The Collier County Behavioral Health Center (CCBHC) was initiated to address the community’s growing needs regarding mental and behavioral healthcare. On May 25, 2021, the Board approved a Vacant Land Contract with David Lawrence Center (DLC), a private non-profit, to acquire a vacant five-acre parcel of land upon which it could construct the CCBHC, along with a Long-Term Lease and Operating Agreement, under which DLC would lease back the land from the County and operate the facility.
This project was initially approved for $25M from the Community Priorities component of the County’s Infrastructure Sales Tax Fund. However, the latest approved construction cost estimate has reached $56.1M, over twice the original amount. The difference in funding requirement between the original programmed amount of $25M million and the final Guaranteed Maximum Price contract that will be presented in January, has been proposed to be funded by additional Infrastructure Sales Tax funds.
The financial responsibilities of the DLC presented at the December 10th BCC meeting, included security, licenses, building maintenance, and operational costs, with an estimated amount of $5M per year. To offset these costs, which can not be covered by the infrastructure surtax, the DLC proposed considering a Naming Rights Agreement opportunity to encourage donations from the philanthropic community. This naming opportunity was designed to cover immediate furniture, fixtures, and equipment costs and to generate funding to aid with the CCBHC operations funding gap. The agreement indicates that naming rights shall last as long as DLC operates the CCBHC, and that the agreement shall automatically terminate if either Party terminates the Lease. It further clarifies that any funds donated in consideration for naming rights and any furniture, fixtures, or other assets acquired in consideration for naming rights shall be transferred to the successor operator of the CCBHC.
Donations acquired in consideration for naming a space within the Behavioral Health Center are to be restricted specifically for use within the Behavioral Health Center. Naming rights donations are to be deposited into a segregated account managed by DLC; the Clerk’s Office is authorized to inspect, review, or audit the accounts, books, records, and activities of DLC as they relate to these donations. Yearly auditing requirements might prove to be a challenge considering the several revenue sources and expenses that will need to be segregated by DLC. Specifics of the audit plan will need to be worked out upon finalization of the agreement.
I expressed concerns with this agreement prior to the December 10th BCC meeting. One concern is that none of the revenue from these naming agreements will be used to offset the capital costs of the building (paid by the taxpayers through the surtax fund), which has doubled from $25M to over $56M+ including design and other anticipated costs. Additionally, the amount estimated to be raised is not expected to cover all the operating costs previously committed by DLC. This leaves an unfunded gap that might result in additional taxpayer funding for operations. Without a clear ongoing source of operating funds, a re-evaluation of the project should be made.
The original plan was for estimated Construction cost of $26.5M, with $25M in capital from the Surtax funding, with “ongoing O&M provided by DLC”. It was for a 55,000 square foot facility and 130 beds. The current plans are for over 64,000 square feet, but only 87 beds. The need identified in the surtax ordinance and ballot language was:
“The David Lawrence Center currently has 30 crisis treatment beds, and the facility is consistently at peak capacity. State data demonstrates that a considerable number of Collier Baker Acts are currently being transferred out of county. Additionally, there are approximately 150 inmates in the Collier Count Jail each day who have mental health issues and/or co-occurring substance abuse issues that could be more effectively treated in a different, less intensive setting”.
The most recent design contains 45 adult crisis stabilization beds, 30 adult Medicare/Acute beds and 12 Emergency Services Assessment Center beds, for a total of 87 beds.
Current plans appear to be inadequate for the originally projected need and are estimated at double the original cost estimates. Additionally, the estimated annual funding shortfall for Operating costs as identified by DLC are:
Operating losses are estimated to be between $19M to $52M over the first 8 years. The building life cycle is estimated at 40 years.
We will continue monitoring this project as the county plans to proceed with the Guaranteed Maximum Price (GMP) of construction presentation at the January 28th BCC meeting.