Red Rock Academy operator accuses state of violating contract

Nevada’s abrupt closure of a juvenile correction campus in Clark County is being challenged by the nonprofit that ran the facility and is raising questions about possible contract violations.

State officials contend it was a mutual decision.

An exchange of letters shows conflicting messages between state officials and Rite of Passage, which operated Red Rock Academy. The contract was set to expire Sept. 30, 2017, but the state closed the facility with little notice on March 10. The state said both parties reached an “amicable” agreement to end their relationship.

But a March 27 letter sent to the state’s Division of Child and Family Services by Rite of Passage’s board of directors claims both parties hadn’t reached such an agreement and said the state instead “demanded” that the nonprofit sign an amendment ending the contract or face a notice of termination for cause.

Rite of Passage officials on March 9 were given “one hour to decide and were threatened with contract termination without any details,” a source close to the issue said this week.

When state officials were asked to comment, Mary Woods, spokeswoman for the state’s Department of Health and Human Services on Friday repeated that Rite of Passage signed the “amicable contract amendment.”

The board of directors of Rite of Passage met on March 27 and sent the letter to the state withdrawing, revoking and rescinding its consent to the amendment.

“Now that the Rite of Passage board of directors have had ample time to evaluate their options, they chose to follow the terms of the contract and revoke the early termination,” a source said.

The amended language called for the contract between Rite of Passage and the state’s Division of Child and Family Services to be effective from July 9, 2013, to March 9, 2015, which was the day before the state closed the facility.

The Rite of Passage letter also called for the amendment not to go to the Nevada Board of Examiners for approval. The amendment says that changes to the original contract should not take effect until approved by the Board of Examiners.

However, a Wednesday letter from Richard Whitley, interim director of the state’s Department of Health and Human Services, to Rite of Passage officials asserted the amendment was legally binding after being signed by all parties on March 10. The letter also says that the amendment doesn’t require Board of Examiners’ approval.

The state conducted its final walk-through at Red Rock on Friday.

The original contract specifies that amendments should be made in writing, signed by the parties and approved by the Nevada attorney general’s office and the Board of Examiners. The contract also says that unless otherwise specified, termination should not be effective until 90 days after either party has served written notice of termination for default, or notice for termination without cause.

Rite of Passage “has never received a written notice of default and time to correct any defaults that is specifically required under sections 4 and 10 of contract 14575 prior to any notice of termination for cause being served,” claims its March 27 letter to state officials.

The state in March said it did not provide a 90-day written notice to Rite of Passage “because both parties agreed to an amicable separation.”

Emails and documents show that there was communication on Feb. 24 between state officials and Rite of Passage concerning needed actions on nursing practices. That included hiring a registered nurse to provide oversight to two licensed practical nurses and the medical unit. The facility’s controlled substances policies also needed to require medication counts to be done by two staff members, accurate identification of clients receiving medication, appropriate disposal of medication, and documentation on medication administration.

Rite of Passage the same day responded with a corrective action plan, which was accepted by Dr. Tracey Green, the state’s chief medical officer. In an email, she indicated a state nurse would be at the facility to ensure compliance the next day.

A different nine-week monitoring report also found things such as a kitchen knife missing from the locked cabinet, which was later found in the dishwasher, and an open door to the visiting center.

On Feb. 26, Red Rock Academy and a 2014 legislative audit of the facility sparked conversation among state lawmakers during a Division of Child and Family Services budget hearing. That audit also identified issues in the medical unit. After compliance problems were raised by Mike Willden, chief of staff for Gov. Brian Sandoval’s office, Assemblywoman Maggie Carlton, D-Las Vegas, called for quick action.

“I don’t want to put you guys in a rough spot, but I think we should have a discussion about when we are going to call it done,” she said during the hearing.

On March 4, state officials were at the facility to discuss compliance issues.

In a letter dated March 5 and sent to Willden, Rite of Passage President S. James Broman said the nine-week monitoring report Willden provided gave the nonprofit clear examples of concerns.

“It is equally apparent that we have not been responsive to them,” Broman’s letter reads. “For these issues and for all of your frustrations, we apologize.”

Effective immediately, Rite of Passage would implement a five-point plan to ensure compliance, according to the letter.

But a few days later, officials were moving in a different direction.

In a March 9 letter to Amber Howell, administrator for the Division of Child and Family Services, Broman high­lighted two issues as well as possible solutions in the amicable separation agreement. He proposed negotiations that would take place during a 90-day window before termination, which would comply with the contract.

Rite of Passage proposed getting re­imbursed a flat rate for 46 students over the 90 days. That would amount to $260,000 per month until all juveniles were “removed or the winding up transaction is completed,” according to the March 9 letter.

The nonprofit was also asking to be reimbursed for expenses, not to exceed $250,000, related to the December 2013 opening of the facility and operations.

The state rejected that offer and instead pulled juveniles out of the facility the next day, a source close to the issue said.

At the time Red Rock was closed, it housed 43 juveniles who were transferred to the Nevada Youth Training Center and Caliente Youth Center. Seventeen of those inmates were placed on supervised release.

Contact Yesenia Amaro at yamaro@reviewjournal.com or 702-383-0440. Follow @YeseniaAmaro on Twitter.