Analysis Item 9: Employment Department Supplemental Nutritional Assistance Program Employment Services
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1 Analysis Item 9: Employment Department Supplemental Nutritional Assistance Program Employment Services Analyst: Michelle Deister Request: Increase the Other Funds expenditure limitation by $5,574,000 and establish 22 limited duration positions (19.25 FTE) for enhanced employment services provided to Supplemental Nutritional Assistance Program (SNAP) eligible customers. Recommendation: The Legislative Fiscal Office recommends that the interim Joint Committee on Ways and Means recommend that the Other Funds expenditure limitation for the Employment Department be increased by $5,574,000, and 22 limited duration positions (19.25 FTE) be established in a budget reconciliation bill during the 2018 legislative session for enhanced employment services to Supplemental Nutritional Assistance Program eligible customers. Analysis: The Oregon Department of Human Services (DHS) has an existing contract with the Oregon Employment Department (OED) to provide enhanced employment services to recipients of the federal Supplemental Nutritional Assistance Program (SNAP). OED s budget has approximately $6 million in expenditure limitation for SNAP recipients who voluntarily choose to avail themselves of enhanced services available to them through what is referred to as the SNAP Training and Employment Program (STEP). Services provided include the following: needs and skills assessments; career exploration; resume building; job search skills and planning; and follow up with Department staff. The goal of these enhanced services is to procure employment and reduce reliance on federal and state income subsidies. STEP services are reimbursed at a rate of 50% from Federal Funds received by the Department of Human Services and passed through to the Employment Department; the balance of the cost is borne by the Supplemental Employment Department Administrative Fund. Because of this work, the Employment Department is well situated to provide even more intensive case management services to a targeted subset of SNAP recipients, those able-bodied adults without dependents (ABAWD customers). Services for able-bodied adults without dependents will be over and above those for other SNAP recipients, and include helping individuals to assess their local job market, formulate an individualized training and employment plan, access and complete training, and track participation and work search hours. These individuals also have access to payments for education and training payments, and supportive service payments such as child care and transportation costs, which will be distributed and reported by the Employment Department. These enhanced services (over and above the regular STEP services) are eligible for 100% reimbursement. During the Great Recession when competition for available jobs was significant, federal work search requirements for certain ABAWD SNAP recipients were waived. As the economy improves, federal rules associated with income subsidies require able bodied adults without dependents to adhere to enhanced work search requirements as a condition for continued receipt of benefit payments. DHS applies for an Oregon SNAP waiver annually for able bodied adults without dependents clients, and is able to justify the need for the waiver based on the program parameters associated with insufficient jobs and services within counties. In counties where there are deemed sufficient jobs and services, the waiver is no longer applied. DHS is in the process of finalizing an agreement with OED, effective October 1, 2017 to provide these more intensive case management services in Multnomah, Legislative Fiscal Office Interim Joint Committee on Ways and Means September 2017
2 Washington, and Clackamas counties. As of January 1, work search requirements will also apply in Marion, Yamhill, Benton, and Lane counties, which will also be served under the agreement. Though an annual agreement, the Employment Department anticipates that it will be renewed and run through the close of the biennium. Funding to OED for enhanced services to ABAWD customers comes as reimbursement from Federal Funds from DHS. and constitutes $4,044,778 of the total request, which is anticipated to be reimbursed at a rate of 100%. The balance of $1,529,222 is associated with STEP services, which will be reimbursed at a rate of 50% by DHS. OED projects serving 6,645 individuals in the aforementioned counties. Should actual participants exceed this estimate, DHS would need to provide additional funding or allow a reduction in the level of service provided to clients. Of the $5.6 million in requested additional expenditure limitation, $2.7 million is attributable to personal services costs of 22 Business and Employment Specialist II positions for a period of 20 months, with an attendant $671,000 in services and supplies for these positions. Due to the timing of the contract, OED plans to recruit and fill these positions administratively, in anticipation that additional expenditure limitation and position authority will be authorized during the 2018 legislative session. Special payments of $2.2 million are budgeted for qualifying expenses of participants, such as child care, transportation costs, and work clothes. The Legislative Fiscal Office recommends that the interim Joint Committee on Ways and Means recommend that the Other Funds expenditure limitation for the Employment Department be increased by $5,574,000, and 22 limited duration positions (19.25 FTE) be established in a budget reconciliation bill during the 2018 legislative session for enhanced employment services to Supplemental Nutritional Assistance Program eligible customers. Legislative Fiscal Office Interim Joint Committee on Ways and Means September 2017
3 9 Oregon Employment Department Lisper Request: Increase Other Funds expenditure limitation by $5,574,000 and establish 22 limited duration positions (19.25 full-time equivalent). The Department of Human Services (DHS) is requesting the Employment Department (OED) provide Able Bodied Adults without Dependents (ABAWD) with federal mandated job service activities to these clients in seven Oregon counties. Recommendation: Approve the request during the 2018 Legislative Session. Discussion: The agency s request for additional Other Funds expenditure limitation and the establishment of 22 limited duration positions enables OED to provide coordinated and specific job service activities to Supplemental Nutrition Assistant Program (SNAP) ABAWD clients. ABAWD clients are a subset of the SNAP program. During the Great Recession, federal work search requirements for ABAWD clients were waived. Annually, DHS applies for a SNAP waiver for these clients and can justify the need based on the program parameters associated with insufficient jobs and services within the state. The current SNAP waiver associated with ABAWD clients impacts seven state counties as outlined below. The ABAWD clients in the seven counties