Agenda Item
Regular Meeting of the
Board of Supervisors
Tuesday, September 15, 2026

Golden State Finance Authority Memorandum of Understanding Overview

The proposed Memorandum of Understanding (MOU) establishes a framework for San Benito County to participate in the Golden State Finance Authority (GSFA) program designed to pursue reimbursement for costs incurred as a result of unfunded state mandates. Through this program, GSFA will engage outside counsel and/or consultants to support designated legal test claims filed with the Commission on State Mandates. The test claim identified in the MOU concerns Title 15, Division 1, Chapter 1, Subchapter 5 of the California Code of Regulations (Minimum Standards for Juvenile Facilities).

 

Test Claim Summary - San Benito County

A San Benito County Superior Court order required inpatient treatment for a youth at a private facility. The County does not have the means to provide this level of treatment within existing juvenile or behavioral health programs. After evaluation, the Behavioral Health Department determined the youth met criteria for inpatient mental health placement. Because the treatment needed could not be provided at the County Youth Services Center or through outpatient programs, the youth was released for placement in an appropriate mental health facility.

 

On February 19, 2026, the County entered into a contract with Evolve Adolescent Behavioral Health in the amount of $99,000 for sixty days of treatment, including individual, family, and group therapy. The County first incurred costs on February 23, 2026, using state realignment funding. Additional general county costs were also potentially incurred.

 

If the State does not reimburse general county costs associated with this unfunded mandate, these expenses would fall entirely on the County's General Fund. The County's test claim will address reimbursement for general fund costs incurred in this matter and any related impacts. The County's obligation to pay GSFA is limited to reimbursement revenues received from the State and will not be funded from any other source.

 

MOU Responsibilities and Cost Structure

Under the MOU, the referenced legal test claim will be filed in the County's name. San Benito County will remain responsible for fulfilling all obligations of a test claimant, including providing information, documentation, and staff participation as requested by GSFA and outside counsel. GSFA will initially cover the costs of outside counsel.

 

Repayment to GSFA is limited as follows:

• If the County receives reimbursement from the State of California, the County will repay GSFA an amount equal to 110 percent of the outside legal costs GSFA paid. Maximum reimbursement will be 110% of the total outside legal costs GSFA paid to prepare County claim and represent County in front of the Commission.
• Repayment will occur solely from reimbursement revenues received under the mandate.
• If the claim is not approved or reimbursement is not obtained, the County will owe nothing, and GSFA will absorb all incurred costs.
• The County will not be responsible for any GSFA staff costs.

Reimbursement Timeline

The reimbursement process typically takes approximately one year following the filing of the test claim and includes the following steps:

 

• Filing of the test claim and associated comment period;
• Preparation of a proposed decision by Commission staff, followed by additional public comments;
• Commission hearing and decision;
• Preparation of parameters and guidelines by the Commission and State Controller;
• Development of claiming instructions and reimbursement forms by the State Controller;
• Submission of reimbursable costs by the County and subsequent payment by the State

 

Only after the County receives State reimbursement will the County be required to repay GSFA, and only for outside legal costs.

 

Term and Termination

The MOU will remain in effect for the latter of three years or until final disposition of the covered test claim. Either party may terminate the agreement for convenience with 30 days written notice.

 

Recommendation

Approval of the MOU would allow San Benito County to participate in GSFA's coordinated effort to seek reimbursement for eligible costs associated with state's mandated requirements, including the identified Title 15 juvenile facility test claim.