Public Hearing

April 17, 2003

Hiram Johnson State Building

455 Golden Gate Avenue, Hearing Room 9

San Francisco, California



Industrial Welfare Commission






CYNTHIA M. JUDY, Hearing Reporter


Proceedings 4

MAUREEN WRIGHT, The Respite Inn 5

LISA CHIN, Service Employees International Union 8

SHEA CUNNINGHAM, Service Employees International Union 12

SISTER MARYGRACE PUCHAC, East Bay Services for the Developmentally Disabled 15

WARDELL JACKSON, Association of California Care Operators 23

JENNIFER SNYDER, California Residential Services Association 29

JIM BURTON, Regional Center of the East Bay 31

TONY MARTINHO, Association of California Care Operators 35

SHEA CUNNINGHAM, Service Employees International Union, Martinho's House 39

Adjournment 41

Certificate of Reporter/Transcriber 42



(Time noted: 10:00 a.m.)

COMMISSIONER COLEMAN: I'm going to call the meeting to order. The time is ten o'clock, April 17th. And this is a public hearing for the Industrial Welfare Commission.

My name's Leslee Coleman, and I will be chairing the meeting today. Also present is Harold Rose, for the record.

The purpose of the meeting today is to take testimony on the proposed amendment to Wage Order 5, the public housekeeping industry. So the amendment is to Section 3, under "Hours and Days of Work," to add to Section 3(A)(2)(e), to read as follows:

"Section (A)(2) above shall apply to employees of 24-hour non-medical out-of-home licensed residential facilities of 6 beds or fewer for the developmentally disabled, elderly, and mentally ill adults.

"This section, (3)(A)(2)(e), shall sunset on July 1, 2005."

We have also included for the public copies of the charge to the wage board for Wage Order 5, and also the wage order itself.

So, with that, we'll just begin taking testimony. So I've got a couple of cards here. And if you would like to speak, just please get a card and fill it out.

First we have Maureen Wright, from The Respite Inn.

MS. WRIGHT: Good morning --



MS. WRIGHT: -- respected members of the Industrial Welfare Commission. My name is Maureen Wright. I am an administrator of The Respite Inn, which is a 10-bed facility for adults with developmental disabilities.

And I will read from this because I don't want to forget anything.


MS. WRIGHT: I strongly urge the IWC to include all -- to include adult residential facilities of 15 beds or less, and also to include homes for the mentally ill.

I have been in this field for over twenty years now. And most of these twenty years, I have been working as a direct care worker in group homes that serve adults with developmental disabilities.

It was an advantage for me to work as an employee in this type of work due to the greater flexibility I had with my work schedule and also with the family. When I went to college, I was able to work a 40-hour week in a four-day period versus a five-day period. This saved me money as far as gas. It saved me time being on the road, where I only had to -- where I only had to be in commute traffic for four days versus five days, and, in addition, it saved me money in regards to bridge toll. And it gave me more time to be with my family. It also gave me more time to study. My employer gave me a schedule that I wanted. Having this type of job was the only way that I could make it through college.

Now I am an administrator. I highly value our employees. We pay our employees $11 to $12 an hour, starting. We recognize the importance of paying decent wages, and also honoring the quality of care of our workers. Of course, I would love for these wages to be even higher and to pay overtime after eight hours. However, our hands are tied, given to the lack of funding in this industry. Now that the state is in such a financial crisis, that even makes this more critical.

In understanding the needs of our employees, employees are wanting more flexibility with their work schedules and are wanting to work longer shifts so that they can have more days off to be with their families, to go to school, or to even work a second job. In addition, if workers are only able to work eight-hour shifts, group homes are not able to schedule overlapping shifts. Overlapping shifts are extremely important to provide the continuity of care required by residents.

We're in a financial crisis now, even more so than ever. Paying overtime for work after eight hours is a significant hardship for most, if not all, group homes that serve adults. And many have already closed their doors.

I strongly urge the IWC to expand this exemption to include adult residential facilities of at least 15 beds or less. If more residential facilities close, this will even put such a burden -- more burden on the state, even more than what we are experiencing now.

I truly, sincerely thank you for your time and your interest.



COMMISSIONER ROSE: I have a question. First of all, do you know adding -- going from six beds to 15 beds, how many more residential care facilities that adds?

MS. WRIGHT: No, I don't have the statistics.

COMMISSIONER ROSE: Okay. And what is the average income per patient to the place that you're at?

MS. WRIGHT: For the --

COMMISSIONER ROSE: I mean, are they mostly Medicare, Social Security?

