Memorandum
Date: June 17, 2026
To: The Honorable Lake County Board of Supervisors
From: Elise Jones, Behavioral Health Services Director
Subject: Behavioral Health Fiscal Stabilization and Reform Readiness Workshop.
Executive Summary:
Lake County Behavioral Health Services requests that the Board of Supervisors receive a fiscal stabilization and reform-readiness presentation and provide policy direction regarding resolution of the remaining $2 million General Fund loan balance.
The Department's current fiscal position is best understood as the result of successful service expansion occurring at the same time as major State payment reform, Electronic Health Record implementation, local-match/IGT sequencing requirements, reimbursement timing issues, provider payment lag, and State offsets. The Department significantly expanded access to medically necessary behavioral health services, including mobile crisis, school-based services, DMC-ODS, medication-assisted treatment, justice-involved services, CARE Act-related work, and opioid settlement-funded service development. This work has produced meaningful community benefit and has drawn County, State, and statewide recognition.
However, the financing infrastructure supporting these services did not keep pace with the scale and timing of the expansion. Under CalAIM payment reform, services may generate reimbursable value, but reimbursement is not immediately available as usable cash. The County must maintain sufficient local match in the SMHS IGT/CFA account before certain federal reimbursements can be released. DHCS initially frontloaded Lake County's IGT account by approximately $250,000 based on estimated monthly service volume, but current SMHS IGT need is closer to $1 million per month. This created a structural cash-flow mismatch during a period of rapid service growth.
The Department is now showing signs of stabilization. Current Budget Unit 145 year-to-date revenues exceed expenditures by approximately $3....
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