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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Reagan, Ronald: Gubernatorial Papers,
1966-74: Press Unit
Folder Title: [Health] - Health and Welfare Agency,
1973-1974 Program
Box: P37
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives Catalogue: https://catalog.archives.gov/
HEALTH
AND
WELFARE
AGENCY
1973 - 1974 PROGRAM
CONFIDENTIAL
HEALTH AND WELFARE AGENCY
1973-1974 PROGRAM
November 22, 1972
1 -
TABLE OF CONTENTS
DEPARTMENT OF HEALTH
3
CALIFORNIA COMMUNITY MENTAL HEALTH PROGRAM
13
CENTER FOR THE STUDY OF VIOLENT BEHAVIOR
26
CALIFORNIA HEALTH FACILITIES PROGRAM
37
CALIFORNIA COMMUNITY MANPOWER PROGRAM
51
CALIFORNIA DEPARTMENT OF MANPOWER
66
CALIFORNIA JOB CREATION PROGRAM
78
CALIFORNIA DEPARTMENT OF BENEFIT PAYMENTS
88
CALIFORNIA COMMUNITY CORRECTIONAL PROGRAM
102
CALIFORNIA DEPARTMENT OF HEALTH
4 -
DEPARTMENT OF HEALTH STATUS REPORT
1. In accordance with the Governor's Health Reorganization Program and in response to the
California Legislature, the Health and Welfare Agency is implementing the consolidated
Department of Health on July 1, 1973. Dr. J. M. Stubblebine has been appointed Director of
the interim Department of Health and will coordinate and carry out necessary actions for
administrative implementation of the new Department. The following is a summary of the
working concepts and ongoing actions being taken within the Health and Welfare Agency to
implement this new organization.
A. The Department of Health will be organized along five health systems lines:
Health Treatment Systems
Health Financing Systems
Health Protection Systems
Health Quality Systems
Health Administrative Systems
B. The Department will use a general classification structure that will allow for management
flexibility in the hiring and rotation of staff. It will accommodate the current personnel
in existing functions while they are reviewed for the purpose of consolidation and
contraction. There will be an initial contraction in administrative areas of at least ten
percent.
C. The Department of Health as currently structured legally, includes all functions of the
Departments of Health Care Services, Mental Hygiene, and Public Health. Ten of the
Healing Arts Licensing boards from the Department of Consumer Affairs, and the Social
Services functions from the Department of Social Welfare, are to be assigned statutorily
to the Department of Health.
D. The following is a summary of the proposed organization of the Department:
(1) Director's Office
- 5 -
(a) Director
(b) Chief Deputy
(c) Assistant Director (Legislative Liaison)
(d) Assistant Director (Communications)
(e) Assistant Director (Administrative Advisor)
(f) Executive Secretary, Advisory Health Council
(2) Health Treatment Systems - provides services for those with behavioral health problems
in a variety of public and private facilities through State hospitals, regional centers and
local mental health programs. This includes programs for the mentally ill, the
developmentally disabled, the alcoholic, the drug abuser, etc.
(a) Direct Services Branch
(1) State Hospital Operations Division
(2) Treatment Control and Evaluation Division
(b) Local Programs Branch
(1) Substance Abuse Division
(2) County Operations Division
(3) Health Financing Systems -- responsible for upgrading the health of California's
population by providing access to necessary medical services for that part of the
population whose income and resources are inadequate to meet their needs for medical
care. This is currently carried out through the Medi-Cal and Crippled Children Services
Program.
(a) Financing Program Branch
(1) Program Division
(2) Health System Division
(b) Financing Operation Branch
(1) Contract Administration Division
(2) Field Services Division
6
(4) Health Protection Systems protects the health of California's citizens through the
control or elimination of environmental health hazards, assurance of high-quality
preventive medical services, and monitoring and coordination of local health social
service programs.
(a) Public Health Branch
(1) Environmental Health and Consumer Protection Division
(2) Preventive Medical Services Branch
(b) Medical and Health Social Services Branch
(1) Community Services Division
(2) Laboratory Services Division
(5) Health Quality Systems -- responsible for facility licensing and certification, surveillance
and provider standards, and overall health research, planning and evaluation for all
department activities.
(a) Licensing and Certification Branch
(1) Institutional Licensing and Certification Division
(2) Social Services Licensing and Certification Division
(3) Program Surveillance Division
(b) Program Quality Branch
(1) Research and Evaluation Division
(2) Planning Division
(6) Health Administrative Systems provides all of the necessary central administrative
support functions for the other systems in the Department of Health.
(a) Fiscal Management Branch
(1) Fiscal and Accounting Division
(2) Audits and Services Division
(3) Legal Services Division
7
(b) Systems Management Branch
(1) Personnel and Training Services Division
(2) Management Assistance Systems Division
(3) Reports and Statistics Division
(4) Computer Services Division
The Department of Health budget is being prepared through a joint effort of the
Departments of Health Care Services, Mental Hygiene, Public Health, Finance, and the
Health and Welfare Agency.
2. The Director of the Department of Health will coordinate the remaining steps needed for
implementation.
A personnel officer or personnel task force will be established to implement necessary
personnel policies, and a special group will be formed to look at the necessity and
advisability of moving department functions from one State geographical location to
another. (An example would be a review of the Department of Public Health functions in
Berkeley to see which could and should be moved to Sacramento.)
3. The possibility of leaving the ten Healing Arts Licensing boards in the Department of
Consumer Affairs rather than moving them to the new Department of Health is also being
studied. Their retention in the Department of Consumer Affairs would provide a check and
balance system between those who run State health programs and those who affect the
health professions. If an affirmative conclusion is reached, new legislation will be proposed.
4. Consideration is also being given to transferring some minor social services that are not
related directly to health from the Department of Health to the Health and Welfare Agency,
Office of Special Services. These are such services as adoptions, out-of-home care, and adult
and child protective services.
5. A technical clean-up bill will be submitted. The bill will not deal with substantial issues but is
necessary in order to clean up the codes.
8
6. In the first year, the estimated savings to the General Fund resulting from consolidation will
be $10,000,000 and a reduction of 600 man years. The bulk of the savings comes from
reductions in administrative overhead.
7. A review of the existing boards, commissions, committees, and advisory groups will be
undertaken to explore possibilities for organizational consolidation.
8. An important element in reorganizing health-related functions is movement of staff and line
personnel to support effective planning and to coordinate program placement within a new
arrangement of health systems. This movement will not effect the current Public Health
laboratories or those functions closely related to the labs. Approximately 600 Department
of Public Health employees will be transferred from offices in Berkeley to Sacramento.
Opposition is anticipated, based on protests from local legislators, some businesses and
workers organizations when Public Health moved its headquarters to the Capitol in 1968. We
believe, however, that transfers are necessary to achieve the savings implicit in
Reorganization Plan No. 1, and to improve the managerial control of the Department. The
Department of Public Health's timetable is as follows: 125 transferred to Sacramento as soon
as practical after January 1, 1973; transfer of the remaining 475 employees, as space
becomes available within existing Agencywide allocated space. The estimated cost of moving
will be offset by anticipated salary savings from vacancies created by personnel not choosing
to remain with the Department in its new location and by reduction in normal travel
between Berkeley and Sacramento.
-9-
DEPARTMENT OF HEALTH
ORGANIZATION
BRANCHES
DIRECTOR & STAFF
HEALTH
HEALTH
HEALTH
HEALTH
HEALTH
TREATMENT
FINANCING
PROTECTION
QUALITY
ADMINI STRATIVE
SYSTEMS
SYSTEMS
SYSTEMS
SYSTEMS
SYSTEMS
DIRECTOR & STAFF
DIRECTOR
CHIEF DEPUTY
DIRECTOR
ASSISTANT
ASSISTANT
ASSISTANT
EXECUTIVE
DIRECTOR
DIRECTOR
DIRECTOR
DIRECTOR
Legislative
Communications
Administrative
Advisory Health
Liaison
Advisor
Council
- 10 -
DEPARTMENT OF HEALTH
HEALTH TREATMENT
HEALTH
TREATMENT
SYSTEMS
DIRECT SERVICES
LOCAL PROGRAMS
-STATE HOSPITALS
-SUBSTANCE ABUSE
-TREATMENT CONTROL
-COUNTY OPERATIONS
HEALTH FINANCING
HEALTH
FINANCING
SYSTEM
FINANCING PROGRAM
FINANCING OPERATION
-PROGRAM
-CONTRACT ADMINISTRATION
-HEALTH SYSTEM
-FIELD SERVICES
RESPONSIBILITY
-Medi-Cal
-Crippled Children Services
-11-
DEPARTMENT OF HEALTH
HEALTH PROTECTION
HEALTH
PROTECTION
SYSTEMS
PUBLIC HEALTH
MEDICAL & HEALTH
SOCIAL SERVICES
-Environmental
-Preventive Medicine
-Community Services
-Laboratory Services
HEALTH QUALITY
HEALTH
QUALITY
SYSTEMS
LICENSING &
CERTIFICATION
PROGRAM QUALITY
-INSTITUTIONAL
-RESEARCH & EVALUATION
-SOCIAL SERVICES
-PLANNING
-SURVEILLANCE
- 12 -
DEPARTMENT OF HEALTH
HEALTH ADMINISTRATIVE
HEALTH
ADMINISTRATIVE
SYSTEMS
FISCAL MANAGEMENT
SYSTEMS MANAGEMENT
-FISCAL & ACCOUNTING
-PERSONNEL & TRAINING
-AUDITS & SERVICES
-MANAGEMENT ASSISTANCE
-LEGAL SERVICES
-REPORTS & STATISTICS
-COMPUTER SERVICES
13 -
CALIFORNIA COMMUNITY MENTAL HEALTH PROGRAM
14 -
CALIFORNIA COMMUNITY MENTAL HEALTH PROGRAM
A. Introduction/Background
1. Mentally ill and retarded persons unable to care for themselves were originally confined
in jails and poorhouses. That form of community care was replaced in the late 19th and
early 20th century by state hospital systems involving massive institutions placed at
some distance from population centers. Originally intended as more humane facilities
than the prisons and almshouses they replaced, the state hospitals rapidly became
overcrowded, underfunded human warehouses where there was no effort at treatment or
rehabilitation and great abuses of human dignity and rights.
In the early 1900's, the conditions in state mental hospitals became more widely known,
and reforms were initiated. During this period of hospital reform (up to 1958) the State
of California built fourteen state hospitals. Eleven of these institutions still operate: five
for the mentally retarded, two for the mentally ill, and four to serve both kinds of
patients.
Major capital outlay in the form of new mental hospital construction could not keep up
with the demand for hospital service which was growing even faster than the general
population. By 1957, at the peak of their occupancy, state hospitals held over 36,000
mentally ill and nearly 11,000 mentally retarded persons. Counties and individuals
shared a small part of the cost of care for the retarded, but the state supported the entire
cost of treating the mentally ill.
2. In 1957, after several years of often intense public debate which culminated in passage
of the California Community Mental Health Law, or Short/Doyle Act, the State began to
encourage local treatment programs of professionally approved design by supplying 50
percent of the net costs of service. The reimbursement formula for new programs was
increased in 1963 to 3:1 state funds, and in 1969 to 9:1 state funds. This fiscal
incentive, coupled with growing professional support for community mental health
programs, led to the establishment of local mental health services in every county in the
State by 1972.
- 15 -
Local program development was further enhanced by the federal Joint Commission on
Mental Health and Illness, which recommended in 1955 the establishment of
community-based facilities. In addition, the development of chemotherapy during the
1950's made it possible for the new community facilities to manage patients at home
instead of in hospitals. The extension of welfare benefits also enabled many people
formerly committed to state hospitals to live in their own homes or in other community
settings. All of these efforts resulted first in a leveling-off, and then a gradual decrease, in
the mentally ill hospital population to a current figure of less than 8,000 patients.
Mentally ill patients formerly held in state hospitals are now being treated both
differently and in different settings. Some are served in county mental health inpatient
services, whose bed capacity is now 1,415, or in private institutions with a combined
capacity of 13,438 beds. A larger number are in facilities other than hospitals, ranging
from private homes to skilled nursing care units. Private residential facilities for the
retarded provide more than 6,000 beds and 1,700 day treatment patient spaces. An
increasing distinction is being made between the patients' medical treatment needs and
their domiciliary needs. When the latter are adequately met, treatment needs can
frequently be fulfilled in day treatment or outpatient facilities at greatly reduced dollar
and manpower costs but with no loss of efficiency.
3. The Lanterman Mental Retardation Services Act of 1970 established regional centers for
the evaluation and referral of retarded persons including, when appropriate, referral to a
state hospital for treatment and care. Strenuous efforts by the hospitals, the regional
centers, and the placement workers have combined to reduce the mentally retarded
patient census from a high point of 12,000 to about 10,000 at present. A slower but
steady decline is expected to continue.
4. The future of physical facilities for the mentally ill and retarded is likely to reflect a
continuation of the trend greatly in evidence for the past fifteen years. The changes so
dramatically begun may be hastened by several forces. One is a federal court decision
(Wyatt VS. Stickney, Alabama) which, unless overturned on appeal, identifies 35
conditions for the mentally ill and 49 for the retarded, considered to be medical and
-16 -
constitutional minimums in state hospitals. While most of those conditions are being met
or exceeded in California institutions, some of them having to do particularly with space
and design could, if they were to become binding here, require major remodeling and
modernizing at substantial cost.
The significantly more demanding facilities standards of the Joint Commission on the
Accreditation of Hospitals will also require major remodeling. These new and expanded
requirements may make it more than ever desirable to reduce to a minimum the number
of facilities designed to deliver 24-hour hospital care.
B. Program Objectives
1. Provide effective community mental health services
2. Decrease program costs
3. Place operational responsibility at the community level
C. Program Proposals
1. These objectives will be achieved through the following programs:
Increase community mental health program capabilities
Phase out state hospitals
Redefine financial responsibility for medical care related to mental health programs
2. Increased community capabilities:
Modern psychiatric crisis intervention techniques, promptly invoking the entire array of
mental health disciplines in human crisis situations, have demonstrably greater and more
rapid impact, prevent or markedly lessen morbidity, and reduce dependency and
chronicity. Persons with mental and emotional disorders are generally incapacitated for
work only briefly, if at all. Treatment in the patient's home community facilitates rapid
return to normal life. Because of the large concentration of public and private mental
health programs in the community, health care for this large segment of the population
will become more professionally refined and individualized.
17.-
Community mental health programs can be significantly expanded by providing the
county with the funds necessary to enable them to furnish the services presently
available in state hospitals. Counties will be able to provide, through public facilities or
contract services, the inpatient treatment necessary for mentally ill persons requiring
special restraints and intensive therapy, while also increasing the quality of community
mental health services generally.
3. Phase Out State Hospitals:
Hospitals are highly specialized, extremely expensive collections of increasingly exotic
equipment and specially trained staff brought together in an elaborate and complex
setting to focus life-saving and restorative efforts on persons with physical, medical and
surgical problems. Most psychiatric patients have no medical or surgical problems
warranting such equipment, staff or facility and should be in a hospital only if their
problem necessitates such care. They and their fiscal sponsors, including the state mental
health authority, should not pay to maintain or operate hospital facilities unless they are
mandatory to satisfy patients' medical needs and safety.
None of the conventional treatment modalities applied to mentally disordered persons
requires application in a hospital. Medical and nursing attention may be required, even
around the clock; this is not the same as full-time hospitalization. Skilled nursing and
intermediate care facilities can provide all the medical and nursing attention required in
mental health treatment by proper staff design. Specialized diagnostic services
(laboratory and radiology) and medical/surgical treatment procedures can readily be
procured on contract from local public or private sources.
The cost savings resulting from gradual phase out of state hospitals will provide the
necessary funds to finance the expanded community mental health programs. There will
be at least a 40 percent reduction of State mental hygiene employees in the Department
of Health in five years, and further reductions of approximately 40 percent in ten years,
with concommitant administrative savings. (As personnel reductions occur, there will be
a corresponding increased demand by county mental health services for trained
personnel, which will alleviate the unemployment hardships.) Other cost savings will bei
realized as major capital outlays to maintain state hospitals and/or bring them up to
- 18
increasingly rigid state and federal standards are avoided, and as fewer Department of
Health resources are diverted from treatment to the administrative costs necessary for
the hospitals.
4. Redefine financial responsibilities for medical care related to mental health programs:
The costs of mental health services can be separated from costs for health care services.
State funds for mental health services should be appplied only to the psychiatric care
and rehabilitation programs provided by community, and costs for health care should be
handled by the individual or public assistance programs where applicable. Thus, many
costs now being borne by Short/Doyle or Mental Retardation funds will be transferred
to the private sector or such public programs as Medicare/Medicaid, and Crippled
Childrens Services.
The current operation of state hospitals for the mentally ill and mentally retarded
includes medical care services, with associated overhead costs. Community programs do
not make any distinction between costs for mental health services and those for medical
services: the total cost is included in financial statements provided to the State for
payment under Short/Doyle and the Regional Mental Retardation Program. Previous
attempts by the State to identify Medi-Cal or Medicare eligibles in mental health
programs have not been successful because counties do not make the effort to identify
their eligibles. With the inception of the proposed Community Mental Health Program
and the shift of program responsibilities to the community, it will be administratively
directed that mental health funds cannot be used for provision of health care. The
county will have to separate these costs and determine eligibility for public assistance
funds or private payment.
