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Archive for the ‘Privatization’ Category

Office of Student Financial Assistance latest to be overrun by Jindal Privatization Express; 47 set to receive pink slips

Posted in Civil Service, Governor's Office, Layoffs, Privatization on March 28, 2012| 6 Comments »

Gov. Bobby Jindal’s Privatization Express continues to roll on at the expense of 47 employees of the Louisiana Office of student Financial Assistance (LOSFA) scheduled to lose their jobs next June.

The State Civil Service Commission is scheduled to consider the layoff plan of LOSFA Executive Director Melanie Amrhein when it meets Tuesday and Wednesday of next week.

The Civil Service Commission in January rejected a plan to lay off about 60 information technology employees at the Department of Health and Hospitals (DHH) because of questions about a proposed privatization contract for those services.

Similar action by the commission could throw the LOSFA schedule off just as it did with DHH.

Certain administrative positions are scheduled to be retained but Amrhein said her agency does not yet have a complete list of those who will be retained.

The cover letter to Civil Service Director Shannon Templet, however, did say that two unidentified student financial aid administrators have been exempted from the layoffs and will remain on a temporary basis.

“Because we are moving all operations under a contracted vendor, the experience and guidance of these employees, who have combined 40 years of experience, will be essential to the smooth and successful transition of these operations,” Amrhein said in her letter.

LOSFA administers several programs, including the state’s Taylor Opportunity Program for Students (TOPS), TOPS Teacher, Go Grants, State Matching Funds Grants and the Guaranty Agency which handles the Federal Family Education Loan Program (FFELP), among others.

Nineteen employees in the FFELP Outstanding Loan Portfolio, which administers loans totaling more than $1.6 billion, are among the 47 who will lose their jobs. The remaining 26 to be laid off work with the FFELP’s Outstanding Default Portfolio which has more than $251 million in defaulted loans.

New originations of FFELP ceased on June 30, 2010 and all new federal Stafford and PLUS loans have been originated under the federal William D. Ford Direct Loan Program since July 1, 2010.

The proposal to be considered by Civil Service says that loan processing and issuance fees paid on new loans have resulted in a $1.4 million per year loss.

Following the invitation to bid that went out in February, bid submissions for a new privatizing contract are scheduled to be reviewed in April and the contract awarded sometime after that with layoffs scheduled for June 30.

“We have a contract with Sallie Mae Guarantor Services for utilization of software to operate the loan program in compliance with federal laws,” Amrhein said. “This contract will be terminated once the transition to the successful bidding contract is complete.”

The proposal that will be submitted to Civil Service next week notes that the agency has “finite revenues” because no new loans are being originated.

In attempting to justify the privatization contract, the proposal said that:

• a reduction of overhead was necessary to maintain support to state programs;

• an attrition of staff leads to ineffective administration and further strain on generating revenue;

• contracting services will potentially result in higher performance on portfolio while allowing the agency to retain a higher net income with reduced overhead;

• the timeline provides an orderly conversion from in-house functions to managed contractor operation;

• adversely affected employees will be given time to fine new employment.

Just as with the Office of Risk Management—the only state agency to actually be privatized thus far—and the Office of Group Benefits, none of the justifications given for privatization provided any specifics as to how contracting services will benefit anyone other than the contractor.

In the case of Risk Management, the state paid F.A. Richard and Associates (FARA) more than $68 million to take over that office. About seven months into its contract, FARA sought and was approved for a $6.8 million contract amendment, bringing its fee to just under $75 million.

Two weeks later, it was learned that FARA had been sold to an Ohio company. Last fall, a third company took over the contract in apparent violation of the state contract that specifically prohibited any transfer of contractual services without “prior written consent” from the Division of Administration (DOA).

A public records request by Capital News Service for a copy of written approval on either transfer resulted in an email from DOA saying that no such document existed.

