DOR Stakeholder Call Transcript: COVID-19 and Budget Updates

Moderator: Josefina Notsinneh
May 18, 2020
11:00 AM PT

Coordinator:
Welcome and thank you for standing by. At this time, all participants are in a listen-only mode until the question-and-answer session of today’s conference. At that time, you may press star 1 on your phone to ask a question. I would like to inform all parties that today’s call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to Ms. Josefina Notsinneh. Thank you, you may begin.

Josefina Notsinneh:
Good morning, everyone. This is Josefina Notsinneh. I am facilitating this discussion for now. I wanted to let you all know that the purpose of this call is to share with you the provisions that in (Governor Newsom’s) May revised proposal, with respect to funding of DOR-administered programs. After our speakers and summary, there will be time for your questions and comments, and we’ll have the operator open up the lines for questions and comments. I would like to introduce DOR Director Joe Xavier now.

Joe Xavier:    
Thank you, (Josefina). Good morning to all of you across the state. Before we open up the lines, we had upwards of 230 people calling in. As you can imagine, the number of callers from each of those, so thank you for making the time to join us. We can share some information with you. As I always remind myself and acknowledge all of you for the partnerships that we have across the state with each of you, we cannot do the work that we’re doing without those partnerships. We have a number of members of our boards and committees that are joining us and listening in, so thank you for doing so as well.

On behalf of our executive team here in central office, I want to thank each of you for what you’re doing to make a difference in the lives of individuals with disabilities. As I’ve said, this could not be possible without those partnerships.

Next week is Memorial Day, and I just wanted to take this opportunity to wish all of you a safe and happy Memorial Day.

Each of us is feeling COVID-19 in a very different way, whether it’s from a health, economic, or emotional perspective, and while our perspectives are as diverse as we are, we share one thing in common, and that is a respect for each other and a respect for each other’s perspectives, and I think it’s something that we need today, as much as any time in our history.

I wanted to also take this opportunity to remind all of you that while we will be talking about the May revised budget, that the May revised governor’s budget advances the conversation on the budget development and itself is not the final budget. That will come after the negotiation with the legislature, and after the passage of the final budget. So to help you understand some of the conversation that is taking place here, I wanted to provide some context around elements that are key to the budget, and that I’ll get into, where the budget has been adjusted, what the reductions are on a broad scale, and then get into – and then we’ll also talk a little bit about what we’re doing as we’re transitioning to the various phases with COVID-19, and then we’ll come back and open this up for questions that you may have.

So, first of all, in understanding the budget, it’s important to remember that the work that we’re doing here, or the budget that we have, is really based on some of the work that the administration had done in the past, and that that work really ensures that we’re in a good place, compared to where we could have been. And so what do I mean by that? So, the administration had invested 88% of the funds last year, the new investments, in either one-time investments and-or in paying down the wall of debt that you heard the governor talk about. And as a result of that, as much difficulty as we have with the gap that we have today, it certainly would have been a whole lot more challenging than that.

The other thing that I wanted to point out is that the unemployment rate back in the last recession, in 2012, was 12.2%. And in the coming budget year, we’re projecting an 18% unemployment rate. The governor has already said that the expected peak of unemployment is 24.5%. I think those numbers alone are both staggering, but also very reflective of the challenges that are before us.

The solutions that are in the budget include canceling new initiatives that were proposed in the governor’s January budget, cancelling and reducing spending that was proposed in the last budget act, drawdown reserves, and those include things like the Rainy Day Fund, the Safety Net Fund, Prop  98, et cetera. It also includes borrowing from special funds, and it includes temporary increases in certain revenues. One of the other things that is very much part of this budget is making government more efficient, and I’ll talk about that throughout the presentation. We also – the governor also uses – the budget also uses stimulus funding to be part of the solution in closing the gap, and I’ll talk about that a little more in a few minutes.

There are also, built into the budget, shortfall – to close the shortfall, adjustments that will be made if additional stimulus money is not forthcoming. So what is the stimulus that California has received to date, that they’re using to close the gap? $15.3 billion, that’s B as in Bob, are coming from stimulus money across a range of funding sources and throughout a range of departments, programs, and services.

We, as the Department of Rehabilitation, have been working and continue to work to identify where individuals and-or organizations are eligible for and can apply and leverage those funding that I just listed, the $15.3 billion. And thus far, we have not identified where the Department of Rehabilitation is directly eligible for any of the $15.3 billion that have come to California. $8.5 million of the $15-plus billion is allocated directly to the independent living centers here in California.

One of the principles that are used to guide the May revise, one is to ensure that individuals that were eligible continue to be eligible for the various programs, and to ensure that individuals who may need those programs tomorrow will be eligible and able to apply for those programs and services. Two, that the investments that we make are moving us into that future that the governor has so often talked about, and three, that a lens of equity be placed on the overall construct of the budget.

So what is the shortfall that California is facing? It’s a $54 billion shortfall. Our agency is making up about a third of that shortfall. And what is that shortfall made up of? $41 billion of that is a revenue shortfall. $7 billion of that is case increase, and then there’s a $6 million of these other things, some of which I’ve already mentioned. So, while I want to provide a high-level understanding of some of the reductions in impact people with disability across all of the state programs, we will leave it to each respective department to speak to the details and-or to speak to any actions of implementation.

So, Department of Social Services. So, CalFresh is expected to go up by 102% caseload and IHHS is projected to receive a 7% reduction in service hours. For the Department of Health Care Services, it’s expecting a two million person increase to the Medi-Cal roles.

The Department of Developmental Services is what’s drawing the program performance incentive plan that was in the proposed budget. They are also advancing family cost of share, and they are projecting to reduce by $300 million the rate paid to service providers. Aging is eliminating the community-based adult services program, as well as the money or multiple services, the seniors program. Both of those are slated to be eliminated in the proposed budget.

In addition, there are some statewide reductions that are going across all of the state government. So, one of them is a 10% reduction in salary, and that 10% reduction is expected to begin with the July pay period. And the state is going to make every attempt to work with the unions to allay that 10% reduction, and there will be a provision in the budget that, in the event negotiations do not materialize in that 10%, that the governor has a mechanism to effect the 10% reduction.