MS. WRIGHT: Yeah. They're all on SSI.


MS. WRIGHT: Um-hmm.

COMMISSIONER ROSE: And that's what? Eight-something --

MS. WRIGHT: I think 840, 850, something in that range.

COMMISSIONER ROSE: Something like that. Okay. And that's what they are?


COMMISSIONER ROSE: Okay. And you have -- you're from a 10-bed?

MS. WRIGHT: Ten-bed, yes.



Next is Shea Cunningham -- I'm not sure --

MS. CHIN: We're together.

COMMISSIONER COLEMAN: Okay, great. And Lisa Chin. Okay.

(Ms. Chin hands documents to commissioners.)



MS. CHIN: I'm Lisa Chin, with the Service Employees International Union.

As requested, we went back and did the research on the numbers of facilities and types of facilities that all the different proposals would cover.

While we agree with the petitioners that some form of relief is warranted, we are only supportive of an exemption that is time-limited and narrow in scope. And reflecting upon all the testimony put forth in Industrial Welfare Commission hearings, we feel that the most compelling testimony came from the small, owner-operated, six beds or less facilities serving elderly and persons with developmental disabilities.

The administrators and workers in these facilities provide services in home-like settings, allowing their clients to live in their communities. While bigger size facilities may be facing financial problems as well, we are currently opposed to expanding the proposed overtime exemption to those facilities as well.

SEIU is also opposed to extending the exemption to cover mental health facilities, as it would impact a whole additional universe of workers. Our research shows that there are currently 659 six beds or less licensed residential facilities serving persons with mental illness and persons with a dual diagnosis of developmental disability and mental illness. For 15 beds or less, the number is 916. At the last Industrial Welfare Commission meeting, the petitioner stated that only 73 additional facilities would be affected if the exemption was extended to persons with mental illness. We find this to be a substantial discrepancy, and it shows that the words -- just inserting the words "mentally ill" has consequences that, you know, we didn't anticipate at the time.

In addition, SEIU also represents some social rehabilitation programs that would qualify. There are similar facilities that would qualify under this exemption. For example, we represent one here in San Francisco that's a nonprofit social rehabilitation program that has a multi-million-dollar budget, which is a different picture than the mom-and-pop operations that a lot of testimony has been coming from.

Regarding the number of workers that would be affected by expanding the overtime exemption, we'd like to note that the Industrial Welfare Commission's proposed amendment does not differentiate between different kinds of levels of service, and this needs to be taken into consideration. The ratios differ depending on the level of care. Sometimes in the regulations, it says that you have to have one staff person per six consumers. It goes all the way to a one-to-one ratio. So, in looking at the data from the community care facility database, they don't differentiate the different levels of care, so it's really hard to determine how many workers would be affected. And even if you take the average, one staff person per three consumers, you have to take into account that if there are six consumers in a six-bed facility, and you have to have two workers there at all times, and there's three eight-hour shifts a day, the numbers fluctuate depending on what kind of facility you have. So the numbers that we're presenting today represent kind of the average that we calculated.

We believe that the SEIU proposal that we presented last -- at the last meeting is extremely far-reaching. It covers a lot more workers than we anticipated If you just kind of do the numbers and do the calculations based on averages, we're looking at -- our SEIU proposal would cover about 7,786 facilities, and doing -- using an average ratio, potential impact on 55,000 workers. So this is significant.

So we hope that if you do provide short-term relief for this industry, that you take all these things into account. The proposal we put forward would cover six beds or fewer, facilities that serve elderly, blind, and developmentally disabled, the same populations that were granted meal and rest period overtime exemptions the last time amendments were made to Wage Order 5.

We'd also want to note that not all community care facilities are on the verge of collapse. And there are facilities that are able to pay their workers overtime. And we want to make sure that continues to the extent that's possible.

That's about it for now. If you have any questions, Shea Cunningham is here, and she did all the research on the community care facility database.

MS. CUNNINGHAM: Licensing database, right.

MS. CHIN: Licensing.



COMMISSIONER ROSE: So, what you're saying is the proposed amendment, you want to leave it at six beds, or do you want to --

MS. CHIN: Yes.

COMMISSIONER ROSE: You don't want it to go to 15.


COMMISSIONER ROSE: And you want mentally ill taken out.

MS. CHIN: Yes.

COMMISSIONER ROSE: Is there anything -- any other changes?


COMMISSIONER ROSE: Okay. I understand.

