Board Backs $19.3M to Avert Healthcare Layoffs in $6.7B Budget

Alameda County supervisors unanimously set the framework for a $6.7 billion spending plan that closes a $185 million funding gap — and made their biggest policy bet by directing up to $19.3 million in one-time funds to prevent 92 layoffs at the county's safety-net hospital system. Final adoption is scheduled for Thursday.

• Up to $19.3M in one-time funds directed to Alameda Health System to eliminate 92 planned layoffs, fund a performance audit, and extend a behavioral health program

• $6.7 billion FY 2026-27 budget advances 5-0, closing a $185M gap without major service cuts or forced layoffs across the county's 10,400-employee workforce

• SEIU members demand fair wages as contract negotiations with 4,000+ county workers continue behind closed doors

• $37M in bridge funding shields behavioral health providers navigating the Proposition 1 transition from prevention to early intervention

• Haubert pushes for cross-agency efficiency reviews beyond AHS, but colleagues insist the broader study wait

• Office of Immigrant and Refugee Affairs secures $3.3M contract extension and a dedicated director position

County Safety Net on the Line: $19.3M Buys AHS a Year to Restructure

The most consequential action of the meeting was the board's unanimous decision to include up to $19.3 million in one-time funding for Alameda Health System in the final budget — a move co-authored by Supervisor Nate Miley and Supervisor Nikki Fortunato Bas that effectively prevents 92 healthcare workers from losing their jobs.

The basics: The allocation covers three purposes: $17 million–$18 million to prevent the remaining 92 planned reductions in force for one year, allowing AHS to use natural attrition and voluntary separations instead of involuntary layoffs; procurement of an independent performance audit estimated at nine months (three months procurement, six months assessment); and extension of the Partial Hospitalization/Intensive Outpatient (PHP/IOP) behavioral health program through Oct. 31, 2026, with a feasibility study during that period.

Why it matters: AHS is the county's public health system — a safety-net provider serving the region's most vulnerable patients during a period of deep federal funding uncertainty tied to HR1 cuts. The county already invests $327.35 million in AHS through direct contracts and financial agreements, and AHS separately receives approximately $150 million annually from Measure A. Without this intervention, layoffs would proceed and the PHP/IOP program would shut down.

Where things stand: An ad hoc committee convened by Supervisor Miley and Supervisor Fortunato Bas over four meetings has already produced concrete results. Supervisor Fortunato Bas detailed the progress: "We also reduced the AHS behavioral health funding withhold from 20% to 10%, which provided approximately $8 million in additional cash flow." The committee also facilitated roughly $30 million in AHS efficiency improvements, Alameda Alliance reimbursement rate increases yielding $3.2 million, and a $100 million increase to the county's net negative balance credit line.

AHS CEO James Jackson was candid about the structural challenge. "75% of our expenses are in labor. So the vast preponderance of what we spend goes right into payroll. And so we believe that to change our cost structure in a significant way, we've got to have less FTEs," he said. Jackson noted that patient volumes are only now approaching pre-COVID levels despite staffing growth, and that AHS intends to use the one-year runway for attrition rather than forced layoffs.

On the PHP/IOP program, Jackson struck a personal note while maintaining fiscal discipline. "I've had family members who have benefited from that program," he said. "But I can't in good conscience indefinitely endorse a program that we cannot see a way to at least having it at a break-even proposition."

The other side: Not every supervisor was comfortable with the size of the commitment. Supervisor Lena Tam framed the math bluntly: "Essentially we're being asked to shift a quarter of AHS's deficit to the county, asking us to close instead of a $91.4 million budget deficit to add $19.3 million or $110 million at the county level." She ultimately voted yes but flagged the tradeoff: "If I had to choose, I would choose supporting AHS and patient care any day."

Supervisor Elisa Marquez issued a sharper warning about precedent. "I'm fearful of setting the precedent that we're always going to be the answer because we don't know what's coming," she said, pointing to projected five-year deficits.

Supervisor Miley countered that the allocation was also about maintaining labor peace: "Without this money, labor is not prepared to move forward with any consideration, any consideratory steps."

Supervisor Fortunato Bas drew a firm line on funding sources: "We do not anticipate that any Measure W funds would be utilized. I want to make that clear. I certainly don't support that."

Decisions: The board voted 5-0 to direct County Administrator Susan Muranishi to incorporate the AHS allocation into the final budget. (For: Supervisor Marquez, Supervisor Tam, Supervisor Miley, Supervisor Fortunato Bas, Board President David Haubert; Against: none; Absent: none.) Supervisor Tam moved the motion; Supervisor Miley seconded.

