MOORLACH UPDATE — New Hiring — December 26, 2013

The County’s employee population is growing in two areas. The first is attributable to Proposition 63 funding, also known as the Mental Health Services Act, which is directed to the Health Care Agency. This portion of the increase is covered in detail in the OC Register piece below. The second area, which is touched on in the article, is growth in Social Services Agency staffing to assist with the implementation of the Affordable Care Act, also known as Obamacare. Consequently, the beefing up results from independent state and Federal tax revenue sources which are restricted toward these two health care objectives, and the costs for the new employees are not necessarily being funded out of the general funds of the County.

County, reversing trend, is hiring workers

After shedding jobs for years, county agencies are again hiring. The newest positions are 169 mental health jobs previously filled by contractors.

Orange County and local governments across the nation reduced their payrolls as full-time benefit costs climbed and tax revenue declined. Many turned to less expensive independent contractors. Now, faced with long-term demands in health care and elsewhere, the county is taking on full-time workers. The county this year is pushing 18,000 positions – just 700 shy of its fiscal 2008 peak. It reached a nadir of 17,200 positions in fiscal 2012.

Supervisor John ‍Moorlach recently requested a summary of hiring at the Health Care Agency and the Social Services Agencies – the two departments with the most expansion this year – so he could better explain the growth. In September, Social Services added about 150 workers to screen patients for the Affordable Care Act. Constituents and current employees become concerned about new hires, ‍Moorlach said, “especially when you’re saying you can’t give a raise.”

“We’re beefing up,” he added, “but it’s being done with (dedicated) Health Care Agency money.”

The county’s allocation of state Mental Health Services Act funds is growing by about $25 million over the next year and a half, to $132 million in fiscal 2014-15. The funds must be spent on personnel and other resources to support mental health programs.

Funded by a tax on individuals making more than $1 million a year, the MHSA was passed in 2004 by voters, under Proposition 63.

It pays for programs such as the Centralized Assessment Team, which responds to psychiatric emergencies in homes or medical settings. Two years ago, that group’s budget doubled, from $2 million to $4 million annually.

So the agency beefed up staffing with independent contractors – clinical social workers, marriage and family therapists, and others.

“This was a good way for us to expand,” said Mary Hale, county deputy director of behavioral health.

But two years later, with a reliable revenue stream, the county decided to bring the positions into the county fold – with full benefits.

Another factor was federal tax law. It says that if an employer has “control,” a worker must be classified as an employee. Factors considered include whether the worker is trained by the employer, submits reports, works on the premises and follows a set schedule.

Sometimes, this sort of shift is prompted when contractors take legal action, but county officials said the workers didn’t file a claim against the county.

“The majority of them were really thrilled to have a job,” Hale said.

All 169 contractors are now interviewing for their jobs, as the positions are open for recruitment.

In total, the county plans to pay $18.9 million for the in-house workers, compared with a total cost of $14.8 million for contractors. A mid-range clinical social worker making $36 an hour as a contractor would make $29 per hour plus benefits as an employee – which comes out to roughly $39 per hour, county Chief Human Resources Officer Steve Danley said.

“Save money, comply with the law – where’s the balance?” Danley said.

He’s working on creating a job classification that would allow the county to employ people for one to three years without benefits.

As the Mental Health Services Act brings in nearly $25 million more funds over the next year and a half, Hale expects to bring on more workers – either contractors or in-house – to staff new programs.

In May, she plans to request that the Board of Supervisors adopt Laura’s Law, which would enable officials to place severely mentally ill people into court-imposed outpatient treatment, even if the treatment is against the patients’ will.

CONTACT THE WRITER: mreicher@ocregister.com  

FIVE-YEAR LOOK BACKS

2008

December 26

The Long Beach Press Telegram provided an editorial that observed my response to the CalPERS spin (see MOORLACH UPDATE — Quasquicentennial — December 24, 2013). It was titled “Pension smarm factor – Defense of big increases is only half of the story,” and it also appeared in the Daily Breeze.

Worried about what the economic downturn will do to taxpayer-financed pension funds? The president of the California Public Retirement System has a soothing response.

Smarmy might be a better description. Here’s the condescending comment from Rob Feckner, head of CalPERS:

"Every time the stock market suffers a major setback, those who don’t fully understand how government pensions work begin sounding alarm bells that it will absolutely drive up the cost of government pensions."

Oh? Here’s a rejoinder from John Moorlach, somebody who does fully understand how government pensions work. Moorlach, chairman of the Orange County Board of Supervisors and former Orange County treasurer, says that Feckner isn’t telling the full story.

Feckner says that market downturns are followed by recoveries, which is true. But the opposite also is true, that market booms are followed by corrections. Moorlach, writing in the Orange County Register, says that during the boom years CalPERS should have preserved the overfunding to protect taxpayers during the next down cycle, but instead increased pension benefits to government employees 50 percent.

Pretty slick, eh?

Smarmy is a better word for it. What’s needed are more public officials like Moorlach who will tell the full story and stand behind it.

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