Board accepts proposed FY25‑26 budget; public and staff press to preserve HSA labs, suicide‑prevention post and programs for women

Board accepts proposed FY25‑26 budget; public and staff press to preserve HSA labs, suicide‑prevention post and programs for women

The Santa Cruz County Board of Supervisors on April 29 accepted and filed the proposed fiscal year 2025–26 budget and asked staff to return with options to preserve several county health and social‑service programs after hours of public comment and departmental testimony. The boardvoted unanimously to accept the budget and to direct staff to identify ways to maintain X‑ray/lab services, the suicide‑prevention coordinator position, and community contracts that support programs such as Gemma and MH CAN (Mental Health Client Action Network).

Why it matters

The proposed budget would reduce staffing and services in the countyHealth Services Agency (HSA), which provides clinics, behavioral health and other health programs for residents who often cannot get care elsewhere. HSA leaders and unions warned the cuts would hurt access to urgent diagnostic services and mental‑health supports; frontline workers and former clients told supervisors they feared increased suffering and more pressure on emergency rooms and law enforcement.

What the board received and decided

Carlos Palacios, county executive officer, and Assistant CEO Nicole Coburn presented budget highlights. The proposal is a $1.23 billion countywide spending plan with a general‑fund component of about $793 million. Staff summarized major constraints: $90 million in unresolved FEMA/disaster reimbursements, declines in some state and federal health revenues and uncertainty at the federal level that could produce further cuts. The plan allocates about $6.9 million to general‑fund contingency and proposes a reduction in HSA of about $8.98 million and 74.4 full‑time equivalent (FTE) positions. Staff said most of the HSA reductions reflect programmatic revenue declines, changes to Medi‑Cal/CalAIM reimbursement, and other grant reductions; HSA warned it may need layoffs effective June 30 if alternate funding is not found.

Board action: The board voted unanimously to accept and file the proposed FY25‑26 budget and directed staff to return with options to preserve X‑ray/lab services, the countysuicide‑prevention coordinator, and community contracts supporting the Gemma program, MH CAN and the Justice & Gender Commission. (Vote: 5–0.)

Key details from staff and unions

- Total budget: $1,230,000,000 (countywide). General fund budget ~ $793,000,000. - HSA proposed reduction: ~$8,980,000 and 74.4 FTEs (staff said about 63.6 of those are currently vacant; roughly 11.6 are filled positions that could be affected). Staff noted HSA revenue shortfalls including an $11.1 million reduction in Medi‑Cal reimbursements and a 34% reduction in some behavioral‑health revenues. - Contingency and reserves: Proposed general‑fund contingency $6.9 million; general‑fund reserves ~$98.1 million (about 12.7% of general fund, below peer average noted in staff materials). - Capital / debt: Staff noted nearly $90 million in outstanding FEMA/Caltrans reimbursements from prior disasters that continue to drive debt costs.

Public comment and front‑line testimony

More than fifty speakers addressed the board during the extended public‑comment period. A large portion of testimony focused on proposed HSA service reductions: - MH CAN (Mental Health Client Action Network), Gemma House (womentransitional housing) and the Justice & Gender Commission (JAG) drew repeated appeals from staff, clients and community organizations to restore or find replacement funding. Former clients and employees described the programs as lifelines for people returning from incarceration or experiencing homelessness. - Clinic and lab staff said ending county lab and X‑ray services would delay diagnoses for patients who cannot reach commercial draw sites and would shift costs and infections into local emergency departments.

Representative excerpts (transcript): - Blair Boracious (MH CAN client): "Cutting that is gonna destroy so many people's lives...I'm somebody who is off the street today because of MH CAN." - Max (SEIU chapter president): "Personnel is asking you to cut jobs from our health services, eliminating 12 frontline staff whose role it is to protect our most vulnerable community members... There were 17 managers in HSA in 02/2017; in 02/2023 there are 31." - Kevin Gallagher (mental‑health therapist): "If we cut our lab and X‑ray services at the county health clinics, our patients will have to make appointments at a limited number of commercial draw sites in the area...This budget proposal, if accepted, will lead to people needing lab testing and not being able to get it. It will lead to worsened health outcomes." (Quotes are verbatim excerpts from the public record.)

Staff response and next steps

HSA and the county CAO said staff are already looking for alternate funding and operational models (for example, contracting with commercial labs while maintaining close referral pathways for county patients, and piloting mobile services). Staff told the board they would: - return with specific funding options during the June budget hearings, per the boarddirection; and - present midyear and fall updates tied to changes in state May‑Revise and any federal reconciliation outcomes.

Discussion vs. formal decisions

- Discussion: Board members and the public debated options for preserving services, redirecting funding, and whether to require more cuts at the administrative level to protect frontline services. Staff emphasized uncertainty in federal/state funding and ongoing disaster costs. - Direction: The board unanimously accepted and filed the proposed FY25‑26 budget and directed staff to return with options to preserve the named programs and services and to provide more analysis during the June hearings. - No final program eliminations were enacted at the meeting; the proposed reductions remain subject to decisions at the June budget hearings.

