San Jose City Council
April 19, 2022

TO: HONORABLE MAYOR AND FROM: Jacky Morales-Ferrand
CITY COUNCIL Jim Shannon

SUBJECT: SEE BELOW DATE: April 1, 2022

Approved Date
4/1/2022

SUBJECT: PROPOSED CHANGES TO THE SPENDING PRIORITIES AND

PERCENTAGE ALLOCATIONS OF MEASURE E REAL PROPERTY

TRANSFER TAXES

RECOMMENDATION

(a) Hold the second of two public hearings regarding proposed changes to the spending priorities and percentage allocations of real property transfer tax revenues as described under Section 22 of City Council Policy 1-18.

(b) Accept the staff report and adopt a resolution amending City Council Policy 1-18, Operating Budget and Capital Improvement Program Policy, to make the following changes to the spending priorities and percentage allocations of real property transfer tax revenue set forth under Section 22, Real Property Transfer Tax Revenues, to modify the category names and the percentage allocations to:
(1) 40% for creation of new affordable housing for extremely low-income households;
(2) 30% for creation of new affordable housing for low-income households; (3) 5% for creation of new affordable housing for moderate-income households; (4) 10% for homeless prevention and rental assistance; and (5) 15% for homeless support programs including shelter construction and operations.

OUTCOME

This is the second of two public hearings necessary to make proposed changes to the spending priorities and the percentage allocations for the Measure E real property transfer tax revenue consistent with Section 22 of Council Policy 1-18. In order to make these changes, a two-thirds vote of the City Council must be made supporting these changes. If these changes are approved by the City Council, the revised spending priorities and percentage allocations will be used to modify the current Measure E spending plan and will be used for future fiscal years. The proposed changes to Council Policy 1-18 Section 22 can be reviewed in Attachment A.

COUNCIL AGENDA: 4/12/2022
FILE:

ITEM:
22-486

8.1 HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

EXECUTIVE SUMMARY

Measure E has quickly become a critical source of funding for both the production of affordable housing and funding for homeless prevention and rental assistance programs. The pipeline for new affordable housing development is strong, while other local sources of funding such as Measure A are being depleted. This dynamic placed a higher demand for Measure E funds to support shovel-ready permanent housing to move forward. At the same time, the City of San José (City) has provided a direct response to the need to house the homeless population by building emergency interim housing and acquiring hotels to provide shelter options for hundreds of families and individuals facing homelessness in San José.

This memorandum provides information regarding the homeless services provided by the Santa Clara County’s (County) behavioral health program, and efforts being coordinated across multiple levels of government to match resources with the needs in our community. The memorandum also includes an analysis of the long-term financial impacts of committing to creating additional interim housing communities.

Considering all of this information, staff is recommending changes to City Council Policy 1-18 Section 22 which outlines the use of Measure E funds. Changes will clarify the use of funds in each category and reallocate funding from each category to create a new priority to fund Homeless Services Programs. This will allow the City to use Measure E funds to support homeless programs including case management, outreach teams, encampment services, safe parking, employment and training programs, homeless shelters and interim housing construction and operations.

BACKGROUND

The City has a substantial need for affordable housing. As discussed below, upon approval of Measure E, the City Council updated City Council Policy 1-18 to add Section 22 clarifying the intended use of General Fund revenues raised from Measure E. Measure E is a general tax and the revenues derived from the tax are unrestricted, which means the City can use Measure E revenues for any governmental purpose. While these revenues are deposited in the General Fund and can be used for any governmental purpose, the City Council intended that the revenues be allocated towards addressing the affordable housing and homelessness crisis. The City’s most urgent housing issues include, but are not limited to, housing for the individuals and families experiencing homelessness and developing or acquiring new affordable housing.

On December 3, 2019, the City Council voted to place a new Measure E real property transfer tax on the March 3, 2020 ballot. The proposed Measure E real property transfer tax funds general City services and is set at the following rates:
• Transfers valued under $2 million: exempt (adjusted for inflation) • Transfers from $2 million to $5 million: 0.75%
• Transfers from $5,000,000.01 to $10 million: 1.0%

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

• Transfers over $10 million: 1.5%.

In June 2020, the City Council amended City Council Policy 1-18 to include a new Section 22 which specifies spending priorities and percentage allocations for Measure E and a process for making changes to the priorities. The policy states “the City Council intends for the revenues to be allocated towards addressing the homelessness crisis and the City’s most urgent issues including, but not limited to, homeless prevention and developing new affordable housing.”

The policy also states that up to 5% of the Measure E revenues may be allocated for the administration of funding related to increased workload resulting from more robust homeless prevention efforts and the creation of more affordable housing, including, but not limited to, financial, legal, or administrative and policy programmatic support.

After 5% of the funds are set aside for administration, the remaining funds are distributed on a proportional basis in the funding categories identified in Table 1.

Table 1: Current Measure E Spending Priorities and Percentage Allocations per City Council Policy 1-18, Section 22
Measure E Spending Priorities (After the subtraction of the 5% for Administration Purposes)
Spending Priority
Percent of
Transfer Tax
Permanent Supportive and Affordable Rental Housing for Extremely Low- Income Households 45%
Affordable Rental Housing for Low-Income Households 35% For-Sale and Moderate-Income Rental Housing Households 10% Homelessness Prevention and Rental Assistance 10%

Additionally, Section 22 of City Council Policy 1-18 outlines a process for making changes to the percentage allocations. Any modification of the percentage allocations requires:

• 60-day public notice in advance of the effective date of the proposed allocation change; • At least two public hearings prior to City Council action; and • Two-thirds vote of the City Council.

On February 15, 2022, the City Council held the first public hearing to consider proposed changes to Measure E spending priorities and percentage allocations. At this meeting, the City Council directed staff to make the following changes to City Council Policy 1-18:

• Accept the staff recommendation to modify the category definitions; • Adjust the spending priorities and percentage allocations:

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

o 40% for creation of new affordable housing for extremely low-income households;
o 30% for creation of new affordable housing for low-income households; o 5% for creation of new for-sale and rental affordable housing for moderate- income households;
o 10% for homeless prevention and rental assistance; and o 15% for homeless support programs including shelter construction and operations.

Additionally, staff was directed to gather information and initiate discussions providing a basis for recommendations to amend Measure E allocations. The items below summarize the information requested and actions to be taken prior to the second public hearing.

• Estimated Homelessness Prevention System capacity for the effective distribution of rental assistance by both monetary amount and the number of households served from the current date through June 30, 2002 and for the time period July 1, 2022 through June 30, 2023.
• An estimated source and use funding plan for the construction and operations of 1,000 emergency interim housing units including a more comprehensive collection of revenue sources. These include potential sources such as Homeless Housing Assistance and Prevention (HHAP) Rounds 3 and 4; the Project HomeKey program; federal sources such as the Emergency Shelter Grant; the County; and the County Housing Authority voucher revenue.
• Begin a formal conversation with the County regarding their responsibility to provide a social safety net such as drug, alcohol, and behavioral mental health services, to the City’s unhoused residents.
• Work with City and County Intergovernmental Relations teams and the Mayor’s Office to lobby for funding of support services.

This memorandum provides an update on these items and recommendations for changes to City Council Policy 1-18.

ANALYSIS

The City continues to face both a homeless and an affordable housing crisis. Given that limited funding remains in Measure A fund, the unexpected surplus of Measure E revenue in the current fiscal year, and stronger revenues preliminarily forecasted in the future, staff is exploring opportunities to use Measure E to address the future funding gaps to address our affordable housing and homeless crisis. This memorandum includes an analysis of funding sources in response to the direction provided to staff at the Rules and Open Government Committee on September 29, 2021 to create 1,000 emergency housing community units and 300 HomeKey motel units under construction or completed by December 2022.

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

Strong Measure E Revenues

For Fiscal Year 2020-2021, the total amount of Measure E revenues generated was $50.5 million, exceeding the initial 2020-2021 Adopted Budget estimate of $40.0 million. The 2021- 2022 Adopted Budget also estimated $40.0 million in Measure E revenue. Based on revenues received through December 2021 and revised projections for the remainder of the fiscal year, actions included in the 2021-2022 Mid-Year Budget Review increased the budgeted estimate for 2021-2022 by $50.0 million, for a new total estimate of $90.0 million. The significant 2021-2022 collection level is due to several factors, including the timing of when the payment from the County was processed for June collections, resulting in additional 2021-2022 revenues of $9.7 million; and ten high-value commercial property transfers occurring between July and December 2021 totaling $32.9 million. Though this revenue stream remains volatile and is disproportionately impacted by large commercial real estate transactions – for example, a property known as “HQ @ First” was sold for $535 million in August 2021 and generated over $8 million in Measure E revenues – the Administration preliminarily estimates future year ongoing revenues at $65 million.

Any revenues collected in excess of the budgeted estimate are proportionately allocated to each spending category specified in City Council Policy 1-18 as part of the City Manager’s Annual Report that is approved by the City Council each October.

Table 2: Measure E Revenue Actuals and Projections
Measure E Revenue Actuals and Projections
Fiscal Year
Initial Estimate/
Forecast
Actual/Revised
Forecast Surplus/ (Deficit)
2020 – 2021 $40,000,000 $50,530,828 $10,530,828
2021 – 2022 $40,000,000 $90,000,000 $50,000,000
2022 – 2023 $65,000,000 TBD TBD

I. Current Challenges in Funding Housing Programs
Depletion of Measure A Funding

In 2016, the County passed Measure A, which created a $950 million affordable housing bond with a goal to construct 4,800 units of affordable housing and assist 235 families in first time homebuyer programs. Approximately $773 million or 81% of the $950 million Measure A Housing Bond is committed with the recent approval of the six new developments in February 2022. Setting aside $25 million for homeownership programs and $67 million for mixed income rental and homeownership housing, there is only $85 million left in Measure A funding to invest in the development of affordable housing. In the future, as this valuable resource to the production of permanent supportive housing in San José is expended, local funding sources will

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

be essential in meeting the City’s goals to produce affordable housing to end homelessness in addition to addressing the affordable housing needs of our residents.

