Agenda Item 4 D
October 31, 2017
Introduction
MEMOR ANDUM
October 27, 2017
1
TO:
FROM:
SUBJECT:
County Council
r-A
1
~
Josh
Hamlin,
Legislative Attomelt 1\
Introduction:
Bill 35-17, Finance-Pay ments to Service Providers
Bill 3 5-17, Finance - Payments to Service Providers, sponsored by Lead Sponsor Council President
Berliner and Co-Sponsors Councilmembers Leventhal, Elrich, Katz, Floreen, Rice, Rucker, Council
Vice-President Riemer and Councilmember Navarro, is scheduled to be introduced on October 31,
2017. A public hearing is tentatively scheduled for November 28 at 1:30 p.m.
Bill 35-17 would:
• define terms related to the annual supplement to certain providers of services to persons
with developmental disabilities (currently provided through the budget resolution);
• require that a payment be made to eligible providers each year, to the extent that funds are
appropriated;
• require the Director of Finance, in setting the amount of the payment, to consider the State
reimbursement rates to service providers and the additional operating support needed to
allow each service provider to pay direct service workers, on average, 125% of the County
rmmmum wage;
• establish eligibility standards for a provider to receive the payment, including
demonstrating to the Department of Health and Human Services that it pays direct service
workers at a rate specified in the Council's current operating budget resolution; and
• provide for the issuance of method (2) regulations to administer the law.
Background
For many years, Montgomery County has chosen to pay a supplement to certain providers
of direct services to Developmentally Disabled individuals in recognition that the State's
reimbursement rates do not take into account the higher cost of living in Montgomery County. For
many years, this supplement ("DD Supplement") was distributed based on the number of clients,
the severity of their disability, and services required as determined by the State. Many years, the
total amount of funding was increased by a percent or by an amount that recognized the increase
in the number of people being served (expansion adjustment). Starting in FY13, the HHS
Committee discussed in more detail how these funds were used by organizations. While most
organizations used the additional funding to increase wages, there was no requirement or reporting
on whether the funds were being used for this purpose. The HHS Committee recommended, and
 PDF to HTML - Convert PDF files to HTML files
the Council agreed, that starting
in
FY15, organizations would have to report to DHHS on the use
of funds. There was a phase-in period for the requirement that these funds be used to ensure
worker pay would be above the State minimum.
In
FY16, additional funding was added so that the DD Supplement would allow
organizations to pay workers at least 25% above the minimum wage.
In
FYl 7, the Council
specified that 100% of the supplement was to be used to ensure that workers received, on average,
at least 125% of the Montgo_mery County minimum wage.
The FYI 8 Operating Budget includes the following provision:
This resolution appropriates $14,729,712 to the Department of Health and Human
Services to provide a supplement to organizations providing direct services to
clients of residential, community supported living arrangements, day habilitation,
or supportive employment provided through the Developmental Disabilities
Administration.
In
order to receive this supplement, an organization must
demonstrate to the Department that 100% of the funding is being used to increase
the pay of direct service workers in recognition of the higher cost of living in
Montgomery County compared to other parts of Maryland. Each organization must
document to DHHS that the funds are being used for this purpose. Section G of
this resolution includes entities eligible to receive this non-competitive payment.
For FY18, funds are expected to allow organizations to pay direct service workers,
on average, 124% of Montgomery County minimum wage.
During the Council's recent consideration of Bills to increase the County minimum wage
- fust Bill 12-16 and currently Bill 28-17 - these organizations raised concerns about the impact
of the proposed increases on their ability to retain employees. This Bill would codify the above-
described longstanding practice of providing financial assistance to these organizations. The Bill
would require that determination of the amount of the assistance include consideration of the State
reimbursement rates to these organizations and the additional support necessary to allow the
organizations to pay direct service workers, on average, 125% of the County minimum wage.
Circle#
1
4
This packet contains:
Bill 35-17
Legislative Request Report
F:\LAW\BILLS\1735 Payments To Service Providers\Intro Memo.Docx
 PDF to HTML - Convert PDF files to HTML files
35-17
Bill No.