Following Civil Service’s rejection of the proposed contract calling for the University of New Orleans to take over information technology services from DHH, UNO President Peter Fos said he was disinclined to sign the proposed contract until his concerns “are addressed and resolved to my satisfaction.”

The IT workers were informed in a December meeting that their jobs would be gone in January. Upon returning to their work stations, they found they had been locked out of their computers. Access to the computers was restored after the Civil Service Commission’s actions but the IT employees then found that their requests for leave were receiving blanket denials by supervisors.

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Office of Student Financial Assistance next on Jindal hit list; Outsourcing projected to cost 50-60 employees their jobs

Posted in Civil Service, Governor's Office, Higher Education, Layoffs, Privatization on February 28, 2012| 5 Comments »

The Louisiana Office of Student Financial Assistance (LOSFA) is the latest state agency to be scheduled for privatization by Gov. Bobby Jindal’s administration, LouisianaVoice has learned.

LOSFA, the administrative arm of the Louisiana Student Financial Assistance Commission and the Louisiana Tuition Trust Authority, has been instructed by the governor’s office to outsource the office’s loan program.

The agency comes under the organization umbrella of the Board of Regents. Jindal, in presenting his executive budget to the Joint Legislative Committee on the Budget, targeted 2,837 jobs in higher education for elimination. Many of those are vacant positions that will not be filled.

In all, Jindal is proposing to eliminate 6,371 authorized positions, again meaning that an unspecified number may be vacant positions.

LOSFA will lose between 50 and 60 positions in the outsourcing action, according to Gus Wales, director of public information for the office. The affected employees are scheduled to be laid off by June 30.

Like the privatization of the Office of Group Benefits, the latest outsourcing move makes little sense in that the office’s loan program is funded from self-generated revenues, not the State General Fund.

What’s more, after June 30, students with questions about their loan repayment will probably have to talk to someone in another state instead of in Baton Rouge as before meaning Jindal will have taken jobs from Louisiana residents and given them to citizens outside Louisiana.

Many of the employees scheduled to lose their jobs have as much as 20 years of service but three unclassified staff members, reportedly making in excess of $100,000 each, will be retained, according to information provided to LouisianaVoice.

Unclassified personnel in the office include Executive Director Melanie Amrhein, Deputy Executive Director Sujuan Boutté, Assistant Executive Director of Marketing and Outreach David Roberts, Assistant Executive Director for Fiscal and Administrative Affairs Jack Hart and General Counsel George Eldredge.

The administration reportedly was approached by Great Lakes Higher Education Corp., a student loan servicing company in Madison, Wisconsin. The company was said to have told the governor’s office that the state could cut a significant number of employee positions by giving them the portfolio.

The agency has forwarded an invitation to bid (ITB) to State Purchasing for public release, sources said.

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Doing the two-step on one leg: it takes twice as long but if it’s doing more with less, it fits nicely into Jindal’s agenda

Posted in Civil Service, Layoffs, Privatization, Teague on February 28, 2012| 5 Comments »

The Department of Health and Hospitals apparently is moving forward with its plan to contract out its information technology (IT) services to the University of New Orleans, the State Civil Service’s objections notwithstanding.

That’s the word received by LouisianaVoice from one of the IT employees who is one of the 69 employees scheduled to lose their jobs in the move touted to the Civil Service Board on Feb. 1 by Carol Steckel, chief of DHH’s Center for Health Care Innovation and Technology.

More about her background later.

An email received on Monday from the IT employee announced, “I have already been Teagued,” a reference to Gov. Bobby Jindal’s firing of Social Services grant reviewer Melody Teague in October of 2009 a day after her legal testimony against Jindal’s proposed streamlining of state government and that of her husband, Tommy Teague, 18 months later.

Tommy Teague was the director of the Office of Group Benefits who took the agency from a multi-million dollar deficit to a $500 million surplus. But his hesitancy in jumping on board Jindal’s privatization “sold train” cost him his job last April.