Need for Funding the Production of Affordable Housing

On December 20, 2021, the Housing Department released a Notice of Funding Availability for $150 million for the development of new affordable housing throughout San José. Nearly half of these funds were made available through Measure E. Nineteen developments submitted by 15 developers are requesting a total of $241 million dollars in funding. The Notice of Funding Availability was oversubscribed by $91 million which demonstrates a strong pipeline in San José for affordable housing development. Staff is recommending moving forward with awards for 11 developments totaling 1,288 new affordable that will guarantee affordable rents for the next 55 years providing housing stability to at-risk residents in San José. Based on information gathered from the Planning Division, nearly 30 new affordable housing developments have submitted preliminary applications for more than 3,000 new affordable apartments. At the $125,000 per unit subsidy provided by San José, this would require $375 million in funding from the City in gap financing. To continue this momentum, it is critical that developers know that there is an ongoing source of funding for the development of new affordable housing.

Over the past few years, the Housing Department has limited its investment to $125,000 per unit primarily due to the availability of Measure A funds that leveraged City funds to close the financing gap for affordable developments. As Measure A funds are depleted, the City will need to reconsider the level of subsidy necessary for funding future affordable units. The per unit subsidy amount is expected to rise in the coming years. Measure E funds can provide the additional funding needed to fill these gaps.

Creation of New Interim Housing

In January 2020, the City opened its first Bridge Housing Community (BHC). The BHC program provides interim housing for formerly unhoused individuals. The City has two BHC communities that each have 40 cabins designed for individual occupancy. Each community includes community support facilities including shared bathrooms, showers, laundry, kitchen and community space (community garden space and a dog run) for the residents. Residents who move into the site are provided case management to support their transition into a permanent home. The program gives participants an opportunity to stabilize their lives and work toward self-sufficiency.

During the coronavirus pandemic the City built Emergency Interim Housing (EIH) communities, which use modular premanufactured housing instead of individual cabins. EIHs provide the same services and support as the BHC communities. For the duration of the pandemic, both BHC and EIH communities are predominately being used to house medically vulnerable unhoused residents who are at risk of severe illness or death if they contract COVID-19. When the pandemic subsides, EIH and BHC communities will serve a variety of individuals with a wide range of abilities and disabilities. Referrals will come from multiple points, including those from

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

street outreach teams referring individuals from nearby encampments, abatements and referrals from the City’s homeless employment programs.

The City also applied and received funding for the purchase of the SureStay Hotel through the Project HomeKey program. Project HomeKey is an opportunity for state, regional, and local entities to develop a broad range of housing types and convert commercial properties and buildings to permanent or interim housing. The City recently submitted applications to the State Department of Housing Community and Development for two additional HomeKey sites at the Arena Hotel and the Branham & Monterey location. Additionally, staff anticipates submitting an application for the Pacific Motor Inn in the current HomeKey funding round. The state does not cover the entire cost of operating the HomeKey sites and the City must provide additional funding to cover the gap. The HomeKey sites will no longer need ongoing operating subsidies when the sites are redeveloped, likely within the next five years.

Interim Housing Sites: Funding Needed for Ongoing Operations

Currently the BHC and EIH communities house 473 at-risk individuals and families, and the Plaza Hotel and SureStay Hotel shelters another 115. At full capacity the four additional Project HomeKey sites awaiting notification of award could provide an additional 438 shelter beds. Each of these sites requires funding for ongoing operational costs. Table 3 below displays the estimated annual expense to operate all sites. If all sites were open at the same time, the combined annual cost is expected to exceed $30 million. However, as discussed below and represented in greater detail in Attachment C, not all sites will be operational at the same time, and some will cease as the redevelopment of the sites move forward.

Table 3: Interim Housing Operating Costs
Annual Interim Housing Operating Costs Per Bed
Interim Housing
Site
Number
of Beds
Estimated
Annual
Operating Costs
Estimated Annual
Operating Cost per
Bed
Anticipated
End
Current Sites
Mabury Road BHC 40 $1,924,000 $48,100 2023
Felipe Ave BHC 40 $1,924,000 $48,100 2025*
Monterey/Bernal EIH 78 $3,621,000 $46,423 2025*
Rue Ferrari EIH 118 $3,621,000 $30,686 2025*
Evans Lane EIH 121 $2,881,000 $23,810 2025*
Guadalupe EIH 76 $3,200,000 $42,105 2025*
Plaza Hotel 42 $1,050,000 $25,000 2026
SureStay Hotel ** 73 $1,800,000 $24,658 2023
Pending Project HomeKey Application Sites
Branham &
Monterey EIH*** 204 $5,463,000 $26,779 -

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

Arena Hotel*** 89 $2,186,000 $24,562 2026
Pacific Motor
Inn**** 72 $3,125,000 $43,403 2025
Total 953 $30,795,000 $383,626
* Current legislation gives the City authority to develop and operate these emergency housing sites through 2025; Department staff intends to work with the City’s Intergovernmental Relations team to advocate for legislation extending this authority ** The SureStay Hotel is anticipated to convert to permanent housing in 2023-2024 ***These sites have been placed on the waitlist for Project HomeKey Program grant awards ****The Pacific Motor Inn has not yet submitted a Project HomeKey Program grant application

While the Housing Department currently leverages a number of federal, state, and local funding sources to operate these communities, the majority of these funding sources are set to expire in Fiscal Year 2024-2025. The use of Measure E dollars will be critical to supplement the gap in funding sources.

Interim Housing Sites: Funding Needed for New Sites

On September 29, 2021, the Rules and Open Government Committee approved a memorandum from the Mayor and Councilmembers Peralez, Jimenez, Foley and Mahan seeking to have 1,000 pandemic-era EIH units and 300 HomeKey motel units under construction or completed by December 2022. Actions approved by the City Council at the first public hearing regarding Measure E on February 15, 2022 included direction to staff to return with “an estimated source and use funding plan for the construction and operations of 1,000 quick-build units (EIHs), including a more comprehensive review of revenue sources, including such potential sources as HHAP Rounds 3 and 4, HomeKey, federal sources such as Emergency Shelter Grant, the County, and Housing Authority voucher revenues.”

As requested, staff has developed a source and use model providing financial projections from the current year through Fiscal Year 2029-2030. The model lays out the available funding from a range of sources which are described in more detail in Attachment B. Staff developed three scenarios, each case building on the previous scenario, demonstrating the long-term financial impacts for each proposed case. In each of the three scenarios, the existing funding sources are not adequate to fully cover operating costs through 2029-2030, with additional funding being needed from the City’s General Fund and the American Rescue Plan Fund. These scenarios are included as Attachment C. Key assumptions were made to build the model and are summarized below.
• In all cases, the only ongoing revenues sources beyond 2023-2024 are Senate Bill 2, Measure E, and the General Fund.
• All scenarios assume the use of Measure E revenues: $12.2 million in 2021-2022 and $6.2 million ongoing. A breakdown of this allocation is provided below in Table 9. • While other federal or state sources might be provided in later years, the financial projections only include funding expected to be received in the next few years.

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

• These projections do not include any philanthropic donations, which have been used to build the current sites and will be critical in constructing additional sites. • Each scenario results in different levels of funding allocations from the American Rescue Plan in 2022-2023, and the General Fund in 2022-2023 and beyond.

Scenario 1: Current Sites - This scenario includes the funding sources and costs for current sites that are either operational, under construction, or will be approved to receive funding in the future. This scenario does not include the waitlisted or pending HomeKey applications of Monterey/Branham EIH, Arena Hotel, and Pacific Motor Inn. • A merican Rescue Plan Fund 2022-2023 Allocation: $0
• General Fund Allocation: $4.0 million in 2029-2030

Scenario 2: Current Sites + Pending Project HomeKey Application - This scenario also includes the waitlisted or pending HomeKey applications of Monterey/Branham EIH, Arena Hotel, and Pacific Motor Inn)
• A merican Rescue Plan Fund 2022-2023 Allocation: $10.0 million • General Fund Allocation: $2.0 million in 2025-2026 that steadily increases to $12.0 million in 2029-2030 (total potential multiyear allocation of $37.0 million)

Scenario 3: Current Sites +
Pending Project HomeKey Application + Four New EIH Sites - This scenario also includes four additional EIH sites developed between 2022-2023 and 2023-2024 to achieve the 1,000-unit goal. For forecasting purposes, the cost to develop, design and construct a new EIH site is estimated at $15.0 million; the cost to maintain a new EIH site is estimated at $3.5 million, escalated at 3.0% annually.
• A
merican Rescue Plan Fund 2022-2023 Allocation: $20.0 million to kick-start construction
• General Fund Allocation: $20.0 million in 2022-2023 to kick-start construction; annual contributions begin in 2023-2024 at $5.0 million, escalate to $12.0 million in 2024-2025, and rise to $32.0 million in 2029-2030 (total potential multiyear allocation of $179.0 million)

It is important to stress that these scenarios are provided for illustrative purposes to show the relative magnitude of investment required to provide homeless sheltering options for our unhoused community. The actual costs and level of future General Fund contributions will be based on the availability of pending Project HomeKey applications; the number, type, and design of new EIH sites authorized for construction; and the availability of other funding sources and philanthropic efforts. One of these sources could include funding from the Housing Authority.

The City has started discussions with the Housing Authority to explore using funds to provide a shallow rent subsidy to a specific site to provide for operating costs. Using funding from the Housing Authority will require additional research and potentially the addition of a new Move to Work activity. It is anticipated that the new activity will be included in the 2024 Move to Work Plan.

