County Planning to Contract Out Bulk of Welfare Reform Efforts

Orange County plans to contract out the bulk of its new welfare reform programs, sticking with a national trend and its post-bankruptcy fiscal plan. The move, which would give an estimated $18 million to $20 million in public funds to private companies, is part of an overhaul proposed for the county Social Services Agency.

“We have turned the house upside-down,” according to Larry Leaman, executive director of the agency, who said the proposed reorganization and privatization were in response to the enormous changes required under federal and state welfare reform laws.

Orange County, along with San Diego County, has opted for much more aggressive privatization than Los Angeles and other counties in Southern California. Several nationally known welfare contractors such as Curtis & Associates and Maximus, which already do welfare work for the county, and Lockheed Martin IMS have expressed interest, Leaman said.

Union leaders said county workers would be able to do the work more cheaply and that their attorneys are researching whether the privatization of two-thirds of the job training and placement efforts would be legal. Some experts also warned that private companies might put profits ahead of finding lasting, decent jobs for poorly educated welfare recipients.

But the county Board of Supervisors and chief executive officer have decreed--for now--that no staff will be added to handle welfare changes, Leaman said, in spite of millions of dollars in new state and federal funds earmarked for everything from job training to baby-sitting.

“The counties around us are adding hundreds of new employees to do welfare reform,” said Leaman. “Orange County is going to do as much as it can with existing staff, and concurrently write contracts with private companies by putting out bids.”

In addition, more than 300 county employees who have handled welfare benefits may receive promotions and 5 1/2% raises, because they will be doing more intensive work.

The agency has already eliminated its decades-old Financial Assistance Department, which issued welfare checks. Two new departments have been created--the Family Self-Sufficiency Department and the Economic and Community Partnerships Department.

The first is headed by Angelo Doti, who spent 18 months studying welfare reform nationwide and developing changes in Orange County. His staff must tell the county’s caseload of 22,000 able-bodied adults that they have two years to find a job. The staff will also make the initial assessments of each client’s education and skills, and other needs. From there, clients would be assigned to private contractors or to county workers for motivation classes, resume writing, interviewing and other job help.

The second department, headed by Judy Tanasse, will coordinate privatization efforts, including writing bid specifications and overseeing the selection process, expected to take until year’s end.

Supervisor William G. Steiner and Doti said the privatization was a first step, and that if it did not work, the programs could easily be changed in coming years.

Fred Smoller, an associate professor of political science at Chapman University, said it was no surprise that Orange County would try to privatize so much of the new programs.

“Anything the Board of Supervisors feels the private sector can do better, they’re going to give to them,” he said. “There’s a general desire to keep government as lean as possible.”

But, he said, “the potential downside of privatization is that companies will put profit ahead of outcome . . . profit maximization as opposed to getting clients well educated and [into] good jobs.”

He also said there was a risk that private contractors could end up handling the easier two-thirds of the caseload, while county workers might get stuck with the substance abusers, alcoholics and entrenched recipients with serious impediments to keeping a job.

Doti said Orange County had chosen to contract out work not just because it is county policy to privatize whenever possible but because “it makes sense to have people who are better at these services than us provide them.”

He said that Maximus, Curtis & Associates and Foster Assessment and Evaluation had all done fine work in the old Greater Avenues to Independence programs that trained and placed 6,000 clients in jobs in recent years. He said a mandatory condition would be that the companies subcontract with established charities and community organizations with track records in handling domestic violence, language barriers and other challenges.

But Nick Berardino, director of employee relations for the Orange County Employees Assn., which represents social workers who have traditionally done more intensive work with welfare clients, said the proposed privatization plan was “ridiculous.”

He noted that a study conducted three years ago demonstrated that the county could do the same work cheaper than contractors.

Berardino also said state law governing privatization of traditional government functions might bar such large contracts.

Nancy Smith, a supervisor with Curtis & Associates’ job training program in Santa Ana, said there was plenty of work to go around. Steiner noted that county workers will still perform a third of the job training and placement, and said the competition between private and public sector workers to effectively place welfare clients could be healthy.