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HomeMy WebLinkAbout2024 HHSB Training MaterialsLegal Basics for Consolidated Human Services Boards Kristi A. Nickodem Plan Why?•Why do we have CHS governing boards? Who?•Who serves on a CHS board? Where?•Where are the different types of human services boards across the state? What?•What does a CHS board do? What does the CHSA director do? How?•How does the CHS board carry out its business? WHY? The legal framework for CHS boards Legal Framework Consolidated human services boards State Constitution Statutes regarding public health boards Ex: G.S. 130A-35 Consolidated human services board statutes G.S. 153A-77; G.S. 108A-15.1; G.S. 130A-43 Statutes regarding social services boards Ex: G.S. 108A-1 Grants all powers and duties of PH and DSS boards, except cannot: Appoint the human services director Transmit or present the agency’s budget State law requires counties to: Social Services •Have a county social services board •Administer mandated social services programs under supervision of county social services director •Provide adequate facilities for social services department •Fund part of the cost of social services programs •Comply with state law & policy Public Health •Have a local board of health •Provide, contract for, or certify available mandated public health services (some must be under direction of local health director and the supervision of the local board of health) •Be accredited by the North Carolina Local Health Dept. Accreditation Board •Fund part of the cost of local public health programs •Comply with state law & policy 5 State/County Relationship State •Develops law and policy to shape programs •Transmits federal and state funding to counties •Supervises county administration County •Administers programs •Allocates funding •Hires/supervises staff •Develops some county-specific programs Social Services •Develops law and policy to shape programs •Administers statewide public health programs •Transmits federal and state funding to local agencies •Assures accreditation requirements are met •Adjudicates disputes (OAH) County/DistrictState •Administers programs, including providing public health services •Allocates funding •Hires/supervises staff •Develops some county or district specific programs •Engages in rulemaking and fee-setting •Adjudicates disputes Public Health State Oversight and Rulemaking DHHS Division of Social Services Social Services Commission Child Care Commission Division of Public Health Commission for Public Health NCLHD Accreditation Board WHO? The Composition of the CHS Board Compare and Contrast Traditional DSS Board •3 or 5 members •2 appointed by BOCC; 2 by SSC; 1 by members •No composition requirements •3-year terms CHS Board •Up to 25 members •All appointed by BOCC •Composition requirements for some positions •4-year terms Traditional Board of Health •11 members •All appointed by BOCC •Composition requirements for most positions •3-year terms True or False? •A consolidated human services agency’s governing board must include a county commissioner •A consolidated human services agency’s governing board must include a psychologist Who is on the CHS Board? Up to 25 people, including: •One county commissioner •Four consumers of human services •Eight professionals: psychologist, pharmacist, engineer, dentist, optometrist, veterinarian, social worker, registered nurse. •Two physicians licensed to practice medicine in NC (one must be a psychiatrist) •Up to 10 others, “including members of the general public representing various occupations.” Board must “reasonably reflect the population makeup of the county.” Qualifications •Legal resident of county•No minimum length of residency required•May be “part-time” resident or work in another county •Certain CHS board members must meet professional qualifications •Additional legal qualifications may be established by board of county commissioners •Term Limits –four years, can only serve two consecutive terms•County commissioner member may serve only as long as he or she remains a county commissioner. Multiple Office Holding Limits •No person may concurrently hold more than •Two appointive public offices or •One elective and one appointive public office •Appointment of county commissioner •Is “ex officio” •Doesn’t “count” as separate office 13 Incompatible Office Holding Office Office 14 •May not hold two incompatible offices •Offices are incompatible if: •Conflict between functions or duties •One is subservient to other May a board member serve as acting or interim director? Other Potential Conflicts •Board member who is licensed foster parent •May not be supervised by or accept placements from resident county •Board member (or spouse) who owns or operates nursing or adult care home •May not receive Medicaid or Special Assistance payments 15 WHERE? Human Services Agency Organization and Governance Across North Carolina Board of County Commissioners as a DSS Board Department of Social Services Board of County Commissioners Consolidated Human Services Board Consolidated Human Services Agency Governance Models Available to Counties –Social Services Example Board of County Commissioners as a Consolidated Human Services Board Consolidated Human Services Agency Board of County Commissioners Appointed DSS Board Department of Social Services OPTION A OPTION B OPTION C OPTION D * If public health affected, must appoint health advisory committee Key Differences BOARD DIRECTOR EMPLOYEES DSS w/ DSS Board Appointed; 3-5 members Board hires SHRA Health Dept. w/ Board of Health Appointed; 11 members Board hires SHRA BOCC as DSS and/or PH Board Elected*BOCC hires SHRA CHSA with CHS Board Appointed; up to 25 members County manager hires with advice & consent of CHS board SHRA Optional CHSA with BOCC as CHS Board Elected*County manager hires with advice & consent of BOCC SHRA optional Traditional Model Options Available Since 2012 to Counties with a County Manager Not consolidated Consolidated human services agency (CHSA) with a consolidated human services board (Wake) CHSA with BOCC as governing board (Mecklenburg) PH and SS Organization and Governance June 2012 19 SS & PH agencies with appointed governing boards Option 1 with both SS & PH agencies governed by BOCC (Graham, Cleveland, Sampson) Option 1 with SS agency governed by BOCC, PH agency with appointed governing board (Cherokee, Ashe, McDowell, Mitchell, Watauga, Wilkes, Surry, Columbus) Option 1 with PH agency governed by BOCC, SS agency with appointed governing board (Pamlico) Option 2 with consolidated HS agency including SS & PH, appointed CHS board (Haywood, Buncombe, Polk, Gaston, Davie, Union, Forsyth, Stanly, Rockingham, Wake, Nash, Edgecombe, Carteret, Dare, New Hanover) Option 3 with consolidated HS agency including SS & PH, governed by BOCC, health advisory committee (Clay, Swain, Alexander, Yadkin, Mecklenburg [no advisory comm.], Guilford, Montgomery, Richmond, Bladen, Brunswick, Pender, Onslow) Option 3 with consolidated HS agency including SS & other human services but not PH, governed by BOCC (Cabarrus) PH and SS Organization and Governance As of February 2022 WHAT? Powers and Duties of the CHS Board and the CHS Director Powers and Duties Determined by State law Statutes enacted by General Assembly Administrative rules adopted by Social Services Commission and the North Carolina Commission for Public Health Ordinances adopted by county commissioners 22 Powers and Duties What powers of the DSS Board and Board of Health does the CHS Board NOT have? CHS Board Powers and Duties Powers and duties of the CHS Board Advise and consent to hiring/firing of director Plan and recommend a CHSA budget Assure compliance with laws related to State and federal programs Recommend creation of human services programsPerform public relations and advocacy functions Conduct audits and reviews of human services programs, including quality assurance activities Develop dispute resolution procedures for human services contractors, clients, and public advocates Advise local officials through the county manager Powers and Duties Acquired from Board of Health •Make policy for local public health agencyPolicy •Adopt local public health rulesRules •Adjudicate disputes regarding local rules or locally imposed public health administrative penalties (fines)Disputes •Impose local public health feesFees •Satisfy state accreditation requirements for local boards of health Accreditation CHS Board Powers and Duties –Public Health Duty -Accreditation •In order to receive state and federal public health funds, local health departments must obtain and maintain accreditation under North Carolina’s accreditation system (G.S. 130A-34.1; 130A-34.4). •Assesses capacity to provide the ten essential public health services •NCLHD Accreditation Board -Health Department Self-Assessment Instrument (HDSAI) Interpretation Document •Explains Accreditation Board’s interpretation of rules (10A NCAC Chapter 48) •Identifies evidence to be used to satisfy the activities specified in the rules •Includes BOH/CHS Board training requirements Power –Public Health Rulemaking What is a local public health rule? A local law that is necessary to protect or promote public health, and that is adopted by the CHS board. Applies to jurisdiction covered by the local board, including within municipalities. Has the “force of law” –there are legal means to enforce the rule against those who do not comply. Can prohibitresidents from doing something OR require residents to do something Limitations on subject matter: Statutory Peedin test State preemption of local authority A local rule may be more stringent than state public health rules if necessary to protect public health Public Health Training https://sph.unc.edu/nciph/nciph-boh-rulemaking-authority/ https://sph.unc.edu/nciph/nciph-boh-roles-respon/ Powers and Duties Acquired from Board of Social Services Inspect Records Authority to inspect social services and public assistance records Program Decisions Authority to make some decisions related to Work First, Special Assistance, and services funded through Social Services Block Grant (can be delegated to director) Review Fraud Review suspected cases of fraud for some public assistance programs (can be delegated to director) Provide Advice Advise county and municipal authorities in developing policies and plans to improve the social conditions of the community CHS Board Powers and Duties –Social Services Power -Access to Social Services Information Access •Board members may inspect records relating to applications for and provision of public assistance and social services (see G.S. 108A-11) Protect •Board members may not disclose any information acquired by examining such records Limits •Board’s right of access may be limited by some state confidentiality laws and federal funding requirements SOG Blog Post on Coates’ Canons: https://canons.sog.unc.edu/access-confidential-records-social-services-governing-boards/ Duty -Confidentiality Most individually identifiable information held by social services is confidential under law Exceptions allow sharing with law enforcement, courts, schools, health care and other service providers, government oversight, etc. Most individually identifiable health information held by public health is confidential under law Exceptions allow disclosures to facilitate provision of health care, or for important public policy purposes, including disclosures to public health for disease control purposes, disclosures to DSS for protective services, disclosures for court proceedings, etc. Powers and Duties of CHSA Director •Appoint CHSA staff with county manager’s approval •Administer state & local human services programs •Act as secretary and staff to CHS board •Plan CHSA budget •Advise BOCC through the county manager •Perform regulatory functions of investigation & enforcement of state and local health regulations •Act as agent of and liaison to the State •Appoint an individual with local health director qualifications (with county manager’s approval) •Exercise (or delegate, when permitted) legal powers & duties of local health director and director of social services Other Powers and Duties of the CHS Director •Administer public health programs & enforce PH laws •Employ PH remedies, including abating PH nuisance, imposing fines in some instances, seeking misdemeanor charges, food embargo •Investigate & control spread of communicable disease •Order isolation or quarantine •Rabies control activities •Disseminate PH information and protect health Examples of Local Health Director Powers & Duties •Administer public assistance and social services programs •Serve as guardian of incompetent adults •Serve as temporary guardian of minor children •Serve on community child protection team, child fatality prevention team, & juvenile crime prevention council •Arrange disposition of unclaimed bodies •Issue youth employment certificates •Perform functions specified in local emergency management plans Examples of Social Services Director Powers & Duties HOW? Laws Governing How the CHS Board Operates CHS Board Business CHS Board Chair •Must be elected annually by members of the CHS Board. CHS Board Actions •For purposes of voting or otherwise making decisions as a board, a majority of the members constitutes a quorum. Removal of CHS Board Members •A board member may be removed for: •Commission of a felony or other crime involving moral turpitude; •Violation of a State law governing conflict of interest; •Violation of a written policy adopted by the county board of commissioners; •Habitual failure to attend meetings; •Conduct that tends to bring the office into disrepute; or •Failure to maintain required qualifications for appointment. 