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

City Council’s approval of the Mayor’s March Budget Message for Fiscal Year 2022-2023 directed the City Manager to: 1) allocate a sufficient amount of one-time funding – through a combination of federal, state, and General Fund sources – to enable the development, construction, and ongoing operations of emergency and interim housing at six sites, including quick-build communities and converted motels; and 2) identify a funding strategy to ensure that the combination of anticipated external and internal resources, including the General Fund, as necessary, are sufficient to operate any authorized EIHs and converted motels over the next five years. The 2022-2023 Proposed Operating Budget is anticipated to include American Rescue Plan Fund and General Fund allocations in 2022-2023 that combine to total approximately $40 million to support this direction, and a Manager’s Budget Addendum will be released later in the budget process to provide additional context and strategies to achieve a sustainable strategy to operate EIH sites and converted motels into the future.

Study of Interim Housing Operating Costs

The Rules and Open Government Committee approval of the memorandum on September 29, 2021, also included direction to study the costs of interim housing operations and provide options to reduce operating costs. The Housing Department is working with the San Francisco Foundation to engage a consultant. The consultant study will identify proven best practices (local or national) for interim housing, specifically:
• Models of services and operations that reduce operations and service costs; • Service and operational models that engage residents in the governance, and operations of their own community; and
• Service and support models that move participants to permanent housing.

The San Francisco Foundation has identified a consultant and is in the process of finalizing a contract. It is anticipated that the consultant’s findings will be released this fall.

II. Additional Research

This section of the memorandum provides additional research gathered in response to questions asked by the City Council at the first public hearing held on February 15, 2022. Information includes an evaluation of capacity within the Homelessness Prevention System, information regarding the County safety net programs, and an update regarding efforts from the Intergovernmental Relations team.

Homelessness Prevention System Capacity

The homeless prevention system was established in 2017 with the goal of addressing the needs of individuals and families who are at risk of homelessness. Addressing the needs of these at-risk households results in keeping residents housed, rather than facing the challenges of becoming homeless. The program has been successful and has grown from serving a few hundred households in early years to over 1,200 per year for the last three years. The goal of the program,

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

as stated in the Community Plan to End Homelessness is to serve 2,500 households countywide annually by 2025. Approximately 65% of all residents served by the homeless prevention system live in San José.

The pandemic created an acute need for rental assistance programs and challenged our local homeless prevention program to stretch to meet the needs of thousands of households across the City. To meet the needs of the most vulnerable, the local rental assistance program grew and was able to provide over $29.5 million in rental assistance. Mid-stream, the state required that all rental assistance be centralized, causing the local program to unwind over the past several months. The state rental assistance program will be closing at the end of March 2022, creating a need for local assistance once again.

The Homelessness Prevention System does not have capacity to ramp back up in the remaining three months of this fiscal year. The existing homeless prevention contract for 2021-2022 is $3.8 million funded through Measure E. An assessment was made of the capacity for additional funds for the remaining three months of the year and the capacity is for an additional $1.7 million in funding. Discussions with the team have led to recommend that any remaining Measure E funds in the current fiscal year should be reallocated to the homeless prevention program in 2022-2023.

The shifting of eviction protections combined with the closing of the state rental assistance program creates a greater need for Measure E funds in the coming fiscal year. Destination: Home will be seeking funding from the City, the County and private funds to meet the funding need of the Homeless Prevention Program. Table 4 below summarizes the funding need to meet the capacity and maximize the service level in the homeless prevention system for the current and upcoming fiscal year.

Table 4: Homeless Prevention Program Funding Needs

Homeless Prevention Program Households Served Funding Needed 2021-2022 Current Year Capacity 1,100 $1,700,000
2022-2023 Funding Need 1,830 $16,700,000
2023-2024 Estimated Need 2,160 $19,200,000
2024-2025 Estimated Need 2,500 $22,000,000

County Safety Net Services

The City Council requested information regarding the County’s role and responsibility to provide safety net services to the residents of the County. The County’s Behavioral Health Services Department (BHSD) has an annual budget of over $600 million, funding 749 full time equivalent positions. The BHSD oversees a network of outpatient and inpatient care for Medi-Cal beneficiaries, primarily children with a serious emotional disturbance and adults with a serious mental illness. Table 5 below is a summary of the funding by program for the BHSD in Fiscal Year 2021-2022.

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

Table 5: The BHSD Program Funding
Program Name 2021-2022 Appropriation FTE
Acute Psychiatric Hospital Care $97,349,223 6.0
Blended 88,973,744 126.0
Community Clinics Across the Lifespan 136,728,968 261.1 Community Crisis Services 6,382,374 30.0
Community Training 7,698,664 25.0
Intensive Wraparound Services 143,202,119 10.0
Peer and Family Support 4,296,633 25.0
School Based Services 7,800,453 19.0
Substance Use Detox and Residential Services 46,946,979 93.5 Substance Use Prevention 3,575,306 10.0
Suicide Prevention 1,626,697 9.0
Supportive Housing Services 29,072,243 57.0
Treatment Courts and Post Justice Services 36,074,511 77.5 Total $609,727,914 749.1
Source: County Fiscal Year 2021-2022 Adopted Budget
https://home.sccgov.org/sites/g/files/exjcpb1196/files/document/FY-21-22-Adopted-Budget.pdf

On February 28, 2022, the Santa Clara County Board of Supervisors held a special meeting to hold a Behavioral Health Workshop. In this meeting, staff provided an overview of the behavioral health services provided for the County. The full packet for the workshop can be found on the County’s website. The following is an excerpt of the staff report for the workshop.

The Behavioral Health Services Department (BHSD) is both the provider and the Mental Health Plan for behavioral health services in Santa Clara County. BHSD has a scope of responsibilities that includes providing a network of care for both children and adults, and this network includes both county-operated and contracted community-based providers, as well as inpatient psychiatric facilities.

The behavioral health continuum of care is a public mental health system in a county of approximately two million residents. Out of 31,449 unique clients served in Calendar Year (CY) 2021, a total of 29,380 received outpatient services provided by the county and contractors. Outpatient services make up the largest percentage (94%) of services provided in the continuum. Of the remaining 6% in CY 2021, 360 clients were seen in locked, long- term facilities (e.g., Skilled Nursing Facilities and Institutions for Mental Diseases) and 335 clients were served at Barbara Arons Pavilion. Although the data is unavailable for CY 2021 for short-term acute facilities, the FY 2021 data is available to reflect 1,374 clients in short-term acute facilities (i.e., both contracted acute and non-contracted acute facilities throughout the rest of the state) which is a decent analog for CY 2021.

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

The 6% of the total population served have intense needs, and in a county of approximately two million residents, the public mental health system will serve the most profoundly challenging clients with intellectual delays, histories of trauma, substance abuse, and assaultive behaviors. Locating a set of services, even with a system as robust as the current continuum of care, will be a constant challenge when serving this population.

On top of these challenges, there are overarching behavioral health needs exacerbated by significant events in the community. For example, throughout the COVID-19 pandemic, there has been an increase in depression and anxiety, increased experiences with racism and violence, and other traumatic incidents that have impacted the community in a more concentrated manner. These impacts began with the Gilroy Garlic Festival shooting in 2019 and continued through George Floyd’s murder in 2020, the wildfires, COVID-19 surges, the January 6th, 2021 insurrection, the May 2021 Valley Transportation Authority shooting, the August 2021 Valley Transportation Authority suicide, the October 2021 Gilroy shooting, and the precipitous rise in opioid addition and deaths due to overdoses. Throughout all of this, the continuum has operated with a reduced workforce due to deployment of Disaster Service Workers, loss of staff through the Great Resignation, and the ongoing professional workforce shortage of clinical positions.

The presentation for the workshop is included in this memorandum as Attachment D In reviewing this information, it is clear behavioral health is complex and the level of care necessary for individuals varies greatly with each situation.

As requested by the City Council, the presentation includes a chart showing the number of beds available across the County to support individuals in need of acute, sub-acute, or residential treatment. The chart below is a summary of the beds available.

Table 6. Bed Capacity
Bed Type Current Capacity
Institutes for Mental Diseases 183
Residential Care Facility – Supplemental Patch Services 236 Adult Residential Treatment 55
Crisis Residential 83
Withdrawal Management 28
Master Lease Housing – Shared Housing 22
Total 607

As the report indicates, the number of available beds is not adequate to meet the needs of the community and the County has developed a strategy to address the unmet need.

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

Intergovernmental Relations Coordinated Efforts

On an annual basis the City Council adopts legislative advocacy priorities. In the current legislative year, identifying homeless funding opportunities is one of the City’s four top advocacy priorities. The Intergovernmental Relations team has actively sought opportunities to advocate for interim housing’s funding needs—both capital and operational. The team continues to highlight the need for ongoing, flexible emergency housing operating funds during the state budget process. Additionally, the team is examining federal earmark opportunities for one-time funding to sustain operations at the Mabury Emergency Interim Housing site, Evans Lane Emergency Interim Housing site and the SureStay Hotel, though if successful, these additions would only be one-time supports. Moving forward, the team will collaborate with regional partners to continue pursuing funding at the County, state, and federal level to support operations at interim housing sites and other emergency housing options.

The City’s Intergovernmental Relations team is also working closely with the County’s team to align efforts to secure additional funding for housing, homeless and behavioral health services.

For example, they are working to understand and support the Governor’s proposal to set aside $14 billion to create the Care Court which will be a new approach to provide support to residents with mental health and substance abuse disorders. This new framework will create accountability through the court system while continuing to maintain individual’s rights. This legislation will be closely tracked to understand the potential to bring critical resources to San José.

III. Proposed Policy Changes

Definitions of Measure E Allocation Categories

The spending priority descriptions are being revised to provide clarity regarding the use of funds for each category. The language broadens the definitions providing transparency on the types of activities that may be used to meet the goals of each category.