So what does that mean for the Department of Rehabilitation? Well, it means an approximately $18 million reduction in the salaries of our staff. In addition, there is a 5% reduction in state operations, and for us here at the department, that’s going to be upwards of $3.5 million that will be realized. There are additional cost containment and modernization actions that are called for in the budget, and I want to go through a few of those.

One is to expand the strategy of long-term telework. We know that COVID-19 has really brought upon us the opportunity to do that in a major way, and the expectation is that we look for ways to continue to advance that. We are to increase the modernization of government services, including how we deliver those services online. So, one of the things that we’ve been doing here at the department is a portal to engage with our service providers and with our consumers, which is you go through the web page. Of course, we’re also doing things like electronic signatures that many of you have already become familiar with. We are being asked to reconfigure our office spaces, and part of that is because we are expected to reduce the amount of space that we lease as a department.

And, when possible, we are to adopt flexible work schedules for our workforce. Non-essential contracts, purchases, travel have all been terminated, and we are going to hold a very tight line on putting any of those into play in the coming weeks. We have also been directed, on top of what I’ve already listed, to only fill those essential positions. So in addition to reducing the salary of our staff, we will be reducing the volume of staff that we have across all of our programs and services. Some of these actions that I am talking about are already in current year. They were put into place through budget, whether 2011, the call for us to take these immediate actions in the current year’s budget.

So, what is in the May revise budget for the Department of Rehabilitation? First, in January, as you guys know, we proposed to increase support for our security information officers by three positions, as well as the position to address enterprise architecture of information and technology. That budget change proposal continues to be supported. We also had, in the January budget, the continuance of the authority to continue the partnership that we have with the California Public Utilities Commission Deaf and Disabled Telecommunications  program. The support continues for that budget change proposal.

In the May revise, two additional items are being added. One is extending the authority — this is not dollars, this is just authority — for the CalFresh pilot work that we’re doing with our Department of Social Services, and our Independent Living Services Centers to outreach and support individuals who are eligible for the CalFresh program.

In addition, in the May revise, there is a $2.1 million reduction in general fund allocation to the Independent Living Centers. Again, I want to remind everyone that the May revise continues the development of the budget. It is not the final budget. I also want to remind everyone that, as I mentioned, the $15.3 billion that is part of the solution to close the gap, that a lot of these solutions are one-time solutions. And of course, the $41 billion shortfall in revenue is expected to be in each of the three coming years. We also know that we have another stimulus bill introduced by the Democratic House. Thus far, we have not identified or heard that there are any direct dollars for vocational rehabilitation in that bill.

So let me talk a little bit about COVID-19 and the force and the impact that it had on our programs and services. Well, it has created opportunities that we have not anticipated. We just finished a call with all of our 2,000 staff members across the state. We never believed that that was possible, and COVID-19 forced us to find ways to make that happen. I mentioned electronic signatures. For decades, we believed that we lacked both the authority and the infrastructure to do it, and yet COVID-19 helped us find a way to do it.

We also know that COVID-19 has interrupted many things that are very near and dear to us. The ability for us to come together, the ability for us to develop those relationships that foster the coordination, the collaboration, and the partnership, these are all now being done by telephone and Zoom. I’ve spent more time on video chats in the last two weeks than I have in my prior 50 years of living collected, or together. We know that COVID-19 has also forced the escalation of many trends, things like telework, things like tele-counselling, remote services, and of course things like the gig economy has been lately escalated with some of the COVID-19 actions. COVID-19 has also forced upon all of us that immediate need for us to innovate, to create, to do things in a very different way, and while I think that’s really beneficial to us in the long run, it’s also important that we recognize that COVID-19 was not the start point for that.

The administration has long had the principles and the expectation, and frankly, has asked Congress that we all continue to rethink our programs and services and how we deliver those programs and services. And the other thing that I would point out about COVID-19 is that while it may have accentuated the challenges and the gaps that we face, it did not create those challenges or those gaps. And I truly believe that it’s going to be our collective work that will address both the challenges and the gaps that we’re facing as we continue to move forward.

So what are the actions specific to the Department of Rehabilitation as we move forward? You guys have, for many years now, heard me talk about rightsizing, and rightsizing is essentially because we’d have to ship over 15% of our funding to (unintelligible) services. With passage of WIOA, we have reliance on reallocation of federal dollars, as well as social security reimbursements, which are both very unreliable funding sources. But no matter what you think of rightsizing or how you label it, what rightsizing essentially says is that we must live within our budget and we will take all available measures to ensure that we live within our budget. We need to continue to put every single one of our functions under major scrutiny.

This is called for in the governor’s budget. This is something that we already believe we need to be doing. Can that function be eliminated? Can that function be streamlined, mitigated? We must reduce the demand on that function so that we can free up the resources. An example that I’ve used with (unintelligible) and more internal conversations is the payment of an invoice. If you start looking at how many people audit and approve the payment of an invoice, we see a lot of duplication. That is one example. There are many such like that, that we must put every function in this organization through those paces, no matter what the program is.

And we need to ensure that every single service that we are providing is as effective as it can be, in ensuring that an individual is ready for competitive integrated employment, and that they not only secure competitive integrated employment, but that they retain competitive integrated employment.

We need to evolve our resource allocation. The approach that we have traditionally used is to allocate resources based on the structure. We need to be much more nimble, and we need to allocate resources based on workload and based on demand, and we have to do it repeatedly and in a very agile fashion.

If COVID-19 was not enough and the budget shortfall was not enough, we have of course beyond growing demand to improve the performance of vocational rehabilitation, frankly, all of our programs and services. We know today that if 100 people leave our program today, only 25 will have a job in a year. And that’s something that Congress is looking at very closely. There are a number of reports that have been sent to Congress to continue to highlight the need for us to improve the performance and the outcomes that we have under the vocational rehabilitation program, and that touches every single one of you on the phone, and every single partner across the state.