It is expected that this new departure will represent an increase to Medi-Cal costs, but
this will be more than offset by the reduction of State general fund expenditures
through Short/Doyle and the Mental Retardation programs. The health care related costs
will be partially borne by federal funds, as opposed to the almost total State funding of
mental health programs.
- 19
D. Current Programs/Proposed Changes
1. Community Mental Health Program
Currently all California counties operate extensive programs for the mentally ill
(Short/Doyle) and the mentally retarded (Lanterman). Under the Short/Doyle Act, the
county is the primary provider of services, either directly or by contract. For mentally
retarded persons, the Lanterman Act established 13 regional centers which determine
mentally retarded patient needs, and provide necessary care, including referral to state
hospitals. These local programs provide the full spectrum of mental health and medical
services, ranging from inpatient care in the local community to outpatient care for crisis
intervention, therapy, counseling, etc. Almost every county also uses the state mental
health hospitals.
This proposal will expand current county programs through infusion of increased funds,
which will increase the quality and quantity of care now being provided in the
community. Furthermore, it will eliminate health care costs as part of mental health
programs.
2. State Hospitals
The State currently operates eleven hospitals for mentally ill and mentally retarded
persons throughout the state, at current annual cost of approximately $180,000,000. In
addition to providing mental health services, the hospitals have medical staffs and
facilities for provision of health care services. Patients in these hospitals are referred by
counties and regional centers. Costs per patient average $30 per day, and the State
encourages retention of mental health patients in local community programs by paying
counties $15 per day for inpatient care. This program is somewhat self-defeating, since
reduction of state hospital occupancy does not significantly reduce operating costs.
The State of California under this proposal will cease to provide direct hospital services
to mentally ill and mentally retarded persons. The majority of these persons now being
treated in 24-hour hospitals, general or psychiatric, local or state, should be treated in
other settings: skilled nursing care, intermediate care, residential care, or in their own
- 20
homes. By 1982, all 24hour treatment of psychiatric patients should be conducted in
these community settings. In order to provide an orderly transition and phase-out, the
number of beds in hospitals for the mentally ill will be reduced 10 percent every six
months beginning in July, 1973.
Medical and surgical services, other than emergencies, will be discontinued at all state
hospitals on or before July, 1973. Each hospital will maintain a well-equipped
emergency treatment unit, evacuation unit, and a health maintenance program. All
medical and surgical services will be obtained by contract from the community.
It is estimated that the State will realize a general fund savings of approximately $207
million over the next six years through the closure of state hospitals. The added cost of
local programs in order to provide the services now available in the state hospitals will be
approximately $146.7 million over the next six years. There will also be an increased
cost to Medi-Cal, but the amount cannot be determined since it is impossible to
determine how many patients will be eligible. The counties have not made a major effort
to identify Medi-Cal eligible patients in the past so no reliable figures are available upon
which to base an estimate. The following table indicates the fiscal impact:
ESTIMATED FISCAL IMPACT
COMMUNITY MENTAL HEALTH PROGRAM
Total
FISCAL YEAR
1973-74
1974-75
1975-76
1976-77
1977-78
1978-79
1973-79
Costs:
Local Program
Increase
$6.0
$11.9
$19.6
$28.0
$40.6
$40.6
$146.7
Savings:
Hospital
Phaseout
$6.0
$17.0
$28.0
$40.0
$58.0
$58.0
$207.0
Net Difference:
0
$5.1
$8.4
$12.0
$17.4
$17.4
$60.3
- 21
3. Medical Care Related to Mental Health
Generally, medical care costs are presently included in the total mental health program
costs submitted by counties for funding by the state (90 percent) and the county (10
percent). Little effort is made by the county mental health program administrations to
identify these health care costs or determine eligibility of patients for public programs,
such as Medicare or Medi-Cal.
State mental health programs include health care services as a standard part of their
operation and expense. Some of this cost is now recovered through Medi-Cal.
Under this proposal, county mental health programs will be authorized to claim
reimbursement for 24-hour inpatient services only for the cost of space, food, ordinary
maintenance, medications, basic laboratory, x-ray and other clearly indicated diagnostic
services and professional services required by the patient's psychiatric condition and
needs. Counties will be required to identify health care services provided to mental
health patients and make other arrangements for funding from the individual or public
assistance programs. Hospital care for persons with mental illness or disorders will be
provided exactly as for other persons, i.e., only when there is a clear medical or surgical
requirement for treatment in a hospital.
E. Implementation Schedule
1. The number of beds in hospitals for the mentally ill, offered by the State for county
patients, will be reduced 10 percent every six months beginning July, 1973.
State hospitals will designate as skilled nursing, intermediate and residential care
facilities, those portions of the state facility unlikely to meet hospital accreditation
standards. These designated portions must be administered as separate entities who
purchase space and certain support services and supplies from the main hospital.
Each hospital will be limited to the establishment of 200 skilled nursing and 300
intermediate or residential beds during the five-year period ending June 30, 1977. The
number of such beds, when combined with the remaining acute beds, may not at any
time exceed the total number of beds authorized at each facility in keeping with a 10
percent overall reduction in beds every six months.
22
2. Specific Hospital Changes:
Patton State Hospital will become an administrative unit of Pacific State Hospital on
June 30, 1973, with a single administration and support structure.
Stockton and Agnews State Hospitals will become a single administrative entity June
30, 1973, and will consolidate patient care in one facility on or before June 30,
1974.
Those portions of Metropolitan State Hospital closed or converted to skilled nursing,
intermediate, or residential care each six months will be offered for sale or lease to
Los Angeles County and/or Orange County. If the counties do not desire to buy or
lease these parts of the facility, they will be offered to any legitimate public or
private body on similar terms, or declared surplus.
Atascadero State Hospital will be reduced in capacity 10 percent every six months
for the next five years. Care for mentally disordered offenders will be shifted to
other hospitals, to the local programs in their own facilities or in county jails, honor
farms and the like, and to installations in the correctional system where local mental
health organizations will supply staff and programs.
All admissions to Patton State Hospital will be closed in July, 1973.
All beds for the mentally ill at Patton State Hospital will be closed January 1, 1974.
All admissions for the mentally ill to Stockton State Hospital will be closed July,
1973.
All beds for the mentally ill at Stockton will be closed January 1, 1974.
F. Legislative Proposal:
1. An act authorizing the closure of the state hospital system on a gradual basis before such
closures occur.
2. An act sanctioning 24-hour psychiatric treatment in free-standing skilled nursing care
and intermediate care facilities, and in crisis intervention units outside a general or
psychiatric hospital.
- 23
3. An act permitting designation of appropriate portions of any state hospital as skilled
nursing care and intermediate care facilities.
G. Marketing Plan
This proposal can be effected. Indeed, the current and past thrust of informing the public of
mental disorders lends itself to assisting the implementation of the proposal. This will be
achieved with a sustained education and public information effort. Local and county
government as well as the general public will be informed.
Now being developed is a carefully planned and coordinated information and education
program -- a program that is constructive, positive and responsive. It requires the cooperation
of all operating units.
This proposal will be made on the basis of an enlightened and humane approach to the care
of the mentally ill and retarded. It must be supported by the professional community, as the
best means for meeting the real needs of the mentally ill and the mentally retarded. To some
extent this is being done; more is required.
State hospitals will gradually disappear from the scene as a consequence of this more humane
treatment, but the plan will not be labeled a plan merely to close state hospitals. The
emphasis should be on the fact that equal or better treatment will be delivered in the home
or neighborhood environment.
Following are some of the target audiences which will be included and which will be
approached simultaneously:
1. The general public
A long-range, multi-media, mental health education plan is being developed to use skilled
professionals who will use every available means of changing the community attitude and
increasing public understanding of the mentally disordered and mentally retarded. The
campaign will be mounted as soon as Cabinet approves and will be the keystone to the
success of the program.
24
2. Associations and parent groups
As soon as it is decided to proceed with the plan, these groups will be brought into the
program so that they can become identified with the effort and provide positive input
through advisory councils and planning groups. In any event, these organizations will be
approached before the plan is made public and presented with the philosophy and
positive goals. Timing is important to prevent an adverse reaction to the proposal.
This is an area of potential opposition from three aspects:
The quality of care offered by the alternate sources must be equal to that offered in
the state hospitals. The improved state hospital programs have been received with
approval and are now considered to be equal to or better than in other facilities.
This quality must be maintained.
There must be a guarantee to the parents of the mentally disordered that continued
care will be assured by the State and will not depend on the health or financial
condition of a program operator.
There are some parents of the mentally retarded who for various reasons do not wish
to have their children near them. Opposition to placement in the parent's home
community could develop for these reasons.
3. The medical profession, medical societies, and specialty groups
The forward-looking concepts embodied in this plan will be presented in a professional
manner to the medical professions and their societies as well as other professional
organizations involved in mental health activities. Endorsement. and support of these
groups is invaluable to obtain public acceptance of the plan. This is critical since one
aspect of this plan is to contract with the medical professionals within the community
for medical and surgical problems.
4. Planning commissions, county supervisors, the State Legislature, and other public bodies
This is a major area of potential opposition to implementing this plan. A deliberate,
organized and coordinated effort will be quickly mounted to allay fears concerning the
- 25
threat to the community from the mentally disordered or mentally retarded or that the
local taxpayer will be required to assume a greater burden as a result of the new system.
Certain key legislators and other individuals will be contacted in advance to help shape a
successful passage of this proposal.
5. The legal profession
Because this group, particularly district attorneys and judges, constantly deal with the
problem of mentally disordered offender, an education program aimed specifically at
them will be launched.
6. Special interest groups such as caretakers and operators of care-providing facilities will be
made aware of the financial benefits and the quality control aspects of this system. This
group will be most supportive, since payments for care are increased.
7. State employees
The closure of state hospitals will result in obvious employee turmoil. As county and
community mental health programs are expanded, however, there will be an increasing
need for trained personnel. A major part of the marketing plan will be an intensive
employee information program which includes personnel policies and assistance plans to
minimize economic hardships to those employees directly affected.
There is a general climate of acceptance of a system such as this by groups interested in the
care of the mentally ill. This goodwill will be fostered in order to build acceptance by the
groups interested in the care of the mentally retarded.
CENTER FOR THE STUDY OF VIOLENT BEHAVIOR
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CENTER FOR THE STUDY OF VIOLENT BEHAVIOR
A. Introduction/Background
1. During 1971 over 100,000 violent crimes were reported in California. The magnitude of
violent crimes is such that more than one in fifty (50) California families is involved
annually.
2. The Health and Welfare Agency recognizes its responsibility to promote programs which
contribute to the safety of Californians. The Agency believes that a Center for the Study
of Violent Behavior will make a significant contribution to the safety of California
citizens. Such a center will represent the only program in the United States focused on
the comprehensive review of violent behavior and the systematic development of viable
detection, prevention, control and treatment models.
B. Program Objectives
1. To define the epidemiology of violent behavior, its underlying etiology, its social,
psychological, and physiological correlates.
2. To identify and cause to be tested predictors of various forms of violent behavior.
3. To document the circumstances and conditions under which violent behavior is likely to
be repeated.
4. To develop and cause to be tested models for the control, treatment, and change of
violent behavior.
5. To develop and disseminate through educational, training, and informational programs
knowledge, techniques, and models found useful in detecting, preventing, controlling,
and treating violent behavior.
6. To define the ethical and legal contingencies relative to human experimentation and the
parameters to be used in the development of detection, prevention, control, and
treatment models.
28
C. Program Proposal
1. These objectives will be achieved through the establishment of a Center for the Study of
Violent Behavior at the University of California at Los Angeles.
2. While the Center will concentrate on the compilation of a body of knowledge, the basic
thrust of the Center's program will be to develop and demonstrate practical applications
of models for the detection, prevention, control, and treatment of violent behavior (VB).
The research component will provide material for incorporation into VB models.
This will involve research to determine what data are available, and what can be
developed, as well as to evaluate the effectiveness of existing models.
The development component will provide the models required for the reduction of
VB. Models will be used for incorporating knowledge into university educational
programs, community training programs, and Agency projects and practices. The use
of models will provide maximum transportability and marketability of VB
knowledge.
The ethics and legal component will provide guidelines for experimentation and
development of VB models.
3. Research will focus on defining correlates of dangerous behavior and the development
and testing of scales and procedures for classifying, predicting, controlling, and
modifying violent behavior. Three dimensions will be examined; epidemiological factors,
biological factors, and psychosocial correlates.
Epidemiological Factors
The Center will gather and evaluate information on where, when, and by whom.
violent acts are committed. Epidemiologists will locate focal points of violence, and
measure both the spread of violence from and the control within these foci. Such
factors as the relationship between changes in society, the family structure, unrest
among the poor, the changing role of religion, the impact of mass media, and gang
behavior will be encompassed within the epidemiological studies. Epidemiology will
also play a role in monitoring the impact of detection, prevention, control, and
treatment programs identified or developed by the Center.
- 29 -
Biological Factors
The Center will investigate genetic, biochemical, neurological, and
neurophysiological elements of violent behavior. For example, the recent indications
that the XYY chromosomal defect may be associated with the presence of violent
behavior will be pursued. Evidence is also mounting that the predisposition to
alcoholism may be inherent and because of the apparent connection between
alcohol and violent behavior, this will be explored.
The effects of hormones on aggressive behavior will be studied in the biological
laboratories. New drugs now being developed hold some promise for the diminishing
of violent outburst without dulling other brain processes. These drugs will be tested
in laboratory situations within the Center programs and in related Health and
Welfare Agency programs. Other applications of pharmacology will be developed in
the course of the Center's activities. Studies of abnormal electrical activities within
the brain involving various forms of brain lesions and brain diseases will be carried
out in the neurological and physiological laboratories to clarify their relationship to
various types of violent behavior. Examples include hyperkinetic children and
aggressive or violent sex crimes.
Psychosocial Factors
The Center will be fundamentally concerned with violent behavior as it involves
people. The Center will study the relationship of violent behavior to such factors as
the individual's attitudes, his way of reasoning, his methods of controlling impulse
and action, his perception of other people, and his mode of adaptation to his
environment, and to such environmental factors as overcrowding and noise.
Attention will be given to the direct and indirect victims of violence, in order to
minimize the deleterious effects of the violent act. The question of victim-proneness,
a phenomenon suspected to account for the peculiar frequency of assault on certain
persons, will be explored.
4. The development programs will concentrate on models which can be piloted or
implemented in public or private facilities. The program will involve five basic models:
education, detection, prevention, control, and treatment.
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Educational Models
The Center will be concerned with translating the products of research and
development activities into educational and training materials and models. These
models will include pilot programs, designed to provide skill in identifying,
classifying, controlling, and treating violent behavior. For example:
Seminars and training programs for professionals who must deal with persons
expressing VB.
Seminars and training for professionals who must deal with juveniles.
Curricula for university-based courses for mental health and correctional
workers and other students.
Packaged informational and instructional material for the general public,
community groups, and the universities.
Additionally, the Center will initiate faculty affiliations for qualified faculty
members and student stipends for the pursuit of interdisciplinary graduate
training in VB.
Detection, prevention, control, and treatment models can be viewed as points on a
continuum. Each point represents a successive progression of intervention into VB.
Detection Models
Among other detectors the Center will develop behavioral indicators, profiles, scales,
biological correlates, and social and environmental predictors of violent behavior.
Prevention Models
Intimately aligned with the systematic establishment of a body of knowledge
relative to the causes and detection of VB is the development of preventive models.
The models will assist appropriate persons and agencies, e.g., school administrators,
law enforcement personnel, governmental departments, to design and develop
special programs to prevent the overt expression of VB (see detection models
above).
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Control Models
Beyond the detection and general prevention of violent behavior, the paramount
public need is to control the expression of such behavior when a clear and present
danger exists. The development of functional models within an ethically and legally
sound framework will represent the prime objective of the Center. Included within
this area will be models designed to control the activities of identified sociopaths,
sex offenders, murderers, juvenile gangs, and rioters. Emphasis will be placed on
models which protect society from the destructive actions of dangerous individuals
and groups. The Center will be responsible for reviewing, developing, and testing a
wide range of control models, ranging from supervisorial models to halfway houses
to chemical and physical controls.
Treatment Models
Commensurate to the requirement for control of violence will be the development
of treatment models designed to ameliorate or supplant the expression of violent
behavior. Treatment programs will emphasize patient/inmate performance and
responsibility in demonstrating alternative socially acceptable behaviors. A partial
list of facilities which will be used to develop treatment models and implement pilot
and demonstration programs are:
Atascadero State Hospital
Camarillo State Hospital
U.C.L.A. Neuropsychiatric Institute
Langley Porter Neuropsychiatric Institute
California Medical Facility, Vacaville
The Center will examine the legal and ethical guidelines and scientific philosophy
surrounding human experimentation. The Center will develop and adopt legal and ethical
parameters for the prevention, control, and treatment of violent behavior. The research
and models developed by the Center will adhere to these legal and ethical parameters.
6. A task force will be appointed by the Health and Welfare Agency Secretary. It is planned
that at the time the Center is established at UCLA there will be a faculty, ongoing
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projects, a specific plan for meeting the objectives as established by the Health and
Welfare Agency, and a physical plant. Intergovernmental problems will be identified and
functional resolutions will be developed. The task force will:
Be composed of one member recommended by the Department of Mental Hygiene,
one member recommended by the Department of Corrections, one member from
the Health and Welfare Agency, and three members recommended by the University
of California. One of the three members from UC will be the prospective Center
director.
