MOORLACH UPDATE — Voice of OC — August 7, 2010

What would it look like if we didn’t have the Mental Health Services Act?

Let’s start by asking this question at the front end of a quick discussion.

Over the past few years, as we have been making cuts in our Social Service Agency and Probation Department, which are funded by realignment of sales tax and vehicle license fee revenues from the state to the county, the Health Care Agency (HCA), which receives the same revenue sources, has not had the same percentage of staffing reductions.

Why?  The Mental Health Services Act, Proposition 63, has been providing funding for HCA to supplant, not supplement, mental health care services.  Consequently, staff with HCA have been retrained, pulled from providing core services, and are now working to provide new mental health services that would be “luxury” or “wish we could if we had the funding” type programs.

We’ve made mention of this a few times over the past few years.  This juxtaposition of revenue streams going in opposite directions has allowed many HCA employees to keep their jobs with the County.  The Voice of OC provides a detailed analysis of this unique budgeting aberration.

The Voice of OC also had a pensive photo of me pondering an issue at a recent Board of Supervisors meeting that I’m throwing in as a bonus.

A New Mental Health Paradigm Brings a New Conundrum

Mental health care in Orange County and elsewhere is undergoing a paradigm shift that is in large part due to massive budget deficits and California’s propensity for ballot-box budgeting.

The county is transitioning away from a traditional care model in which the focal point is the one-on-one relationship between patient and clinician to one where a patient’s care is parceled out to a variety of separate programs and services.

The reason for this has more to do with where the money flows than anything else.

Countywide mental health services budgets have been slashed by $43 million since 2007, according to Orange County Health Care Agency officials. Meanwhile, money is flowing in from Proposition 63, or the Mental Health Services Act, an initiative approved by voters in 2004 that taxes millionaires another 1 percent and directs the money to mental health programs.

The catch with the new money is that it cannot be used to fund mental health programs that already exist.

So Orange County ends up with the closure of at least one traditional outpatient clinic in Costa Mesa, as well as a reduction in clinician services at the county’s other outpatient clinics in Anaheim, Fullerton, Westminster, Mission Viejo and Santa Ana.

But Proposition 63 money is paying for new programs like job replacement services, prevention and early intervention programs, community education plans, mobile crisis management teams and even the construction of new mental health facilities. About 160 employees have already shifted to working under the new programs, according to Health Care Agency officials.

"The old services are gone. Those people being funded to be clinicians in their old roles just aren’t there anymore," said Mark Refowitz, deputy director of behavioral health services, a department of the Health Care Agency.

Refowitz says the agency’s new mental health care model will provide solutions that connect people with their communities and get them back to work and living normal lives. Those solutions, he says, will hopefully keep people from needing traditional outpatient care.

Others, however, aren’t ready to buy into the new focus.

Dr. Jay Slosar, who served as president of the Orange County Psychological Association in 2004, is worried about cuts to outpatient clinics. He said the personal relationship between the clinician and the patient is the "nitty gritty" of mental health treatment and simply can’t be replaced. Diagnosis, follow-up sessions and "continuity of care" form the foundation of any mental health treatment plan, Slosar said.

"The ongoing [clinician-patient] relationship is what’s important," Slosar said. "Any time you cut corners like that you’re going to see an impact on quality."

County Supervisor John Moorlach says the funding arrangement is a result of the "law of unintended consequences" that can be triggered when budgets are put together at the ballot box. Moorlach says it’s just one example of revenue streams that local government has no control over.

"We’re cutting core services for what I would call in the budget ‘luxury items,’" Moorlach said. "It’s a frustration."

Refowtiz said core services are still being provided and the neediest are not falling through the cracks.

The clinician services are only being scaled back for adult patients without a medical necessity as defined by state law, Refowitz said, and that makes up about 50 percent of the patients served. To qualify, walk-in patients at the clinic are assessed by an on-site professional. If they’re deemed not sick enough, they’re referred to "other places," he said.

"Even though we’ve had significant reductions, we’ve tried to keep ourselves to the folks with the most severe and persistent mental illness," Refowitz said.