We need to embrace the realization that jobs that are coming are very different than those that were here before. Just think about the companies that have announced that their jobs will not come back: Nordstrom, JC Penney. It is expected that 25% of the jobs that we lost will not come back. There’s a lot of information there.

I’m going to stop here, I’m going to turn this over to (Andi) to walk you through some of the changes that are occurring as we transition to continue to open up the economy and expand the services that we have already been delivering, and then welcome back and open this up for conversation. So, (Andi), I’ll stop here and turn it over to you.

Andi Mudryk:
Thanks, Joe, and good morning, everybody.

I wanted to start by saying that we have been open and serving consumers all along. We are an essential government function, and the services that we provide are critical to the needs of people with disabilities.

And some of the principles that we’ve adhered to during this time have been that we trust our staff’s commitment to their work, and we believe that their jobs can be done, whether they’re teleworking, out stationed, or in a physical branch office, and we will continue in that effort. We also have been guided by the principle that we will minimize risk to the health of our staff, customers, and the public by taking appropriate health and safety measures in accordance with state guidance, coming primarily from our Department of Public Health.

We are adhering to standards of physical distancing, provision of personal protective equipment such as masks, and the ability to adjust our hours of operations and stagger work times to support social distancing, while continuing to meet the needs of our consumers, including businesses. As I said, we are following state guidance, while also acknowledging that there are differences in various counties, and we’re adhering to local variances when they are not inconsistent with the statewide guidance.

We are maintaining continuity of services through innovation and flexibility, including in some of the ways that Joe mentioned, in terms of accepting email as a form of electronic signature. And, we’re maximizing and prioritizing the ability to serve our customers and our consumers.

We have a majority of our staff members teleworking, and we have relied heavily on information technology to be able to do that. And we intend to continue that practice, both as a way of ensuring physical distancing and keeping folks safe and as a way, where appropriate, to realize cost savings.

I’m going to stop there. I’m sure there are a lot of questions that have to do with the budget, and so I’m going to turn it back over to (Josefina), who’s going to facilitate the question and answer portion.

Josefina Notsinneh:    
Thank you. So, at this point, I am going to ask the operator to open the lines for questions and comments. I really want to ask all of you to please state your name and affiliation before asking your question. Operator, go ahead.

Coordinator:  
At this time, we’ll begin our question and answer session. If you’d like to ask a question, please press *1, unmute your phones, and record your names and disclose your affiliation clearly, when prompted. If you’d like to withdraw your question, press *2. One moment while we wait on our first question. The first question comes from (Mitch). Please state your full name and affiliation. Your line is now open.

Mitch Pomerantz:        
Good morning, Joe. It’s (Mitch Pomerantz), and I’m a member of the Blind Advisory Committee. I – in hearing your comment that state salaries would be reduced by 10%, a couple things crossed my mind. The first is, is it safe to assume that this is in lieu of layoffs? At least, this upcoming fiscal year? And beyond that, is there a likelihood of the need for not filling positions and having positions phased out, based on attrition retirements and whatever, that at some point in the next year or two, I think the department has allocated currently 108 positions that, at some time in the next year or two, that number will be, you know, in the 90s, let’s say. So those are my questions, and thanks very much.

Joe Xavier:    
Thank you, (Mitch), and I will start the conversation and look to the team here to fill in gaps. So, just a couple of things to help contextualize the reduction in salary. The 10% target will be negotiated with the unions. Assuming concurrence, we’ll move forward from that. Without that, you know, the governor will have the – is putting into the budgets the ability to enact that. So, I’m highlighting that to say that there’s a full expectation there will be 10% salary reduction across the department, period. In addition to that, there will be a restriction on filling positions to those that are essential.

So that means that in addition to the salary reduction, we will see an actual reduction in the amount of people that we have working for us over the coming months and probably a couple of years. Now, will it be – in lieu of layoffs? Well, there’s no conversation of layoffs right now. But in effect, layoffs is to eliminate existing workforce. So, the two options that I described reduce the cost of the workforce and, by their nature, also reduce the number of people in the workforce. So I hope that helps understand how that materializes, when that – you know, when the budget is finalized. But again, we already have some of this in place in the current budget letter. We already have a restriction on filling positions. Operator, next question, please.

Coordinator:  
The next question comes from (Tanya). Please state your full name, as well as your affiliation. Your line is now open.

Tanya Mauve:
Hi, (Tanya Mauve), from Alameda County. I had a question regarding the increased sufficiency expectations and demand. How might those impact CDO contracts and outcomes-based payment expectations, or evidence-based practice uptake for the Division of Rehab Services?

Joe Xavier:    
So I’m going to start broadly with the increased sufficiency expectation, and then I’m looking at our team here to speak more specifically to your contract. So I think there’s sort of two overriding things that I would reemphasize here. When we talk about increased efficiencies and expectation, we are literally going to take every single function that we are performing within this department, regardless of program, and say, “Is this needed? If so, what’s the appropriate demand that this function should create on resources?” And you’ll recall the example I used for paying invoices. And that has to be done across not just a division or a section, it’s across the entirety of your organization.

So, when you think about a function, sometimes it gets – it’s something that occurs in three or four different divisions. And we have to look at this collectively, and then we have to look at it and say, “How can we modernize this?” So I mentioned, for example, that we’re moving to put our invoicing, our consumer services online, so that we can, you know, move in that direction.

So that’s part of what we need to do. The other thing that is important for us to think about as we modernize, and that is the effectiveness of each service, resulting in people getting a job and keeping that job. It doesn’t do us a lot of good if we’re putting 50 people to work, and again, later, only 25 have a job. There’s a gap there somewhere. I’m not judging, this is about us collectively. But we need to better understand what is it we’re doing that is not allowing those 50 people to keep a job? So that’s one thing, another thing that we need to look at. So I’m going to stop there and look at our field folks to contribute more specifically to your question specific to contracts.

