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HomeMy WebLinkAbout6j. Behavioral Health Services Contract Renewals for Community Action Team and Mobile Crisi Unit (FYS2025-27) Item 6j Department: Administration Cost Center: 1001 For Agenda of: 8/19/2025 Placement: Consent Estimated Time: N/A FROM: Whitney McDonald, City Manager Prepared By: Natalie Harnett, Policy and Project Manager SUBJECT: BEHAVIORAL HEALTH SERVICES CONTRACT RENEWALS FOR COMMUNITY ACTION TEAM AND MOBILE CRISIS UNIT (FYS 2025–27) RECOMMENDATION Authorize the City Manager to execute up to two (2) one-year renewals of the contracts with the County of San Luis Obispo for continued Behavioral Health Services in support of the Police Department’s Community Action Team and the Fire Department’s Mobile Crisis Unit. POLICY CONTEXT The City’s investment in the Community Action Team (CAT) and Mobile Crisis Unit (MCU) supports ongoing efforts to provide coordinated, community-based responses to behavioral health and substance use crises. With contract costs now exceeding the City Manager’s purchasing authority, Council approval is required to continue funding these services using opioid settlement funds. This recommendation aligns with community priorities around public safety and Homelessness Response Major City Goal Objectives. DISCUSSION Background The MCU and CAT are collaborative response programs that pair behavioral health professionals with public safety personnel to provide crisis intervention and support for individuals experiencing mental health or substance use-related emergencies in the field. The CAT was established in 2013, initially partnering a Police Officer with a contracted mental health outreach worker from Transitions Mental Health Association (TMHA). With the adoption of the 2021-23 Financial Plan, the City Council approved the creation of the MCU, which followed a similar model but paired a TMHA outreach worker with a Fire Department EMT/Paramedic. Since then, the City has transitioned away from contracting these positions through TMHA and now staffs both programs with Community Resource Services Specialists, who are contracted directly by the City. Due to the programs’ success, the City began working with the County of San Luis Obispo Page 139 of 350 Item 6j in 2024 to explore expanding both teams and incorporating Licensed Psychiatric Technicians (LPTs) into the CAT and MCU models. The County shared the City’s interest to expand access to behavioral health services in the field and had qualified LPTs to support this work. However, due to funding reductions following the passage of Proposition 1, the County could commit to funding only half the cost of one LPT, leaving the City responsible for the remaining 1.5 LPT positions—an estimated cost of $225,000 annually. Around the same time, the City opted in to direct annual payments from various national opioid settlement agreements in which it had participated.1 These funds are restricted for use on opioid-related services and strategies, including crisis response and outreach to vulnerable populations. Both the CAT and MCU programs are eligible uses under the settlement guidelines, including salary costs of behavioral health and outreach specialists who work with populations affected by the opioid crisis. In response, the City chose to allocate its share of opioid settlement funds to cover the City’s share of the LPT positions, resulting in no net impact to the General Fund. For a detailed financial breakdown, see the Fiscal Impact section. Two separate contracts were executed with the County for LPTs, one for the Fire Department and one for the Police Department, because the MCU and CAT operate under different City departments and have distinct funding arrangements. The original agreements (Attachments A and B) were signed in September 2024 and were effective through June 30, 2025, with language allowing for up to two additional one-year renewals with written notice. While services remain underway since June 30, 2025, no formal renewal was ever signed. This Council action will retroactively authorize Amendment No. 1 with an effective date of July 1, 2025, extending both agreements through June 30, 2026 , and allow the City Manager to renew again next year (through FY 2026-27), if funds are available. Per the City’s Purchasing Policy Section 202, the original one-year contracts were within the City Manager’s purchasing authority. However, with the proposed renewal s, the contract amounts now exceed that threshold and require Council approval. 