Budget Committee - Regular Meeting

Are there any additions or corrections that we have?

There are none.

There are none. Great. We'll go to public comment on items that are not on today's agenda within the jurisdiction of the committee. See nobody in the room, nobody online. So we will close public comment. Move to approval of the action minutes. Good with those? I'm good with those. Reach out just on public comment. Don't see anybody. So we will approve by consensus and move on to the consent agenda. This is a list of standing and follow-up reports. Any questions or items there?

No.

I don't have either. There's nothing on public comment I don't see anywhere. So we will close that and approve the consent agenda. by consensus. We'll move on into the quarterly reports, which is to receive the Natividad Medical Center's financial report for the third quarter.

Great. Good afternoon, Supervisors. Daniel Leon, Natividad Medical Center. Rocio, would you allow me to share my screen?

Yes, go ahead.

Can you see the screen? Yes, we can see the screen. We're ready to go whenever you are, Daniel.

Excellent. Thank you. Again, the following report, two components, the financial results, quarter three, which includes January through March 2026, and the second part of the information report, of the presentation, Supervisor Alejo requested some estimates related to the funding from HR1. What you see in front of you is actually monthly trends of the average daily census of the hospital. So related to quarter three in particular, it is January, February, and March. to the right of the graph. As you can see, going back, you know, 12 months ago, March of 2025, we were somewhere in the 120s. And then around August, census started to drop to one, in the middle, 115s. And as everyone knows that HR1, the provision of HR1 started in July of 2025, but we feel that this is not fact-based, but I think, you know, because of the pressures related to the activities from ICE that affected the community healthcare services, you know, or seeking from healthcare services from the community actually, you know, perhaps, you know, it was delayed or they did not want to come out, you know, to the hospital. And that's the reason of the trending of the volumes going down since somewhere in the summer of 2025. The other look year over year, What you see is, again, this is 2026 as of March. And going back five years, again, this shows the average delayed daily census per day. Again, the definition of average daily census is, on an average, how many patients stay in the hospital for care. So going back to 2021, the hospital average about 127 patients per day, steadily every year continue to be 127 up to 2023. And actually business grew or healthcare or seeking for healthcare services increased to 130 back in 2024. And as you saw on the monthly trend, starting in 2025, the average daily census started to decrease. What you see back in 2021 to 2023, the blue bar represents COVID. Just as a reminder, back in 2020, that's when COVID started, but then it started to decrease. The green bar represents trauma services. These are the patients that are staying in-house for trauma-related services, and the rest of them was non-trauma services. But overall, as I said before, business picked up up to 2024, and in 2025, started to decrease. Keep in mind that the fiscal year 2025, six months was 2024, July through December, which did not have any impact related to HR1 or, as I mentioned before, perhaps activities from ICE. And in 2025, that's when we feel that, you know, activities, you know, started and therefore the volume started to decrease. When you look at the trauma services, it has actually not been affected. Obviously, you know, when individuals in the community, you know, they get on an accident, you know, they have to come to the hospital. So this is monthly trend of trauma cases. It has been pretty much on the average between 120 to 125 average cases. Can I ask you a question?

Activation, does that mean hospitalization or what does that mean?