Kathi Mowers-Moore: 
Hi, (Tanya), thank you for your call. As you know, many of our county behavioral health programs do have third party cooperative agreements, and where those cooperative agreements exist, we are working very closely with them, as we move forward for both renewals of current contracts and discussing outcomes. As you know, we are also continuing to propel forward both from within third-party cooperative agreements, as well as external to third party cooperative agreements in the area of innovative approaches, surveying individuals with behavioral health disabilities, and that does include the ITS model. There’s several projects going on throughout the state, so thank you for your question.

Joe Xavier:    
Operator, next question.

Coordinator: 
The next question comes from (Christina). Please state your full name as well as your affiliation. Your line is now open.

Christina Mills:   
Thank you. This is (Christina Mills) from the California Foundation for Independent Living Centers. I have a series of questions, and I just want to first start by saying that I’m sure none of this was easy. I’ve been on a number of state budget calls over the last several days, and you know, the cuts for everybody across the state are really hard to swallow, especially for those of us in independent living, who within our careers have not experienced something to this degree. So with that, I just want to start by asking – make sure I heard correctly, were there no other specific program cuts in the Department of Rehabilitation? Am I correct in saying that I only heard Independent Living Centers as being the program cut?

Joe Xavier:    
No. Let me explain that a little bit, (Christina). So, there are three programs that we see direct general funds in the governor’s budget that, under the Department of Rehabilitation’s budget. One of those programs, of course – one of those is of course us, ourselves, our overall VR budget, and so as you’ve already heard me say, there’s going to be many more than tens of millions of dollars that’s going to be cut across all these programs. You’re talking about staffing resources, operating costs. All of these are going to apply across every range of programs that fall specifically in the VR funding.

The other two programs that get direct general funds in the budget is the TBI Program, and I think that we see – I’m looking at Victor, like $1.1, $1.2 million. And that program, knock on wood, that program was not cut. It is a program that you and many of the colleagues on the call helped to continue to survive, is the best way I can put it. But the third program that we see direct general funds is the Independent Living Center Program, and that’s why you see that single value specifically there, and not part of the overall reduction that shows up in ways I’ve already described for programs that are funded under the VR.

Christina Mills:   
Okay, thank you. My next question is, where the cuts would actually come down for Independent Living Centers, based on the WMI code, is it – am I correct in saying that the cut would actually happen in the formula area of population?

Joe Xavier:    
Yes, (Victor), please.

Victor Duron: 
Hi, (Christina). This is (Victor). So, we’re still looking at the WMI code to see how we can operationalize the reduction within the framework of the WMI code. So, you know, you’re correct at first blush. The population portion of the WMI code is the one with the most flexibility, but we’re still doing that analysis.

Christina Mills:   
Okay, thank you. My next question, based on the essential positions that you mentioned, re-evaluating what is considered essential, there are some ILAC position openings, and I’m wondering are those considered essential at this point? Will they continue to be filled?

Joe Xavier:    
This is Joe. So, it’s a case by case look at it right now, under the current budget letter. And so, some of those are likely – may be, and some may not be, right? So, there’s not going to be – well, what’s the best way that I can describe this? It’s not a formula application. We have to look at implications, short and long-term, when we’re filling essential positions. But suffice it to say that we’ve been tasked with holding the line on reducing further beyond the 10% by not filling positions. So, that’s a very convoluted answer. It depends. We’ll look at it on case by case. I’m sorry?

Christina Mills:   
All right, and – I’m sorry. (Unintelligible) is not slated to be cut in the budget. Is there a need for continuing the ILC’s current contract beyond the fall, or will there be a new contract put in place?

Victor Duron: 
Hi, (Christina). This is (Victor). So, you know, that’s a really good question, and let me just clarify. So the – just to clarify, the contract that’s going to continue into next fiscal year is with funding that had already been appropriated and encumbered in prior years. And beyond the contract term, which is slated to end in December 31 of 2020, we’re working closely with the Department of Aging and Department of Social Services to strategize about what the future of that program looks like. And obviously, those conversations are different now in the climate that we currently find ourselves in.

Christina Mills:   
Okay. Thanks, (Victor). And then two more quick questions, one is based on the budgets that have already been submitted for fiscal year, when would these potential proposed — I want to say just proposed — budget cuts occur for the independent living centers, if they were to pass?

Joe Xavier:    
Well, is there – since they’re in the budget, in the May revised budget, those would become operational if they were in the final budget, and the final budget takes place July 1.

Christina Mills:   
Okay, just confirming that. And then, lastly, aside from the ILAC programs, does DOR have any other direct services that are providing COVID-19 (unintelligible) to communities?

Joe Xavier:    
I’m sorry, can you repeat that last question?

Christina Mills:   
Yes, sorry. I had you on speakerphone. Aside from the ILAC section of DOR, are there other programs within the department that are providing direct COVID-19 related services to the community?

Joe Xavier:    
So I’m not quite sure what you mean by direct COVID-19. I think, you know, if you think about the services that the department provides through all the VR programs, you know, we have individuals that are affected by COVID-19 all over the place. So, don’t know that I would see that any different than what the ILCs are providing.

Christina Mills:   
Thank you.

Joe Xavier:    
Okay.

Coordinator:  
The next question comes from (Eli). Please state your first and last name, as well as your affiliation. Your line is now open.

Eli Gelardin:  
Hi, (Eli Gelardin), Marin Center for Independent Living, and (Christina) answered my question, so I don’t have a question at this time. Thank you.

Coordinator:  
The next question comes from (Sheri). Please state your full name and affiliation. Your line is now open.

Sheri Burns:  
Hi, this is (Sheri Burns) with Silicon Valley Independent Living Center. (Christina) asked all my questions that I had listed down, Joe, except for whether or not the department is taking a look at a multi-year approach to budget, and since we’re understanding that is projected, that this might be a two to three year period of time of economic uncertainty, and less revenues coming in, so just wondering what the impact might be, long-term, after this first year of fairly, you know, sizable cuts. Thank you.

Joe Xavier:    
Yes, thank you, (Sheri). Those are – that’s a good question. Let me speak a little bit to that. So you’re right that the anticipated revenue shortfall is $41 billion over the coming three years, and I already mentioned that there’s one-time solutions. So, obviously as we get into the next budget, you know, there’s going to have to be some conversation around what does that look like and, you know, how will those materialize? And obviously, we don’t know – at this stage, at least, we don’t know what the feds will do with the stimulus package. Because remember, that if you look at the governor’s budget, there’s a number of reductions in there that are predicated on not receiving additional stimulus. So, that’s another variable that’s still up in the air, frankly.