COMMISSIONER COLEMAN: A quick question. It sounds like you've done quite a lot of research on these facilities. Have you had any -- have you been able to see into the budgets at all or see how many of these have closed since the amendment changed, post-AB 60, and how many are on the financial verge of bankruptcy or closure, so we can see how this might be affecting the people in those facilities?

MS. CHIN: We don't have any --


MS. CHIN: -- before and after. We can try to find that for the next --

COMMISSIONER COLEMAN: That would be -- yeah, I think that would be useful, because I think we're trying to find, you know, where the breaking point is.

MS. CHIN: Yeah. And also, the fact that there are so many types of facilities, and every time you change a word, you're covering populations that you may not realize you're covering.


MS. CHIN: And given the different levels of care, it really differs in terms of how many workers are at each facility, because if you have a high level of care, you have to have a one-to-one ratio. You've got -- that's several workers. They're not working 24 hours a day, seven days a week, so you get pretty high numbers.

MS. CUNNINGHAM: Up to eight workers in the average facility, which is the 4A, Level 4A. So if you have -- assume you have three shifts, you can have six workers with a couple of relief workers, so eight workers per -- per six-bed facility.


MS. CUNNINGHAM: And the estimate we used was actually below that, 1.25 workers per -- per -- or a one-to-1.25 ratio.


COMMISSIONER ROSE: I have a question for them.


COMMISSIONER ROSE: Who sets the level of care? The State of California or --

MS. CUNNINGHAM: Yeah. The regulations that we're looking at are Title 17. The basic staffing level is stipulated in Title 17. I footnoted it in -- on Page 1 of the memo.

COMMISSIONER ROSE: Okay. I have that. Okay.

And then, can most of these facilities -- these are still people that are on SSI? I mean, they're not getting $3,000 a month for these people as income?

MS. CHIN: I don't -- I don't know the breakdown. I think especially in the -- for those of the -- the persons with developmental disabilities, blind, elderly, that is kind of the --

COMMISSIONER ROSE: That's the normal --

MS. CHIN: SSI, SSP grants are for those populations. So I would anticipate a lot -- a lot of part of how they cover board and care costs is through those grants.


MS. CHIN: So, yeah, it's --

COMMISSIONER ROSE: Now, what is -- what is the industry doing to -- well, not the industry -- what is like the union going to do or can do to help increase the amount of money they get?

MS. CHIN: Well, we're working on trying to find long-term solutions. We have legislation we're trying to move this year that we've been working with the petitioners on. We're hoping to try to get more federal funding for the system overall. Every year the budget keeps getting cut. Things aren't getting better. There's high worker turnover. There's a lot of issues that need to be addressed. And we think we need system-wide, long-term reform to accomplish more funding.



MS. CHIN: Thank you.

COMMISSIONER COLEMAN: Okay. Sister Marygrace.




SISTER MARYGRACE: Thank you so much for having this hearing.

I'm Sister Marygrace, from East Bay Services to the Developmentally Disabled. And I'm here to plead that you please take into consideration and to look carefully at the ramifications of the Section 3(A)(2). We ask that you please consider certainly the 24-hour, non-medical, but for facilities of 15 beds or fewer.

The reason for this is that we have a number -- we have very few homes that are 10 to 15. And these are facilities that have served for years. They have a history of excellence, and they've served our people for years in this state. Then, after a while, the trend was to make facilities smaller, to six or less. So we're not talking about a lot of facilities.

In fact, we're working on -- we're diligently working on some numbers for you. We have found that we have to study very carefully all the licensed facilities in the state. We have to also coordinate with Developmental Disability Department as to the accuracy of the number of homes, how many in each home. And we're diligently working on that so that we can get that to you. We're find that we just could not take it off the Internet, of how many licensed homes, that it had to be really looked at very carefully so that we give you some accurate figures.

The reason for also the consideration, if we could look at the time of employees and the time that they work, we're finding that we're getting some people that are very talented, and their expertise is invaluable. But they only want to work part-time. They only want to work maybe two days, maybe because they have a family. And if we go according to the eight hours, it really restricts what we can do. We're also looking at people that are retired, that perhaps only want to work a couple days.

I have a woman who's been with us for twenty-five years, and she likes to come in on Saturday and she likes to leave at one o'clock on Sunday. And she loves that -- that schedule.

We do pay well. It's just that if we were to closely follow that -- the ramifications as it is, we would have to lower salaries. We could not pay the salaries that we're paying. We would have to lower them.

