Memorandum
Date: May 12, 2026
To: The Honorable Brad Rasmussen. Chair, Lake County Board of Supervisors
From: Elise Jones, Behavioral Health Director
Subject: (a) Adopt a Resolution amending the FY 2025-26 Adopted Budget for Fund 141 (Mental Health) to increase revenues and appropriations, (b) Adopt a Resolution amending the FY 2025-26 Adopted Budget for Fund 141 (Substance Use Disorder Services) to increase revenues and appropriations; (c) Adopt a Resolution authorizing Lake County Behavioral Health Services to utilize Encampment Resolution Fund (ERF) grant funding administered through the Lake County Continuum of Care; (d) Amend the FY 2025-26 Capital Asset List for Budget Unit 4014 to include one (1) vehicle funded by ERF grant funding
Executive Summary:
This item requests approval of budget amendments for Fund 145, Budget Unit 4014 (Mental Health) and Fund 141, Budget Unit 4015 (Substance Use Disorder Services), authorization to utilize Encampment Resolution Fund (ERF) grant funding, and a corresponding amendment to the FY 2025-26 Capital Asset List.
The FY 2025-26 Adopted Budget for these funds was developed using prior-year and baseline assumptions. Since adoption, updated revenue projections and actual expenditure trends have materially changed. These amendments are necessary to align the budget with current program operations, service demand, and actual funding levels.
For Fund 145, Budget Unit 4014 (Mental Health), the proposed amendment increases revenues and appropriations by $9,510,998. This adjustment is primarily driven by increased Mental Health Medi-Cal revenue, Behavioral Health incentive funding, and one-time Mental Health Block Grant funding, as well as higher-than-budgeted service delivery costs. Major expenditure changes include significant increases in contracted billable provider services and client placement costs. These increases are partially offset by salary savings associated with vacant positions and other expenditure reductions. The amendment also includes $600,000 in BHCIP bond-related capital project costs and the associated match, as well as $200,000 in ERF grant funding for the purchase of one vehicle to support service delivery.
For Fund 141, Budget Unit 4015 (Substance Use Disorder Services), the proposed amendment increases revenues and appropriations by $1,058,000. This adjustment is primarily driven by updated Medi-Cal billing projections and increased contracted services supported by Opioid Settlement funding. These increases are partially offset by salary savings from vacant positions and reductions in certain operating costs. The amendment also includes a $600,000 interfund transfer to Fund 4014 to support the required BHCIP bond match. While these amendments do not include any transfers from reserves, they do include this interfund transfer, which is reflected in the attached budget resolutions and supported by available restricted funding within Budget Unit 4015.
These amendments reflect a shift from staffing-based expenditures to service delivery costs, including contracted providers and client placements, consistent with current operational needs, workforce capacity, and service utilization.
This item is being brought forward separately from the midyear budget process because updated revenue and expenditure information became clearer following budget adoption and midyear review. Since that time, material changes in Medi-Cal revenue projections, contracted service utilization, and client placement needs have been identified. These amendments are therefore necessary to ensure the FY 2025-26 budget accurately reflects current program activity, funding levels, and service demand.
ERF funding has been awarded through the Lake County Continuum of Care, with Lake County Behavioral Health Services serving in a lead administrative role for Behavioral Health-related components. The attached ERF resolution authorizes Behavioral Health to utilize ERF funding for eligible program activities in accordance with grant requirements, while clarifying that expenditure remains limited to amounts appropriated by the Board through the County budget process. The current FY 2025-26 budget amendment includes $200,000 for the purchase of one vehicle within Fund 145. Any additional ERF-funded program expenditures will be brought forward for future Board consideration through subsequent budget actions.
All revenues supporting these adjustments are derived from State, federal, grant, and other restricted funding sources. These amendments do not require any additional General Fund contribution. The proposed budget adjustments and vehicle purchase are fully supported by these dedicated funding sources and do not result in any increase to County General Fund cost. A prior internal loan from the General Fund used to address temporary cash flow disruptions during State payment reform and electronic health record transition remains unchanged and is not impacted by these amendments.
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Recommended Action:
(a) Adopt a Resolution amending the FY 2025-26 Adopted Budget for Fund 141 (Mental Health) to increase revenues and appropriations;
(b) Adopt a Resolution amending the FY 2025-26 Adopted Budget for Fund 141 (Substance Use Disorder Services) to increase revenues and appropriations;
(c) Adopt a Resolution authorizing Lake County Behavioral Health Services to utilize Encampment Resolution Fund (ERF) grant funding administered through the Lake County Continuum of Care;
(d) Amend the FY 2025-26 Capital Asset List for Budget Unit 4014 to include one (1) vehicle funded by ERF grant funding.