“My last day is March 2,” the employee, whose identity is being protected by LouisianaVoice, said in his email. “We have been scrutinized so much since this has happened back in December.”

He was referring to the conference call in December during which the IT employees were told their jobs would be gone in January. The Civil Service Board, however, shot down Steckel’s proposal, saying she had done a poor job of showing there would be a true savings by laying off employees.

The State Civil Service Board must approve any proposed contract before it can be implemented. To get that approval, agencies must show that the contract work is a task that cannot be performed by state civil service personnel and that any layoffs are not the result of political decisions.

That regulation stems from a 2003 State Supreme Court decision that said the City of New Orleans could not contract out services which could be performed by existing employees and that the city could not lay employees off for political reasons.

Following that conference call, the IT employees returned to their work stations only to learn that they had already been locked out of their state computers, leaving them with nothing to do until the date of their terminations. They regained access to their computers a few weeks later, however.

“There is no security anywhere in DHH,” the employee said.

That is fairly evident across the board in agency after agency by now. The Civil Service Board, which voted unanimously on Feb. 1 to reject the contract proposal, is scheduled to meet March 7 at which time the IT contract is expected to be presented again.

Another IT employee also emailed LouisianaVoice earlier to say, “I am one of the 69 DHH Information Technology staff that is affected by the UNO contract.

“Basically, we have been misinformed on future employment by DHH executives on three occasions. At each meeting, we felt as though we were being threatened with furlough without pay, having to pay 100 percent of COBRA to maintain our insurance, (and) being threatened (with) not receiving our 300 hours of saved annual leave.”

Steckel first said the proposed contract would save an estimated $2.1 million over the next three years but later revised that upward to $7 million. But member after member challenged her numbers with one saying he had “zero confidence” in the figures she provided.

While her proposal to contract the IT services would chop the legs out from under the 69 employees, that apparently is nothing new for her. In fact, it appears to be her style.

Before coming to DHH in November of 2010, she served as Alabama’s Medicaid Commissioner from 1988-1992 and again from December of 2003 until her departure for Louisiana.

It was in that capacity in Alabama that in 2008 she implied that poor residents of Alabama apparently did not need artificial limbs.

In January of that year, she submitted the state’s Medicaid budget that cut programs that pay for prosthetics and orthotics (an orthopedic apparatus used to provide support and alignment to prevent or correct deformities) because, she said, the programs were optional, not mandatory.

Saying she wanted to present a budget that was realistic in the face of state budgetary problems, she said, “Every day in the state of Alabama, people make tough decisions about what they can and cannot afford. State government must do the same.”

Rep. Barbara Boyd of Anniston sounded a chord that has come to have a familiar ring in Louisiana when she said Alabama is at a disadvantage because it does not appropriate the kind of money that would attract more than the bare bones federal matching funds.

“With the high rate of diabetes in this state (Alabama), cutting a program that pays for prosthesis could be devastating to amputees,” she said.

One Alabama observer described the move as a trifecta: “penny wise, pound foolish and heartless to boot.”

Well, folks, that’s the nature of compassionate conservatism. Or passionate, anyway.

And Louisiana, it would appear, has franchise rights.

In case you’ve ever wondered why Jindal keeps going out of state for these people who parrot his philosophy with such consistency, there’s a reason: they don’t have to live with us. They’ll be gone as soon as he leaves office.

But we’ll be stuck with the cleanup.

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To Teague or not to Teague: in this case, there is no question

Posted in Civil Service, Governor's Office, Layoffs, Privatization, Teague on February 23, 2012| 10 Comments »

One of Gov. Bobby Jindal’s former teachers at Baton Rouge’s McKinley Middle Magnet School recently provided revealing insight into his mental makeup when she confided that he was a difficult student who simply could not accept the fact that he might be wrong. About anything.

That certainly explains a lot.

Take, for example, that state Civil Service Commission meeting of Feb. 1.