What's next: The final budget is scheduled for formal adoption at a special meeting on Thursday, June 25, at 4:00 p.m. The performance audit procurement process begins immediately, with milestones reported back to the board on a regular basis. The ad hoc committee will provide a year-end status report.

Closing a $185M Gap: The Budget Big Picture

County Administrator Susan Muranishi presented the FY 2026-27 proposed budget: "The budget before you provides a balanced $6.7 billion spending plan across all funds supporting county programs and services throughout the county and a workforce of more than 10,400 employees. The budget closes a $185 million funding gap while maintaining critical investments in county priorities without major funding reductions or layoffs."

Why it matters: The budget supports more than $1.25 billion in contracts with 271 community-based organizations providing healthcare, behavioral health, housing, social services, and public safety. It eliminates 45 FTE positions through a combination of vacancy reductions and reorganization — not layoffs — to close the gap.

Board President David Haubert put the spending trajectory in perspective, calculating a 9.3% increase — $570 million — over the prior year. He argued that the county needs to look beyond AHS for efficiencies: "I don't see how we should reasonably limit a study of efficiencies to just AHS without exploring the linkages to public health and social services."

Colleagues were sympathetic to the idea but firm that it should not slow down the immediate AHS action. Supervisor Marquez was direct: "I strongly feel that is a separate conversation. If we combine it to the task at hand, it's only going to further delay what we're trying to accomplish here." The board agreed to address broader cross-agency efficiency reviews at a future work session.

Supervisor Marquez also pushed for a plan to raise operational reserves from 5% toward a 16% target: "It's really important that we have that level of resiliency and sustainability." She requested updates on the master fee schedule, assessment appeal fees, and environmental health permits.

$37M Bridge Protects Behavioral Health Providers in Prop 1 Transition

The board had previously approved $37 million in bridge funding on June 2 to cover community behavioral health providers during the mandated shift from prevention to early intervention services under Proposition 1. The budget discussion confirmed that providers who opted into early intervention will be held harmless during the transition, which staff described as a more sustainable path because it enables Medi-Cal billing.

Alameda County Behavioral Health has established a dedicated technical assistance team to help CBOs navigate the transition, and the public health department will convene groups to leverage state resources for prevention work. The budget also includes $5.5 million in new Prop 1 backfill in the final adjustments.

Brown Act Cloud Over AHS Ad Hoc Committee

Supervisor Tam raised questions about the AHS ad hoc committee's long-term structure, asking whether it would follow Brown Act requirements — the California open-meetings law — with public noticing and comment opportunities.

County counsel warned that an ad hoc committee is limited in time and purpose, and that extending it for two to three years would make it resemble a standing committee subject to Brown Act requirements. Supervisor Miley acknowledged the issue but said he envisioned the committee continuing for at least two more fiscal years: "I think we're going to probably need to extend the ad hoc for at least the next two fiscal years."

Supervisor Tam pointed out that the existing Health Committee and joint Social Services/Health Committee already cover similar ground. Supervisor Fortunato Bas proposed returning with an update before year-end to evaluate the committee's status. The board agreed to a year-end status report.

SEIU Workers Sound the Alarm on Wages

Kathy Reeves, a shop steward with SEIU Local 1021 and a 26-year legal secretary in the Public Defender's office, delivered a forceful public comment ahead of the closed-session labor negotiations. She demanded fair wages and respect for the county's 4,000-plus SEIU members, stating workers cannot afford housing, food, and gas on current compensation — with many commuting up to two hours because they cannot afford to live in Alameda County.

During budget deliberations, Maria Betencourt, SEIU Local 1021 chapter president and specialist clerk at John George psychiatric facility, urged the board to support the ad hoc committee's work and the $19.3 million AHS allocation, calling on county, state, and federal partnerships to protect safety-net healthcare services.

The closed session included conferences with labor negotiators for all labor organizations, SEIU Local 1021, Teamsters Local 856, unrepresented management, and SEIU Local 2015 for IHSS. No reportable actions were taken.

Minor Items

• Measure W Essential County Services Fund captures $20 million in estimated excess sales tax receipts that remain unallocated within a $58.7 million total fund. The Senior Services Coalition has requested $19 million in continuation funding for programs funded in the prior year.

• Senior services contracts — 30 of 77 Area Agency on Aging contracts are receiving temporary six-month extensions while new RFPs are processed; award dates range from July through August 2026. Social Services Agency Director Andrea Ford provided updates on the timeline.

• Office of Immigrant and Refugee Affairs secured a $3.3 million contract extension and a dedicated director position in the budget. Updates on current contracts will go to the ACT Committee on July 16, with a full implementation study presentation on July 28.

• A $500,000 AAA Senior Community Services Employment Program allocation was clarified as now a City of Oakland program formerly run by the county.

• No reportable actions were taken during the closed session on labor negotiations.