It’s back to the drawing board for those who want to privatize Milwaukee County’s mental health hospital.
This summer, Milwaukee County’s Behavioral Health Division (BHD) asked for bids to privatize its mental health hospital by 2018. Only two bidders responded, neither of which fit the county’s requirements, BHD leaders said. On Oct. 2, BHD suspended its Request for Proposals (RFP) process.
Instead of rethinking its privatization policy or issuing a new RFP for competitive bids, County Health and Human Services Director Héctor Colón says he is considering offering a sole-source contract to a private company, meaning that no bids would be required.
“Right now I think we see either way it would be a sole-source option, whether it would be with a private health system here locally or a national entity,” Colón said. “Either way it would be a sole-source approach.”
Colón made his remarks at an Oct. 6 panel on the future of Milwaukee County’s mental health system convened by Wisconsin Health News and moderated by its editor, Tim Stumm.
Sole-source or no-bid contracts are a very poor alternative to a competitive bid process. In general, competitive bids offer taxpayers the chance of striking a good deal in a publicly transparent process. In addition, no-bid contracts are generally frowned upon because they open the door to corruption and can potentially steer a contract to a preferred vendor. For example, on Tuesday Barbara Byrd-Bennett, former CEO of the Chicago Public Schools, pleaded guilty in a federal case alleging she steered contracts to her former business associates in return for 10% of the contracts and other perks. The Chicago Public Schools board and its chief are appointed by the mayor.
The county’s request for proposals, let out in July, offered a 20- to 35-year contract for a private vendor—either nonprofit or for-profit—to take over the county’s in-patient services for children, teens and adults. It asked the vendor to build or repurpose a facility and operate a psychiatric emergency room, observation unit and in-patient care, as well as be responsible for housekeeping, food service, administration and everything else necessary for running a hospital.
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Colon indicated last week that the RFP process itself seemed to deter health care systems from expressing their interest.
“We do have some national entities that did demonstrate some interest,” Colon said at the forum. “They did not respond to the RFP. It was my understanding that they do not respond to RFPs but they do sole-source.”
The Milwaukee County Mental Health Board, made up of appointees with expertise in behavioral health, will discuss the matter during its Oct. 22 meeting. A 2014 state law, backed by County Executive Chris Abele, created the board, which took over the Milwaukee County Board of Supervisors’ responsibilities for the county’s mental health and substance abuse services. The board authorized BHD to privatize the mental health hospital, but had little to no input on the scope or content of the RFP.
BHD and the RFP review panel pulled the plug on the bidding process two weeks ago without consulting the board.
Colon said he intends to stick to the original schedule of privatizing the hospital by 2018.
“We have an aging facility that costs us $10 million in overhead to maintain,” Colon said at the forum. “Anything could happen with regards to that facility. In the event of an emergency we don’t have a significant amount of reserves, we don’t have bonding authority, so if some major capital expense came our way we would not be prepared to have the funds to take care of that. And our hospital systems right now are not prepared to serve these clients.”
Abele’s Mixed Record on Big Contracts
Through a spokeswoman, Colon wouldn’t respond to the Shepherd’s questions about his plans to use a no-bid contract, but emailed, “As we look at our next steps, we will continue to keep our focus on expanding community-based mental health care services.”
Granting sole-source contracts is very bad policy, which is why the state and the county have laws governing sole-source agreements. Many county insiders believe Colon and the Abele administration’s fixation on sole-source contracts is that they are just an easy way for Abele to reward his pals at the expense of the Milwaukee County taxpayers.
The Abele administration has had a questionable record on big contracts. When Abele was attempting to privatize the Milwaukee County Transit System and was ready to award a contract to a Dallas-based transit company, the losing bidders appealed the decision and a review panel found that the bidding process was flawed. Abele let out a little-used “requests for interest,” a practice which is open to corrupt sweetheart deals, to develop the Transit Center parcel, which developer Rick Barrett won. Just north of that site, Abele accepted Northwestern Mutual Life’s offer to buy O’Donnell Park without soliciting bids from any other developers. The county board rejected the bid and is pursuing a deal with the Milwaukee Art Museum. The Abele administration fast-tracked a proposal to privatize the zoo’s concessions, retail and catering contract, which was scuttled after supervisors and local caterers raised objections. Most recently, a development company affiliated with the Bucks purchased nine acres of the Park East for $1, beating out another developer for land estimated to be worth close to $9 million.
Thanks to a last-minute amendment to the Republican-approved state budget, Abele now has near-unilateral control over the sale of non-park land—that includes the airport, zoo and the BHD site—and only needs the signature of one other person, not the county board, to do so.
Abele seems intent on downsizing BHD quickly. His proposed 2016 budget decreases the tax levy for BHD by $286,370 to $58.8 million and calls for demolishing the day hospital at 9201 W. Watertown Plank Road and the food service building, but makes no mention of privatizing in-patient care. The department will finish closing all of its long-term care units by the end of this year. County supervisors cannot alter BHD’s budget, thanks to the state law that created the Mental Health Board.
This article is part of an ongoing series about Milwaukee County’s mental health services. For more, go to shepherdexpress.com.