1 Until the City opted in to direct payments in 2024, the City’s allocated share had been deferred to the County, dating back to 2021. At that time, the cost and resource burden of administering the funds outweighed the anticipated value received. By 2024, however, the addition of several new settlements (including Teva, Allergen, Walgreens, Walmart, CVS, and Kroger) meaningfully increased the dollar amount the City could receive directly each year to combat the effects of opioid use and addiction. Page 140 of 350 Item 6j Summary of Amendments – FY 2025–26 Behavioral Health Contracts The Option to Renew and Amendment No. 1 (Attachments C and D) for both the Police and Fire Department contracts with the County of San Luis Obispo include the following key changes: 1. Contract Renewal for FY 2025–26: Extends the contract term for one additional year, from July 1, 2025, to June 30, 2026, in accordance with the renewal option outlined in the original agreement. 2. Updated Scope of Services: Revises the language in Exhibit A to clarify the LPT role in: o Assisting with voluntary and involuntary psychiatric (rather than “medical”) holds. o Petitioning for and participating in judicial processes related to extended involuntary commitment orders or conservatorships. Previous Council or Advisory Body Action The City Council approved participation in opioid settlement agreements on December 7, 2021; April 4, 2023; and July 16, 2024. Public Engagement Public comment on this item can be provided to the City Council through written correspondence prior to the meeting and through public testimony at the meeting. CONCURRENCE The City Attorney’s Office, Fire Department, and Police Department concur with this recommendation. ENVIRONMENTAL REVIEW The California Environmental Quality Act (CEQA) does not apply to the recommended actions in this report, because the actions do not constitute a “project” under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: Yes Budget Year: 2025-26 Funding Identified: Yes Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $0 $0 $0 $0 Other: Opioid Settlement Revenue (Fund 217) $351,908 $235,063 $116,845 Total $351,908 $235,063 $116,845 $246,816 Page 141 of 350 Item 6j There is no fiscal impact directly associated with this recommendation, as sufficient funds are already budgeted in the Opioid Settlement Special Revenue Fund 217. To date, the City has received $374,343 in revenue (see Table 1 below), with ongoing annual estimates provided by BrownGreer and Associates, the settlement administrator. While each settlement’s terms and annual amounts vary, the City anticipates receiving an average of approximately $135,000 per year over the next five years. Although this amount is not sufficient to fully fund both LPT positions on an ongoing basis, the existing fund balance is sufficient to close the gap on a one -time basis and fully support the positions through FY 2026–27. In addition, several outstanding lawsuits are expected to yield further settlement revenue. Staff will be seeking Council authorization to participate in two of these at a September Council meeting. Participation in these and future settlements is anticipated to increase annual revenue. Staff will continue to monitor the fund balan ce and evaluate the availability of funds at each contract renewal and when future settlement estimates are released. Table 1 - Opioid Funding Overview (Fund 217): Settlement Revenue FY 2025 FY 2026 FY 2027 Allergan $31,352 $15,413 $15,413 CVS $32,500 $28,542 $28,542 Distributors $47,757 $47,757 $48,192 Janssen $46,189 $8,434 $8,434 Kroger $11,756 TBD Walgreens $49,591 $14,108 $14,108 Walmart $134,165 $5,410 $1,082 Teva $28,515 $14,037 $14,037 Interest Earned $4,283 TBD TBD Total Revenue $374,353 $145,457 $129,808 Expenditures Fire - LPT $55,9672 $78,354 $82,272 PD - LPT $111,9352 $156,708 $164,544 Total Expenditure $167,902 $235,063 $246,816 Net Fund Balance $206,451 $116,845 -$1633 2 Contract began in September 2024; therefore, this accounts for ¾ of the annual cost. 3 Staff anticipates that this minor overage will be offset by future interest earnings and FY 2027 Kroger settlement funds. Page 142 of 350 Item 6j ALTERNATIVES 1. Council could decide to authorize approval for only one of the two contract amendments. If only one contract is approved, the City would continue to receive LPT support for the approved department, but would lose access to behavioral health services for the other. This would reduce the City’s capacity to respond to mental health-related calls and may increase the burden on public safety personnel. 