Votes at a glance (selected items from the meeting) - Item 8 (Proposed FY 2025–26 budget, accept and file): Motion to accept and file and direct staff to return with options to preserve X‑ray/lab, suicide‑prevention coordinator, Gemma, MH CAN and JAG — passed unanimously (5–0). (Mover: Supervisor Koenig; Second: Supervisor Cummings.) - Item 13 (Ad hoc subcommittee to review core funding process): approved unanimously (5–0). (Mover: Supervisor Cummings; Second: Supervisor Martinez.) - Multiple consent and ordinance items were also approved at the meeting (see meeting minutes).

Discussion points supervisors flagged

Supervisors stressed competing priorities: infrastructure and disaster debt, public safety, and the social safety net. Several supervisors asked for options showing the cost/benefit of alternatives and asked staff to explore non‑HSA funding (Measure G/K or other one‑time sources) to preserve essential programs while the Board finalizes the budget in June. Several also requested more detailed labor‑cost analyses and comparisons to market wages for hard‑to‑fill classifications (physicians, licensed mental‑health clinicians and attorneys).

What to watch next

- June 3–4: departmental budget hearings when staff will present options and costs to preserve programs. - June (ongoing): staff to return with analysis of alternative funding sources, post‑May Revise updates, and requests tied to public‑safety and health mandates.

Sections

lede: The board accepted and filed the proposed FY2025–26 budget after a daylong public record focused on Health Services Agency reductions and threatened cuts to county lab and behavioral‑health programs.

nut_graf: The plan reduces HSA by about $9 million and 74.4 FTEs, shifts some diagnostic work out of county clinics, and prompts the board to ask staff to identify options to keep X‑ray/lab services, the suicide‑prevention coordinator and community contracts (Gemma, MH CAN, JAG) in place while the board finalizes spending in June.

ending: The board left the budget proposal in place for now and asked staff for alternative funding options and cost estimates; final decisions remain scheduled during June budget hearings once the county has updated estimates and the May Revise is available.

speakers:[{"name":"Carlos Palacios","role_title":"County Executive Officer","affiliation_type":"government"},{"name":"Nicole Coburn","role_title":"Assistant CEO","affiliation_type":"government"},{"name":"Max","role_title":"SEIU chapter president","affiliation_type":"nonprofit"},{"name":"Blair Boracious","role_title":"MH CAN client/speaker","affiliation_type":"citizen"},{"name":"Kevin Gallagher","role_title":"Mental health therapist","affiliation_type":"citizen"},{"name":"Devin King","role_title":"SEIU representative (HSA)","affiliation_type":"labor"},{"name":"Lauren Apter","role_title":"Assistant District Attorney","affiliation_type":"government"},{"name":"Max Hare","role_title":"Deputy Public Defender","affiliation_type":"government"}],

authorities:[{"type":"policy","name":"County budget process","citation":"Santa Cruz County code/board procedure","referenced_by":["budget discussion"]},{"type":"other","name":"Measure G/Measure K","citation":"Voter‑approved local sales tax measures","referenced_by":["funding options"]}],

actions:[{"kind":"budget_adoption","identifiers":{},"motion":"Accept and file the FY 2025-26 proposed budget and direct staff to return with options to preserve X‑ray/lab services, the suicide‑prevention coordinator, Gemma House, MH CAN and the Justice & Gender Commission","mover":"Supervisor Koenig","second":"Supervisor Cummings","vote_record":[{"member":"Supervisor Koenig","vote":"yes"},{"member":"Supervisor Cummings","vote":"yes"},{"member":"Supervisor DeSerpa","vote":"yes"},{"member":"Supervisor Martinez","vote":"yes"},{"member":"Supervisor Hernandez","vote":"yes"}],"tally":{"yes":5,"no":0,"abstain":0},"legal_threshold":{"met":true,"notes":"Standard majority"},"outcome":"approved","notes":"Board accepted and filed the proposal; final adoption/changes to occur at June hearings"}],

discussion_decision":{"discussion_points":["HSA proposed reductions of about $8.98M and 74.4 FTEs","Outstanding FEMA reimbursements ~ $90M","Public outcry over possible cuts to MH CAN, Gemma House, lab/X‑ray, suicide prevention coordinator","Uncertainty at the federal level may drive further cuts"],"directions":["Staff to return to June budget hearings with funding options to preserve X‑ray/lab services, suicide‑prevention coordinator, Gemma House, MH CAN and JAG","Staff to provide updated May Revise impact and federal budget risk analysis"],"decisions":["Accept and file proposed FY25‑26 budget; unanimous vote to direct staff to provide options for preserving specified programs"]},

clarifying_details:[{"category":"budget_total","detail":"Total proposed county budget","value":"1230000000","units":"USD","approximate":false,"source_speaker":"Carlos Palacios"},{"category":"hsa_reduction","detail":"Proposed Health Services Agency reduction","value":"8980000","units":"USD","approximate":false,"source_speaker":"Nicole Coburn"},{"category":"hsa_positions_reduction","detail":"Proposed reduction in HSA staff","value":74.4,"units":"FTE","approximate":false,"source_speaker":"Nicole Coburn"},{"category":"general_fund_reserves","detail":"General fund reserves","value":"98100000","units":"USD","approximate":false,"source_speaker":"Marcus Pimentel"}],