So depending on the situation of a patient, out in the field, the first thing the ambulance, you know, makes a determination whether or not the patient really needs, you know, trauma services. But this is on a diagnostic, you know, on a diagnostic, you know, phase out in the field. So when the ambulance, you know, determines the needs, you know, needs trauma, the patient gets, you know, a transfer, you know, here, Once the patient gets here, immediately there's a group of trauma physicians and nurses that actually treats the patient. And that's when they determine whether or not actually the patient needed trauma services. And that's where the activation definition refers to. So when we look at gross revenues and also gross revenues, what you see here, it is actually total charges that we bill to the different payers. There are five major payers, you know, basically that we work with. It is the Medi-Cal, which is the state Medi-Cal. Medi-Cal HMO, which is our local CCAH, Medi-Cal H managed care. Commercial insurance, which, you know, includes you know, all of your private insurance, Blue Cross Blue Shields, United Health, so forth and so on. Also we have a short oil and also we have the major one also is Medicare and including of the payor group is the uninsurer or, you know, self-pay. So each of those payors, they pay differently and pretty much there it is on a fixed rate. They pay us on a per day basis. and some of them on a per case basis. So when you see these growth charges, doesn't mean that when we bill $114 million, we get the same amount back. On an average, for every dollar that we bill, we get about 20 cents on the dollar. So what you see here is that back in the times when census was higher, as shown on the first slide, the average census was 120. On a monthly basis, we would bill about $124 to $125 million. Again, you multiply this by 20%, that's the amount of net revenue actually collected. And as you can see in August, we started seeing a decrease in gross revenues, 114, 112, and then the most recent two months, 116 and 114. To better look at gross revenues again year over year, you see that increase from 2021 to 2024 associated to the census that we just talked about. So when you look at, and this is average per month, by the way. So in 2024, we bill $124 million of gross revenues per month. The conversion of the actual receipts from that was about $25 million, I'm rounding. And now in 2026, we're averaging bills per month of $121 million or a decrease per month of $3 million on a gross basis. On a net basis, we have seen a decrease of about $600,000 lower revenues from the insurance. And that's all associated from the volume decrease. when you look at the emergency visits, and of course, emergency visits are basically the gate for majority of our business, pretty much month over month, 4,800, 4,900, just one month in this particular slide that you see back in May, we hit over 5,000. So pretty much on an average, you see 47, 4,800 And again, when you look at average per month, year over year, similar to the gross revenues in the census, there was an increase of emergency visits, you know, per month. And we started seeing the decrease since 2024, as you can see on the slide. So one of the things, you know, you know, we attempt to adjust, you know, obviously costs, you know, as a result of, you know, lower business or lower census is in the resource side, you know. Obviously, the importance of, you know, flexing your resources is to make sure the priority is that patients do not get you know, impacted by the quality of care. But again, you know, as volume decreases, you just need to make sure, you know, that within reason, you know, the services continues to be provided at high quality. And so, as you can see here back in the census, you know, were high productive FTEs. We're somewhere close to 1300 and as the volume, you know, dropped, we know we have adjusted the resources, obviously, you know, to reduce, you know, the cost to accommodate the cost to, you know, to match, you know, some of the, to the lower, you know, revenues. So currently on the, for Q3, as you can see, we were using about close to 1,200 FTEs to accommodate the current volume of census that you saw on the previous slides. So when you look at the margin, margin meaning the difference between revenues and expenses, what you see in front of you, it's in a quarterly comparison. This goes to quarter one. The green bar represents revenues. the blue bar represents expenses. But obviously, we would like to see is the green bar above the blue bar. But as you can see here is the opposite. There's a little gap here where the blue bar, which is expenses, is higher than the green bar. And the difference is on the first quarter, which includes July through September of 2025, the difference where expenses was higher than revenues was $1.7 million. The second quarter, revenues also were lower than expenses by $1 million. The third quarter, January through March, the difference was 2.1. So when you're looking at it cumulative for this fiscal year for nine months, the difference between expenses to revenues it's a $4.8 million gap where expenses is higher than revenues, you know, so far. For looking for Q4, since we're already in June, April and May, between those two months, expenses were still higher than revenues by $200,000 for the two months. However, given the fact that this is the time where the farming community it's the time to the agricultural, you know, resources, you know, increases. So therefore, we have seen in June a pretty significant increase in our volumes, you know, where we are running about 131 as of today. So therefore, quarter four, the forecast that I, in my opinion, we should come in positive between or close to about a million dollars for quarter number four. And again, that's associated to the higher volume unexpectedly that we