Title
Health and Human Services Agency (HHSA) recommending the Board:
1) Accept the Proposition (Prop) 36 award in the amount of $384,096.81 and approve and authorize the HHSA Director to sign the California Department of Health Care Services Funding In Agreement 10440, for the retroactive term of March 1, 2026, through March 31, 2028; and
2) Delegate authority to the HHSA Director or Chief Assistant Director to execute future amendments to this agreement that do not increase Net County Cost, contingent upon County Counsel and Risk Management approval as applicable, and subsequent administrative documents or required fiscal or programmatic reports.
FUNDING: State Assembly Bill 102 Prop 36 Funding.
Body
DISCUSSION / BACKGROUND
Prop 36, enacted November 5, 2024, titled the “Homelessness, Drug Addiction, and Theft Reduction Act,” allows prosecutors to charge felony drug possession after two prior drug convictions, with defendants eligible to have those charges dismissed upon successful completion of treatment. However, the proposition includes no funds to pay for these services. Assembly Bill (AB) 102, enacted June 27, 2025, provided around $50 million in funding relief for the counties to provide these state mandated services.
On January 6, 2026, Sierra Health Foundation, through its Center for Health Program Management (The Center), acting as the administrative entity for DHCS released a non-competitive allocation-based Request for Information (RFI) for Prop 36 behavioral health implementation and funding. Counties could choose to decline the allocation or submit a scope and budget to initiate a contract for the funds. HHSA submitted their application on March 16, 2026, and the contracting process was initiated. At least 50% of funds must be used for planning and capacity building activities such as hiring, training, and development of policies and procedures. Up to 50% of funds can be used on behavioral health treatment services, however, these funds may not be used to pay for services covered by an individual’s insurance coverage. All of HHSA's planned uses will be under the planning and capacity building activities.
HHSA plans to use roughly 55% of the Prop 36 funds to expand Avatar, the County’s electronic health record and billing system service, to update to the current version of Avatar as the version presently used by HHSA will no longer be supported. In addition, HHSA plans to use 35% of the funds to fund a portion of a Health Education Coordinator position for Prop 36 related activities and part of an Extra Help Mental Health Worker who will assist in Prop 36 client transportation needs. The remaining 10% will be used for indirect costs.
As HHSA received this agreement from the state retroactively, bringing this retroactive agreement before the Board was unavoidable.
ALTERNATIVES
Should the Board decline to approve this funding agreement, HHSA would be forced to decline $384,096.81 in funding for Prop 36 clients and would need to find alternative funding sources for transporting Prop 36 clients to treatment and Avatar electronic health record upgrades.
PRIOR BOARD ACTION
N/A
OTHER DEPARTMENT / AGENCY INVOLVEMENT
County Counsel, Human Resources, and Risk Management.
CAO RECOMMENDATION
Approve as recommended.
FINANCIAL IMPACT
There is no Net County Cost associated with this agenda item. Sufficient appropriations were included in the fiscal year (FY) 2025-26 and FY 2026-27 budgets and will be included in future budgets for the terms of the Agreement.
CLERK OF THE BOARD FOLLOW UP ACTIONS
N/A
STRATEGIC PLAN COMPONENT
N/A
CONTACT
Olivia Byron-Cooper, MPH, Director, Health and Human Services Agency