Encompass announced this week that our Casa Pacific mental health residential program in South County is at risk of closure due to a severe reduction in County funding. We are the only provider of mental health residential services for people with Medi-Cal in Santa Cruz County stepping down from acute psychiatric hospitalization. Our staff provide individual and group counseling, crisis intervention, structured activities, community outings, and assistance with independent living skills in an unlocked, homelike environment. If Casa Pacific closes, there is no alternative for this level of care. Closure will further exacerbate bottlenecks at local emergency rooms, psychiatric hospitals, and other residential behavioral health treatment facilities in the community. This inevitably leads to increased homelessness, increased incarceration, and, lost lives. 

Effective July 1, the County of Santa Cruz has proposed reducing the mental health residential room and board reimbursement rate from $125 per person per day to just $75 per person per day, a 40% reduction in funding. Medi-Cal does not cover these room and board costs.  This drastic cut, combined with the elimination of the $471,000 in Measure K support that helped cover shortfalls in the last fiscal year, will make it financially impossible for Encompass to continue operating Casa Pacific and potentially other mental health residential facilities throughout the County. Currently, it costs Encompass $162 per person per day for room and board. We have already been forced to close Telos, another one of our other mental health residential treatment locations, last month due to County reimbursement shortfalls.   

County Behavioral Health officials were informed of Encompass’ potential mental health residential treatment facility closures at every budget negotiation meeting, starting on March 27th of this year.  County Behavioral Health officials responded to Encompass’ room and board rate concerns by citing a $50 average room and board rate across the state. However, what County officials failed to consider was that the $50 average rate does not account for reduced economies of scale for smaller facilities at Encompass with fewer beds, operated in a County with a high cost of living.  Our mental health residential facilities with lower occupancy simply cannot afford to absorb this low room and board rate to stay financially sustainable. 

“This is a heartbreaking moment for our agency, for the 17 dedicated staff members who provide life-saving care, and especially for the 50 clients per year who rely on Casa Pacific for recovery and stability after a psychiatric hospitalization,” said Shellee Stopera, CEO of Encompass. “Without this program, there will be nowhere for these individuals to go — no step-down care, no safe environment for healing. This decision will lead to far more hospitalizations and less treatment options for sustained recovery.” 

The 2023 Santa Cruz County Civil Grand Jury Report highlighted the County’s behavioral health crisis, citing understaffing, inadequate crisis stabilization capacity, and a lack of step-down care options. Casa Pacific and Encompass’ other residential programs address these exact gaps. Funding cuts will further widen the cracks in the County’s already strained mental health system. 

“The annual budget is a direct reflection of the County’s priorities. By reducing the mental health residential treatment room and board rate by 40% and not allocating additional funds, the County is choosing not to prioritize our community’s behavioral health. Our social safety net is quietly disappearing in the aftermath of these decisions, and those most vulnerable will not be able to get the services they need to live a healthy life.” Encompass’ COO, Linda Alves, stated. Alves attended this week’s Board of Supervisors meeting urging the Board to reconsider their funding allocation and save these critical services.  

Encompass urges Santa Cruz County residents to take action. Contact your Santa Cruz County Supervisor today and ask them to: 

• Reinstate the $125 per person funding rate for mental health residential room and board, 

• Reallocate alternative critical funds to replace the Measure K funds from last fiscal year, and 

• Keep Casa Pacific open for the clients, families, and community members who need it most. 

Supervisor Contact Information: Visit the Santa Cruz County Board of Supervisors page for contact information for your district. 

“This is a defining moment for our County,” said Stopera. “Do we turn our backs on the most vulnerable members of our community—or do we stand up and make sure that mental health care is accessible, equitable, and fully funded?”