saw in June. And we believe, again, is due to the increase in seasonality due to the needs in the farming community. Total AR, and this is provide additional details in AR as requested from Supervisor Alejo. What you see here, balances of accounts receivable on a gross basis. Again, similar to what I just said before, this is gross charges. Multiply this by 20%. That's actually more or less the estimated collections of these gross charges. So going back to fiscal year 2024, when census was high, our receivables was $261 million. You know, since this, you know, dropped in 20 in 25, obviously receivables as they were collected in volume decrease also decreased. So the balance at the end of June was $204 million as compared to 261 in 2024. On the second quarter ending December 20, 2025, the balance was at 212. and currently as of March is $209 million of gross receivables. A little bit busy, but let me just explain what this means. That $209 million receivables is basically all of these components. I mentioned that the major categories earlier, it is your Medi-Cal, Medi-Cal managed care, Medicare, managed care, this is the commercial, uninsured, insured oil. So looking at the purple line, again, going back to 2024 at the end of June. The other point of reference is June of 2025, December of 2025, and March of 2026. So this is the receivables related to commercial insurance. Commercial insurance, again, as a reminder, are your Blue Cross Blue Shields, United Health, Kaiser, and other insurance companies. So back in 2024, our receivables with those insurance companies were $90 million. Now it's at $79.6 million. One of the challenges that Natividad has with commercial insurance due to the trauma services that we have, commercial insurance have taken a stronger position to take longer in adjudicating those claims. One other process that they have put in place over two years ago is to ask for every single documentation for every claim that we submit, and they take their time to review it and ask questions or continue to ask for additional documentation. So usually it takes at least about 120 to 150 days or more for them to process claims or pay us the claims. So the second line, it is the Medi-Cal. These are CCH Medi-Cal members. Back again in 2024 was $71.7 million, and now it's at $51.3 million. The green one is Medicare. Medicare have a statute or a requirement to all hospitals to pay claims within 45 days. So basically, you know, the turnaround with Medicare, you know, is pretty quick as long as, you know, we send it to them. So 45.6 to $40 million. And as you can see, it's pretty, it has been pretty steady, even though back then the census was higher, but the difference has been, you know, almost the same. And the reason for that is because, again, the statute for, the statute that are required to CMS is to adjudicate claims within 45 days. This light blue bar represents a Medi-Cal state, members that have Medi-Cal, but they are state, sorry, they have Medi-Cal enrollment, $27 million back in June of 2024, and we're down to 18.7. The orange bar, we continue to work with our peers from George Doyle, $21.5 million, and currently at 18. We're trying, of course, you know, trying to get this thing down to a much lower balance than 18.7, and we continue to, you know, work with them. And the last one, the red one, fortunately, right now, it has not been impacted, you know, substantially. This is the self or uninsured, 4.5 to 2.5 But, you know, in my opinion, this will, I expect this number over the next years, not next year, but over the next years to increase as it relates to HR1, where in provisions, the different provisions within HR1 starts, you know, taking hold, where many CAL members either no longer qualify they will lose insurance, but they still need to come through our ER doors. And so this line should, and it expected, in my opinion, that will, you know, change. So even the fact, given the fact that, you know, these are just numbers, you know, that I presented to you, the check and balances, you know, to all of this is actually cash collections. You know, how are we, you know, collecting, you know, cash, even though you see the AR coming down. So this is average, on an average, cash collections only from the payors that I mentioned. It does not include supplemental because that's a different type of collections. So as you can see, on an average, between $27 to $28 million. We had a high month in October of 34. November, December was low. And usually this is the time when the government, the state, commercial insurance, they go out on holiday and they slow down cash. So this is, you know, as expected. But then when you look at it again year over year, These are average month collections. So this is kind of the check and balances that our collections continues to be strong. 27, like I mentioned before, on an average, as compared to even the, you know, volume has dropped, but continues to be high into the collection side as compared to 24, which you saw that, you know, our census was, you know, relatively higher than this year's. And that ends the presentation for the financials. The second part of it is the HR1 funding estimates. Now, the information that I will present to you, we just need to keep in mind that the provisions from HR1 have not have not taken hold, strongly on hold yet, because some of them are not active. And so these are estimates, you know, that can significantly, you know, change up or down. So having said that, everyone knows the HR-1 within the contents of it, it has many provisions, but as it relates to Natividad and actually across the country, for all of the hospitals. But most significantly, safety net hospital like Natividad will have a significant impact. So just looking at the provisions, the elements within HR1 that significantly will impact Natividad funding, the funding part of it will be, of