REPORT TO COUNCIL
SUBJECT
Title
Action on a Memorandum of Understanding Between the City of Santa Clara and County of Santa Clara for Mental Health Services and Related Budget Amendment
Report
EXECUTIVE SUMMARY
The proposed Memorandum of Understanding with the County of Santa Clara will allow the City to continue the Psychiatric Emergency Response Team (PERT) co-response program, a proven model that improves outcomes for individuals experiencing mental or behavioral health crises while enhancing public safety.
BACKGROUND
Police officers routinely respond to calls involving individuals experiencing mental or behavioral health crises. Over the past decade, there has been a regional increase in such calls, along with broader recognition at the state and county level of the need to divert individuals with mental illness or substance use disorder away from the criminal justice system and toward appropriate treatment at the earliest point of contact.
In response, the Police Department (Department), in coordination with the City Council and the County of Santa Clara (County), has implemented a series of programmatic enhancements over time to strengthen its approach to behavioral health-related calls for service. Early efforts included a 2015 partnership with the County Behavioral Health Services Department (BHSD) to provide intensive case management services for chronically unhoused individuals, as well as the City Council’s allocation of FY 2018/19 Citizen’s Option for Public Safety (COPS) Supplemental Law Enforcement Services funding to support the integration of mental health resources into police operations.
Building on these efforts, the Department restructured its Nuisance Suppression Unit into the Community Response Team (CRT) in 2019, shifting its focus toward addressing long-term public safety issues, reducing crime, and supporting vulnerable populations through proactive engagement and problem-solving strategies. In 2020, the Department further expanded its capabilities by assigning officers as Crisis Intervention Specialists (CIS) and providing specialized training to respond to individuals experiencing mental, behavioral, or substance use-related crises. While this model enhanced service delivery, it remained a law enforcement-only response without embedded clinical expertise.
During this same period, the County advanced a complementary response model through the development of the Psychiatric Emergency Response Team (PERT) program, which pairs law enforcement officers with licensed behavioral health clinicians to provide real-time, in-field clinical assessment and intervention, and the Mobile Crisis Response Team (MCRT), a clinician-led mobile response. The Department used the MCRT on a limited basis, these services were not consistently available to meet operational demand due to countywide resource constraints.
Recognizing both the increasing demand for behavioral health response and the limitations of existing resources, the Department pursued a formal PERT co-response model. On August 30, 2022, the City Council authorized the City Manager to negotiate and execute a Memorandum of Understanding (MOU) with the County to formally establish a Department PERT program. The initial term of this MOU extended through December 31, 2023, with a maximum City obligation of $180,000, fully funded from the FY 2018/19 COPS Supplemental Law Enforcement Services Fund (Attachment 1). On February 7, 2023, the City Council approved allocating an additional $70,000 using FY 2022/23 COPS Supplemental Law Enforcement Services Funds for an anticipated extension to the program (Attachment 2.)
Due to County staffing limitations, full implementation of the PERT program was delayed until June 2023. As a result, on September 19, 2023, the City Council approved Amendment No. 1 (Attachment 3), extending the term through December 31, 2025, increasing the funding cap to $240,000, while also formalizing key operational roles, including the designation of a PERT officer to partner with a County BHSD clinician. As part of this action, the unspent balance for the PERT program was approved to be carried over from FY 2022/23 to FY 2023/24.
In October 2024, the City and County executed Amendment No. 2 (Attachment 4), revising the term to June 30, 2025, to align with the fiscal year. During FY 2024/25, the County assumed financial responsibility for the BHSD clinician assigned to the PERT program, resulting in no cost to the City; accordingly, the previously allocated $70,000 was not expended.
Since implementation, the program has been delivered in close partnership with the County’s BHSD. The integration of a clinician into field operations represents a significant evolution from the Department’s earlier CRT/CIS model by embedding clinical expertise directly into the response. This coordinated co-response approach has enhanced the Department’s ability to conduct real-time assessments, reduce escalation, connect individuals to appropriate treatment and support services, and improve overall outcomes. The program has also contributed to reductions in repeat calls for service and strengthened community trust through a more service-oriented response to individuals in crisis.
DISCUSSION
In August 2025, the City was notified that the County would discontinue funding for mental health clinicians assigned to the Psychiatric Emergency Response Team program at the end of calendar year 2025 and transition to a revised countywide Mobile Crisis Response Team (MCRT) model. The MCRT program deploys clinical teams independent of law enforcement and collaborates with police only when necessary. While MCRT remains available as a resource, it does not provide the same real-time, co-response capability that has been central to the PERT model.