2. Council could decide not to authorize approval for either contract renewal for FY 2025-26. Should council choose this option, the City would no longer receive behavioral health services provided LPTs through either the CAT or the MCU. This would significantly limit the City’s behavioral health response capacity and place a greater burden on public safety personnel. In this case, the full amount of opioid settlement funds currently allocated to these programs would remain unspent, and alternative uses would need to be explored and approved by Council at a later date. ATTACHMENTS A - Executed SLOFD Mobile Crisis Unit Contract FY 2024-25 B - Executed SLOPD Community Action Team Contract FY 2024-25 C - Mobile Crisis Unit FY 2025-26 Option to Renew and Amendment No.1 D - Community Action Team FY 2025-26 Option to Review and Amendment No.1 Page 143 of 350 Page 144 of 350 Page 145 of 350 Page 146 of 350 Page 147 of 350 Page 148 of 350 Page 149 of 350 Page 150 of 350 Page 151 of 350 Page 152 of 350 Page 153 of 350 Page 154 of 350 Page 155 of 350 Page 156 of 350 Page 157 of 350 Page 158 of 350 Page 159 of 350 Page 160 of 350 Page 161 of 350 Page 162 of 350 Page 163 of 350 Page 164 of 350 Page 165 of 350 Page 166 of 350 Page 167 of 350 Page 168 of 350 Page 169 of 350 Page 170 of 350 Page 171 of 350 Page 172 of 350 Page 173 of 350 Page 174 of 350 Page 175 of 350 Page 176 of 350 Page 177 of 350 Page 178 of 350 Page 179 of 350 Page 180 of 350 Page 181 of 350 Page 182 of 350 Page 183 of 350 Page 184 of 350 Page 185 of 350 Page 186 of 350 Page 187 of 350 Page 188 of 350 Page 189 of 350 Page 190 of 350 Page 191 of 350 Page 192 of 350 SLOFD Community Action Team FY 2025-26 Exercise Option to Renew and Amendment No. 1 Page 1 of 3 OPTION TO RENEW AND AMENDMENT No. 1 To the CONTRACT FOR BEHAVIORAL HEALTH SERVICES COUNTY OF SAN LUIS OBISPO BEHAVIORAL HEALTH SERVICES Entered into by and between the County of San Luis Obispo, a public entity in the State of California, (hereafter “County”) and the City of San Luis Obispo, a California municipal corporation, (hereafter “City”), together “Parties” and individually “Party”. WHEREAS, on September 24, 2024, County and Contractor entered into a contract for fiscal year 2024-25 (the “Contract”) under which Contractor agreed to provide certain services; and WHEREAS, County and Contractor have a need to exercise the option to renew the Contract as per Exhibit C, Section 4. “Option to Renew for One Year”; and WHEREAS, County and Contractor have a need to amend the Contract to update the scope of services, other terms and the budget under the Contract; and WHEREAS, the Board of Supervisors delegated to the Health Agency Director or designee the authority to decide whether to exercise the option to renew this Contract for two (2) successive one (1)-year periods; and WHEREAS, the Board of Supervisors delegated to the Health Agency Director or designee the authority to amend the Contract to exchange, delete, or add to the types of services as per Exhibit D. NOW THEREFORE, the Parties agree that the Contract is amended as follows: 1. The Contract, Exhibit A, Section 1. “Mobile Crisis Unit (MCU),” subsection b.1). viii., is deleted and replaced in its entirety with the following: viii. Assist the MCU in assessing and transporting individuals to be detained under voluntary or involuntary psychiatric/mental health holds, and, when appropriate under the professional judgment of the Licensed Psychiatric Technician, petition for and participate in judicial processes to extend involuntary commitment orders and/or conservatorships of the person. 2. The Contract, Exhibit C, Section 3. “Duration Date.”, subsection a., is deleted and replaced in its entirety with the following: a. This Contract shall remain in effect from July 1, 2025, until June 30, 2026, unless terminated sooner pursuant to Exhibit D, Section 5., “Termination for Convenience” of the Contract. Page 193 of 350 SLOFD Community Action Team FY 2025-26 Exercise Option to Renew and Amendment No. 1 Page 2 of 3 3. All other terms and conditions of the Contract and any amendments not expressly modified herein shall remain in full force and effect. 4. In any instance in which a provision of this Option to Renew and Amendment No. 1 contradicts or is inconsistent with provisions of the Contract, the provision of this Option to Renew and Amendment No. 1 shall prevail. 5. The effective date of this Option to Renew and Amendment No. 1 shall be July 1, 2025. 6. This Option to Renew and Amendment No. 1 may be executed in counterparts, each of which shall be deemed to be an original, but all of which, when taken together, shall constitute one and the same agreement. This Option to Renew and Amendment No. 1 may be executed and delivered by facsimile, scanned signature, or electronically by any of the Parties and the receiving Party may rely on the receipt of such document so executed and delivered by facsimile, email, or other electronic delivery method, as if the original had been received and shall have the same legal validity and enforceability as a manually executed signature. IN WITNESS WHEREOF, County and Contractor have executed this Option to Renew and Amendment No. 1 on the day and year set forth below. CITY OF SAN LUIS OBISPO By: _____________________________________________ Date:______________________ Whitney McDonald, City Manager ATTEST: By: _____________________________________________ Date:______________________ Teresa Purrington, City Clerk REVIEWED: By: _____________________________________________ Date:______________________ Todd Tuggle, Fire Chief