REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
May 19, 2026
FROM
JOSHUA DUGAS, Acting Director, Department of Behavioral Health
SUBJECT
Title
Memorandum of Understanding Template and Agreements for Specialty Mental Health Services for Foster Youth
End
RECOMMENDATION(S)
Recommendation
1. Approve a Memorandum of Understanding Template, including non-standard terms, to establish arrangements for timely reimbursement between individual Mental Health Plans in the State of California to ensure that Specialty Mental Health Services are provided and funded for those foster youth who fall under the expectations set by Welfare and Institutions Code sections 14717.2, 14717.25, and 14717.26, in the total aggregate amount not to exceed $14,500,000, for the contract period beginning the date of execution through June 30, 2030.
2. Authorize the Director of the Department of Behavioral Health to execute the Memorandum of Understanding Template with individual Mental Health Plans in the State of California, including any non-substantive amendments, on behalf of the County, subject to review by County Counsel.
3. Authorize the Director of the Department of Behavioral Health to execute individual Agreements with any individual Mental Health Plan in the State of California, with certain non-standard terms, for timely reimbursement between individual Mental Health Plans, in the total aggregate amount not to exceed $14,500,000, to ensure that Specialty Mental Health Services are provided and funded for those foster youth who fall under the expectations set by Welfare and Institutions Code sections 14717.2, 14717.25, and 14717.26, including any non-substantive amendments, on behalf of the County, subject to review by County Counsel.
(Presenter: Joshua Dugas, Acting Director, 252-5142)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Foster Sustainable Development Through Strategic Partnerships.
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). The estimated local match not to exceed an aggregate amount of $14,500,000 for the portion of Specialty Mental Health Services (SMHS) paid for by the state or county (non-federal share), required to access federal matching dollars will be funded by a combination of the Department of Behavioral Health’s (DBH) existing ongoing 1991 and 2011 Realignment funds. Any funds received by San Bernardino County (County) from a County of Jurisdiction (COJ) Mental Health Plan (MHP) will offset the utilized aggregate amount and shall make available the same amount in receipt for future payments to other County of Residence (COR) MHPs. Adequate appropriation and revenue have been included in DBH’s 2025-26 budget and will be included in future recommended budgets.
BACKGROUND INFORMATION
DBH is responsible for providing mental health and substance use disorder (SUD) services to County residents experiencing severe mental illness and/or SUD. SMHS are intensive, specialized, and clinically necessary mental health services integrating with residential care to offer core services such as community engagement, health support, life-skills services, transitional support, and trauma-informed care for youth and non-minor dependents. Since 2010, DBH has contracted with Short-Term Residential Treatment Programs (STRTPs) for the provision of SMHS.
STRTPs provide 24-hour care and supervision for youth with severe emotional and behavioral disorders. Functioning as a component of the SMHS continuum of care, STRTPs provide short-term, intensive mental health treatment to further facilitate a youth’s readiness to reside in a home-like setting. The aim is to reduce congregate care placements and expedite permanency within the child welfare and juvenile justice systems.
Chapter 402, Statutes of 2022 (Assembly Bill 1051 [AB 1051]) added Welfare and Institutions Code sections 14717.2, 14717.25, and 14717.26, which became effective July 1, 2024, ensuring uninterrupted access to SMHS for dependents under the jurisdiction of one county but residing in another. The legislation requires formal agreements between the COJ‑MHP, the county responsible for establishing a youth’s Medi‑Cal eligibility, and the COR‑MHP, the county where the youth has been placed in residential care.
When foster children and youth are placed in a Children’s Crisis Residential Program, Community Treatment Facility, Group Home, or STRTPs outside their COJ and need SMHS, AB 1051 mandates that the responsibility to provide, arrange, and pay for those services remains with the MHP in the COJ, unless a specific exception applies.
The Memorandum of Understanding (MOU) template to be used by DBH with other MHPs will create two-way agreements between the COJ-MHP and the COR-MHP to ensure the provision and timely reimbursement of SMHS for foster youth placed in residential care facilities outside their COJ. The MOU aims to clearly delineate responsibilities, facilitate communication, establish billing processes, and create a mechanism to reimburse the COR for the local share of costs of SMHS. DBH has been and will continue engaging with MHPs in the State to determine their willingness to use the MOU template.
The MOU template includes the following non-standard terms:
1. The MOU does not require the contracting county to meet the County’s insurance standards as required pursuant to County Policies 11-05, 11-07 and 11-07SP.
• County policy requires contractors to carry appropriate insurance at limits and under conditions determined by the Risk Management Department and as set forth in County policy and in the County standard contract.
• Potential Impact: The County has no assurance that the contracting county will be financially responsible for claims that may arise under the MOU, which could result in expenses to the County that exceed the total MOU amount.