But more specifically, too, what is the department doing as we look long-term? A number of the options that I described and the number of the actions that are called for in the budget are in fact long-term. So, you know, the ensuring the effectiveness and the efficiency of every service, looking at every function and ensuring that if the right function at the right time with the right source demand are operating, you know, whether it’s, you know, the rollback on contracts, the rollback on, you know, travel and all of that. I would expect that to be something that we’re looking at, multi-year. And there’s probably a number of others that I’m not, you know, thinking about at the moment. But yes, some of this is obviously going to be multi-year, so we’re very much looking at it with that in mind, and it’s something that, you know, we’re going to need every single one of your help to look at. None of this can be done in a vacuum. When we’re talking about how do we improve the work that we’re doing, it has to be a collective conversation.

Sheri Burns:
Okay, thank you. Appreciate it.

Joe Xavier:
You’re welcome.

Coordinator:
I’m sorry?

Joe Xavier:
No, go ahead, please.

Coordinator:
The next question comes from (Ruth). Please state your first and last name, as well as your affiliation. Your line is now open.

Ruth Davis:
(Ruth Davis). I work with Goodwill of San Diego County, and we operate work service programs. And I just wanted to make sure I’m hearing this right, is that the supported employment programs will be affected through the Independent Living Program? Is that correct? Did I hear that correct? Thank you.

Joe Xavier:
No, let me nuance that out a little bit more. So, the supported employment program is a program that is in partnership with the Department of Rehabilitation, and those consumers that are regional center-eligible were the Department of Developmental Services. So – and as you heard me mention at the outset for proposing the budget is a $300 million reduction in service provider rates for the Department of Developmental Services. We don’t know what services that will entail. To the extent that it entails supported employment, then obviously we’ll be having those conversations, because we share that service, and there’s probably a couple of others we may share in common. On the broader – I mean, specific to the Department of Rehabilitation, the reductions are going to be – it’s going to be really looking at each service and saying, “What is that service doing for us?” We’re going to have a reduction in the number of staff that are supporting, you know, the consumers, that are supporting the work that you’re doing, and so that’s something that again, we’ll continue to evolve over the coming weeks and months. And team, anything you would add to that?

Okay. Operator, next question, please.

Coordinator: 
I’m showing no further questions at this time.

Joe Xavier:    
Could you please remind the audience how to ask a question (unintelligible)?

Coordinator:  
Yes. If you would like to ask a question, please press *, then 1, unmute your phone, and record your name clearly when prompted. If you’d like to withdraw your question, press *2.

Joe Xavier:    
Okay, we certainly want to give you – I’m sorry?

Coordinator:  
I apologize, there are a few more questions in the queue.

Joe Xavier:    
Okay.

Coordinator:  
For the next question, it looks like a name was not recorded. You can go ahead and speak out.

Norma James:   
Hi, (Norma James) at (unintelligible) Independent Living Center of Southern California, and I’m interested in the fact of how you’re – the – on the subject of budget cuts, (unintelligible) specifically to Independent Living Centers, and the – and you already said the time frame would be July.

Joe Xavier:    
Go ahead. What was your question, (Norma)?

Norma James:   
I want to know if the – what the number is on Independent Living Centers, as far as the cuts. I know we (unintelligible) all around, but I know there’s a cut. But how bad that’s going to come out? (Unintelligible) stimulus funds – the funds that were coming from the (unintelligible). Now, is that going to affect the budget, or how is that going to relate?

Joe Xavier:    
Yes, so (Norma), the reduction that is in the proposed budget is to the general fund allocation that goes to the Independent Living Centers, and that is being reduced by $2.1 million.

Norma James:   
2.1, okay. That’s what I thought.

Joe Xavier:    
Okay.

Coordinator:  
The next question comes from (Amy). Please state your first and last name, as well as your affiliation. Your line is now open.

Amy:              
Hey, this is (Amy) from (unintelligible) in San Diego, and I just wondered if there would be a transcript of this call provided after, or a recording?

Josefina Notsinneh:    
Yes. We will be posting a transcript of this call in two to three days, online at our Web site.

Amy:              
Thank you.

Josefina Notsinneh:    
Operator, any more questions?

Coordinator:  
Hello, yes. The next question comes from (Darla). Please state your first and last name, as well as your affiliation. Your line is now open.

Darla Kim:     
Hello, this is (Darla Kim) from Deaf Ability Resource, providing employment services to those who are Deaf and hard of hearing, and other disabilities, but focused on the Deaf and hard of hearing. My question is regarding the expansion of our plan to do things remotely, continuing to do them remotely, and I appreciate that we can have an email as a signature. And I – we are a mobile program in the way that we go out to the AGCC, as well as DOR offices, to provide our services. And I’m thinking that those services could be limited for people being able to come into those sites any longer.

So my question would be to make sure that we’re going into the right track of expanding our remote services, in that this will be farther – that we can take it farther than what we’re expecting through COVID-19. Are we expecting remote services to just continue to expand? Because I’d like to – I see that as working for us, because we use technology a lot with the Deaf, and we make placement and we’ve made great relationships with employers and follow up and follow through has been very – done very well, as well as no transportation issues with anybody involved, that I would like to really expand it. But I want to make sure I’m going in the right direction, so I want to hear from you, Joe, specifically, to make sure that I’m not expanding something that would eventually not be possible to us.

Joe Xavier:    
Yes, good question. I’ll speak to part of it, and then I’ll ask you to follow up with – on another part of it. So, kudos for being innovative, kudos for being creative and thinking about how to do it differently, and I can tell you that that’s the way we’re going forward. Now, to be fair to you, I would ask that you follow up – and I’m looking at our folks in the room to tell you who to follow up with, so they can speak specifically about your circumstance. I think – I want to make sure that we do address this and you’re, you know, not getting an incomplete answer. So, folks, who should she call?

