BOS Agenda Date [February 24, 2004

County of Santa Clara

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Board of Supervisors
Supervisorial District Four
Supervisor James T. Beall, Jr.

BoSD42-24-03ref2
DATE;

Febmary 24, 2004

TO:

Board of Supervisors

FROM:

James T. Beall, Jr.

Supervisor, District 4

Blanca Alvarado

Supervisor, Second District
SUBJECT: Board Referral; Assessment of Community Treatment Facility

RFCOiVIMF-NnED ACTION

Refer to administration to consider and report back to the Flealth and Flospital Committee
and Board of Supervisors:

1. Compare the current model for assessment and refeinals to the Community Treatment
Facility (CTF) with the assessment and refeinals systems used by other urban Counties:

Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh. Jim Beall, Liz Kniss
Count/ Executive, Peter Kutras Jr.

1

'4

BOS Agenda Date :February 24,2004

San Francisco, Contra Costa, and Los Angeles

2. Develop a plan to effectively address programmatic, treatment, and fiscal issues as
appropriate to the responsibility ofthe County.

3.Scope of the evaluation should include, but not limited to the following:
Describe and evaluate ways to increase census by identifying and treating adolescents
in juvenile justice system

Define current and potential funding sources including cost recovery and services that
can generate additional funds

Identify legislative related opportunities to advocate for increased funding

FISCAL IMPLlCATLaNS
None.

REASONS FOR RECOMMENDATLON

Since October 2000, Starlight has been an essential partner in treating seriously emotionally
disturbed youth by providing alternatives to out-of-state and state hospital placements. Many
ofthese adolescent clients cycle in and out of group homes and end up in institutions
(Children’s Shelter and Juvenile Hall) awaiting appropriate placements. Recently, Starlight
has indicated they are experiencing significant financial losses due to underutilization of the

program, and has an operational deficit of $600,000 for current fiscal year. The Mental Health
Administration indicated that Starlight is the only CTF with a census problem in California.

Santa Clara County is well known for its innovative and collaborative initiatives. A good

example is Juvenile Detention Reform, an interagency collaborative whose primary goal is to
reduce the population of detention facilities and create detention alternatives which would
increase positive outcomes for youth.

A disproportionate number of youth in custody have mental health needs. Appropriate
placement and treatment for severely disturbed youth is challenging for families, schools, and

ultimately counties. Treatment facilities such as Starlight serve as viable alternatives to
juvenile detention at the ranches or state group facilities.

Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh,Jim Beall, Liz Kniss
County^ Executive: Peter Kutras Jr.
2

BOS Agenda Date ;Februaty 24, 2004

BACKGROUND

In 1998, planning began for the development of a Community Treatment Facility(CTF)and
key program elements to address a range of psychiatric symptoms and severe behavior
problems of Dependent Wards, Delinquent Wards, and emotionally disturbed youth(AB
3632) in the County. On May 9, 2000, the Board of Supervisors approved the purchase of the
building at 455 Silicon Valley Blvd., San Jose by investing $9 million with the intent to help

the mental health and substance abuse needs of youth in Santa Clara County. In addition,
$1.2 million dollars were reserved within the Mental Health Department's budget to address
costs associated with the development of the behavioral health programs and any
meet

unanticipated facility expense. CTF was to serve children and adolescents experiencing crisis

and needing residential support, and increases coordination of care. Starlight Adolescent
Center, Inc. was selected to provide specific mental health programming within a CTF area
region.

In October 2000, Starlight Adolescent Center began admitting clients establishing the first

CTF in the state, which effectively launched the County of Santa Clara as a leader in
children's mental health service delivery and design. Starlight continues to provide essential

and comprehensive mental health and physical assessment, evaluation, and intensive treatment
for severely emotionally disturbed adolescents including case management,

Short-Doyle/Medi-Cal certified day treatment program. Starlight High School, and

therapeutic behavioral services.

