When the Flagstaff City Council decided in February to delay for 18 months a special election that could have repealed the new city law hiking the minimum wage to $15 an hour by 2021, Rick Hargrove realized his company would have to make a drastic change.
In the four months since the city’s minimum wage increased to $10.50, Hargrove, co-owner and chief operating officer of Abrio Care, has moved four of its Flagstaff group homes for special needs adults to the Phoenix area and will move the remaining three homes within the next few weeks.
When the move is complete, 20 individuals with disabilities will have left Flagstaff and moved to Phoenix to continue their care with Abrio. Two individuals have chosen to stay in Flagstaff and transfer their care to the Hozhoni Foundation, Hargrove said.
Abrio has also closed its day program in Flagstaff and plans to open one in Phoenix instead. The Abrio program served individuals in resident programs with other vendors in addition to Abrio.
“It’s almost like ethnic cleansing, only it’s disability cleansing,” Hargrove said. “We are cleansing people with disabilities and indigent seniors out of our community.”
Increases to the city’s minimum wage beyond the state’s have left service providers in a bind, said Armando Bernasconi, the CEO of Quality Connections, which provides residential programs, a day program and employment opportunities for people with disabilities.
The state minimum is $10 an hour and will increase in stages to $12 by 2020. Flagstaff’s minimum will grow to $15.50 by 2022 unless repealed by voters in the special election next November and reset to essentially match the state law.
Most companies like Abrio and Quality Connections receive most of their funding from the federal government through Medicaid. Between 20 and 25 percent of the organizations’ funding comes from the Arizona Legislature, Bernasconi said.
For the Flagstaff provider network, which includes nine organizations that are funded by Medicaid, the discrepancy between funding they expect to receive to cover state minimum wage increases and what they need to fund Flagstaff minimum wage increases in the coming year is about $860,000, Bernasconi said. However, depending on state funding, that number could actually be closer to $950,000, said Monica Attridge, the CEO of Hozhoni.
Throughout the provider network, 32 people with disabilities have lost their jobs or had their hours cut so much they are not considered to be employed, Bernasconi said. Due to budget cuts, 56 people who work with individuals with disabilities have also lost their jobs and a total of 26 people who reside in group homes have been moved outside of Flagstaff.
To keep providers afloat for the fiscal year, which includes the city’s increase to $11 per hour in January, Bernasconi approached the city council this month to ask that the council pick up the difference in funding.
“It is only right that because Flagstaff voted this into law that Flagstaff should have to pay for it,” Bernasconi said.
Bernasconi said there are about 900 people in the city and nearby communities receiving services from providers, including many who are either mostly or completely in need of assistance like for eating, restroom needs, bathing and dressing. If the individuals were not able to access that kind of care in Flagstaff, they would most likely leave the city to get the care they require, he said.
The provider network employs over 1,000 people in Flagstaff and has an economic impact of about $25 million, Bernasconi said.
The $860,000 would “prevent providers from going out of business” in 2018, Bernasconi said. He said he does not know where the city would get the extra money to fund care providers, but the city spends money on things that are not core services, like parks and public art.
“Are those monies being spent really more important?” Bernasconi asked. “If something isn’t done, 900 people with disabilities will be relocated.”
The uncertainty with funding has made planning for the future very difficult, Bernasconi said. The funding he is requesting from the city council would help solve the issues with funding to providers, at least in the short term, but the effects of an increasing minimum wage are far-reaching for people with disabilities.
“Our guys are having a heck of a hard time finding jobs in Flagstaff,” Bernasconi said of people with disabilities who use Quality Connections for employment opportunities.
To help encourage businesses to hire workers with disabilities, Bernasconi suggested the city implement some kind of tax incentive employers could receive.
At Hozhoni, the increased cost meant eliminating six positions, including a program director, who was not replaced when she retired, Attridge said.
Hozhoni serves about 80 clients in the residential program in Flagstaff and about 100 people attend Hozhoni’s day and employment programs, some of whom live in the foundation’s residential programs and others who come from other residences. The foundation employs about 150 people in Flagstaff.
The minimum wage debate has put service providers in a difficult position, Attridge said.
“We certainly value our caregivers highly, but we are not able to pay them what they are worth,” she said. “It’s hard for them to see us advocate for a lower minimum wage, because they’re worth more. Sometimes it’s hard for them to understand that.”
Hozhoni started in Flagstaff and Attridge said she does not want the organization to leave the city, and said the foundation is looking to expand into other funding sources, like rehabilitation, to provide services around the state. However, she said she is not looking to expand in Flagstaff.
However, for the clients at Abrio, the move to the Phoenix area has not been all bad, Hargrove said.
“They are thriving now that they are here,” Hargrove said. “There are so many more things to do.”
Hargrove said he was driving one of the moving vans with some clients during the move.
“One of them turned to me and said, ‘I’m a big city girl now,’” he said.
The lower cost of living has also been a benefit.
“With the money we were spending in Flagstaff, we were able to get much nicer houses in Phoenix,” he said. “They are very excited about all the new opportunities for things to do.”
A lack of money has also detrimentally affected the clients’ experiences and opportunities, Attridge said.
“If we don’t have enough staff, it means our clients aren’t getting out and doing things,” she said. “Nationwide, there is a huge push for people with intellectual disabilities to get out and do things in the community, but at the same time the money is being cut.”
Attridge said she feels that people with disabilities are not as respected as they used to be.
“In my mind, it seems like people with intellectual or cognitive disabilities are being devalued,” she said. “Now, it almost seems like they’re a bother, they’re not being seen as individuals who deserve the same opportunities and experiences as everyone else.”