Kathi Mowers-Moore: 
So (Darla), this is (Kathi) (unintelligible), and I’d encourage you to reach out to your community resource development specialist, and will be happy to make sure and facilitate that engagement. As you know, we really appreciate the creativity and innovations that are moving forward, and where those innovations are working really well, to help individuals, and as long as we can continue them, we would want to continue those innovations to maximize opportunities.

Darla Kim:     
Thank you so much. Our (unintelligible) and she’s very active in assisting us, very helpful. Thank you.

Joe Xavier:    
Okay.

Coordinator:  
The next question comes from (Susan). Please state your first and last name as well as your affiliation. Your line is now open.

Susan Rotchy:
(Susan Rotchy), the Executive Director at the Independent Living Resources of Solano and Contra Costa County. Thank you for holding this call. I wanted to ask, Joe, you had mentioned that the budget would start July 1. As you know, the Independent Living Centers, our budget year ends September 30. I just want to make sure we’ll be able to finish out the year without any cuts.

Joe Xavier:    
So, (Susan), thank you for your question. There’s two different issues, okay? The state budget is on the state fiscal year, and that does start July 1. And so what we’re talking about here is a reduction of general funds, state general funds. So that would start July 1. You’re – I don’t know if you’re talking about your federal reporting or your program budget year, but that would not change the enactment of the reduction in general fund, if that’s part of the final budget. (Victor), anything you would add to that?

Victor Duron: 
Sure. Yes, thank you, (Susan). That’s a really good question. So, you know, we’ll confirm, but the way that the budget generally works is we have an appropriation, and we encumber it for a given purpose. And so, the general funds that supported the current grant were appropriated last year. And the reduction would go into effect for the general funds that would be appropriated to support the next grant cycle for next fiscal year. But that’s a really good question, so let me just make 100% sure that we’re all on the same page on that.

Joe Xavier:    
So (Victor)’s saying he’ll get back to you.

Susan Rotchy):  
Okay, thank you.

Joe Xavier:    
Okay.

Coordinator:  
For the next question, a name was not recorded. You can go ahead and speak out. The next question comes from (Lisa). Please state your first and last name, as well as your affiliation. Your line is now open.

Lisa Navarro:
Hi, I am (Lisa Navarro). Can you hear me?

Joe Xavier:    
Yes.

Lisa Navarro:
Okay, good. I work with CAP, so I’m a CAP advocate, and I had a question. I guess it’s the practicality regarding processing documents by vendors, private vendors for consumers, and consumers on signatures for consent forms, and trying to make that more accessible so that an individual doesn’t have to print the document, sign it, take a picture, or scan it, because of COVID-19 issues. So, I wanted to speak to that guide and tract. It is, I think, changing, and there was some directive that came out last week. But the practicality of it, I don’t know that it’s being implemented as quickly as a consumer needs. So, I don’t know if this is the forum to ask that question, but if there’s anyone who could talk to that, that in fact – because there’s so many other programs that are available where people can just, with their finger, enter a signature onto a document. And I know that there’s a lot of, like you said, Joe, a lot of layers of approval and layers of vendor processing or vouchers processing. So, I just didn’t – I wanted someone, if there was anyone who had – could talk to that issue.

Joe Xavier:    
Yes. So, I’m going to start that conversation, and then folks here are going to tell you, or follow up with you, because you’re bringing up an issue that we have great interest in. So, the electronic signature policy that’s out there does not require signing the finger or otherwise. We’re simply using the email to have a – to authenticate who that user is. And then, I’m going to speak more broadly to this whole concept of e-signature, and then (Steph) staff will follow up with you or tell you who to follow up with, in terms of where this is not being implemented, because we definitely want to know about that.

So, one of the things that we have done as a society forever is this whole concept that we sign with our finger, that we sign with a pen or we sign with whatever it is, right? And that’s traditionally the way that we’ve authenticated who that user is. We actually need to shift our thinking a bit, and I’d just invite all of you to think about the transactions that you’re doing online for retail, whether it’s Amazon or any other of your favorite stores, or the banking transactions that you’re doing, or the medical transactions. In my case, I have Kaiser. Now, how many of those are we signing anything, right?

So it’s really a mindset that needs to shift from “signing” as if a signature’s going to show up somewhere, to how do we authenticate that Joe is the person who’s approving this? And as you see, we continue to roll out the modernization of patient rehabilitation connections, which is a portal. It shifts away from this mindset that we need a signature to an assurance that we know who is approving this, and that there’s a person (unintelligible) approve it. And that occurs in many different ways beyond finger on pad or finger – pen on paper.

Andi Mudryk: 
So hi, (Lisa). This is (Andi). Nice to hear your voice. I am happy to follow up with you after the call. I think you’re right – there are two forms. You know, electronic signatures presented some difficulty, and one had to do with release forms, and it sounds like that’s what you’re talking about. So, let me connect you with somebody who can answer your specific questions after the call, if that works.

Lisa Navarro:
Sure, it does work, and one is a consent form and one is a vendor processing. This is a consumer who has a person who is providing childcare to her children, so – and as you know, that process is sometimes very – needs to be signing, and it’s not always signing.

Andi Mudryk: 
Okay, so we’ll connect after the call. Thank you.

Lisa Navarro:
Thank you.

Coordinator:  
The next question is from (Steve). Please state your full name as well as your affiliation. Your line is now open.

Steve Ramirez:  
Hello, Joe. This is (Steve Ramirez).

Joe Xavier:    
Hey there, how are you?

Steve Ramirez:  
I’m doing good, sir. Question, I know you indicated some proposed cuts to the budget. You talked about a 10% staff reduction in salary, some general fund cuts. Either you or somebody in your department, have you looked at, as a result of today’s new normal and cost savings that will occur as a result of COVID, whether certain costs are reduced or eliminated entirely? Because I know we’re looking at that as a private non-profit. We are realizing and experiencing some of the costs that we associate with providing direct services is either reducing or going away.

