Los Angeles County’s plan to pay $7.8 million a year for an inexperienced Virginia firm to run the new state-mandated workfare program was called illegal Friday by the Deukmejian Administration and ridiculed by Democratic lawmakers.
Los Angeles, like all other counties in the state, was supposed to have begun the Greater Avenues for Independence (GAIN) workfare program by Sept. 26. More than 50 counties complied with that legal deadline, but the Board of Supervisors’ desire to hire a private firm to manage the Los Angeles program has led to delays.
In the hope of defusing what has become a pitched battle of wills between two levels of government, county Chief Administrative Officer Richard Dixon promised Friday to have the workfare program running by Nov. 1, one way or another.
But lawmakers, noting that Dixon did not show up at a September hearing in Los Angeles and had to be subpoenaed to appear Friday, were skeptical that the Nov. 1 pledge could be met and questioned the management ability of Los Angeles county officials.
The GAIN program, which passed the Legislature in 1985, is intended to train welfare recipients, most of them mothers with children, for jobs that will keep them off public aid. State and federal money will pay for the program, which was considered a major reform of the welfare system in California.
In Los Angeles, where the voters approved a law encouraging the county to do more of its business with private firms, Dixon and the Board of Supervisors contend that a company can manage the program more efficiently than the Department of Public Social Services.
The Virginia management consulting firm that was selected, Maximus, has never overseen welfare cases before. But county officials said the company was the best of four firms that applied for the contract, and will save taxpayers about $500,000 the first year and up to $4.3 million in later years.
However, the use of private citizens to oversee welfare recipients raises questions of confidentiality and due process. The state Health and Welfare Agency has taken the position that the law bars public officials from allowing a private company to make decisions over the personal lives of welfare recipients.
Such private firms may legally decide simple questions of fact, such as a child’s age or whether a woman is pregnant, state attorneys contend. But they should not be involved in evaluating a person’s suitability for employment or making other less-objective decisions.
Dixon, testifying Friday before a joint legislative committee established to oversee the GAIN program, said that county attorneys continue to dispute the state’s legal analysis despite several efforts at reaching an agreement.
But Dixon conceded Friday that state approval is needed before Maximus can be hired, and announced that the Board of Supervisors will vote on Tuesday whether to prepare an alternative plan in order to get some kind of GAIN program in place by November.
At Friday’s legislative hearing, Dixon and county welfare chief Eddy Tanaka came in for scorn from the only two lawmakers who attended, both of them Democrats.
Assemblywoman Delaine Eastin (D-Union City) bored in on the county officials for more than hour, questioning their management abilities and raising doubts about some provisions in the county’s deal with Maximus.
Eastin said that the contract with Maximus, which provides for a pay rate of $238 an hour for the firm’s top officer and $204 an hour for the No. 2 officer, would make those Maximus executives the highest-paid government employees in California.
Savings Could Be Cut
Eastin also said the cost savings envisioned by the county--$500,000 the first year--would be closer to $200,000 and might be wiped out altogether if Maximus takes advantage of a provision that allows the firm to raise its rates by 10% after the contract is signed.
Under questioning by Eastin and state Sen. Bill Greene (D-Los Angeles), the county officials said they could not independently vouch for the qualifications of Maximus to do the work. The firm has worked for the county before and is seeking contracts to manage welfare programs elsewhere, but has yet to actually oversee a large welfare program, the county officials said.
Tanaka, who runs the county Department of Social Services, also was unable to answer queries about the background and qualifications, or even the name of the man hired by Maximus to run its operations in Los Angeles.
That drew a heated response from Greene, who told Tanaka: “You are not honorable. . . . Your word isn’t worth 5 cents.” After the meeting, Dixon defended Tanaka, saying: “I thought it was unfortunate. My experience is his integrity is without question.”