So, you know, I think that the other real picture is that we're taking care of the most vulnerable people in our society. Now, which of people that walk the street are willing to open a home for people that are mentally ill, mentally retarded, with various ramifications of care and behavior, and care for them? And it means that they're on your doorstep 24 hours. And it means that you've got to care for them. You have to make sure that they're -- that they're eating well, that they're growing, that they're developing, that they're being enriched. It's the whole person. It's not like a workshop where you walk in at eight and you leave at three. But you're taking care of that whole person, and you're looking at that quality of life.

It is a very intense and challenging service. We're not talking about somebody that sells coffee at Starbucks. You know, there is a difference in what we're asking of staff, and there's a difference in how we're looking at this whole eight-hour. I think that when this law was done, I think that we didn't closely at the ramifications of what it's going to do to the periphery of our society.

And I'm asking you if you could please take a look at this. The realities of our -- the crisis, the financial crisis in our state is not going to get any better for at least another three years. So we're going to ask you if you could make a concession for 15 beds or less, and if it could be done at least for three years, so that we get back on our feet and that, if the SEIU is really going to work on a path that's going to help the system, it's going to take that much time. It's not going to be happening in a year.

So, again, I ask you, and I thank you for your care and attention in this matter.

COMMISSIONER COLEMAN: Thank you. Thank you.

Any questions?

COMMISSIONER ROSE: Yeah, one question. You say you pay well. What do you pay?

SISTER MARYGRACE: We pay -- we start at $12 and we go to $15 an hour.




SISTER MARYGRACE: With full benefits. We offer full health, full -- a premium for dental. We offer three weeks vacation, starting. We offer -- after one year, we offer retirement, and we pay the retirement. Five percent we invest every month into that person's. So our salaries are high.

Now, granted, there are some agencies that are not that high. But, see, we're a 15-bed, and we can do that. And we value our staff. And we really make sure that we can do that. With this new reality, we're going to have to lower salaries. You know, we're not going to be able to do it.

COMMISSIONER ROSE: And it means you don't set the level for the amount of employees you need for the care.

SISTER MARYGRACE: No. The state does.

COMMISSIONER ROSE: And you can't employees go.


COMMISSIONER ROSE: You have to reduce levels --

SISTER MARYGRACE: That's right, yes.

And then the people that want to work part-time and the people that are retired, we're going to have to tell them that they can't work any more, that we're going to have to have the blocks of eight-hour time. And, you know, we're -- we're going to sidestep all this talent and the productivity of other people that could really serve us.

The other thing is that we've got to support families. You know, we have mothers with children. And somewhere in the workforce, we've got to support that. You know, we've got to support that care and compassion that parents have to take care of children, so that when they're working an eight-hour day five days a week, at an intense service, it takes a toll. If they can do -- like Maureen said, if they can work four days, you know, or even three days, that -- not the 40 hours, but if they can work at other hours, then they have time with their family. And it also is a way of support for families.

COMMISSIONER ROSE: Do you have a choice of the care that you give? I mean the patients that come in. Do you have a choice?


What do you mean? As far as people coming in?

COMMISSIONER ROSE: As far as people that you care for, so you have a choice of that. So you could pick those patients that you have a lesser level of care that needed care.

SISTER MARYGRACE: Well, our home has Level 2 and Level 3, so --

COMMISSIONER ROSE: Does it go by the home or --

SISTER MARYGRACE: No. The state sets the level.


SISTER MARYGRACE: The State of California Developmental Disabilities sets the level, and they say, "If someone functions on this level, then they're a Level 2, or they're a Level 3." They also designate how the staffing ratio goes --


SISTER MARYGRACE: -- if it's one-to-three or one-to-six, you know.

COMMISSIONER ROSE: But could have a home of 15 people, all Level 1?

SISTER MARYGRACE: You could. You could. But I don't know if there are any Level 1's.


SISTER MARYGRACE: Many of them are Level 2 and beyond.

COMMISSIONER ROSE: And then I'll ask you, what is the industry doing to improve the financial condition coming in, other than coming to the IWC?

SISTER MARYGRACE: Yeah. Well, we're trying to do fundraising. And it's an endless -- you know, it's an endless task to keep fundraising, so you have to keep supplementing what you're doing. That also takes away from the time and attention of really the heart of what we need to do, when we have to go out and start fundraising.


COMMISSIONER COLEMAN: One question I also had.


COMMISSIONER COLEMAN: The proposal of the SEIU pertained to the number of beds, but also to the inclusion of mentally ill in the definition. How do you think that might impact the industry and the workers?

