Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Colleen Chawla, Chief, San Mateo County Health
Jei Africa, Director, Behavioral Health and Recovery Services
Subject: Funding Commitment for Horizon Services’ Palm Recovery Center under BHCIP Round 2: Unmet Needs
RECOMMENDATION:
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Adopt a resolution:
A) Approving a funding commitment of $2,000,000 from San Mateo County Opioid Settlement funds as 10% local match funds for Horizon Services, Inc.’s Palm Recovery Center project application under the California Department of Health Care Services (DHCS) Behavioral Health Continuum Infrastructure Program (BHCIP) Round 2: Unmet Needs; and
B) Authorizing the Chief of San Mateo County Health, or designee(s), in consultation with County Attorney, to negotiate and execute all agreements, award letters, and other documents necessary and appropriate to accomplish the purposes of this resolution.
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BACKGROUND:
On May 21, 2025, San Mateo County Behavioral Health and Recovery Services (BHRS) experienced the closure of its 14-bed Sobering Center, leaving a critical gap in the local substance use continuum of care. This closure has impacted law enforcement, emergency departments, and community members seeking safe sobering and stabilization options. Meanwhile, Palm Avenue Detox, a longstanding provider operated by Horizon Services, Inc. (Horizon Services), faced facility and sustainability challenges under the American Society of Addiction Medicine’s (ASAM) Criteria’s Fourth Edition, which requires residential withdrawal management/detoxification services to be incorporated into residential treatment to facilitate seamless “step-downs” to lower levels of care. CalAIM’s fee-for-service payment reform changes also necessitate economies of scale and efficiencies not available to smaller facilities. As a result, the County and Horizon Services identified the need for a new, integrated campus facility to sustain detoxification and treatment services while restoring sobering services in a more central location within San Mateo County.
DISCUSSION:
Horizon Services, a long-standing County partner with decades of experience operating detoxification, residential, and sobering programs in multiple Bay Area counties, intends to submit a proposal under the State’s BHCIP Round 2 to develop the Palm Recovery Center at 101 North El Camino in San Mateo. The proposed integrated behavioral health campus would include 58 licensed beds: 14 Sobering Center beds, 14 Withdrawal Management/Detox beds, and 30 Residential Treatment beds, consistent with ASAM best practices. This model restores lost sobering services, expands detox and residential treatment capacity, and improves outcomes by engaging clients in a continuum of care.
The Palm Recovery Center will operate as a co-occurring capable program with enhanced Incidental Medical Services and expanded Medication-Assisted Treatment, in alignment with CalAIM reforms. The program is expected to achieve an 80% utilization rate across service lines, improving client outcomes, reducing emergency department boarding, lowering relapse and overdose risks, and reducing incarceration.
The total estimated project cost is approximately $20 million, with $6.5 million for acquisition and $14.5 million for construction. The County’s $2 million commitment of opioid settlement funds will serve as the required 10% local match, unlocking approximately $20 million in State bond funds. Horizon Services will cover $400,000-$500,000 in predevelopment costs, including nonrefundable deposits and architectural and legal fees. Facilities must operate for the intended purpose for at least 30 years.
The BHCIP application is due no later than October 28, 2025, and evidence of 10% local matching funds must be demonstrated as part of the application submission. The Notice of Award (NOA) is expected in the Spring of 2026. Construction must be finished within five years of the NOA, and projects must be built and actively offering services within five years of execution of the Program Funding Agreement with DHCS.
The resolution contains the County’s standard provision allowing amendment of the County’s fiscal obligations by a maximum of $25,000 (in aggregate).
The agreement and resolution have been reviewed and approved by the County Attorney as to form.
It is anticipated that there will be 50% average utilization of licensed beds in the first year and 80% utilization in the second year.
PERFORMANCE MEASURE:
|
Measure |
FY 2028-29 Projected |
FY 2029-30 Projected |
|
Percentage of Utilization of licensed beds |
50% (29 clients/day) |
80% (46 clients/day) |
*The performance measure is based on projected completion and operational dates of the facility. These may be subject to change.
COMMUNITY IMPACT:
The Palm Recovery Center will expand low-barrier 24/7 access to substance use disorder services for vulnerable County residents, particularly low-income, unhoused, uninsured, and Medi-Cal clients disproportionately impacted by the opioid crisis. The facility will restore sobering services utilized heavily by San Mateo Medical Center as an emergency department step-down and by local law enforcement for individuals brought to the site in lieu of jail for driving under the influence violations. This new campus will create a seamless continuum of low-barrier services for high-risk, high-need residents and support long-term recovery for individuals at high risk of homelessness, relapse, and overdose.
FISCAL IMPACT:
The County’s commitment is $2,000,000 from Opioid Settlement funds, representing the required 10% match under BHCIP Round 2. This investment will leverage approximately $20 million in State bond funds. There is no Net County Cost.