The state faces an unprecedented federal takeover of its mental-health programs if it does not dramatically improve its efforts in implementing a plan to provide services to thousands of mentally ill Hawai'i residents by April 30.

U.S. District Judge David Ezra yesterday denied a request by Justice Department lawyers asking for unspecified sanctions based on what they said are the state's "egregious failings" in not complying with the plan that was part of an agreement approved by the federal court.

But Ezra said he agreed with the lawyers.

"It does not appear the state is making reasonable best efforts to comply with the court's order," the judge said in a strongly worded address.

"We see backsliding on all fronts," he said, even suggesting that some health officials lacked the dedication to get the job done.

The judge said he is giving the state "one last and final opportunity to meet its obligations."

He said if the state doesn't do it by April 30, he will hold it in contempt and place the mental-health programs under federal receivership.

State Attorney General Mark Bennett acknowledged that the state has not done all that it wanted to accomplish, but said the health officials have done their best and there is no basis to impose sanctions.

He said the state will oppose any contempt or takeover and insist that it be afforded all its rights.

Several mentally ill residents agreed that the state is still far behind and one felt the judge should have issued a stronger order.

"How long more do people with mental illness have to wait to get these services," said Sunny Medeiros, a 44-year-old Makiki resident who suffers from a bipolar disorder and is also an advocate for other mentally ill residents.

"The consumers are the ones who are not being able to get full treatment services."

The hearing is the latest development over the community mental-health plan that the state agreed to implement for a growing number of residents deemed eligible for services. Last year, it was estimated that there were about 9,000 eligible residents, but the latest totals show that the number is now more than 11,000.

The plan was developed as part of the 1991 federal consent decree that was the result of a Justice Department lawsuit alleging constitutional violations of Hawai'i State Hospital patients.

The hospital emerged from the consent decree in late 2004, but the state agreed to develop the plan to provide services for patients discharged from the hospitals and others who were diverted from the facility.

Federal courts have previously used their contempt powers here to force the state to take action. Ezra found the state in contempt in the Felix consent decree case involving services to children with special needs and in the state hospital case during the 1990s.

In both cases, he stopped short of ordering a federal takeover after the state took remedial action.

Yesterday's hearing was in stark contrast to the court proceedings when Ezra approved the lifting of the federal oversight of the state hospital. Federal and state lawyers applauded the state's improvements at the Kane'ohe facility.

Since then, U.S. Magistrate Judge Kevin Chang has issued reports criticizing the state officials for falling behind in implementing the community plan. Justice Department lawyers based their request for sanctions on Chang's latest report issued last month.

Ezra acknowledged that the "sad reality" is that the case has now taken on a confrontational posture.

Verlin Deerinwater, Justice Department civil rights lawyer from Washington, D.C., told the judge his office felt "compelled to act and act with force" based on Chang's report.

"We're not close by a long shot," he said about the state's compliance with the plan. "There must be consequences for this."

Bennett said Chang's report did not recommend any sanctions; the Justice Department knew that the state was not likely to meet a June 30 deadline to be in substantial compliance with the plan; and the department's recommendations and the law do not support any sanctions against the state.

But Ezra said the state has been "woefully lacking" in complying with the plan.

He said the state cannot have psychotic individuals wandering the streets or former patients discharged from the hospital committing suicides.

The judge ordered Justice Department and state lawyers to determine what must be done by April 30 to avoid the contempt finding.

"The time for action is here," he said.

Bennett later said he can't say whether the state can avoid contempt because state and federal lawyers haven't determined yet what the state must do. "It is certainly my hope that what is set forth in the order is something achievable," he said.

But Bennett also said he would oppose any contempt ruling by arguing that the Justice Department lawsuit that led to the consent decree is based on the federal Civil Rights of Institutionalized Persons Act. The court would not have jurisdiction to hold the state in contempt for failing to provide "noninstitutional" services to people outside the hospital, he said.

If the judge finds the state in contempt and appoints a receiver to take over the state programs, Bennett said he will appeal the rulings.

Deerinwater told the judge the warnings about contempt was a "very appropriate resolution."

"We are pleased and grateful to the court," Assistant U.S. Attorney Harry Yee later said.

Steve Kishimoto, 54, a Ho-nolulu resident who suffers from depression and is under contract with the state to help other mentally ill residents with their finances, attended the hearing.

"I'm also sad it's come to this point," he said.

But he said the state hasn't been meeting its obligations, especially in serving hospital patients acquitted of crimes by reason of insanity and released in the community. "It appears they are just starting to begin work on it," he said. "Why hasn't it started six months ago?"

Mike Pablin, 58, who suffers from depression and is an advocate for the mentally ill, said the state hasn't moved quickly enough. But he said he would like to see the state continue to administer the programs.

He said he fears a federal receiver might not be effective in getting results.

Medeiros said the state still lacks effective transitional programs for patients leaving the hospital. "The problem is they're not getting the education they need to learn how to deal with their disorders or prepare for coming out in the community," she said.

She said she respects Ezra, but is disappointed that the proceedings will continue while the mentally ill must wait for services.

Reach Ken Kobayashi at kkobayashi@honoluluadvertiser.com.