Harris County Emergency Services District No. 11 commissioners at a contentious June 24 meeting tentatively agreed to pay Cypress Creek Emergency Medical Services' June billing invoice, provided CCEMS meets several requirements.
Tension has risen between the two entities since June 2020, when ESD 11 commissioners initially voiced concern over extending the district’s contract with CCEMS that provides emergency medical services for approximately 177 square miles in areas including Cypress, Tomball, Spring and Humble.
Last September, ESD 11 commissioners voted to terminate that contract after 360 days and announced in December it would form its own EMS provider—ESD 11 Mobile Health Services—to replace the services provided by CCEMS when the contract expires on Sept. 4.
Representatives from both entities sparred at the June 24 meeting, with ESD 11 commissioners claiming CCEMS officials have been unresponsive to questions pertaining to the impending transition of services, as well as a pair of audits that date back to 2020.
At the June 24 meeting, ESD 11 Executive Director Doug Hooten said he reached out to CCEMS CEO Wren Nealy multiple times to discuss the transition.
“We have been attempting to have discussions and conversations with CCEMS about transitional stuff,” Hooten said. “So far, we’ve been unsuccessful at having those meetings after a number of attempts, or phone calls and emails, as well as letters.”
Nealy said he had responded in a June 18 email to Hooten concerning a number of questions previously submitted by ESD 11 General Counsel Regina Adams, but he conceded Adams had not been sent that same response.
Adams pressed Nealy at the meeting to provide an exact date to talk with Hooten to iron out transition details, and he agreed to meet with Hooten June 25.
After the June 24 meeting, Nealy said the June 18 email explained he had not reached out to schedule a time to talk with Hooten because CCEMS was in the process of hiring a chief operating officer that would be responsible for all aspects of the transition, though he noted the hiring process has taken longer than he expected.
PKF Texas audit
Later in the meeting, ESD 11 Special Litigation Counsel Brian Trachtenberg expressed frustration regarding an outside audit conducted by PKF Texas inspecting CCEMS’ financial records and physical inventory. Last December, Community Impact Newspaper reported that PKF Texas Director Danielle Shukis Cheek alleged CCEMS’ records indicated roughly $10 million in unaccounted funds.
“[PKF] continues to do their work, but they are continuously frustrated by CCEMS’ flow of information, which only happens in the days leading up to our meetings, and otherwise, they’re silent in between,” Trachtenberg said. “We may come up with a conclusion that we can’t answer certain questions because CCEMS simply refuses to give you the information that PKF needs.”
CCEMS attorney George Vie said he had responded to PKF’s inquiry on the alleged missing $10 million, stating those funds had been accounted for in the operating and depository accounts.
“They’ve acknowledged that we have provided information and we continue to provide information,” Vie said, adding that he has since received several more requests for additional information. “I’m also getting asked for documents for the first time on June 11 from an audit that’s been going on for a year. ... I understand that [PKF is] never going to be happy with the time by which we’re responding to things.”
According to Trachtenberg, however, the responses to information requests have not answered PKF’s questions.
“When PKF asks a question Mr. Vie doesn’t like, PKF feels they’re getting non sequiturs and distractions,” Trachtenberg said. “They’re getting partial bits of information instead of the full information.”
Vie contended that CCEMS has provided all of the information requested in regard to the PKF’s preliminary report issued in December, which encompassed the first phase of the audit, and is continuing to respond to additional inquiries that have arisen in phase two.
“It’s an ongoing set of requests,” Vie said. “It’s an ongoing set of response documents from both sides. ... We’ve knocked out a lot of the things that went back to January, February, March, April. These are new things in April and May, and now I have new things in May and June, so I’m working on them. I’m trying to respond to them and the most recent requests.”
Trachtenberg remained unconvinced on CCEMS’ compliance with the audit.
“Yes, there are new requests that come in, because, as with any investigation, once Mr. Vie gives you something, you look at it and process it and have further questions,” Trachtenberg said, ultimately stating he didn't think CCEMS had complied with the second phase of the audit.
After the meeting, Nealy said he believed the PKF audit was being extended so ESD 11 would not have to pay out the approximately $2.5 million in funding that was withheld by the district, following disputes over financial documents and insurance claims.
ESD 11 began to withhold funds in June 2020 due to unreleased documents related to the audit. The ESD 11 board voted in September 2020 to withhold 30% of its regular payment to CCEMS due to the insurance claims. A Harris County judge later signed an agreed temporary injunction between both parties in November 2020 barring ESD 11 from withholding payment to CCEMS based on employee insurance claims.
“The PKF audit is an ongoing, never-ending audit,” said Nealy, noting the audit was originally supposed to run through August 2020 but has since been extended to June of this year. “You can’t just keep extending this and extending it and extending it. This is my personal opinion: I think they’re doing that because if they complete the audit, they have to turn the completed report over, and their motion was that when they complete the audit and it’s done ... then they will pay us the $2.5-$2.8 million they owe us from 2020. They don’t want to do that.”
In a June 25 emailed response, Trachtenberg said the investigation could have been over months ago if CCEMS had cooperated.
"The investigation of CCEMS’ financials was launched by ESD 11 because of concerns about overbilling and misuse of taxpayer dollars," Trachtenberg said. "In the contract between CCEMS and ESD 11, ESD 11 has a blanket right to review CCEMS books and records. ... In 2020, PKF was hired to undertake the current investigation. CCEMS again refused to cooperate, until ESD 11’s board of commissioners told CCEMS it would not be paid if it did not comply with PKF’s requests. Since then, CCEMS has been trickling out information to PKF at a snail’s pace."
When discussing the payment of CCEMS’ June invoice, ESD 11 commissioners proposed a motion awarding the payment only if Nealy met with Hooten for the June 25 meeting and that Hooten was satisfied with the meeting, as well as CCEMS' continued cooperation with PKF.
The motion also stipulated CCEMS approve a separate audit for the fiscal year that ended on Dec. 31, 2020, conducted by Weaver Audit Firm that has not yet been completed.
Vie argued that CCEMS had already provided services for the month of June and that it was unreasonable for the funds to be withheld based on the completion of an audit outside of its control, noting that CCEMS’ ability to operate would be greatly diminished if the payment was not approved.
“If we don’t have operating funds, there’s going to be a problem,” Vie said. “I don’t want to leave this meeting with an uncertain period of time when I don’t [know] when I’m going to have a check or not have a check for my client’s operation to provide emergency services.”
ESD 11 commissioners ultimately amended their motion to require CCEMS to provide an approximate date for the completion of the Weaver audit to be provided by Nealy’s June 25 meeting with Hooten, in addition to the continued compliance with the PKF audit.
The board approved the motion 3-2, with commissioners Robert Pinard and Kevin Brost casting the dissenting votes.
Vie confirmed on June 25 that he was able to provide an approximate date for the completion of the Weaver audit and that CCEMS would receive payment for its June invoice pending the outcome of the transitional meeting between Hooten and Nealy.