Posted in Civil Service, Governor's Office, Notable Quotables on January 31, 2012| 2 Comments »
“We encourage you to use this opportunity to recognize your employees and educate the public about the work state employees are doing to keep our citizens safe, protect our drinking water, provide medical care to the indigent, help abused children, maintain our roads and bridges, and so much more.”
—Gov. Bobby Jindal in last spring’s General Circular No. 2011-008 in which he proclaims May 4, 2011, as “State Employee Recognition Day in Louisiana.”
Posted in Civil Service, Contract, Contracts, Notable Quotables, Privatization, Transparency on January 11, 2012| Leave a Comment »
“We recognize that there is a delicate balance to be reached between the (civil service) commission’s duty to protect against the spoils system, either by privatization or otherwise, and the…power and authority to operate…in a fiscally responsible manner and to enter into contracts to fulfill that duty.”
–Louisiana Supreme Court ruling of Sept. 9, 2003 on City of New Orleans efforts to privatize operations of the New Orleans Cultural Center.
Posted in Campaign Contributions, Civil Service, Contract, Contracts, Ethics, Governor's Office, Privatization on January 11, 2012| Leave a Comment »
In September of 2000, the City of New Orleans awarded a contract to SMG Crystal for the management and operation of the New Orleans Cultural Center in an effort to reduce the city’s $915,000 deficit incurred in 1999.
The agreement called for SMG, which also manages the Louisiana Superdome, the New Orleans Arena and the Baton Rouge River Center, to spend $25,000 per year to market and promote the Cultural Center and for the city to pay SMG $175,000 per year, plus an incentive fee based on the amount by which SMG reduced the operating deficit.
The Cultural Center had 19 classified civil service employees, 10 of whom accepted employment with SMG and nine who remained with the city in the Department of Property Management at their same pay rate.
The New Orleans Civil Service Commission filed suit against the city because the agreement, it said, was entered into in violation of its rules that required commission approval prior to privatization of any governmental function.
Rules adopted by the commission specify that:
• Contracts for personal or professional services shall be approved only when such services require unique or specialized skills not presently required of positions in the classified service;
• Any contract for privatization of a governmental service shall contain a provision that thoroughly explains the effects of privatization on the status of current employees, as well as any specific contractual commitments entered into by the parties, which affect the interests of the displaced employees;
• All contracts for personal or professional services first shall be transmitted to the Civil Service Department for initial consideration and review, and again for final approval after all other aspects of contractual review have been completed.
The upshot of that legal action was a ruling, upheld by the Louisiana Supreme Court, that the city must submit for prior approval—or disapproval—by the civil service commission any agreement calling for privatization of any city department or agency.
The ruling said, “If…the commission finds that no civil servants will be involuntarily displaced from the civil service, or, if they will, that the contract was entered into for reasons of efficiency and economy and not for politically motivated reasons (emphasis our) as to the civil servants, it should approve the contract.
“However, if the commission has good reason to believe that civil servants will be involuntarily displaced and that the contract was entered into, not for reasons of efficiency and economy, but for politically motivated reasons, it may refuse to approve the contract,” it said.
Because of this decision, the Louisiana Civil Service Commission receives a printout at its monthly meetings. This printout contains a list of all proposed state contracts for the commission’s review. If there are no objections by the commission, the list is then forwarded to the Office of Contractual Review, located in the Division of Administration, for final approval.
The printout ostensibly is to assure the commission members that:
• No state civil servants will be displaced by the contract, and;
• There are no state civil service employees (or at least an insufficient number of civil servants) who are qualified to performed the needed services.
But It would require more than a single meeting of the civil service commission for its members to make such a determination on each of the proposed contracts.
That’s because the latest printout is 208 pages with an average of 10 proposed contracts per page. The dollar amount on these 2,000 contracts? Almost $4.1 billion.
There is no possible way the commission members can make an intelligent decision on the merits of each and every one of these proposed contracts.
And you can be sure that those in positions to reward political campaign contributors are fully aware of that.
Take C.H. Fenstermaker & Associates of Lafayette, for example.
That firm landed a lucrative $3 million contract with the Governor’s Office of Coastal Protection and Restoration to “provide engineering services for coastal protection and restoration projects.”
That’s a pretty vague description of services and fails to address the issue of whether or not there were qualified state employees to perform the work.
But Fenstermaker and his firm contributed $20,500 to Jindal’s gubernatorial campaigns from 2003 to 2009.
Likewise, Providence Engineering of Baton Rouge, which gave Jindal more than $2,700 in 2007, has a $750,000 contract with the Office of Coastal Protection and Restoration to “provide engineering services for coastal protection and restoration projects on an as-needed basis.”