Concerning: Finance - Payments to
Service Providers
Draft No. 4
Revised:
10/20/2017
October
31, 2017
Introduced:
May 1,
2019
Expires:
_ _ _ _ _ _ _ _ __
Enacted:
Executive: _ _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: --'--"N=on= e'----------
Ch. _ _ , Laws of Mont. Co. _ _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Council President Berliner
Co-Sponsors: Councilmembers Leventhal, Eirich, Katz, Floreen, Rice, Bucker, Council Vice-
President Riemer and Councilmember Navarro
AN ACT
to:
(1) provide for an annual payment to certain providers of direct services to persons
with developmental disabilities;
(2) require the Director of Finance to consider certain factors in setting the amount of
the payment;
(3) establish eligibility standards for a provider to receive the payment; and
(4) generally amend the law governing payments to service providers.
By adding
Montgomery County Code
Chapter 20, Finance
Article XVI, Payments to Service Providers
Section 20-83
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unqffected by bill.
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
The County Council for Montgomery County, Maryland approves the following Act:
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 35-17
1
2
3
4
5
6
7
8
9
10
11
Sec 1. Article XVI (Section 20-83) is added to Chapter 20 as follows:
ARTICLE XVI. Payments to Service Providers.
20-83.
Payment to
providers of direct services
to
persons with
developmental disabilities.
(fil
Definitions.
In
this Section:
ill
Developmental disability
means developmental disability as
defined in Section 7-101 of the Health : General Article of the
Maryland Code.
ill
Direct service worker
means an employee of
~
service provider
that provides direct treatment or services to persons with
developmental disabilities for at least 50% of their work hours.
12
13
ill
ill
Director
means the Director of the Department of Finance.
Service provider
means an organization providing direct
residential,
meaningful
day
(including
employment
and
14
15
16
17
18
19
20
21
22
23
24
25
26
27
community development services) or support services to clients
through the Developmental Disabilities Administration of the
Maryland Department of Health.
(hl
Payment.
Each year, to the extent that funds are appropriated, the
Director must make
~
payment to each eligible service provider in
recognition of the higher cost of living in Montgomery County
compared to other parts of Maryland.
(f)
Amount
g.f
payment.
In
calculating the payment, the Director must
consider:
ill
ill
the State reimbursement rates to service providers; and
the additional operating support needed to allow each service
provider to
mY
direct service workers, on average, 125% of the
County minimum wage.
0
f:\law\bills\1735 finance-payments to service providers\bill 4.doc
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 35-17
28
29
30
31
32
33
34
35
36
(ill
Eligibility
for
payment.
To receive
£!.
payment under this Section,
£!.
service provider must:
ill
demonstrate to the Department of Health and Human Services
that it Pill direct service workers at
~
rate specified m the
Council's current operating budget resolution; and
ill
meet any other eligibility standards set in regulation.
_uu
Approved:
Regulations.
The Executive may issue regulations under Method
ill
to
implement this Section.
37
Roger Berliner, President, County Council
Date
38
Approved:
39
Isiah Leggett, County Executive
Date
40
This is a correct copy ofCouncil action.
41
Linda M. Lauer, Clerk of the Council
Date
0
f:\law\bills\1735 finance-payments to service providers\bill 4.doc
 PDF to HTML - Convert PDF files to HTML files
LEGISLATIVE REQUEST REPORT
Bill 35-17
Finance
-
Payments to Service Providers
DESCRIPTION:
Bill 35-17 would:
define terms related to the annual supplement to certain
providers of services to persons with developmental
disabilities;
require that a payment be made to eligible providers each year,
to the extent that funds are appropriated;
require the Director of Finance, in setting the amount of the
payment, to consider the State reimbursement rates to service
providers and the additional operating support needed to allow
each service provider to pay direct service workers, on average,
125% of the County minimum wage;
establish eligibility standards for a provider to receive the
payment, including demonstrating to the Department of Health
and Human Services that it pays direct service workers at a rate
specified in the Council's current operating budget resolution;
and
provide for the issuance of method (2) regulations to administer
the law.
PROBLEM:
Providers of services to persons with developmental disabilities are
concerned that proposed increases in the minimum wage will hurt their
ability to attract and retain workers.
Provide County commitment to funding for certain service providers
in recognition of the higher cost ofliving in Montgomery County.
Department of Finance
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
To be requested.
To be requested.
NIA
Josh Hamlin, Legislative Attorney
To be researched.