SISTER MARYGRACE: Yeah. The mentally ill, I think, in our system is probably at the bottom of the totem pole. It is the silent -- it is the silent industry in our state. And somewhere, it has to step up and have a voice. But I think it's, again, the industry and the service that is at the bottom. The payment for people that are mentally ill in homes are very low. I think Lonnie even stated how much -- I think it's like $700 or something that they get per person.

Can you imagine a home with, you know, six or ten mentally ill people that you have to care for, day in and day out, 24 hours a day, and 365 days a year? You know, that, the intensity of that, is -- I think they need to be included because their rates are so low. And this impact will even be an impetus to close more homes, because people aren't going to be able to do it. And then we're going to have more people on the streets that really should be in better situations.




MR. JACKSON: Good morning. My name is Wardell Jackson, and I represent providers over the State of California with the Association of California Care Operators. And I am here today to urge you to support the amending of Wage Order Number 5 to also include 15 beds or less and to include homes for the mentally ill.

As far -- you just asked about the mentally ill. Like Sister Marygrace said, they are some of the most underpaid. They provide a lot of the same services, except that they don't -- there's not a staffing level requirement. But for us to be safe, for us to keep them safe, we have to have a minimum of staff because the mentally ill are -- they do have a lot of behavior problems or ill problems or whatever, so we have to have a -- we have to maintain a certain amount of staff to keep them safe.

So -- but they -- but there is not usually a supplement. There is a supplemental service that the state

Offers. I think that -- it's SRP, and that supplemental service takes care of maybe 10 to 20 percent of the mentally ill in the state. It does not cover -- that's a special program that the counties offer -- the state offers through the county, I believe it is, but it only takes care of a small percentage of all the mentally ill in the state. Therefore, most of -- about 80 percent of the -- of the homes that have mentally ill are not a part of the SRP program. And those people -- those providers are fortunate, and even still with that program, and then they are required to have certain amounts of staffing and a certain amount of services with the SRP. So that is only a small -- and I know Lonnie is the expert on that SRP, because I do have a few -- I have one home with some people that are mentally ill in that home, and my specialty basically is developmentally disabled -- but since Lonnie is not here, I wanted to make sure that that is covered, that the mentally ill -- they are at the bottom of the totem pole, and they are -- and there's no -- there's no reimbursement. Even with the small SRP reimbursement that they get, it's just one basic rate. It's not an adjustable rate like they have in the system for the developmentally disabled. It's just one rate that they do give for people who are mentally ill in the homes.

And, see, the -- one other thing I wanted to mention is that the Department of Developmental Services, years ago, they did a survey, they did -- they spent millions of dollars to study what the rates that the people -- what the providers are being paid in the state. And they found at that point that we were 40 to 50 percent underpaid. The rates were underfunded at that point.

When Shelton Dent, who is the -- who's the head of the Department of Residential Services at the Department of Disabilities, he spoke at a hearing, and I -- and I was trying to find the date and everything else, when that was. But at one point, he stated that when the ARM program came about, which is the Adult -- what is it? -- Alternative Rate Model -- when that program came about, about ten years, and the Department was trying to justify -- well, trying to bring the rates up, and what -- and they found that we were underfunded, and they had basically legislation that said that they would fund us according to the costs of living every year. And of course, that never happened. So, therefore, every year we got further behind. But Shelton Dent stated at a hearing that when they did the ARM program, they did not include funds for paying staff over eight hours or 24-hour service -- or the rates that you're asking -- or you're telling us that we have to pay. This was not included when they set the rates at that point more than ten years ago. So, therefore, the system is doomed to fail. The crisis that we're in now was doomed to happen because the Department of Developmental Services did not prepare -- they did not put the work in place for us to be able to pay our staff more or do anything at that point.

Right now, what we're doing now, along with parents, along with consumers -- because you asked what is the industry doing now -- well, the industry now, we are approaching our legislators. Parent groups are getting together, consumer groups are getting together, provider groups are getting together, and we're all -- we all have plans. We have meetings with our legislators now. We're meeting on a local level, we're going to Sacramento, and we're letting them know exactly what's happening, because the Legislature does not know what's happening in this field. And I think that's why -- and that's -- and I know that sort of ties your hands, as far as a state agency is concerned, because what can you do if they're just turning their back away? And that's what -- that's what the governor is doing now, that's what the legislators are doing now, because they do not know the system as it is. They do not know the crisis that's happening in the system.