Here are a few others:
• BCG Engineering & Consulting: $3 million contract “to provide engineering services for coastal protection and restoration projects on an as-needed basis.” BCG contributed $5,000 in January of 2010 for a Jindal “fun hunt.” BCG also contributed about $100,000 more to other candidates;
• HNTB Corp., which made an in-kind contribution of $1,947 last March, has two such contracts with the Office of Coastal Protection—one for $3 million and another for $750,000;
• ASC State & Local Solutions made two $5,000 contributions to Jindal in 2003 as well as an additional $48,000 to 11 other candidates, including State Treasurer John Kennedy, then legislator Bill Cassidy, then-Lt. Gov. Mitch Landrieu, former New Orleans Mayor Ray Nagin and former Gov. Kathleen Blanco. The contributions appear to have paid handsome dividends; ACS has consulting contracts worth $74.5 million and $13.95 million with the Office of Community Development and the Department of Children and Family Services, respectively;
• Volkert & Associates: $892,350 contract with the Division of Administration for “relocation assistance services for University Medical Center in New Orleans in accordance with federal relocation guidelines (seven contributions to Jindal between 2003 and 2011 totaling $7,000);
• T. Baker Smith & Son: $3 million contract with the Governor’s Office of Coastal Protection and Restoration for “engineering services for coastal protection and restoration projects on an as-needed basis,” and a $250,000 contract with the Department of Natural Resources (DNR) for “engineering services for the Atchafalaya Basin Program.” T. Baker Smith contributed $5,000 to Jindal in 2008;
• Ardaman & Associates: $3 million contract with Governor’s Office of Coastal Protection and Restoration “to provide geotechnical services for coastal protection and restoration projects on an as-needed basis.” Contributed $1,000 to Jindal in 2008;
• Morris P. Hebert, Inc.: $1 million contract with Governor’s Office of Coastal Protection and Restoration “to provide the means for surveying assistance for coastal protection for coastal restoration projects on an as-needed basis. Hebert contributed $1,000 to Jindal in 2007;
• Peter Meyer Advertising of New Orleans: $5 million contract for advertising and communication services for the Department of Economic Development; $8,000 in contributions to former Lt. Gov. Mitch Landrieu;
• Trumpet Consulting of New Orleans: $3.9 million contract with the Office of Culture, Recreation and Tourism (which is part of the lieutenant governor’s office) “for creative, marketing, media, brand identity for the Office of the Lieutenant Governor and the Department of Culture, Recreation and Tourism; $1,000 contribution to Landrieu by Trumpet in 2006 and $1,000 to Jindal by Trumpet agent David Lukinovich;
• URS Corp.: Eight contracts with seven separate agencies for more than $4.5 million; five separate contributions to Jindal totaling $12,500, all in 2003;
• C&C Technologies: $3 million with the DNR to “provide the means for surveying assistance for coastal restoration projects on an as-needed basis; $5,000 contribution to Jindal in 2007 by C&C President Thomas Chance;
• CH2M Hill Corp.: $12 million contract with the Office of Coastal Restoration and Management to “provide environmental science consultant services,” $3 million contract with DNR to “provide engineering assistance for coastal restoration projects; $16,000 in four contributions to Jindal from 2003 to 2011and more than $50,000 to several other candidates;
• Sigma Corp.: $750,000 contract with the Governor’s Office of Coastal Restoration and Management and a $250,000 contract with the Department of Natural Resources; $5,750 in two contributions to Jindal in 2003 and 2008 and $10,500 in three contributions to Jindal between 2003 and 2010 by Sigma President Miles Williams;
• CSRS, Inc.: $2,125,674 contract with the Governor’s Office of Coastal Protection and Restoration “to augment existing professional engineering staff.” CSRS made a $5,000 contribution to Jindal in 2008. CSRS Vice President Curtis Soderberg made contributions of $5,000 to Jindal in each of his three gubernatorial campaigns for a total of $15,000;
• Value Options, Inc.: $13.75 million contract with the Office of Group Benefits to “provide a fully-insured managed mental health and substance abuse treatment service. Value Options contributed $5,000 to Jindal in 2008.
Next, we will take a look at contracts which call for services that it would seem state employees could perform and at contracts that simply defy logic.
Posted in Civil Service, Governor's Office, House, Senate, Legislature, Legislators, Teague, Transparency on December 21, 2011| 2 Comments »
If one thinks Gov. Bobby Jindal, that paradigm of virtue, is not capable of vindictive reprisals in order to advance his political agenda, one need look no further than the 2009 standoff between Jindal and the State Civil Service Commission.
