COUNTY ADMINISTRATOR 220 NORTH MAIN STREET, P.O. BOX 8645 ANN ARBOR, MICHIGAN (734) FAX (734)

Transcription

1 COUNTY ADMINISTRATOR 220 NORTH MAIN STREET, P.O. BOX 8645 ANN ARBOR, MICHIGAN (734) FAX (734) TO: THROUGH: FROM: Felicia Brabec, Chair Ways & Means Committee Gregory Dill County Administrator Diane M. Heidt Deputy County Administrator DATE: August 8, 2018 SUBJECT: Instituting an Exemption Waiver Process for Community Mental Health Direct Care Service Vendors BOARD ACTION REQUESTED: It is requested that the Board of Commissioners institute an exemption waiver process for Community Mental Health direct care service vendors. BACKGROUND On October 1, 2001, the Washtenaw County Board of Commissioners adopted a Living Wage Ordinance specifying that certain non-exempt County vendors must pay their employees a certain wage for contractual work done for the County. Effective , the Living Wage rates are $13.22 per hour for those County vendors who provide health care benefits to their employees and $14.75 per hour for County vendors who do not supply such health benefits. DISCUSSION The Washtenaw County Community Mental Health Agency (WCCMH) annually contracts, through the County, to provide mental health services by a network of service organizations to meet the mandated and medically necessary services to Medicaid beneficiaries. The mental health service providers claim they are unable to comply with the County s Living Wage Ordinance because Medicaid reimbursement rates for the services provided to direct care workers is not high enough to permit the WCCMH vendors to pay such workers the required living wage rate. Since 2015 the County Board of Commissioners has approved a blanket waiver of the Living Wage requirement for mental health service workers. On July 12, 2017, the Board of Commissioners passed a Resolution (#17-104) directing the County s WCCMH to negotiate new contracts with its mental health

2 service providers to provide the following: (1) vendor payment to direct care workers of no less than $10.00 per hour by October 1, 2017; (2) vendor payment to direct care workers of no less than $10.50 per hour no later than January 1, 2018; (3) continued efforts by WCCMH vendors to meet the County s Living Wage requirement by 2020; and (4) continued opportunity for WCCMH vendors to request an exemption from the Living Wage requirement. Discussions on this matter between the County, WCCMH and the mental health service vendors continued after passage of this Resolution which culminated in the Board of Commissioners passing another related Resolution on September 20, 2017 (17-147) which suspended the Living Wage amounts required under the July 12, 2017 Resolution to give the County and the mental health service providers time to engage in non-binding mediation on the Living Wage issue. The September 20, 2017 Resolution also provided that should the parties fail to reach a mediated settlement as evidenced by a letter from the County Administrator, the terms of the July 12, 2017 Resolution would be reinstituted effective the date of the Administrator s letter. The County, through its attorneys contacted the attorney for the mental health service providers to arrange for non-binding mediation of the living wage issues. The attorney for the mental health service providers ultimately refused to engage in non-binding mediation, because he believed that the County s Living Wage Ordinance was invalid under Michigan law and he did not want to divert resources from service delivery to pay a mediator under any pretense that the living wage ordinance is valid with respect to contracts. Instead of engaging in non-binding mediation, the attorney for the mental health service providers agreed to meet with County officials without a mediator to explore how staff wages can be increased. On December 11, 2017, the County s Corporation Counsel contacted Commissioner Andy LaBarre and Commissioner Jason Morgan, the two County Commissioners originally designated by the Board of Commissioners to participate in the non-binding mediation, to see if they wanted to participate in the information meeting with the mental health service vendors. These Commissioners agreed to the informal meeting which was then scheduled for January 23, 2018 at the New Center in Ann Arbor. The parties did meet at the New Center on January 23, 2018 and discussed a number of issues related to the County s Living Wage requirements, although the parties did not reach any final agreement. On April 4, 2018 the County Administrator has submitted a letter to the Board of Commissioners stating that the parties have failed to reach a mediated settlement and that in accordance with Resolution # the terms of Resolution # have been reinstated and will be enforced immediately. Given that no settlement of the Living Wage issues has been reached, the Board of Commissioners indicated that they now wished to take further steps in this matter. Therefore, in April, 2018, the Board of Commissioners suspended enforcement of the Living Wage Ordinance for WCCMH vendors until such time

