This report proposes creation of a flexible and coordinated system for delivery of comprehensive community-based services to Minnesota children with emotional and behavioral disorders. The proposal calls for the state to support multiagency Local Collaboratives with: (1) legislation that grants local communities certain powers in exchange for commitments and accountability, (2) technical assistance, (3) coordination of state medical programs, and (4) coordination of state departments. Local Collaboratives should eventually include the county agencies for mental health, child welfare/protection, health, and juvenile court services, along with schools, providers, and insurers. The proposed system is functionally integrated, involving multiagency intake by parent and professional collaboration, multiagency assessment coordination, multiagency care planning, unitary case management, and customized services. A locally integrated funding strategy is proposed to enhance the efficiency of existing dollars and leverage significant new dollars through federal reimbursement to fund the expansion of earlier identification and intervention capabilities. The role of managed care in mental health services is also discussed. Appendices contain data on funding needs and expenditures, target population criteria, funding approaches, task force members, a draft of legislation to implement the proposed mental health system, and a glossary. (Reference notes accompany each section.) (JDD)