Joe Xavier:    
Yes and those are good points. I think things like moving to telework means we don’t have a reliance on brick-and-mortar which means we have less leases which means we spend less money in that arena. Things that allow us to deliver a service remotely reduces the demand for travel and those kinds of things. So, you know, whether it’s tele-counseling or whether, you know, whatever the case may be. All of those things, you know, do result in, you know, the long-term savings which is why you see the governor demanding that all departments really emphasize and move in that direction.

One thing that I want to make sure that I don’t lose in this conversation — of reducing cost-cutting remote services — is the basic principle that we have (relied) on for vocational rehabilitation is individualized. And it’s not one size fits all. You and I are blind and we don’t experience blindness in the same way. And so we don’t want to lose — in all this conversation — that we first start with what does a consumer need and how does it best work for that consumer – right, one piece?

And the one that (Andi) reminds me of routinely — and she’s right — is that we need to ensure that all of this move to remote telework, etcetera, etcetera, that this has not become social isolation. As people with a disability, we — those of us who have lived it — know the isolation that can occur. So we have to be very, very careful that as we are innovating and creating and (choosing) how we think that we’re not reverting to the days of segregation and isolation under a different title – okay, whether it’s social, emotional or physical.

Steve Ramirez:  
Thank you.

Joe Xavier:    
You’re welcome. – Operator, next call.

Coordinator:  
The next question comes from (Ana). Please state your full name as well as your affiliation. Your line is now open.

Ana Acton:    
Hi (Joe), it’s (Ana Acton) with (FREED).

Joe Xavier:    
Good morning.

Ana Acton:    
Good morning – afternoon I guess almost here – so a couple of questions. I’d like some clarity on the CalFresh extending authority for CalFresh. Did I hear you correctly? There would be no additional funding so those of us who are already completing our contract as of June 30th. Will there be an opportunity for an extension and for new funding to continue the conference program is my first question?

Victor Duron: 
Hi (Ana), this is (Victor). Let me clarify. Sorry for any confusion. So there’s no additional funds being appropriated (just) state fiscal 2021 because the dollars that would support this initiative through the end of December are already appropriated. So yes, there is an opportunity and we are actively working with all of our CalFresh providers and our partners of social services to get the program extended through December 2020 which is why we have the budget action reflecting in extension of reimbursement authority so that we can assure that we can fully spend the dollars that are already appropriated and it will be available through 2020 – through the end of 2020.

Ana Acton:    
Thank you for clarifying that (Victor). Secondly, it’s more of a comment than a question. I – we also — Independent Living Centers — are being proposed. There’s a proposal of the 20% cut to the (RL) program. We also have the new eight-year fee funding that’s receiving a very significant proposed cut to that funding as well. And a lot of the justification to these cuts seem to be based on the allocation of new CARES Act funding. But I wanted to make a comment that CARES Act funding is very specific to COVID-19 response and that has been really clear, at least from the communications they have with (APL).

And while we are very busy with COVID-19 response, (FREED) for example has seen a doubling of requests for services during COVID-19. We still need the course of risk funding that’s not always COVID specific. So while we’re still providing our typical IR services that are based on an individual’s independent living situation that may not be connected to COVID, we also need support to operate and expand services during COVID. So I guess I want to throw that out there and see if you have a response to, you know, how that is really a justification for cutting the independent living services.

Joe Xavier:    
So (Ana), you know, I think I’ve been from this earlier in my presentation. I just, you know, I don’t know that I want to speak directly. (Victor) can offer some additional thoughts here in terms of debt dollars. And thank you for sharing that. And I’ve heard that the ADRCs are also seeing a reduction in the general funds from that direct allocation. And that does not flow through the department. As, you know, that goes (through) waging.

What I mentioned earlier was that there’s $15 billion of this solution is coming from stimulus money. So I would imagine that there’s going to be some connectivity there that, you know, may link to what you’re talking about in terms of similarities of, you know, what those funds are allowed to be used as. That’s one piece of that. (Victor), anything you would add to that?

Victor Duron: 
Sure, thank you (Joe) and thank you (Ana). That’s a really important point and we’re acutely aware that the funds are not a one-for-one exchange and that there are some differences in the focus of the funds and how they are reported. And my team is working closely to look at the flexibilities and the limitations. In the CARES funding, we’re going to be reaching out with each of the centers individually to see how we can work together and brainstorm and, you know, to the extent of appropriate seek additional guidance from ACL so that we can maximize the flexibility of the CARES funding and we can maximize the extent to which we can mitigate the impact of the reduction in general fund.

And, you know, of course, the grant administrators are the first and best resource for the independent living centers. And certainly, if there is a specific cost area that an independent living center is really struggling, that they would traditionally be able to support out of what they – the general fund portion and they’re really struggling to figure out where — whether it’s 7C whether it’s the remainder of the $82 or $84 or whether it’s the CARES Act. They can shift those expenditures to support them. I would invite them to connect with a grant administrator, and we’re going to be providing that technical assistance and guidance as we move forward.

Joe Xavier:    
Operator, next call.

Coordinator:  
The next question comes from (Christina). Please state your full name as well as your affiliation. Your line is now open.

Christina:       
Hi guys – this is (Christina) with (unintelligible). I had one other question. I looked at the budget documents and I couldn’t find the specific details on the Independent Living Center changes. Is there a way you can send that out to the IL Network or through your external communications’ email?

Joe Xavier:    
Yes, (Victor) will follow up with our fiscal (budget) and show where that’s identified in the budget. But remember that that is funding. That is not – it’s allocated to the Department of Rehabilitation for the Independent Living Center, so it’s not easy. I’m sharing that because — for those of you who don’t know — it’s not easy to go to a budget line item and identify it. It’s not that simple. We’ll get that information out to you so you guys know right where to go look for it.

Christina:       
Thank you.

Joe Xavier:    
Okay.

Coordinator:  
The next question is from (Tonya). Please state your full name as well as your affiliation. Your line is now open.

Tonya Alameda:
(Tonya Alameda) – I was wondering if you have any information on any federal changes to VLS, their annual reporting measures like measurable skill chains or outcomes that are collected that may impact our service provision here in California.