Board ofSuper^/isors: Donald F. Gage, Blanca Alvarado, Pete McHugh,Jim Beall, Liz Kniss
County' Executive: Peter Kutras Jr,

3

BOS Agenda Date: June 8,2004
Agenda Kem No. 13

County of Santa Clara

Santa Clara Valley Health & Hospital
System
Mental Health Services

HHS07 060804

Prepared by: Donna Bertrand
Contracts Manager

Reviewed by: Nancy Fowler
Director, Property
Management

Submitted by: Nancy Pena, Ph.D
Director, Mental Health
Department
DATE:

June 8, 2004

TO:

Board of Supervisors

FROM:

Robert Sillen

Executive Director, Santa Clara Valley Health & Hospital System
SUBJECT:

Report Back on Starlight Community Treatment Facility and Request to Negotiate Lease Amendment
with Starlight Adolescent Center for premises at 455 Silicon Valley Blvd., San Jose.

Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh,Jim Beall, Liz Kniss
Co untv Executive: Peter Kutras Jr.

1

BOS Agenda Date : June 8.2004
Agenda htem No. 13

RECOMMENDED ACTION

Consider recommendations relating to the report back on Starlight Community Treatment Facility.
Possible action:

a.

Accept report in response to the Board of Supervisors referral from Febmary 24, 2004 regarding the Starlight
Community Treatment Facility.
b-

Approve delegation of authority to the Manager, GSA Facilities, Property Management to negotiate and execute
a retroactive lease amendment with Starlight Adolescent Center for expanded program space at the

County-owned property located at 455 Silicon Valley Blvd., San Jose, at a rate of$1.00 square foot, subject to
County Counsel review as to form and legality, and approval by the Office of the County Executive.

FISCAL IMPLICATIONS

^

The Agreement for Services, administered by the Mental Health Department(MHD), assumes, in its payment schedule,
that rent will be paid by Starlight. Starlight, however, has requested that the existing Lease be amended so that the rent
for the facility is $1 per year, retroactive to July 1, 2003, and that all maintenance and repair services are provided by
County forces, with that provision retroactive to July 1, 2002. The request was made in the context of the overall
program being in a deficit situation, estimated by Starlight in December 2003 at $581,000, and more recently at
approximately $800,000.

If the rental rate was modified as requested, retroactive to July 1, 2003, the General Fund would have a FYOd shortfall of
the full rent amount of$570,944. The estimated amount in FY05 would be $582,000. These figures would be exclusive

of the unpaid balances for building maintenance services, which total $87,207 for FY03, and $28,342 for FY04 to date.
Rather than the requested rate, it is recommended that the rent be reduced to $1 sq.ft, retroactive to July 1,2003 for the
current space of 27,662 sq.ft. For FY05 that same rate would be applied to the expanded space needed for the approved
program activities. The expanded space would total 29,364 sq.ft. These changes would result in reducing the projected

revenue shortfall in FY04 to $239,000 since Starlight must be in a position to pay the new rent amount since MHD will
cover one-time program shortfall with redirected FY04 savings from the adult 24-hour programs. The amendment
would also recognize and forgive unpaid building maintenance balances for FY03 and FY04.

The FY05 program will be restructured to insure program expenses, including the lease rent at the new rate, are within
budget parameters, utilizing available county general fund and state and federal revenues. The FY05 Recommended
Budget assumes rent revenue at the new rate, so action to amend the lease as discussed in this transmittal will have no
negative impact on the General Fund in that year.

Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh, Jim Beall, Liz Kniss
County Executive: Peter Kutras Jr.
2

BOS Agenda Date; June 8,2004
Agenda Kern No. 13

REASONS FOR RECOMMENDATION

At the request of Supervisor Beall, the Board directed Administration to "evaluate and

develop a plan regarding programmatic, treatment and fiscal issues relating to the Starlight Community Treatment

Facility." The Mental Health Department has been meeting with the Starlight, GSA,Probation, and Social Services to
address current issues and to plan for the ongoing stability of this program, which is utilized by Social Services(DFCS),
Probation, and Mental Health to provide secured psychiatric residential treatment to a census of 22 of the most severely
disturbed youth under the jurisdiction of the county. A significant financial shortfall has resulted from fewer than
expected referrals from both in- and out-of-county referral agencies. A plan has been developed to address the
problems, through one-time FY04 strategies, and FY05 program modifieations to insure the ongoing fiscal viability of
the program. Acceptance of this report will allow MHD to proceed with changes to address identified issues.
Authorization for GSA to negotiate a Lease Amendment with the Starlight provider will allow the MHD to implement

aspects of the plan to address the Starlight financial and program issues. The amendment would reduce back rent due for

