Chicago defends renewing $40M contract with Favorite Healthcare Staffing to staff migrant shelters

Over the past month, a series of NBC 5 Investigates’ reports exposed how the Kansas-based company has been paid more than $56 million within the past year

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Chicago Mayor Brandon Johnson’s administration is defending its decision to renew a lucrative $40 million contract with Favorite Healthcare Staffing to staff the city’s migrant shelters through October of 2024.

NBC 5 Investigates was first to report the news of the new agreement on Wednesday.

Over the past month, a series of NBC 5 Investigates reports exposed how the Kansas-based company has been paid more than $56 million within the past year and has routinely billed the city at 84 hours a week – including overtime – for most of its employees who worked at migrant shelters spread across Chicago.

Our review of previous invoices found that during one week, Favorite billed the city for as much as $580,000 for one shelter, the Inn of Chicago, the city’s largest shelter that houses more than 1,500 migrants.

If the company continues to bill at similar rates of 84 hours per week for each worker, it could lead to Chicago taxpayers having to shoulder six-figure annual pay rates for each of the workers, running between $220,000 to $850,000 per worker – even with the newly reduced pay rates.

Starting Oct. 1, hourly rates will run between $40 to $156 per hour.

Which rates the employees receive depends on if the employees are local hires or are from out of town and if they need Favorite to cover their housing and travel expenses. The mayor’s office has said that the previous rates were inflated to cover those administrative costs for housing and travel.

During a briefing with reporters Thursday, First Deputy Chief of Staff Cristina Pacione-Zayas said the Johnson administration had little choice but to renew the deal, because there aren’t enough local providers in the pipeline to replace Favorite at 25 city-run migrant shelters.

“If we were to kill this contract, who would staff these spaces? We would get slammed and critiqued on that. And so we are being responsible while trying to come up with new ways to be responsive and also sensitive to the fact that the city of Chicago is paying for this, and all of this is falling on the shoulders of Chicago,” Pacione-Zayas said.

During the briefing with reporters, Pacione-Zayas provided an update on a request for proposal – put out this summer – that seeks to have local providers staff some of the city’s migrant shelters.

She told reporters that the city had received 21 proposals from nine different agencies to staff as many as 11 of the shelter sites. Even if all 11 are eventually staffed by local providers, that could still potentially leave Favorite to operate the remaining majority -- if not all the sites.

When asked if she saw a future without Favorite being involved, Pacione-Zayas said it’s unclear and likely won’t be fully understood until the local applicants are vetted and the city can determine if it could eventually be able to “disengage with Favorite.”

Pacione-Zayas also side-stepped a question when asked if the city should consider conducting an internal audit based off reporters’ findings that Favorite billed the city with exorbitant overtime costs, saying:

“I am concerned about staffing our shelters with Chicagoans and making sure we can move people off the streets and out of the floors of police stations and airports,” she said.

For weeks, Favorite has not responded to our repeated question about its billing processes or rates; but in a one-sentence statement, said: “We look forward to continuing to work with the city on this important mission,” the statement attributed to Keenan Driver with Favorite Healthcare Staffing read.

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