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

Table 7: Revised Measure E Categories and Potential Uses

Proposed Spending Priority Category Descriptions
Existing
Spending Priority
Language
Proposed Spending
Priority Language Proposed Uses of Funds
Permanent
Supportive and
Affordable Rental
Housing for
Extremely Low-
Income
Households

Creation of New
Affordable
Housing for
Extremely Low-
Income Households

Predevelopment, acquisition, construction,
operating costs and reserves, and permanent
financing for new construction,
acquisition/rehabilitation or preservation
developments serving extremely low-income
households for newly restricted for-sale and rental
housing for a minimum of 20 years and limited
funding for neighborhood serving commercial
space for households up to 30% of the Area
Median Income. For-sale activities can include but
are not limited to forgivable loans, down payment
assistance, first-time homeownership
opportunities, sites under land trusts and shared-
equity programs. Case management activity may
be funded when it is used to support the creation
of extremely low-income units.

Affordable Rental
Housing for Low-
Income
Households

Creation of New
Affordable
Housing for Low-
Income Households

Predevelopment, acquisition, construction,
operating costs and reserves, and permanent
financing for new construction,
acquisition/rehabilitation or preservation
developments serving low-income households for
newly restricted for-sale and rental housing for a
minimum of 20 years and limited funding for
neighborhood serving commercial space for
households up to 80% of the Area Median Income.

For-sale activities can include but are not limited
to forgivable loans, down payment assistance,
first-time homeownership opportunities, sites
under land trusts and shared-equity programs.

Case management activity may be funded when it
is used to support the creation of low-income
units.

For-Sale and
Moderate-Income
Rental Housing
Households

Creation of New
Affordable
Housing for
Moderate-Income
Households
Predevelopment, acquisition, construction,
operating costs and reserves, and permanent
financing for new construction,
acquisition/rehabilitation or preservation
developments serving moderate-income

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

households for newly restricted for-sale and rental
housing for a minimum of 20 years and limited
funding for neighborhood serving commercial
space for households up to 120% of the Area
Median Income. Financing may also include
funding rent-restricted Accessory Dwelling Units.

For-sale activities can include but are not limited
to forgivable loans, down payment assistance,
first-time homeownership opportunities, sites
under land trusts and shared-equity programs.

Homelessness
Prevention and
Rental Assistance

Homelessness
Prevention and
Rental Assistance

Programs and services targeting people who are
homeless or at-risk of becoming homeless
including homeless prevention, gender-based
violence programs, legal services, and rental
assistance. Case management services may be
funded if directly supporting these activities.

N/A

New Category:

Homeless Support
Programs
Including Shelter
Construction and
Operations

Programs and services targeting people who are
homeless or at-risk of becoming homeless
including but not limited to case management,
outreach teams, encampment services, safe
parking, employment and training programs,
homeless shelters and interim housing construction
and operations.

- Creation of new affordable housing for extremely low-income households, low- income and moderate-income households – All three funding categories have been aligned to clarify that both for-sale and rental housing are eligible activities. Activities include acquisition/ rehabilitation of existing apartment buildings and preservation of naturally occurring affordable housing throughout the City as long as it results in a new income restricted housing for a minimum of 20 years. The proposed use of funds also clarifies that funds may be used for predevelopment and acquisition funding for the creation for the targeted incomes. For-sale activities included forgivable loans, down payment assistance, first-time homeownership opportunities, sites under land trusts and shared-equity programs. The moderate-income category may be used to rent-restrict Accessory Dwelling Units. Case management activity may be funded with these categories if the services are supporting these new affordable units. In limited cases, these funds may be used for neighborhood serving commercial space within an affordable housing development serving extremely low-income households. - Homelessness prevention and rental assistance – This category will preserve the original intent of the measure to set aside 10% of Measure E revenue for homeless prevention, rental assistance, and legal services providing housing security for residents housed, potentially facing homelessness and individuals and families fleeing violence. In

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

addition to the housing provided, case management services to support the housing is eligible under this category when it is tied to an eligible housing activity in this category. - Homeless support programs including shelter construction and operations – This is a new category introduced to allow the use of funds for a broad range of homeless programs. This includes outreach teams, encampment services, mobile services, safe parking, employment and training programs, case management, homeless shelters and interim housing construction and operations. Creating this new category will allow funding of ongoing programs and shelters created in the past three years.

Proposed Solution to Support Interim Housing

After carefully weighing the needs and resources available, staff is recommending a change to the percentage allocation between each category and revising the definition of Homeless Prevention and Rental Assistance to allow for funding the operations of interim housing in addition to the current uses. Table 8 below shows the proposed change in the percentage allocation and the resulting amounts of funding in each category. This table includes the action in the 2021-2022 Mid-Year Budget Review to increase the 2021-2022 revenue estimate by $50 million (from $40 million to $90 million) and the preliminary forecast of $65 million for 2022- 2023.

Table 8: Revised Allocations for Measure E Funds – Assuming $90 Million Current Allocation Proposed Allocations
FY 2021-2022 FY 2021-2022 FY 2022-2023
Spending Priority % Amount
($40M) % Amount
($88M)* % Amount
($65M)
Creation of new
affordable housing for
Extremely Low-
Income households
(40%)
45% $17,100,000 40% $35,200,000 40% $24,700,000
Creation of new
affordable housing for
Low-Income
households (30%)
35% $13,300,000 30% $26,400,000 30% $18,525,000
Creation of new
affordable housing for
Moderate-Income
households (5%)
10% $3,800,000 5% $4,400,000 5% $3,087,500
Homelessness
prevention and rental
assistance (10%)
10% $3,800,000 10% $8,800,000 10% $6,175,000

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

Homeless support
programs including
shelter construction
and operations (15%)
0% $0 15% $13,200,000 15% $9,262,500
Total 100% $38,000,000 100% $88,000,000 100% $61,750,000 *The allocation for Program Administration for 2021-2022 is recommended to remain at $2 million, consistent with the Adopted Budget, as additional resources will not be needed for the remainder of the current fiscal year.

Impact of Proposed Changes

- Permanent Supportive Housing and Affordable Housing for Extremely Low-Income Allocation – This category will be reduced from 45% to 40%. The City Council holds a policy stating 45% of all funding be dedicated to extremely low-income households in the new construction program. With this proposal, moving 5% of funding to the Homelessness Prevention and Rental Assistance category will continue providing funding support to the most vulnerable populations in our community. The combined allocation of Extremely Low-Income, Homelessness Prevention and Rental Assistance, and Homeless Support Programs is 65% of all Measure E funding. - Affordable Rental Housing for Low-Income Allocation – This category will be reduced by 5% from 35% to 30%. This change will result in a combined total of $61.6 million in the current year will be available for funding new construction of affordable low and extremely low-income housing. This level of funding will create stability to produce future permanent housing.
- For Sale and Affordable Housing for Moderate Income Allocation – The moderate- income allocation will be reduced by 5% providing $4.4 million for funding moderate income programs. This is the same level that has been allocated in the past two years for the moderate-income category.
- Homelessness Prevention and Rental Assistance – This category will be preserved at the 10% level ensuring adequate funding for the homelessness prevention and rental assistance programs. Historically, the City has supported 50% of the funding needed for the Homeless Prevention System. For example, the projected need from the City of San José for the Homeless Prevention System for FY 2022-2023 is $8,350,000, assuming the City committed 50% of the costs. However, with the 10% spending cap for homelessness prevention and rental assistance activities, only $6,175,000 is projected to be available to support this activity in FY 2022-2023. As a result, the City would be unable to meet the overall funding gap for the system. The capacity of the system is expected to grow even more in FY 2023-2024 resulting in a greater unmet gap.
- Homeless Support Programs Including Shelter Construction and Operations – This new category will be set at 15% of the allocation creating a new source of funding for the construction and operations of interim housing.

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

Table 9 below provides a draft allocation of the 15% Measure E allocation for homeless support programs. Of the existing available funding, per City Council action in its approval of the 2021- 2022 Mid-Year Budget Review on February 8, 2022, a portion of the funds will be used to provide supportive services for those unhoused individuals currently residing within the Guadalupe River Park Area that accept housing assistance. While the County will provide the rental assistance, support services for the program would need to come from the City. Staff is currently in conversation with the County to determine the details of this agreement, with $1.0 million potentially needed in 2021-2022 and $3.0 million needed ongoing, depending upon the number of people within the Guadalupe River Park Area accepting assistance and remaining in the program. The remaining $12.2 million in 2021-2022 and $6.3 million ongoing would be available to support construction and operations of EIHCs and converted motels.

Table 9. Measure E Capacity for Funding Interim Housing Description 2021-2022 Ongoing
Estimated 15% Allocation of Measure E Revenue $13,200,000 $9,262,500

Support to Santa Clara County for Guadalupe River Park
Area Unhoused Residents ($1,000,000) ($3,000,000)

Remaining Available Funding $12,200,000 $6,262,500

CONCLUSION

Production of affordable housing continues to be a priority for the San José and the region. As other local sources, such as Measure A, are beginning to be exhausted, the Housing Department has determined that it is necessary to maintain an alternative stable local funding source. At the same time, an ongoing need for operating support to interim housing solutions and rental assistance has emerged and needs to be addressed. Adjusting the spending categories to include a new category specifically for homeless programs including construction and operating costs associated with interim housing will create a new source of funding for this growing need. This hybrid solution of funding recommits the City to our goals of providing permanent housing and providing much needed funding for the operation of interim housing.

As the real estate market in the San Francisco Bay Area has historically proven to be a strong market, Measure E will continue to prove an investment in affordable housing for years to come.

This vital funding source can also function as a resource for addressing critical housing related needs in our community. The City would greatly benefit from the flexibility within Measure E to address the housing crisis.

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

EVALUATION AND FOLLOW-UP

In order to maintain compliance with City Council Policy 1-18, the dates outlined in Table 10 below must be followed:

Table 10: Timeline for Amendments to Measure E Spending Priorities and Spending Plan Activity Date
Minimum 60-day notice to public of the proposed amendments February 4, 2022 to April 5, 2022
First public hearing to consider changes to the Measure E spending priorities February 15, 2022
Second public hearing and City Council action to approve the recommended policy changes April 12, 2022
Proposed Adjusted Measure E Spending Plan to Measure E Oversight Committee (Housing and Community Development Commission) April 14, 2022 Adjusted Measure E Spending Plan to City Council April 26, 2022 New percentage allocations included in the release of the 2022-2023 Proposed Operating Budget May 2, 2022

CLIMATE SMART SAN JOSE

The recommendation in this memorandum does not affect Climate Smart San José energy, water, or mobility goals.

