The Center for Health Care Services (CHCS) and Bexar County are deadlocked in a legal standoff over which organization owes the other millions of dollars.
CHCS provides affordable outpatient mental health services, addiction recovery and developmental disability care to Bexar County adults and children. The agency is one of 39 local mental health authorities in Texas, and one of five in the state that serves a single county.
The legal dispute between the county and CHCS has been brewing behind closed doors since 2018 — before many of the Bexar County’s current leaders were in office. At the center of the fight is a disagreement over a 2016 contract and a clause that was later added.
Bexar County says CHCS owes as much as $6 million in unpaid rent. CHCS says it owes nothing, and that the county owes $2.8 million in unpaid mental health services, according to interviews, letters exchanged by lawyers representing CHCS and Bexar County Judge Peter Sakai.
CHCS president and CEO Jelynne LeBlanc Jamison has been publicly calling for increased local funding as it tries to make up a $15 million budget shortfall this year, which could bring layoffs and impact the number of people served.
“We’re going to offer an alternative (to bringing the issue to court), and we’re also offering mediation to resolve the issue,” Jamison said. “But we feel very confident in our legal position related to the services in lieu of rent, and obviously the services that we provided that we need to be paid for.”
In a letter to Jamison on Aug. 21, Sakai said that the county wouldn’t commit any funding to CHCS until the organization committed to cooperating with an audit, provided more financial data and reconciled its outstanding rental balance, among other asks.
“If CHCS does not timely and unconditionally confirm its cooperation, I will continue to recommend that no request for additional discretionary County funding be advanced,” wrote Sakai, a longtime district court judge before he was elected to the county’s top leadership role in 2022.
Funding gap
Bexar County and University Health are CHCS’s “sponsoring entities,” meaning they appoint some of its board and provide funding through direct contributions, in-kind services or contracts — though the amount is not specified in their contract, which has been in place since 2000.
Ultimately, CHCS is regulated by the Texas Health and Human Services Commission.
Jamison has publicly called for more funding from University Health and Bexar County to make up the $15 million budget shortfall the organization faces in fiscal year 2027. CHCS operates a $154 million budget, with about half of its funding coming from the state, offering affordable behavioral healthcare to anywhere from 37,000 to 40,000 Bexar County residents annually.
Its service population includes those struggling with serious mental illnesses, developmental disabilities and substance abuse. The broader goal of local mental health authorities like CHCS is to offer care to this population before it escalates into a crisis and overwhelms hospitals and the criminal justice system.
“If (local governments aren’t) supporting community mental health, where are these individuals going?” Jamison said. “The short answer is, they’re going to the emergency department at University Health or they’re going to the jail at Bexar County. Is it a better investment to invest in the local mental health authority, or do you pay for them later in your emergency department and in your jail?”
An escalating feud
The legal dispute between the county and CHCS originates from a 2016 interlocal agreement between the two organizations.
This agreement allowed CHCS to operate out of a new outpatient clinic at 928 W. Commerce St., now the Paul Elizondo Adult Behavioral Health Clinic, a $23 million county-owned clinic that opened late 2018. Under the agreement, CHCS agreed to pay Bexar County rent annually.
A year later, the Texas Legislature passed Senate Bill 292, which opened up grant opportunities to local mental health authorities. These grants weren’t free money, as the state required 100% local match for organizations serving above a certain population threshold.
So Bexar County and CHCS would have to work together to essentially pay the state the same amount of money it received in mental health grants.
In 2019, CHCS and Bexar County agreed to add an amendment to the 2016 interlocal agreement. According to lawyers representing CHCS, this amendment made it clear that the annual rental payments CHCS owed to Bexar County could instead go directly to the state toward the local match.
In other words, instead of writing a rent check to the county, CHCS could just reroute that money to the match requirement.
CHCS is arguing that the $6 million in rent payments from fiscal years 2021 through 2023 is not the agency’s responsibility, as they have elected to allocate that money to the state for the match requirement.
In fact, in a 2025 letter to Sakai, CHCS’s lawyers argue that the agency doesn’t owe the county $16 million in future rent through 2031, since they are still electing to put that money toward the remaining state match balance.
Furthermore, CHCS argues that Bexar County actually owes it $2.8 million in mental health services it provided on behalf of the county for nearly a year that it was never compensated for.
“CHCS has been providing the same services to the county that were described in detail in the FY 2024 General Contract, but CHCS does not have a written contract with the county to provide those services, nor has CHCS been paid for those services,” lawyers wrote.
The county’s view
Needless to say, the county sees things differently.
In the Aug. 21 letter to Jamison, Sakai framed the issue at hand as CHCS owing millions of dollars in rent payments and failing to comply with an audit by an independent accounting firm it hired to look into the matter.
Sakai demanded that the agency provide written commitment to cooperate with the audit, complete access to its financial records, payment of disputed balance, and submit a “corrective action plan.”
“Bexar County remains prepared to address legitimate community needs,” Sakai wrote. “Responsible stewardship, however, requires verified facts, complete documentation, an independent examination, and resolution of existing financial obligations before additional taxpayer funds are considered.”
The two sides don’t seem any closer to an agreement. CHCS lawyers wrote back to Sakai on Wednesday, explaining that they didn’t agree with Sakai’s stipulations, but that they would cooperate with a “properly structured” audit.
The lawyers offered their own framework for resolving the matter, asking Sakai to confirm whether he accepts the framework by the end of August.
“CHCS’s public statements about its funding needs are not an attempt to avoid accountability,” the mental health authority’s lawyers wrote. “They reflect the real consequences for Bexar County residents if vital behavioral-health services are not adequately funded. Those present needs should not be put on hold by treating unresolved questions of contract interpretation and accounting as a precondition to every current or future funding discussion.”
On Wednesday, the county declined to comment further.