35 County commissioners (not CHS board) have removal authority •Open meetings law applies to “official meetings” of “public bodies” •Law requires notice and access •“Official meeting”: •A majority of the members •Gathering simultaneously in person or electronically •To conduct a hearing, deliberate, vote or otherwise conduct public business •Be careful about email exchanges and other electronic group communication •Public bodies must create and retain minutes of meetings and general accounts of closed sessions. •Minutes and general accounts are public records, but may be withheld from public to the extent necessary to avoid frustrating the purpose of the closed session. Open Meetings Law -Basics Open Meetings –Closed Sessions Limited authority to meet in closed session •Preserve confidentiality of records •Preserve attorney client privilege •Consider performance, qualifications, appointment, of public employees and public officers (not members of the board itself or other boards) •Matters involving alleged criminal misconduct *Partial list: See G.S. 143-318.11 for complete description Must occur as part of a meeting that complies with the notice and access requirements of the Open Meetings Law. Motion made in open session must state the purpose of the closed session. •Special rules for: •Preservation of confidential records: Must cites the law that makes the record confidential. •Attorney-client privilege: If there is litigation, must identify the parties. Open Meetings -Notice •Chair or three of the members may call special meeting on 48 hours written notice (G.S. 153A-77(c)). •KEEP IN MIND: Special notice requirements apply to public health rulemaking; must be provided in addition to notice required under the Open Meetings Law. See G.S. 130A-39(d). Open Meetings •Comply with notice and access requirements •Do not conduct board business outside of meetings, even in the interest of efficiency •Closed sessions are allowed only for specific purposes •Minutes (or general accounts for closed sessions) are always required Key points to remember True or False? Emails sent from your private email account are not subject to the public records law Text messages sent from your personal cell phone are not subject to the public records law Public Records –Chapter 132 of the General Statutes Any record made or received in the transaction of public business is subject to public access unless an exception applies. It’s the CONTENTof the record, not its location, that determines whether it is a public record. Records created on personal devices or accounts are public records if the content involves public business. Records created on government devices or accounts are not public records if the content does not involve public business. Public Records Right of access requires providing records: •to anyone who requests them •to inspect or receive a copy •regardless of why they want them •in the medium requested if possible •“as promptly as possible” Two types of exceptions: •May release, but not required to when the law says ”not public records” •Examples: Criminal investigation, economic development information •Shall not release when the law says “confidential” •If not, no disclosure is required. •If yes, continue to question 2. 1. Does a record exist that corresponds to the request? •If not, disclosure is not required. •If yes, continue to question 3. 2. Is the record “made or received in the transaction of public business?” •If not, the requested access must be provided. •If yes, continue to question 4. 3. Is there an exception that applies? •If a prohibition applies to the entire record, do not disclose; if it applies only to certain information, redact and disclose. •If no right of access, but release is not prohibited, determine whether to release the record (in its entirety or redacted). 4. Does the exception apply to the entire record, or only to certain information? Does it prohibit disclosure or does it deny the right of access? Public Records Requests: Framework for Response Records Retention Records retention schedules dictate what must be kept and how long it must be retained. Schedules must be approved by the local governing board before they can be used to authorize the destruction of public records. Records of “transient” value need not be retained •Personal messages (including electronic mail) not related to official business. •Records that do not contain information necessary to conduct official business, meet statutory obligations, carry out administrative functions, or meet organizational objectives. Schedules: https://archives.ncdcr.gov/government/local Public Records •“In connection with the transaction of public business” is the trigger •Retention requirements apply •General rule is that the public record must be made available upon request unless an exception applies •Many records held by a CHSA will be confidential and not subject to disclosure Key points to remember True or False? You cannot be sued for anything related to your work on the CHS board because you are a public official. Liability: Key Points to Know •Is a lawsuit against the county •In some cases, State Tort Claims Act could also involve the state as a defendant Lawsuit against CHSA or the Board •“Official capacity” = county •“Individual capacity” = you (or director or CHSA employee) Official v. Individual Capacity •Provides protection in “individual capacity” suits for alleged negligence under state law •Must be engaged in a discretionary act Public Official Immunity •May provide protection in certain circumstances for lawsuit under 42 U.S.C. 1983 Qualified Immunity Immunity: Always has limitations and exceptions Liability –Open Meetings Anyone who believes that the board has violated the state’s Open Meetings Law may file a lawsuit against the board in district or superior court. Injunction may be issued. Any action taken by the board in violation of the law can be declared null and void. If board member knowingly or intentionally violated the law, member could be ordered to personally pay all or part of the plaintiff’s attorney’s fees. No plaintiff’s attorneys’ fees owed if board member or the board followed the advice of an attorney regarding the board’s actions. Liability –Criminal Law A CHS board member could be subject to criminal liability for: •Unlawfully disclosing confidential social services information •Disrupting an official meeting of the CHS board •Threatening or assaulting other board members, the CHSA director, or CHSA employees •Embezzling county funds •Willfully failing to discharge his or her duties as a board member •Unlawfully receiving a direct benefit from a contract that involves the CHSA Liability -Consequences Potential consequences of agency misconduct Loss of federal funding Potential DHHS takeover Monetary verdict against county Monetary verdict against the state Loss of community trust Ethics Distinguishing Legal Requirements from Ethical Standards •What is a legal requirement? •What is an ethical standard? A legal requirement is a floor, not a ceiling. Remember that public perception matters. Ethics -Basics Act in the public interest and for the public good, not for your own private benefit. Avoid using position on the board to promote partisan political platforms, parties, or candidates. Cannot use position to influence the CHSA director to hire, promote, or provide preferential treatment to the board member’s spouse or any other relative. Making a Contract –G.S. 14-234(a1)(2)-(3) Making or administering a contract A public officer or employee is involved in making or administering a contract if: 1.He or she oversees the performance of the contract; or 2.He or she has the authority to make decisions regarding the contract or interpret the contract; or 3.He or she participates in the development of terms or in the preparation or award of the contract. Be Careful with Contracts –G.S. 14-234(a) Someone involved in making or administering a contract Direct benefit to you or your spouse Class 1 Misdemeanor Attempt to influence You are involved in making or administering a contract Direct benefit to you or your spouse Class 1 Misdemeanor and Void Contract* Solicit or receive a gift or favor Class 1 Misdemeanor Attempt to influence Someone involved in making or administering a contract YES YES YES YES NO NO NO NO Did you: Attempt to influence the award of a contract under which you or your spouse directly benefit? OR Solicit or receive a gift, favor, reward, or service in exchange for influencing (or attempting to influence) the award of a contract even if you or your spouse don’t directly benefit under that contract? YES G.S. 14-234 2. Do you or your spouse receive a prohibited benefit directly under that contract? 1. Is there a contract between you or your spouse and your unit of government? No Conflict 3. Are you involved in making or administering that contract? No Conflict No Conflict STOP! Class 1 misd. Void contract 4. Does an exception apply? No Conflict Ethics -Conflicts of Interest in Contracting Only: PhysicianPharmacistDentistOptometristVetNurse Board of Commissioners Board of Education Mental Health DSS Health County with no city populationover 20,000 Mental Health DSS Health “Small Jurisdiction” Exception G.S. 14-234(d1) Total contract amount must be under $60,000 in a 12-month period ($20,000 for medical services). •Must meet certain procedural requirements, including no participation or voting by conflicted official. Ethics •Use your position to serve the public, not to promote yourself or a political platform •Be careful of conflicts of interest in contracting •It is unlawful to: •Directly benefit from contract if involved in making or administering contract •Attempt to influence person making or administering a contract for benefit of official •Solicit or receive a gift or reward for recommending or influencing award of contract by public agency Key points to remember Want to learn more? Coates’ Canons –NC Local Government Law Blog https://canons.sog.unc.edu/ NC Human Services Hub https://humanservices.sog.unc.edu/ Questions? Kristi Nickodem UNC School of Government 919.962.2762 nickodem@sog.unc.edu 1 © 2022. School of Government. The University of North Carolina at Chapel Hill. North Carolina Human Services Agencies: Options For Organization And Governance Kristi Nickodem In 2012, the North Carolina General Assembly passed Session Law (“S.L.”) 2012-126, which provided counties with new options regarding organization and governance of their human services functions. Specifically, S.L. 2012-126, which amended G.S. 153A-76 and G.S. 153A-77: 1. Allowed any Board of County Commissioners (“BOCC”) in a county with a county manager appointed pursuant to G.S. 153A-81 to combine two or more human services functions into a single consolidated human services agency (“CHSA”); and 2. Allowed any BOCC to directly assume the powers and duties of one or more of the governing boards responsible for overseeing a local human services agency (i.e., the local board of health, county board of social services, or consolidated human services board).1 Prior to the enactment of S.L. 2012-126, only counties with a population of at least 425,000 could create a consolidated human services agency2 or have the BOCC assume and exercise the powers and duties of a county social services board or a consolidated human services board.3 For more information on the process of creating a CHSA, please see “Considerations When Creating a Consolidated Human Services Agency.” Kristi A. Nickodem is an assistant professor of public law and government at the UNC Chapel Hill School of Government. Her areas of expertise include the organization and governance of human services agencies, powers and duties of social services directors, and confidentiality of social services information. This resource draws upon the work of the author’s colleagues, Aimee Wall and Jill Moore, who have spent years providing guidance to North Carolina counties regarding the organization and governance options for human services agencies. The author is indebted to Wall and Moore for their legal analysis and insight on this topic. 1. Amendments to G.S. 153A-76 prohibit county commissioners from abolishing and assuming the powers and duties of any of the following: (i) An area mental health, developmental disabilities, and substance abuse services board (though a grandfather clause provides an exception for Mecklenburg county, at G.S. 153A-76(6)); (ii) a public health authority assigned the power, duties, and responsibilities to provide public health services as outlined in G.S. 130A-1.1.3; (iii) a public hospital authority authorized to provide public health services under S.L. 1997-502.4; or (iv) a public hospital as defined in G.S. 159-39(a). 2. Wake County and Mecklenburg County were the only counties that opted to create consolidated human services agencies prior to the enactment of S.L. 2012-126. 3. Mecklenburg County was the only county that elected this option prior to the enactment of S.L. 2012-126. 