POLICY ALTERNATIVE

Alternative #1: Combine the Homeless Prevention and Homeless Support Services Categories into One Category for 25% of the Allocation
Pros: Combining the two categories into one larger category will provide maximum flexibility for the City to fund the most urgent needs facing our homeless residents.

Cons: Combining the categories may erode the original intent of the City Council to prioritize homeless prevention programs.

Reason for not
recommending:

Ensuring adequate funding for homeless prevention programs continues to be a priority.

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

PUBLIC OUTREACH

Consistent with City Council Policy 1-18, a 60-day public noticing period was held from February 4, 2022 to April 5, 2022 for these proposed policy changes. An initial public hearing was held on February 15, 2022 to consider changes to the category names and allocation amounts of Measure E funds. Public comments were made expressing concern related to maintaining an allocation of Measure E funding for homelessness prevention and rental assistance; concern regarding the use of Measure E funds for commercial space within affordable housing developments; and general support for staff recommended changes to the updated description and amounts of Measure E allocations.

COORDINATION

This memorandum was coordinated with the City Manager’s Office of Administration, Policy and Intergovernmental Relation and the City Attorney’s Office.

COMMISSION RECOMMENDATION/INPUT

In June 2020, the City Council adopted Resolution 79608 designating the Housing and Community Development Commission to serve as the Community Oversight Committee for the general fund revenues generated by Measure E. The Community Oversight Committee’s role is limited to the review of the Measure E Transfer Tax spending plan and providing recommendations to City Council prior to their approval. The Community Oversight Committee is not required to review changes to the reallocation of spending priorities. Therefore, the Community Oversight Committee did not review this proposed change. The updated Measure E spending plan for 2021-2022 and the proposed plan for 2022-2023 will be brought to the Community Oversight Committee following the City Council’s action regarding the changes in the allocation policy.

CEQA

Not a Project, File No. PP17 008, General Procedure and Policy Making resulting in no changes to the physical environment.

/s/

JACKY MORALES-FERRAND JIM SHANNON
Director of Housing Budget Director

HONORABLE MAYOR AND CITY COUNCIL
April 1, 2022
Subject: Proposed Changes to the Spending Priorities and Percentage Allocations of Measure E Property Transfer Taxes

For questions, please contact Rachel VanderVeen, Deputy Director, at (408) 535-8231.

ATTACHMENTS:

Attachment A: Proposed Changes to City Council Policy 1-18 Section 22 Attachment B: Sources of Funds for Homeless Services and Ongoing Housing Funding Sources Attachment C: Emergency Interim Housing Communities and Hotels Source and Use Statements
Attachment D: Behavioral Health Workshop Presentation

Attachment A: Proposed Changes to City Council Policy 1-18 Section 22

Excerpt from City Council Policy 1-18 – Section 22

22. Real Property Transfer Tax Revenues

On March 3, 2020, the voters of San José passed Measure E to enact a new real property transfer tax (“Transfer Tax”) on the transfer of certain real property in the City. The provisions of this section shall apply to the budgeting of Transfer Tax revenues. The Transfer Tax is a general tax and the revenues derived from the tax are unrestricted, which means the City can use the Transfer Tax revenues for any governmental purpose. While these revenues are deposited in the General Fund and can be used for any governmental purpose, the City Council intends for the revenues to be allocated towards addressing the homelessness crisis and the City’s most urgent issues including, but not limited to, homeless prevention and developing new affordable housing.

The approach for estimating and budgeting Transfer Tax revenues is described below.

a. Estimating Revenue from the Transfer Tax – Due to the volatile nature of a real property transfer tax such as the Transfer Tax, the City will conservatively estimate revenue from the Transfer Tax as part of the Proposed Budget process. During the course of the fiscal year, revisions to the Transfer Tax revenue estimate may be recommended to the City Council to align with the pace of actual collections.

b. Spending Allocations of Transfer Tax – The spending priorities for the Transfer Tax are listed below.

1. Up to 5% of the revenues may be allocated for the administration of funding related to increased workload resulting from more robust homeless prevention efforts and the creation of more affordable housing, including, but not limited to, financial, legal, or administrative and policy programmatic support.

2. The remaining revenue is allocated as follows:

i. 10%
for homelessness prevention, gender- based violence programs, legal services, and rental assistance;
ii. 45% for permanent supportive and affordable housing for 40% for creation of new affordable housing for Extremely Low-Income (ELI) households earning less than 30% of area median income (AMI) as defined by the U.S. Department of Housing and Urban Development; iii. 35% for affordable rental housing for 30% - 80% AMI households 30% for creation of new affordable housing for Low-Income households earning less than 80% of area median income (AMI) as defined by the U.S. Department of Housing and Urban Development;

iv. 10% 5% for new affordable housing below market rate for sale housing and for moderate-income households rental housing up to and including 120% AMI, including but not limited to, rent-restricted Accessory Dwelling Units (ADU) forgivable loans, down payment assistance, land trusts, shared equity programs, and first-time homeownership opportunities for households up to 120% AMI; and
v. 15% for homeless support programs, shelter construction and operations, that may include, but is not limited to case management, outreach teams, encampment services, safe parking, employment and training programs, homeless shelters and interim housing construction and operations.

c. Modifications to Spending Allocation – Any revisions to the revenue estimate, as well as a reconciliation of year-end actuals to budgeted estimates, will be proportionally applied to the spending categories described above. Modifying the percentage allocations during the Proposed Budget process or during the year requires:

1. A 60-day notice in advance of the effective date of the proposed allocation change posted on the City’s website and at least two public hearings prior to City Council action on the proposed allocation change, with a notice of each public hearing posted on the City’s website at least 10 days in advance of the public hearing; and

2. A two-thirds vote of the City Council.

Attachment B: Sources of Funds for Homeless Services and Ongoing Housing Funding Sources

Sources of Funds for Homeless Services
Source of Funds

Total Award

Amount for
Interim
Housing
One-Time/
Ongoing Allowable Uses
Emergency Solutions
Grant CV2 (ESG
CV2) (Federal)
$32,836,839 $16,586,055 One-Time Emergency shelter, homeless outreach, homeless
prevention, rapid rehousing.

Approximately $11.97
million is remaining for 2021-
2022, as shown in Attachment
C.

SB 89 (State) $3,270,000 $3,270,000 One-Time COVID-19 prevention and containment efforts for
shelters, including testing,
handwashing stations, shelter
enhancements to allow social
distancing and isolation;
emergency shelter operation;
shelter capacity; isolation or
quarantine at hotels, motels
Community
Development Block
Grant CV1 (Federal)
$5,263,414 $778,000 One-Time Acquisition and rehabilitation of affordable housing units;
public facilities buildings and
improvements; assistance to
businesses, public services;
short-term financial assistance
for rent, mortgage, and
utilities; acquisition or
operating costs of hotels and
motels to address needs for
social distancing and isolation
Community
Development Block
Grant CV3 (Federal)
$7,578,510 $400,000 One-Time Acquisition and rehabilitation of affordable housing units;
public facilities buildings and
improvements; assistance to
businesses, public services;
short-term financial assistance
for rent, mortgage, and
utilities; acquisition or
operating costs of hotels and
motels to address needs for
social distancing and isolation
HHAP 2 $11,266,278 $3,900,000 One-Time Homeless programs, rental assistance, services, outreach,
interim sheltering, permanent

housing, innovative housing
solutions
HHAP 3 $29,118.995 $17,000,000 One-Time Homeless programs, rental assistance, services, outreach,
interim sheltering, permanent
housing, innovative housing
solutions
HHAP 4 $29,118,995
(estimated)
$17,000,000
(estimated)
One-Time Homeless programs, rental
assistance, services, outreach,
interim sheltering, permanent
housing, innovative housing
solutions
SB 2 $4,200,000 -
$6,000,000
(estimated
annual)
$4,200,000 Ongoing Development, acquisition and
rehab of permanent affordable
housing, homeless programs
including rapid rehousing,
navigation centers,
emergency shelter,
homeownership programs,
acquisition and rehab of
foreclosed or vacant homes
American Rescue
Plan 2021
$212,300,000 $4,000,000 One-Time Activities supporting the health of communities, and
helping households, small
businesses, impacted
industries, nonprofits, and the
public sector recover from
economic impacts of the
pandemic
HOME American
Rescue Plan (Federal)
$11,600,000 $11,600,000 One-Time Development and support of affordable housing, tenant
based rental assistance,
provision of supportive
services, acquisition and
development of non-
congregate shelter
Santa Clara County
Office of Supportive
Housing Grant
$1,000,000 $1,000,000 Annual for
three years
Operating costs for the
Branham Monterey interim
housing site
Project HomeKey
Operating Grant
(State Housing and
Community
Development)
$5,900,000 -
$3,900,000
$5,900,000 -
$3,900,000
Annual for
three years
Operating costs for the Arena
Hotel, Branham Monterey
and Pacific Motor Inn interim
housing sites

Attachment C: Emergency Interim Housing Communities and Hotels Source and Use Statements