Organize and advise the Agency Secretary on appointments to the Center's Advisory
Committee.
Review and compile all existing State research relative to VB. Transfer functional
responsibility for this research to the Agency.
Administer the receipt of existing and proposed funds for the operation of the
Center.
Establish a specific program plan for the ongoing operation of the Center.
Specify the criteria which the University of California must meet prior to obtaining
operational control of the Center.
Negotiate and consult with the UC administration on the transition of the Center to
UC. Upon transfer of the Center to UC, the task force will be dissolved.
7. The University of California in assuming operational responsibility of the Center shall
appoint the Center director and the two additional task force members. The Center
director shall be responsible for the direct administration and coordination of the Center
activities. The director will be responsible for seeking additional support independent of
State funds for accomplishing the Center's objectives.
The President of the University of California, upon consultation with the Secretary of
the Health and Welfare Agency and the appropriate University Chancellors, shall appoint
an Advisory Committee for the Center. The Committee shall:
- 33 -
Be composed of 50 percent faculty members of University-related members and 50
percent State of California members. The University quota shall include student
representation.
Meet regularly with the Center director and participate actively in evaluating the
Center's objectives, programs, and effectiveness. In so doing, provide a continuous
review of the Center for responsiveness of the Center's efforts to the national
context and the Health and Welfare Agency.
8. A Coordinating Council will be appointed by the Secretary of the Health and Welfare
Agency. The Council will:
In cooperation with Center's Advisory Committee work to assist the Center in the
pursuit and accomplishment of the objectives and priorities set forth by the Health
and Welfare Agency.
Be composed of eight members: two from the health area, two from the correctional
area, two from the manpower/services area, one designee of the President of the
University of California, and the chairman from the Health and Welfare Agency. The
directors of the Departments of Health and Corrections and of the Center shall serve
as ex officio members of the Council.
Review and clear all grant requests not generated by the Center but related to VB.
Coordinate all such grant requests with the Center.
Provide that all models and projects developed by the Center are coordinated with
and/or incorporated with the appropriate State or public unit either for review,
demonstration, or implementation.
Develop and promote through the Center student governmental internship in areas
associated with the interdisciplinary activities of the Center.
D. Analysis of Current Programs and Proposed Changes
1. The State Departments of Corrections, Mental Hygiene, and the Youth Authority and
the universities are at the present time independently engaged in examining the causes of
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violent behavior. Additionally, the judiciary, law enforcement officers, correctional
officials, psychologists, physicians, and other private and public groups and agencies are
actively participating in the prevention, detection, control, and treatment of violent
behavior. No single group has been responsible for either the systematic review of the
techniques utilized to detect, prevent, control, and treat violent behavior or the
concentrated development of effective methods to detect, prevent, control, and treat the
expression of violent behavior.
2. The Center will concentrate state, university, local, and national resources on the study
of violent behavior. The Center will serve as a focus for the university, the state
government, the judicial system, and law enforcement for the study and the
development of models designed to reduce the incidence of violent behavior. The Center
will be within the University of California, and will be controlled by an Advisory
Committee composed of University and State members. The Advisory Committee shall
work to assist the Center in the pursuit and accomplishment of the Center's objectives,
i.e., the development of practical models to detect, control, prevent, and treat violent
behavior.
3. The funds to operate the Center will initially be drawn from operating budgets of
Departments within the Health and Welfare Agency. The proposed budget for the Center
is:
F.Y. 1972/73 - $ 500,000
F.Y. 1973/74 - $1,500,000
F.Y. 1974/75 - $1,000,000
The allocation for F.Y. 1972/73 will be totally funded from the general fund. The
California Council on Criminal Justice has awarded a grant for $750,000 for F.Y.
1973/74 so the general fund contribution will be $750,000. It is anticipated that the
Center will generate grant funds in increasing amounts once it is established and that by
1974/75 the primary source of support will be these grants. The state share for each
fiscal year will be distributed among the Departments of Corrections, Youth Authority,
Mental Hygiene (Health), and Human Resources Development. The 1972/73
appropriation will provide for start-up and operating costs and seed money for research
- 35 -
grants. The projection for 1973/74 includes additional research funds and will cover
increases in the educational endeavor as well as the ongoing basic support for the Center.
It is anticipated that major funding during 1974/75 will be available through grants
generated by the Center. It is hoped that these grant funds will total at least two million
dollars over the one million dollars in State funds.
E. Implementation Schedule
It is planned that the Health and Welfare Agency will be responsible for the initial
development of the Center and for outlining of the basic program structure. These activities
shall include the specification of criteria which the University of California must meet prior
to assuming operational control of the Center. This development shall proceed in such a
manner that the University of California can obtain direct operational control of the Center
by April 1, 1973. The Agency in organizing the Center shall, therefore, conform with the
administrative policies and procedures concerning organized research units as set forth by the
University of California Regents.
F. Legislative Proposals
No legislation will be necessary. The Center can be established administratively.
G. Marketing Plan
Since the Center can be established administratively, it will not be necessary to "sell" this
program to the public and to the Legislature before the project is begun. The nature of the
project is such, however, that little opposition is expected. To the contrary there are
considerable benefits to this program which will be emphasized and which will receive major
play in a statewide information program. Groups which will receive special attention are as
follows:
1. Law enforcement agencies: The primary purpose of this center is to develop better
means of ensuring public safety. This program has been reviewed by CCCJ and has been
approved for a grant under LEAA. This information will be made public and the benefits
to the law enforcement agencies will be emphasized.
36
2. The University: It is possible that certain elements within the University will be less
enthusiastic about the Center because of the degree of control exerted by the Health and
Welfare Agency and because of the emphasis on applied research. This opposition will be
minimal. Factors which will attract the University are:
a. The university is in general need of research money.
b. The emphasis on applied research should produce a base for attracting new money
to the Center and University.
C. The movement within the University toward societal relevance in their programs.
d. The contingency that the models will be developed in a legally and ethically sound
framework.
3. The Community: The Agency's purpose for establishing the Center and the anticipated
benefits to the public in general and to persons involved in the control and treatment of
violent behavior should be clearly communicated. The public media (press, radio,
television) should obviously be utilized, but more importantly persons associated with
the intellectual community, the judicial system, and mental health will be sought out for
participation on the Center's Advisory Committee and on the State Coordinating
Council. Semi-professional journals and newsletters will be used as a vehicle for
attracting interest from these groups for the Center's formal activities. Of particular
significance will be the transfer of the Center to the University by the Secretary of the
Health and Welfare Agency.
By establishing the Center the Administration has demonstrated a commitment to utilize
all available resources, including applied research, in order to promote and preserve
public safety in California. This commitment will be clearly and carefully publicized.
CALIFORNIA HEALTH FACILITIES PROGRAM
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CALIFORNIA HEALTH FACILITIES PROGRAM
A. Introduction/Background
1. Historically, hospitals have been considered charitable institutions. Their primary, if not
only, function was to serve medical needs of the community. Sound business
administration was often non-existent. Operating deficits were met mainly through
taxation and donation.
The construction of hospitals and other medical facilities was not subjected to standards
of quality or need. New hospitals were built near existing facilities without regard to the
occupancy rate of the existing facility or the complete absence of hospitals in other
areas. Thus there was created within each metropolitan area, a concentration of hospitals
and associated businesses. These were often located for the convenience of the health
profession and not always responsive to the needs of the consumer.
2. Some concern with hospital care was expressed by the State legislature in 1945 with the
passage of the Hospital Licensing Act. This law required state licensing to operate, but
the concern of the law was the physical plant, in relation to its safety and sanitation. The
result was that many fine edifices were built, but the care given to patients within them
could be poor, inadequate, or inappropriate. This quality of care was not subject to
public agency review.
Rapidly rising costs, declining philanthropic support, and governmental purchase of
services introduced a new philosophy to the medical facility field, causing it to become
an "industry". With the advent of federal Medicaid and Medicare legislation in 1965, the
profitability of providing institutional health care was increased. The demand for service
was also increased drastically. Advancing medical technology still further increased this
demand, and calls for health care began to come from a population segment which
previously had not been able to afford full medical care.
This increased demand resulted in a dramatic rise in the construction of health facilities.
In 1965 when the Medicare and Medicaid program was approved there were 64,887
acute care beds and 77,525 nursing home beds in facilities in California. By 1971 the
- 39 -
number of acute care beds had risen to 75,551 and the number of nursing home beds
totaled 120,494. It soon became obvious that there were more facilities than the demand
could justify. The result has been careless and excessive utilization of facilities and
services, a serious manpower shortage to provide these services, and inflated costs, with
still no assurance as to the quality of the services purchased.
3. California is now faced with a number of serious problems:
There is no assurance that care provided in health facilities is of acceptable quality;
There is wide fragmentation and attendant inefficiency in facility licensing functions
of the State;
Areawide planning agencies are unable to fulfill their planning obligations because
they have been given health facility franchising responsibilities;
Inconsistencies in the organization and operation of the areawide agencies have
created major problems in the franchising of facilities;
There is no effective means of controlling the ever-rising costs of health facility care.
It is proposed to bring this run-away industry under control so that the people of
California have assurance that the health care purchased, whether through tax dollars or
out-of-pocket, is of an acceptable quality and a reasonable price. At the same time, this
plan will increase the efficiency of State government's role in regard to health facilities.
B. Program Objectives
1. Assure the provision of quality health service in California at reasonable cost.
2. Assure equitable access to health facilities and services.
3. Improve the cost effectiveness of health facilities usage by both the private and public
sector.
40 -
C. Program Proposals
1. These objectives will be achieved through the following programs:
Consolidate licensing of facilities function in the Department of Health;
Establish a system to certify health services statewide;
Establish a system to retard inflationary cost increases for hospital and extended
care services;
Establish a single approval authority for new construction of health care facilities;
Reconstitute areawide health planning agencies.
2. Consolidate Licensing of Facilities Function
The fragmentation of facilities licensing functions will be eliminated by designating the
Department of Health as the single department responsible for licensing facilities and
certifying services. Consolidation will eliminate administrative delays caused by the need
to secure overlapping approvals and will also eliminate inconsistencies in the licensing
regulations. All licensing now being done by the Departments of Public Health, Mental
Hygiene and Social Welfare will be incorporated into a single unit. Greater efficiency,
fiscal savings and uniformity in the application of licensing laws will result.
3. Certification of Health Services
Assurance of acceptable quality of care will result from development and administration
of standards for health facility services. Indirectly, the certification of services will result
in a decrease in excess facilities and better distribution of special services. The
Department of Health will inspect and certify services as to their compliance with
standards determined by the Department. Only those services which are certified will be
offered by the facility. The Department, under authority granted by statute, will set
standards which will serve as a means of assuring the quality of care. These will be of two
types:
Those standards applicable to basic services such as for hospitals, surgery, medicine,
obstetrics, pediatrics, radiology, etc.
- 41 -
Those applicable to special units such as renal dialysis, intensive newborn care units,
burn units, coronary care units, emergency medical care, etc.
For long-term care facilities, standards will cover such services as: custodial care, care for
bedridden patients, ambulatory patients, restorative care, convalescent care and
intermediate care. For out-patient services, standards are needed for primary medical
care, rehabilitation, out-patient surgery, home care, aid service, and dental service.
Regulations for general services in hospitals will deal with such factors as: facility
organization and administration; nursing administration; adequacy and qualifications of
staff; organization and qualifications of attending staff; ancillary services; in-service
training; service policies and procedures; internal mechanism for evaluation of services;
records; and methods of handling equipment. Specific indicators for quality will be
developed service by service.
4. Control Cost Increases
Just as the Department of Health will be able to assure the quality of care through
certifying services, the California Hospital Commission ensures the reasonable cost of
care by reviewing rate increase requests through the Federal Economic Stabilization
Program. If not extended, the present price control on rising medical costs will expire in
April 1973. There is currently no State program to replace the federal control and,
without such a control, the costs of health facility services will increase sharply.
Furthermore, the Federal Administration has expressed clear intent of establishing a
replacement price control mechanism.
Positive State action is necessary to avert further federal intervention into a local matter.
Therefore, the California Hospital Commission will be reconstituted as a nine member
California Health Facilities Commission with authority to review and approve rate
increases for all health facility services. The California Hospital Commission now has
authority to recommend approval or disapproval of health care institutional price
increases in excess of limits established under the Federal Economic Stabilization
- 42
Program. The new Health Facilities Commission will assume the responsibility for the
federal program and will continue the function under authority granted by the State if
the federal program is terminated. The Health Facilities Commission will devise, prior to
January 1, 1974, and will also implement by July 1, 1974, a plan authorized by the
legislature in which the Commission will approve rates of reimbursement prices for all
health facility services. These will be the only rates chargeable to any patient. The plan
will also provide that upon enactment of this legislation the Health Facilities
Commission authority to approve facilities construction will terminate.
5. Single Approval Authority for New Construction
Consolidation of the various approving functions for authorizing new construction of
health care facilities into the Health Facilities Commission will eliminate present
inequalities in approval procedures and enable the State to better effect the proper
distribution of such facilities to meet the needs of consumers. By eliminating this
function from the areawide planning agencies they will be able to perform the planning
functions for which they were originally established.
6. Reconstitute Areawide Planning Agencies
Establishment of uniform standards for areawide planning agencies will eliminate
areawide inconsistencies in the development and application of the State Plan for health
facilities and services. Each areawide agency will continue to contribute to the planning
for local health needs, and thereby contribute to the development of the State Plan. The
Department of Health will be charged with the responsibility for establishing uniform
criteria for the composition of these agencies.
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7.
Fiscal Impact
The total cost for this program is estimated as follows:
Health Facilities Commission
67 Man Years @
$ 859,416
Staff Benefits 12%
103,130
Total Personnel Services
$ 962,546
Equipment, General Overhead*
126,170
Total Budget
$1,088,716
*General Overhead includes rent and communications
Current revenue derived from Hospital Commission assessment of .02 mill/dollar of operating
costs will result in revenues of approximately $560,000. The assessment rate will need to be
increased to .04 mill/dollar of operating costs to meet needed operating costs.
Licensing
Current Cost to State General Fund
Public Health
$ 700,000
Mental Hygiene
342,895
Social Welfare
1,969,782
Total
$3,012,677
Current License Fees
-216,160
$2,796,517
Federal Social Welfare Share
-787,912
Grand Total
$2,008,605
44 -
Anticipated Department of Health Cost
$ 700,000*
Public Health
750,000*
Mental Hygiene
Social Welfare
2,205,148
Total
$3,655,148
Anticipated License Fees
-3,327,400
328,548
Federal Social Welfare Share
-882,060
Excess Revenue
$ 553,412
*Excludes cost borne by Federal Government under direct contract.
Certification of Services
139 Man Years @
$1,921,898
(Less Salary Savings-5%)
-96,095
1,825,803
Staff Benefits 12%
219,096
Total Personnel Services
2,044,899
Equipment, General Overhead*
484,765
TOTAL BUDGET
$2,529,664
Contracts**
500,000
$3,029,664
*General Overhead includes Rent and Communications
**Contracts with medical specialists or CMA to assist with hospital certifications.
These costs will be recovered by the inclusion into this plan of an appropriate fee
schedule for licensure and certification. The fees for the licensure of facilities are
authorized by existing statutes.
Authorization for the establishment of fees to cover the cost of certification of services
will be requested in legislation to be submitted in the next session of the Legislature.
- 45 -
D. Current Programs/Proposed Changes
1. Licensing of Facilities
Currently, four State departments -- Public Health, Mental Hygiene, Social Welfare and
Health Care Services - are in some way involved in facility licensing. The licensing
functions of these various departments are primarily involved in physical facilities only,
in terms of safety and sanitation. Standards vary from department to department.
This proposal will consolidate all health facility licensing functions into the Department
of Health.
2. Certification of Health Services
Currently, there is no authority or procedure established to certify the quality and
quantity of health services. This situation is remedied by the establishment of a
certification of health services function within the Department of Health in tandem with
the licensing function.
3. Control of Cost Increases
Currently, price control is administered by the California Hospital Commission as part of
the federal Economic Stabilization Program.
This proposal will reconstitute the California Hospital Commission as the California
Health Facilities Commission with State authority to review and approve cost increases,
and develop a legislatively authorized plan which will authorize the Commission to
establish maximum allowable rates for health facility services.
4. Approval of New Construction
Currently approval of new health facility construction is the function of areawide
planning agencies. These agencies are nonprofit corporations established in the local
areas for the purpose of health planning. There are no criteria for composition of these
agencies, which are virtually autonomous in determining who can build what facilities in
their area. These agencies are not answerable to elected authority.
- 46
To correct this problem, approval authority will be given to the California Health
Facilities Commission, which will use the State Plan for health developed by the
Department of Health as a principal guideline in controlling overbuilding.
5. Reconstitute Areawide Planning Agencies
Although the original purpose in establishing the areawide planning agencies was to
develop comprehensive health plans for their area of responsibility, their main function
has become review and approval of facility construction requests. Consequently, the
planning process has become unnecessarily controversial.
This proposal will reconstitute the areawide planning agencies to remove authority for
approving new construction. The Department of Health will establish uniform standards
for composition and operation of areawide planning agencies, with their sole function
being comprehensive area health planning.
