Approve and authorize the Chairman to sign the In-Home Supportive Services - Public Authority Rate Modification Application for submission to the California Department of Social Services to increase the In-Home Supportive Services provider hourly rate to $11.90 (comprised of hourly wage $10.50, administrative cost $0.15, employer paid payroll taxes $1.25) effective January 1, 2017.

The California Department of Social Services (CDSS) requires the submission of a Rate Modification Package whenever changes are made to any component of the In-Home Supportive Services (IHSS) hourly rate calculation. The proposed rate reflects the minimum wage increase to $10.50 per hour, payroll taxes of $1.25 per hour, and the hourly administration cost increasing to $0.15 per hour, which reflects the Fiscal Year (FY) 2016-17 In-Home Supportive Services-Public Authority (IHSS-PA) budget. The recommended action will allow the Health and Human Services Agency to formally submit its rate modification package to CDSS.

State statute requires counties, as the employer of record for IHSS providers, to develop a rate in order to establish an hourly reimbursement level for the PA. The rate is calculated by combining the IHSS provider hourly wage, payroll taxes, and the PA administrative costs.  The hourly administrative costs are derived by dividing the total PA budget by the total projected paid IHSS hours for the year.  The rate package documents the maximum direct and indirect operating expenses of the PA, including provider wages that will be paid by the State.  The FY 2016-17 IHSS-PA administrative cost rate is $0.15 per hour, representing total of expenditures in the FY 2016-17 budget of $514,252 divided by an estimated 3,449,166 provider hours.  Reconciliation is completed quarterly to determine actual administrative costs and revenue is adjusted accordingly by the state.

Although submission of a Rate Modification Application is mandated with any change in wages, the Board could delay the submission to CDSS.  The State requires up to 60 days to review and approve a rate/wage increase.  A delay in submission could potentially affect the implementation of and reimbursement for the IHSS rate change.

CDSS provided technical assistance in helping to determine the rate and complete the submission process.  The County Administrative Office reviewed the recommendation.

In FY 2011-12, the state implemented a Maintenance of Effort (MOE) for county cost in the IHSS program.  The MOE automatically increases by 3.5% per year beginning in FY 2014-15 without regard to actual costs incurred.  The IHSS program is funded by a combination of state and federal funds with the local share of cost coming from 1991 Social Services realignment and County General Fund.  There is no additional General Fund impact associated with approval of the recommendation.