(1) Two or more counties may organize and operate a community mental health services program by creating a community mental health organization under the urban cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.501 to 124.512.

    (2) One or more counties and an institution of higher education in this state that has the authority to grant a baccalaureate degree, has a medical school, has its main facility in a city having a population of at least 100,000 but no more than 500,000, and is located in a county initiating the formation of a community mental health organization under this subsection may organize and operate a community mental health services program by creating a community mental health organization under the urban cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.501 to 124.512.

    (3) Subsequent to the formation of a community mental health organization under subsection (2), a county that joins or merges with that community mental health organization shall comply with all of the following:

    (a) The manner of employing, compensating, transferring, or discharging necessary personnel is subject to the provisions of the applicable civil service and merit systems and the following restrictions:

    (i) An employee of a community mental health organization is a public employee.

    (ii) A community mental health organization and its employees are subject to the provisions of 1947 PA 336, MCL 423.201 to 423.217.

    (b) At the time a community mental health organization is expanded under this subsection, the employees of the former community mental health services program shall be transferred to the community mental health organization and appointed as employees who shall retain all the rights and benefits for 1 year. An employee of the community mental health organization shall not, by reason of the transfer, be placed in a worse position for a period of 1 year with respect to worker's compensation, pension, seniority, wages, sick leave, vacation, health and welfare insurance, or another benefit that the employee had as an employee of the former community mental health services program. A transferred employee's accrued benefits or credits shall not be diminished by reason of the transfer.

    (c) If a former county community mental health services program was the designated employer or participated in the development of a collective bargaining agreement, the community mental health organization assumes and is bound by the existing collective bargaining agreement. The expansion of a community mental health organization does not adversely affect existing rights or obligations contained in the existing collective bargaining agreement. For the purposes of this subsection, "participation in the development of a collective bargaining agreement" means that a representative of the community mental health services program actively participated in bargaining sessions with the employer representative and union or was consulted during the bargaining process.