E. Implementation Schedule
1. The licensing function of the Department of Mental Hygiene and the Department of
Social Welfare will be transferred to the Department of Health effective July 1, 1973.
2. During the calendar year 1973, the Department of Health will develop standards for
certification of services which will commence on January 1, 1974.
3. The Department of Health will prepare a State Plan for health utilizing local plans
submitted by the areawide planning agencies. These plans are to be updated annually.
4. The Department of Health will establish standards to provide for uniform organization
of areawide planning agencies, boards and advisory panels, including provisions for prior
approval of the budgets of such boards and panels, effective July 1, 1973.
5. Effective July 1, 1973, funding of areawide health planning agency administration
expense will become subject to continued availability of federal funds.
6. Effective July 1, 1973, areawide health planning agencies will no longer control facility
development, but will be required to submit areawide plans for health as inputs to the
- 47 -
Department of Health, for development of a State Plan for health. The Plan will include
the documented area needs for facilities, manpower and services.
7. The California Hospital Commission will cease to function under that title on the date
legislation is implemented creating the California Health Facilities Commission under the
operating authority of the Health and Welfare Agency. The terms of appointment of
present commissioners will expire with the termination of the Hospital Commission. The
California Health Facilities Commission will be composed of nine members (five public,
four professional) appointed by the Governor for four year terms. The Commission will
establish accounting standards and uniform reporting requirements for health facilities.
Such requirements will be implemented by all facilities January 1, 1974.
8. The California Health Facilities Commission will be authorized to review and approve or
deny requested rate increases above the established level on July 1, 1973.
9. The California Health Facilities Commission on July 1, 1974, will implement a plan to
establish maximum allowable rates for health facility services. Termination of the
facilities construction approval process will occur July 1, 1974.
F, Legislative Proposals
1. An act to create the California Health Facilities Commission by requiring expiration of
terms of appointment of present Commission members on the date the Act becomes
effective and requiring appointments by the Governor, subject to Senate approval, of
nine (9) commissioners for four year terms.
2. An act designating the Commission as the body responsible for reviewing and approving
facility construction requests.
3. An act designating the Commission as the body with authority to review and approve
rate increases in excess of an established limit.
4. An act to shorten the time delay for implementing the required accounting systems by
changing the 15th month to January 1, 1974.
5. An act to apply the annual gross expense assessment to all facilities affected by this Act
and others included, and to permit establishment of charges by the Commission for
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appeals and unique services in behalf of the individual organizations and appropriate
such monies as required.
6. An act to provide that all services offered by a facility shall meet standards established
by the Department of Health. The Department shall inspect and certify services as to
their compliance with the standards, and only those services which are certified shall be
offered by the facility.
7. An act to adopt legislation incorporating all licensing functions within the Department
of Health.
8. An act requiring the Health Facilities Commission to develop a plan, and submit it to the
legislature, authorizing the Commission to establish maximum allowable rates for health
facility services. The legislation should also eliminate the facility construction approval
once the rate setting approval is established.
9. Legislation eliminating the facility franchising authority of areawide health planning
agencies and transferring such authority to the California Health Facilities Commission,
with program phaseout date of July 1, 1974.
10. Legislation authorizing certification of services by the Department of Health.
G. Marketing Plan
1. This proposal can be effected. To the general public and to government the rapidly
increasing costs of medical services are a matter of concern. Through a comprehensive
media effort, there will be demonstrated a concern for the cost and an indication how
our proposal effectively deals with the problem.
2. The providers of medical services have also been sensitive to the rising costs of medical
care and have been particularly concerned with the present inefficient and unequal
system of regulating costs through the limits on the establishment of new facilities and
services. A carefully planned and coordinated information program will present our
proposal as a constructive, positive and responsive approach to controlling the rising
costs in medical care while at the same time streamlining the present facilities approval
process in order to benefit the provider groups.
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3. This proposal will be presented not as increased government control over the providers
but rather as a reform of existing procedures designed to open up the system and to
minimize the amount of bureaucratic red tape.
4. Target Audiences: The following are some of the target audiences which the marketing
plan will address:
a. The general public: A long range, multi-media education program will be developed
to inform them of our proposal which is designed to control the rising costs of
medical care and to assure the quality of health care services. This group, when
properly organized and motivated, should be strongly supportive.
b. Consumer groups: Organized groups which purchase medical services for their
memberships will be the subject of a concentrated educational effort. Such groups as
organized labor, employee groups and employer groups will be particularly attracted
to those parts of the program designed to reduce the costs of care. Their
representatives will be carefully cultivated in order to assure that they will strongly
and actively support the program when legislation is introduced.
C. Provider groups: The California Hospital Association is most directly affected by
this program. As soon as this program is approved they will be informed in detail
regarding the specifics of the proposal. The Association can be expected to generally
support this proposal if we emphasize the elements designed to minimize the control
of facility approval.
(1) Areas of opposition include:
(a) Medical Provider Associations (CMA, CNA, chiropractors, etc.) can be
expected to have reservations about the proposal to regulate cost increases
and about the proposal to certify services. Even though individual providers
are not affected, the provider associations will view this as a first step
toward an all-inclusive rate setting program.
(b) Certain liberal elements will maintain that this proposal does not go far
enough in regulating the health industry.
50
(2) Neutralizing the opposition: The opposition of the health providers can be
minimized if they can be convinced that this is a proposal which does not
expand government authority but is rather an attempt to reform an unworkable
system. Primary effort will be oriented toward enlisting the active support of
the Hospital Association. The other health provider groups will be strongly
influenced by the position of the Hospital Association.
d. Government:
(1) The Legislature is expected to be generally favorable toward this proposal. An
organized and coordinated effort will be mounted to inform the legislators of
the specifics of the proposal and to allay fears that it is either too biased toward
government control or, on the other hand, not sufficiently broad in scope to
control rising costs of health care.
(2) Local governments:
A major effort will be undertaken to enlist the support of local government. As
a major purchaser of health services they can be expected to support the
program. The County Supervisors Association and the League of California
Cities will be actively involved in the effort to secure legislative approval.
There is a general climate of acceptance of a program for ensuring quality and
limiting costs. The regulation of the health industry is already an accomplished
fact. Present regulations, however, are not effective and are burdensome to
providers. The benefits to be derived from this program, even for the provider
groups, are sufficient to ensure approval of the program once the program is
properly presented to interested parties.
CALIFORNIA COMMUNITY MANPOWER PROGRAM
52
CALIFORNIA COMMUNITY MANPOWER PROGRAM
A. Introduction - Background
It has become painfully clear that California's manpower programs have not been successful
in meeting the needs of persons requiring manpower services. This is primarily attributable to
the lack of clear-cut national or state manpower policies. The many federal manpower
programs are not responsive to community and state needs, and state and local manpower
administrators have not been able to exert much influence in the planning and administration
of these programs.
The primary emphasis has been on training programs, with little resultant placement. In the
recent federal report, nationwide, California ranks at the bottom in terms of placement -- 51st
after 49 states and the District of Columbia. A reordering of priorities is in order to provide a
comprehensive appraisal of an individual's needs and the application of planned services to
accomplish effective and lasting -- placement in a meaningful job. The California
Community Manpower Program is proposed to bring about this reordering of priorities and
the creation of an effective state manpower service.
In order to place this proposal in proper perspective, it is necessary to understand how the
present situation evolved.
1. The Department of Employment
In the mid '30s. legislation was enacted establishing a federal-state cooperative
employment system. This system operated both a labor exchange to provide job referrals
for individuals seeking work and an insurance compensation program for workers who
were involuntarily unemployed. In California, both programs were administered by the
Department of Employment. In 1946, state Disability insurance was introduced to pay
benefits to workers unemployed because of illness not connected with work. During the
'40s, autonomy in local operations contributed to an inefficient program administration.
To compensate, tight centralization of control and uniform operating procedures were
installed in the early '50s. Strong administrative direction resulted in a high level of
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placements and strong employer and labor support. This policy placed little emphasis on
serving the disadvantaged and minority group members who were not job-ready.
In the late '50s and early '60s federal legislation changed the direction of manpower
programs, gradually shifting to individuals who had no skills or whose skills were not in
demand, and individuals who did not have equal opportunity in the labor market such as
the handicapped, elderly, youth, welfare recipients, parolees and minorities. Federal laws
which established new programs include the Manpower Development and Training Act,
the Economic Opportunity Act, and the Work Incentive Program amendments to the
Social Security Act. Examples of some of the programs include the Neighborhood Youth
Corps, the Job Corps, Operation Mainstream, New Careers, Job Opportunities in the
Business Sector, and Concentrated Employment Program.
2. The Department of Human Resources Development/Welfare Reform
In the late '60s, California recognized that the proliferation of manpower programs
needed better coordination. Thus, AB 1463, the Human Resources Development Act of
1968, created the Department of Human Resources Development. The major
restructuring was to assist the disadvantaged to become employed. But the result has
been declining overall placements including the disadvantaged. Employers have not had
needs met and have turned to other sources of job ready employees, causing further
problems for HRD applicants whether disadvantaged or not.
The Governor's Welfare Reform Program emphasizes job placements for employable
welfare recipients. The Department of Labor (HRD's primary source of job placement
and manpower funds) is also emphasizing an increased number of job placements.
Additionally, the existing "California Employables Program" is scheduled for statewide
implementation in 1973. This program, where implemented, has required that all
potentially employable aid recipients register for manpower services, training and
employment. The necessary manpower and social services are jointly provided by HRD
and the county welfare department under HRD supervision.
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B. Program Objectives
1. Increase employment.
2. Reduce direct and indirect costs of the unemployed.
C. Program Proposals
1. Reorganize and redirect the Department of Human Resources Development.
2. Establish community Manpower Centers as the focal point for employment assistance
and comprehensive manpower planning.
D. Current Programs/Proposed Changes
1. Current Programs
The current HRD organization and programs demonstrate many major problems
responsible for the department's poor performance. From operating procedures the
department has been characterized as employee, or staff, oriented. Allowances were
made for poor performance (it's the fault of DOL, the Agency, the reorganization, AB
1463, the economy, etc.), rather than determining and implementing corrective action.
Realistic demands for increased performance and lower costs were not made. Staff was
permitted to set up operations in areas in which other units were functioning.
Consequently, accountability and responsibility were clouded.
Successful organizations measure performance, measure cost, and refer to these figures in
decision-making. This has been missing from HRD.
The department has been more oriented toward the "clients" than toward industry. The
use of "clients" to refer to those seeking work, rather than to refer to the employer as a
"client" who is providing the funds and jobs HRD seeks for placements, demonstrates
the bias. The staff spends considerable effort learning to understand the clients, their
problems, and their capabilities. A comparable effort is not made to understand the local
employers, and to apply the assistance the state might provide.
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The divisions of the department have duplicated functions, run separate training
programs, seldom exchanged management information or personnel, etc. The divisions
were clearly more interested in internal goals rather than what's best, or least costly, for
the State.
2. Proposed Program
Department of Human Resources Development Reorganization.
Administratively, the Department is being reorganized into three branches: (1) a
Program Services Branch to be generally responsible for the planning, development, and
maintenance of Department programs; (2) an Administration Branch to provide
administrative support, and (3) an Operations Branch to be responsible for all operations
and delivery of services.
Field Operations are to be combined on a community, geographic basis with emphasis on
both job seekers and business. Full service concepts can be accomplished, (i.e.,
registration for work, job referrals, claims services, etc.). Field Office consolidation will
allow significant cost reductions now caused by overlap in many communities.
Communication and information on jobs will improve significantly.
The Operations Branch will have a two-divisional approach to line operations within the
Department. One will include the line functions of Job Training, Development and
Placement (JTD&P), Rural Manpower Services (RMS), Unemployment Insurance (UI),
and Disability Insurance (DI). The other will be a Division of Accounts and Tax
Collections.
These two divisions will have departmentwide support services operating through an
Office of Administration and Budget, Office of Planning and Special Projects, Office of
Legal Affairs, Office of Public Information and Office of Evaluation.
This will make it possible to combine and streamline many of the operations within this
Department and gives real substance to the work that every person in this Department
will be performing.
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COMMUNITY MANPOWER
PROPOSED CHANGES
DEPARTMENT OF HUMAN RESOURCES DEVELOPMENT
BEFORE REORGANIZATION
DIRECTOR
CHIEF DEPUTY DIRECTOR
SPECIAL
LEGAL
PIO
EVALUATION
PROJECTS
TAX COLLEC-
JOB TRAINING
RURAL
MANAGEMENT
TIONS INSUR-
DEVELOPMENT
MANPOWER
SERVICES
ANCE PAYMENTS
PLACEMENT
SERVICES
DIVISION
(TCIP)
DIVISION
DIVISION
DIVISION
AFTER REORGANIZATION
DIRECTOR
CHIEF DEPUTY
LEGAL
COMMUNICATIONS
PROGRAM SERVICES
OPERATIONS
ADMINISTRATIVE
BRANCH
BRANCH
BRANCH
JOB TRAINING
DEVELOPMENT
PLACEMENTS
TCIP
-57 - -
This new structure is designed to:
-- Make HRD first in the nation in terms of placing people in jobs, by September,
1973.
-- Separate WHAT must be done, which is required by law and administration policy,
from HOW it can be done, which involves operational procedures and general
guidelines.
-- Develop better measures of program performance.
-- Implement an embossed card UI payment system.
-- Push on with the Community Work Experience Program for welfare recipients.
-- Go statewide on the Employables Program to register welfare recipients for
employment.
-- Expand the efforts to correlate educational curricula with future employment
needs
-- Expand the employment assistance programs for the job-ready.
-- Provide Job Information Centers wherever possible in HRD offices.
- Make new efforts to "deinstitutionalize" the field offices.
-- Eliminate overlap and duplication wherever possible.
-- Develop new roles for employment counselors under the changing emphasis
toward self-service.
It is recognized that employees are concerned with how they personally will be affected
by the changes that are in progress. The following information summarizes the
approaches and priorities that will be followed in filling positions in conjunction with
the reorganization.
To the greatest extent possible, present employees will be moved by lateral transfer to
new positions on the basis of management decisions as to where they can best be
utilized. This may necessitate placing employees in positions that do not support their
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current classification. In these cases, the Department will ask the State Personnel Board
to allow a "grace" period during which every effort will be made to place employees in
positions appropriate to their classification.
Every effort will be made to keep geographic moves to a minimum. However, the
Department will, to the extent possible, accommodate employees who wish to move
their locations or accept appointments in different locations. It is hoped that forced
transfers will not be necessary, but should they become necessary, they will be handled
in the appropriate manner as determined by the State Personnel Board and
communicated to employees in advance.
When appointments cannot be made by lateral transfer, appointments from eligible lists
will be discussed with the staff of the State Personnel Board and communicated to
employees prior to any action being taken.
Every effort will be made to keep these to a minimum. If it is necessary to make such
appointments, the Department will work closely with the Personnel Board staff in
accordance with Civil Service laws and rules.
Community Manpower Centers
Community Manpower Centers will be established to emphasize service to the total
community, including the disadvantaged and minorities. Local job information will be
provided in each Community Manpower Center to enable many of those who are
job-ready to assist themselves. This will also allow more time and resources for those
who need help or training to find employment.
Within each labor market area, one or more Community Manpower Center will be
maintained for the delivery of placement and employability services. The program of the
Community Manpower Centers will be designed to:
Serve the needs of employers by providing them with referrals of qualified job
applicants.
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Provide necessary assistance to the job ready.
Provide Individuals who are potentially employable with individualized assistance to
overcome their employment handicaps.
Each person will be provided with as much service as he needs but not more than he
needs. The extent of services will range from self-help through directed assistance to
intensive individualized service. Three levels of service will be available:
Level 1 - Job Referral and labor market information.
Level 2- - Employment exploration and job development services.
Level 3- Referrals to the Department of Rehabilitation for individual employability
development and placement.
The Center Manager will be charged with the responsibility of identifying community
needs and determining the extent to which the staff would consist of placement services
specialists, eligibility workers or highly trained counselors to serve community needs.
a. Level 1 - Job Referral and Labor Market Information Services
Applicants at this level are occupationally competitive and are qualified by training
and/or experience in the labor market. Their only need for assistance is to be
referred to and placed on a job and/or to be provided with labor market and job
opportunity information. Applicants will be encouraged to utilize self-help services.
These applicants will be provided the following services:
Job referral and placement.
Information on job opportunities, including current job openings, the Inventory
of Job Openings, Civil Service job announcements, and Union Summary of
Hiring Practices.
General labor market information including the location of employers who
utilize workers in the client's occupation, location of unions, transportation
facilities, and other related information.
60
b. Level 2 - Employment Exploration and Job Development Services
Applicants at this level are employable but need some directed assistance in planning
an effective job search and/or coping with minor barriers to employment. Where
possible, services will utilize group instead of individual methods. Services at this
level are designed to:
Prepare groups of applicants to use the Level 1 job referral and information
services; instruct in job finding techniques; and initiate their own job search.
Assist applicants directly by developing job opportunities.
Provide, as necessary, usually on a one-time basis, such services as the following
to individual applicants:
Contacting an employer to explain an applicant's qualifications or limitations
(e.g., handicap not affecting work) in relation to requirements for a particular
job and arranging an interview.
A more thorough appraisal of his capabilities and desires in relation to the job
market than is required of an applicant seeking only job referral and labor
market information.