proper_names:[{"name":"Santa Cruz County Health Services Agency","type":"agency"},{"name":"MH CAN","type":"organization"},{"name":"Gemma House","type":"program"},{"name":"Justice & Gender Commission (JAG)","type":"organization"},{"name":"Measure K","type":"other"},{"name":"Measure G","type":"other"}],

community_relevance":{"geographies":["Santa Cruz County"],"funding_sources":["general fund","Measure G","Measure K","federal grants","state grants"],"impact_groups":["clients of county clinics","people experiencing homelessness","people with serious mental illness","county frontline health employees"]},

meeting_context":{"engagement_level":{"speakers_count":80,"duration_minutes":520,"items_count":70},"implementation_risk":"high","history":[{"date":"2025-04-29","note":"Budget introduced and accepted/filed with direction to preserve key services; final adoption pending June hearings."}]},

searchable_tags:["budget","health services","mental health","labs","suicide prevention","homelessness","MeasureK","HSA"],

provenance:{"transcript_segments":[{"block_id":"block_18483","local_start":0,"local_end":156,"evidence_excerpt":"Chair Hernandez and members of the board, today, we are introducing, the FY 20 25, 20 26, budget.","tc_start":"184.83","tc_end":"187.00","reason_code":"topicintro"},{"block_id":"block_24007","local_start":0,"local_end":188,"evidence_excerpt":"I'll move the staff recommendations and add to that that we're provided options for consideration to maintain funding for the X‑ray lab services, Gemma House, MH CAN and suicide prevention coordinator and the justice and gender commission.","tc_start":"24007.94","tc_end":"24011.00","reason_code":"topicfinish"}]},

salience:{"overall":0.88,"overall_justification":"Large budget with immediate local impacts to health and human services, broad public turnout, and unanimous board direction to produce alternatives.","impact_scope":"local","impact_scope_justification":"Directly affects Santa Cruz County clinic and social services operations.","attention_level":"high","attention_level_justification":"Extensive public comment and board direction; decisions scheduled for June.","novelty":0.45,"novelty_justification":"Budget timing and federal funding threats elevate urgency but process is routine.","timeliness_urgency":0.95,"timeliness_urgency_justification":"FY adoption cycle and incoming May Revise make timing urgent.","legal_significance":0.45,"legal_significance_justification":"Potential labor and contractual impacts; no new law adopted.","budgetary_significance":0.85,"budgetary_significance_justification":"Proposed reductions in HSA and unresolved disaster debt drive material impacts to services and finances.","public_safety_risk":0.6,"public_safety_risk_justification":"Cuts to behavioral health and lab services could increase ER usage and strain public safety resources.","affected_population_estimate":12000,"affected_population_estimate_justification":"Estimate based on HSA clinic and behavioral health caseloads referenced in testimony.","affected_population_confidence":0.3,"affected_population_confidence_justification":"Rough estimate based on testimony, not a formal count.","budget_total_usd":1230000000,"budget_total_usd_justification":"Staff presented a countywide budget of $1.23 billion.","decision_deadline":"2025-06-10","decision_deadline_justification":"Final budget hearings and adoption scheduled in June.","policy_stage":"proposal","policy_stage_justification":"Board accepted and filed proposal pending additional hearings.","follow_up_priority":1},

engagement_forecast:{"newsworthiness":{"national":0.05,"regional":0.25,"local":0.95,"justification":"Local budget and social services decisions primarily affect county residents; some regional interest due to disaster reimbursements."},"notify_recommendation":{"audience":"city","reason":"High local impact to health and social services; recommended to notify municipal partners and community providers.","audience_regions":["US-CA-SCC"],"justification":"Many municipal partners and community providers may be affected and should be kept informed."},"notify_thresholds":{"local_min":0.5,"regional_min":0.75,"national_min":0.9},"predicted_interest":{"national":0.05,"regional":0.25,"local":0.95,"justification":"High local public interest and substantial public comment."},"predicted_click_through":0.55,"predicted_click_through_justification":"Local readers highly likely to open story about health services cuts.","predicted_read_time_minutes":4.5,"predicted_read_time_minutes_justification":"Complex budget with quotable facts; readers will take several minutes."},

graph_signals:{"jurisdictions":["US-CA-SCC"],"jurisdictions_justification":"Santa Cruz County","ontology_topics":["local_budget","public_health","behavioral_health","homeless_services"],"ontology_topics_justification":"Central themes in testimony and staff presentation","entities":[{"id":"ent_hsa","name":"Santa Cruz County Health Services Agency","type":"agency"},{"id":"ent_mhcan","name":"MH CAN","type":"organization"}],"entities_justification":"Named agencies and contractors central to the discussion"}},{