Memorandum
Date: June 10, 2025
To: The Honorable Lake County Board of Supervisors
From: Elise Jones, Behavioral Health Services Director
Subject: Consideration of Short-Term Loan from the General Fund to Behavioral Health Services in the amount of $2,000,000.
Executive Summary:
Lake County Behavioral Health Services (LCBHS) is requesting a short-term loan of $2,000,000 from the General Fund to sustain operations during the State's annual Medi-Cal claims payment pause, which spans from mid-May through late August. This loan addresses a temporary cash flow challenge caused by the Department's successful and strategic expansion under Medi-Cal payment reform-not a structural deficit.
Background
As part of Medi-Cal payment reform, counties must maintain an account balance with the State to draw down matching federal funds through the Intergovernmental Transfer (IGT) process. Lake County uses 2011 Realignment funds as the non-federal share to participate in this process.
Over the past two years, LCBHS has expanded its service delivery significantly, aligning with State reform goals and securing the highest Specialty Mental Health Services (SMHS) fee-for-service rates in California. This expansion has resulted in a dramatic increase in submitted claims-and with it, the matching funds required to access full reimbursement.
As of May 2025, LCBHS has contributed $6,932,914.68 in IGT match for FY 2024-25 SMHS claims and has received $5,184,008.77 in IGT funds back to date. Though this funding flows with a delay, the overall return is strong: for every dollar LCBHS commits to IGT, the County typically receives more than twice that amount in combined reimbursements from the State General Fund (SGF), Federal Financial Participation (FFP), and returned IGT.
However, nearly all of the funding returned must immediately be reallocated to the IGT account to maintain claim flow. This creates a low-cash, high-throughput cycle that prevents LCBHS from building the reserves neede...
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