3 as the Board of Commissioners approves a new Living Wage Ordinance waiver or partial waiver specific to WCCMH vendors. The Board of Commissioners directed County Administration and the County s Senior Leadership Team to develop a waiver process for WCCMH vendors to apply for a waiver from the County s Living Wage requirements, and $10.50/hour mandate, with such process including standards to follow to determine when a waiver is warranted. The Board of Commissioners directed the Chair of the Board of Commissioners to appoint at least one and no more than three Commissioners to work with the County s Senior Leadership Team and Administration on the development of the waiver process. Additionally, the Board of Commissioners directed County Administration and Senior Leadership to develop a process whereby County funds may, at the discretion of the Board of Commissioners, be used, if legally permitted, to help raise the hourly rate of direct care staff who provide mental health services. The Board of Commissioners directed County Administration and Senior Leadership to complete the stated tasks and return them to the Board for review and consideration at its June 6, 2018 meeting. On June 2, 2018 the County Administrator requested a timeline extension to bring back a formal waiver process to the Board of Commissioners pending the receipt of a legal opinion regarding extending funds to direct care worker providers to increase hourly wages, as well as analyzing audit and financial questions that could impact compliance on the part of both the County and the Providers. A process has been developed to provide an opportunity for the Community Mental Health vendors to apply for an exemption of the Living Wage Ordinance and/or $10.50/hour mandate. IMPACT ON HUMAN RESOURCES: The approval of this request will provide for temporary funding for a financial analyst to collect and review data received by the Community Mental Health direct care vendors requesting an exemption of the Living Wage Ordinance and/or $10.50/hour mandate. IMPACT ON BUDGET: The approval of this request will be managed through Administrator authority. IMPACT ON INDIRECT COSTS: The approval of this request will have no impact on Indirect Costs. IMPACT ON OTHER COUNTY DEPARTMENTS OR OUTSIDE AGENCIES: The approval of this request will have no impact on any other county department.

4 CONFORMITY TO COUNTY POLICIES: This request is in conformance with all County policies. ATTACHMENTS/APPENDICES: Resolution Exemption Provider forms and process

5 A RESOLUTION INSTITUTING AN EXEMPTION WAIVER PROCESS FOR COMMUNITY MENTAL HEALTH DIRECT CARE SERVICE VENDORS WASHTENAW COUNTY BOARD OF COMMISSIONERS August 8, 2018 WHEREAS, on October 1, 2001, the Washtenaw County Board of Commissioners adopted a Living Wage Ordinance; and WHEREAS, under the Ordinance, certain non-exempt County vendors must pay their employees a certain wage for contractual work done for the County; and WHEREAS, effective , the Living Wage rates are $13.22 per hour for those County vendors who provide health care benefits to their employees and $14.75 per hour for County vendors who do not supply such health benefits; and WHEREAS, the Washtenaw County Community Mental Health Agency (WCCMH) annually contracts, through the County, to provide mental health services by a network of service organizations to meet the mandated and medically necessary services to Medicaid beneficiaries; and WHEREAS, the mental health service providers claim they are unable to comply with the County s Living Wage Ordinance because Medicaid reimbursement rates for the services provided to direct care workers is not high enough to permit the WCCMH vendors to pay such workers the required living wage rate; and WHEREAS, since 2015 the County Board of Commissioners has approved a blanket waiver of the Living Wage requirement for mental health service workers; and WHEREAS, on July 12, 2017, the Board of Commissioners passed a Resolution (#17-104) directing the County s WCCMH to negotiate new contracts with its mental health service providers to provide the following: (1) vendor payment to direct care workers of no less than $10.00 per hour by October 1, 2017; (2) vendor payment to direct care workers of no less than $10.50 per hour no later than January 1, 2018; (3) continued efforts by WCCMH vendors to meet the County s Living Wage requirement by 2020; and (4) continued opportunity for WCCMH vendors to request an exemption from the Living Wage requirement; and WHEREAS, discussions on this matter between the County, WCCMH and the mental health service vendors continued after passage of this Resolution which culminated in the Board of Commissioners passing another related Resolution on September 20, 2017 (17-147) which suspended the Living Wage amounts required under the July 12, 2017 Resolution to give the County and the mental