The short version of this story reveals Jindal to be as capable of no-holds-barred, take-no-prisoners dirty fighting as any politician anywhere, at any level.
The story actually begins in 2006 in the aftermath of Hurricanes Katrina and Rita and about two years before Jindal took office.
That is when the Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP) was created to deal with emergencies like hurricanes and oil spills, among other things.
Initially, GOHSEP’s staff was assigned to the governor’s office but then the legislature decided that current and future GOHSEP employees would be unclassified civil servants. They previously were unclassified as part of the state’s Military Department (National Guard).
Barry Erwin, president of the Council for a Better Louisiana (CABL), pointed out that unclassified employees work at the pleasure of the hiring authority, meaning an entire agency of unclassified workers would be subject to a governor’s patronage.
While unclassified employees don’t enjoy the job protection that classified employees do, neither are they bound by the same pay classifications. That means their salaries can—and are—set at considerably higher pay levels.
On average, unclassified employees make about $20,000 per year than their classified counterparts.
Moreover, unclassified employees are not required to meet strict earning guidelines, job qualifications or rules for promotion as do classified workers.
The Civil Service Commission attempted to learn what some of those GOHSEP salaries were and promptly met with claims of executive privilege. The commission, concerned at the proposal to change 425 GOHSEP employees from classified to unclassified and offended at Jindal’s resistance to transparency, filed suit to block the move.
While the lawsuit was pending, Jindal’s forces went into action. Sen. Mike Walsworth (R-West Monroe) promptly filed SB-209 calling for a constitutional amendment to provide “that the director, deputy director and all employees of (GOHSEP) are included in the unclassified service of the state civil service.”
The Civil Service Commission’s concerns notwithstanding, the bill passed the Senate by a unanimous 39-0 vote. The House likewise approved the measure by a 72-11 vote with 21 members not voting.
Jindal signed the bill as Act 538 and the matter was placed on the ballot for Oct. 2, 2010. Voters subsequently approved the measure by the narrowest of margins: 306,106—283,185 (51.9 percent to 48.1 percent) and the controversy appeared settled in favor of increased power for the governor.
But not so fast.
Not to be trifled with, Jindal went on the offensive against the Civil Service Commission and about 62,000 state classified employees. His attack dog this time was Rep. John Schroder (R-Abita Springs).
Schroder filed five separate bills in the 2010 session each of which had civil service directly in its crosshairs.
The crown jewel of those five bills was HB-753 which would have called for a constitutional amendment to abolish the State Civil Service Commission and the Department of Civil Service, effective Jan. 9, 2012.
The other bills included:
• HB-752, which called for a constitutional amendment to grant the legislature sole authority to provide for pay increases for persons in state service;
• HB-754, which called for a constitutional amendment to prohibit pay increases to persons in state service when there is a budget deficit;
• HB-755, which called for a constitutional amendment to require the legislature to determine prior to each fiscal year if a pay increase may be granted to persons in state service and if so, the manner and amount of the increase;
• HB-757, which would have required reports regarding employees of the Department of Civil Service and that copies of those reports be sent to the Senate President and Speaker of the House.
Neither of the bills made it out of committee but that doesn’t mean that they won’t be back on the legislature’s calendar next spring.
With another major budget deficit looming in the not so distant future, it’s probable that state employees will be denied pay raises for a third consecutive year.
But of more concern should be a resurrection of efforts to abolish Civil Service, a move, if successful, would leave state employees with no job security and subject to political pressure in order to keep their jobs, just like the old days of Huey Long, the spoils system and the deduct box.
And don’t dismiss the possibility; Jindal has a long memory.
Posted in Civil Service, Education, Governor's Office, Health Care, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Privatization, Retirement on October 16, 2011| 4 Comments »
BATON ROUGE (CNS)—With the outcome of this year’s gubernatorial election all but final heading into the last days of the 2011 campaign, it might be good to look ahead at what’s in store as Gov. Bobby Jindal prepares for his second term.
He has already partially unveiled his agenda for the next four years to trusted top staff. And not all staffers—including some cabinet members—are within his circle of trust.
If you think he was a bit ambitious with his agenda to reduce the role of government during his first term, you might want to find something to hold onto during the next four years. It’s going to be quite a ride. That’s provided, of course, he sticks around that long. There’s no guarantee of that because he does harbor national ambitions despite his comforting assurances to the contrary.
Details of Jindal’s plans for the coming four years remain sketchy but there are a few moves that can be predicted with relative ease. Others might be considered improbable if one chooses not to observe what conservative Republican administrations have managed to do in other states.