Scenario 1: Current Sites

2021-2022 2022-2023 2023-2024 2024-2025 2025-2026 2026-2027 2027-2028 2028-2029 2029-2030 Source
Carryover Funding (Beginning Fund Balance) 23,573,276 40,936, 669 48,855,669 40,925,669 32,018,669 24,073,669 15,523,669 6,349,669 American Rescue Plan Fund, 2021-2022 4,000,000
Emergency Solutions Grant CV2 (ESG CV2)
(Federal) 11,970,000
Community Development Block Grant CV1
(Federal) 778,171
Community Development Block Grant CV3
(Federal) 400,000
HOME American Rescue Plan (Federal) 8,575,251
Homeless Housing Assistance and
Prevention (HHAP) 2 (State) 3,977,639
Homeless Housing Assistance and
Prevention (HHAP) 3 (State) 17,000,000
Homeless Housing Assistance and
Prevention (HHAP) 3 (Pavilion) (State) 2,200,000
Homeless Housing Assistance and
Prevention (HHAP) 4 (State) 17,000,000
SB2 (State) 4,248,646 6,609, 142 6,600,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 SB89 (State) 3,269,820
Measure E - Portion of 15% Allocation 12,200,000 6,200, 000 6,200,000 6,200,000 6,200,000 6,200,000 6,200,000 6,200,000 6,200,000 Project HomeKey Operating Grant (State
Housing and Community Development)
Santa Clara County Office of Supportive
Housing Grant
General Fund 4,000,000
American Rescue Plan Fund, 2022-2023
TOTAL SOURCE 40,844,276 64,157, 669 70,736,669 61,055,669 53,125,669 44,218,669 36,273,669 27,723,669 22,549,669 Use
Operations
Bridge Housing Communities
Mabury BHC 1,924,000 1,924,000 1,982,000 1,982,000 2,081,000 2,081,000 2,143,000 2,208,000 2,274,000 Felipe BHC 1,924,000 1,924,000 1,982,000 1,982,000 2,081,000 2,081,000 2,143,000 2,208,000 2,274,000 Emergency Interim Housing Communities
Monterey Bernal 3,621,000 3,621,000 3,730,000 3,730,000 3,916,000 3,916,000 4,034,000 4,155,000 4,279,000 Rue Ferrari 3,621,000 3,621,000 3,730,000 3,730,000 3,916,000 3,916,000 4,034,000 4,155,000 4,279,000 Evans Lane 2,881,000 2,881,000 2,967,000 2,967,000 3,116,000 3,209,000 3,306,000 3,405,000 3,507,000 Guadalupe (E Lot) - 3,200,000 3,360,000 3,528,000 3,704,000 3,816,000 3,930,000 4,048,000 4,169,000 Monterey/Branham
Additional EIH 1
Additional EIH 2
Additional EIH 3
Additional EIH 4
Hotels
Pavillion 2,200,000
Pl
aza Hotel 1,000,000 1,050,000 1,100,000 1,150,000 1,200,000 SureStay Hotel 1,800,000 1,800,000
Arena Hotel
Pacific Motor Inn
Maint & Repairs 500,000 1,000,000 1,030,000 1,061,000 1,093,000 1,126,000 1,160,000 1,195,000 1,231,000 Sub-Total Operations 17,271,000 23,221,000 19,881,000 20,130,000 21,107,000 20,145,000 20,750,000 21,374,000 22,013,000 Construction
Mabury Relocation 2,000,000
Additional EIH 1
Additional EIH 2
Additional EIH 3
Additional EIH 4
Sub-Total Construction - - 2,000,000 - - - - - - Unrestricted Ending Fund Balance 23,573,276 40,936,669 48,855,669 40,925,669 32,018,669 24,073,669 15,523,669 6,349,669 536,669 TOTAL USE 40,844,276 64,157,669 70,736,669 61,055,669 53,125,669 44,218,669 36,273,669 27,723,669 22,549,669 Emergency Interim Housing Communities and Hotels - Current Sites

STATEMENT OF SOURCE AND USE OF FUNDS

Scenario 2: Current Sites + Pending HomeKey Application

2021-2022 2022-2023 2023-2024 2024-2025 2025-2026 2026-2027 2027-2028 2028-2029 2029-2030 Source
Carryover Funding (Beginning Fund Balance) 23,573,276 52,808,069 55,873,469 41,374,469 26,376,469 17,465,469 10,770,469 5,267,469 American Rescue Plan Fund, 2021-2022 4,000,000
Emergency Solutions Grant CV2 (ESG CV2)
(Federal) 11,970,000
Community Development Block Grant CV1
(Federal) 778,171
Community Development Block Grant CV3
(Federal) 400,000
HOME American Rescue Plan (Federal) 8,575,251
Homeless Housing Assistance and
Prevention (HHAP) 2 (State) 3,977,639
Homeless Housing Assistance and
Prevention (HHAP) 3 (State) 17,000,000
Homeless Housing Assistance and
Prevention (HHAP) 3 (Pavilion) (State) 2,200,000
Homeless Housing Assistance and
Prevention (HHAP) 4 (State) 17,000,000
SB2 (State) 4,248,646 6,609,142 6,600,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 SB89 (State) 3,269,820
Measure E - Portion of 15% Allocation 12,200,000 6,200,000 6,200,000 6,200,000 6,200,000 6,200,000 6,200,000 6,200,000 6,200,000 Project HomeKey Operating Grant (State
Housing and Community Development) 5,932,400 5,042,400 3,990,000 Santa Clara County Office of Supportive
Housing Grant 1,000,000 1,000,000 1,000,000 General Fund 2,000,000 5,000,000 8,000,000 10,000,000 12,000,000 American Rescue Plan Fund, 2022-2023 10,000,000
TOTAL SOURCE 40,844,276 81,090,069 88,650,469 73,063,469 55,574,469 43,576,469 37,665,469 32,970,469 29,467,469 Use
Operations
Bridge Housing Communities
Mabury BHC 1,924,000 1,924,000 1,982,000 1,982,000 2,081,000 2,081,000 2,143,000 2,208,000 2,274,000 Felipe BHC 1,924,000 1,924,000 1,982,000 1,982,000 2,081,000 2,081,000 2,143,000 2,208,000 2,274,000 Emergency Interim Housing Communities
Monterey Bernal 3,621,000 3,621,000 3,730,000 3,730,000 3,916,000 3,916,000 4,034,000 4,155,000 4,279,000 Rue Ferrari 3,621,000 3,621,000 3,730,000 3,730,000 3,916,000 3,916,000 4,034,000 4,155,000 4,279,000 Evans Lane 2,881,000 2,881,000 2,967,000 2,967,000 3,116,000 3,209,000 3,306,000 3,405,000 3,507,000 Guadalupe (E Lot) - 3,200,000 3,360,000 3,528,000 3,704,000 3,816,000 3,930,000 4,048,000 4,169,000 Monterey/Branham 5,463,000 5,515,000 5,712,000 5,999,000 6,179,000 6,364,000 6,555,000 Additional EIH 1
Additional EIH 2
Additional EIH 3
Additional EIH 4
Hotels
Pavillion 2,200,000
Plaza Hotel 1,000,000 1,050,000 1,100,000 1,150,000 1,200,000 SureStay Hotel 1,800,000 1,800,000
Arena Hotel 2,186,000 2,240,000 2,296,000 2,411,000 Pacific Motor Inn 3,125,000 3,223,000 3,779,000 Maint & Repairs 500,000 750,000 1,000,000 1,030,000 1,061,000 1,093,000 1,126,000 1,160,000 1,195,000 Sub-Total Operations 17,271,000 28,282,000 30,777,000 31,689,000 29,198,000 26,111,000 26,895,000 27,703,000 28,532,000 Construction
Mabury Relocation 2,000,000
Additional EIH 1
Additional EIH 2
Additional EIH 3
Additional EIH 4
Sub-Total Construction - - 2,000,000 - - - - - - Unrestricted Ending Fund Balance 23,573,276 52,808,069 55,873,469 41,374,469 26,376,469 17,465,469 10,770,469 5,267,469 935,469 TOTAL USE 40,844,276 81,090,069 88,650,469 73,063,469 55,574,469 43,576,469 37,665,469 32,970,469 29,467,469 Emergency Interim Housing Communities and Hotels - Current Sites + Pending Project HomeKey Application

