was our final item for today, and I don't believe that there was anything else on the agenda. But we our next meeting is scheduled for September 24 at 1PM, And I was hoping that we could just be I did have the additional item to request that we talk about sort of what our policies and practices are for the scope of this committee so that we can have clarity for all of our county staff who are trying to understand what's required to come to budget committee, what isn't, and that we can make sure that we're using our time here wisely and most effectively. Also considering the the just the fiscal challenges that the county has headed to us, I'd love to make sure that we're looking at sort of board policies and directives around budget planning and process here. And then the other request that I would have is that this committee is tracking and paying attention to maybe with a regular update about some of the outstanding of the outstanding sorry.

The outstanding costs that are sort of on the horizon and what our discussion about how how we're thinking about setting aside or planning to fund, you know, the ERP dollars. We've got some big costs that are coming at us, and we I I wanna make sure we don't lose sight of the need to have funds set aside to be able to pay for some of the big expenditures that are gonna hit the county over the next six six to twelve months. And so I think just having that being clear about what those costs are and making sure that we're thinking about them in advance, whether that's putting some policies in place or whatever we need to do. So making sure we have a time to talk about that and consider what what strategies we might wanna recommend for consideration. So those would be two items that I'd like to see agenda is for our next meeting.

Anything that you wanted to have on the agenda for next meeting, Chris?

Nope. I think I'm good.

Okay. Alright. With that, thank you all for joining us, and we'll see you in September.

Thanks.