And -- and I wanted to emphasize too, because my vice president, Tony, is always saying that, you know, even with the union, they're always talking about how bad this industry is, but even with the problems that we're in, we can -- and I don't know how we do it -- we continue to give a good quality service to the people we serve. And I think it goes a lot to the people that we are, who -- the people who we are. We do this from our heart. If we were to do it for money, we would have been closed a long time ago. We do this because we love what we're doing. We love the people that we serve. I do this because I love to be able to see someone who couldn't do something today do something tomorrow, even if -- even if it's just being able to -- to pick up a spoon, and they couldn't do that yesterday and they can do it today. And my staff has helped to train them to do this today. And that's why I'm in this field. The money does not have -- there's not -- money is not the bottom line. But as far as the state is concerned, it is.

So that's why we're going to legislators now and letting them know that we're in trouble, that we need -- we will continue to do services because we love what we do, but there has to be some kind of break so -- and that's why we're asking for maybe a three year, because even with what SEIU is doing, whether that goes through or not or whatever, it is going to take a while for everything to get into place. It's going to take a while for us to get through to the Legislature and let them know what our problems are. And, hopefully, they will make whatever changes that has to be made.

But right now, we are in a crisis, and we need -- and we are afraid that -- well, we are losing homes. There are people that are telling me that they're going out of business. There are people that have gone out of business because they cannot continue to operate with the funding that they have. And like I said, the DDS has acknowledged this. This is on paper -- this is in the governor's office -- that shows that we have been underfunded for the last ten or twelve years. This is a fact. It's not fiction. It's a fact.

And so, therefore, now what we -- what our job is is to let the Legislature know that we are in trouble and they need to step up to the plate to make sure that this -- that we get out of the hole that we're in, because we're going to continue doing what we're doing, regardless of what. But there are some people that cannot. There are some people that cannot continue to operate at the level that they've been doing. And then, also, to expect new laws and regulations coming in, as far as our wage -- Wage Order Number 5, they cannot operate with these new regulations.


Questions, Harold?


COMMISSIONER COLEMAN: No questions. Okay. Thank you. Thanks for your time.

Jennifer Snyder.

Thank you.

MS. SNYDER: Jennifer Hendrick Snyder. I'm here today on behalf of the California Residential Services Association, which represents community care facilities for the developmentally disabled, mainly six beds or fewer. And most of our members are in the Central Valley area.

The last speaker did a very nice job of giving you an overview of how -- what a tough time financial that a lot of these buildings, these facilities and homes, are having.

A couple things -- I gave you some written testimony, but I just wanted to point out just two -- two points.

One is that facilities for the developmentally disabled are also, just like children's facilities, trying to simulate a home-like environment. And so they try to have their employees work longer shifts, where they're there for two to three days in a row. And it gives both the employees and residents both a more flexible environment, and employees the ability to do other things besides work in a home, either for their family or go to school or have other jobs.

Second is we -- with these changes in the wage order from before, dealing with overtime, also now with the new constraints related to the budget, workers' compensation costs, liability insurance, we're seeing a number of facilities close. And we're -- it is clear that there aren't the facilities out there to provide services to the developmentally disabled.

With these changes, I think, in Wage Order 5, they'll be able to provide a little bit more flexibility. They'll be able to employ their employees for the longer shifts and not pay the time and a half or the double time after 40 hours in a workweek. And it'll make a huge difference, I think, financially for these buildings, and they'll be able to stay open as homes for the developmentally disabled.

So we're supportive of the amendment as written by the Commission and would ask you to pass that amendment as written.

COMMISSIONER COLEMAN: A question. Do you have a sense -- or does your organization have any comment on the proposal to increase it to 15 beds?

MS. SNYDER: Although we don't represent those types of buildings -- we generally represent six beds or less -- I would agree that there are not that many 10- to 15-bed facilities that are out there. And I think -- and they have the same concerns and same frustrations as the six beds or less. They are trying to give flexibility to their employees. They're trying to create a home-like environment with their -- with their residents. They're having the financial problems just like the six-beds. So, although I can't speak to that because that's not who we work with, I would -- I would actually say that the 15 beds should be included.

COMMISSIONER COLEMAN: All right. Thank you.

Next speaker, Jim Burton.

MR. BURTON: Good morning.


MR. BURTON: I'm Jim Burton, executive director of the Regional Center for the East Bay. As such, I have the responsibility to serve 12,000 people with developmental disabilities in Alameda and Contra Costa Counties. Approximately 1,500 of our consumers reside in community care facilities affected by Wage Order 5.