WITHIN
MUNICIPALITIES:
PENALTIES:
None
F:\LAW\BILLS\1735 Payments To Service Providers\LRRDocx
 PDF to HTML - Convert PDF files to HTML files
Agenda Item 4 D
October 31, 2017
Introduction
MEMOR ANDUM
October 27, 2017
1
TO:
FROM:
SUBJECT:
County Council
r-A
1
~
Josh
Hamlin,
Legislative Attomelt 1\
Introduction:
Bill 35-17, Finance-Pay ments to Service Providers
Bill 3 5-17, Finance - Payments to Service Providers, sponsored by Lead Sponsor Council President
Berliner and Co-Sponsors Councilmembers Leventhal, Elrich, Katz, Floreen, Rice, Rucker, Council
Vice-President Riemer and Councilmember Navarro, is scheduled to be introduced on October 31,
2017. A public hearing is tentatively scheduled for November 28 at 1:30 p.m.
Bill 35-17 would:
• define terms related to the annual supplement to certain providers of services to persons
with developmental disabilities (currently provided through the budget resolution);
• require that a payment be made to eligible providers each year, to the extent that funds are
appropriated;
• require the Director of Finance, in setting the amount of the payment, to consider the State
reimbursement rates to service providers and the additional operating support needed to
allow each service provider to pay direct service workers, on average, 125% of the County
rmmmum wage;
• establish eligibility standards for a provider to receive the payment, including
demonstrating to the Department of Health and Human Services that it pays direct service
workers at a rate specified in the Council's current operating budget resolution; and
• provide for the issuance of method (2) regulations to administer the law.
Background
For many years, Montgomery County has chosen to pay a supplement to certain providers
of direct services to Developmentally Disabled individuals in recognition that the State's
reimbursement rates do not take into account the higher cost of living in Montgomery County. For
many years, this supplement ("DD Supplement") was distributed based on the number of clients,
the severity of their disability, and services required as determined by the State. Many years, the
total amount of funding was increased by a percent or by an amount that recognized the increase
in the number of people being served (expansion adjustment). Starting in FY13, the HHS
Committee discussed in more detail how these funds were used by organizations. While most
organizations used the additional funding to increase wages, there was no requirement or reporting
on whether the funds were being used for this purpose. The HHS Committee recommended, and
 PDF to HTML - Convert PDF files to HTML files
the Council agreed, that starting
in
FY15, organizations would have to report to DHHS on the use
of funds. There was a phase-in period for the requirement that these funds be used to ensure
worker pay would be above the State minimum.
In
FY16, additional funding was added so that the DD Supplement would allow
organizations to pay workers at least 25% above the minimum wage.
In
FYl 7, the Council
specified that 100% of the supplement was to be used to ensure that workers received, on average,
at least 125% of the Montgo_mery County minimum wage.
The FYI 8 Operating Budget includes the following provision:
This resolution appropriates $14,729,712 to the Department of Health and Human
Services to provide a supplement to organizations providing direct services to
clients of residential, community supported living arrangements, day habilitation,
or supportive employment provided through the Developmental Disabilities
Administration.
In
order to receive this supplement, an organization must
demonstrate to the Department that 100% of the funding is being used to increase
the pay of direct service workers in recognition of the higher cost of living in
Montgomery County compared to other parts of Maryland. Each organization must
document to DHHS that the funds are being used for this purpose. Section G of
this resolution includes entities eligible to receive this non-competitive payment.
For FY18, funds are expected to allow organizations to pay direct service workers,
on average, 124% of Montgomery County minimum wage.
During the Council's recent consideration of Bills to increase the County minimum wage
- fust Bill 12-16 and currently Bill 28-17 - these organizations raised concerns about the impact
of the proposed increases on their ability to retain employees. This Bill would codify the above-
described longstanding practice of providing financial assistance to these organizations. The Bill
would require that determination of the amount of the assistance include consideration of the State
reimbursement rates to these organizations and the additional support necessary to allow the
organizations to pay direct service workers, on average, 125% of the County minimum wage.
Circle#
1
4
This packet contains:
Bill 35-17
Legislative Request Report
F:\LAW\BILLS\1735 Payments To Service Providers\Intro Memo.Docx
 PDF to HTML - Convert PDF files to HTML files
35-17
Bill No.