6 health service providers time to engage in non-binding mediation on the Living Wage issue; and WHEREAS, the September 20, 2017 Resolution also provided that should the parties fail to reach a mediated settlement as evidenced by a letter from the County Administrator, the terms of the July 12, 2017 Resolution would be reinstituted effective the date of the Administrator s letter; and WHEREAS, the County, through its attorneys contacted the attorney for the mental health service providers to arrange for non-binding mediation of the living wage issues; and WHEREAS, the attorney for the mental health service providers ultimately refused to engage in non-binding mediation, because he believed that the County s Living Wage Ordinance was invalid under Michigan law and he did not want to divert resources from service delivery to pay a mediator under any pretense that the living wage ordinance is valid with respect to contracts; and WHEREAS, instead of engaging in non-binding mediation, the attorney for the mental health service providers agreed to meet with County officials without a mediator to explore how staff wages can be increased, and WHEREAS, on December 11, 2017, the County s Corporation Counsel contacted Commissioner Andy LaBarre and Commissioner Jason Morgan, the two County Commissioners originally designated by the Board of Commissioners to participate in the non-binding mediation, to see if they wanted to participate in the information meeting with the mental health service vendors; and WHEREAS, these Commissioners agreed to the informal meeting which was then scheduled for January 23, 2018 at the New Center in Ann Arbor; and WHEREAS, the parties did meet at the New Center on January 23, 2018 and discussed a number of issues related to the County s Living Wage requirements, although the parties did not reach any final agreement; and WHEREAS, on April 4, 2018 the County Administrator has submitted a letter to the Board of Commissioners stating that the parties have failed to reach a mediated settlement and that in accordance with Resolution # the terms of Resolution # have been reinstated and will be enforced immediately; and WHEREAS, given that no settlement of the Living Wage issues has been reached, the Board of Commissioners now wishes to take further steps in this matter; and WHEREAS, in April, 2018, the Board of Commissioners suspended enforcement of the Living Wage Ordinance for WCCMH vendors until such time as the Board

7 of Commissioners approves a new Living Wage Ordinance waiver or partial waiver specific to WCCMH vendors; and WHEREAS, the Board of Commissioners directed County Administration and the County s Senior Leadership Team to develop a waiver process for WCCMH vendors to apply for a waiver from the County s Living Wage requirements, and $10.50/hour mandate, with such process including standards to follow to determine when a waiver is warranted; and WHEREAS, the Board of Commissioners directed the Chair of the Board of Commissioners to appoint at least one and no more than three Commissioners to work with the County s Senior Leadership Team and Administration on the development of the waiver process; and WHEREAS, the Board of Commissioners directed County Administration and Senior Leadership to develop a process whereby County funds may, at the discretion of the Board of Commissioners, be used, if legally permitted, to help raise the hourly rate of direct care staff who provide mental health services; and WHEREAS, the Board of Commissioners directed County Administration and Senior Leadership to complete the stated tasks and return them to the Board for review and consideration at its June 6, 2018 meeting; and WHEREAS, on June 2, 2018 the County Administrator requested a timeline extension to bring back a formal waiver process to the Board of Commissioners pending the receipt of a legal opinion regarding extending funds to direct care worker providers to increase hourly wages, as well as analyzing audit and financial questions that could impact compliance on the part of both the County and the Providers. NOW THEREFORE BE IT RESOLVED that the Board of Commissioners hereby approves the attached request for exemption process from the Living Wage Ordinance, as well as exemption from compliance with the $10.50/hour direct care worker wages, specifically those including the following services and/or CPT codes: Applied Behavioral Analysis 0364T, 0365T, 0366T, 0367T, 0373T, 0374T Clubhouse Psychosocial Rehabilitation Program H2030 Community Living Supports H0043, H2015, H2016 Peer Directed and Operated Drop-in Center Out of Home Non-Vocational Habilitation H2014 Out of Home Prevocational Service T2015 Personal Care in Licensed Specialized Residential Setting T1020 Respite H0045, S5150, S5151, T1005, T2036, T2037 Skill Building Assistance H2014

