Committee backs $5.3 million DHS package for competency services, outpatient clinic and a 16‑bed renovation

The Capital Development Committee recommended a $5.3 million capital package from the Department of Human Services (DHS), split into two separate line items for Joint Budget Committee consideration: $3,577,898 in cash funds for a home‑like residential facility (a renovated 16‑bed unit on the Pueblo campus) and $1,722,906 in capital construction funds for an outpatient clinic with a lease‑term stipulation.

Senior Director Leora Joseph, who leads civil and forensic mental health services at DHS, told the committee the package responds to a gap at the intersection of public safety and health: people judicially found permanently incompetent to proceed (referred to in testimony as "unrestorable") who cannot be treated in state hospitals and cannot legally remain in jail. "Competency is a legal term. It is a constitutional right," Joseph said, and added that some individuals, particularly those with dementia or other neurocognitive disorders, are not restorable and thus need alternatives to hospital or jail placements.

Joseph described program elements: an outpatient psychiatric clinic intended to provide supervised community care and a renovated 16‑bed secure unit on the Pueblo campus to serve people with intellectual disabilities and complex neurocognitive conditions. She said the two pieces are "all part of the same solution" and that the department sees the clinic as a bridge to other placements.

On costs and timing, Joseph said the department's capital asks total $5,300,000 and emphasized the outpatient clinic carries a smaller budget item while the Pueblo renovation is the larger expense. Joseph also said the department is pursuing interim measures—short‑term renovations of regional center properties and partnerships with providers—for immediate placements while the longer‑term options are developed.

Joseph described the federal lawsuit and consent decree that shape DHS obligations: the lawsuit was filed in 2011 and a consent decree entered in 2019; the state currently pays capped fines "between 10 and $12,000,000" per year under the consent decree, and the department has spent roughly $60,000,000 through related committees and programs. She said the decree's term runs through 2027 and plaintiffs may return to court if obligations are thought unmet.

Committee members raised leasing concerns about spending significant tenant‑improvement dollars on leased space that the state might later vacate. Director Lars Rockholm (DHS facility management) explained state leasing rules make lessors reluctant to amortize tenant improvements because Colorado can exit leases at fiscal‑year end; DHS said it will seek firm multi‑year terms (for example, 10 years with extensions) and recognized that tenant improvements may need to be fronted by the state. The committee added a stipulation that any lease term for the outpatient clinic be structured so its length matches the expected useful life of the improvements.

CDC recommended both DHS items in separate motions. The clerk recorded unanimous roll‑call approval for the home‑like residential facility at $3,577,898 (cash funds) and unanimous approval for the outpatient facility at $1,722,906 (capital construction funds) with the lease‑term stipulation. The committee noted it would forward the separate line recommendations to the Joint Budget Committee, which retains final authority over supplemental appropriations.

Next steps: CDC’s recommendations will be delivered to the Joint Budget Committee for final supplemental consideration; the committee emphasized follow‑up on lease terms and reporting so tenant improvements are aligned with the life of the leased space.