course, the medical work requirements. the frequency of the requirements to qualify for Medi-Cal every six months, limits on the state on provider taxes. And this is the limitation on provided taxes means, you know, that the state will no longer be able to access, you know, matching funding from the federal government. limits on state-directed payments. And this is going to be a very large impact because what it's doing is moving the payments from what Medi-Cal is paying us to a much lower base, which is similar to what Medicare pay us. When you look at the average payment for Medi-Cal currently, it is a much higher payment per day than from a Medicare patient. And this provision, it's moving that payment to Medicare over the next seven to eight years. And obviously the last one is to reduce federal medical spending in several areas. As mentioned earlier, all of the provisions are not hitting us or not hitting all the hospitals at one time. It is over time that depending also on some of the supplemental funding that each of the hospitals are receiving, the timeline will move accordingly until they meet the reductions that are required under the provisions of HR1. So just to kind of put a framework before getting to the estimates. So this is the annual revenues actually that Natividad receives. The first one is $304 million. And basically this is associated to the previous numbers that I presented on the financial results. They were all associated to the volumes in the collections that we collect from the various payors, which is this one. Government funding. This is the one where HR1 will be attacking and will have the most significant impact. And other revenues. These are other revenues that are non-patient related. Rentals. rebates from supplies, interest income from funds that we have. So overall on an annual basis, our revenues is about $436 million. So on the estimates, government funding is $101 million. The previous slide is 102. there are components that are not related to supplemental funding. So that's the difference. But this is all related to Medi-Cal and Medicare supplemental government funding. The first impact is the state direct payments. This is the one that was eluding. The provision requires hospitals. to reduce or to change the state medical reimbursement to Medicare payments. Some hospitals, you know, the impact to them will be within five years. Some of them will go to 10 years. Our estimate is going to be $9.6 billion. And these are annual estimates, you know, just one year. So this will be recurring in our estimates for the next eight years. The second one is elimination of disproportionate share payment. And this will progress over two to three years at a $5 million reduction in supplemental funding each year. The UIS moving to the state. So what this means is these are the UIS population that currently is covered by Medi-Cal HMO, which is our local CCH plan. These individuals, the provision requires them to move to the state effective January 1st. And this one, the impact of this, and this is the one that is very volatile, because again, we don't know whether or not Once the US population, you know, let's assuming that all of them, they pursue continuation of coverage to the state, we don't know whether or not each of those individuals would actually qualify under the new requirements for Medi-Cal. So in these estimates that, you know, we included in here, we put an assumption that 50% of those individuals, for some reason, you know, would not qualify. In addition to that, the additional requirements. So that would be $14.5 million, you know, each year for the next two years. And the reason why, again, it's an estimate over the next two years is because once eligibility and the additional requirements for eligibility occurs or the process continues over the next year, pretty much the population will be stabilized. So the largest hit to funding would be either the first or in two years' time. There are smaller provisions or not as large provisions within H.R.1 that also impacts, but not as significant as the other ones that you can see related to the enhancement in the enhanced subsidies. This is the individuals that can buy Medi-Cal to the exchanges, the asset limit limitations, redeterminations, and others. So this would have an impact of about half a million dollars per year. So altogether for just one year, again, these are just estimates, $29.5 million. So when you take the initial government funding currently out of 101 minus the 29, so this is the estimated adjusted government funding. As mentioned earlier, this is not, unfortunately, not a just one time direct hit. It'll have a progression. And again, I keep repeating over and over, it is just very flexible in terms of what the impact is going to be. But if the assumptions presented is correct, hopefully not. Over time, this will have over eight years, that we can have at $123 million impact related to HR1. So I think this is nothing new. If in fact, whether it is 50% of losing enrollment or 25% or even 10%, there is going to be some funding impact to that. And unfortunately, this is the long-lasting impact of HR1, the reduction in volume growth. And in the indirect part of it, it is, as mentioned earlier, is not part of the HR1, but the indirect association to HR1, which is the activities from ICE. the reduction in reimbursement, increased uncompensated care. All of those things, obviously, it gives substantial pressure to the operating margin to be balanced. And once those things happens, the capital resources are not available to continue to provide appropriate recruitment to the workforce. And of course, The last thing is the challenge, you know, and be able to provide programs that we currently have at the level that, you know, we are currently providing. And that concludes the two parts of the report. And I'm open for questions.