I wanted to speak specifically about the need for this exemption to Wage Order 5 for our service providers, community care facilities. The rates for these programs are substandard, have been for a very long time. Direct care staff wages are substandard and need to be adjusted, and we need to continue to work together to find ways of impacting both of those issue.

But the state rates for our service providers remain at abysmally low levels. And until we're able to impact that and have some -- get some changes to that, our service providers really have no options when it comes to the pay rates for their staff.

In terms of 7- to 15-bed facilities, I wanted to give you some information -- I just got it a few moments ago -- about the numbers statewide. There are about -- I haven't done the math yet, but I'll provide you with a report -- there are over 200, about 225 community care facilities between -- with a size of 7- to 15-bed capacities. Certainly that's a much smaller number than the zero to six capacity, but it is substantial. And those facilities face exactly the same difficulties that a community care facility serving six consumers face. They have the same -- the same methodology that was used to set the rates for a six-bed facility is used to set a 7- to 15-bed. And I would ask that you keep that in mind in considering this exemption.

I also wanted to speak about the specific problems that we face in the Bay Area, and why you may hear more from Bay Area high-cost areas on this issue. State rates for our services remain the same throughout the state. And in the San Francisco Bay Area, it is -- cost of living is not accounted for in state rates. At the Regional Center of the East Bay, the two counties that we serve, our cost of living is 25 percent above average. And so the difficulties that our providers face is that they're at a 25 percent disadvantage in the amount that they -- the purchasing power that they have with the money that they receive.

In this -- in San Francisco and in San Mateo and Marin Counties, those are the three highest-cost counties in the Bay Area, and those costs can be 50 percent and higher than the state rates. And again, there's no adjustment in the state rate system for that. So providers in the Bay Area are deeply affected by this.

I appreciate your willingness to continue to work on this issue. Thank you.


COMMISSIONER ROSE: Now, you say that the state rate -- is that what we're talking about? SSI?



MR. BURTON: Sorry. The state rates that are established for community care facilities, which includes the SSI, but it's a total rate.


MR. BURTON: That, in California, is set under a system called the Alternative Residential Model, ARM system, and that's where you -- what was described earlier -- Level 2, Level 3. It's a differing rate based upon the needs of the consumers served.

COMMISSIONER ROSE: Is that published somewhere?

MR. BURTON: Pardon?

COMMISSIONER ROSE: Is that published somewhere?

MR. BURTON: Yes. It's in Title 17 of the California Administrative Code.

COMMISSIONER ROSE: Going to make me do -- go to

-- do my homework, huh?


COMMISSIONER COLEMAN: Of these 200 to 225 additional facilities, do you have a sense of how many workers that would affect, how many workers would be employed by those facilities?

MR. BURTON: Boy, just looking at the numbers -- I'm sorry -- I just got these at 9:15 this morning --


MR. BURTON: -- so I haven't really done the calculations. And they're pretty evenly spread, from a 7-bed facility to a 15-bed facility.

The number of staff are determined and required based upon the level of consumer service. So consumers that require Level 2 service, for instance, have a -- basically, a one-to -- one staff person to six consumers in the home. A Level 3 facility would be one staff person for three consumers in the home. And Level 4, there are actually a wide range of rates based upon the level, and those are primarily homes serving people with severe behaviors.

COMMISSIONER COLEMAN: Okay. So there's no average number that you could -- that you could give, sort of back a back of the envelope, at this point, because you don't know what levels necessarily are served within those.


COMMISSIONER COLEMAN: Okay. That would be useful information, if you're able to get that to us.

MR. BURTON: Yes. We are.

COMMISSIONER ROSE: Yes, very much so.


Tony Martinho.

MR. MARTINHO: Good morning.


MR. MARTINHO: My name is Tony Martinho. I'm a care provider and the vice president of the Association of California Care Operators.

And I think there's not much that I can add than what my colleagues have been talking about, except that nobody mentioned that even facilities with a 15 -- or even facilities with a six, that's not a fact that -- well, sometimes, like myself, I have a facility for six, I only have four consumers. I cannot definitely pay overtime to my staff. I have to work there myself. That's one. And the same thing happened to all facilities with 17 or 15 consumers. It doesn't make any difference. The clients are moving out, and because they are licensed for 15 doesn't mean they have 15. But they mostly -- they have to keep the same employees, something like -- for instance, my Level 2, I have one for six. I lost four -- I'm sorry -- I lost two clients -- I only have four. What am I going to do? I'm going to fire my employee? I can't. And that's why I have to pay him the same amount. You know, and that's -- the other facilities, Level 3's, Level 4's, and, you know, they have the same problems.

