Summary Sheet- WSS ISSUE REVIEW SUMMARY

MEMORANDUM – ISSUE REVIEW SESSION
TO:
Mayor and Council
THROUGH:
Greg Ruiz, Interim Deputy City Manager, (480) 858-7212
FROM:
Tim Burch, Community Health and Human Services Director, (480) 858-2358
DATE:
1/11/2024
SUBJECT:
Sober Living Task Force Update
AGENDA ITEM: 3C 
PURPOSE:
The purpose of this presentation is to provide Mayor and Council with a City of Tempe Sober Living Task 
Force update and recommendations for a City-coordinated, collaborative, and strategic response to the 
fraudulent sober living crisis.
RECOMMENDATION OR GUIDANCE REQUESTED:
Staff is seeking approval of the recommended strategies proposed by the Sober Living Task Force for 
addressing and responding to the fraudulent sober living crisis, and direction regarding next steps.
CITY COUNCIL STRATEGIC PRIORITY AND RELATED PERFORMANCE MEASURE:
Safe and Secure Communities – 1.05: Achieve ratings for responses to “When it comes to the threat 
of crime, how safe do you feel in your neighborhood?” between 80 and 100 on a scale of 0 (not safe at 
all) to 100 (completely safe) greater than or equal to the top ten percent of national benchmark cities as 
measured by the monthly police sentiment survey.
Safe and Secure Communities – 1.09: Achieve response ratings of “No” relating to whether or not 
respondents of their household members were victims of crime higher than or equal to the National Crime 
Victimization Survey benchmarks as measured by the Community Survey.
 
Quality of Life – 3.01: Achieve 85% on the Code Compliance Composite Score while ensuring equity 
across all demographic categories.
Quality of Life – 3.34: Achieve health and well-being of the community indicated by the Cantril Self-
Anchoring Striving Scale with increases in the category of thriving and decreases in the categories of 
struggling and suffering as measured by the Community Survey.
BACKGROUND INFORMATION:
Sober Living Task Force
The Fraudulent Sober Living Provider Crisis Task Force (Task Force) convened in June of 2023 at the 
bequest of the City Council and City Manager Rosa Inchausti. This group was organized with the purpose 
of identifying the scope of fraudulent sober living providers impact within the City of Tempe’s jurisdiction, 
identifying gaps within the current system of response, and recommending strategies for addressing the 
gaps. This presentation is the culmination of multiple Task Force meetings, listening sessions with local 
partners including the McKinney-Vento and wraparound services liaisons within Tempe’s school districts, 
and a Technical Event Readiness Forum (TERF) event convened by the Tempe Office of Emergency 
Management. As a result, crucial recommendations were developed with a focus on improving the 
efficiency and effectiveness of City operations, particularly in the areas of general business licensing, 
code enforcement, and oversight processes as it pertains to the issue of fraudulent operators of sober 
living facilities within the City of Tempe.

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Findings
The issue of fraudulent providers claiming to provide legitimate outpatient therapy services for individuals 
experiencing substance use disorder while intentionally overbilling for legitimate claimants of the Arizona 
Healthcare Cost Containment System (AHCCCS) Indian Health Plan and the wholesale fraud of residents 
not eligible for this plan began as early as 2019 and reached a fever pitch in June of 2023. In conjunction 
with several tribal nations, the Governor convened the Operation Rainbow Bridge task force to identify 
and rectify the living situations of tribal members who had been defrauded and misplaced because of 
coordinated efforts among bad actors in the Indian Health Plan (IHP) system.  
Solari Inc, the provider of 2-1-1 Arizona and coordinator of Crisis Intervention Services, was identified as 
the central reporting and response system for the fraudulent sober living crisis. Individuals who are in 
harm’s way because of a fraudulent provider can report the provider for review by AHCCCS and request 
help for housing and treatment services by calling 2-1-1 and pressing Option 7. As of December 1, 2023, 
over 168 providers have been reported via 2-1-1*7 covering 6,200 unique individuals; this is in addition 
to the more than 400 providers suspended or terminated by AHCCCS. Data shows that the fraud has 
expanded dramatically to include over 50% of the defrauded claimants not having a legitimate tribal 
affiliation, many of whom were unhoused residents of local jurisdictions prior to fraudulent enrollment in 
the IHP option of AHCCCS. 
This scheme has thus far presented itself as a back channel for licensed outpatient treatment center 
(OTC) providers to sequester clients in housing as AHCCCS does not pay for that resource directly. 
Typically, the housing providers do not receive payment from AHCCCS; rather, from OTC providers who 
are fraudulently billing for services that have not been rendered, or for services for fraudulently enrolled 
members, sometimes to the tune of 24+ hours of services in a single day. These housing providers 
typically set up operations in a single-family residential home, most likely groups of homes, or in the case 
of the City of Tempe; in properties licensed and zoned as hotel/motels. Occupants have often found 
themselves subject to extreme limitation of movement and reduction of their civil liberties. Documented 
occurrences of being plied into compliance with the provision of alcohol and drugs for which they were 
supposedly being provided treatment and frequent relocation from state-to-state and location-to-location 
locally, often not even knowing their actual street address of residence.  
 