Arrange for short-term supplemental services.
C. Level 3 - To be provided by Department of Rehabilitation and Others
Applicants for this level are potentially employable but are in need of more intensive
services before becoming employable because they are vocationally handicapped due
to a disability. The intensive employability services provided by case-responsible
persons to applicants at this level include, but are not limited to, the following:
counseling and coaching; diagnostic services (testing, medical examinations, and
work evaluations); physical restoration; self-employment assistance; training;
tutoring; and referral to other agencies.
Results Expected
Increased Effectiveness in Job Placement
To properly serve the nation's largest labor force and the state's employers, emphasis
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will be on a job match system that brings workers and employers together. The
Department's target is 430,000 nonagricultural job placements for Fiscal Year 1973,
a 35 percent increase over Fiscal Year 1972 accomplishments. Included in the goal
are 197,000 disadvantaged job placements, a 68 percent increase over Fiscal Year
1972 accomplishments.
Increased Services and Economies
Staff reductions will result in substantial reductions of expenditures. A freeze has
been placed on new hiring and promotions at higher professional levels. This, plus a
staff cut of over 500 positions from the June 1972 level, is expected to result in a
reduction of at least 693 positions in Fiscal Year 1973 for a $7,666,240 budget
reduction.
During Fiscal Year 1973, the Department will be able to redirect 300 personnel to
providing direct community services to the public by combining separated,
splintered operations and reducing the need for duplicative management, clerical and
field office support positions. This will allow redirection of approximately
$3,000,000 to providing direct community services without any budget increase.
The restructuring of the Department program staff will allow the redirection of at
least 100 personnel from headquarters program staff services to field office
operations to further increase direct service to the public. During Fiscal Year 1973,
this should provide a redirection of an additional $1,000,000 of the Department's
resources for services.
Increased Services to Community Employers, Labor
The Department's new directions and structure will enable it to provide improved,
expanded services to the community, employers and labor. Services will be provided
to assist employers to fill job vacancies and the unemployed to obtain employment.
Employers and labor organizations will be provided with assistance in benefit
payment matters. Assistance will also be available for achieving industrial and union
affirmative action plans.
62
Increased Employment of Welfare Recipients
A Consolidated field operational system with operations designed to meet the needs
of a local community will enable the Department to continue carrying out its
responsibilities under the Welfare Reform Act of 1971. Welfare applicants are now
required to register for employment or maximum services with the Department of
Human Resources Development before aid is granted.
During Fiscal Year 1972, 10,456 Work Incentive Program enrollees entered
employment. The Work Incentive Program has been redirected to concentrate on
assisting welfare recipients to enter employment. For Fiscal Year 1973, the
Department has established a goal of placing 37,500 persons in jobs.
Manpower Training Programs
The new structure and direction of the Department will provide for improved
manpower training programs. At the local level consolidated management and the
community labor market information system will provide the direction,
coordination, and information needed to enable the Department to establish
effective linkages with local educational facilities, public and private, to insure
manpower training activities are geared to the employment needs of the community.
The establishment of a single program staff service unit for manpower training
efforts will assure uniform policy and procedural direction resulting in a coordinated
manpower training effort. The Department will concentrate on more on-the-job
training and less institutional training.
Unemployment Insurance and Disability Insurance Contributions Operations
The formation of a separate division in the Operations Branch, for Tax Collections
operations, will provide for strengthening the functions involved in the collection of
unemployment insurance and disability insurance contributions. These functions
and services are vital to the Department's benefit payments operation.
Personal Income Taxes
The collection of the State Personal Income Taxes has added a new dimension to the
Department. A separate division for tax collection and processing of State tax
63 -
money is necessary to insure proper management of this important activity.
Community Based Labor Market Information
The development and implementation of a statewide community based labor market
information resource will be of immediate substantial benefit to job seekers,
employers and the community.
Intelligence about the labor market is the life blood of a comprehensive manpower
service. Acquisition of quality labor market information will enable the Department
to carry out its missions. Provision of accurate, timely information to job seekers
and employers will shorten a job seeker's period of unemployment, and reduce the
time the employer must wait to fill his job vacancies. Improved labor market
information will also provide better direction to manpower and vocational training
efforts.
Increased emphasis on accountability
The new organizational structure will insure that performance objectives are stated
for Department operations and programs. There will be assignments of performance
objectives to managers and supervisors at all levels, and accountability for results.
Employees will be rated by performance measures. These will be used when
considering staff for promotion and merit salary increases.
E. Implementation
1. All reorganization efforts, with new structure in place and operating, will be completed
on or before January 1, 1973.
2. Legislation required to amend necessary sections of the Unemployment Insurance Code
will be introduced in January, 1973.
F. Legislation required
Essential legal changes necessary for the reorganization of the Department of Human
Resources Development are being drafted. These changes involve amendments to the
Unemployment Insurance Code and the HRD Act of 1968.
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G. Marketing Plan
The reorganization of HRD and new emphasis on community manpower programs is
primarily an internal matter that can be achieved without public opposition. Certain
segments of the Mexican-American community have been very vocal in opposing some of the
changes already accomplished, which they view as a threat to job placement activities for
their group. A comprehensive public information program, with particular emphasis on
gaining the understanding of the Mexican-American community, will be implemented.
It will never be possible to alleviate all problems because HRD is involved in the sensitive
business of affecting the economic situation for communities and individuals. Care will be
necessary to insure minority and community support for all changes.
The development of Community Manpower Centers (CMC) that serve the needs of job
applicants and employers will have wide support in concept and principle. Some concern
may exist and be voiced because of the change process, but these can be eliminated with
increased public information and contact with interested groups by HRD staff at all levels.
Special efforts will be made to reach the following:
1. Employers will be contacted by mail, and through the Chambers of Commerce, business
clubs and by direct meetings to tell how HRD will serve them and gain their inputs of
needs.
2. Job applicants will receive printed material on CMC services as well as verbal description
when dealing with CMC offices.
3. Through the HRD advisory committee and by encouraging all staff, especially
management, to become active in community affairs, information will be directly
provided to interested groups.
4. Legislators will receive briefings and information about results especially stressing the
following:
Better service to employers, job ready and potentially employable persons and the
community.
Cost savings to employers and taxpayers.
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Community based, one-stop manpower services.
Improved labor market information.
Improved manpower training programs.
CALIFORNIA DEPARTMENT OF MANPOWER
- 67 -
CALIFORNIA DEPARTMENT OF MANPOWER
A. Introduction/Background
The following from the Governor's Manpower Policy Task Force accurately describes the
current situation:
"Today in California we spend more than $2 billion a year in State and Federal funds to
finance hundreds of programs supposedly designed to solve 'the manpower problem' - the
combined problem of unemployment job training, job placement and job creation. Yet,
when we look at the manpower barometer, unemployment, we find that it is still in the
neighborhood of six percent.
"The National Manpower Development and Training Act of 1962 reflected two premises
which still dominate manpower policy at all levels of government. The first premise is that
manpower programs must be primarily concerned with the development of the supply of
labor and its placement. The second premise is that these programs must be concerned
predominantly with the development of the most disadvantaged and poverty-stricken portion
of the labor supply.
"Such efforts are intended to solve some specific problems in the achievement of overall
manpower goals. However, unless programs designed to relieve poverty are recognized as only
one part of a broadly defined manpower policy, and unless the present direction of legislative
and administrative thinking and action is changed, the manpower function of government
will remain what it is actually becoming - a sophisticated form of public assistance.
"There are other elements to consider in evaluating the existing complex referred to as
'manpower.' In the late 1950s and early 1960s, changes were imposed upon the employment
service. Qualified and skilled people from all walks of life were out of work. Clearly, job
matching was no longer the solution to manpower problems. The problems of manpower had
changed complexion.
68 -
"The need was that of retraining those with obsolete and displaced skills. In response to this
need, Congress passed the Manpower Development and Training Act of 1962. After
implementation, it became apparent that the need had been miscalculated. Highly skilled
individuals who already possessed enough adaptability and capability to meet the changing
environment were being retrained. Conversely, the group that was hardest hit was the manual
and unskilled laborer whose skills were marginal. Machines were becoming cheaper than the
physical labor they offered as services.
"Since the enactment of the Manpower Development and Training Act of 1962, Federal and
state manpower programs have been unable to deal with these and other complex problems
in this field. The development of Federal manpower programs has largely been reactive in
nature, and the profile of programs has been determined by political needs and crises in the
manpower field. The end result, of course, was inevitable: A proliferation of programs and
no central, controlling manpower policy for the nation, as the situation exists today.
"At the state level, there is a similar lack of centralized policy for manpower. All of the
states, including California, have found themselves in the roles of managing Federally-funded
programs. These programs have rigid categorical restrictions and very little flexibility to
readily adapt to current local needs.
"Another problem of manpower programming is the direct funding of local manpower
programs to cities, counties and other organizations, with a complete bypassing of state
control and policy and without attention to needs on a statewide basis. This
compartmentalization of manpower programming eliminates the possibility of an integrated
systems approach.
"Additionally, the welfare effort and the manpower effort have been organizationally
separated, although, basically, a purpose of both welfare and manpower programs is to move
people into economic self sufficiency.
"The various programs, such as unemployment insurance, disability insurance and welfare,
and their relationships to unemployment, have not been coordinated into any kind of
systematic approach. The result is a disjointed effort.
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"A problem approaching crisis proportions occurred in the aerospace industry as a
consequence of employment cutbacks. Although this problem could have been anticipated,
such was not the case, and there was an overreaction to the problem. Proper manpower
planning could have anticipated the coming need for transitional employment, relocation and
retraining of displaced aerospace workers.
"Adding further to the manpower dilemma is the failure to relate educational goals to the
world of work. The role of education has not been properly integrated into overall
manpower planning and programming."
"Finally, there is little coordination between the public and private sectors in relating
employment needs to manpower planning, policy and programs. Attempts to solve critical
manpower needs and problems are often reactions to situations that exist, rather than
solutions to the problems. While not all manpower needs and problems are predictable, this
fact does not preclude the need for communication, planning and a system to deal with these
needs and problems as they become realities.
"To reiterate, the result of our past course in manpower planning and programs has been
inevitable. The proliferation of programs, funding sources, objectives, sponsors, resources,
etc., is almost beyond comprehension, as well as control. Manpower programs are usually
funded to meet one of the following functions: preparation for employment; placement and
supportive services; job creation; income maintenance.
"Because of a lack of consistent planning and policy, it is difficult, if not impossible, to
evaluate the effect of present manpower programs. In the final analysis, however, it is clear
that manpower services and programs are not meeting the requirements of labor markets and
communities. Every manpower program is introduced into an existing economic, political
and social environment which strongly influences the nature of the program and, in part,
predetermines the relative success or failure. Problems and circumstances also differ among
communities and often require a different set of programs, services or policies.
Unfortunately, control of policy, planning and programming is centralized at the national
level. This creates inflexibility and often inappropriate programming and funding. As a result,
manpower programs are not consistent with sound planning, making evaluation an imperfect
tool."
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In summary, programs based on Federal determinations of needs are the rule and the
resulting programs are most often reactive. The Federal Government directs the many
fragmented programs. There is no overall manpower policy, thus a multiple number of goals
exist. There is now an emphasis on the non-job ready. There are multiple offices and
operations that provide separate but related services to clients. Efforts to create job
opportunities are so loose and uncoordinated as to be almost non-existent.
California's various programs dealing with manpower are fragmented to the advantage of no
one and the detriment of many. The Department of Human Resources Development bears
the responsibility of combining state and federal efforts to maintain employment, administer
unemployment and disability insurance programs and carry out training programs of many
different types and with many different goals. The Department of Rehabilitation and other
elements of State government also provide manpower services to achieve similar employment
goals. In order to better accomplish the several present charges and to advance capabilities as
recommended in the Governor's Manpower Policy Report, these Departments and offices
should be reformed and renamed the Department of Manpower.
B. Program Objectives
1. Decrease unemployment.
2. Reduce costs.
C. Program Proposals
1. Consolidate all California manpower programs from the Departments of Human
Resources Development and Rehabilitation into a single Department of Manpower.
2. Develop a state plan that combines and consolidates all government-funded manpower
programs in California.
3. Expand the Community Manpower Center concept to provide a full range of service
from job information to intensive rehabilitation service.
71
D. Current Programs/Proposed Changes
1. Current Programs
a. Department of Human Resources Development
The policies, programs and activities of the Department of Human Resources
Development, particularly when it was known as the Department of Employment,
have essentially been those of the federal Department of Labor which administers
the National Employment Service. About 90% of the Department's operating budget
is derived from federal sources. Funding by Congress is by broad program categories.
However, under other provisions of law, the Department of Labor has wide
discretionary authority, and it exercises considerable control over the planning,
budgeting and administration of state employment programs and functions. The
creation of the Department of Human Resources Development in 1969 sought
increased state involvement in planning and greater administrative flexibility, but has
had very little impact on the redirection of federal manpower programs.
b. Department of Rehabilitation
Since 1921, vocational rehabilitation services have been provided under a
federal-state program in California to assist disabled people on an individualized
basis to overcome their vocational handicaps and become employed.
In 1963, the Legislature created the Department of Rehabilitation to consolidate
services and broaden responsibility to disabled and to promote coordination of all
public and private agencies serving the handicapped.
C. Other State Manpower Efforts
Comparatively smaller programs exist in the State Personnel Board, Department of
Commerce, Cal-Job Development Board, and others. These programs are designed
both to place and/or train people and also to stimulate economic development, thus
creating new business and jobs.
72
2. Proposed Changes
a. Organization of Manpower Department
All manpower and rehabilitation functions in the Health and Welfare Agency,
particularly those of the Department of Human Resources Development and the
Department of Rehabilitation will be consolidated into a single Department of
Manpower. The Department will be responsible for the development and approval of
a comprehensive statewide plan of all federal and state manpower programs and for
the provision of services to the job-ready, the disabled and the disadvantaged.
The State Plan will be based upon local needs and priorities and would provide for a
variety of manpower services under a flexible format which recognizes the differing
needs of individuals in obtaining employment. The Department would allocate funds
to local communities by a formula encompassing population, labor force,
unemployment and poverty criteria allowing for a balance between urban and rural
areas. The HRD Act of 1968 provided that the Department of Human Resources
Development created by the act would be the sole state agency to plan and
administer needed manpower programs.
The new department will seek to direct all Federal manpower funds coming into
California to be allocated to the Department of Manpowerwith a minimum of
categorization; maximum flexibility for State use or reallocation of funds to
communities; and maximum accountability for results achieved under manpower
programs.
The Department will consist of three major operational service components:
Job Placement Services will include all activities related to job placement, job
development, employer relations and labor market information. In order to
provide ready access to job referrals, responsibility for determining eligibility for
unemployment insurance will be assigned to this component.
Employability Services will include manpower development, welfare work
programs, and prevocational services.
-73-
MANPOWER DEPARTMENT
ORGANIZATION
PRESENT
1973 DEPARTMENT OF HUMAN RESOURCES
DEVELOPMENT
DIRECTOR
CHIEF DEPUTY
LEGAL
COMMUNICATIONS
PROGRAM SERVICES
OPERATIONS
ADMINISTRATIVE
BRANCH
BRANCH
BRANCH
JOB TRAINING
DEVELOPMENTS
PLACEMENTS
TCIP
1973 DEPARTMENT OF REHABILITATION
DIRECTOR
CHIEF DEPUTY
ADMINISTRATIVE
COMMUNICATIONS
FIELD SUPPORT
FIELD
MANAGEMENT
SERVICES
SERVICES
SERVICES
74
MANPOWER DEPARTMENT
ORGANIZATION
PROPOSED
1974 DEPARTMENT OF MANPOWER
DIRECTOR
CHIEF DEPUTY DIRECTOR
LEGAL
COMMUNICATIONS
PROGRAM SERVICES
ADMINISTRATIVE
OPERATIONS BRANCH
BRANCH
BRANCH
VOCATIONAL
JOB PLACEMENT
EMPLOYABILITY
REHABILITATION
SERVICES
SERVICES
SERVICES
- 75 -
Vocational Rehabilitation Services will include vocational rehabilitation for the
disabled such as Orientation Center for the Blind, Counselor-Teachers for the
blind and rehabilitation services for the independent living. This component will
be staffed by employees skilled in the vocational rehabilitation process.
b. Proposed Department of Benefit Payments*
The proposed Department of Benefit Payments will be responsible for all benefit
payment and tax collection functions within the Health and Welfare Agency. The
Department of Manpower will continue to have responsibility for local eligibility
determination for unemployment insurance, disability insurance and the
individualized payments from case service funds which are a necessary part of an
individualized vocational plan for disabled or disadvantaged people. The basic fiscal
management activities will be transferred to the Department of Benefit Payments.
C. Benefits
The proposed program will result in more effective utilization of the manpower
funds available to the State by providing a better balance of program in each
community and better coordination of the planning for manpower services at a State
level. As a result of clarifying and specifying objectives, the Department of
Manpower efforts will be more effectively directed at achieving more placements in
terms of number and quality.
The Department will employ only those workers it needs to perform its proper and
necessary functions. To seek to attack the unemployment problem by expanding the
government payrolls not only begs the issue but compounds the problem and delays
the proper solutions.
State and local manpower needs will be used as the basis of a State developed
long-range plan for manpower services. A statewide coordinated delivery system will
be planned and implemented.
