Resolution Establishing CMH as an Authority

At a regular meeting of the Board of Commissioners of the County of Ottawa, Michigan, held at the Fillmore Street Complex in the Township of Olive, Michigan on the 26th day of February 2026 at 9:00 a.m. local time.

PRESENT: Commissioners: Sylvia Rhodea, John Teeples, Doug Zylstra, Jacob Bonnema, Kendra Wenzel, Allison Miedema, Joe Moss, Jordan Jorritsma, Phil Kuyers, Jim Barry, Josh Brugger. ABSENT: Commissioners: None.

It was moved by Commissioner Jordan Jorritsma and supported by Commissioner John Teeples that the following Resolution be adopted:

WHEREAS, Ottawa County has for decades operated a Community Mental Health
Services Program (“CMHSP”) as an “Agency”;

WHEREAS, in 1995, the State Legislature recognized that CMHSP programs were becoming increasingly complicated and additional funding tools were increasingly needed and so it encouraged counties through MCL 330.1205 to incorporate their agencies into authorities;

WHEREAS, such additional funding tools include the ability to accept dedicated gifts, grants and bequests and to undertake limited borrowing—all without financial risk to the taxpayers of Ottawa County (collectively, the “Authority Financial Benefits”);

WHEREAS, until 2025, Ottawa County has always believed that the State of Michigan considered itself the underwriter of any deficits in the Medicaid federal/state entitlement plan that serves as the bulk of funding for the CMH Agency if the prepaid inpatient health plan (“PIHP”) for the County lacked sufficient reserves; WHEREAS, during 2025, the State of Michigan intentionally refused to confirm its status as the underwriter for any Medicaid deficits in Ottawa County, implying that it considers Ottawa County taxpayers to be responsible for such unreserved deficits because it has not incorporated its Agency into an Authority under MCL 330.1205;

WHEREAS, among the Authority Financial Benefits available through MCL 330.1205 and MCL 330.1220 is clarity that the State of Michigan will be responsible for funding the CMHSP Medicaid program in Ottawa County;

WHEREAS, all but five (5) counties in Michigan have taken advantage of MCL 330.1205 to incorporate their CMHSP agencies into CMHSP authorities, thereby confirming that the State of Michigan is responsible for any unreserved Medicaid deficits in their counties;

WHEREAS, not a single one of those counties after incorporating their agencies into an authority has had to cover unreserved Medicaid deficits with their general funds, while in 2019 Ottawa, Muskegon and Washtenaw—which have not incorporated—had to cover a collective
$22 million in unreserved CMHSP Medicaid deficits with their own funds;

WHEREAS, the Ottawa County Board of Commissioners determines that a failure to incorporate is unfair to Ottawa County’s taxpayers, because they are pro-rata responsible as State of Michigan taxpayers for Medicaid deficits in other counties that have authorities, while also being potentially solely at risk for such deficits in Ottawa County;

WHEREAS, the Ottawa County Board of Commissioners determines that the financial protection that becoming an authority presents to the Ottawa County taxpayers and the additional Authority Financial Benefits available to the Ottawa CMHSP in becoming an authority merit incorporation of the Ottawa County CMH Agency into an authority;

WHEREAS, the Ottawa County Board of Commissioners determines that eliminating an extra lawyer of government in the administration of Ottawa County CMH through an authority controlled by the Director and the Mental Health Board will also enable it to more quickly adapt to the changing needs of the behavioral health system;

WHEREAS, the Ottawa County Board of Commissioners determines that the Agency’s employees in the short term will be protected by the incorporation to an Authority by the protections of MCL 330.1205 and through the attached Transition Agreement, and in the long term will enjoy greater staffing security and wage growth opportunities as a result of this change;

WHEREAS, the Ottawa County Board of Commissioners also finds that the transition of its CMH Agency to an Authority will not negatively impact service recipients because Ottawa County will remain obligated to fund general fund CMH services and CMH clients who receive Medicaid, will retain all of their Medicaid benefits since Medicaid is federal entitlement program whose services can only be changed by federal regulation;