Questions? Yeah. Thank you. Thank you, Daniel. Thank you for the comprehensive report. I don't know when the last time we had one on Natividad, but obviously there's a lot of concern, as you just finished explaining, with the impacts of HR1. And I had just been hearing that our census numbers were down today. And as your last slides mentioned, maybe not the next fiscal year as much, but the following fiscal year when some of those other provisions of HR1 kick in in 27, 28, the impact, financial impacts increase significantly. So going on that last point, starting there first, if we're already potentially negative. This year, we're so far negative 4.8 million. And you said the fourth quarter may look more positive with the net of 1 million. That still puts us almost 4 million in the negative. And if we're able to kind of look out into the future, and if we're seeing a potential drop of an additional 30 million per year, what does that mean to the hospital? What kind of impacts are of just over $30 million, would that have year after year on our operations and the services we provide to the community at Natividad?

Excuse me. If, you know, let's assume that those numbers materialize, and obviously, you know, we'll start seeing the immediate changes starting January in moving forward. So the immediate action that I believe that this organization, along working with county supervisors, is to identify or determine what are the services that must continue to be available to the community. and not in terms of totally eliminating services, but perhaps downsizing the availability of services available to the community supervisor level.

And that's my concern. I think part of the responsibilities of this committee is to provide that oversight so that we're kind of forecasting and asking these questions now and forming the full board, this committee of two supervisors, and our staff informing the full board of what we see coming around the corner. Obviously, our county and our county's association was advocating for additional state funding for eligibility workers to not have so many people lose their Medi-Cal Eligibility and therefore not coming into the hospital when they're getting sick. There's also some additional funding that was provided for the public hospitals of which Natividad is 1 and then also some additional funding for indigent care. That wasn't factored in because I was just included in the budget negotiations and voted on. last week. So this is our projection of what we'll lose, but we still haven't calculated how that state funding might end up mitigating the loss of 30 million per year, right?

That is correct. And actually, through our agency, the California Association of Public Hospital, we have been, you know, integral with them you know, working with them, you know, with our, you know, representatives from both the state and the federal level. And they're also, you know, they've been working and trying to get additional funding that they've been negotiating over the past, you know, couple of years. So there might be, in addition to the $250 million through the state budget, there might be potential funding you know, not significant, but some, you know, pickups, but at this point in time, it is unknown, and it is not part of the presentation provided in the HR1 impact supervisor level.

Right, and that's why I'm glad we're kind of forecasting what the potential losses will be. We don't know yet how much money will come out of what was approved in the budget to specifically to Monterey County, but in time we will. By the end of the year, we should be able to tell what are the trends look like, right? How much are we losing each year on this fiscal, this coming fiscal year and the following one. This is what we expected our losses to be, but because of the help, the state provided, it's less, but it also tells us where those gaps are and how much we're still losing despite the assistance the state gave, because it's not going to fund all the losses that we've had as a result of H.R. 1. So that's why I'm hoping that we could keep tracking that as those funds come in and as we see what the impacts are specifically to our hospital and that then this committee could keep the full board apprised of what that picture looks like. Obviously, we have some leadership changes at Natividad, and I think that's why it's even more important as supervisors to keep an eye on what the impacts could be to our hospital. The last thing we want is to have to make those tough decisions that are going to harm our employees, potentially harm our employees or reduce services for the community. The last question I have was just on accounts receivable. Obviously, that was something that my previous time here, we always kept track of, but you see, and this was pre-COVID when I was on there, but the last two years showed that It's been stable. The accounts receivable amount, the collections have been stable. That is not an issue of concern. It's not higher than where we were at pre-COVID.

That is correct. Actually, so in one of the slides that I presented to give you assurance, you know, that, you know, the inventory of AR has not increased significantly as far as OLEGO is the one that showed that on an average cash collections in the past, current year and last year, the average cash collection actually has increased even though as compared to the times when census was much higher. And that's the check and balance to assure you, to assure the supervisors that our accounts receivables are being worked on and the corresponding cash are coming in.

And just on the census, the numbers were down as you showed, your chart showed. The numbers might have gone up a little bit recently, but I just want to make sure that we're keeping track of that because if there's things the hospital could do to try to get those numbers up out in the community, get more people utilizing our services, I think we should be thinking of how the hospital could... do a better job of doing that if the numbers are dipping down and if they continue to dip down, there should be some things that we potentially can do to make sure we're opening our doors and more of our residents are coming through our doors as their chosen provider.

