DATE: November 3, 2026
TO: Board of Supervisors
SUBMITTED BY: Susan Holt, Director, Department of Behavioral Health
SUBJECT: Master Housing Agreement for Full-Service Partnership Persons Served
RECOMMENDED ACTION(S):
TITLE
1. Under Administrative Policy No. 34 for competitive bids or requests for proposals (AP 34), determine that an exception to the competitive bidding requirement under AP 34 is satisfied and a suspension of competition is warranted due to unusual or extraordinary circumstances, due to the passage of the Behavioral Health Services Act (BHSA) making significant changes to how funding is allocated for Full Service Partnership (FSP) services and carving out housing interventions from FSP services; and
2. Approve and authorize the Chairman to execute a Master Agreement with various housing operators, for housing and housing related services, effective upon execution through June 30, 2027, and one optional 12-month extension, total not to exceed $7,175,000.
REPORT
There is no additional Net County Cost associated with the recommended actions, which will waive the competitive bidding process and allow the Department to continue to provide housing and related services to its Full Services Partnership (FSP) persons served who are homeless or at risk of homelessness living with a serious mental illness at appropriate housing facilities. These actions will ensure compliance with Behavioral Health Services Act (BHSA) regulations. This item is countywide.
ALTERNATIVE ACTION(S):
Should your Board not approve of the recommended actions, the Department would be required to transition individuals to other facilities and possibly higher level of care institutions for severely and persistently mentally ill services. This would result in an increase in costs related to the change in placement facilities.
SUSPENSION OF COMPETITION/SOLE SOURCE CONTRACT:
It is requested that the County find under Administrative Policy No. 34 (AP 34) that an exception to the competitive bidding requirement is satisfied, and a suspension of competition is warranted due to unusual or extraordinary circumstances. This is due to the passage of BHSA which has resulted in the need to carve out housing intervention funds from FSP treatment providers and to contract directly with Housing operators. The General Services Department - Purchasing concurs with the Department’s assessment that this satisfies the exception to the competitive bidding process required by AP 34.
FISCAL IMPACT:
There is no increase in Net County Cost associated with the recommended actions. The maximum compensation for the recommended Master Agreement is $7,175,000 and will be funded with BHSA Housing Intervention funds. Some of these housing costs will be offset by CalAIM Transitional Rent benefits for eligible participants in lieu of BHSA funding. Sufficient appropriations and estimated revenues are included in the Department’s Org 5630 FY 2026-27 Adopted Budget and will be included in future budget requests for the duration of the term of the agreement. Actual costs will be determined by actual services provided.
DISCUSSION:
On March 5, 2024, BHSA replaced the Mental Health Services Act (MHSA), and reshaped how County behavioral health funding was to be allocated by focusing heavily on severe mental illness, substance use disorder treatment, and housing for the unhoused population. County behavioral health agencies are required to spend 30% of their annual funding on housing interventions. Housing interventions are a proven recommended best practice for achieving long term behavioral health recovery and housing stability. BHSA program priorities for housing interventions are designed to reduce homelessness among BHSA eligible individuals experiencing homelessness with a behavioral health condition, and focus efforts on the chronically homeless.
FSP treatment services are to provide comprehensive and integrated care for persons with a high risk of homelessness, justice involvement, and hospitalization. FSP treatment contractors are required to provide persons served with supports to promote their recovery with a "whatever it takes" philosophy, which includes referral to housing interventions.
Historically under the MHSA, FSP treatment contracts contained funding for housing interventions. Effective July 1, 2026, BHSA required counties to carve out housing interventions from FSP treatment services and establish formal agreements with housing operators directly to efficiently manage and administer rental payments.
On June 16, 2026, FSP treatment agreements (Nos. 23-296, 25-380, 25-413, 25-381, 25-412, 25-414, and 25-382) were amended to remove housing intervention funding. The proposed master agreement will fund housing services for FSP persons served who are already living in housing facilities, and future persons served who are assessed to need housing interventions through contracted FSP programs.
The Department has notified and received approval from the Department of Human Resources of execution of the recommended master agreement to comply with AB 339.
OTHER REVIEWING AGENCIES:
The Behavioral Health Board was notified of this agreement at their September 2026 meeting.
REFERENCE MATERIAL:
BAI #54, June 16, 2026
ATTACHMENTS INCLUDED AND/OR ON FILE:
Suspension of Competition Acquisition Request
On file with Clerk - Master Agreement with FSP Housing Operators
CAO ANALYST:
Dylan McCully