2. The County is required to defend and indemnify the other county for claims that arise out of the negligent acts, errors, or omissions of the County, its authorized officers, employees, agents, and volunteers.
• The County standard agreement does not impose an indemnity obligation on the County.
• Potential Impact: In the event that an indemnifiable claim arises, the County would be required to pay for attorney’s fees in defending the other county and potentially paying any settlement/judgment.
3. The other county limits its indemnity obligation to the County to claims that arise out of the negligent acts, errors or omissions of the other county, its authorized officers, employees, agents, and volunteers.
• The County standard general indemnity provision requires the contractor to indemnify, defend, and hold County harmless from third party claims arising out of the acts, errors, or omissions of any person.
• Potential Impact: The other county’s indemnity obligation is more limited compared to the standard County general indemnity obligation. In the event a claim arises that falls outside the scope of other counties' limited indemnity obligation, the County could be financially responsible for the defense of the claim and any resulting judgment/settlement.
Approval of Recommendation No. 3 will give the Director of DBH authorization, subject to County Counsel review, to enter into those agreements that include non-standard terms with MHPs that will not agree to the MOU proposed by DBH but accomplish the same goal of creating two-way agreements between the COJ-MHP and the COR-MHP. DBH has been in contact with several MHPs that already have agreements with other MHPs and do not want to create duplicate agreements for the same mandate.
Additionally, approval of Recommendation No. 3 will establish a structure that allows DBH and other MHPs to revise their agreements under the authority granted by this item. Agreements will be coordinated statewide. However, MHPs with non‑standard terms not covered by this item will be brought back to the Board for approval. This recommended process supports uninterrupted access to SMHS in compliance with AB 1051, ensuring timely foster-youth placement and reducing administrative burden for eligible clients.
These agreements may contain non-standard terms as follows:
1. Venue may be in a different County in California.
• County Policy 11-05 requires venue for disputes in the Superior Court of California, County of San Bernardino, San Bernardino District.
• Potential Impact: Having a venue in another county may result in expenses that the County may need to incur in the event of a dispute that might not have been incurred if the venue were within the County.
2. Payment terms may be less than Net 60 days.
• County standard payment terms are Net 60 days with no interest or late payment penalties.
• Potential Impact: County standard processing time is 60 days or more. Failing to pay within the time period specified in the agreement may result in a material breach of the agreement, which could allow the other county to terminate the agreement and seek other legal remedies.
3. The County may be contractually required to indemnify the other county for the negligence, acts, errors, or omissions of the County, its employees, elected officials, officers, agents, contractors, licensees, and volunteers.
• The standard County agreement does not impose a contractual indemnity obligation on the County.
• Potential Impact: In the event that a claim arises that falls within the scope of the County’s indemnity obligation, the County will need to retain attorneys to represent the other county and may need to pay any resulting settlement/judgment.
4. The other county’s indemnity obligations may be limited to the negligence, acts, errors, or omissions of the other county, its employees, elected officials, officers, agents, contractors, licensees, and volunteers.
• The County standard general indemnity provision requires the contractor to indemnify, defend, and hold the County harmless from third party claims arising out of the acts, errors, or omissions of any person.
• Potential Impact: The other county’s indemnity obligation is more limited compared to the standard County general indemnity obligation. In the event a claim arises that falls outside the scope of other counties' limited indemnity obligation, the County could be financially responsible for the defense of the claim and any resulting judgment/settlement.
5. The agreements may not require the other county to meet the County's insurance standards as required pursuant to County Policies, 11-05, 11-07 and 11-07SP.
• County policy requires contractors to carry appropriate insurance at limits and under conditions determined by the Risk Management Department and as set forth in County policy and in the County standard contract.
• Potential Impact: The County has no assurance that the contracting county will be financially responsible for claims that may arise under the agreement, which could result in expenses to the County that exceed the total agreement amount.
6. The agreements may be silent on indemnity obligations.
• The County’s standard general indemnity provision requires the contractor to indemnify, defend, and hold the County harmless from third party claims arising out of the acts, errors, or omissions of any person.
• Potential Impact: If the agreements are silent on indemnity obligations, neither party has an express contractual obligation to defend or indemnify the other party.
PROCUREMENT
N/A
REVIEW BY OTHERS
This item has been reviewed by Behavioral Health (Michael Shin, Administrative Manager, 388-0899) on March 27, 2026; County Counsel (Charles Phan, Supervising Deputy County Counsel, 387-5455) on April 16, 2026; Risk Management (Stephanie Mead, Staff Analyst II, 386-9044) on April 16, 2026; and County Finance and Administration (Iliana Rodriguez, Administrative Analyst, 386-8392) on May 4, 2026.