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Health facilities authority seeks extended deadline for jail-diversion infrastructure grants
Summary
The California Health Facilities Financing Authority asked the Senate subcommittee to reappropriate remaining funds and extend the deadline for the Community Services Infrastructure grant program to 2028, citing construction delays and permitting challenges that threaten four unfinished projects.
The California Health Facilities Financing Authority (CHFA) told the Senate subcommittee it needs more time to finish a set of competitive grants intended to build community-based alternatives to incarceration. CHFA requested reappropriation of remaining Community Services Infrastructure (CSI) program funds and an extension of the project deadline to June 30, 2028.
CHFA said the CSI program was funded once in 2017 with $67.5 million from the General Fund to support county projects that expand mental health and substance-use infrastructure for justice-involved individuals. The authority has awarded funds in four competitive rounds and has disbursed about $42.8 million to date; 10 of 14 projects have finished and four remain active in three counties. CHFA noted that counties have faced permitting delays, NIMBY opposition, construction cost increases, labor shortages and COVID-era disruptions.
Why it matters: Without an extension, counties could forfeit remaining grant funds and the unfinished projects — intended to divert people from jails and prisons into crisis stabilization, residential treatment and other community-based services — would revert money to the general fund. Local county representatives urged the committee to allow more time to complete rehabilitation and construction work.
Other CHFA items discussed: CHFA also described other programs in its portfolio and answered questions about the Distressed Hospital Loan Program. CHFA said it has implemented a two-step loan-modification process for hospitals struggling to make initial payments on six-year distressed-hospital loans: (1) a 12-month extension of the deferment period and (2) a possible year-by-year partial forgiveness of debt service tied to demonstrated operational outcomes. CHFA reported it had received eight applications for the 12-month extension and is processing them.
Follow-up and next steps: CHFA asked the subcommittee to approve the proposed reappropriation so counties can finish construction and fully expend their awards. County representatives, including Santa Clara County, urged the subcommittee to support the extension so local diversion capacity is not lost.
Ending: The subcommittee took testimony without voting; CHFA said it would continue to work with counties and the Department of Finance to process the remaining disbursements and that funds forfeited by nonperforming grantees would revert to the general fund.