2 North Carolina Human Services Agencies: Options For Organization And Governance © 2022. School of Government. The University of North Carolina at Chapel Hill. Options For Human Services Agency Organization And Governance A. Separate Agencies with Appointed Governing Boards Organization. Human services agencies (such as a local health department and county department of social services) remain separate. Governance. Local appointed governing boards oversee the county’s local human services agencies (i.e. local board of health and county board of social services). B. Separate Agencies with Partial or Full BOCC Governance Organization. Human services agencies (such as a local health department and county department of social services) remain separate. Governance. The BOCC directly assumes the powers and duties of one or more of the governing boards responsible for overseeing a local human services agency (i.e., local board of health and/or county board of social services).a C. CHSA with Appointed CHS Governing Board Organization. The BOCC creates a new CHSA by combining two or more human services functions, departments, or agencies. Governance. The BOCC appoints a new consolidated human services (“CHS”) board that serves as the CHSA’s governing board. D. CHSA with BOCC Governance Organization. The BOCC creates a new CHSA by combining two or more human services functions, departments, or agencies. Governance. The BOCC becomes the CHSA’s governing board when it directly assumes the powers and duties of the CHS board. a. In some counties, the BOCC governs all human services agencies, while in others, the BOCC has only assumed governance of one agency while leaving another under the control of an appointed governing board. Additional Decisions for North Carolina Counties Under S.L. 2012-126 Personnel Decisions for CHSAs: As a general rule, employees of county departments of social services and local health departments are county employees but are subject to the State Human Resources Act (“SHRA”). When a county creates a new CHSA by electing either Option C or Option D described above, the employees of the new agency are removed from SHRA coverage and become subject to county personnel policies, unless the BOCC affirmatively elects to keep them under the SHRA. If the employees are not kept under the SHRA, the county’s personnel policies for CHSA employees must comply with the federal merit personnel standards.4 For more information on the federal merit personnel standards and the personnel decisions involved when creating a CHSA, please see “Personnel Decisions for North Carolina’s Consolidated Human Services Agencies.” Functions to Include in a CHSA: G.S. 153A-77(b)(3) authorizes a county to create a CHSA to “carry out the functions of any combination of commissions, boards, or agencies appointed by the board of county commissioners or acting under and pursuant to the authority of the board of county commissioners.” Counties can choose which human services functions to include in a CHSA. The term “human services” is undefined in the law. CHSAs may incorporate local health departments and/or departments of social services, but other departments and agencies may also be involved 4. The federal merit personnel system standards are found at 5 CFR § 900.603. North Carolina Human Services Agencies: Options For Organization And Governance 3 © 2022. School of Government. The University of North Carolina at Chapel Hill. (such as local departments focused on veterans, aging populations, or transportation). 5 There are, however, some limitations. A CHSA may not include: 1. A local management entity (“LME”) involved with mental health, developmental disabilities, and substance abuse services (with the exception of the CHSA serving Mecklenburg County); 2. A public health authority assigned the power, duties, and responsibilities to provide public health services as outlined in G.S. 130A-1.1; 3. A public hospital authority authorized to provide public health services under S.L. 1997-502; or 4. A public hospital as defined in G.S. 159-39(a). Advisory Committees for Some Counties Electing BOCC Governance: If a BOCC decides to assume the powers and duties of either a local board of health or a consolidated human services board (where the CHSA includes public health), it must appoint an advisory committee for public health. 6 The committee membership must, at a minimum, meet the requirements for a county board of health found in G.S. 130A-35. 7 It may also include more members. For example, if a CHSA will include a department of social services, this advisory committee could have a broader scope and include people with social services expertise or interests. The BOCC also has the option of appointing a separate advisory committee for social services or other issues, but that is not required by law. 8 The law does not specify whether the public health advisory committee needs to be appointed before the BOCC assumes the powers and duties of the local board of health or consolidated human services board. Other Organization and Personnel Options for Local Public Health and Social Services Agencies in North Carolina District Health Departments: Counties can opt to create a district health department, which is a multi-county agency that provides local public health services for the residents of all counties in the district. 9 A district health department may be created upon agreement of the county commissioners and the boards of health of two or more counties. 10 A county may join an existing district health department upon a similar agreement entered by each affected county. A district health department is governed by a single board of health and administered by a single health director. 5. To date, all CHSAs formed across the state have included departments of social services, though not all CHSAs have included local health departments. There is, however, no requirement that a CHSA incorporate a county’s department of social services. 6. The requirement for a health advisory committee applies only to counties that abolish their health boards after January 1, 2012. This amounts to an exception for Mecklenburg County, which abolished its boards (a county board of health, and subsequently a consolidated human services board) before that date. 7. Per G.S. 130A-35, a county board of health must include a physician, a dentist, an optometrist, a veterinarian, a registered nurse, a pharmacist, a county commissioner, a professional engineer, and three representatives of the general public. 8. See G.S. 153A-77(a). 9. There are currently six district health departments in North Carolina. 10. G.S. 130A-36. 4 North Carolina Human Services Agencies: Options For Organization And Governance © 2022. School of Government. The University of North Carolina at Chapel Hill. Public Health Authorities: Counties can opt to create a public health authority (PHA) to provide public health services. A PHA may be organized as either a single county or a multi-county agency. It is a government entity that is independent of the county. To create a single county PHA, both the BOCC and the local board of health must adopt a joint resolution that it is in the interest of the public health and welfare to provide public health services to the community through a PHA.11 To create a multi-county PHA or join an existing PHA, the boards of county commissioners and local boards of health in all participating counties must adopt a similar joint resolution. A PHA, whether single or multi-county, is governed by a PHA board and administered by a PHA director. Public Hospital Authority: In Cabarrus12 County, public health services are provided through a “public hospital authority.” Special legislation was enacted in 1997 that allowed for this unique arrangement. 13 This option for providing public health services is only available to Cabarrus County. Regional Departments of Social Services: As of March 2019, North Carolina counties have authority to voluntarily join together to create regional departments of social services. 14 To date, no counties have opted to create a regional department of social services. If counties choose to create a regional department, the regional department would be a “public authority,” which is a separate legal entity from the counties involved. 15 For example, the regional department would have its own director, governing board, personnel, and budget. The regional department could include all social services programs or just a subset of such programs. For example, the regional department could focus exclusively on adult services (such as adult protective services and guardianship), economic services, child welfare, or child support enforcement. This authority is similar to the authority available to counties to establish district health departments under G.S. 130A-36. Shared Director for Social Services Agencies: North Carolina law authorizes two or more county social services boards to employ one person to serve as the social services director of two or more participating counties. 16 Currently, no one serves as the social services director for two or more counties in North Carolina. “Substantially Equivalent” Personnel Systems: Counties can remove social services and public health employees from certain aspects of SHRA coverage without creating a CHSA. This is accomplished by applying for and receiving a “substantially equivalent” exemption from the Office of State Human Resources (“OSHR”). The SHRA allows the State Human Resources Commission (acting through the OSHR) to determine whether particular elements of a county’s personnel management system are “substantially equivalent” to the SHRA. 17 Counties can petition for this designation in five aspects of personnel management: (i) Recruitment, Selection, and Advancement, (ii) Classification/Compensation; (iii) Training; (iv) Employee Relations; and 11. G.S. 130A-45.02(a). 12. G.S. 130A-45.1; G.S. 130A-45.4. 13. S.L. 1997-502, Section 12. 14. G.S. 108A-15.7 et seq. 15. G.S. 159-7(b)(10)). 16. G.S. 108A-12(b). 17. G.S. § 126-11(a); 25 NCAC 1I.2407. North Carolina Human Services Agencies: Options For Organization And Governance 5 © 2022. School of Government. The University of North Carolina at Chapel Hill. Use of this publication for commercial purposes or without acknowledgment of its source is prohibited. Reproducing, distributing, or otherwise making available to a non-purchaser the entire publication, or a substantial portion of it, without express permission, is prohibited. For permissions questions or requests, email the School of Government at copyright_permissions@sog.unc.edu. Other School resources can be accessed on the Publications page of our website: sog.unc.edu/publications. (v) Political Activity. 18 If the county’s petition is approved, the county employees that are subject to the SHRA (including public health and social services employees) become subject to the county personnel system and are exempted from the SHRA solely with respect to those approved aspects of personnel management.19 A relatively small number of counties in North Carolina have had all or part of their personnel systems approved as “substantially equivalent.” 18. G.S. § 126-11(b). 19. G.S. § 126-11(b). 1 © 2022. School of Government. The University of North Carolina at Chapel Hill. Considerations When Creating a Consolidated Human Services Agency Kristi Nickodem In 2012, the North Carolina General Assembly passed Session Law (“S.L.”) 2012-126, which provided counties with new options regarding organization and governance of their human services functions. Specifically, S.L. 2012-126, which amended G.S. 153A-76 and G.S. 153A-77: 1. Allowed any Board of County Commissioners (“BOCC”) in a county with a county manager appointed pursuant to G.S. 153A-81 to combine two or more human services functions into a single consolidated human services agency (“CHSA”); and 2. Allowed any BOCC to directly assume the powers and duties of one or more of the governing boards responsible for overseeing a local human services agency, including a consolidated human services board.1 This document is intended to provide information to counties about creating a CHSA. For more information on the other organization and governance options available for human services agencies in North Carolina, please see “North Carolina Human Services Agencies: Options for Organization and Governance.” Kristi A. Nickodem is an assistant professor of public law and government at the UNC Chapel Hill School of Government. Her areas of expertise include the organization and governance of human services agencies, powers and duties of social services directors, and confidentiality of social services information. This resource draws upon the work of the author’s colleagues, Aimee Wall and Jill Moore, who have spent years providing guidance to North Carolina counties regarding the creation of consolidated human services agencies. The author is indebted to Wall and Moore for their legal analysis and insight on this topic. 1. Amendments to G.S. 153A-76 prohibit county commissioners from abolishing and assuming the powers and duties of any of the following: (i) An area mental health, developmental disabilities, and substance abuse services board (though a special clause provides an exception for Mecklenburg county, at G.S. 153A-76(6)); (ii) a public health authority assigned the power, duties, and responsibilities to provide public health services as outlined in G.S. 130A-1.1.3; (iii) a public hospital authority authorized to provide public health services under S.L. 1997-502.4; or (iv) a public hospital as defined in G.S. 159-39(a). 