The commission each month is provided a list of proposed contracts along with justifications of why it is more economical—or necessary—to contract services out than for state employees to perform a job.

(These are the same documents, by the way, that the Division of Administration said did not exist when LouisianaVoice made a public records request for them back on Dec. 19.)

Yes, this more about Jindal’s apparent obsession with privatization.

The contract called for the Department of Health and Hospitals (DHH) to contract out its information technology (IT) services to the University of New Orleans. The proposed contract would have provided IT services currently provided by 69 classified employees.

Approval of the contract would have resulted in the 69 employees being Teagued.

To the less erudite, to be “Teagued” is to be removed from one’s employment with state government by a governor critically short on forgiveness.

The term derives its name from Jindal’s propensity to fire employees, especially those who may have the temerity to question or challenge his decisions. It began early in his first administration when Tammie McDaniel, a member of the Board of Elementary and Secondary Education, questioned certain budget decisions. Jindal immediately asked for her resignation. She refused at first but eventually resigned.

Then there was William Ankner who was forced out at the Department of Transportation and Development when it was revealed that a $60 million highway contract was awarded not to the low, but the high bidder.

Jim Champagne, executive director of the Louisiana Highway Safety Commission, in a moment of ill-advised level-headedness, disagreed publicly with Jindal’s plan to repeal the state’s motorcycle helmet law. Gone.

Ethics Administrator Richard Sherburne hit the bricks when Jindal gutted the Ethics Board’s adjudicatory authority and gave it to administrative law judges.

But the most high-profile firings, and the namesake of our new terminology, were the dismissals of Department of Social Services grant reviewer Melody Teague in October of 2009 and her husband, Office of Group Benefits (OGB) Director Tommy Teague, 18 months later.

Mrs. Teague testified against Jindal’s government streamlining plan that included calls for massive privatization. It took her six months but she got her job back.

Her husband was not so lucky. He was shown the door when he did not jump on board quickly enough to please the administration when it floated its idea of privatizing OGB.

Thus, the all-too-appropriate term Teagued.

But now, back to those 69 IT employees.

The Civil Service Commission took one look at the contract proposal—and balked.

For one thing, documents submitted by DHH never nailed down the precise cost of the proposed three-year contract, saying it would be for either $35 million of $37 million.

Carol Steckel, chief of DHH’s Center for Health Care Innovation and Technology, said the proposal would save an estimated $2.1 million over the next three years (later revised to $7 million) but commissioners weren’t buying it.

“I have zero confidence in your numbers,” commission member Scott Hughes, of Shreveport said.

“I don’t think you have come close to showing there’s either a cost saving or efficiency,” added member John McLure, of Alexandria.

Member Lee Griffin, of Baton Rouge, said he could not understand the proposal despite his “50 years in the banking industry.”

Commissioner Kenneth Polite, of New Orleans, said he found it difficult to support the proposal because the Jindal administration “has railed against increased spending” and yet DHH is relying on additional federal funds, which the administration also has opposed.

Information submitted by DHH was “woefully inadequate,” said commission Chairman David Duplantier, of Covington.

The commission voted unanimously to disapprove the contract after Hughes observed that the documents submitted by DHH made it clear that instead of saving money, the agency would actually increase spending by up to $8 million with the contract.

That, as we said, was on Feb. 1.

But let’s back up to December. DHH employees were called in for a telephone conference call several weeks before the contract proposal was presented to the Civil Service Commission.

During that conference call, the IT employees were informed that in January, their positions would be abolished.

Following that collective downer, the IT personal returned to their work stations only to discover that during the conference call, they had been locked out of their computers.

Subsequent to the Civil Service Commission’s action, the employees have regained access to their computers. But the issue is scheduled to come before the commission again in March and if the past is prologue, there will have been considerable pressure applied by the fourth floor of the State Capitol by then.

So, what we have here is an administration so cocksure of itself that it notified 69 IT employees that they would be unemployed in a few weeks before it ever got around to making its pitch to the Civil Service Commission, even going so far as to unplug the employees’ computers while their backs were turned.