As a result of this change, continuation of the PERT co-response model requires direct City funding. Beginning in December 2025, the City and County have been in discussions regarding the terms of the proposed MOU (Attachment 5) governing the continued services on a reimbursable basis. Due to the need to essentially fund the County’s Clinician position in order to keep the program in operation, the terms of the MOU differ significantly from the City’s standard service agreement terms. As described below, the City’s financial obligation, and the associated risks, are more significant than in other service agreements; however, staff believes that the benefits to the community that come from providing the PERT Program Co-Response Model are significant enough to justify the increased financial risk.
Key Terms of the MOU:
The proposed agreement establishes a continued partnership between the City of Santa Clara and the County of Santa Clara to operate the Psychiatric Emergency Response Team (PERT) program under a co-response model pairing a sworn Police Department officer with a Behavioral Health Services Department clinician.
County Responsibilities:
The County will employ and assign a State-licensed BHSD clinician in good standing to work alongside Police Department personnel. The County will initially cover all personnel-related costs, including salary, benefits, training, payroll taxes, and workers’ compensation, and will provide necessary equipment such as a laptop and cellphone. The County will invoice the City monthly for reimbursement and is not obligated to continue services once the City’s maximum financial obligation is reached. The County waives any right to seek reimbursement from the City or its personnel for workers’ compensation or related expenses associated with injuries to the clinician arising from services performed under the agreement. The assigned clinician must complete a background investigation and maintain appropriate licensure, law enforcement security clearance, and knowledge of current psychiatric diagnostic criteria and applicable legal and ethical standards.
City Responsibilities:
The City will reimburse the County for all personnel-related costs associated with the clinician, including required supervision, at rates consistent with the County’s applicable collective bargaining agreement. Any rate increase during the term of the agreement shall not exceed five percent (5%) and shall not include County general overhead costs. The City pays the County for the costs of the position for all periods when the Clinician is assigned to work for the City, even if the Clinician is not working on a particular day (i.e., City pays for the position even when Clinician is taking vacation days or sick days). No payment will be made during periods when a clinician is not assigned to the City. Each party bears responsibility (and associated liability, if any) for the actions of its own employees. The City will provide necessary equipment and workspace, including a fitted protective vest, desk, and office supplies and will reimburse the County for mutually agreed-upon training expenses in accordance with City policy. Training needs will be determined collaboratively throughout the term of the agreement. The City will also collaborate with the assigned clinician to prepare and submit quarterly program narrative reports to the County, which will include summaries of the PERT program’s performance goals, milestones achieved, and any issues or concerns encountered during the reporting period.
Term and Cost:
The agreement covers Calendar Years 2026 through 2028. The City’s maximum financial obligation under the agreement is $269,343 annually (comprised of one (1) full-time licensed clinician and 0.15 FTE for administration, supervision, and consultation), or $808,029 for a period of three years, subject to annual identification of a funding source and City Council appropriation.
PERT Co-Response Model Impact:
The co-response model provided through PERT has demonstrated clear operational advantages. By pairing officers with a clinician in the field, the program enables immediate clinical assessment, supports de-escalation, and facilitates direct linkage to behavioral health and substance use disorder services. This approach reduces reliance on emergency rooms and the criminal justice system while improving outcomes for individuals in crisis.
Since the integration of a dedicated clinician in June 2023, the Department has observed measurable improvements in key outcomes, including reductions in calls for service, use-of-force incidents, and psychiatric hospitalizations.
|
Year |
Mental Health Related Dispatched Calls for Service |
Use of Force |
Psychiatric Hospitalization |
|
2022 |
942 |
4 |
324 |
|
2023 |
864 |
2 |
209 |
|
2024 |
772 |
2 |
225 |
|
2025 |
867 |
2 |
246 |
As shown above, mental health-related calls for service in 2024 declined approximately 18 percent compared to the 2022 baseline. Although call volumes increased in 2025, they remain below pre-implementation levels, suggesting that early intervention and follow-up services are reducing repeat crises.
Use-of-force incidents during mental health-related calls declined from four incidents in 2022 to two incidents annually from 2023 through 2025, indicating improved de-escalation outcomes and enhanced safety for both community members and responding personnel.
Psychiatric hospitalizations also declined significantly following implementation, decreasing by approximately 35 percent in 2023 compared to the pre-PERT baseline. While hospitalization volumes have modestly increased in subsequent years, they remain approximately 20 to 30 percent lower than pre-implementation levels, reflecting more effective in-field assessments and increased utilization of community-based alternatives.
These outcomes demonstrate that the PERT co-response model is an effective, data-driven approach to addressing behavioral health crises. Unlike the clinician-only response models, PERT provides immediate, coordinated intervention that integrates public safety and clinical expertise in real time. Continued investment in this program will allow the Department to sustain these gains, maintain a high level of service for vulnerable populations, and preserve a proven co-response capability for individuals experiencing behavioral health crises.
A significant portion of behavioral health related calls involve co-occurring substance use disorder, further reinforcing the need for an integrated co-response model that can address both clinical and safety considerations in real time.