2 Considerations When Creating a Consolidated Human Services Agency © 2022. School of Government. The University of North Carolina at Chapel Hill. Options for Governance of Consolidated Human Services Agencies CHSA with Appointed CHS Governing Board Organization. The BOCC creates a new CHSA by combining two or more human services functions, departments, or agencies. Governance. The BOCC appoints a new consolidated human services (“CHS”) board that serves as the CHSA’s governing board. CHSA with BOCC Governance Organization. The BOCC creates a new CHSA by combining two or more human services functions, departments, or agencies. Governance. The BOCC becomes the CHSA’s governing board when it directly assumes the powers and duties of the CHS board. Decisions Facing a County When Creating a CHSA 1. Governance Options A CHSA can be governed by an appointed CHS board or directly by the BOCC. More information on appointed CHS boards is included later in this document. If the CHSA includes public health and the BOCC assumes the powers and duties of the governing board, the BOCC must appoint an advisory committee for public health.2 The advisory committee membership must, at a minimum, meet the requirements for a county board of health found in G.S. 130A-35. If the CHSA will include a department of social services (“DSS”), this advisory committee could have a broader scope and include people with social services expertise or interests. The BOCC also has the option of appointing a separate advisory committee for social services or other issues, but that is not required by law. If the BOCC becomes the governing body for a CHSA that includes public health, the BOCC should also keep in mind that it will assume all responsibilities of the local board of health, including acting as the adjudicatory body for public health, imposing certain fees for public heath services, public health rulemaking, and taking on activities necessary for state accreditation of the health department.3 2. Which Functions to Include in the CHSA G.S. 153A-77(b)(3) authorizes a county to create a CHSA to “carry out the functions of any combination of commissions, boards, or agencies appointed by the board of county commissioners or acting under and pursuant to the authority of the board of county commissioners.” Counties can choose which functions to include in a CHSA. The term “human services” is undefined in the law. A CHSA may incorporate a local health department and/or DSS, but other departments and agencies may also be involved (such as local departments focused on 2. G.S. 153A-77(a). The law does not specify whether the public health advisory committee needs to be appointed before or after the BOCC assumes the powers and duties of the CHS board. Note that the requirement for a health advisory committee applies only to counties that abolish their health or CHS boards after January 1, 2012. This amounts to an exception for Mecklenburg County, which abolished its boards (a county board of health, and subsequently a consolidated human services board) before that date. 3. For more information on these BOCC responsibilities related to public health, see Jill Moore, County Commissioners and Local Boards of Health: What Would Pending Legislation Allow and What Would it Mean, UNC School of Government Coates’ Canons Blog, June 20, 2012, available at https://canons.sog.unc. edu/county-commissioners-and-local-boards-of-health-what-would-pending-legislation-allow-and-what- would-it-mean/. Considerations When Creating a Consolidated Human Services Agency 3 © 2022. School of Government. The University of North Carolina at Chapel Hill. veterans, aging populations, domestic violence, or transportation).4 There are, however, some limitations. A CHSA may not include: •A local management entity (“LME”) involved with mental health, developmental disabilities, and substance abuse services (with the exception of the CHSA serving Mecklenburg County); •A public health authority assigned the power, duties, and responsibilities to provide public health services as outlined in G.S. 130A-1.1; •A public hospital authority authorized to provide public health services under S.L. 1997-502; or •A public hospital as defined in G.S. 159-39(a). 3. Personnel Decisions Employees of county departments of social services and local health departments are county employees but are subject to the State Human Resources Act (“SHRA”). When a county creates a new CHSA, the employees of the new agency are removed from SHRA coverage and become subject to county personnel policies, unless the BOCC affirmatively elects to keep them under the SHRA.5 By default, if the resolution creating the CHSA is silent, the employees become subject to county personnel policies and are removed from SHRA coverage. If the BOCC wants to keep social services and public health employees covered under the SHRA, it must explicitly state this intention in the resolution creating the CHSA. Regardless of whether or not a county opts to keep CHSA employees under the coverage of the SHRA, all CHSAs are required to comply with the federal merit personnel standards (found at 5 CFR § 900.603, attached as Appendix A). These standards are reflected in the SHRA. When a county wants to remove its CHSA employees from the coverage of the SHRA (which occurs by default if the resolution creating the CHSA does not state otherwise), the county should first conduct a careful review of its county personnel policies, procedures, and ordinances to ensure that they comply with and reflect each of the federal merit personnel standards. Among other things, the relevant federal merit personnel system standards mandate recruitment, selection, and retention of employees based on their ability, knowledge, skills, and performance. The federal merit personnel standards also require that employees be given fair and equitable treatment without regard to race, color, religion, sex, pregnancy, gender identity, national origin, age (as defined by the ADEA), disability, genetic information, marital status, political affiliation, sexual orientation, status as a parent, or labor organization affiliation or nonaffiliation. For more information on the federal merit personnel system standards and the personnel decisions involved when creating a CHSA, please see “Personnel Decisions for North Carolina’s Consolidated Human Services Agencies.” 4. Appointment of the CHS Director and Organizational Structure Counties have chosen many different methods by which to organize personnel within their CHSAs. In each county with a CHSA, a CHS director must be identified and appointed. The director of a CHSA is appointed by the county manager with the advice and consent of the CHS 4. To date, all CHSAs formed in North Carolina have incorporated departments of social services, though not all CHSAs have incorporated public health. There is, however, no requirement that a CHSA incorporate a county’s department of social services. 5. G.S. 153A-77(d). 4 Considerations When Creating a Consolidated Human Services Agency © 2022. School of Government. The University of North Carolina at Chapel Hill. board.6 This individual could be current director of an existing agency (the DSS director or the public health director) or could be someone different (a new hire or an employee from another agency, for example). In some counties, the assistant county manager serves as the CHS director. In other counties, the CHS director also continues to act as the director of social services or director of public health functions within the CHSA. There are no minimum education and experience requirements for a CHS director set forth in state law. However, the CHS director needs to be someone who is prepared to administer a local agency that carries out numerous state and federal programs and typically has a relatively large budget and staff compared to other local departments. If the CHSA includes the county DSS, the CHS director assumes most of the powers and duties granted to a DSS director (see G.S. 108A-15.1), with the limitation that the CHS director’s hiring/firing decisions and executive responsibilities are subject to the oversight of the county manager. The CHS director would be allowed to exercise all of that authority or to delegate some of it to others within the agency. The DSS director holds many significant powers, including the ability to make end-of-life decisions for certain individuals in the county, so the delegation of this power should be thoughtfully considered. If the CHSA includes public health, the CHS director acquires most of the powers and duties of a local health director, with the limitation that the CHS director’s hiring/firing decisions and executive responsibilities are subject to the oversight of the county manager. Although the CHS director acquires the powers and duties of a local health director, the CHS director might not be the person who exercises them. The powers and duties of a local health director that appear in G.S. Chapter 130A may be delegated to another person.7 If the CHS director does not have the statutory qualifications to be a local health director (found in G.S. 130A-40), then the CHS director must appoint a person who has those qualifications and is approved by the county manager.8 All North Carolina counties that have formed CHSAs have identified someone who is serving as the local health director. In a few counties, the CHS director is identified as the local health director. However, most counties that have formed CHSAs to date have identified someone other than the CHS director to serve in the local health director role. Like the DSS director, the local health director holds many significant powers, so the CHS director should give careful thought to the delegation of those powers. In the event that the CHS director appoints an individual (other than the CHS director) to be the local health director, G.S. 153A-77 and G.S. 130A-34.1 are silent on whether the CHS director must delegate the powers and duties of the local health director to that appointed individual. However, this appears to be the intent behind requiring such an appointment, so that the individual making decisions about important public health matters such as isolation/quarantine, use of imminent hazard authority, and disease investigations will have the appropriate training and qualifications to make those decisions. For more information on the appointment of the CHS director and decisions regarding the internal personnel structure of a CHSA, please see this School of Government bulletin. 6. G.S. 153A-77(e). 7. For more information on this topic, see Jill Moore, Delegating Local Health Director Legal Powers & Duties, UNC School of Government Coates’ Canons Blog, March 30, 2015, available at https://canons.sog. unc.edu/delegating-local-health-director-legal-powers-duties/. 8. G.S. 153A-77(e). This appointment is only necessary if the CHSA director does not already personally meet the statutory local health director requirements in G.S. 130A-40(a). Considerations When Creating a Consolidated Human Services Agency 5 © 2022. School of Government. The University of North Carolina at Chapel Hill. Procedural Matters to Consider When Forming a CHSA 1. Public Hearing If the BOCC plans to serve as the governing board for the new CHSA, it must hold a public hearing. The law requires “30 days’ notice of said public hearing given in a newspaper having general circulation in said county.”9 The hearing requirement is triggered by the BOCC assuming the powers and duties of another board – which could be a local board of health, a county board of social services, or a CHS board. The law does not explicitly state that a public hearing is required prior to forming a CHSA with an appointed CHS board (as opposed to having the BOCC as the governing board). However, holding such a hearing with appropriate notice is a best practice, given that the creation of a CHSA is a significant change for a county and is likely to create many questions from county residents and human services employees. 2. Drafting a Resolution The law does not explicitly require that counties create a CHSA through the use of a resolution, unless the BOCC is also assuming the powers and duties of the agency governing board. However, the School of Government strongly recommends the use of a resolution to form a CHSA. Among other things, the language of the resolution establishes whether employees will be subject to the SHRA or subject to county personnel policies, as well as which departments or functions are being consolidated into the CHSA. To date, every county in North Carolina that has created a CHSA has done so through a resolution. 3. Order of Actions When establishing a new CHSA, the county manager will have the authority to appoint the agency director, but may do so only with the advice and consent of the governing board.10 Because of the advice and consent requirement, there is a logical sequence that should be followed when establishing the CHSA. A. Establish the CHSA. B. Appoint a CHS board or have the BOCC assume the powers and duties of the agency governing board. C. The county manager identifies a candidate for CHS director and seeks the advice and consent of the agency governing board. D. If the agency governing board consents to the appointment, the county manager appoints the CHS director. These four steps may take place in the same meeting or on the same day, but the order of events is significant under the law. The CHS director cannot be appointed before the CHSA has been created and the governing board is in place, because the governing board must consent to the CHS director’s appointment. 4. Appointing the Initial CHS Board If a BOCC does not want to serve as the governing board of the CHSA, it will need to appoint a new CHS board. G.S. 153A-77(c) includes many details about CHS board composition, terms and term limits, and powers and duties. It also includes a specific process for appointing the 9. G.S. 153A-77(a). 10. G.S. 153A-77(e). 