Slosar, however, argues that the cuts on mental health services can have dramatic consequences on society. People with mental health problems often end up in jail, and without access to outpatient clinics, jails could start filling up with indigents.

"When you cut back on these core services, they’re going to end up in jail — and they don’t deserve to be there," Slosar said.

Refowitz defended Proposition 63, saying it has provided an array of "outstanding" programs that never could have existed before.

Many of the Proposition 63-funded programs are designed to cater to the underserved — which include a complex mix of needs, like being on the verge of homelessness or a member of an ethnic group that holds stigmas toward the mentally ill.

Other programs, like the mobile response teams, assist police and firefighters on calls involving the mentally ill. There are also community treatment programs that focus on group, rather than individual, therapy.

Refowitz points to early intervention programs as being one solution to the cutbacks to core services. Although these programs are still being put together, if mental health problems can be addressed early on, then there would be no need for more intensive services in the future.

Refowitz declined to say, if it were up to him, how he would arrange the funding priorities or if they seem as backwards to him as they do to Moorlach. But, he said, he’s just grateful that Proposition 63 is there.

"The better question would be … what would it look like if we didn’t have the Mental Health Services Act?" Refowitz asked.

Please contact Adam Elmahrek directly at, and follow him on Twitter: And add your voice with a letter to the editor.


Photo by Violeta Vaqueiro for the Voice of OC


August 9


Peter Larsen of the OC Register reported the news in “Board OKs rival tobacco-funds ballot measure – Government:  The county’s version allows more money for non-health-related purposes.  Both may be unconstitutional.”

                Measure G – the competing measure written by County Treasurer John Moorlach – requires 40 percent of the money go to bankruptcy debts.

Monte Morin of the LA Times covered the news in “Use Tobacco Funds Toward Debt, Board Proposes – Supervisors approve a ballot item that will rival a measure sponsored by the medical community to use the money for health care.”

                Measure G was proposed by Orange County Treasurer John M. W. Moorlach and calls for 40% of the tobacco settlement payments to help pay off the county’s $950-million bankruptcy debt.


Bob Fauteux of the Foothills Sentry did a column, titled “Spendthrift OC landlord can’t take tenant’s money,” to reassure that the funds invested by participants in the Orange County Investment Pool (OCIP) were safe.

                The following excerpt is from [County Treasurer John] Moorlach citing the safeguards that now exist to protect OCIP members from raid on their money by the Board of Supervisors:

“California state code is very clear that funds managed by the county treasurer from outside participants are not to be utilized for county purposes.  Government Code Section 53684(e) states:  Any money deposited in the county treasury for investment are not subject to impoundment or seizure by any county official or agency while the funds are so deposited.”

Moorlach further commented that it is unfortunate that bad press resulting from the Supervisors’ pension plan decisions generated a public perception that other county services may be at risk.  He emphasized that the county investment pool is not at risk and is fully insulated from any of the county’s pending financial problems.

August 11


Deborah Finestone of The Bond Buyer covered Measure G in her piece, titled “Orange Keeps Priorities – Voters May Set Aside Tobacco Funds for Bonds.”  Here are selected paragraphs.

                In Orange County’s latest move to keep repaying the debt related to its 1994 bankruptcy a priority, the Board of Supervisors has agreed to ask voters whether the county should dedicate 40% of its annual payments under the national tobaccos settlement to pay down those bonds.

Under the plan, which was authored by county Treasurer John Moorlach and is known as Measure G, the county would use between $12 million and $15 million a year towards early retirement of its 1995 refunding recovery bonds and 1996 refunding certificates of participation.  Both issues are insured by MBIA Insurance Corp.

                Moorlach said there is about $950 million of bonds outstanding from the two issues, which cost the county $50 million per year for debt service.

                Moorlach said that by paying down bonds more quickly, Measure G would free up other money in the budget.  It also would allow the county to address more health care, safety, and related taxpayer benefits than Measure H would, he said.

                “Simply put, Measure H is good, Measure G is better,” Moorlach said.  “It offers oversight, reporting, performance measurements, and more in the way of taxpayer protection.  Measure H says ‘show me the money.’  Measure G says ‘show me results and substance.’”

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