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Health and Human Services Agency (HHSA) recommending the Board approve and authorize the Chair to sign a Fiscal Year 2024-25 Budget Transfer Request (BTR) to increase the use of Mental Health Services Act (MHSA) Prudent Reserve and contingency appropriations by $1,158,360, in the HHSA Behavioral Health Division to align the MHSA Prudent Reserve balance with the amount reported to the Department of Health Care Services (4/5 vote required).
FUNDING: 100% State MHSA.
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DISCUSSION / BACKGROUND:
HHSA BHD is requesting a BTR to move $1,158,360 from the MHSA Prudent Reserve into Appropriation for Contingency. This transfer will align the Prudent Reserve balance with the amount recently assessed and reported to DHCS in compliance with updated state requirements.
Counties are required to maintain an MHSA Prudent Reserve to ensure continuity of services during periods of reduced funding. Effective January 1, 2019, Senate Bill (SB) 192 limits this reserve to no more than 33% of the average Community Services and Supports (CSS) revenue over the past five years. Counties were directed to meet this requirement by June 30, 2020. In February 2020, the Board approved a BTR to bring HHSA into compliance to decrease MHSA Prudent Reserve (Legistar file 20-0196). On July 1, 2020, California Code of Regulations Title 9, Section 3420.30 was enacted, which set a minimum MHSA Prudent Reserve Level at 5% of the average CSS revenue over the past five years.
The proposed transfer reflects an adjustment based on the most recent financial assessment to bring the County’s MHSA Prudent Reserve balance to 7% of the average CSS revenue over the past five years, which aligns with the balance reported to the DHCS. This action reclassifies funds to better align with current fiscal policy and state reporting standards.
ALTERNATIVES:
Should the Board decline to approve this BTR for HHSA BHD, the MHSA Prudent Reserve balance would stay at its current level of 23% of the average CSS revenue over the past five years. As the County has less flexibility to appropriate MHSA Prudent Reserve dollars, this would result in less MHSA funds for the County to appropriate.
PRIOR BOARD ACTION:
02/25/20, 20-0196, HHSA FY 2019-20 Midyear Budget Transfers
OTHER DEPARTMENT / AGENCY INVOLVEMENT:
N/A
CAO RECOMMENDATION:
Approve as recommended.
FINANCIAL IMPACT:
There is no General Fund dollars associated with this agenda item. If approved, the budget transfer will increase revenue and appropriations in the BHD by $1,158,360 in FY 2024-25.
CLERK OF THE BOARD FOLLOW UP ACTIONS:
1) Obtain signature of Chair on the attached BTR; and
2) Submit the BTR to the CAO office for further processing.
STRATEGIC PLAN COMPONENT:
N/A
CONTACT:
Olivia Byron-Cooper, MPH, Director, Health and Human Services Agency