STATEMENT OF SOURCE AND USE OF FUNDS

Scenario 3: Current Sites + Pending HomeKey Application + New EIH Sites

2021-2022 2022-2023 2023-2024 2024-2025 2025-2026 2026-2027 2027-2028 2028-2029 2029-2030 Source
Carryover Funding (Beginning Fund Balance) 23,573,276 52,808,069 27,123,469 13,866,469 2,182,469 1,145,469 1,872,469 1,323,469 American Rescue Plan Fund, 2021-2022 4,000,000
Emergency Solutions Grant CV2 (ESG CV2)
(Federal) 11,970,000
Community Development Block Grant CV1
(Federal) 778,171
Community Development Block Grant CV3
(Federal) 400,000
HOME American Rescue Plan (Federal) 8,575,251
Homeless Housing Assistance and
Prevention (HHAP) 2 (State) 3,977,639
Homeless Housing Assistance and
Prevention (HHAP) 3 (State) 17,000,000
Homeless Housing Assistance and
Prevention (HHAP) 3 (Pavilion) (State) 2,200,000
Homeless Housing Assistance and
Prevention (HHAP) 4 (State) 17,000,000
SB2 (State) 4,248,646 6,609,142 6,600,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 SB89 (State) 3,269,820
Measure E - Portion of 15% Allocation 12,200,000 6,200,000 6,200,000 6,200,000 6,200,000 6,200,000 6,200,000 6,200,000 6,200,000 Project HomeKey Operating Grant (State
Housing and Community Development) 5,932,400 5,042,400 3,990,000 Santa Clara County Office of Supportive
Housing Grant 1,000,000 1,000,000 1,000,000 General Fund 20,000,000 5,000,000 12,000,000 20,000,000 28,000,000 31,000,000 31,000,000 32,000,000 American Rescue Plan Fund, 2022-2023 20,000,000
TOTAL SOURCE 40,844,276 111,090,069 93,650,469 56,313,469 46,066,469 42,382,469 44,345,469 45,072,469 45,523,469 Use
Operations
Bridge Housing Communities
Mabury BHC 1,924,000 1,924,000 1,982,000 1,982,000 2,081,000 2,081,000 2,143,000 2,208,000 2,274,000 Felipe BHC 1,924,000 1,924,000 1,982,000 1,982,000 2,081,000 2,081,000 2,143,000 2,208,000 2,274,000 Emergency Interim Housing Communities
Monterey Bernal 3,621,000 3,621,000 3,730,000 3,730,000 3,916,000 3,916,000 4,034,000 4,155,000 4,279,000 Rue Ferrari 3,621,000 3,621,000 3,730,000 3,730,000 3,916,000 3,916,000 4,034,000 4,155,000 4,279,000 Evans Lane 2,881,000 2,881,000 2,967,000 2,967,000 3,116,000 3,209,000 3,306,000 3,405,000 3,507,000 Guadalupe (E Lot) - 3,200,000 3,360,000 3,528,000 3,704,000 3,816,000 3,930,000 4,048,000 4,169,000 Monterey/Branham 5,463,000 5,515,000 5,712,000 5,999,000 6,179,000 6,364,000 6,555,000 Additional EIH 1 1,750,000 3,500,000 3,605,000 3,713,000 3,824,000 3,939,000 4,057,000 Additional EIH 2 1,750,000 3,500,000 3,605,000 3,713,000 3,824,000 3,939,000 4,057,000 Additional EIH 3 1,750,000 3,605,000 3,713,000 3,824,000 3,939,000 4,057,000 Additional EIH 4 1,750,000 3,605,000 3,713,000 3,824,000 3,939,000 4,057,000 Hotels
Pavillion 2,200,000
Plaza Hotel 1,000,000 1,050,000 1,100,000 1,150,000 1,200,000 SureStay Hotel 1,800,000 1,800,000
Arena Hotel 2,186,000 2,240,000 2,296,000 2,411,000 Pacific Motor Inn 3,125,000 3,223,000 3,779,000 Maint & Repairs 500,000 750,000 1,250,000 1,288,000 1,327,000 1,367,000 1,408,000 1,450,000 1,494,000 Sub-Total Operations 17,271,000 28,282,000 34,527,000 42,447,000 43,884,000 41,237,000 42,473,000 43,749,000 45,059,000 Construction
Mabury Relocation 2,000,000
Additional EIH 1 15,000,000
Additional EIH 2 15,000,000
Additional EIH 3 15,000,000
Additional EIH 4 15,000,000
Sub-Total Construction - 30,000,000 32,000,000 - - - - - - Unrestricted Ending Fund Balance 23,573,276 52,808,069 27,123,469 13,866,469 2,182,469 1,145,469 1,872,469 1,323,469 464,469 TOTAL USE 40,844,276 111,090,069 93,650,469 56,313,469 46,066,469 42,382,469 44,345,469 45,072,469 45,523,469 Emergency Interim Housing Communities and Hotels - Current Sites + Pending Project HomeKey Application + New EIHC Sites

STATEMENT OF SOURCE AND USE OF FUNDS
Behavioral Health Workshop
February 28, 2022
Board of Supervisors
Attachment D
2 Agenda
I. Introduction & History of Public Mental Health
II. P
resentation from Aurrera Health Group
III. Behavioral Health Services Department (BHSD) Budget, Principles & Objectives
IV. BHSD Access Maps
V. Adult/Older Adult System of Care
VI. Children, Youth & Families System of Care
VII. BHSD Strategies & Solutions
VIII. Workforce Shortage Solutions (BHSD & BHCA)
IX. Questions

Break for Questions
94%
4%
1%
1%
360 clients served
(e.g., Skilled Nursing Facilities (SNF),
Institutes for Mental Diseases (IMD)
CY 21
335 clients served
CY 21
2021 Behavioral Health Services
31,449 Clients Served
1%
1%
*FY 21 data is utilized for short-term acute population due to data availability; data can be used as an analog for CY 21.

Barbara Arons Pavilion (BAP)
Long-Term Locked Facilities
1,374 clients served
(e.g., contracted acute and non-contracted acute
hospitals/facilities throughout CA) FY 21*
4%
Short-Term Acute Facilities
29,380 clients served
CY 2194%
Outpatient
Guiding Principles
• The right t o behavioral health services and well- being across the life span • Achieving recovery from mental illness can be done with effective treatment and support • Equitable access t o quality, cultural and linguistically competent services • Prioritize trauma-in formed systems and cross-systems integration Behavioral Health System of Care: Principles and Objectives Objectives
• Interrupt the cycle o f emergency services, hospitalization, and incarceration
• Strengthen th e community-based system to those most in need • Prioritize access t o appropriate levels of care and align capacity to demand
• Increase efficiencies
• Maximize r esidential and co -occurring capacity
Access to Crisis Services
Access to Outpatient Services
Justice Services
Behavioral Health Services: Access Map
Law Enforcement, Self
Referrals, Family,
Private Providers
Walk In
Mobile Response Crisis Team
(MCRT), Psychiatric
Emergency Response Team
(PERT), Mobile Response
Stabilization Services
(MRSS), & Emergency Psych
Behavioral Health Urgent
Care
BHSD Provider
Network
Self Referrals, School
Linked Services (SLS)
Coordinators, Social
Workers, Family,
Private Providers
BHSD Call Center
BHSD Provider
Network
Probation Officers,
Court, Re-Entry
Center
Centralized
Authorization Unit
Behavioral Health
Resource Center
(BHRC)
BHSD Provider
Network
Client referred to Emergency Psychiatric Services (EPS) through self or law enforcement referral.

Put on 72-hour hold, evaluated for medical conditions, determination made for ongoing stabilization.

Client enters contracted acute inpatient hospital
or Barbara Arons Pavilion (BAP)
(48 beds)
Client enters Institutes
for Mental Diseases
(IMD)
(183 beds)
Shortage of beds causes
back up at BAP
Client discharged to
the community, with
access to services
including:
• Shelters/Motel
• In-Home Outreach
Teams
• Re-connection to
existing service
provider
Client enters Crisis
Residential
(83 beds)
Client enters
Residential Care
Facility
(291 beds)
Client enters State
Hospital
(39 beds)
No state hospital beds
available, clients sent
back to IMD
Inpatient Care
Client has access to:
• Mission Street
Recovery Station
• Valley Homeless
Healthcare Program
Call Center receives referral from Outpatient Team or Inpatient Hospital Assertive Community Treatment (ACT), Intensive Full Services Partnership (IFSP), Full Service Partnership (FSP) providers receive referral via Call Center email inbox
Institutes for Mental Diseases (IMD)/hospital referrals:
24-hour Care Liaison coordinates with Contract Monitor, notifies Call Center Provider notifies Emergency Psychiatric Services, hospital, or client of scheduled appointment on the same day the referral was received
Outpatient Care
Provider opens a file for client, client engages in
treatment services
Client attends appointmentClient does not attend appointment Provider begins outreach process for up
to 60 days
Outreach is successful
Client can be referred to In-Home Outreach Teams
(IHOT) and if unsuccessful, referral is closed.

Client may access services through another referral
Outreach is unsuccessful
Angela
• 65-year-old Mexican-
American female
• Chronic health conditions
including diabetes,
hypertension, fibromyalgia
• Experiencing residual
symptoms after recovering
from COVID-19
Unspecified Anxiety
Disorder, Unspecified
Depressive Disorder
• Brief therapeutic and case
management services
• Further assessment for
possible transition to a higher
level of care if needed
Prevention & Early
Intervention
(~2-4 hours/month)
Linh
• 37-year-old Vietnamese
female
• Monolingual
• Recent immigrant
• Limited health insurance
Post-Traumatic Stress
Disorder, Bipolar Disorder
• Case management for
medical, dental, and food
assistance
• Medication management
and ongoing Dialectical
Behavioral Therapy &
Cognitive Behavioral
Therapy services
Outpatient
(~4-7 hours/month)
Jason
• 25-year-old Mexican
American male
• Homeless
• Has been in and out of
jail 10 times in the last
year
Schizoaffective Disorder,
Bipolar Type
• Case management for
living skills, education,
and prosocial activities
• Transitional residential
program
Intensive Outpatient
(~8-14 hours/month)
James
• 58-year-old Caucasian
male
• Drug use since age 14
• Housing stabilization
received and living
independently
Methamphetamine
Disorder, Depressive
Disorder, Social Anxiety
• Referred to Office of
Supportive Housing’s
Outreach and Engagement
Team
• Linked to medical, mental
health and substance use
resources/support
Residential
Andrew
• 47-year-old Caucasian
male
• High utilizer of the
mental health system
• Alcohol and drug
addiction since his 20’s
• Refuses residential
placements
Schizophrenia Disorder,
Substance Use Disorder
• Intensive case
management services
• Substance Use
Treatment Services
• Currently residing at a
crisis residential facility
Intensive Treatments &
Supports
(15+ hours/month)
Adult/Older Adult Sample Patient Profiles
Severity
Condition
Treatment
Level of
Care
Patient
Example

MILD MODERATE MODERATE HIGH HIGH

$13,279,895
$17,324,560
Adult/Older Adult System of Care Budget
~ $287,240,334
5%
6%
Source: County of Santa Clara Behavioral Health Services Department Budget Fiscal Year 2021-2022
Supportive Housing
Crisis Services
$165,665,583
Outpatient
$5,196,0732%
Prevention & Early Intervention
2%
57%
6%
5%
30%
57%
Residential/Inpatient/IMD
$85,774,22330%
Acute (acute psychiatric hospitals, psychiatric health facilities, acute beds at state hospitals, acute care hospitals with psychiatric wards)
Who goes in? Conserved and/or severely mentally ill clients who require the highest level of care to stabilize, who may be in danger to themselves or others, and may be on a hold.

Subacute (Mental Health Rehabilitation Centers [MHRC], Skilled Nursing Facilities [SNF] with specialized treatment programs, Institutes for Mental Diseases [IMD]) Who goes in? Conserved and/or severely mentally ill clients stabilized enough to step down from inpatient facilities, but with specialized needs that preclude them from living independently in the community. May require 1:1, nursing care, longer lengths of stay.

