Cost of Welfare Compliance Put at $1.6 Million

Los Angeles County will pay at least $1.6 million in overtime to staff welfare offices six days a week in an effort to meet federal and state welfare-to-work deadlines, officials said Thursday.

The expenses represent 62,000 hours of overtime expected to be logged in an eight-week period covering May and June. The costs will probably continue to spiral as the county tries to enroll 100,000 recipients into its welfare -to-work program, Greater Avenues for Independence before a Jan. 1 state-imposed deadline.

At stake is the potential loss of millions of dollars in federal funding if the state fails to put sufficient numbers of recipients to work. The 1996 federal welfare overhaul mandates that 40% of single parents in California’s welfare caseload be engaged in some kind of work activity for at least 20 hours a week by 1999. The work participation rate rises to 50% by 2002.

In Los Angeles County, most recipients will have to work 32 hours a week to qualify for benefits and services.

The mad scramble to enroll recipients in the county’s key welfare-to-work program is yet another bump in the road for local officials and points up the immense logistical problems confronting the county, whose welfare caseload exceeds the public assistance population of most states.

About 50,000 recipients are enrolled in the program, but the Department of Public Social Services lacks the staff and facilities to complete its tasks and is falling behind schedule, officials concede.

“There are a lot of operational problems the department is dealing with,” said Department of Public Social Services budget Director Otto Solorzano. “It’s a question of the requirements versus having the manpower and space to fulfill all of them.”

The county is trying to acquire or convert several facilities to handle the overload of cases, officials said.

But instead of staffing them with additional public employees, the county has chosen this crucial period to experiment with contracting out some of its welfare-to-work functions to private companies. The move was initiated by Supervisor Zev Yaroslavsky and approved by the Board of Supervisors in February.

The intent was to give the county more maneuverability and avoid having to hire and fire hundreds of new public employees in the face of shifting caseloads and fiscal uncertainties, said Yaroslavsky spokesman Joel Bellman.

However, the plan has drawn the wrath of public employee unions. They said they may file a legal challenge to block it. The groups contend that state law bars privatizing some public services unless there are no other less costly alternatives.

Officials said the overtime is needed until the board approves the contracting arrangement. They also argue that experienced county employees can do a better job.

“The whole point of this effort is for caseworkers to do whatever they can to figure out what are the roadblocks keeping people from working, whether it be transportation or in the home or neighborhood,” said James Johnson, a senior representative for the Service Employees International Union, Local 535, which represents about 750 Greater Avenues for Independence employees. “The caseworkers will need to take a holistic approach and the contracted workers simply will not be able to meet that test.”

Tanya Akel, a researcher with Local 660 of the Service Employees International Union, asserted that contracting out case management duties will merely add another layer of bureaucracy and paperwork and will require intense scrutiny and monitoring by county workers. The law, she noted, dictates that determinations about eligibility and sanctions for noncompliance must be made by public employees.

Any contract to provide for even a portion of Los Angeles’ welfare services represents a lucrative deal. The total allocation for Greater Avenues for Independence services for the 1997-98 fiscal year was $346.2 million.

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The county has only now begun a feasibility study to determine the cost-effectiveness of privatization but has nonetheless committed to contracting some services on a temporary basis to quickly expand its program in the next few months. The Department of Public Social Services will report to the supervisors in mid-August with the cost analysis and a recommended permanent contractor, said program services supervisor Raul Ramirez.

Ramirez said eight companies have bid to provide temporary services for six months with an option to extend the contract on a month-to-month basis up to a year. He would not identify the bidders but said final negotiations are being conducted with the top candidate.

Employee representatives and several supervisors’ offices have confirmed that the companies PDQ Personnel Services and Maximus are contenders.

The permanent contract, expected to be bid this month, would staff three offices with about 300 contracted workers, about 25% of the total county program. The workers would be located in the Palmdale, Panorama City and Glendale/Burbank offices.

Pointedly left out by their own insistence are districts represented by Supervisors Gloria Molina and Yvonne Brathwaite Burke, who opposed the privatization plans.

County officials insist that those districts will not be underserved, even though they hold the largest concentrations of welfare recipients.

Molina deputy Miguel Santana said the supervisor is not convinced that a private company can provide service more cheaply.

“She feels that at a time when we have an unprecedented challenge it is the least opportune time to try to experiment with agencies we know nothing about and models where we have had such a bad experience in the past,” said Santana.

He was referring to an attempt by the county in the late 1980s and early 1990s to privatize a portion of its welfare services. The contract with Maximus to provide case management services was widely held to be a failure.