What could conceivably account for such arrogance, such underhanded Machinations?

For that answer, perhaps someone should ask the governor’s middle school teacher.

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Jindal Retirement Alternative Plan Enhancement (J-RAPE)

Posted in Civil Service, Governor's Office, Layoffs, Privatization, Retirement on February 22, 2012| 10 Comments »

Cindy Rougeou, executive director of the Louisiana State Employees’ System (LASERS) has been openly critical of Gov. Bobby Jindal’s retirement package for Louisiana Civil Service employees.

Jindal has offered sweeping retirement reforms for some 58,000 active employees—reforms which Rougeou says targets workers who are barred from lobbying on their own behalf, which attempt to force state employees to work longer for reduced benefits, which give legislators false information on the percentage that employees contribute to the cost of their retirement, which ignore that the current unfunded accrued liability (UAL) came about because of legislators’ reneging on their obligation to pay the state’s required contribution, and which violate both the Louisiana and U.S. constitutions.

What’s more, Jindal is concentrating only the LASERS’ $6.8 billion unfunded accrued liability, which is just over a third of the total UAL for the four state retirement systems—teachers, school employees and state police are the others.

But it seems there may be one more: The Jindal Retirement Alternative Plan Enhancement.

Also known as J-RAPE, as in raping state taxpayers, this is an unofficial plan to enhance former legislators who the governor feels were loyal to him before either losing their re-election bids or becoming term limited.

In other words, while the state struggles to find funds to balance the budget for yet another year, the administration sees nothing wrong with padding the state payroll with pathetically unqualified former legislators—so they can enhance their state pension.

Example: former Rep. Noble Ellington spent 24 years in the legislature. If his three highest earning years in the legislature averaged $35,000, he would qualify for a yearly retirement of $21,000.

But wait. He somehow managed to land a job as second in command to Jindal ally Insurance Commissioner Jim Donelon at a cool $150,000 per year. If he remains in that position another three years—five years if Jindal’s retirement reform passes—he will be able to retire at $105,000 or $108,750 per year, again, depending on passage of Jindal’s retirement package. Either way, that’s a 400 percent increase in retirement benefits as a political favor from our fiscally-responsible governor.

J-RAPE.

Then there is Jane Smith, another legislator-with fewer years than Ellington-who was term limited but nevertheless landed a $107,500 per year job as deputy secretary of the Department of Revenue, a stroke of good luck that will bump her retirement from $10,500 to $43,000—in addition to her benefits from the teachers’ retirement system. Both she and Ellington possess woefully inadequate experience or qualifications for their positions.

J-RAPE.

An infuriating aspect of these—and other appointments—is that the average retirement for state civil service employees is around $19,000 per year. Yet, neither the appointees nor the governor show any remorse for such blatant misuse of political patronage—all while Jindal holds himself up to voters as the citadel of ethics and all things good and decent.

Troy Hebert is another. After 11 years in the legislature, he was eligible for a whopping $9,650 per year in retirement benefits. But then he was appointed Commissioner of the Office of Alcohol and Tobacco Control. His $107,000 job will qualify him for an annual pension of $40,000 if he stays on for four years, an increase of more than $30,000. If he remains for nine years, giving him 20 years of state service, his retirement would be $53,500.

Another aspect of all this that is particularly grating is that no one in the media asks the obvious questions: How can you possibly justify thumbing your nose at taxpayers and state employees by handing out these six-figure jobs to political cronies? Where is that transparency, that accountability now?

When someone like Edwin Edwards, probably the most media-accessible, media-friendly governor in this state’s history did things like this, reporters were all over him like red beans on rice.

But when Jindal, who seldom holds press conferences because he despises reporters, abhors the media, loathes the fourth estate, does it, no one says a word.

The silence is deafening.

Where’s the outrage?

J-RAPE.

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