FY04 by applying a retroactive rent of $1 sq.ft., consistent with lower market rents in general and with circumstances
outside Starlight's control that have led to a lower than anticipated utilization, and would expand the space that will beto
and access
utilized by Starlight consistent with MHD program objectives and overall program security. The layout of
efforts
to
the newly defined space will allow a true "lockdown" to be in place. This is believed to be supportive of
expand program utilization to additional agencies.

These ehanges are necessary to allow for program and budget changes that will insure continued operation of the
Community Treatment Facility (CTF). Remaining FY04 budget problems can be addressed through one-time MHD
adjustments. FY05 problems will be addressed through facility and program changes, increased access by other counties
to this critical service, and by restructured agreements between Santa Clara and other counties.
BACKGROUND

The Board of Supervisors approved the development of a sub-acute residential treatment program for adolescents in the
(CTF),
FY98/99 budget. The intent was to utilize a newly certified program model, the Community Treatment Facility
the
State
several
years.
This
new
program
model
is
licensed
by
which had been in development at the state level for
Department of Social Services(SDSS)as a group home; and is certified by the State Department of Mental Health
available

(SDMH)as a community treatment program. CTF programs are the only secure residential treatment programs
for California youth, outside of state hospitals and the California Youth Authority.

MHD,in collaboration with the parent company of the current Starlight CTF,submitted a proposal to the State selection
Department of Mental Health in response to a Request for Proposal(RFP)issued in May 1999 for the statewidehost
of the new CTF programs. Because of Santa Clara County's need for the new services, we agreed to act as the

county for the new regional service. The State approved a total of400 CTF beds statewide. Seventy—six (76) of those

beds were allocated to the Greater Bay Area Region. The Santa Clara County proposal was for a total of thirty-six (36)
beds, with twenty-six (26) of the beds to be dedicated to Santa Clara County and ten (10) beds to Alameda County.

San Jose.
On May 9, 2000, the Board of Supervisors approved the purchase of the building at 455 Silicon Valley Blvd.,
This building, the former Charter Hospital, was purchased with the intent of securing a facility for the new CTF, and
Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh,Jim Beall, Liz Kniss
County Executive; Peter Kutras Jr.

3

BOS Agenda Date : June 8, 2004
Agenda Item No. 13

other behavioral health programs for Santa Clara County youth. After extensive inter-departmental planning involving
staff from the new CTF provider, Mental Health Department, Probation, DFCS, and GSA,the Starlight Adolescent

Center opened in October 2000, as a 36-bed regional residential treatment program. Of the thirty-six (36) beds,beds
twenty-four (24) were allocated for Santa Clara County youth, ten (10) to Alameda, and the remaining two (2)
were allocated to Solano County.

The Starlight CTF program is funded through multiple sources including AFDC group home payments through Social
Services, education funds for non-public schools, and through a Short-Doyle/Medi-Cal agreement with MHD, whichAll

includesMedi-Cal and State EPSDT matching funds. State CTF supplemental rate funds, and county general funds.

funding is available tlirough various mechanisms based on client occupancy in the program. The program annual budget
is based on an expected 90% occupancy, and all referrals to the program must be approved through the county

interagency placement committee. Resources for Intensive Serviees Committee (RISC), consisting of DFCS,Probation,
and Mental Health staff.

The program accepts the most severely disturbed youth referred by county departments and has proven to be a critical
posing
service, in particular for Probation and Social Services in addressing the needs of youth who previously were has
seven
Hall
and
the
Children's
Shelter.
Currently
Probation
severe placement concerns and lengthy stays in Juvenile
(7), DFCS nine (9), and Mental Health four (4) youth in the program. All three county departments have indicated that
alternative placement options for these and similar youth are virtually non-existent, outside of Metropolitan State

Hospital in Los Angeles, CYA,or out-of-state locked programs.
Existing Lease

The current Lease with Starlight is for 27,662 square feet of space in the County-owned building at 455 Silicon Valley
Blvd., San Jose, sometimes referred to as the old Charter Hospital. The Lease expires on June 30,2004, though a