COUNTY OF SAN LUIS OBISPO A Public Entity in the State of California By: _________________________________ Date: _______________________ Page 194 of 350 SLOFD Community Action Team FY 2025-26 Exercise Option to Renew and Amendment No. 1 Page 3 of 3 Nicholas Drews, Health Agency Director Approved as to form and legal effect. JON ANSOLABEHERE COUNTY COUNSEL By: ________________________________ Date: _______________________ Deputy County Counsel Page 195 of 350 Page 196 of 350 SLOPD Community Action Team FY 2025-26 Exercise Option to Renew and Amendment No. 1 Page 1 of 3 OPTION TO RENEW AND AMENDMENT No. 1 To the CONTRACT FOR BEHAVIORAL HEALTH SERVICES COUNTY OF SAN LUIS OBISPO BEHAVIORAL HEALTH SERVICES Entered into by and between the County of San Luis Obispo, a public entity in the State of California, (hereafter “County”) and the City of San Luis Obispo, a California municipal corporation, (hereafter “City”), together “Parties” and individually “Party”. WHEREAS, on September 24, 2024, County and Contractor entered into a contract for fiscal year 2024-25 (the “Contract”) under which Contractor agreed to provide certain services; and WHEREAS, County and Contractor have a need to exercise the option to renew the Contract as per Exhibit C, Section 4. “Option to Renew for One Year”; and WHEREAS, County and Contractor have a need to amend the Contract to update the scope of services, other terms and the budget under the Contract; and WHEREAS, the Board of Supervisors delegated to the Health Agency Director or designee the authority to decide whether to exercise the option to renew this Contract for two (2) successive one (1)-year periods; and WHEREAS, the Board of Supervisors delegated to the Health Agency Director or designee the authority to amend the Contract to exchange, delete, or add to the types of services as per Exhibit D. NOW THEREFORE, the Parties agree that the Contract is amended as follows: 1. The Contract, Exhibit A, Section 1. “Community Action Team (CAT),” subsection b.1). viii., is deleted and replaced in its entirety with the following: viii. Assist the CAT in assessing and transporting individuals to be detained under voluntary or involuntary psychiatric/mental health holds, and, when appropriate under the professional judgment of the Licensed Psychiatric Technician, petition for and participate in judicial processes to extend involuntary commitment orders and/or conservatorships of the person. 2. The Contract, Exhibit C, Section 3. “Duration Date.”, subsection a., is deleted and replaced in its entirety with the following: a. This Contract shall remain in effect from July 1, 2025, until June 30, 2026, unless terminated sooner pursuant to Exhibit D, Section 5., “Termination for Convenience” the Contract. Page 197 of 350 SLOPD Community Action Team FY 2025-26 Exercise Option to Renew and Amendment No. 1 Page 2 of 3 3. All other terms and conditions of the Contract and any amendments not expressly modified herein shall remain in full force and effect. 4. In any instance in which a provision of this Option to Renew and Amendment No. 1 contradicts or is inconsistent with provisions of the Contract, the provision of this Option to Renew and Amendment No. 1 shall prevail.. 5. The effective date of this Option to Renew and Amendment No. 1 shall be July 1, 2025. 6. This Option to Renew and Amendment No. 1 may be executed in counterparts, each of which shall be deemed to be an original, but all of which, when taken together, shall constitute one and the same agreement. This Option to Renew and Amendment No. 1 may be executed and delivered by facsimile, scanned signature, or electronically by any of the Parties and the receiving Party may rely on the receipt of such document so executed and delivered by facsimile, email, or other electronic delivery method, as if the original had been received and shall have the same legal validity and enforceability as a manually executed signature. IN WITNESS WHEREOF, County and Contractor have executed this Option to Renew and Amendment No. 1 on the day and year set forth below. CITY OF SAN LUIS OBISPO By: _____________________________________________ Date:______________________ Whitney McDonald, City Manager ATTEST: By: _____________________________________________ Date:______________________ Teresa Purrington, City Clerk REVIEWED: By: _____________________________________________ Date:______________________ Rick Scott, Police Chief COUNTY OF SAN LUIS OBISPO A Public Entity in the State of California By: _________________________________ Date: _______________________ Page 198 of 350 SLOPD Community Action Team FY 2025-26 Exercise Option to Renew and Amendment No. 1 Page 3 of 3 Nicholas Drews, Health Agency Director Approved as to form and legal effect. JON ANSOLABEHERE COUNTY COUNSEL By: ________________________________ Date: _______________________ Deputy County Counsel Page 199 of 350 Page 200 of 350