The Virginia Department of Behavioral Health & Developmental Services’ (DBHDS) mission is to support individuals by promoting recovery, self-determination, and wellness in all aspects of life. To support this mission, DBHDS maintains the below facilities, which provide mental health, training, behavioral rehabilitation, and medical services:

• Catawba Hospital

• Piedmont Geriatric Hospital

• Central State Hospital

• Southern Virginia Mental Health Institute

• Commonwealth Center for Children and Adolescents

• Virginia Center for Behavioral Rehabilitation

• Eastern State Hospital

• Southwest Virginia Mental Health Institute

• Hiram W. Davis Medical Center

• Western State Hospital

• Northern Virginia Mental Health Institute

• Southeast Virginia Training Center

Virginia Acts of Assembly Chapter 552 designates the Department of General Services (DGS) to review the DBHDS capital outlay, maintenance reserve, maintenance and operations, and real estate activities across the DBHDS agency. As part of this review, DGS was required to develop system-wide recommendations that are cost-effective and promote operational efficiency. Findings and recommendations will be reported to the Governor and Chairs of the House Appropriations and Senate Finance and Appropriations Committees.

DGS contracted KPMG LLP to conduct this review and draft the associated report with the assistance of DGS and DBHDS. This interim report will be delivered on October 1, 2021. A subsequent final report will be delivered no later than December 31, 2021.

Assessment Overview

The study is primarily focused on four DBHDS functions: capital outlay, maintenance reserve, maintenance and operations, and real estate activities. KPMG’s analysis of DBHDS includes three phases:

1. Qualitative Assessment: Staff interviews and workshops and policies/document review. Findings are summarized in this interim report.

2. Benchmarking: Covering both qualitative and quantitative analysis. Full benchmarking results will be included in the final report.

3. Quantitative Assessment: Review of staffing levels, historic spending, work orders, etc. Quantitative assessment results will be included in the final report.

The interim report and final report include a roadmap of improvement initiatives to address gaps related to the primary focus areas. The improvement initiatives are grouped into short, medium, and long-term initiatives, with completion timescales of one, two, and five years, respectively. The phasing of the improvement initiatives considers both the priority, expected benefits, and sequencing considerations.

Current State Assessment

Table 1: Current State Assessment Summary

The initial high-level results of the qualitative assessment are summarized below. These observations will be further refined and will consider the findings from the benchmarking and quantitative assessments for the final report.

1. DBHDS and Facilities excel in certain areas, including:

• Understanding of stakeholders (internal and external) and population needs

• Understanding of risks to service delivery (and plans to manage risks)

• Awareness of and adherence to legal, regulatory, and statutory requirements

• Understanding and documentation of roles and responsibilities

• Planning for development of skills and competencies

• Capital expenditure governance

2. Practice and Performance Varies Across Facilities

• There are many examples of innovation and high performance across the facilities, such as LEED-certified buildings, switchgrass-fired utility plant, high utilization of TMS, etc.; however, practices are generally inconsistent

• Structural differences include serving unique populations and different geographies

• Rural facilities face significant challenges in attracting and retaining staff, as well as accessing external contractors for skilled trades, recycling programs, etc.

3. DBHDS Should Tell a Data-Driven Story to Justify Additional Resources

There is anecdotal evidence for additional resources. This needs to be more data driven, including the impact on lifecycle cost and service associated with not investing. Examples include, but are not limited to:

• Limited understanding of the State of Good Repair Backlog – quantifying the total value of assets beyond their expected useful lives and/or no longer fit for purpose

• Inconsistent staffing levels compared to maintenance burden (facilities sq. ft., age/complexity of assets, etc.)

• Excess derelict property and related cost burden

4. Cultural Issues Inhibit the Ability to Change

The strategy and vision for DBHDS is not clearly defined and communicated to the individual facilities.

• There is a general lack of visibility into the overarching DBHDS strategy

• The lack of a clear strategy and vision results in an inconsistent view on the future facility needs across the department

• There is a general reluctance to adopt changes: Staff see little incentive to adopt changes if they believe the changes will be short-lived (Gubernatorial and Commissioner turnover cited as issue)

Recommendations

Opportunities are available across the facilities to become more effective and efficient in facilities’ capital and operating and maintenance practices. If implemented, the improvement initiatives will contribute to delivering further value in DBHDS’ capital, O&M, and real estate activities. KPMG recommends a series of improvement initiatives for the short, medium, and long terms. The following is a summary of the recommended short-term improvement initiatives (Note these are not in order of priority at this stage).

Table 2: Recommended short-term improvement initiatives

Initiative: Develop a DBHDS Strategic Plan
Focus Areas Addressed: Capital Outlay, Maintenance Reserve, O&M, Real Estate
Summary: Create a robust strategic plan & associated communications plan

Initiative: Develop an Asset Information Strategy & Improvement Plan
Focus Areas Addressed: Capital Outlay, Maintenance Reserve, O&M, Real Estate
Summary: Develop a facility/asset information strategy to compliment Data Pinnacle initiative

Initiative: Develop a State of the Infrastructure Report
Focus Areas Addressed: Capital Outlay, Maintenance Reserve, Real Estate
Summary: Create an overview of the physical condition, fitness for purpose, and demand for DBHDS asset portfolio

Initiative: Utilize DGS for Management of Major/Complex Projects and Define Roles and Responsibilities for DGS, DBHDS, and Facility
Focus Areas Addressed: Capital Outlay, Real Estate
Summary: Develop a Memorandum of Understanding for DGS to manage complex projects with agreed-upon roles and responsibilities for DBHDS and Facility

Initiative: Assess Maintenance Contracting Mechanisms
Focus Areas Addressed:  Capital Outlay, O&M
Summary: Identify more efficient and effective options for alternative contracting mechanisms, such as Job Order Contracting

Initiative: Assess Building & Grounds Staffing Needs by Facility
Focus Areas Addressed: O&M
Summary: Establish consistent staffing levels based on assets and target service levels by facility

Initiative: Review Capitalization Policy
Focus Areas Addressed: Capital Outlay
Summary: Review and communicate policy for consistent accounting for capital assets in line with Virginia Department of Accounts (DOA) policy

Initiative: Revise the Investment Planning Framework
Focus Areas Addressed: Capital Outlay, Maintenance Reserve, Real Estate
Summary: Revise the approach to investment planning to provide further rigor and transparency

Initiative: Develop Levels of Service (LOS) Framework
Focus Areas Addressed: Capital Outlay, Maintenance Reserve, O&M
Summary: Create a LOS framework including agreed service levels for each facility.

Initiative: Carry out a Surplus Property/Land Assessment
Focus Areas Addressed: Real Estate
Summary: Carry out a Highest & Best Use Study of excess DBHDS land and facilities to identify revenue and efficiency opportunities

Final Report

Note that this report will be delivered in two stages, an interim report, dated October 1, 2021 and a final report, to be delivered by December 31, 2021. The interim report includes placeholder language throughout the document where additional data and/or information is needed to complete the analysis portion of the report. In addition to any initial feedback received, the final report will address all placeholder language in the interim report. Additionally, the content within the final report will include further quantitative analysis of DBHDS compared to its peer agencies and will include a roadmap to implement the recommended initiatives, including initiatives’ timescales, dependencies, priorities, and resource requirements.