Now, we're not just looking at what the fixed rate for a facility, you know, and say, "Here it is, $10 for you, counting the facility." No, it's by consumer. And that's more the figure that they want -- the people and this Commission and everybody else knows about it. Nobody's been discussing that situation. Other than that, I cannot add anything else on what everybody's been telling you.


COMMISSIONER ROSE: I have a question.


COMMISSIONER ROSE: I'm still trying to get back to -- in other words, you get a certain dollar amount from the state, and then from the federal government, kind of like SSI or that -- SRP? Is that correct?

MR. MARTINHO: Yes. The rates are established through the government. The SSI comes in mixed with the other money that comes from the state. They're all -- the rate for Level 2 is one, Level 3 is another -- established, not -- no difference. We don't receive any extra money from nowhere.

COMMISSIONER ROSE: So for each person at your facility, you're only getting $860, something like that, whatever it is?

MR. MARTINHO: That's part of the SSI.

COMMISSIONER ROSE: Right. That's all you get.

MR. MARTINHO: No, no. That's -- you talked about mentally ill people. Our facilities, they are -- we get extra money from the state for -- you know, from different

-- the services we service.

COMMISSIONER ROSE: Okay. I'm trying to get -- what do you get paid per person?

MR. MARTINHO: Again, like I said, it depends on the level of the facilities. Every facility at Level 2, Level 3, is -- or Level 4, they get different rates.


COMMISSIONER COLEMAN: And it's paid by a consumer from the state.

MR. MARTINHO: Well, the regional center is the one that gives us the money, but, of course, it comes from the state.


MR. MARTINHO: And then the consumer -- the SSI will pay us. When they receive the SSI, they pay, at the beginning of the month, a portion of the rent.


MR. MARTINHO: But that -- like I said, it doesn't cover anything regardless, because if I lose two consumers

-- some other people lose more -- and we still have to keep the employee. And this is about -- twenty years ago, there was an increase for our -- toward the employees. The government gave some money for the employees, which was -- it happened two years in a row. And now the rates are based on that six -- six consumers. And if we lose two consumers, now we lost the money to pay the employee. I cannot go to my employee, tell him, say, "Hey, I lost the money; I'm going to cut you down." I have to be working there myself, or my wife, or something like that -- but I have no wife any longer. But with your help, we're probably going to be able to survive.


Those are all the cards that I have.

MS. CUNNINGHAM: Oh, I wanted to say -- can I

just --


MS. CUNNINGHAM: Shea Cunningham again, from SEIU.

Just since I have some of the data right here, just for your edification, the -- Mr. Burton definitely is correct about the 225 facilities. And those are developmental -- DD facilities, developmentally disabled service in the community care facilities.

If you include -- well, I should say that based on the ratio that we're using --


MS. CUNNINGHAM: -- the worker estimate, of 1.25 to one --


MS. CUNNINGHAM: -- that would be about 1,757 workers.


MS. CUNNINGHAM: And if you include the mentally ill facilities and the elderly facilities, that is 944 facilities and would possibly be impacting about 7,373 workers.



COMMISSIONER COLEMAN: Okay. Well, with that, any final comments?



COMMISSIONER ROSE: That's it. I move we


COMMISSIONER COLEMAN: All right. So moved. First -- I'll second.

All in favor?



All right. Thank you very much.


COMMISSIONER COLEMAN: Should we let folks know when the next meeting is?

MR. McCONKIE: Monday, the 21st, in San Diego.

COMMISSIONER COLEMAN: And then the one after that is in Sacramento.

MR. McCONKIE: The 24th, Thursday, in



COMMISSIONER ROSE: And if anybody has any type of calculations or any information to pass on, please make sure it makes it to the Sacramento meeting, you know, in plenty of time so they can get it out to us.

COMMISSIONER COLEMAN: Preferably in advance.

COMMISSIONER ROSE: I do read all my mail, so --


COMMISSIONER ROSE: -- I'll be reading this.

COMMISSIONER COLEMAN: Thank you very much.


(Thereupon, at 10:49 a.m., the public hearing was adjourned.)




I, Cynthia M. Judy, a duly designated reporter and transcriber, do hereby declare and certify under penalty of perjury under the laws of the State of California that I transcribed the tape recorded at the Public Hearing of the Industrial Welfare Commission, held on April 17, 2003, in San Francisco, California, and that the foregoing pages constitute a true, accurate, and complete transcription of the aforementioned tape, to the best of my ability.

Dated: April 17, 2003 ______________________________