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: Authorization of County Funding and Agreements for Horizon Services, Inc.'s 69-Bed Recovery Center at 826 Mahler Road, Burlingame under BHCIP Round 2: Unmet Needs
RECOMMENDATION:
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Adopt a resolution:
A) Confirming and approving the County’s previously committed 10% local match from San Mateo County Opioid Settlement Funds, which amount now totals $2,500,000, as the County's local match and contribution to Horizon Services, Inc.'s 69-bed Palm Recovery Center project under the California Department of Health Care Services (DHCS) Behavioral Health Continuum Infrastructure Program (BHCIP) Round 2: Unmet Needs, for development at 826 Mahler Road, Burlingame, subject to DHCS approval of the site relocation and the conditions in the County funding agreement; and
B) Authorizing the Chief of San Mateo County Health, or designee(s), in consultation with the County Attorney and County Executive, to negotiate and execute a funding agreement, operating agreement, award or commitment letters, certifications, amendments, and other non-real-property agreements and documents necessary and appropriate to provide the County funds and implement the project at the Burlingame site.
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BACKGROUND:
On May 21, 2025, San Mateo County Behavioral Health and Recovery Services (BHRS) experienced the permanent closure of its 14-bed Sobering Center, leaving a critical gap in the local substance use continuum of care. The closure affected law enforcement, emergency departments, and community members seeking safe, short-term sobering and stabilization services. The County and Horizon Services, Inc. (Horizon) also identified a need for an integrated facility that can sustain withdrawal management and residential treatment while restoring sobering services.
On October 21, 2025, this Board adopted a resolution committing $2,000,000 in County Opioid Settlement Funds as a local match for Horizon's Behavioral Health Continuum Infrastructure Program (BHCIP) Round 2 application to the California Department of Health Care Services (DHCS). The BHCIP Round 2 funding requires a local government match of 10% calculated based on total BHCIP funds requested. At that time, Horizon’s application contemplated an approximately 58-bed Palm Recovery Center at 101 North El Camino Real in the City of San Mateo and anticipated approximately $20 million in State funding.
On March 11, 2026, DHCS announced a conditional BHCIP Round 2 award of $25,499,281 to Horizon for a 69-bed behavioral health facility in San Mateo County, with a stated project completion date of September 2028.
The State award was initially tied to the 101 North El Camino Real site in the City of San Mateo. Following significant concerns about the suitability and potential neighborhood impacts of that location, the County and Horizon began working together to identify a new site that would be suitable for client services and acceptable to the County and DHCS. Any relocation of the State-funded project requires DHCS review and written approval.
On May 5, 2026, this Board approved the County's purchase of property at 1501-1521 Bayshore Highway, 1533-1545 Bayshore Highway, and 818-826 Mahler Road in Burlingame, identified as Assessor's Parcel Number 026-321-440. Escrow closed on June 12, 2026. Building C at 826 Mahler Road, which formerly housed the County's 14-bed Sobering Center, is the proposed new site for the Recovery Center. On July 7, 2026, this Board approved a framework and directed staff to negotiate site-control and operating documents for Horizon's use of Building C.
DISCUSSION:
Horizon is a long-standing County partner with decades of experience operating sobering, withdrawal management, and residential treatment programs. Under the BHCIP award, Horizon is responsible for project development and operations, including design, construction management, financing, permits, licensing and certification, staffing, security, and day-to-day operation. The County will provide a portion of treatment funding and program oversight and, separately, will act as the owner of the proposed Burlingame property.
The proposed 69-bed Palm Recovery Center will create an integrated continuum that includes sobering, withdrawal management/detoxification, and residential treatment capacity. The final bed configuration, facility design, and service model will be subject to DHCS approval, applicable land-use and building requirements, State licensing and certification, and the final agreements between the County and Horizon. The program is intended to be co-occurring capable and to provide Incidental Medical Services and medications for addiction treatment consistent with applicable standards.
DHCS awarded Horizon $25,499,281 in conditional BHCIP funding. The County's previously approved 10% local match from Opioid Settlement Funds now totals $2,500,000, which amount will be used as eligible local match and project funding in accordance with the BHCIP award documents and the County funding agreement.
The County funding agreement will establish eligible uses, payment conditions, milestones, reporting and audit requirements, remedies and repayment obligations, and compliance with Opioid Settlement Fund and BHCIP requirements. No County funds will be disbursed until DHCS has approved the site relocation in writing, Horizon has entered into site-control documents for 826 Mahler Road that are acceptable to the County, and the Chief of San Mateo County Health determines that the other conditions precedent in the funding agreement have been satisfied.
The funding and operational documents executed by the Chief of San Mateo County Health will be coordinated with the County Executive and County Attorney. Any ground lease, purchase option, conveyance, deed restriction, or other real-property instrument will be executed by the County Executive or another duly authorized County officer consistent with the Board's July 7, 2026 direction and any subsequent Board authorization.
The conditional State award identifies a September 2028 project completion date. The final schedule will depend on DHCS approval of the site relocation, completion of site-control and funding agreements, design and permitting, construction, and licensing and certification.
The resolution has been reviewed and approved by the County Attorney as to form.
The resolution contains the County's standard provision allowing amendments that increase the County's maximum fiscal obligation by no more than $25,000 in aggregate and/or modify the agreement term or services within the current or revised fiscal provisions.
It is anticipated that the facility will achieve approximately 50% average utilization in its first year of operation and 80% in its second year.
PERFORMANCE MEASURE:
|
Measure |
FY 2028-29 Projected* |
FY 2029-30 Projected* |
|
Percentage utilization of available beds |
50% (about 35 clients/day) |
80% (about 55 clients/day) |
*The performance measure is based on the current projected completion and operational dates and the proposed 69-bed capacity. Dates and capacity may change based on DHCS approval, final design, licensing, and construction.
COMMUNITY IMPACT:
The Palm Recovery Center will expand low-barrier, 24/7 access to substance use disorder services for vulnerable County residents, including low-income, unhoused, uninsured, and Medi-Cal clients disproportionately affected by the opioid crisis. The proposed Burlingame location can restore a centrally located sobering resource used by emergency departments and law enforcement while connecting clients to withdrawal management, residential treatment, medications for addiction treatment, and ongoing recovery supports. The project is intended to reduce avoidable emergency department and jail use, lower overdose risk, and improve continuity of care.
FISCAL IMPACT:
DHCS has awarded Horizon $25,499,281 in BHCIP Round 2 funding, meaning the County's 10% local match commitment is now $2,500,000 from Opioid Settlement Funds. County Opioid Settlement Funds will be disbursed only for eligible project costs and after the conditions in the County funding agreement are satisfied. There is no Net County Cost.