All right. Perhaps, you know, perhaps we should have a bake sale, you know, in And maybe there will be more.

We have farmers market, but it only goes so far.

Yeah, exactly. But also the other thing, Supervisor Leopold, every month this information is presented to our finance committee and the board of trustees. Pretty much 90% of what you saw is presented to them to make them aware of where things are going.

That's good to hear too as well.

Thank you. I've got a few questions. I've had some of the food at the Tampa Dad, so I don't know if bake sale is really going to be raising a lot of money for us.

Superrest Church, free cookies. Free cookies takes you a long ways.

If you could go back to a couple slides for me, there was one on trauma.

Yes. Would you like me to put it back? Yes, could you please put it up?

I had a couple slides, two or three slides I had some questions on. Do you see it? Yeah, I see the slideshow, but I think it's around seven or eight, that slide on trauma. There. There, it's fine. I guess it was. Why was it peaking there in early fall, late summer? Is that typical? Yeah.

So trauma is one of those businesses, you know, that actually is hard to predict. Because again, as you know, the relationship to trauma is dependent upon how many accidents occur, you know, in the community. And so most of the You know, believe it or not, we thought originally in 2015, you know, when trauma was developed, you know, we thought that the trauma sources of the accidents, you know, was different than what it's going to tell you. So most of the number one and two sources of accidents, it is actually accidents from the farming community and of course, you know, tourism. And so the only thing that I can guess in August of last year, because between May and August, there's a lot of activities that happens here in the farming community. So a lot of, you know, accidents occur and perhaps that was one of the reasons. But we cannot really manage in terms of control, you know, the types of accidents that happen. And so we just, as you know, whenever it happens, it just, you know, they need to come to our doors for services.

A lot of tourism in August, a lot of things going on. So I'll explain that. The next one was margin, a few slides after that. Sure. I think you just passed it up. Would you give me an idea of the time? It says margin on it. Oh, margin, yeah. There. And I guess I didn't write down my question on that. I just wrote down margin because I thought I'd remember it. So now I don't remember what it is. All right. Well, maybe I guess we'll skip that one. That was a negative. That's a deficit. That's a deficit one there. Yeah. I don't remember what my question was. But I did write down my question for you had the AR one by payer. There it is right there. OK, so I try to understand is when I look at the left column for June 24, I count up a little over 260 million. When I look over in March or 26, I count over 210 million. That's a $50 million difference. How did we, I mean, we're talking about $30 million here and drop later on, but how did we adjust to those? That's quite a drop in over a two-year period, and that's 20%. I mean, any business that's going to experience that is going to be having some severe challenges.

So part of the reason of the drop is our internal efforts in collecting the receivables. The effectiveness of our business office in collecting the patient bills, in a sense. Not only just to the patients, but the government as well. So the reason part of this drop is because we are, on an average per month, we're collecting more cash.

Does that reconcile? Okay. That reconciles some, I think.

As an example, let's say we provided services to five patients. So there are five bills that we sent to Medicare and Medi-Cal. If we would not have You know, if we would not have collected those five bills, our AR balance should be in this range, as an example, analogy. But because we are working on those bills to get it collected, so our inventory of receivables has dropped. On the other side of it, the check and balances is on the cash, where I show you, oops, where is it?

So I see part of the thing I think is going to explain here is we're looking at gross AR, not net AR. So that's why I'm looking back at it here. I mean, I see a $50 million drop, but it's not really a $50 million of money that's coming into us.

Right.

Yeah.

So, okay. If I may, you know, let's say, you know, you have five of your neighbors that owes you because you lend them money, but you don't go and collect them. So they're still going to owe you, say, within the five of them, $100, right? $20 each. So you loaned it to them five years ago. And you don't go and go ask them to pay you back, nor they want to pay you. So you are going to still having, hey, they still owe me $100 that I paid them five years ago. But let's say... that three of them paid you, you still have two. So now in your mind, my receivables from my neighbors is only 40 bucks because I went and actually, you know, pursued them to pay me. So that's kind of the analogy.