Combining the Department of Rehabilitation and the Department of Human
Resources Development will permit a total scope of manpower services. The
*See pages 88 through 101
- 76
development of "plans" will be designed to permit a tailoring of program to
localized problems. The new department will be flexible and responsive to the
changing needs of manpower in a dynamic job market.
E. Implementation Schedule
1. The Agency and Department staff have begun to prepare the necessary legislative and
support documents. All material will be ready by January 1, 1973.
2. State legislation will be introduced during the 1973 session.
3. Implementation of the new Department will be completed July 1, 1974.
F. Legislation Required
1. Legislative proposals have been drafted for submission to the Legislature in January,
1973. These consist of amendments to the Unemployment Insurance Code and the
Welfare and Institutions Code necessary to consolidate state manpower programs and
organizations. These legislative proposals are being coordinated with those in the
California Community Manpower Program.
2. The Agency has also drafted proposed amendments to Federal law to allow state
management of all manpower funds and programs in California.
G. Marketing Plan
The major changes proposed for the Department of Manpower (DMP) are to consolidate
program and organizations and to actually become the State planner and coordinator of all
manpower effort in California. To accomplish these changes substantial changes are required
in Federal law and regulations of the Department of Labor and of Health, Education and
Welfare. Congressional action recently to provide Revenue Sharing to communities is
somewhat opposed to the idea of State management and control of Manpower funds.
However, there is tremendous support for reform of manpower efforts. It comes from
business, labor, educators, many Congressmen, and the general citizenry. The problems of
manpower are well defined and agreed upon, but the proposed solutions range far apart.
California's approach is logical and has recent community and business support from the
efforts of the Governor's Manpower Task Force.
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Basically, any proposal that emphasizes local input and locally tailored program efforts is
quite acceptable to most. The main concern with this proposal which stresses strong state
management and control will come from those who see it as a loss of control, namely the
Federal agencies and some local interests.
We can sell this effort by gaining the support of those to be served such as the job ready,
applicants needing manpower service and employers. The concerned Departments will
establish a statewide planning group and a network of information outputs to interested
groups. Special efforts will be made to include the disabled and disabled interest groups in
the final planning because the vocational rehabilitation model has proved successful and will
be one of the main new thrusts to serving job applicants who need manpower services.
CALIFORNIA JOB CREATION PROGRAM
79 -
CALIFORNIA JOB CREATION PROGRAM
A. Introduction/Background
1. Last March, Governor Reagan's Manpower Policy Task Force began a study of the state
manpower situation. In August, Mr. Thomas Hamilton, Chairman of the Task Force,
transmitted the final report on that study. From that report came the following
statement:
"The ultimate requirement for a successful manpower policy is a healthy and
growing economy. The goal for manpower planning and programming should be to
assist individuals to prepare for and find jobs. The name of the game, in other words,
is 'jobs'.
If the State really wants to do something to solve the manpower problems, it will
refrain from those activities which thwart economic growth and prevent the creation
of new jobs."
2. The civil disturbances of the 1960's brought about efforts by both government and
private business to foster economic development in America's inner cities. The emphasis
of these efforts was to promote the growth of small businesses in the disadvantaged
urban area, thereby perpetuating current employment and expanding employment
possibilities within the community.
The many programs have provided a framework to solve the economic problems, but
they have become fragmented and ineffective. A duplication of services in both
management and technical assistance programs also adds to the ineffectiveness of present
efforts.
Out of the prevalent duplication and confusion has evolved one effective tool for
creating a good climate for the small businessman. The California Job Development
Corporation Law Executive Board has provided a climate of financial backing and
management/technical aid to small businesses which has proved successful in attaining
the goals of job creation and expansion.
80
This proposal is designed to expand the capability of the California Job Development
Corporation Law Executive Board and the Small Business Administration to meet the
needs of businessmen and potential businessmen in California's disadvantaged
communities.
3. A fundamental policy consideration lies at the foundation of this proposal. Traditionally
government's attempts at job creation have centered upon grant approaches. Outright
grant programs fail to stimulate entities which become self-sustaining and independent.
This proposal, however, is centered upon an expansion of the loan guarantee approach
instead of grants. This approach emphasizes accountability and stimulates the incentive
to become a competitive member of the free enterprise system.
B. Program Objectives
1. To increase the activity of business and job creation and expansion in disadvantaged
areas.
2. To improve the economic well-being of employable persons in disadvantaged areas.
3. To create a self-supporting help program for small businessmen.
4. To provide an effective mechanism to replace the "grant" approach.
C. Program Proposal
1. This proposal will establish that:
The State will institute a broader loan guarantee policy to Regional Job
Development Corporations;
Technical and management assistance in both the pre-investment and
post-investment periods will be a requisite in any proposed venture;
The California Job Development Corporation Law Executive Board (Cal Job) will be
made an advisory board with operational management of the program under the
Secretary of Health and Welfare.
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2. Loan Guarantees
To broaden the Cal Job Program, the State will exercise its guarantee capability to a
greater degree by allocating substantial loan guarantees to the Regional Job Development
Corporations. This will increase the funding capability of the Regional Corporations.
That capability is now limited by the Regional Corporations' financial commitment to
the program. Broader State participation will augment the present funding system.
The Regional Corporations will provide individual guarantees to qualified borrowers
not to exceed 15 percent of the total loan request;
The borrower will be required to have a minimum 5 percent equity in the business,
or obtain venture capital from other sources.
Additionally, the Regional Corporation will provide an additional loan guarantee to the
borrower for initial management and technical services and approve appropriate
consultants to provide needed services to the borrower. Consultants will also be provided
for ongoing management assistance as required by the business. The Regional
Corporations will be authorized to charge a fee or issue debentures for each guarantee
extended to defray administrative costs of the Cal Job Program.
The number of jobs generated through loan guarantees will vary widely with the type of
businesses involved. Based on the experience to date of 974 jobs created or retained with
a loan guarantee fund of $650,000, $1 million will stimulate 1500 jobs. This formula is
based on the current method of issuing guarantees at 100 percent. Using this formula the
proposed State Loan Guarantee Fund will guarantee 15 percent of initial capitalization
on an individual basis, therefore, $1 million in State Loan Guarantees will generate 6.7
times the amount of jobs previously created, or 10,050 jobs.
During the first two years, the program will be expanding and funds totalling $2 million
per year will be necessary to provide satisfactory statewide loan guarantees and funds for
administering the management and technical assistance programs.
82 -
Monies will not be expended until actual loan losses occur. It is anticipated that this loan
guarantee fund will eventually evolve into a revolving State Loan Guarantee Fund.
3. Management and Technical Assistance
A major feature of this proposal is the establishment of an assistance program, utilizing
consulting firms, to provide guidance to the small businessman in such areas as
accounting, marketing, business procedures, obtaining loans and other areas of known
weaknesses generally found in small business operations. Many of these firms are already
in existence and have been playing a role in the present program. With the expansion of
Cal Job/SBA capability, this portion of California's business community will also
expand.
The technical assistance program will emphasize the transfer of technological advances to
the small business area. At present, many devices, products and techniques are in use in
the nation's aerospace centers and research laboratories, but have not filtered into
civilian-oriented industries. The technical assistance agencies will seek out those devices,
products and techniques and transfer them, where feasible, to the businesses created
under the Cal Job and Small Business Assistance Programs. This will upgrade the overall
product of the assisted firms and aid in assuring them of maximum productive economy
and a higher viability in the market place.
4. Organizational Change
The basic organizational change proposed is the alteration of the existing charge of the
Executive Board. The Board will be utilized in an advisory and policy-making capacity.
The operation of the Cal Job Program will be placed under the Health and Welfare
Agency, initially in the Office of Special Services and later the Department of
Manpower, thus allowing decisions to be made in concert with manpower programs and
objectives.
5. Results Expected
Cal Job Programs
This proposed approach will provide a more equitable basis for private participation.
By entering into the risk sharing with the Small Business Administration and other
- 83 -
-
lenders, the current exposure of Regional Job Development Corporations will be
drastically reduced. The Regional Corporation will also have an increased capability
to attract a larger amount of financial resources and eliminate fragmentation.
Small Business Assistance Program
The integration of State and Federal technical assistance programs will enable
pre-investment organizations to service specific areas increasing program
effectiveness, eliminating duplication and reducing government costs.
Cost Effectiveness
This is the fourth year since the implementation of the California Job Development
Corporation Law Program and the integration into it of the Small Business
Assistance Program. Trends noted even this early in the program clearly identify a
sound economic basis. Quantitative data evolving from the continual evaluation of
the program have established that 2,016 jobs have been created and/or retained in
businesses which might not have existed, or would have failed, except for support
from the combined Cal Job and Small Business Assistance Program; $60,200,000 in
wages and salaries will be paid by these businesses over an assumed seven-year life
expectancy for the existence of these jobs; and 218 businesses with combined
annual sales in excess of $24,800,000 have been created or expanded through
benefits derived from the two programs. The total State cost to date for operating
expenses, including losses in business which failed, amounts to $896,000. This
includes $266,000 for contractual services paid for by the State and made available
to businesses participating in the Small Business Assistance Program. The State's
total cost of $444 per job created or retained over the seven-year life expectancy of
that job opportunity amounts to less than $64 per year.
It is important to note that if a nominal 20 percent unemployment rate is assumed
to apply to the 2,016 persons in the disadvantaged area, the savings in welfare costs
alone in seven years for those 400 individuals would constitute $11,200,000 - a
handsome saving in exchange for $896,000 investment which the State has made to
date.
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While treating these findings in a most conservative manner, the simple arithmetic of
these figures clearly indicates the economic sensibility of the program. The figures
demonstrate the merit in directing efforts toward the further utilization of the Loan
Guarantee and technical assistance programs.
D. Analysis of Current Program and Proposed Changes
1. Currently, there is reluctance on the part of the private sector to invest in the Cal Job
Program because of the inequitable risk factor. It is a program limited by private sector
loan commitments.
Little or no equity is required of the borrower. There is limited cooperation between
State and Federal programs for management/technical assistance to borrowers. There are
inadequate methods for determining the reasons for the success or failure of businesses
begun under the program. There is little attempt to bring about a transfer of available
technology from governmental science agencies to assisted small business operations. The
Cal Job Executive Board maintains direct operational control over program activities
limiting expedient action.
2. The proposed program will provide a more reasonable financial risk factor by greater
State participation in loan guarantees. Small business development activity will increase
with the State Loan Guarantee increase.
The borrower, or backing investors, will be required to hold 5 percent equity in the
business.
There will be the development of closer operational ties between Cal Job and the Small
Business Administration to provide better pre-investment and post-investment
counselling to borrowers. The management/technical assistance program will supply
better quantitative measures of assisted businesses. Agencies will be formed in the private
sector to investigate and transfer applicable technological advances to small businesses to
improve operation and production efficiency.
85 - -
The Cal Job Board will be placed in an advisory capacity with operations directly
handled by the Executive Director. A closely coordinated effort will be made with the
Manpower Programs of the Health and Welfare Agency.
E. Implementation Schedule
1. Requests for additional funds and changes in legislation will be initiated in January,
1973 for July 1, 1973 implementation.
2. Loan guarantees and increased management assistance to start July 1, 1973.
3. The Cal Job Board to become an advisory body July 1, 1973.
F. Legislation Required
1. Expansion of the Cal Job Board's Loan Guarantee Capacity
This would require an increased general fund appropriation which would be
accomplished in the budget act. No change is necessary in the Corporations Code.
2. Guarantee each loan to individual businesses rather than guaranteeing a percentage of the
entire job development corporation loan portfolio.
The Corporations Code is sufficiently broad in scope to permit individual loans to
businesses and they can be guaranteed on an individual basis without any statutory
change.
3. Provide funds to the businesses for management and consulting services at the time the
business is started.
4. The current definition of economically disadvantaged areas is not broad enough to
include all disadvantaged areas, particularly areas directly contiguous to defined
disadvantaged economic areas. To achieve more flexibility the definition of the
economically disadvantaged area as set forth in the Corporations Code should be
modified.
- 86 -
5. Permit the regional corporation to charge the borrower a loan guarantee fee. Imposition
of a fee would require an amendment to the Corporations Code which does not
currently provide for a fee.
6. Incorporate the Small Business Assistance Program into the Cal Job Board.
7. The limitations on the number of non-profit associations that can provide technical
assistance will be eliminated to permit greater flexibility in the areas of operations and
associations utilized.
G. Marketing Plan
Increasing the opportunity for the disadvantaged through business and job development is
American tradition and appealing. Many groups will automatically approve especially the
Small Business Administration, Chambers of Commerce, Minority Groups, and the existing
Cal Job Board. However, the main question of true support will be faced when additional
funding is required. So far, California has not given priority to economic development
through the use of State funds directly except for the Cal Job effort, which was noticeably
small.
The results of the Cal Job Program to date are astounding and when projected should sway
the most skeptical to agreeing that "jobs" are the best and most economical long-term
manpower program. Considerable effort of staff will be used to present the facts about
performance to date and to discuss improved benefits. The efforts of creating and expanding
businesses operating in disadvantaged areas will be stressed as follows:
Increased loan guarantee ability to fund new business and expand current operations in
disadvantaged areas.
More rapid response to needs through Cal Job Executive Director rather than a part-time
Board.
Greater support for the borrower through the management/technical assistance
programs.
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Increased taxes for local, State and Federal governments.
Borrower equity requirement insures greater sense of responsibility and accountability
on his part, and contributes to success.
CALIFORNIA DEPARTMENT OF BENEFIT PAYMENTS
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CALIFORNIA DEPARTMENT OF BENEFIT PAYMENTS
A. Introduction/Background
1. This proposal is an extension of the Governor's Reorganization Plan No. 1 of 1970,
which created a new Department of Health. The Reorganization Plan was authorized by
legislation (AB 698) which was introduced and enacted during the 1971 session of the
Legislature. The new health department will be operational on July 1, 1973.
The Department of Health will consolidate the existing Departments of Public Health,
Mental Hygiene, Health Care Services and certain healing arts boards presently located in
Consumer Affairs. In addition, the existing social service functions, authorities, and
responsibilities of the Department of Social Welfare will be transferred to Health. The
remaining structure of the Department of Social Welfare after the transfer of social
services to Health is the foundation from which the Department of Benefit Payments
will be advanced.
2. In 1970, there were essentially four arguments advanced which supported the transfer of
social services, in total, to the Department of Health.
A general acceptance at all levels of government of the desirability of making a clear
separation of the two basic responsibilities generally associated with welfare
programs, social services and money payments. In California, counties were directed
to accomplish this separation. The federal government required that separation be
carried out at the State level as well.
A growing recognition of the interrelationship and interdependency of health
services and social services. Social services relate in varying degrees to health services.
They range from the placement of persons discharged from State hospitals in
out-of-home care facilities to the supervision of county adoption programs, from
identification of medical treatment needs to promotion of adequate child nutrition;
and from family planning counseling to the provision of a home health aide or
homemaker.
Several departments have overlapping responsibilities in the health and social service
fields. For example, alcoholism clinics (rehabilitation), local mental health clinics
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(Mental Hygiene), and diagnostic centers for mental retardation (Public Health)
compete with the county welfare department's protective services for budget
resources, qualified staff, and even clients.
The three major departments being consolidated into the Department of Health
Mental Hygiene, Public Health, and Health Care Services : also have social work
staffs. In addition, social workers are included as an integral part of the staffs of
local community programs for the mentally ill and mentally retarded. Consolidation
of state responsibility for social services in the Department of Health permits the
integration of this staff into a more effective system, with a consequent
improvement in the quality of service rendered to the public.
Examples of social services which are presently authorized and which will be transferred
are: Information and Referral Services; Protective Services for Children and Adults;
Services to Strengthen Families and Individuals; Out-of-Home Services for Children and
Adults; Family Planning Services; Adoptions; Licensing; Child Welfare Services, and
Homemaker Services.
All of the above services are actually delivered by counties under regulations
promulgated by the State, except that the State provides some adoption and licensing
services directly.
3. The social services portion of the State Department of Social Welfare will be transferred
on July 1, 1973. Approximately 25% of the SDSW staff will transfer to the new
department. Once accomplished, this leaves Social Welfare with essentially one
responsibility - payment of benefits to welfare recipients. Section 10600 of the Welfare
and Institutions Code reads, in part, as follows:
"The State Department of Social Welfare is hereby designated as the single state
agency with full power to supervise every phase of the administration of aid..." (i.e.,
benefit payments).
The designation of Social Welfare as the responsible department for administration of aid
payments results in that department retaining the following major functions:
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Promulgation and enforcement of regulations implementing the state plan for aid
payments.
Field fiscal planning and operation, including verification and authorization of
county claims.
Program audits and evaluation.
Appeals and fair hearings.
Research and Evaluation.
County Contract administration.
Recovery Program (including fraud detection).
B. Program Objectives
1. Increase the operating efficiency of those functions within the Health and Welfare
Agency that are primarily related to the collection and disbursement of money.
2. Provide appropriate service to those who participate in benefit payment programs.
3. Improve checks and balances within Agency programs by separating, where feasible,
program responsibility from payment responsibility.
4. Improve the State's ability to detect administrative error and fraud.
5. Reduce program costs to the State.
C. Program Proposal
1. To accomplish the stated objectives, the following changes are proposed:
The Department of Social Welfare shall be named the Department of Benefit
Payments.