6 Considerations When Creating a Consolidated Human Services Agency © 2022. School of Government. The University of North Carolina at Chapel Hill. initial board. The BOCC must first create a nominating committee that includes members of the current (pre-consolidation) board of health and social services board, as well as the board responsible for managing mental health, developmental disabilities, and substance abuse services in the county. The nominating committee then recommends members for the new CHS board and the BOCC makes appointments based upon those recommendations. After the initial board is in place, the BOCC will fill vacancies based upon nominees presented by the members of the CHS board. The CHS board must be composed of no more than 25 members. All members of the CHS board must be residents of the county. The composition of the CHS board must “reasonably reflect the population makeup of the county” and must include: •Four persons who are consumers of human services. •Eight persons who are professionals, each with qualifications in one of these categories: one psychologist, one pharmacist, one engineer, one dentist, one optometrist, one veterinarian, one social worker, and one registered nurse. •Two physicians licensed to practice medicine in North Carolina, one of whom must be a psychiatrist. •One member of the BOCC. •Other persons, including “members of the general public representing various occupations.” The BOCC may elect to appoint a member of the CHS board to concurrently fill more than one category of membership (the categories described above) if the member has the qualifications or attributes of more than one category of membership. The members of the CHS board must serve four-year terms. However, for purposes of establishing a uniform staggered term structure for the board, a member may be appointed for less than a four-year term when the CHS board is initially formed. No member may serve more than two consecutive four-year terms. The county commissioner member shall serve only as long as the member is a county commissioner. Common Questions to Anticipate When Forming a CHSA 1. How is a CHSA or a CHS board different from our county’s current governance and organization structure for human services? Here are a few key differences: •The CHS director is appointed by the county manager, not by the CHS board. The CHS board must, however, provide advice on the appointment and consent to the appointment. •The CHS board plans and recommends the budget for the CHSA but does not transmit or present the budget to the county commissioners. •The CHS director: Ǟ May only serve as the executive officer of the CHS board to the extent and in the manner authorized by the county manager; and Ǟ May only appoint CHSA staff upon the approval of the county manager. Considerations When Creating a Consolidated Human Services Agency 7 © 2022. School of Government. The University of North Carolina at Chapel Hill. Other CHS board duties: •If the CHSA includes public health, the CHS board acquires all powers and duties of •the local board of health except appointing the director. This includes adopting local health regulations, participating in enforcement appeals of local regulations, and performing regulatory health functions required by State law. •If the CHSA includes social services, the CHS board acquires all powers and duties of the county board of social services except appointing the director. •The CHS board sets fees for CHSA services (subject to constraints in the law). •The CHS board must assure compliance with laws for state and federal programs and can conduct audits and reviews of human services programs. •The CHS board recommends the creation of human services programs. •The CHS board advises local officials via the county manager. •The CHS board performs public relations and advocacy functions. 2. Will the consolidation save money? The consolidation may ultimately create some cost savings (particularly through staff efficiencies and streamlining), but this is not guaranteed. Based on anecdotal reports from directors and county managers to the School of Government, some counties have experienced an initial increase in costs after the initial consolidation (though this may level out or decrease over time).11 Some of the financial implications will depend on how staff will be structured and the extent to which the county wants departments to operate in a shared space, which may require a move and/or new construction. 3. How will this impact social services and public health employees? This is one of the most complex questions to answer in connection with the formation of a CHSA. The BOCC should consult with the county attorney to analyze impacts on employees in advance of creating the CHSA. The impacts to employees will largely depend on: (1) whether the county plans to keep the employees subject to the SHRA or move them under county personnel policies, and (2) how the county’s personnel policies align with the SHRA. If the BOCC elects to keep CHSA employees subject to the SHRA, then any impacts on employees should largely happen at an operational level (for example, potential reorganization, position eliminations, or role transitions). If the BOCC opts to move the employees under county personnel policies, employees may lose some protections and benefits that they would have had under the SHRA, including “just cause” protection for employees with career status under the SHRA and the right to appeal certain decisions to the state Office of Administrative Hearings.12 In some cases, county personnel policies may provide protections that are similar to protections provided under the SHRA (for example, if a county provides that employees can only be terminated for “just cause” after a 11. The School of Government does not collect or maintain data regarding costs incurred or saved by counties as a result of creating a CHSA. Accordingly, the information provided in this paragraph is solely based on informal, anecdotal reports from county officials to the School of Government. 12. For more information on this topic, please see Kristi Nickodem, Personnel Decisions for North Carolina’s Consolidated Human Services Agencies, Soc. Servs. Bulletin No. 49 (UNC School of Government, Dec. 2021). 8 Considerations When Creating a Consolidated Human Services Agency © 2022. School of Government. The University of North Carolina at Chapel Hill. certain length of service). In other cases, the county personnel policies will almost certainly be different than the SHRA (for example, county policies likely do not provide an employee with the right to appeal a county agency’s decision to the state Office of Administrative Hearings). 4. What will happen to the current human services boards? As noted above, the initial nominating committee for the CHS board must consist of the of the current (pre-consolidation) board of health and social services board, as well as the board responsible for managing mental health, developmental disabilities, and substance abuse services in the county. The initial CHS board could, in theory, consist (at least in part) of the existing board of health and social services board members, provided that they otherwise meet the membership qualifications of G.S. 153A-77(c). That could help to provide some continuity in board operations. However, in some situations, retaining the existing, pre-consolidation board members may not serve the county’s goals in creating the CHSA and the CHS board. 5. How will consolidation impact operations? The impact on day-to-day services and operations of the agencies being consolidated will largely depend on how the county intends to structure its CHSA. In some counties, staff positions have been eliminated as a result of consolidation. In others, new positions have been added. In some counties, the CHSA operates out of a single building incorporating public health and social services functions. In other counties, the departments consolidated into a CHSA continue to function largely independently in separate buildings and simply have a shared governance structure. Ideally, one of the benefits of the CHSA model is that it should promote more cross- departmental collaboration and a focus on holistic, integrated client service. However, this outcome largely depends on decisions made by the county and requires some strategic planning. APPENDIX A 5 CFR § 900.603. Standards for a merit system of personnel administration. The quality of public service can be improved by the development of systems of personnel administration consistent with such merit principles as - (a) Recruiting, selecting, and advancing employees on the basis of their relative ability, knowledge, and skills, including open consideration of qualified applicants for initial appointment. (b) Providing equitable and adequate compensation. (c) Training employees, as needed, to assure high quality performance. (d) Retaining employees on the basis of the adequacy of their performance, correcting inadequate performance, and separating employees whose inadequate performance cannot be corrected. (e) Assuring fair treatment of applicants and employees in all aspects of personnel administration without regard to race, color, religion, sex (including pregnancy and gender identity), national origin, age (as defined by the Age Discrimination in Employment Act of 1967, as amended), disability, genetic information (including family Considerations When Creating a Consolidated Human Services Agency 9 © 2022. School of Government. The University of North Carolina at Chapel Hill. Use of this publication for commercial purposes or without acknowledgment of its source is prohibited. Reproducing, distributing, or otherwise making available to a non-purchaser the entire publication, or a substantial portion of it, without express permission, is prohibited. For permissions questions or requests, email the School of Government at copyright_permissions@sog.unc.edu. Other School resources can be accessed on the Publications page of our website: sog.unc.edu/publications. medical history), marital status, political affiliation, sexual orientation, status as parent, labor organization affiliation or nonaffiliation in accordance with chapter 71 of title V, or any other non-merit-based factor, or retaliation for exercising rights with respect to the categories enumerated above, where retaliation rights are available, and with proper regard for their privacy and constitutional rights as citizens. This “fair treatment” principle includes compliance with the Federal equal employment opportunity and nondiscrimination laws. (f) Assuring that employees are protected against coercion for partisan political purposes and are prohibited from using their official authority for the purpose of interfering with or affecting the result of an election or a nomination for office. 1 © 2021. School of Government. The University of North Carolina at Chapel Hill. NO. 49 | DECEMBER 2021SOCIAL SERVICES LAW BULLETIN Personnel Decisions for North Carolina’s Consolidated Human Services Agencies Kristi A. Nickodem CONTENTS Background on County Human Services Employees and the SHRA 2 The Personnel Choice for Counties with CHSAs 3 Why Would a County Choose to Remove CHSA Employees from the Coverage of the SHRA? 4 What Does Compliance with the Federal Merit Personnel Standards Require for CHSAs? 4 What is a “Substantially Equivalent” County Personnel System? 6 Why Might a County Choose to Keep CHSA Employees Subject to the SHRA? 8 What Happens to Protections under the SHRA When CHSA Employees Are Moved under County Personnel Policies? 9 Can CHSA Employees Lose Their “Just Cause” Protections? 10 Other Personnel Decisions When Creating a CHSA 11 Conclusion 13 Kristi A. Nickodem is an assistant professor of public law and government at the UNC Chapel Hill School of Government. Her areas of expertise include the organization and governance of human services agencies, powers and duties of social services directors and boards, and confidentiality of social services information. 2 Social Services Law Bulletin No. 49 | December 2021 © 2021. School of Government. The University of North Carolina at Chapel Hill. Since 2012, twenty-eight North Carolina counties have established new consolidated human services agencies (CHSAs). All but one include both public health and social services.1 When a board of county commissioners (BOCC) decides to establish a new CHSA, North Carolina law gives the BOCC the option of making a significant change to the legal framework governing employees of the newly formed agency. Specifically, the BOCC can choose to make CHSA employees subject to county personnel policies and ordinances instead of keeping them subject to the State Human Resources Act (SHRA).2 If a BOCC creates a CHSA and does not explicitly elect to keep the CHSA’s employees subject to the SHRA, the county then faces a new hurdle. The county is required to ensure that its personnel policies for CHSA employees “comply with all applicable federal laws, rules, and regulations requiring the establishment of merit personnel systems.”3 Why might a county choose to keep CHSA employees under the SHRA, or, conversely, move them over to the coverage of county personnel policies? How can a county with a CHSA ensure it is compliant with the federal merit personnel standards? Can a county that has not created a CHSA take any action to exempt its human services employees from any portion of the SHRA? This bulletin will address these questions and other topics related to CHSA personnel. Background on County Human Services Employees and the SHRA In North Carolina, most county employees are subject to county personnel policies or ordinances.4 However, a subset of county employees is subject by law to the SHRA, not county policies or ordinances, with respect to recruitment, selection, and dismissal procedures. This subset consists of employees working for (1) area mental health, developmental disabilities, and substance abuse authorities (except as otherwise provided in Chapter 122C of the North Carolina General Statutes (hereinafter G.S.)); (2) local social services departments; (3) county and district health departments; and (4) local emergency management agencies that receive federal grant-in-aid funds.5 Why are employees working for these entities treated differently from other county employees under state law? This is because each of these agencies receives federal funds that are conditioned on the use of personnel policies and procedures that comply with federal merit personnel standards.6 For example, references to the federal merit personnel standards are found in statutes governing federal funding of programs pertaining to Food and Nutrition Services (Supplemental Nutrition Assistance Program (SNAP) benefits), Medicaid, 1. Cabarrus County’s CHSA does not include public health. 2. Chapter 153A, Section 77(d) of the North Carolina General Statutes (hereinafter G.S.). The SHRA (G.S. 126) was formerly known as the State Personnel Act (SPA). 3. Id. 4. See G.S. 153A-94 (authorizing a board of county commissioners to adopt personnel policies and prescribe office hours, workdays, and holidays for county employees). 5. See G.S. 126-5(a)(2). 