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Supervisors approve three DPH mental‑health contracts, sever one fiscal‑intermediary contract for rebid
Summary
The Budget and Finance Committee moved three Department of Public Health contracts forward to the full Board but severed and continued the Calvin Louie fiscal intermediary contract after committee members raised procurement and contingency‑fund oversight concerns.
The Budget and Finance Committee on Monday recommended approval of three Department of Public Health contracts for mental‑health services and deferred one fiscal‑intermediary contract for further review after finding the procurement process and sizeable contract contingencies needed additional oversight.
Deputy Financial Officer Anne Okubo described five proposed contracts that together totaled about $178 million in baseline not‑to‑exceed amounts, with a proposed contingency of roughly $20.25 million (12%) to address add‑backs and COLA adjustments over the contract terms. Okubo said the contingency is a not‑to‑exceed contract flexibility that would only be executed if funding becomes available.
Committee members expressed concern about placing contingency language into professional services contracts without explicit Board release rules. The Budget Analyst advised approving the baseline amounts but treating contingency release as a policy decision. Comptroller Leo Levinson said contingencies can make contract management more targeted, while other supervisors warned they create risks to Board oversight.
A second issue emerged over the fiscal intermediary contract for which the department reported only one bid from the incumbent, Calvin Louie. The budget analyst said the RFP had been sent primarily to community‑based organizations and to a single private firm; several supervisors said the department should reissue or expand outreach to private financial services firms and requested a short‑term contract while rebidding. Supervisor Sean Ellsborne proposed moving three contracts forward (Canyon Manor, Crestwood Behavioral Health, and Medi‑Pack) and severing the Calvin Louie item for the Board meeting in two weeks. The committee approved that approach and asked DPH and the Controller's Office to provide reporting requirements and oversight language as trailing legislation.
Public commenters urged a full financial audit of Department of Public Health and General Hospital during the discussion. The committee asked DPH to work with the Controller's Office on revised RFP outreach and reporting requirements and scheduled the severed Calvin Louie contract for further review.
Next steps: three contracts to be forwarded to the full Board for approval; the Calvin Louie fiscal intermediary contract to be reissued or reviewed and returned at the next meeting.