RESPONSE:
The Task Force convened as a whole, once per month. Working groups convened between meetings of 
the Task Force, focusing on matters of engaging community partners, developing communications, 
reporting, and tracking, and legal/enforcement issues. Additionally, an innovative approach was taken to 
view this problem as a disaster, and Emergency Management was engaged to host a Targeted Event 
Readiness Forum (TERF), wherein numerous sections of City operations were able to delineate their 
current abilities, restrictions, and desired system improvements necessary to address the increasing 
problem of fraudulent sober living home providers in Tempe. Summary progress updates were provided 
to the Human Services and Community Safety Committee in October 2023, and in the joint City Council 
State Legislative Priorities meeting in November 2023. This presentation serves as a final update and 
summary recommendation on behalf of the Task Force.
  
RECOMMENDATIONS:
1. Creation of a General Business License
The Task Force proposes the implementation of a comprehensive general business license system within 
the City, similar to other municipalities. A general business license would streamline the process for 
businesses to operate legally within the City and provide a centralized platform for oversight. This would 
not only facilitate better regulation, but also contribute to improved communication to businesses in the 
community. The City of Surprise, AZ has seen demonstrated success with this tool regarding culling the 
number of fraudulent sober living providers over the last five years.

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2. Systemic Tracking of Problematic Properties
To address issues related to problematic properties, the Task Force recommend the establishment of a 
systemic approach for code enforcement and law enforcement to track such properties. This would 
involve the development and implementation of a robust information system that allows for efficient data 
sharing and collaboration between relevant departments. Timely identification and resolution of problems 
will contribute to the overall improvement of the city's neighborhoods.
3. Excessive Calls for Service Ordinance at Commercial Properties
Commercial properties associated with unlicensed services and/or fraudulent billing are understood to 
generate an increased number of calls for service from law enforcement.  Extreme service demands 
would be captured in the systematic tracking system of recommendation 2. Additional tools for 
enforcement, such as an ordinance like the City of Anchorage (AK) put in place via a Fee for Excessive 
Police Response, would add an additional way to address providers who are derelict in their duty to 
provide proper support for their clients while being a good corporate citizen and neighbor to Tempe 
residents. Existing City of Tempe ordinances in support of this work include the Loud Party Ordinance 
and the False Alarm Ordinance. 
4. Continued Public Communication
The Task Force urges continued public communication and advocacy for change at the state level to 
enhance the annual licensure and inspection process. Recommendations to state legislators include:
• Closing loopholes in the annual licensure process to ensure a more thorough and rigorous 
    inspection of businesses.
• Increasing annual fines for non-compliance to act as a deterrent and encourage businesses to 
   adhere to regulations.
• Requiring businesses to make annual payments before relicensing to ensure prompt compliance 
   and streamline the renewal process.
Moreover, we recommend that the state legislature invest in staffing and information systems technology 
to modernize and improve the efficiency of the oversight process. This investment will lead to a more 
effective regulatory environment, benefiting both businesses and residents.
CONCLUSION:
In conclusion, the Sober Living Task Force believes that implementing these recommendations will 
contribute to the overall health and well-being of our community. We appreciate the Mayor and City 
Council's dedication to fostering a safe and prosperous environment for all residents, and we hope that 
you will consider these suggestions as valuable steps towards achieving that goal.
FISCAL IMPACT or IMPACT TO CURRENT RESOURCES:
There is no financial request attached to this presentation.
ATTACHMENTS:
1. 20240111_WSS_SOBER_LIVING_TASK_FORCE_UPDATE_PRESENTATION_FINAL.PPTX