^

provision allows for annual extensions consistent with the term of the Contract for Services for a Community Treatment
and Day Treatment program, administered by MHD.The rent for FY04 is $47,578.64 per month, or $570,943.68 per
year. If the Lease is extended, the rent will increase on July 1, 2004, and in any future year, by the Consumer Price Index
(CPI)for the San Jose area. In addition. Starlight is responsible for payment of 55% of the utilities in the building, based
to the
on its occupancy of the total. Maintenance is shared between the County and Starlight as defined in an exhibit
Lease. The Agreement for Services, administered by MHD,assumes, in its payment schedule, that rent will be paid by
Starlight.
Problems and Solutions - FY04 and FY05

In November and December 2003, Starlight informed MHD,GSA and the Board of Supervisors of financial problems

resulting from a lower than expected census in the program, thus significantly decreasing revenues to Starlight. At the
time, the year-end revenue loss was projected at $500,000. In a February 2004 meeting with Starlight, attended by SSA,
Probation, GSA,and Mental Health staff, the deficit projection was reported to be just over $800,000, and Starlight
indicated that their ability to continue providing this program was in serious jeopardy.

A series of meetings have occurred since the February meeting to review the program and financial issues that have
created the current problems. The meetings have included input from Starlight, MHD program staff, SCVHHS Finance
staff. Probation, DFCS, GSA, and County Counsel. Key issues were identified as responsible for the current situation
and agreement was reached on a plan to address the problems in FY04 and FY05.

Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh,Jim Beall, Liz Kniss
Count/ Executive: Peter Kutras Jr.
4

BOS Agenda Date: June 8, 2004
Agenda ttem No. 13

The most critical cause of the current fiscal problems is the low census and the resulting loss of revenue to the provider.
Virtually all program expenses are covered by census-based revenue. The Starlight budget assumes a 90% program
occupancy within the 36-bed program, allowing for some fluctuation in admissions and discharges. However, program
costs have not fluctuated with the significantly low census(70%; average 25 beds) this fiscal year, resulting in a

projected FY04 shortfall of $1,010,000. The factors contributing to the low referrals by both in-county and

out-of-county agencies are outlined below.

• Cost and Financial Risk to Counties - Because the funding streams that finance the CTF's are not within the control of

counties(AFDC payments, Medi-Cal/EPSDT billings. State supplemental rates), many counties are not willing tonetenter
into agreements with Santa Clara County, unless they are guaranteed a fee-for-service rate. While the estimated
county cost is relatively low compared to hospital and out of state placements ($135/day), current funding structures

require that counties assume the risk at reconciliation if any of the funding assumptions are not realized. In this
economic climate, counties are not prepared to take that risk. In addition, those counties with commitments to Santa
is, i"
Clara County have not had the number of expected referrals from Social Services and Probation Departments. This
is
also
part, because some counties require the referring department to pay for the county share of the placement. Thiseach
have
thought to contribute to lower than expected referrals. Within Santa Clara County, DFCS and Probation24
beds.
indicated a critical need of 10 beds each, while MHD requires 4,for a total Santa Clara County need of
Agreed Solutions-

1. Provider to immediately reduce program staffing to meet current census levels in order to save on expenses for the
remainder of the fiscal year.

^ 2. MHD to determine unavoidable FY04 Starlight shortfall and redirect one-time MHD funds to address current year
deficit.

3. GSA to renegotiate FY04 and FY05 lease terms related to rates, maintenance, and space.

4. MHD to negotiate and restructure FY05 Starlight agreement to accommodate Santa Clara County(MHD,Probation,
with
and DFCS)needs for 22 beds, within FY05 existing county resources; and will negotiate and restructure contracts
on
other counties to allow both dedicated and fee-for-service options. Program capacity will be established based
confirmed beds requested from other counties plus twenty-two (22) Santa Clara County beds.