Certain fiscal and banking activities shall be moved from the departments of Human
Resources Development, Health Care Services, Mental Hygiene and Public Health to
the Department of Benefit Payments.
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2. The following is a detailed summary of this proposal.
Change Name of Department of Social Welfare
Section 10550 of the Welfare and Institutions Code is the existing provision of law
which authorizes a State Department of Social Welfare (SDSW). This provision and
numerous other sections of statute will be changed to read Department of Benefit
Payments. There have been suggestions from a number of sources over the years to
change SDSW's name to something else. The Assembly Office of Research, for
example, recently suggested that SDSW be retitled the "Department of Income
Maintenance". This proposal goes further than previous proposals by suggesting that
SDSW assume responsibility for a number of programs which are not related to
income maintenance (e.g. local mental health programs, fiscal intermediaries, etc.).
Thus a broader title is needed, and "Benefit Payments" satisfies that need.
Human Resources Development (HRD)
Three major functions have tentatively been identified for transfer to Benefit
Payments from HRD. These are the tax collection, payment, and audit programs.
Preliminary estimates indicate that approximately 2,360 man-year equivalents and
$40.6 million in support costs would accompany such a transfer. The magnitude of
this shift requires a thorough development plan which will commence upon approval
of this proposal. These estimates, incidentally, include overhead or indirect costs as
well as direct program resources.
There are two principal options that will be studied in order to provide UI and DI
payments in the most efficient manner. The first would require the Department of
Benefit Payments to contract with community manpower centers for the actual
payment to beneficiaries. The second alternative would result in the establishment
of regional Department of Benefit Payments offices which would make UI and DI
payments upon receipt of an authorization or "payment order" from the
Community Manpower Center. Selection of the preferred alternative must await
completion of the detailed development plan.
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Health Care Services (HCS)
It is proposed that four functions be transferred from the Department of Health
Care Services to the new department. These are the payments to and audits of the
fiscal intermediaries and the Prepaid Health Plan and the Recovery Bureau
functions.
Approximately 90 man-years and $2,220,000 would accompany the transfer of
these responsibilities.
Mental Hygiene
From the Department of Mental Hygiene it is proposed that the claims processing
and payment responsibilities for the local mental health programs and the county
audit function be transferred. Approximately 36 man-years from the bureaus of
accounting, budget planning, data processing, and program audits have been
identified for transfer. Roughly $478,000 is presently budgeted for these functions.
Public Health
It is proposed that the payment and audit responsibility for Crippled Childrens
Services, regional diagnostic centers (developmental disabilities), family planning
services, renal dialysis, tuberculosis subsidy, and local health department subventions
be transferred to Benefit Payments. Approximately 76.9 man-years and $845,000
will be transferred.
It is apparent that the division of payment from program responsibility will require
close coordination among the affected departments. It is anticipated that
administrative regulations will be modified to avoid confusion and overlap of related
regulations. For example, Medi-Cal regulations which are presently contained in the
California Administrative Code will be changed to clearly indicate the division of
responsibility between the Departments of Health and Benefit Payments.
3. The main benefits expected to be achieved by this proposal follow.
Staff specialization
Employees who now must spend part of their time in tasks unrelated to their
professional training will be relieved of that responsibility. Employment security
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officers, for example, will be able to devote their attention to job finding tasks. The
payment responsibility will be shifted to the Department of Benefit Payments.
Professional judgments required to operate programs are different from the skills
needed to handle money or authorize payments. Experience has shown that the
benefit payment processes have little relationship to the identification of program
need or eligibility.
Consolidation of Systems and Data Processing
A consolidated computer payment system will be developed, relying heavily on the
Consolidated Data Center authorized by SB 1503, 1972 legislative session. The best
of existing systems within the Agency will provide the base from which expanded
and consolidated systems will be developed. For example, the Department of Mental
Hygiene has developed a well-regulated computerized billing and receipts system
which will provide a model for the other programs. This proposal will also permit
the close integration of the Medi-Cal Management System (MMS) and Social
Welfare's Expanded Data Reporting System (EDRS), a step which has been
recommended by the Legislative Analyst and the Department of Finance.
Reduction in Handling of cash (HRD offices)
The risks inherent in the handling of cash will be reduced by this proposal. A system
is being considered which would all but eliminate the handling of cash in the
unemployment and disability insurance programs. This system will accommodate
the favored program requirement that unemployed, physically capable persons
routinely report to manpower offices to demonstrate their adherence to a job search
plan.
Span of Control
Centralization of payment functions in the Department of Benefit Payments will
permit broader spans of control and a reduction in the number and layers of
supervision. It will also create an organization which can absorb the payment aspect
of any new programs requiring payment of benefits at very little additional
administrative cost. This is an important feature, particularly with regard to
manpower programs which are added and modified continually.
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Potential Savings Impact
As a result of these expected administrative efficiencies, a dollar savings of
$2,244,200 has been targeted. Savings are projected by Department, as follows:
Human Resources Development
$2,050,000
Health Care Services
142,000
Mental Hygiene
48,000
Public Health
4,200
$2,244,200
Improved Checks and Balances
By 1974-75, it is conceivable that the payment functions handled by the
consolidated Department of Benefit Payments will exceed $6 billion (all funds). The
improved checks and balances resulting from the separation of program from
payment responsibility become especially important in a program of this magnitude.
The Department of Benefit Payments will operate in some respects as an agency
comptroller, providing an independent review or pre-audit of payments that are
made through the various agency programs.
Administrative Error and Fraud Detection
The consolidation of systems and data processing will enable the Department of
Benefit Payments to more effectively detect administrative error and fraud. This
proposal facilitates the development of a "basic wage and payment history file" on
each individual regardless of the programs which served him. Such a file will permit
routine cross checks between welfare, health, and manpower programs that any one
individual may be receiving. Ability to eliminate duplicate payments, benefits being
received in more than one county, etc., is greatly enhanced, since the data will be
integrated under one administrative agency.
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BENEFIT PAYMENTS
CURRENT SDSW ORGANIZATION
1972 DEPARTMENT OF SOCIAL WELFARE
DIRECTOR
CHIEF DEPUTY DIRECTOR
ADMINISTRATION
OPERATIONS
LEGAL AFFAIRS
RESEARCH AND
SOCIAL SERVICES
FISCAL DIVISION
EVALUATION
- 97 -
BENEFIT PAYMENTS
PROPOSED ORGANIZATION
1974 DEPARTMENT OF BENEFIT PAYMENTS
DIRECTOR
CHIEF DEPUTY DIRECTOR
LEGAL
COMMUNICATIONS
PROGRAMS AND
ADMINISTRATION
OPERATIONS
EVALUATION
AUDITS
PAYMENTS
COLLECTIONS
CONTRACTS
- 98 -
D. Current Program/Proposed Changes
The following chart illustrates the "before and after" of the Benefit Payment proposal.
Collection, Payment &
Organization Name
Audit Responsibilities
Current Department
Proposed Department
Cash grants
Social Welfare
Benefit Payments
Medi-Cal
Health Care Services
Benefit Payments
Unemployment Insurance
Human Resources Dev.
Benefit Payments
Disability Insurance
Human Resources Dev.
Benefit Payments
Local mental health
Mental Hygiene
Benefit Payments
Cripped Childrens Services
Public Health
Benefit Payments
Family planning
Public Health
Benefit Payments
T. B. Sanatoria
Public Health
Benefit Payments
Regional Diagnostic Centers
Public Health
Benefit Payments
Renal Dialysis
Public Health
Benefit Payments
Local health department
Subsidies
Public Health
Benefit Payments
E. Implementation Schedule
Legislation is required to implement this plan. We propose that a bill be introduced in
January 1973, in order that we may have full benefit of the 1973 session to work for its
passage.
The proposed effective date for full implementation is July 1, 1974.
Contingency planning has already begun in the departments affected, and this will continue
through the 1973 calendar year.
The transfer of social services from Social Welfare to Health will become a reality on July 1,
1973 because of the new Department of Health creation.
- 99 -
BENEFIT PAYMENTS
CURRENT/PROPOSED
SOCIAL WELFARE
HUMAN RESOURCES
DEVELOPMENT
Benefit Payments
Tax Collection
UI/DI Payments
DEPARTMENT
OF
BENEFIT PAYMENTS
HEALTH CARE SERVICES
MENTAL HYGIENE
Cost of Care Payment
County Mental
Audits and Recoveries
Health Claims
PUBLIC HEALTH
- Claims -
Crippled Childrens'
Services
Family Planning
TB Sanitoria
County Health Dept.
Assistance
100 -
F. Legislative Proposals
A legal review of existing statutes and preparation of legislation has begun. The following
changes will be required:
1. Social Welfare
All Welfare and Institutions Code sections referencing the State Department of Social
Welfare will require change to Department of Benefit Payments.
2. Human Resources Development
The Unemployment Insurance Code will require many substantial changes.
Unemployment Insurance Code provisions relating to the Unemployment and Disability
Insurance programs will require comprehensive modification. The eligibility provisions of
the Code will also be rewritten to accommodate the new payment mechanism.
3. Mental Hygiene
Welfare and Institutions Code Sections will require change indicating that the
Department of Benefit Payments is responsible for payment and audit of the various
local health programs.
4. Public Health
A number of Health and Safety Code sections will be modified to indicate that the
Department of Benefit Payments is responsible for payment and audit of the various
local health programs.
5. Health Care Services
Legal action to effect the move will involve amendments in the Welfare and Instititions
Code. Minor changes to the contract with the fiscal intermediaries will also be required.
An ad hoc, legal task force has been convened to prepare the necessary changes.
G. Marketing Plan
The prognosis is good for successful implementation of this proposal. There have been other
suggestions from time to time that Social Welfare be restructured and streamlined to
- 101 -
emphasize their primary purpose - -- making payments to needy persons. We are developing an
information package which will emphasize the "pros" of this approach.
1. This is not without full recognition, however, that we will encounter opposition from
some very notable groups.
The Federal Department of Labor, which in the past has attempted to dictate
manpower policies and procedures.
HEW, which in the past has resisted California's efforts to modify single state agency
requirements.
Employee groups, notably CSEA, since this proposal envisions a reduction in state
positions.
Welfare groups, mainly employee and administrator organizations, who will argue
that the character of the social welfare department is being changed to their
detriment.
Organizations such as the American Civil Liberties Union who will maintain that
centralization of information such as proposed creates a "big brother is watching
you" atmosphere.
2. On the other hand, support should come from a number of influential organizations --
those which generally favor efficiency and economy in government. Examples are:
California Chamber of Commerce
California Taxpayers' Association
County Supervisors Association of California, though it is recognized that an
advanced effort to sell the idea to this group will be necessary.
The Health and Welfare Agency will make a concerted effort to work with each of these
groups to win their support. Key legislators will also be contacted by Agency staff, with
the help and guidance of the Governor's office.
CALIFORNIA COMMUNITY CORRECTIONAL PROGRAM
103 -
CALIFORNIA COMMUNITY CORRECTIONAL PROGRAM
A. Introduction/Background
1. An objective appraisal of Youth Authority and Department of Corrections records
indicate that State operated programs are not effective. Criminal activities by youth are
increasing; successful rehabilitation of youthful offenders is decreasing.
A study by the California Youth Authority in 1966 found that over 40 percent of the
juvenile court wards processed through State institutions during the study period ended
up in the adult criminal system. More recent figures indicate that nearly 30 percent of
the adult male felons received by the Department of Corrections in 1971 had previous
commitments to the Youth Authority. This percentage has been steadily increasing over
the past ten years.
2. Law enforcement officials, psychologists, sociologists, and legislators are increasingly
calling for comprehensive community-based programs to control and rehabilitate
youthful offenders. For the past several years, youths processed by juvenile courts have
been referred with greater frequency to community programs rather than State operated
programs.
Juvenile Court Wards
County
State Institutions
Parole
December 31, 1967
41,362
4,441
10,693
December 31, 1971
47,381
2,277
8,023
This decline in State provided services is also evidenced in the commitment rate. As
recently as 1968-69, the juvenile courts committed 2,965 juveniles to the Youth
Authority. During 1971-72 this number declined to 1,534.
3. At the same time, it is recognized that the State has the responsibility to protect society
from the youthful and adult criminal. The State should continue to operate facilities and
104 -
programs to provide for effective control and treatment of this hardcore criminal
population. The juvenile court ward, not involved in criminal convictions, is better off
not associated with this criminal element.
It is proposed that the State's role in treating and controlling juvenile court wards be to
encourage local governmental, private groups and volunteers to provide required services,
combining public and private resources in a coordinated attack on this problem.
4. Rehabilitation of youthful offenders is a complex, constantly changing field of study.
Even with the change, there is no doubt that external environment plays a key role in
rehabilitation. Separate community programs for these juvenile court wards should best
serve to return these youths to normal productive lives.
The funds presently being expended on State services for juvenile court wards should be
redirected to local communities. This will enable California's counties to expand and
improve community services and provide a coordinated public and private effort to treat
the problem of the youthful offender in his community.
By providing State financial and coordinating resources to each county, where
comprehensive community efforts can be applied to the problems of today's youth, a
viable program can be developed and serve as a model for other states and communities.
B. Program Objectives
1. Provide public protection and promote community safety.
2. Improve confinement and detention at the State and community level.
3. Provide appropriate rehabilitation efforts and releasing administration.
4. Deter criminal behavior by the effective application of correctional laws.
5. Conduct State and community correctional programs in a cost effective manner.
C. Program Proposal
1. The following programs are proposed to accomplish these objectives.
105 - -
Community Juvenile Offender Rehabilitation Program
A program to expand community rehabilitation and control activities for juvenile
offenders.
Community Corrections Performance Measurement System
A program to provide reliable evaluation of results of State and community
programs and subventions.
Department of Correctional Services
A program which consolidates the California Department of Corrections and the
California Youth Authority into a single department.
California Parole Authority
A program which combines the Adult Parole Boards and the Youth Authority Board
into a single Parole Board.
2. Community Juvenile Offender Rehabilitation Program
The existing Probation Subsidy Program provides funds to counties for retaining juvenile
court wards and convicted felons in the community. This subsidy will be augmented by
the establishment of an Incentive Subvention for juvenile court wards only. The
Incentive Subvention will provide for cash payment to counties based on their ability to
reduce the number of juvenile court wards committed to State institutions.
Using the number of juvenile wards committed to the State in 1971-72 from each
county, a commitment rate per 1000 juveniles (between age 10 to 17) will be computed.
This rate will become the yardstick against which to measure commitment reductions.
For each anticipated commitment retained in the community, counties will receive a
cash payment of from $3,000 to $8,000. The amount of payment will be determined by
dividing anticipated commitments into three equal groups. Payments will be based on
the premise that it becomes more difficult and costly to reduce State commitments as
the total number of commitments declines. For this reason, counties will receive $3,000
per case for reducing the first third of their commitments; $5,000 per case for reducing
the second third of their commitments; and $8,000 per case for reducing the last third of
their commitments.
- 106
The chart below illustrates the operation of the existing Probation Subsidy Program and
the Incentive Subvention Program assuming a county with 1971-72 juvenile
commitments of 30 wards.
Total
Incentive
Total
Potential
Probation Subsidy
Subvention
Per Case
Costs
Down to 30
$4,368
$
-0-
$4,368
From 30 to 21
4,368
3,000
7,368
$ 73,680
From 20 to 11
4,368
5,000
9,368
93,680
From 10 to 0
4,368
8,000
12,368
123,680
$291,040
The Subvention Program will provide for cash advances to counties upon receipt of a
three-year plan to reduce commitments to zero. Cash advances will provide an increased
incentive to reduce commitments while facilitating State planning in reducing State
operated programs.
Special provision will be made for small counties who made few or no commitments to
the State in 1971-72. These counties will be allowed to recover a maximum of 75
percent of the costs of services rendered to juvenile court wards with certain other
expenditure limitations.
Maintenance Subsidy payments to counties for maintaining juveniles in county ranches
and camps will be frozen at the 1971-72 level. Presently the State pays counties $95 per
month for each juvenile housed in a juvenile home, ranch, or camp operated by counties.
Since a significant proportion of the new Incentive Subvention will be used to maintain
juvenile court wards in county operated institutions, it would be inappropriate to
continue the Maintenance Subsidy in addition to the Incentive Subvention. However,
several counties would be adversely affected if the Maintenance Subsidy was abolished
and the funds eliminated.
- 107
To provide counties with the proper institution capacity for juvenile wards presently
sent to the Youth Authority, it will be necessary to remodel existing units, add security
and program features, and in some cases build new units. The existing construction
subsidy will be modified to provide 50 percent of the cost of construction not to exceed
$10,000 per additional bed unit.
Further, the existing construction subsidy will be amended to permit remodeling of
existing facilities and additional construction to provide increased security and program
resources necessitated by the shift in responsibility for all juvenile wards to local
programs. Allocations pursuant to this provision will not be made unless there is an
approved county plan for handling all juvenile wards and cost sharing will be limited to
not more than 50 percent, with a maximum of $7,500 per bed unit of rated capacity
after remodeling. None of the remodeling funds will be spent on a facility on which
construction began after July 1, 1973.
The establishment of multi-county detention facilities will be encouraged to the
maximum extent feasible. Total funds available for construction and remodeling will be
$10,000,000 to be appropriated by the Legislature and available for three years. At the
end of the three year period, statutory authority relating to construction and remodeling
will become inoperative.
