Committee forwards $146.9 million amendment extending Crestwood contract for locked behavioral-health beds

The Budget and Finance Committee on July 27 voted 3–0 to forward to the full Board a resolution approving Amendment No. 1 to the Department of Public Health’s contract with Crestwood, increasing the not-to-exceed amount to approximately $224,200,000 and extending the contract term through June 30, 2028. The amendment funds roughly 200 long-term locked mental-health residential beds, many provided out of county.

DPH staff (introduced by the clerk as "Kelly" and later referenced as Ms. Hiramoto) described Crestwood as a major community partner supplying locked acute treatment beds, skilled nursing, and step-down residential programs. DPH said the beds are used for people under LPS conservatorships who need stabilization before returning to less restrictive community settings. DPH told the committee San Francisco has a limited number of in-city beds (DPH cited roughly 100 beds locally and noted the San Francisco Healing Center added about 54 beds via partnership) and that the agreement is structured to access beds in other counties because in-city construction and facility availability are constrained.

The Budget and Legislative Analyst reported the amendment increases the not-to-exceed amount from $77.3M to about $224.2M to accommodate rate increases (averaging ~53% over three years) and to extend the contract term; the BLA recommended approval. Committee members asked detailed questions about why so many beds are contracted out of county, how many comparable beds exist in San Francisco, and whether the city has a long-term strategy to expand local capacity.

A public caller identified as Francisco DeCosta criticized prior practices at Laguna Honda Hospital, said transfers of frail patients outside the city had led to deaths and trauma, and urged the Health and Human Services director to stop forced relocations. Committee members acknowledged the connection between Laguna Honda’s staffing/capacity issues and the need to rely on out-of-county beds.

After discussion, Chair Hillary Ronan moved to forward the Crestwood amendment to the full Board with a positive recommendation. The committee recorded three ayes and passed the motion unanimously.

Next steps: the resolution will be transmitted to the full Board for consideration; the contract amendment, if approved by the Board, would expand the city’s long-term locked-bed capacity under the terms described in the amendment and DPH’s presentation.