Yeah, a little better picture of that. Thank you for that. The last question I had was when I was reading here on the board report. Excuse me. And And, of course, as you showed up here, we've had a drop-off in patients, but it also showed salaries and benefits were up 3.8 million and physicians' expenses up 1.1 million. So I'm trying to understand why some of those expenses are up if patients are down, especially the physicians.

The major reason is because the benefits, you know, part of it, And the second thing is annual increases. So let me just go back to this one, if I may.

Yeah, I sort of understand the benefits. I understand there's some set costs onto that. But the physician expenses, why are they up if we're actually seeing fewer patients?

Because part of the physician, I'm more or less about 40% of those are employed physicians, also that they have benefits. And in addition to that, the other part of it, they're contracted physicians. They're contracted because of the trauma requirements. Every year, they have a substantial annual increase of contracted physicians. So even though... even though the resources in unit goes down, but because the cost per unit goes up, that's the increase that is indicated on the report.

Yeah, no, I understand that. Thank you for that explanation. I just want to make sure I understood that. I don't have any other questions on that. I think it's a really great presentation. It would really probably be good for the board to see it at some point, I think, to understand the full picture.

Maybe going into the new fiscal year to share some of this information Because I don't think we've got a report in quite a while about nativity.

Yeah, I agree. And I think that'd be, I think we've got a recommendation from the committee to do that would be really important for the full board to see this. First, I'll just go out to public comment on this item. Anybody on? Do we have anything else we need to address on this?

First of all, here in our budget committee, I want to just introduce our new intern, Kayla Gonzalez Salinas. She's attending Johns Hopkins University, pursuing a major in public health. So it was good that you were here. We're just talking about Intimidate Hospital and all the concerns there with new federal impacts, federal legislation impacts on our public hospital. She's minoring in Spanish language and Hispanic. So I want to welcome her and hopefully maybe one day she'll be one of our local health care leaders in Monterey County. So welcome. Thank you for joining us today. She's going to be helping with their young super rest program this summer.

Nice to meet you all.

What an outstanding student. These students have over 4.0s when they graduate from high school. So that certainly wasn't my case. You're finishing your first year, right?

Yeah.

Yeah, right on. So Michael, on just future agenda items, I was delayed five minutes here because I was just trying to look up our agendas because the budget committee really should have... lot more on our agenda that's why i saw it was so little today um i served on budget from 2017 to about 2022 when they started rotating the committee assignments so i've been off for a while until i got back on this year but i was just looking at i think if you look at the other staff look at our agendas of what we were having oversight of um it was much more comprehensive out of this committee um I think our average budget committee was like two hours. Not that I like long meetings, but it was a lot to oversee. And because so many items, like last week's agenda, so many big fiscal items get put on consent. It was this committee that had a shot to look at it over first, two supervisors looking it over. Before it went on the agenda, other big expenditures, we were able to have oversight. ERP, now Oracle, we had oversight of ERP the last round. And she was in this committee where we saw we got into how many change orders there was and why why it drove up the cost in the millions of dollars, I think it was 60 changeovers on the last year alone. And we read about a lot here in the budget committee, but I'll just give you an example of the old agenda. This was from May of 2017. Of course, we always have our minutes. We had several items on the consent, but just regular. This was before the budget, right? This committee would receive information on the recommended budget before I went to the full committee that did happen this year. We were having oversight of the public defender's report on the status of its reorganization plan. We received the sheriff's office fiscal year, any proposed financial status report. And back then, just like this year, like last Tuesday's meeting, they were having a lot of issues of significant overruns on overtime and other expenditures. Awesome. But even after that, the next agenda item was receiving a report from the Sheriff's Office on cost savings, comparison between filling positions by hiring, and an overtime base. We received a report on behavioral health funding, programs and financial structure, and we received an Intimidated Medical Center financial report that we did today. But then we also had a quarterly report on the Parks Fund, Monterey County Water Resources recommended budget, And there was a couple that are identified. But those are, for me, were examples of, we're not just items that come to mind, but we were actually looking at different funding budgets for different resources within the county. And we're able to, these two supervisors really would have oversight before things were put on the full agenda during a meeting. I just, but I just said, just saying, if you look at what was, this committee had the oversight of then, I think we should be having, it should remain a very substantive committee moving forward.