State provided services will decline as county capabilities are increased. By June 30,
1976, counties will be required to retain all juvenile wards. The savings achieved will be
redirected to meet the increased payments for the Incentive Subvention and the
Construction and Remodeling Subventions.
- 108
The estimated State financial impact and personnel reductions are presented below:
Financial Effects (In thousands)
1973-74
1974-75
1975-76
1976-77
Probation Subsidy Increase*
$1,299
$ 2,260
$ 4,446
$ 6,078
Incentive Subsidy
1,835
3,067
5,792
8,200
Constr./Remodeling Subsidy
2,250
5,000
2,000
750
Total, Subsidy Increases
$5,384
$10,327
$12,238
$15,028
Less Support Budget Reduct.
-2,181
-5,640
-9,760
-15,650
Net Cost
$3,203
$ 4,687
$ 2,478
$ -622
Cumulative Workload and Personnel Reductions (approximate)
1973-74
1974-75
1975-76
1976-77
Institution Capacity
440
830
1,290
1,900
Parole Caseload
100
900
1,700
2,650
Employees-Institutions
165
345
660
1,150
Employees-Parole
4
36
60
100
*Computed at $4,368 per case
In 1977-78, cost would be about $15,000,000 and savings about $20,000,000-a net
savings of $5,000,000. Conservatively estimated, it would take about three years, or
until 1978-79, to recover the State's investment in the first three years. The only cost to
be recovered is the capital outlay because the subsidy costs will be financed by the
institution and parole reductions.
By approximately June 30, 1979, all juveniles will be removed from the State institution
and parole programs. The State will have reduced approximately 1,500 employees for a
net annual savings (after deducting subsidy and subvention costs) of approximately $7
million.
109 -
3. Community Corrections Performance Measurement System
It is essential that community youth rehabilitation programs be monitored to determine
their success and eventual impact on the criminal justice system.
Counties will be required to develop a baseline data system for all juvenile wards. This
data will be accumulated at the State level and reports on recidivism by county will be
published at least annually. In addition, this data will be used to assist the less successful
counties to improve their juvenile ward programs.
The data system will be developed with the capability for monitoring adult offenders as
well.
4. Department of Correctional Services
The elimination of all juvenile wards from the State correctional system will reduce the
workload of the Youth Authority by more than 50 percent, with only criminal offenders
aged 18-25 remaining. The primary reason for maintaining two Departments has been to
insure separation between adult criminal and juvenile programs. Assumption of
responsibility for all juvenile wards by the counties will allow the Departments of
Corrections and Youth Authority to be consolidated into a single Department of
Correctional Services, thereby increasing the effectiveness and efficiency of State
Correctional Services.
The new Department will be organized in accordance with the attached organization
chart which provides for three major Branches. These Branches include Operations,
Planning and Evaluation, and Administration.
The Operations Branch will provide the direct correctional services (detention,
parole, etc.) currently being provided by the two Departments. This Branch will also
be responsible for administering the subvention programs.
The Administration Branch will provide internal business management, personnel,
and training functions.
110
The Planning and Evaluation Branch will formulate changes in the inmate
classification system, develop methods of assessing inmate program needs, and
develop success indicators and other evaluation methodologies for use in assessing
release readiness. In addition, this Branch will be responsible for the development
and implementation of a comprehensive plan for the delivery of Correctional
Services in California. This plan will address both needs and resources for local, state
and federal correctional programs following the policy that correctional facilities
and programs will be operated at the lowest possible level of government.
Local government will operate facilities and programs for all juvenile court wards
and for convicted felons not requiring long term incarceration in a prison. (Long
term defined as one year or more).
The State will operate facilities and programs for convicted felons requiring long
term incarceration in prison. In the case of youthful criminal offenders, the State
will operate facilities and programs pending development of comparable programs
by local government.
The Federal Government will be requested not to construct nor operate any
correctional facilities in California. Federal prisoners who are California residents
will be housed in local or State operated facilities at Federal expense.
5. California Parole Authority
The Parole Boards will be located in the new Department for housekeeping purposes
only. They will report directly to the Health and Welfare Agency.
The Adult Authority and the Women's Board of Terms and Parole will be combined with
the Youth Authority Board to form the California Parole Authority. This Board will
consist of 17 members initially, at least three of whom will be women.
With the removal of juvenile wards from the State system, this Board will decline to
fourteen members by 1978-79. The Chairman will be designated by the Governor and
-111-
CORRECTIONS
ORGANIZATION
1973 DEPARTMENT OF CORRECTIONS
DIRECTOR
CHIEF DEPUTY DIRECTOR
COMMUNITY
FELON AND NONFELON
LEGAL
MEDICAL
CORREC-
INSTITUTIONS
SERVICES
SERVICES
TIONAL
SERVICES
CAMPS AND
COMMUNITY
PAROLE AND
JOB TRAIN-
MANAGEMENT
INMATE
PRIMARY
COMMUNITY
ING AND
RESEARCH
SERVICES
RELATIONS
PROGRAMS
SERVICES
PLACEMENT
DIVISION
DIVISION
DIVISION
BRANCH
DIVISION
DIVISION
INSTITUTION
PAROLE AND
COMMUNITY
COMMUNITY
REENTRY
SERVICES
DIVISION
DIVISION
-112-
YOUTH AUTHORITY
ORGANIZATION
1973 DEPARTMENT OF THE YOUTH AUTHORITY
DIRECTOR
CHIEF DEPUTY DIRECTOR
YOUTH AUTHORITY
BOARD
REHABILITATION SERVICES
COMMUNITY SERVICES
DIVISION
DIVISION
ADMINISTRATIVE
RESEARCH AND
PERSONNEL MANAGEMENT
SERVICES DIVISION
DEVELOPMENT DIVISION
DIVISION
-113-
CORRECTIONS
ORGANIZATION
PROPOSED
1974 DEPARTMENT OF CORRECTIONAL SERVICES
DIRECTOR
CALIFORNIA PAROLE
ADVISORY GROUPS
AUTHORITY
CHIEF DEPUTY DIRECTOR
NARCOTIC ADDICT
EVALUATION BOARD
PUBLIC INFORMATION
LEGAL/LEGISLATIVE
OPERATIONS
PLANNING AND
ADMINISTRA-
BRANCH
EVALUATION
TION
BRANCH
BRANCH
INSTITUTION
COMMUNITY
AND PAROLE
SERVICES
DIVISION
DIVISION
114
will organize two sub-boards, one to hear youthful offenders and one to hear adult
criminals. The sub-boards may be reconstituted by a majority vote of a quorum of the
full board.
D. Current Programs/Proposed Changes
1. Community Juvenile Offender Rehabilitation Program
Probation Subsidy
Currently Probation Subsidy provides State funds to counties for reducing
commitments to State institutions. Established in 1965, this program established a
combined commitment rate (baseline) to the Departments of Corrections and the
Youth Authority for each county. Counties earn $4,000 annually for each
commitment reduction below that baseline. Recent legislative changes have
increased the $4,000 to $4,368.
Counties were authorized to establish special probation supervision services for
adults and juveniles. Costs of these special services are reimbursed not to exceed the
amount each county has earned via combined reduced commitments. Earnings due
to reduced juvenile commitments may be used to pay the costs of adult special
supervision and vice versa. Expenditures under this program are estimated to be
$21.5 million in 1972-73.
Although Probation Subsidy will continue without modification, it will become part
of the overall subvention program of the new Department.
Incentive Subvention
Currently this subvention does not exist.
This proposal will provide additional State funds to counties shifting juvenile wards
committed to State institutions to the local community. Using 1971-72 juvenile
ward commitments as a base, counties would be paid for each reduced commitment
using the following table:
- 115 - -
Base rate to - 33%
$3,000 per commitment reduction
- 34% to - 67%
$5,000 per commitment reduction
- 68% to - 100%
$8,000 per commitment reduction
Incentive Subvention funds will be expended on juvenile wards only. Total cost of
the Incentive Subvention will be $8,200,000 when all juveniles have been removed
from State programs.
Maintenance Subsidy
Currently this program provides for State payments to counties of $95 per month
for each juvenile maintained in an approved county facility. This subsidy was
originally established to pay 50% of the costs of keeping a juvenile in a county
facility. However, as costs rose, the $95 rate has decreased from 50% of costs until it
now represents 17% of costs.
The Maintenance Subsidy should be abolished, inasmuch as the Incentive Subsidy
will provide funds for maintaining juvenile court wards in county facilities. However,
abolishment of the Maintenance Subsidy would result in a financial loss to the
participating counties. It is therefore proposed that Maintenance Subsidy payments
be frozen at the 1971-72 level. Continuing annual expenditures of $2,758,610 will
be necessary. The subsidy will become a part of the new Department's overall
subvention program.
Construction and Remodeling Subsidy
Currently this subsidy provides for State payments to counties for construction of
additional juvenile homes, ranches and camps at a rate of $3,000 per bed not to
exceed 50 percent of cost. Very little county use has been made of this subsidy
because counties have had great difficulty in raising their share and approximately
30 percent of existing county facilities are vacant. The present subsidy does not
provide for remodeling.
Under this proposal, the Construction Subsidy will be revised to provide State
financing of 50 percent of the cost of new construction not to exceed $10,000 per
bed. Additional provision will be made to provide for State financial participation in
116
the cost of remodeling. The State will provide up to 50 percent of the costs of
remodeling not to exceed a total cost of $7,500 per bed. Total State expenditures
for construction and remodeling will not exceed $10 million which will be
appropriated and available for encumbrance for three years. At the end of the three
year period, State participation in capital outlay and remodeling programs will be
discontinued.
2. Community Corrections Performance Measurement System
Currently this program does not exist.
This proposal will require counties to develop a baseline data system which accumulates
information of each juvenile ward. Data collected will include arrest and conviction
information including juvenile and criminal court disposition. The State will annually
report the relative success rates in dealing with juvenile wards by county.
The State will use this data to assist the less successful counties to develop more effective
programs for juvenile wards.
To insure statewide uniformity, the Department of Correctional Services will design (or
have designed under contract) a system which counties can adopt.
Eventually, this system will be expanded to include similar data on adult offenders.
3. Department of Correctional Services
Combine the Department of Corrections and the California Youth Authority.
Currently the State operates two departments for providing incarceration and parole
services to offenders. The Department of Corrections provides correctional services to
criminal offenders over age 18 and civilly committed narcotic addicts. The Department
of Youth Authority provides correctional services to juvenile wards and youthful
criminal offenders. State resources committed to the direct operation of these two
departments during 1972-73 are reflected below:
- 117 -
Dollars
Man Years
Youth Authority
$ 52,400,000
3,471
Corrections
$112,800,000
7,221
Total
$165,200,000
10,692
This proposal will consolidate the two State Departments. It will result in a single
department responsible for providing direct correctional services to criminal offenders
and civilly committed narcotic addicts only. This department will assume the basic
responsibilities of the current two departments. State resources committed to the direct
operation of this department during 1978-79 will be as follows:
Dollars
Man Years
$143,200,000
9,182
Governor's Commission on Children and Youth
Recently we phased out the Governor's Commission on Children and Youth with
the intention of replacing it with a more responsive body. This proposal will
establish the Advisory Commission on Youth to advise the Director of Correctional
Services relative to local and State correctional programs for youth.
Board of Corrections
This Board is charged with the responsibility for adopting jail standards and making
jail inspections; conducting studies of and planning for crime control; performing a
general advisory function to the Departments of Corrections and Youth Authority;
and removing for cause members of the Adult Authority. The Secretary of the
Health and Welfare Agency is the chairman of this Board. This proposal will abolish
the Board of Corrections and transfer the responsibilities as follows. The
Department of Correctional Services will be responsible for jail inspections. The
California Council on Criminal Justice will be responsible for conducting studies and
planning for crime control. The General Advisory function will be performed by
advisory committees established by the Director of Correctional Services.
- 118
4. California Parole Authority
Combine the Adult Authority, the Women's Board of Terms and Parole, and the
Youth Authority Board.
Currently the Adult Authority is a nine member Board authorized to perform the
paroling function for all adult male felons committed to the California Department
of Corrections. The female counterpart of this Board is the Women's Board of Terms
and Paroles which has five authorized members. The Youth Authority Board is an
eight member Board authorized to perform the paroling function for all juvenile
court wards and youthful criminals committed to the California Department of
Youth Authority. The Director of the Department of the Youth Authority serves as
the chairman.
This proposal will combine these three Boards into a single Board designated the
California Parole Authority. Members will be appointed by the Governor to four
year terms. The chairman will be designated by the Governor and will be authorized
to establish a sub-board serving youth and a sub-board serving adults. The
composition of these two sub-boards may be changed by a majority vote of a
quorum of the full Board. The authorized membership of the California Parole
Authority will decline as the number of juvenile court wards declines.
1973-74
17 members
1974-75
1975-76
16 members
1976-77
1977-78
15 members
1978-79
Continue the Narcotic Addict Evaluation Authority
Currently the Narcotic Addict Evaluation Authority is a four member Board
authorized to perform the paroling function for all narcotic addicts civilly
committed to the California Department of Corrections. This proposal would
continue this Board, but make it responsible to the Chairman of the California
Parole Authority.
119 -
E. Implementation Schedule
The California Community Correctional Program will be implemented on the following time
table:
1. The Community Juvenile Offender Rehabilitation Program will begin 7/1/73.
2. The Community Performance Measurement System will begin 7/1/73.
3. The Department of Correctional Services will become effective in January 1974.
4. The Parole Board revisions will be effective in January 1974.
5. And lastly, State services to juvenile court wards will be discontinued effective 7/1/76.
F. Legislative Proposals
1. All of the programs proposed will require legislation. The Community Juvenile Offender
Rehabilitation Program and the Community Corrections Performance Measurement
System are interlocking programs and should be submitted as a single legislative
proposal. Both programs must become operative at the beginning of the 1973-74 fiscal
year to insure proper accountability between the State and local government.
2. The establishment of the Department of Correctional Services and the revision of the
Parole Boards both represent major organizational changes and should be submitted as a
single legislative proposal. However, both of these organizational changes have major
program and policy implications as they relate to the Community Rehabilitation and
Performance Measurement programs. Major revisions in the Welfare and Institutions
Code and the Penal Code will be necessary to accomplish these organizational changes.
G. Marketing Plan
In developing the California Community Correctional Program, it is necessary to look ahead
and assess the marketability of the program.
To prevent misconceptions about the program proposals, an extensive information campaign
will be prepared to clarify to the public that the State is not trying to unload its criminal
- 120
element on the community. Instead, the State is proposing the removal of wards of the
juvenile courts from State institutions for return to the community where they eventually
return even under the present system. However, unlike the present system, significant
financial resources will be made available so that a major effort can be made in the
community to turn these juvenile wards away from the criminal justice system.
Youth Authority facilities will gradually close as a consequence of this more effective
treatment program but care will be taken to insure that these closures are labeled as a natural
occurrence rather than the real intent of the program.
The following groups will be singled out and provided specifically tailored information
addressing their unique concerns and problems.
1. Law Enforcement
If and when the California Community Correctional Program is approved by Cabinet,
key sheriffs and police chiefs will be briefed. This group will oppose the program because
they will fear that more problems are being returned to them.
This fear can be allayed by pointing out that significant funding goes with the juvenile;
that these funds can be used for detention as well as probation; and that the
measurement system will be used to monitor each county's success or lack of success.
2. Juvenile Court Judges
Juvenile Court Judges will be concerned by the elimination of the sentencing alternative
effective July 1, 1976. Here again, advance briefings of selected judges on the level of
funding and the use for detention as well as probation will override most fears.
3. County Boards of Supervisors
Supervisors will be contacted and briefed in advance of the public release. The extremely
high level of funding will remove most objections of this group.
- 121
4. Communities Suffering Economic Loss Due to Institution Closures
Legislative representatives and members of Boards of Supervisors will be given advance
briefings on closure possibilities. The Stockton area should be the only community to be
effected to any major degree. Consideration will be made of making a portion of this
facility a multi-county detention center for juvenile court wards in the San Joaquin
valley.
5. Chief Probation Officers
The California Community Correctional Program has been discussed in broad terms with
Probation Officers representing the counties of Orange, Los Angeles, and Santa Clara. In
general, the program has been well received and should be strongly supported by this
group.
6. Employee Organizations
Groups such as the CSEA, the Youth Counselors Association, and the Parole Agents
Association will oppose this program because of the anticipated reduction of
approximately 1500 jobs.
The key argument to offset the job loss is that the juvenile court wards will receive
better programming in the community which is the primary concern. Displaced Youth
Authority employees will be offered first choice at jobs in the Department of
Correctional Services and efforts will be made to encourage lateral transfers from the
State to local government.
7. Governor's Select Committee on Law Enforcement
This group is currently studying the entire area of Law Enforcement. Endorsement of
the California Community Correctional Program should be made by this group in its
report to the Governor prior to the Governor's announcement of this program.
Other Considerations
It is proposed that juvenile wards commitments to the State be discontinued July 1,
1976. This may make the Bill unacceptable to law and order groups, the judiciary, and
- 122 .
others. If this proves to be the case, a possible and acceptable compromise would be to
allow counties to contract with the Department of Correctional Services to provide
detention, at county expense. The ward would remain the responsibility of the county
during detention as well as afterwards.