WHEREAS, MCL 330.1205 provides that the Ottawa County Board of Commissioners may approve an Enabling Resolution that would incorporate its CMHSP Agency into a single county Authority

NOW THEREFORE BE IT RESOLVED that the following Enabling Resolution incorporating the Ottawa County CMH Agency into an Authority is adopted and the attached Transition Agreement and Transition Plan to effectual that change are approved for public dissemination:

ENABLING RESOLUTION OTTAWA COUNTY CMHSP AUTHORITY
A. Creation: There is hereby created an Ottawa County CMHSP Authority (“The Authority”), which shall be a public CMHSP authority pursuant to Michigan Mental Health Code (“Code”), specifically MCL 330.1205.
B. Board and Director: The current Ottawa County Mental Health Board and (“Authority Board”) Ottawa County CMHSP Director are hereby empowered to operate the Authority under the authority of the Code and the provisions of this Resolution. Thereafter, the Ottawa County Board of Commissioners will continue to appoint the members of the Authority Board according to the provisions in the Code for appointment of a Mental Health Board. The Director shall be appointed and may be removed by the Authority Board as may be more specifically detailed in an employment contract.
C. Enabling County: The County of Ottawa, Michigan is the only municipality creating the Authority. The Authority Board shall have the right to determine if the Authority merges with any other CMHSP Authority, in whole or in part, provided that the Board of Commissioners also approves.
D. Purpose: The purpose of The Authority is to comply with MCL 330.1205 and to exercise all the powers, authority, rights and responsibilities of a CMHSP authority under the Code.
E. Effective Date: The Authority shall begin its existence upon approval of this Enabling Resolution. However, operationally, the Ottawa County CMHSP shall be totally merged therein upon approval by the Michigan Department of Health and Human Services (“Department”) of the termination of the Ottawa County CMH Agency (“Effective Date”). In this regard, a transition agreement has been developed for Ottawa County and the Authority, which addresses personnel, buildings and equipment, accounting, human resources, pension management, union contract transition, and other services (“Transition Agreement”).
F. Duration: The Authority shall continue indefinitely unless terminated by the Ottawa County Board of Commissioners, merged into another CMHSP through a merger approved by the Authority Board and the County Board of Commissioners or through dissolution. If the Authority is terminated or dissolved, all assets and real and personal property, net of liabilities, shall be transferred to the succeeding CMHSP that replaces the Authority.
G. Real Property: Pursuant to the Transition Agreement and/or Effective Date, the following real estate, buildings and furnishings shall be leased by the County of Ottawa to the Authority, including the James Street Headquarters, Parcel #70-16-16-400-039, 12263 James St, Holland Township and Parcel 70-03-21-425-001, 1111 Fulton St, Grand Haven according to the cost allocation plan of the County for the duration of the Transition Agreement and, thereafter at market rates to be negotiated between the County and the Authority;
H. Other Property: Pursuant to the Transition Agreement and/or Effective Date, all assets, debts, and obligations of the Ottawa County CMHSP Agency, including but not limited to equipment furnishings, supplies, cash and other personal property shall be transferred from the County of Ottawa to the Authority pursuant to MCL 330.1205(3)(a).
I. Privileges: The Authority shall have all privileges and immunities from liability and exemptions from laws, ordinances, and rules that are applicable to the Ottawa County CMHSP and its board members, officers, and administrators, and county elected officials and all employees of the Ottawa County CMHSP are retained by the Authority pursuant to MCL 330.1205(3)(b).
J. Transfer and Protection of Personnel: Pursuant to the Transition Agreement and/or Effective Date, the Executive Director and all employees of the Ottawa County CMSHP shall be transferred to The Authority pursuant to MCL 330.1205(2)(e) and the privileges defined thereunder. Thereafter, such personnel shall no longer be employees of the County of Ottawa, and the Authority shall be the “employer” regarding all laws pertaining to employee and employer rights, benefits, and responsibilities.
K. Governance: As noted above, the Authority shall be governed by its Authority Board appointed Executive Director and the Authority Board appointed by the Ottawa County Board of Commissioners under MCL 330.1222.