Residential (adult residential treatment, enhanced board and cares) Who goes in? Clients diagnosed with severe mental illness, but have less severe specialized needs, who can obtain outpatient treatment to live within the community.

Levels of Care
Bed Capacity and Needs
Bed Type Current
Capacity
Is Current
Capacity
Sufficient to
Meet
Need?
Plans to Increase Beds
Institutes for
Mental Diseases
(IMD)
183 No
Purchase/renovate buildings for placements using Mental Health Services Act (MHSA), grants, etc. Expand transition options (assisted living facilities, independent living, step-down options)
Residential Care
Facility (RCF) –
Supplemental
Patch Services
236 No
Increase rates ($80/day) and move rates closer together for all RCF levels of care to stay competitive in purchasing beds through unused funds/savings.

Combine Full Service Partnership (FSP)/Intensive FSP (IFSP) housing funds, develop additional intensive residential programs to re-direct individuals waiting for state-hospital placement.

Adult
Residential
Treatment
55 No
September 2022- 650 S. Bascom would provide an additional 28 beds funded by MHSA.

Crisis
Residential
83 No
Includes 25 Assisted Outpatient Treatment (AOT) beds funded by MHSA and 10 beds funded by Department of State Hospital (DSH).

Withdrawal
Management
28 No Includes 5 beds for youth. Requested American Rescue Plan Act (ARPA) funds to fund 15 beds.

Master Lease
Housing –
Shared Housing
22 No
50 beds needed for Assertive Community Treatment (ACT) clients and 50 beds needed for FSP/IFSP clients who don’t meet Housing and Urban Development (HUD) requirements but can step down to independent living. 23 Adult/Older Adult Initiatives

1. Increased Crisis Residential Beds

2. T
rusted Response Urgent Support Team

3. Increased Institutes for Mental Diseases (IMD) Beds

4. Fentanyl Prevention & Outreach

5. Assisted Outpatient Treatment (AOT) Services

6. Independent Living Empowerment Project

7. Brief Jail Mental Health Systems Tool

8. Increased outpatient slots

Luis
• 10-year-old Latino male
• Primary Language: Spanish
• Referred by school for
exhibiting oppositional
behaviors and being
disruptive in class
Undiagnosed
• Referred to individual
therapy for an assessment
and counseling services
• Parents linked to 3-6
month collateral sessions
and parenting workshops
Prevention & Early
Intervention
(~1-4 hours/month)
Katie
• 3-year-old Caucasian
female
• Moved to CA, leaving her
grandparents
• Displays aggressive and
disruptive behaviors
• Language and gesture
usage is delayed
Adjustment Disorder,
Communication Delays
• Receives therapeutic
services to focus on
addressing grief
• Linked to school district to
evaluate for services for
communication delays
Outpatient
(~4-7 hours/month)
Marco
• 16-year-old Latino male
• Has a 6-month-old
daughter he sees
weekly
• History of justice
involvement
• History of mental health
and substance use
Complex PTSD, Anxiety,
Depression, Substance Use,
Alcohol Dependency
• Weekly substance use therapy
+ weekly 12-step program
• Parenting classes/resources
• Case management for living
skills, education, and
prosocial activities
• Linked to psychiatric
medication evaluation
Intensive Outpatient
(~8-14 hours/month)
Shawnie
• 17-year-old Caucasian
non-binary (they/them)
• History of truancy
• Family history of
addiction
• History of foster care
involvement & placement
• Grief and loss
Substance Use,
Depression with Suicidal
Ideation
• Short term residential
therapeutic Program is
needed to implement
milieu based coping
strategies
• Motivational Interviewing
to address substance use
• Increase self-regulation
techniques
Residential
Brian
• 16-year-old Vietnamese
male
• Two psychiatric
admissions in 6 months
• Unstable housing
• History of truancy
• History in child welfare
system
Depression with Suicidal
Ideation, Anxiety, Unstable
Moods
• Wraparound program
to address all needs
(i.e., social- emotional,
behavioral, medication
support, housing needs
and educational
supports)
Intensive Treatments &
Supports
(15+ hours/month)
Children, Youth, & Families Sample Patient Profiles
Severity
Condition
Treatment
Level of
Care
Patient
Example

LOW MODERATE MODERATE HIGH HIGH

$2,468,581
$13,445,276
Children, Youth & Families System of Care Budget
~ $167,722,449
1%
8%
Source: County of Santa Clara Children’s Budget Fiscal Year 2021-2022 Crisis Services
Residential/Inpatient
$126,587,586
Outpatient
$25,221,00615%
Prevention & Early Intervention
76%
15%
76%
8%
1%
26 Children, Youth, & Family: Intervention Programs
School Linked Services
School-Based Behavioral Health Services
Substance Use Prevention Services
allcove
Raising Early Awareness and Creating Hope
(REACH)
Suicide Prevention
First Episode of Psychosis
27 Solutions and Strategies
• Addition of beds for Institutes for Mental Diseases (IMD), withdrawal management, r
esidential care homes
• Expansion of Behavioral Health outpatient services
• Workforce Strategies
• Housing Strategies
• School Based Expansion
• Crisis Capacity Expansion (e.g., Trusted Response Urgent Support Team [TRUST], North County/West Valley Mobile Crisis Response Team [MCRT] and Transitional Aged Youth [TAY] Expansion)
• Behavioral Health System Navigator Program
• Assisted Outpatient Treatment (AOT)
• Contract flexibility to facilitate continuity of care • County Contract Provider Netsmart implementation
• Continue to ensure Medi-Ca l beneficiaries are provided timely access to high quality services. • Be proactive in addressing ongoing and emerging needs from COVID-19. • Provide individuals with a ppropriate levels of quality care, including Peer Support Specialists services.
• Expand t emporary residential treatment and permanent supportive housing options. • Develop innovative solutions t o address professional work force shortage. • Strengthen infrastructure t o support an integrated managed care delivery system. • Develop and deploy in tegrated clinical teams.

Strategic Objectives
Permanent Housing Strategies

Treatment and Shelter
Housing Stabilization Program
Permanent Supportive Housing
Scattered Site Rental Assistance
Site Based Programs: Apartments, Shared Housing, and RCFs Transitional Housing
System Changes
Community Feedback* for the Trusted Response Urgent Support Team (TRUST) Phone Number
*From 12 Community Planning Sessions held December 2020 – January 2021 • Fast response times
Improving Beneficiary Services by Consolidating
BHSD Phone Numbers
• Should not be 911
• Branded
• Memorable
• Offer 24/7 care
A 3-Digit
Number
Centralized &
Responsive
Santa Clara County’s Project - Consolidation of BHSD Phone Numbers BHSD/CEO Collaboration
GOAL: Improve Access to Behavioral Health Services for Santa Clara County Residents and Medi-Cal Beneficiaries
One Number Call Center Hub to
receive all behavioral health crisis
calls through the County’s
implementation of 988, providing
suicide and crisis support.

Crisis Non-Crisis
Create an Integrated Call Center for
non-behavioral health calls with the
ability to conduct Screenings and
Assessments.

Informed
• Foundation level that identifies core skills for treatment support. • Status: Learning Partnership is finalizing the certification. • Go-Live: March 2022
Capable
• Next level training that provides an integrated assessment and treatment for mild to moderate co- occurring disorders.
• Status: Pending development upon the completion of the Co-Occurring Informed certification program. • Go-Live: July 2022
Enhanced
• Highest level of training for integrated treatments for moderate to severe co-occurring disorders. • Status: Pending development upon the completion of the Co-Occurring Capable certification program. • Go-Live: December 2022
Co-Occurring Trainings
Trainings: Peer Specialist
• Levels of Care
• Residential Continuum of Care
• Community and Public Services Resource
• Criminal Justice Systems Training
• Vulnerability Index Service Priority Decision
A
ssisting Tool
• Sexual Orientation and Gender Identity
E
xpression
• Safety in the Field
• Health Insurance Portability and
A
ccountability Act
• Documentation billable to SB 803
• Substance Use Treatment Services Training
• Trauma Informed Care • Shadow Essential Entry Points & Services • Shadow Essential Entry Points & Services • myAvatar ( Electronic Health Record) Training March 2022 - August 2022
June 2022 – January 2023
January 2022 – January 2023
Ongoing

Peer Intern Program, Student Intern Program, High School Partnerships/Scholarships
Short, Middle, & Long-Term Strategies for Workforce Shortage • Clinical Master and Doctoral
G
raduate Education Stipend
• Loan Repayment Program
(March 2022- California Mental
Health Services Authority
[CalMHSA] Agreement)
• Rate Adjustments
• Contracts Flexibilities
• Peer Certification Training
• Workforce Committee
Short-Term (2022-2023)
• Partner with universities to build
workforce/building career pathways and
research other scholarship opportunities
Long-Term (2025-2026)
• Establishment of Behavioral Health Coaches
criteria (State level)
• Living Wage Increase
Mid-Term (2023 – 2025)
● Compensation
● Recruitment
● Education/Training & Pipeline
● Unlicensed Staff/Paraprofessionals
● Retention

● Compensation
● Recruitment
● Education/Training & Pipeline
● Unlicensed Staff/Paraprofessionals
● Retention

● Compensation
● Recruitment
● Education/Training & Pipeline
● Unlicensed Staff/Paraprofessionals
● Retention

● Compensation
● Recruitment
● Education/Training & Pipeline
● Unlicensed Staff/Paraprofessionals
● Retention

● Compensation
● Recruitment
● Education/Training & Pipeline
● Unlicensed Staff/Paraprofessionals
● Retention

● Compensation
● Recruitment
● Education/Training & Pipeline
● Unlicensed Staff/Paraprofessionals
● Retention

NEXT
STEPS
41 1. BHSD to present 9-month update regarding Management Audit implementation progress to HHC and FGOC in March 2022

2. BHSD returns to the Board of Supervisors on April 19, 2022 with responses to mental health and substance use as a public health crisis referral and behavioral health alternatives to incarceration referral.

Questions