6. See 5 C.F.R. § 900.601 (requiring state and local agencies that receive certain federal grants to have merit personnel systems in place that comply with minimum federal requirements). Personnel Decisions for North Carolina’s Consolidated Human Services Agencies 3 © 2021. School of Government. The University of North Carolina at Chapel Hill. disability benefits, foster care, and adoption assistance.7 Requiring these county employees to be subject to the SHRA ensures that these agencies comply with federal funding requirements, because the SHRA and its related regulations are designed to ensure such compliance.8 The Personnel Choice for Counties with CHSAs In 2012, the North Carolina General Assembly enacted S.L. 2012-126 (hereinafter “the 2012 Law”), allowing all North Carolina counties9 to create a CHSA having the authority to carry out the human services functions of various agencies in the county, including the local health department and the county department of social services (DSS).10 Prior to the 2012 Law, only counties with populations exceeding 425,000 could create a CHSA.11 In a major departure from the traditional arrangement, the 2012 Law allowed a BOCC to make employees of a CHSA subject to county personnel policies and ordinances instead of the SHRA. This personnel decision is a choice that counties must make as part of the consolidation process. Employees of a new CHSA are subject to county personnel policies by default, unless the BOCC elects to subject the employees to the SHRA.12 The “default setting” for employees of a non-consolidated local health department or DSS is being subject to the SHRA. Once one or both of those departments consolidate into a CHSA, the default setting is for the CHSA employees to be subject to county personnel policies. If the BOCC wants to keep its social services and public health employees subject to the SHRA when creating a CHSA, it must explicitly elect to do so in the form of a resolution.13 Typically, counties that elect to keep employees covered under the SHRA do so as part of the same resolution that creates the CHSA, though this could be achieved through a separate (or later) resolution if desired. If the resolution creating a CHSA stays silent on the issue of personnel, the CHSA’s employees will automatically be covered under county personnel policies instead of the SHRA. Importantly, the option to make employees subject to county personnel policies instead of the SHRA is available only to counties that create a CHSA or already have one. The 2012 Law also allowed a change in social services and public health governance structures for counties without CHSAs (permitting the BOCC to assume the powers and duties of an appointed social services board or board of health), but such a change in governance structure alone does not permit a BOCC to remove its social services and/or public health employees from the coverage of the SHRA. In other words, a county that has not created a CHSA is not permitted to exempt employees from SHRA coverage simply because the BOCC has abolished the appointed social services board or the board of health. The word “consolidation” is sometimes used as a colloquial shorthand to refer to both the governance changes (BOCC versus an appointed board) and 7. See generally 5 C.F.R. Appendix A to Subpart F of Part 900–Standards for a Merit System of Personnel Administration. 8. See Diane M. Juffras, Public Employment Law, in Cnty. & Mun. Gov’t in N. Carolina (2d ed.), 208, 212 (Frayda S. Bluestein ed., UNC School of Government, 2014). 9. That is, all counties with a county manager. Currently, all 100 counties in North Carolina have a county manager. 10. 2012 N.C. Sess. Law ch. 126; G.S. 153A-77(b). 11. See S.L. 2012-126 (striking the prior county population limit of 425,000). 12. G.S. 153A-77(d). 13. Id. 4 Social Services Law Bulletin No. 49 | December 2021 © 2021. School of Government. The University of North Carolina at Chapel Hill. agency structure changes (a CHSA versus separate agencies) that are permitted under the 2012 Law. However, “consolidation” is purely an organizational structure change—it only occurs when a county combines one or more of its human services functions into a single agency.14 Regardless of its governance structure for social services and/or public health, only a county that has created a CHSA can exercise the option to remove its social services and/or public health employees from the coverage of the SHRA. Why Would a County Choose to Remove CHSA Employees from the Coverage of the SHRA? Though some counties in North Carolina have opted to keep social services and public health employees in their CHSAs subject to the SHRA, the majority of counties with CHSAs have chosen to move CHSA employees to the coverage of county personnel policies instead.15 Why? Counties have different motivations for this decision, but a key factor for some has been the desire to create consistency across county employees. Moving CHSA employees out from under the SHRA allows a county to apply a single set of policies and procedures to the majority of its employees.16 Another important factor has been a desire to exercise more control over employee grievance, discipline, and termination processes. For example, some counties may dislike the fact that under the SHRA, final personnel decisions made at the county-agency level can be appealed to (and overturned by) the state Office of Administrative Hearings.17 What Does Compliance with the Federal Merit Personnel Standards Require for CHSAs? G.S. 153A-77(d) mandates that all CHSAs comply with the federal merit personnel systems requirements, which are found in Title 5, Section 900.603 of the Code of Federal Regulations. For counties that elect to keep their CHSA employees subject to the SHRA, the CHSA will generally be compliant with the federal merit personnel standards simply through abiding by the SHRA’s procedures.18 However, when a county wants to remove its CHSA employees from the SHRA, it should first instruct the county attorney (or outside counsel) to conduct a careful review of county personnel policies, procedures, and ordinances to ensure that they meet each of the federal standards. To the extent that they do not reflect the federal merit personnel standards, these documents and practices will need to be modified specifically for CHSA employees. The county is not required to adhere to the federal merit personnel standards for all county employees, though it may choose to do so. 14. See G.S. 153A-77(b). 15. This information is based on BOCC resolutions from counties that have created CHSAs, which are on file with the author. 16. This would not apply to employees of area mental health, developmental disabilities, substance abuse authorities, or local emergency management agencies that would still be subject to the SHRA under G.S. 126-5. 17. See G.S. 126-34.02. 18. See Juffras, supra note 8, 212 (noting that the SHRA incorporates the federal merit personnel system requirements). Personnel Decisions for North Carolina’s Consolidated Human Services Agencies 5 © 2021. School of Government. The University of North Carolina at Chapel Hill. The federal merit personnel system standards19 require the following: •Recruiting, selecting, and advancing employees on the basis of their relative ability, knowledge, and skills, including open consideration of qualified applicants for initial appointment. •Providing equitable and adequate compensation. •Training employees, as needed, to assure high quality performance. •Retaining employees on the basis of the adequacy of their performance, correcting inadequate performance, and separating employees whose inadequate performance cannot be corrected. •Assuring fair treatment of applicants and employees in all aspects of personnel administration without regard to race, color, religion, sex (including pregnancy and gender identity), national origin, age (as defined by the Age Discrimination in Employment Act of 1967, as amended), disability, genetic information (including family medical history), marital status, political affiliation, sexual orientation, status as parent, labor organization affiliation or nonaffiliation in accordance with [5 U.S.C. ch. 71], or any other non-merit-based factor, or retaliation for exercising rights with respect to the categories enumerated above, where retaliation rights are available, and with proper regard for their privacy and constitutional rights as citizens. This “fair treatment” principle includes compliance with the Federal equal employment opportunity and nondiscrimination laws. •Assuring that employees are protected against coercion for partisan political purposes and are prohibited from using their official authority for the purpose of interfering with or affecting the result of an election or a nomination for office.20 As the list above shows, these merit personnel system standards are high-level principles, not granular procedural requirements. The SHRA reflects these federal standards, but it also contains many specific procedures and employee protections that are not explicitly required by the federal standards. For example, unlike the SHRA, the federal merit personnel standards do not mandate that employees who have served in a government position for a certain period of time can only be terminated for “just cause.”21 Likewise, while the federal merit personnel standards require “[p]roviding equitable and adequate compensation,” they do not establish particular salary levels or ranges for any category of employee.22 The SHRA’s implementing regulations, on the other hand, set criteria for salary rates and require that a local jurisdiction’s salary schedule meets basic approval requirements established by the State Human Resources Commission.23 Federal law does not create a private right of action for local government employees to bring civil suits alleging noncompliance with the federal merit personnel system standards.24 Likewise, there is no avenue for employees to appeal local government employment decisions to the federal 19. The terms federal merit personnel standards and federal merit personnel system standards are used interchangeably in this bulletin. 20. 5 C.F.R. § 900.603. 21. See G.S. 126-35(a); see also Title 25, Chapter 01I, Section .2301 of the North Carolina Administrative Code (hereinafter N.C.A.C.); 25 N.C.A.C. 01J, § .0604. 22. 5 C.F.R. § 900.603(b). 23. G.S. 126-9(b); 25 N.C.A.C. 01I, §§ .2101, .2102, .2103, .2106, .2107. 24. See Dunn v. N. Carolina Dep’t of Hum. Res., 124 N.C. App. 158, 162, 476 S.E.2d 383, 386 (1996); see also Pennsylvania Soc. Servs. Union, Loc. 668 v. Com., Dep’t of Pub. Welfare, Off. of Inspector Gen., 6 Social Services Law Bulletin No. 49 | December 2021 © 2021. School of Government. The University of North Carolina at Chapel Hill. Office of Personnel Management (OPM), which is the agency that promulgates the federal merit personnel standards.25 Instead, OPM intends for complaints of alleged noncompliance to be handled under the direction of federal grantor agencies when they are evaluating state or local government performance in the grants-administration process.26 OPM is not authorized “to exercise any authority, direction or control over the selection, assignment, advancement, retention [or] compensation . . . [of] any individual State or local employee.”27 Accordingly, the chief risk to a county whose policies do not meet the federal standards is the loss of federal grant funding. “Chief executives” of state or local jurisdictions must (1) certify their agreement to maintain a system of personnel administration that comports with the federal merit personnel standards and (2) maintain this certification and make it available to OPM upon request.28 Alternatively, the heads of state or local agencies that are required to have such merit personnel systems may certify compliance.29 In North Carolina, this means that written certification from the county manager, the BOCC, or the CHSA director regarding compliance with the federal merit personnel standards with respect to CHSA employees would likely be sufficient to satisfy this requirement. What is a “Substantially Equivalent” County Personnel System? Counties can remove social services and public health employees from certain aspects of SHRA coverage without creating a CHSA. This is accomplished by applying for and receiving a “substantially equivalent” exemption from the Office of State Human Resources (OSHR). The SHRA allows the State Human Resources Commission (acting through OSHR) to determine whether particular elements of a county’s personnel management system are “substantially equivalent” to the SHRA.30 Counties can petition for this designation in five aspects of personnel management: (i) Recruitment, Selection, and Advancement; (ii) Classification/Compensation; (iii) Training; (iv) Employee Relations; and (v) Political Activity.31 If the county’s petition is approved, the county employees who are subject to the SHRA (like public health and social services employees) become subject to the county personnel system and are exempt from the SHRA solely with respect to those approved aspects of personnel management.32 699 A.2d 807, 811 (Pa. Commw. Ct. 1997) (finding that a union had no private cause of action under federal law to enforce the federal merit system standards). 25. See Intergovernmental Personnel Act Programs; Standards for a Merit System of Personnel Administration, 62 Fed. Reg. 33971 (June 24, 1997) (expressly eliminating any implied individual right of appeal to OPM and stating that “issues of merit systems compliance should be raised and addressed in the context of State or local government performance in grants administration…this is appropriately done by or under the direction of the Federal grantor agency.”). 26. Id. 27. 5 C.F.R. § 900.604(b)(2). 28. 5 C.F.R. § 900.604(a)(1)–(2). 29. 5 C.F.R. § 900.604(a)(3). 30. G.S. 126-11(a); 25 N.C.A.C. 01I, § .2407. 