Concerning: Finance - Payments to
Service Providers
Draft No. 4
Revised:
10/20/2017
October
31, 2017
Introduced:
May 1,
2019
Expires:
_ _ _ _ _ _ _ _ __
Enacted:
Executive: _ _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: --'--"N=on= e'----------
Ch. _ _ , Laws of Mont. Co. _ _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Council President Berliner
Co-Sponsors: Councilmembers Leventhal, Eirich, Katz, Floreen, Rice, Bucker, Council Vice-
President Riemer and Councilmember Navarro
AN ACT
to:
(1) provide for an annual payment to certain providers of direct services to persons
with developmental disabilities;
(2) require the Director of Finance to consider certain factors in setting the amount of
the payment;
(3) establish eligibility standards for a provider to receive the payment; and
(4) generally amend the law governing payments to service providers.
By adding
Montgomery County Code
Chapter 20, Finance
Article XVI, Payments to Service Providers
Section 20-83
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unqffected by bill.
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
The County Council for Montgomery County, Maryland approves the following Act:
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 35-17
1
2
3
4
5
6
7
8
9
10
11
Sec 1. Article XVI (Section 20-83) is added to Chapter 20 as follows:
ARTICLE XVI. Payments to Service Providers.
20-83.
Payment to
providers of direct services
to
persons with
developmental disabilities.
(fil
Definitions.
In
this Section:
ill
Developmental disability
means developmental disability as
defined in Section 7-101 of the Health : General Article of the
Maryland Code.
ill
Direct service worker
means an employee of
~
service provider
that provides direct treatment or services to persons with
developmental disabilities for at least 50% of their work hours.
12
13
ill
ill
Director
means the Director of the Department of Finance.
Service provider
means an organization providing direct
residential,
meaningful
day
(including
employment
and
14
15
16
17
18
19
20
21
22
23
24
25
26
27
community development services) or support services to clients
through the Developmental Disabilities Administration of the
Maryland Department of Health.
(hl
Payment.
Each year, to the extent that funds are appropriated, the
Director must make
~
payment to each eligible service provider in
recognition of the higher cost of living in Montgomery County
compared to other parts of Maryland.
(f)
Amount
g.f
payment.
In
calculating the payment, the Director must
consider:
ill
ill
the State reimbursement rates to service providers; and
the additional operating support needed to allow each service
provider to
mY
direct service workers, on average, 125% of the
County minimum wage.
0
f:\law\bills\1735 finance-payments to service providers\bill 4.doc
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 35-17
28
29
30
31
32
33
34
35
36
(ill
Eligibility
for
payment.
To receive
£!.
payment under this Section,
£!.
service provider must:
ill
demonstrate to the Department of Health and Human Services
that it Pill direct service workers at
~
rate specified m the
Council's current operating budget resolution; and
ill
meet any other eligibility standards set in regulation.
_uu
Approved:
Regulations.
The Executive may issue regulations under Method
ill
to
implement this Section.
37
Roger Berliner, President, County Council
Date
38
Approved:
39
Isiah Leggett, County Executive
Date
40
This is a correct copy ofCouncil action.
41
Linda M. Lauer, Clerk of the Council
Date
0
f:\law\bills\1735 finance-payments to service providers\bill 4.doc
 PDF to HTML - Convert PDF files to HTML files
LEGISLATIVE REQUEST REPORT
Bill 35-17
Finance
-
Payments to Service Providers
DESCRIPTION:
Bill 35-17 would:
define terms related to the annual supplement to certain
providers of services to persons with developmental
disabilities;
require that a payment be made to eligible providers each year,
to the extent that funds are appropriated;
require the Director of Finance, in setting the amount of the
payment, to consider the State reimbursement rates to service
providers and the additional operating support needed to allow
each service provider to pay direct service workers, on average,
125% of the County minimum wage;
establish eligibility standards for a provider to receive the
payment, including demonstrating to the Department of Health
and Human Services that it pays direct service workers at a rate
specified in the Council's current operating budget resolution;
and
provide for the issuance of method (2) regulations to administer
the law.
PROBLEM:
Providers of services to persons with developmental disabilities are
concerned that proposed increases in the minimum wage will hurt their
ability to attract and retain workers.
Provide County commitment to funding for certain service providers
in recognition of the higher cost ofliving in Montgomery County.
Department of Finance
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
To be requested.
To be requested.
NIA
Josh Hamlin, Legislative Attorney
To be researched.
WITHIN
MUNICIPALITIES:
PENALTIES:
None
F:\LAW\BILLS\1735 Payments To Service Providers\LRRDocx