Gap Analysis and Competitive Bids for Settlement Funds
A Countywide Model for Funding and Oversight
Sacramento County uses opioid settlement funds to support ten treatment, prevention, outreach, recovery, and overdose response initiatives selected through a community-informed competitive process and monitored through county-level reporting.
The Challenge They Were Addressing
When Sacramento County began receiving opioid settlement funds, it needed a way to turn a one-time revenue stream into services that matched local needs. The county is a behavioral health system that has spent years integrating mental health and substance use programs that were once siloed. Many programs across the treatment, prevention, and recovery continuum were already operating. Still, there were clear gaps: people were being screened for mental health needs without a reliable linkage to substance use treatment, and services inside the county jail were limited before settlement funding arrived.
Fentanyl made opioids the county's top misused substance, while methamphetamine has been a persistent number one or number two substance for decades. Because the need cut across systems, the county wanted funding decisions grounded in two questions at once: where are the gaps in the current county service continuum, and what does the community want the county to work on locally. Answering both required a structured process rather than a first-come, first-served funding approach.
Sacramento County placed responsibility for the funds with the Division of Behavioral Health, because substance use prevention and treatment services already sit within that division. The county then built a governance and allocation model that included a planning year, community engagement, a gap analysis, a competitive selection process, provider contracts, and a reporting system to track whether funded programs produced results.
What They Built
In the FY 2023-2024 planning year, the county ran extensive community engagement to learn what residents wanted from settlement-funded activities. Staff conducted a countywide survey that reached hundreds of respondents and brought the same questions to the county's advisory boards, including the Opioid Coalition, Alcohol and Drug Advisory Board, and Public Health Advisory Board. The county recently created a new Behavioral Health Commission that combined the Mental Health Board and the Alcohol and Drug Advisory Board.
At the same time, county staff analyzed the existing service continuum to identify gaps that settlement dollars could fill, particularly in co-occurring services within existing mental health programs. The county then combined its internal gap analysis with community priorities and put the priorities out to competitive bid, giving community-based organizations an open opportunity to apply. That first year covered planning, contract negotiation, and selection. Most of the ten funded programs began in FY 2024-2025 and continue through FY 2025-2026.
Once programs were funded, the county created reporting forms and collected provider reports throughout the year. Staff review each report, provide technical assistance when a report is missing high-impact abatement activity information or other required detail, and use the data to prepare the annual expenditure report due September 1. The county also uses the data to realign services when a program is not meeting expectations, including the difficult decision to stop funding programs that are not producing outcomes and redirect those dollars.
County-level examples show how the model works in practice. The Homeless Engagement and Response Team cross-trains clinicians who work with people experiencing homelessness so they can screen for substance use and link people to medication-assisted treatment as well as mental health services. Crisis Receiving Engagement for Behavioral Health links people to MAT after discharge and includes built-in screening. Jail services expanded to include individual counseling, group counseling, withdrawal management, three forms of MAT, and discharge protocols that connect people to MAT immediately after induction into custody.
Key Program Components
Who You Need at the Table
What made a willing partner essential vs. optional?
County behavioral health staff run the process, and leadership across the Department of Health Services makes the funding and realignment decisions possible. Correctional health, probation, the courts, and the jails are required for justice-involved programs, and funded providers must deliver the services. These relationships work in Sacramento County because the county has long-standing interdepartmental partnerships across child welfare, probation, public health, law enforcement, and the court system, maintained through regular meetings and communication.
Helpful partners extend reach and improve quality without being essential to day-one operations. County counsel is consulted a few times as questions arise. The opioid and methamphetamine coalition, the advisory boards, and the Behavioral Health Commission provide community feedback and a place to report out. DHCS and the state's guidance structures shape what is allowable. The county notes that hospital systems remain places where linkage from emergency department discharge to community-based programming still needs improvement.
Budget Breakdown
What is the minimum viable budget to replicate this?
The minimum viable version is a governance function. A county needs enough staffing to oversee how funds are used, a way to analyze gaps in its existing continuum, a process to ask the community what it wants, alignment of funding options with allowable and high-impact abatement requirements, and a transparent selection and reporting process created before any money goes out. A smaller county with a modest settlement can run this lean by focusing on a few priorities and using existing programs where settlement dollars can fill a clear gap.
What Worked and Why
Specific decisions or design features that drove success
Dedicated county staffing came first. Before spending, the county built internal capacity to monitor how funds are used, oversee providers, and confirm that services are delivered as intended. That staffing makes the rest of the model, from selection to reporting to realignment, possible.
The county combined an early community needs assessment with an internal gap analysis. A countywide survey and advisory board feedback captured what the community wanted, while the county's own analysis identified where settlement dollars could fill gaps in the existing continuum. Using both sources meant that funding decisions covered community priorities and system needs simultaneously.
A competitive selection process gave community-based organizations a fair, open opportunity to apply and gave the county a defensible basis for its choices. Pairing that process with clear expectations for reporting helped the county show that funded programs were producing positive outcomes.
Designing programs around California high-impact abatement activities kept the county compliant with the rule that at least 50% of funds go toward those activities. Staff attended DHCS webinars, took detailed notes, and consulted county counsel a few times to confirm appropriate use, which reduced the need for outside technical assistance later.
Regular provider reporting and county-level technical assistance created a feedback loop. Staff review reports throughout the year, follow up when required information is missing, and use the data both to prepare the annual expenditure report and to realign services when a program is not meeting the mark. Long-standing interdepartmental relationships made this coordination smoother.
Early outcomes and data
Ten initiatives were funded across treatment, prevention, outreach, recovery, and overdose response.
MAT services are provided to approximately 24% of the jail population.
Group counseling in the jails reaches about 500 to 600 people per month.
Tablet-based MAT and substance use education, plus release resources, were provided to 3,600 people in custody.
Street outreach and engagement teams distributed naloxone, inducted people onto MAT, and linked them to treatment.
Expanded access to naloxone for overdose reversals; 20,446 naloxone kits distributed throughout the county.
Increased social media presence and easier access to opioid resources and treatment options: 1.5+ million impressions.
Reporting forms created and provider reports gathered throughout the year to support the annual expenditure report due September 1.
Lessons Learned
Staff the oversight function before spending. Sacramento County first built internal capacity to monitor funds and oversee programs. That staffing enables selection, reporting, and realignment.
Combine county gap analysis with community priorities. Pairing an internal continuum review with a countywide survey and advisory board feedback enabled the county to fund both system needs and community requests.
Keep high-impact abatement activities in view from the start. Because at least 50% of funds must go toward high-impact abatement activities, designing programs around those activities early avoided rework after the first year.
Use regular reporting to guide tough decisions. Collecting provider data throughout the year made the annual expenditure report manageable and gave the county the basis to realign or stop funding programs that were not producing outcomes.
Expect questions from those who were not funded. Many worthy requests could not be funded. Being ready to explain why programs were selected and the benefit to the county system helped the county field those questions.
Plan for life after settlement funding. The county wants strong programs to continue once settlement dollars run out and would welcome a state process that directs any remaining funds to counties that produce measurable outcomes.