31. G.S. 126-11(d); 25 N.C.A.C. 01I, §§ .2401, .2402, .2403, .2404, .2406. Counties were also previously able to petition for a “substantially equivalent” designation in the area of Equal Employment Opportunity/ Affirmative Action, but the rule in the N.C.A.C. allowing for this (25 N.C.A.C. 01I, § .2405) expired on September 1, 2016, pursuant to G.S. 150B-21.3A. 32. G.S. 126-11(b). Personnel Decisions for North Carolina’s Consolidated Human Services Agencies 7 © 2021. School of Government. The University of North Carolina at Chapel Hill. Any North Carolina county can apply for a substantially equivalent personnel system exemption, regardless of whether it has created a CHSA. However, unlike the personnel option available to counties with a CHSA under G.S. 153A-77(d), the substantially equivalent designation under G.S. 126-11 is not a blanket exemption from all aspects of the SHRA. It allows counties to substitute their own county policies and procedures for the SHRA in particular aspects of personnel management, but does not allow counties to move SHRA- covered employees over to the coverage of the county personnel system in its entirety. For example, consider a county that is approved by OSHR as substantially equivalent only in the Classification/Compensation area of its personnel management system. That county could use its own county policies and procedures (as vetted by OSHR) for employee classification and compensation matters involving SHRA-subject employees, but the county would otherwise be required to comply with the SHRA with respect to all other personnel matters for those employees, such as handling employee grievances. Currently, only eleven counties in North Carolina have personnel systems that are designated as substantially equivalent by OSHR in any of the five aspects.33 Some counties have received the designation in only one or two aspects of personnel management (Classification/ Compensation and Recruitment/Selection/Advancement are the most common), while others have petitioned and been approved as substantially equivalent in multiple areas.34 A county with the substantially equivalent designation is subject to annual monitoring from OSHR to ensure compliance.35 Counties must submit certain documentation to OSHR annually (or upon major interim change) in order to maintain the designation, including an organizational chart and all personnel policies pertaining to the exempt portions of their local systems.36 The BOCC may also be required to recertify its commitment to compliance if (1) there is a significant change in the membership of the board of commissioners, (2) significant new legislation or policy that will apply to the local system or system portion is passed, or (3) there is a major reorganization, restructuring, or downsizing of the personnel system of the county.37 Petitioning for a substantially equivalent personnel system designation is a completely separate process from the personnel decision regarding the SHRA that a county must make when creating a CHSA. Consider, for example, a county that has already been approved by OSHR as substantially equivalent in the area of Classification/Compensation and subsequently decides to create a CHSA. If that county opts to move its CHSA employees under county personnel policies, those CHSA employees would now be governed under county policies and ordinances in all aspects of personnel management (not only Classification/Compensation). However, any county employees who are subject to the SHRA and work outside the CHSA (for example, emergency management employees) will continue to be governed by the SHRA, except in the area of Classification/Compensation, since that area has been approved as substantially 33. Email from Dominick D’Erasmo, Office of State Human Resources (OSHR), to author (Dec. 6, 2021) (on file with author). Seven local management entities/managed care organizations (LME/MCOs) have also been designated as substantially equivalent in one or more areas. 34. Id. 35. G.S. 126-11(c). 36. 25 N.C.A.C. 01I, § .2408(2)(c), -(3)(a). 37. 25 N.C.A.C. 01I, § .2408(1). 8 Social Services Law Bulletin No. 49 | December 2021 © 2021. School of Government. The University of North Carolina at Chapel Hill. equivalent to the SHRA.38 The CHSA personnel decision only impacts the employees who work for the CHSA, but the substantially equivalent exemption impacts all county employees who are subject to the SHRA. What if a county with a traditional DSS and local health department wants the employees of those agencies to be governed under certain county personnel policies, but does not want to consolidate these agencies into a CHSA? That county may consider petitioning for elements of its personnel management system to be designated as substantially equivalent by OSHR. If approved, the county can use county policies and procedures for the social services and public health employees in the areas designated as substantially equivalent by OSHR. Why would a county want to seek a substantially equivalent exemption from the SHRA? •First, this designation (in one or more aspects of personnel management) applies to all county employees subject to the SHRA, not only to employees in a CHSA. Some counties may want to uniformly apply county policies in a particular area (e.g., Recruitment, Selection, and Advancement) to all county employees, regardless of whether those employees are part of a CHSA. •Second, a county that does not wish to consolidate its social services and public health agencies into a CHSA may still want its public health and social services employees to be governed under county policies instead of the SHRA in certain respects. •Third, for a county that does create a CHSA, receiving a substantially equivalent designation from OSHR would be one way of confirming that the county’s personnel policies and procedures are compliant with the federal merit personnel standards, at least in the OSHR- approved areas.39 To be clear, a county with a CHSA is not required to petition or be approved for the substantially equivalent designation (or receive any prior approval from OSHR) in order to move its CHSA employees under its county personnel system. Receiving the substantially equivalent designation would simply be one method of ensuring that key aspects of a county’s personnel system are compliant with the federal merit personnel standards, since the SHRA reflects those standards.40 Why Might a County Choose to Keep CHSA Employees Subject to the SHRA? For some counties, moving CHSA employees outside of the coverage of the SHRA is a primary motivating factor in creating a CHSA. However, other counties decide to keep their CHSA employees covered under the SHRA instead. As described above, counties that want to keep CHSA employees subject to the SHRA must explicitly take action to do so in the form of a resolution, because by default, CHSA employees are governed under county personnel policies instead of the SHRA.41 Why do some counties choose to keep CHSA employees subject to the SHRA? In some counties, this decision may be made for the purpose of continuity and employee retention. Some 38. The majority of county employees traditionally covered by the SHRA do, in fact, work in human services functions (public health and social services) that could be included within the CHSA. 39. See G.S. 126-11(d), authorizing the State Human Resources Commission “to promulgate rules and regulations to implement the federal merit system standards” when defining “substantially equivalent.” 40. See Juffras, supra note 8, 212. 41. See G.S. 153A-77(d); G.S. 126-5(a)(2). Personnel Decisions for North Carolina’s Consolidated Human Services Agencies 9 © 2021. School of Government. The University of North Carolina at Chapel Hill. employees who become part of a CHSA may have worked under the SHRA for years and may be reluctant to suddenly move under the coverage of the county’s personnel policies instead. Moreover, some social services and public health employees may advocate for staying subject to the SHRA because they do not wish to lose certain protections and rights regarding their employment, especially their “just cause” protection with respect to termination. What Happens to Protections under the SHRA When CHSA Employees Are Moved under County Personnel Policies? Employees may lose some protections and benefits when a county opts to have CHSA employees governed by county personnel policies and ordinances. For the purposes of the discussion that follows, consider a county that has not opted to keep its CHSA employees subject to the SHRA. First, it is currently an unsettled question of law whether someone who has attained “career status” under the SHRA (meaning they can be terminated only for “just cause”) loses that status when that individual is converted to a CHSA employee. This bulletin addresses this complicated issue in more detail below. Second, a CHSA employee who is moved under the county’s personnel policies loses access to the employee grievance procedure established by the SHRA. That procedure allows an employee to contest a final agency decision by filing a contested case in the Office of Administrative Hearings (OAH).42 County employees with SHRA career status can file contested cases with the OAH involving a demotion, suspension, or dismissal.43 The OAH has authority to (1) reinstate an employee; (2) order the employment, promotion, transfer, or salary adjustment of any individual to whom it has been wrongfully denied; or (3) direct other suitable corrective action, including requiring payment of lost wages.44 The decision issued by the OAH can then be appealed to the North Carolina Court of Appeals.45 A CHSA employee who is removed from SHRA coverage would not have automatic recourse to the OAH in the event of an unfavorable agency decision regarding his or her employment with the CHSA.46 However, theoretically, that CHSA employee could still file a contested case with the OAH as a former SHRA-covered employee regarding demotions, suspensions, or dismissals that occurred during the period of time while the individual was still subject to the SHRA. Additionally, like any county employee, a CHSA employee could, in the right circumstances, file a civil lawsuit alleging retaliation, harassment, or discrimination in state superior court or federal district federal court, depending on the nature of the claims involved.47 42. G.S. 126-35(a); 25 N.C.A.C. 01I, § .2310. 43. G.S. 126-34.02(b)(3); 25 N.C.A.C. 01I, § .2310. 44. G.S. 126-34.02(a). 45. Id. 46. See Woodburn v. N. Carolina State Univ., 156 N.C. App. 549, 556, 577 S.E.2d 154, 159 (2003) (finding that the OAH “does not have jurisdiction over employees whose positions or departments are statutorily [exempted] from its reach”); see also Murchison v. Bladen Cnty. Dep’t of Soc. Servs., 2019 WL 3812573 (N.C.O.A.H., June 12, 2019). 47. If such a lawsuit is filed under the Age Discrimination in Employment Act (ADEA), Americans with Disabilities Act (ADA), or Title VII of the Civil Rights Act of 1964, the employee must first file a charge of discrimination and/or retaliation with the Equal Employment Opportunity Commission (EEOC). If the employee is or was subject to the SHRA, the employee may be eligible to file a charge with 10 Social Services Law Bulletin No. 49 | December 2021 © 2021. School of Government. The University of North Carolina at Chapel Hill. Can CHSA Employees Lose Their “Just Cause” Protections? A county employee who is subject to the SHRA and who has earned “career status” can only be terminated, suspended, or demoted for disciplinary reasons for “just cause.”48 It is an unsettled question of law whether such a county employee could lose that “just cause” protection when that individual is converted to a CHSA employee and moved to county personnel policies. “Just cause” protection was added to the State Personnel Act (now known as the SHRA) in 197549 and continues to extend to county employees subject to the SHRA, including employees of county and district health departments and county social services departments.50 To receive this protection, an individual must be a state or local government employee (1) in a permanent position with a permanent appointment and (2) continuously employed in a position subject to the SHRA for the immediate twelve preceding months.51 “Just cause” includes two potential bases for adverse disciplinary action: (1) unsatisfactory job performance and/or (2) unacceptable personal conduct.52 Once a local government employee attains “career status” under the SHRA, that individual is no longer an “at-will” employee and must be given due process prior to termination.53 The regulations of the State Human Resources Commission governing local government employees subject to the SHRA set out discipline and termination procedures that satisfy the requirement of due process.54 What happens to this “just cause” protection for an employee with career status when a county creates a CHSA and opts to make its employees subject to the county personnel system instead of the SHRA? For an employee who has already achieved career status under the SHRA, can the BOCC’s decision to move CHSA employees under county personnel policies strip the employee of that status? For a county employee who has achieved career status under the SHRA, what happens if the employee moves to a different county with a CHSA, where social services and public health employees are subject to the county personnel system instead of the SHRA? These open questions have not yet been explored by North Carolina courts. To date, the North Carolina court decisions dealing with CHSAs and employment issues have involved (1) an employee of a CHSA in a county that had opted to keep employees subject to the SHRA in all areas where the county’s personnel system had not been recognized as “substantially equivalent” by OSHR55 and (2) a DSS employee in a county with a CHSA who was terminated prior to the CHSA’s formation and was therefore still subject to the SHRA.56 Accordingly, there is no North the Civil Rights Division-Employment Discrimination Section of the OAH (CRD-EDS). The CRD-EDS “dual-files” the charge with the EEOC, but retains the charge for processing and investigation. See About Employment Discrimination, N.C. Off. of Admin. Hearings, https://www.oah.nc.gov/civil-rights- division/employment-discrimination/about-employment-discrimination#2.