Approval of the proposed MOU will ensure continuity of the PERT co-response model and reflects the City’s and City Council’s continued support for integrated behavioral health response services and coordinated crisis intervention efforts within the community.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a "project" within the meaning of the California Environmental Quality Act ("CEQA") pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
Funding for one full-time County mental health clinician assigned to the Police Department’s PERT program for calendar year 2026 is $269,343, or $134,672 for FY 2025/26. The term of the MOU is three years, for a total not-to-exceed amount of $808,029, with rate increases not to exceed five percent (5%) over the term of the agreement. In FY 2025/26, there are sufficient appropriations in the Opioid Settlement budget to cover the costs for January 1, 2026 through June 30, 2026. In FY 2026/27, the program costs are recommended to be covered by Opioid Settlement funds as well as COPS Program Supplemental Law Enforcement Services funds as discussed below.
The City is eligible to receive opioid settlement funds through a series of national agreements with pharmaceutical manufacturers, distributors, and retailers. In December 2022, the State of California entered into additional settlement agreements with Teva, Allergan, Walgreens, Walmart, and CVS (“New Settlements”), which are expected to provide up to $1.8 billion in statewide abatement funding, in addition to approximately $2.2 billion from earlier settlements.
Under the New Settlements, the City’s allocation represents approximately 0.067 percent of abatement funds, resulting in a weighted share of 0.0549723 percent. If all eligible jurisdictions participate, the City is estimated to receive up to approximately $845,000 in total funding over a 15-year period. Payments are distributed over time and are subject to change based on settlement terms and participation levels.
Staff recommends the following funding sources to support continuation of the PERT program:
1. Opioid Settlement Funds
The PERT program aligns with the allowable uses of opioid settlement funds by addressing behavioral health crises that frequently involve substance use disorders, including opioid-related incidents. The co-response model supports diversion from the criminal justice system and facilitates access to treatment and recovery services, consistent with statewide abatement objectives. To date, the City has an unspent balance of $176,649 in opioid settlement funds, which is sufficient to support program costs through FY 2025/26 and into the following fiscal year. As part of the FY 2026/27 and FY 2027/28 Capital Improvement Program Budget adoption on June 9, 2026, the estimated unspent balance of $41,977 was carried over into FY 2026/27. Additionally, as detailed in the table below, staff recommends recognizing opioid settlement funds that have been received by the City; however, not yet appropriated to cover the costs of this agreement in FY 2026/27.
2. Citizen’s Option for Public Safety (COPS) Program Supplemental Law Enforcement Services Fund
On February 7, 2023, the City Council approved the allocation of $70,000 of COPS 2023 funding for the PERT program. On September 19, 2023, the City Council approved Amendment No. 1 to the MOU with the County for the PERT program, including a budget amendment carrying over the $70,000 in COPS 2023 funding (Attachment 3). Similar to the opioid settlement funds, the 2023 COPs funds have been carried over as part of the FY 2026/27 and FY 2027/28 Adopted Capital Improvement Program Budget for this agreement.
3. General Fund
While additional opioid settlement funds are anticipated, the timing and amount of future disbursements are uncertain. In the absence of sufficient grant or settlement funding, the General Fund may be required to support some or all program costs in future fiscal years.
4. Other Funding Sources
Staff will continue to pursue additional grant opportunities and monitor potential State funding that may become available to support behavioral health response programs such as PERT.
The following budget amendment recognizes and appropriates additional opioid settlement funds to support the PERT program.
Budget Amendment
FY 2026/27
|
|
Current |
Increase/ (Decrease) |
Revised |
|
Expendable Trust Fund |
|
|
|
|
Revenue |
|
|
|
|
Other Agencies Revenue |
$0 |
$160,327 |
$160,327 |
|
|
|
|
|
|
Expenditures |
|
|
|
|
Opioid Settlement Funds |
$41,977 |
$160,327 |
$202,304 |
COORDINATION
The report has been coordinated with the Finance Department and City Attorney's Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Approve and Authorize the City Manager or designee to execute the Memorandum of Understanding between the City of Santa Clara and the County of Santa Clara for Mental Health Services for the period January 1, 2026 through December 31, 2028, with a maximum compensation of $808,029, subject to the appropriation of funds; and
2. Approve the FY 2026/27 budget amendment in the Expendable Trust Fund, recognizing other agencies revenue in the amount of $160,327 and increasing the Opioid Settlement Funds appropriation in the amount of $160,327 (five affirmative Council votes required to appropriate additional revenue).
Staff
Reviewed by: Cory Morgan, Chief of Police
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. RTC 22-931 w/MOU
2. RTC 23-1418 Spending Plan for LE Services Fund
3. RTC 23-858 w/Amendment No. 1
4. PERT Amendment No. 2
5. Proposed PERT MOU CY26 - CY28