And then I have another question wondering if you are aware of any new initiatives with the American Job Centers, (unintelligible) the National Telecommuting Institute that might optimize placement opportunities for people with disabilities during COVID?

Joe Xavier:    
Thanks.

Kathi Mowers-Moore: 
So (Tonya), this is (Kathi) – thank you for your question. Yes, I believe that you were one of our commenters and we appreciated your comments on the state plan. Starting this year, the Measurable Skill Gaines are being measured and evaluated. Yes, that is part of this year’s work on performance metrics in addition to wage data. So yes, that information is being tracked and monitored through our system.

In regards to your second question, do we expect any major changes coming down? We are not aware of any specific changes expected to come down.

Joe Xavier:    
So let me add a piece to the Measurable Skill Gains. So earlier you heard me mention that there’s a continued demand on the performance of vocation or rehabilitation. One area where that materializes is in this Measurable Skills Gains. In the very near future, RSA is going to be publishing a report on Measurable Skill Gains. And in that report, it shows that the average start point of negotiations for the state was around 24% and RSA negotiated where the average start point of the measurable performance is 28%. And we all, you know, we were all kind of shaking our head like doesn’t anybody realize we’re in a COVID-19 environment and we’re doing all this? And I’m only pointing that out because it can continue to highlight that there’s that underlying but ever-present demand for us to really all think about how are we doing the work that we’re doing – okay. So that will be coming out — I would expect in the next week or two — and you’ll be able to see that for yourselves.

Operator, next question.  

Coordinator:  
The next question comes from (Todd). Please state your first and last name as well as your affiliation. Your line is now open.

Todd Higgins:
Hi (Joe) – it’s (Todd Higgins) from Disability Rights California. And first of all, I want to thank you for your presentation today and the kind of clarity and transparency of providing to kind of this move, you know, ongoing situation with the budget. It’s really helpful to get some clear expectation about what’s happening going forward.

You know, my question has to do with — I’m on a California Traumatic Brain Injury Advisory Board — and the funding for the activities for that board comes through a grant from the Agency on Community Living. So my question — two questions — one, are there going to be any restrictions on funds for projects that we’re working on as, you know, that the board is currently working on. And two, as hopefully, we move away from shelter-in-place orders, are there going to be restrictions on funds being used for travel for board activities?

Joe Xavier:    
So I’ll start with the last piece first and then (Victor) can speak specifically to impacts on board-activity funding. One of the other things that is required in the budget is that we do leverage things like a video conferencing and what have you. What we don’t know at this point is how that gets operationalized moving forward because there is an executive order in place that enables the ability for the boards today to use video conferencing, telephone conferencing as a means of conducting business. I’m not quite sure what that will look like in a few months. But where there’s a need – where there’s an opportunity to reduce our cost we certainly will be taking that under some serious consideration.

Victor Duron: 
Hi (Todd) it’s (Victor) – thank you for your question. So we’re very fortunate in that we have not heard of any restrictions that are being imposed on the federal grant that is supporting the TBI Board and activities. So and obviously if that changes, we will let the TBI Advisory Board know. The restriction that we are working within is less to do about the federal funds and more about the very prudent action that our state is taking around social distancing, group gatherings, non-essential travel, and things like that. And, you know, I think that most people are out of the predicting game these days in terms of when that might change or how quickly, but certainly we’ll keep all of our advisory board members looped in as it changes – thank you.

Joe Xavier:    
Operator, can you give us a sense of how many questions are in the queue?

Coordinator:  
I’m showing no further questions at this time.

Joe Xavier:    
Okay – all right well we’re getting to the bottom of the hour so I’m sure many of you are wanting to go to lunch. So I’m going to just take a few minutes — and first of all — thank all of you. Thank all of you for the work that you’re doing, thank all you for being creative and innovative as we continue to move forward. And I’ve spent a little bit of time thinking about, you know, progress. And when I think about the progress that we’ve made over the last couple of months, I’m both humble and deeply appreciative of what our staff has done — what each of you has done — to continue to serve our respective communities across all of our programs and services.

When I think about where we need to be in December of 2021, I have a little bit less patience and a little bit less tolerance for the processes and the systems that present various steps getting there and that is not an indictment whatsoever on how we got here or the people that worked themselves very hard to get us to this point. It’s simply a realization of what we need to do to continually evolve and move into that next generation of our future.

And I just want to remind all of us of our collective responsibility to continue to bend the curve on COVID-19. Following the public health guidance, wash your hands, wash your hands, wash your hands, and wash your hands, and all the other practices that they’ve asked us to do. And just ask all of you to take care of yourselves, take care of your team. This is going to be a long road and it’s your collective safety that is front and center on our minds as well as that of our staff and our consumers.

And is what is facing us difficult – without any question. Are there any easy answers – none, none, none. There’s none of the cuts that I’ve mentioned, none of the actions that I’ve mentioned that are going to be painless or easy to (ignite). And I am convinced that this is the right group of folks to move services for individuals with disabilities in California forward. And we need to keep an open mind. We need to continue to be diligent about what we’re doing and work with a sense of urgency frankly.

And, you know, I have my own personal feelings about the health impact of this, the economic impacts of this, the emotional impacts of this — not just on me — but many of my family members in different ways for different reasons. And so I assure with you that when I get up in the morning and try to stay focused, the thing that I’m doing is realizing that there is a child with a most significant disability born today. And in 20 years — that child who will now then be a 20-year-old adult and me will be 80-years old — will be sitting down having a conversation.

And the question I will be asked is, you were there for COVID-19. What did you do to ensure that I could learn, play, work, and live in my community of choice with purpose and dignity? And that helps to motivate — not only what I’m doing throughout the day — but it helps me to stay focused on where we’re going. Always being respectful of the people that got us here, the hard work that the people who are here are doing, and if this was a light switch, these conversations would not be necessary. It will take a lot of conversation. It will take a lot of thinking and you are the right folks.

Thank you – stay safe. We will connect with you down the road.

Coordinator: 
Thank you for today’s conference. All participants may disconnect at this time.

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