-relationship-between-the- employment-discrimination-section-of-crd-and-the-u.s.-equal-employment-opportunity-commission- (eeoc). 48. G.S. 126-1.1, -35(a); see also 25 N.C.A.C. 01I, § .2301. 49. See N. Carolina Legis. Rsch. Comm’n, State Personnel, Report to the 1987 General Assembly of North Carolina 17 (1986), https://www.ncleg.gov/Files/Library/studies/1987/st10278.pdf. 50. G.S. 126-5(a)(2). 51. G.S. 126-1.1. 52. 25 N.C.A.C. 01I, § .2301(c)–(d). 53. See Peace v. Emp. Sec. Comm’n of N. Carolina, 349 N.C. 315, 322, 507 S.E.2d 272, 277–78 (1998). 54. 25 N.C.A.C. 01I, §§ .2308, .2310. 55. Watlington v. Dep’t of Soc. Servs. Rockingham Cnty., 252 N.C. App. 512, 799 S.E.2d 396 (2017). 56. Rouse v. Forsyth Cnty. Dep’t of Soc. Servs., 373 N.C. 400, 838 S.E.2d 390 (2020). Personnel Decisions for North Carolina’s Consolidated Human Services Agencies 11 © 2021. School of Government. The University of North Carolina at Chapel Hill. Carolina case law establishing how an employee’s “just cause” protection under the SHRA may be affected by a BOCC’s decision to move all CHSA employees out from under SHRA coverage.57 What about CHSA employees who are under county personnel policies and do not have career status protections under the SHRA? Are they fully “at-will” employees? The federal merit personnel system standards arguably necessitate including some form of termination protection in county policies for all CHSA employees. The federal standards require “[r]etaining employees on the basis of the adequacy of their performance . . . and separating employees whose inadequate performance cannot be corrected.”58 This broad language leaves leeway for counties to determine what constitutes “inadequate performance,” but it does suggest that employees cannot simply be terminated at-will, since they must be “retained” based on performance. However, unlike the SHRA, the federal merit personnel standards do not establish any particular process that a county must follow when disciplining or terminating an employee. It is up to counties to decide how they will incorporate the federal “performance” standard into their discipline and termination procedures for CHSA employees, including what type of process must be followed prior to discipline and/or termination. When removing CHSA employees from the SHRA, a county should seek legal counsel regarding whether the county’s discipline and termination procedures for CHSA employees comply with the federal merit personnel standards. Though the federal standards do not establish any “property interest” in continued employment or create any individual right of action for local government employees, CHSA employees could have a cause of action against a county if the county fails to follow its own policies and procedures regarding discipline or termination.59 Other Personnel Decisions When Creating a CHSA The decision regarding SHRA coverage is a significant one, but a county creating a CHSA has other key decisions to make regarding personnel for the new agency. Under the CHSA operating structure, the county manager—not the local governing board—has the power to appoint, terminate, and supervise the CHSA director.60 The county manager’s decision to appoint or terminate the director must be made with the advice and consent of the consolidated human 57. For more discussion on this topic, see Tommy Tobin, Far from a “Dead Letter”: The Contract Clause and North Carolina Association of Educators v. State, 96 N.C. L. Rev. 1681, 1704–05 (2018). Tobin’s article discusses the North Carolina Supreme Court case, N. Carolina Ass’n of Educators, Inc. v. State, 368 N.C. 777, 783, 786 S.E.2d 255, 260 (2016), and its potential applicability to the loss of “career State employee” status by CHSA employees. 58. 5 C.F.R. § 900.603. 59. Article 1, Section 1 of the North Carolina Constitution (the “fruits of their own labor” clause) provides a remedy to public employees in North Carolina who allege that a government employer has violated its own clearly established rule or policy regarding promotion, discipline, or termination. See Tully v. City of Wilmington, 370 N.C. 527, 536, 810 S.E.2d 208, 215–16 (2018); see also Mole’ v. City of Durham, ___N.C. ___, ___ S.E.2d ___ , 2021-NCCOA-527, ¶ 29. Additionally, an exception to the presumption of at-will employment is recognized under North Carolina law when a county ordinance provides for restrictions on the discharge of an employee. Pittman v. Wilson Cnty., 839 F.2d 225, 227 (4th Cir. 1988) (citing Presnell v. Pell, 298 N.C. 715, 723, 260 S.E.2d 611 (1979)). 60. G.S. 153A-77(e); compare with G.S. 108A-12 (DSS board’s authority to appoint the DSS director) and G.S. 130A-40 (local board of health’s authority to appoint the local health director). 12 Social Services Law Bulletin No. 49 | December 2021 © 2021. School of Government. The University of North Carolina at Chapel Hill. services (CHS) governing board (which can be either an appointed board or the BOCC).61 Unlike a DSS director or local public health director, who has sole authority to hire and fire agency employees, the CHSA director may appoint CHSA staff only with the county manager’s approval.62 Inherent in the power to appoint is the power to terminate, meaning that the county manager should be involved in approving termination decisions regarding CHSA staff as well. Except as otherwise provided by law, the individual appointed as the CHSA director acquires all of the powers and duties as a social services director and a local health director (if both social services and public health are consolidated into the CHSA).63 The CHSA director is permitted, but not required, to delegate most of these powers and duties to other staff members within the agency.64 The county manager and the CHSA director have tremendous flexibility in deciding how to delegate these powers and duties and in how to structure the internal organization of the CHSA. For example, in some counties, the new CHSA director was formerly a DSS director or local health director prior to consolidation and retains that role after assuming leadership of the CHSA. In other counties, the CHSA director appoints both a DSS director and a public health director, who both report to the CHSA director and handle the day-to-day management of their respective divisions. In some counties, an assistant county manager is appointed to be the CHSA director and then appoints a social services and public health director (or a director and an assistant director in each division). Figure 1 shows several examples of how CHSA management could be structured, though it is not an exhaustive representation of all possible organizational structures. The only limitation on this flexible internal structuring authority comes from G.S. 153A-77(e), which requires that the CHSA director appoint (with the county manager’s approval) an individual who meets the statutory requirements of a local health director found in G.S. 130A-40(a). This appointment is only necessary if the CHSA director does not already personally meet those statutory local health director requirements. The law does not expressly require the CHSA director to delegate local health director powers and duties to the appointee who meets the G.S. 130A-40(a) requirements, but it may be prudent and logical to do so, since this individual would have the appropriate knowledge and experience to exercise such powers and duties.65 There is no equivalent requirement for the CHSA director to appoint someone with particular social services experience or qualifications, though many CHSA directors will find it necessary and pragmatic to do so. 61. Id.; see also G.S. 153A-77(a). 62. G.S. 153A-77(e); see also G.S. 108A-14(a)(2) (power of DSS director to appoint staff); G.S. 130A-41(b) (12) (power of local health director to appoint staff). 63. G.S. 153A-77(e). These powers and duties are primarily found in G.S. § 108A-14 (DSS director) and G.S. 130A-41 (local health director), though some powers and duties are scattered throughout other portions of the North Carolina General Statutes as well. 64. See G.S. 130A-6, regarding the local health director’s powers and duties (“Whenever authority is granted by this Chapter upon a public official, the authority may be delegated to another person authorized by the public official.”); see G.S. 108A-14, regarding the DSS director’s powers and duties (“The director may delegate to one or more members of his staff the authority to act as his representative. The director may limit the delegated authority of his representative to specific tasks or areas of expertise.”). 65. For more information on this topic, see Jill Moore, Delegating Local Health Director Legal Powers & Duties, Coates’ Canons: NC Loc. Gov’t L., UNC Sch. of Gov’t Blog (Mar. 30, 2015), https://canons .sog.unc.edu/delegating-local-health-director-legal-powers-duties/. Personnel Decisions for North Carolina’s Consolidated Human Services Agencies 13 © 2021. School of Government. The University of North Carolina at Chapel Hill. Regardless of the internal management structure that a county decides to use for a CHSA, the CHSA director should ensure that delegation of duties to staff (including to the social services and/or public health director, if applicable) is clearly documented in writing. This documentation should be examined and updated from time to time. There is no statute or regulation that specifically addresses documenting these delegations of CHSA director authority (or DSS or local public health director authority). However, such documentation may become important if an exercise of authority is challenged in litigation. Moreover, clearly documenting the delegation of authority in writing allows staff members to know who is authorized to take action on certain matters within the CHSA.66 County manager County manager County manager County manager CHSA director/ Social services director CHSA director/ Public health director CHSA director Assistant county manager/ CHSA director Public health director Social services director Public health director Public health director 1 Social services director Social services director 1 Structure A Structure B Structure C Structure D Figure 1. Examples of Management Structures for CHSAs Public health director 2 Social services director 2 14 Social Services Law Bulletin No. 49 | December 2021 © 2021. School of Government. The University of North Carolina at Chapel Hill. Use of this publication for commercial purposes or without acknowledgment of its source is prohibited. Reproducing, distributing, or otherwise making available to a non-purchaser the entire publication, or a substantial portion of it, without express permission, is prohibited. For permissions questions or requests, email the School of Government at copyright_permissions@sog.unc.edu. Other School bulletins can be accessed on the Publications page of our website: sog.unc.edu/publications. Conclusion For a North Carolina county considering creating a CHSA, decisions concerning personnel matters can seem overwhelming. Here are some key takeaways from this bulletin: 1. When creating a CHSA, county commissioners have a choice. Do they want CHSA employees to be subject to the SHRA or to county personnel policies? If the commissioners want to keep employees subject to the SHRA, they must explicitly state that intention through a resolution. If the resolution creating the CHSA is silent with regards to personnel, CHSA employees will move under county personnel policies and ordinances. 2. Employees may lose some protections and benefits under the SHRA when a county opts to have CHSA employees governed by county personnel policies and ordinances. CHSA employees may lose the right to appeal personnel decisions to the OAH and lose discipline/termination protections afforded to employees with career status under the SHRA. A county creating a CHSA should be mindful of the potential impacts of the SHRA coverage decision on employees and may want to consider whether there are ways to mitigate those impacts through a modification of existing county policies. 3. All CHSAs must comply with the federal merit personnel system standards. For counties that opt to move CHSA employees under county personnel policies, advance review and modification of county policies and procedures with respect to CHSA employees is essential. Counties should decide which county official will certify compliance with the federal standards and maintain the certification so that it can be produced upon request. 4. Counties that do not create a CHSA can still obtain some flexibility to use county personnel policies and procedures in particular areas by obtaining a “substantially equivalent” designation from OSHR. This designation exempts certain aspects of the county’s personnel management system from compliance with the SHRA but does not necessarily exempt social services or public health employees from the SHRA in its entirety (as a county could do when creating a CHSA). 5. A county has many options for the internal management structure of a CHSA. When making these decisions, the county manager should think carefully about the skills and experience of existing officials and staff members, the capacity of officials or employees to handle the added administrative burden of managing the CHSA, and the potential need to hire new staff. All delegations of authority from the CHSA director to other employees (including to an existing DSS director and/or local health director) should be carefully documented and periodically updated as needed.