There is the privatization of the Office of Group Benefits (OGB), of course. That’s a no-brainer. It’s an emotional issue and those emotions are not likely to subside as the administration steps up its efforts to sell off what is arguably the most efficient agency in state government. But Jindal and his Commissioner of Administration Paul Rainwater have already sent signals that privatization of the agency is high on their bucket list.
Opponents point out that OGB currently has an administrative overhead of about three percent. That is because it is not required that the agency turn a profit nor does OGB pay taxes on premiums. A private concern would require an administrative cost of about 15 percent to allow for profits and tax liabilities. That would translate to a substantial premium increase for state employees and retirees.
OGB currently has a surplus of about $500 million but those funds are for the payment of benefits only and are off-limits to the administration. If OGB is sold for somewhere in the neighborhood of $150 million to $200 million, however, that money would go straight into the state’s general fund and that’s money Jindal wants desperately.
A recent development is more than a little telling on this issue. OGB has proposed a rate increase of about three percent but the administration has insisted on at least a five percent bump. A bigger premium increase would allow the $500 million surplus to remain intact, thus making the agency far more attractive to potential buyers.
Another nagging issue that Jindal is likely to address is the cost of the various state retirement plans, which currently are saddling the state with an unfunded liability of about $18 billion.
State employees presently have a defined benefit plan as opposed to a defined contribution plan. Look for the administration to take a long, hard look at changing that.
Defined benefits mean that employees pay premiums with the knowledge that their benefits are locked in. That benefit is computed by multiplying the average of an employee’s three highest years of earnings by 2.5 percent by the number of years of service. An employee who earned an average of $60,000 in his three best years over a 30-year career would multiply $60,000 by 2.5 percent, which is comes to $1500. That $1500 is then multiplied by the number of years of service (30) which computes to an annual pension of $45,000.
Under a defined contribution plan, contributions would be set and the money would be invested in much the same way as a 401(K) plan works. There would be no guarantee of benefits because that would depend on market fluctuations. That’s not a change desired by state employees after the recent Wall Street crisis.
State employee sentiments aside, one state legislator, Sen. D.A. “Butch” Gautreaux (D-Morgan City), outgoing chairman of the Senate Retirement Committee, pointed out that should the state convert to a defined contribution system, the state would then be required to begin paying Social Security premiums on state employees. State employees do not presently participate in Social Security.
“Going to a defined contribution system would not save the state any money,” Gautreaux said.
Jindal is almost certain to renew his efforts to privatize several state prisons. He tried earlier this year but backed off those efforts in the face of vocal opposition from prison employees, legislators, and local citizens. With no concerns about being elected to a third term, he is likely to make a harder push next year in an effort to pull in a few million more into the general fund.
Remember Rep. John Schroder (R-Abita Springs)? He’s the legislator who, in 2010, introduced four bills designed to abolish Civil Service and the Civil Service Commission and to give the legislator authority to decide which state employees would receive merit raises.
Those efforts failed and he did not renew his efforts this year, probably because it’s an election year. Those efforts are quite likely to resurface in next year’s legislative session as are attempts by Rep. John LaBruzzo (R-Metairie) to force welfare recipients to undergo drug testing. Previous attempts have never made it out of committee.
Though both measures by Schroder and LaBruzzo have gotten nowhere, consider Gov. Scott Walker who has effectively defanged the state employee union in Wisconsin. And in Florida, Gov. Rick Scott has signed into a law that requires adult welfare recipients to undergo drug screening.
Since day one, Jindal has worked nearly as hard on education reform as he has on political fundraising.
His penchant for replacing public schools with charter schools has incurred the wrath of public school teachers who are forced to accept all comers, to take the bad students with the good. Jindal’s charter schools, they say, have operated under the guise of open admissions when in reality, practicing selective admissions.
The recent school grades released by the State Department of Education would seem to bear that out. All but one of the top performing schools (24 of 25) were schools with selective admissions while 19 of the lowest 25 were alternative schools—those schools into which the poorest performing students are shunted.
Jindal’s efforts to privatize the state’s Medicaid program are likely to continue unabated. The Department of Health and Hospitals already has approved a $300 million contract to CNSI to implement the state’s Medicaid Management Information System. The contract raised eyebrows in the legislature because DHH Secretary Bruce Greenstein once worked for CNSI and Greenstein attempted to conceal from a legislative committee the identity of the contract winner.
With only token opposition in Saturday’s election, the only obstacle for Jindal’s agenda is the legislature itself. But with a solid Republican majority in both the House and Senate, any opposition there is likely to no less token.
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