5. Economics of scale resulting from of fee-for-servicc contracts will be shared among all program users. Santa Clara
County to accept negotiated responsibilities such as service authorization, program certification, and facilities
lease/management.
Facility Security and Lease

A second problem identified is a concern of placing agencies about the security ot the CTF facility, given several
AWOL's from the program this past year. It is thought that some referrals are not being made because of this problem.
This is viewed by Starlight to be related to the fact that the Fire Marshall will only authorize certain areas of the facility
at
to be locked and not the entire facility. This is because there are several non-CTF program components co-located
several
the facility, which by law must have immediate egress from the facility in the event of a fire. Consequently,
youth have eloped while moving between locked and unlocked parts of the building.

Board of Supervisors: Donald F. Gage, Blanca .Alvarado, Pete McHugh,Jim Beall, Liz Kniss
County Executive: Peter Kutras Jr.

5

BOS Ayetula Date : June 8,2004
AyentJa Item Ho. 13

Agreed Solutions—

6. GSA to renegotiate lease and allow Starlight sole occupancy of the facility in order to obtain Fire Marshall Clearance
to lock additional parts of the facility, thereby reducing elopement and increasing security.

Program Population and Referral Process

Because CTF's are locked programs, there has been a significant amount of attention dedicated at the state and local
levels to assuring that the population of youth referred to CTF's require locked settings, and that appropriate voluntary

and involuntary processes are in place. CTF providers have indicated that by allowing structured aftercare services, in
the form of wraparound and intensive in-home treatment, the success of these programs can be enhanced and residential
be reduced by
stays may be reduced. In addition, CTF providers suggest that hospitalizations and placement failures canwho
would
considering youth with severe psychiatric problems who may not have extensive placement failures, but
benefit from short-term intensive treatment rather than incarceration or placement in lower level group homes. This

issue has been raised with respect to the number of severely disturbed youth that are appearing in the juvenile justice of

system, who may be better served by the CTF program than other limited options available to them. An examination
the potential for the CTF to be utilized for juvenile justice youth who are currently waiting placement in juvenile hall, or
who might otherwise benefit from this level of care, to better address severe mental health needs is warranted.
Agreed Solutions-

7. DFCS makes the group home payments to Starlight on behalf of DFCS,the Mental Health and Probation departments.
MHD,DFCS and Probation are working collaboratively to establish a guaranteed portion of the group home payment to
Starlight as a means of maintaining Starlight's fiscal sustainability.

and
8. MHD's FY05 agreement to include more extensive aftercare services for the CTF clients, utilizing Mcdi-Calwith

EPSDT resources in order to extend treatment through transition to community based care. MHD will explore

DFCS, the possible utilization of wraparound resource for up to 90 days of intensive transition services.
to
9. County Departments (Probation, DFCS, MHD)with Starlight to review client admission criteria and processes
and
determine whether additional county youth might benefit from a shorter term program within CTF regulations

requirements.
Summary

The CTF level of care is seen as a vital, yet limited resource needed by Santa Clara County departments responsible for

placement of youth wards, dependents, and mental health clients. To date, only five of the fourteen CTF programs

originally approved by the State Department of Mental Health are operational. The problems facing Starlight arc similar

to those being faced by other programs, according to a recent survey of providers. All providers cite program expense
and funding uncertainty as critical issues. The options proposed here will address those issues most critical to Starlight
and will insure this level of care continues to be available to county youth.

It is requested that the Board approve the above plan and authorize CSA to proceed with lease negotiations. It is also
proposed that MHD utilize one-time savings in the 24-hour programs to address any budget shortfall this fiscal year,
which is expected to be less than $500,000. Additionally, MHD has sought and obtained State approval to allow
Starlight to market vacant beds to counties statewide. . This will limit county fiscal responsibility to only those beds

Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh, Jim Beall, Liz Kniss
Count)' Executive: Peter Kutras Jr.
6

BOS Agenda Date ; June 8,2004
Agenda Item No. 13

dedicated to Santa Clara County placements. These modifications are expected to address current and future issues. In
the event that utilization by other counties does not increase, the county would negotiate a reduced program with the
provider to a capacity of approximately 28 beds.
ATTACHMENTS

•(Transmittal submitted on May 26, 2004 7:50:40 AM - PDF Version)

Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh,Jim Beall, Liz Kniss
Counh'Executive: Peter Kutras Jr.

7

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