L. Powers: The Authority shall have all powers granted to a community mental health services program under the Code and such additional powers as identified and limited in MCL 330.1205(4), (10), (11), (12) and (13). In addition, if not specifically authorized by the foregoing, The Authority shall have all the following powers:
(1) To fix and collect charges, rates, fees or other charges and to collect interest.
(2) To make purchases and contracts.
(3) To transfer, divide, or distribute assets, liabilities or contingent liabilities.
(4) To accept gifts, grants or bequests that determine the way those gifts, grants or bequests, consistent with the donor’s request.
(5) To acquire, own, operate, maintain, lease or sell real or personal property, including the power to determine the location of property purchased, leased, and/or operated.
(6) To enter into contracts and agreements in the Authority’s name.
(7) To employ staff in the Authority’s name.
(8) To acquire, construct, manage, maintain, or operate buildings or improvements in the Authority’s name.
(9) To acquire, own, operate, maintain, lease or dispose of real or personal property in the Authority’s name.
(10) To incur debts, liabilities, or obligations in the Authority’s name that do not constitute the debts, liabilities, or obligations of Ottawa County.
(11) To commence litigation and defend itself in litigation.
(12) To receive and expend funds for the purposes of a CMHSP Authority.
(13) To invest funds in accordance with statutes regarding investments.
(14) To set up reserve accounts utilizing state funds in the same proportion that state funds relate to all revenue sources; to cover vested employee benefits, including but not limited to accrued vacation, health benefits, the employee payout portion of accrued sick leave, if any, and Workers’ Compensation. In addition, The Authority may set up reserve accounts for depreciation of capital assets and for expected future expenditures for an organizational retirement plan.
(15) To develop a charge schedule for services provided to the public and utilize the charge schedule for first and third-party payers. The charge schedule may include charges that are higher than cost for some service units by spreading nonrevenue service unit costs to revenue-producing service unit costs with total charges not exceeding total cost. All revenue over cost generated in this manner shall be utilized to provide services to priority populations.
(16) To determine the method and extent to which the Authority secures and maintains insurance, including but not limited to self-insurance and re-insurance.
(17) To request that the Ottawa County Board of Commissioners place on the ballot a new or renewed community mental health millage and then to levy and appropriate such funds to the Authority if approved by the voters.
M.Additional Obligations: The Authority shall also:
(1) Provide to the Ottawa County Board of Commissioners through the Director, an annual report on the financial, operational and service status of The Authority;
(2) Provide to Ottawa County by February 28th of each year a copy of an annual independent audit performed by a certified public accountant in accordance with governmental auditing standards issued by the comptroller of the United States; and
(3) Approve the attached Transition Agreement between the Authority and the County. Thereafter, the Authority shall be responsible for all executive administration, personnel administration, finance, accounting, and management information system functions. The Authority may discharge this responsibility through direct staff or by contracting for services.
N. Transfer of Liabilities: After the Effective Date of the Authority, the County of Ottawa shall not be liable for any intentional, negligent, or grossly negligent act or omission, for any financial affairs, or for any obligation of the Authority, its Executive Director, the Authority Board, or its board, employees, representatives, or agents.
O. Levy: The Authority shall not levy any type of tax or, except as provided MCL 330.1205(13), issue any type of bond in its own name or financially obligate any unit of government other than itself.
P. FOIA and OMA: To the extent required by law, the Authority, as a governmental entity, shall be subject to the Open Meetings Act, being MCL 15.261 et seq and the Freedom of Information Act, being MCL 15.231 et. seq.

BE IT FURTHER RESOLVED that all resolutions and parts of resolutions insofar as they conflict with this Resolution are hereby repealed.

YEAS: Commissioners: John Teeples, Jacob Bonnema, Jordan Jorritsma, Phil Kuyers, Jim Barry, Josh Brugger.
NAYS: Commissioners: Sylvia Rhodea, Doug Zylstra, Kendra Wenzel, Allison Miedema, Joe Moss.
ABSTENTIONS: Commissioners: None.
RESOLUTION ADOPTED