Because my last meeting, we had a very short agenda, so that's what concerned me. Absolutely, Supervisor, and great questions and great comments. We were actually working internally out of the Budget Office to develop more of a, not an agenda, but more of a program that ultimately comes to the Budget Committee. We did talk about, there were some reasons why we didn't bring the recommended budget this last year to the budget committee, in part because we were doing the budget workshops and the pre-budget workshops. It was more of a duplicative effort. We did make a change this last year to the budget committee items. So we eliminated bringing items to the budget committee that were fully supported. If there were small budgetary changes to a department, We eliminated those coming to the budget committee. If they were not, terminology is escaping me, but if they're minor in nature and fully supported by CO's office, those just went right to the board on consent. But there's absolutely items that we are planning on developing to bring to here. The share of fiscal on a monthly basis is absolutely one of high priority on our list to bring here. Also, the overall salary projections of the county, we do want internally, but we don't show it to anybody. We'd like to start presenting that to the budget committee. Also like to start presenting the max field concept, current status, where we're at with that. Also they need state impacts as they come up. on a routine basis. We still bring in the local economic impacts that we're aware of. We get a report on a quarterly basis that really looks at our main funding streams and impacts for the non-program revenue side. Those we plan on absolutely bringing back to this committee, as well as any projections that we might do in the fiscal forecast as well. So we are planning on... redeveloping, reinvigorating, and using this committee to really help the county drive and be a solid fiscal steward. And this was considered a juice committee.

And that's why I'm saying even this committee, even on the budget agenda, they used to have the chair of this committee. Even before you presented the budget, it wasn't just the CAO, it was the budget chair of this committee. Because the committee had already had one chance to review the recommended budget, When we then, when the budget was presented to the full board of supervisors, the chair said, this is even given an opportunity to speak on the recommended budget from the budget committee standpoint. And even on other projects, like I was thinking the MHRC, the Mental Health Rehabilitation Center. I mean, the Capital Improvement Committee looks at the project merits itself, but all the financial, which ended up being what ended up derailing the project because the costs just shot up. should have been the oversight of this committee looking looking at what are all the finance options let the vetting happen here did we rather than staff one uh presented at the last minute at the 11th hour with no vetting and then there was so many concerns that it for me it was like it really set back this potential project but it also um i think uh lost a lot of support just because the cost ran up so high where had that been vetted earlier on those those red flags could have been part of an earlier discussion, literally at the 11th hour. That was a $200 million project with the debt service. So that's why I'm saying that should have been jurisdiction of this committee having oversight.

Yeah, absolutely. And I know that NHRC was, so we didn't make the change to the budget committee until after the NHRC item actually did flow through the budget committee. But you're right, the way we're using the budget committee should be enhanced. And I totally understand what you're saying. And we'll definitely take it back as we redevelop how these items start coming through and what we start presenting to the budget committee, as well as we start working with your offices directly to understand what other impacts or areas that would like to be explored. So absolutely.

Yeah. And I'll just recommend looking at the agendas of those years and you can see what. I'll put that on my list. All right. Thank you.

Great. Sonia, do you have a few comments from?

yes just a quick comment um what we could do is bring to this committee a sample of how we're going to proceed in terms of the items that would be coming to your committee um i think part of it was just to make sure that we were um not overburdening the committee as well but there were a couple items that were discussed with the broader board that we were taking back directly to the board as opposed to bringing to the committee. And this beginning of this year was just more complex because of the change in the budgeting discussions that were happening. So we could certainly bring back something to this committee so that we are addressing the challenges, as you've mentioned, Supervisor Alejo, to ensure they're vetted first in this arena and then taken to the broader board.

Yeah. And if there's some standards, right, certain types of expenditures, the higher cost ones get vetted here versus the smaller ones, you know, all within reason, right?

Yeah. Okay. With that, I think our meeting is scheduled for July 29th. We do meet in July, right?

Yes, we do have a meeting scheduled.

Unlike other committees. And with that, we'll adjourn until then. All right. Thank you.