8 Supported Employment H2023 BE IT FURTHER RESOLVED that there shall be designated annual cycle from July 1 August 31 for Providers to apply for, and receive, an exemption that coincides with the WCCMH fiscal year BE IT FURTHER RESOLVED that in the event a direct care worker provider is contracted with outside the established exemption cycle, said provider shall receive a full exemption from the Living Wage Ordinance until the next exemption review period BE IT FURTHER RESOLVED that the Board of Commissioners hereby authorizes the County Administrator to retain staff to provide an initial review of exemption requests and make recommendations to a secondary review County Administration designated committee BE IT FURTHER RESOLVED that the County Administration designed committee, to be made up with representation from Administration, Finance, Corporation Counsel and the Chair of the Ways & Means Committee, will make final recommendations to the Board of Commissioners for exemption approval BE IT FURTHER RESOLVED that in the event a Direct Care Worker Provider is not granted an exemption from the Living Wage Ordinance or the $10.50/hour mandate, said Provider shall have 120 days to comply with such $10.50/hour mandate

9 WASHTENAW COUNTY Request for Exemption from Compliance with $10.50/hour Direct Care Worker *** Wages Provider: Date of Exemption Request: INFORMATION SUBMITTED FOR EXEMPTION: YES NO 1.) Complete Provider Exemption Request Form 2.) Most recent IRS Form 990 (n/a if for profit) 3.) Most recent audited financial statements 4.) General description of the services provided. 5.) 6.) 7.) How eligible employees are directly involved in services (direct care, admin, infrastructure, etc.). Detailed list of eligible employees, current hourly wage and whether they are offered benefits. Description of how $10.50/hour mandate would impact provider finances and service provision. 8.) Plan for coming into compliance with the $10.50/hour mandate. CRITICAL DECISION POINTS FOR EXEMPTION COMMITTEE: Consumer Services: YES NO 1.) 2.) Did the provider describe that the requirement to meet the $10.50/hour mandate will result in a diminished quality of service to the consumers? Did the provider describe that the requirement to meet the $10.50/hour mandate will result in a diminished health and safety assurances to the consumers? Employee Relations: Are the provider s employees currently operating under a collective 1.) bargaining agreement? 2.) Does the provider offer the employees health benefits?

10 WASHTENAW COUNTY Request for Exemption from Compliance with $10.50/hour Direct Care Worker *** Wages Organizational/Financial: Does the provider have more than 6 months operating revenue onhand? 1.) 2.) Does the provider have an administrative rate over 15%? *** A contractor providing aide level, no professional license required, mental health services which includes the following services and/or CPT codes shall be considered as providing direct care worker services: Applied Behavioral Analysis 0364T, 0365T, 0366T, 0367T, 0373T, 0374T Clubhouse Psychosocial Rehabilitation Program H2030 Community Living Supports H0043, H2015, H2016 Peer Directed and Operated Drop-in Center Out of Home Non-Vocational Habilitation H2014 Out of Home Prevocational Service T2015 Personal Care in Licensed Specialized Residential Setting T1020 Respite H0045, S5150, S5151, T1005, T2036, T2037 Skill Building Assistance H2014 Supported Employment H2023

11 Washtenaw County Provider Exemption Request Form Contracted Provider Legal Name: Entity Status: Contact Information for Provider Name: Phone: Financial Information Period covered by most recent audited financial statements: Total Annual Revenue: Total Annual Expense: Revenue Less Expense: $ - Total Assets: Total Liabilities: Fund Balance/(Deficit): $ - Months of Operating Revenue On-hand: #DIV/0! Total Expense: Program Expense: Management & General: Non-profit 990 Line 25 a 990 Line 25 b 990 Line 25 c For Profit Audited Financials Audited Financials Audited Financials Administrative Percent: #DIV/0! CEO Salary: Total numbers of Employees: Total number of Employees eligible for wage mandate: Are Employees operating under a collective bargaining agreement: Are Employees provided paid vacation or sick time: Average cost of benefit package provided to eligible Employee: Description of benefits for eligible Employees: 1. Non-Profit: Most recent IRS Form 990 and audited financial statements For-Profit: Most recent audited financial statements 2. General description of the services provided. Please Provide the Following Information with your Submission: 3. How eligible employees are directly involved in services (infrastructure, direct care, administrative, etc.). 4. Detailed list of eligible employees, including wages and actual cost of benefits to the Employer (including but not limited to: health, dental, life, long-term disability and retirement/401 plan). 5. Description of how $10.50/hour mandate would impact provider finances and service provision. 6. Plan for coming into compliance with $10.50/hour mandate.