(a) Each local mental health authority shall develop a local service area plan to maximize the authority’s services by using the best and most cost-effective means of using federal, state, and local resources to meet the needs of the local community according to the relative priority of those needs. Each local mental health authority shall undertake to maximize federal funding.
(b) A local service area plan must be consistent with the purposes, goals, and policies stated in § 531.001 and the department’s long-range plan developed under § 533.032.

(c) The department and a local mental health authority shall use the local authority’s local service plan as the basis for contracts between the department and the local authority and for establishing the local authority’s responsibility for achieving outcomes related to the needs and characteristics of the authority’s local service area.
(d) In developing the local service area plan, the local mental health authority shall:
(1) solicit information regarding community needs from:
(A) representatives of the local community;
(B) consumers of community-based mental health services and members of the families of those consumers;
(C) local law enforcement agencies; and
(D) other interested persons; and
(2) consider:
(A) criteria for assuring accountability for, cost-effectiveness of, and relative value of service delivery options;
(B) goals to minimize the need for state hospital and community hospital care;
(C) goals to divert consumers of services from the criminal justice system;
(D) goals to ensure that a child with mental illness remains with the child’s parent or guardian as appropriate to the child’s care; and
(E) opportunities for innovation in services and service delivery.
(e) The department and the local mental health authority by contract shall enter into a performance agreement that specifies required standard outcomes for the programs administered by the local authority. Performance related to the specified outcomes must be verifiable by the department. The performance agreement must include measures related to the outputs, costs, and units of service delivered. Information regarding the outputs, costs, and units of service delivered shall be recorded in the local authority’s automated data systems, and reports regarding the outputs, costs, and units of service delivered shall be submitted to the department at least annually as provided by department rule.
(f) The department and the local mental health authority shall provide an opportunity for community centers and advocacy groups to provide information or assistance in developing the specified performance outcomes under Subsection (e).