are required to participate in mandatory job search activities to receive certain SNAP benefits. Effective January 1, 2016, ABAWD clients in Multnomah and Washington counties were required to participate in the mandatory job services activities to continue receiving certain SNAP benefits. Effective January 1, 2017, ABAWD clients in Clackamas county were required to participate in the mandatory job services activities to continue receiving certain SNAP benefits. Effective January 1, 2018, ABAWD clients in Marion, Yamhill, Benton and Lane counties will be required to participate in the mandatory job services activities to continue receiving certain SNAP benefits. ABAWD clients in other counties are covered and receive benefits according to the SNAP waiver. At this time, the job service activities are voluntary for ABAWD clients. ABAWD clients in Multnomah, Washington and Clackamas counties were able to receive the necessary required job search activities through another vendor contracted through the Department of Administrative Services (DAS). OED s inter-agency contract becomes effective on October 1, One of the major requirements to be tracked and reported to DHS will be the 80 hour per month minimum of job search activities. OED will monitor, track and report time and activities for each ABAWD client within the state participating in qualified job service activities, regardless of whether the activities are mandatory. The following table lists the job service activities included in the existing OED-DHS contract for the SNAP Training and Employment Program (STEP) services and the seven counties required to participate in both STEP and ABAWD job search activities. The expenditure limitation and Department of Administrative Services 9-i September 20, 2017
4 positions requested only address the ABAWD clients in the seven counties where the SNAP waiver has expired. Job Services Activities as Outlined within the DHS-OED Contracted Services STEP ABAWD (voluntary SNAP clients and mandatory ABAWD- (mandatory activities in the seven counties) SNAP clients) Orientation to STEP, ABAWD and WorkSource Weekly monitoring and record keeping Oregon (WSO) services Assessment of skills, barriers and needs Bi-weekly follow-up meetings between clients and WorkSource staff Address barrier resolution Support service payments Plan re-employment development Vocational / Education training plan development Job retention services Vocational / Education training plan monitoring Follow-up with WSO staff, review of activities and Vocational / Education training payments appointments Job search training (includes: career exploration, resume building, interviewing, networking, job search skills and other on-site training at WorkSource Centers) The new contract for $5,574,000 to service the ABAWD clients in the seven counties affects the number of limited duration (Business and Employment Specialist 2) positions the agency will need. Ten of the 22 positions will be used to address the STEP service activities specific to the ABAWD clients and the remaining 12 positions will be used to address the ABAWD job search activities indicated in the table above. Eighteen of the positions are expected to be on-board prior to October 1, 2017 and the remaining four positions will be hired in November The agency has been instructed to use available vacant Business and Employment Specialist 2 positions prior to hiring other positions. The inter-agency contract estimates 6,645 ABAWD clients will be participating in the new mandatory requirements rather than forgoing their benefits. If the amount of clients increases beyond the estimated 6,645, the agency may return for additional expenditure limitation and/or positions for the biennium. The needs for the biennium are unknown at this time. The agency will track and report monthly to DHS on the program s progress. There is no match required. The agency s proposed budget includes special payments the ABAWD clients may be entitled to as a part of their job search activities, as outlined in the inter-agency contract. The following table is the proposed budget for this request: Service Positions FTE Personal Services & Special Totals Type Services Supplies Payments ABAWD $1,469,656 $366,122 $2,209,000 $4,044,778 STEP $1,224,344 $304,878 $0.00 $1,529,222 Totals $2,694,000 $671,000 $2,209,000 $5,574,000 Without the expenditure limitation and the additional positions the agency has indicated it will not be able to service the ABAWD clients as specified in the inter-agency contract for the SNAP clients. Potentially, ABAWD clients will lose benefits without the mandated services. Department of Administrative Services 9-ii September 20, 2017
5 This request will not impact the existing services provided for SNAP clients within the OED base budget. The services were budgeted at $3.0 million and only apply to the counties included in the SNAP ABAWD waiver program. If the agency moves forward with the inter-agency contracts with DHS, they would need to use existing resources until the Legislature makes a final determination during the 2018 Legislative Session. The agency understands the Other Funds expenditure limitation increase is not guaranteed nor is the establishment of the additional limited duration positions. Additionally, CFO has requested OED send copies of any progress reports on the two inter-agency contracts between DHS and OED. Department of Administrative Services 9-iii September 20, 2017
6 August 21, 2017 Kate Brown, Governor Employment Department 875 Union Street NE Salem, Oregon (503) TTY-TDD The Honorable Senator Richard Devlin, Co-Chair The Honorable Representative Nancy Nathanson, Co-Chair Interim Joint Committee on Ways and Means 900 Court Street NE H-178 State Capitol Salem, OR Dear Co-Chairpersons: Nature of the Request The Oregon Employment Department (Employment Department) is requesting an increase of $5,574,000 Other Funds expenditure limitation and the establishment of 22 limited duration positions (19.25 FTE), to provide additional employment services to Supplemental Nutrition Assistant Program (SNAP) eligible customers, in cooperation with the Department of Human Services (DHS). As partners in the state s workforce system, both agencies are seeking to provide comprehensive, individualized services for these clients, including case management, work activity monitoring, training, and support services in the most effective and cost efficient manner. Background The Employment Department provides coordinated solutions and services to Oregonians and Oregon businesses to deliver on the department s mission to support business and promote employment. The agency includes three major program areas: Unemployment Insurance, Workforce Operations, and Workforce and Economic Research. Workforce Operations staff engage, inform, and assist the current and emerging workforce, with an emphasis on serving specific populations such as veterans, job seekers that receive training, and clients receiving public assistance. The Employment Department works to grow robust economies by supporting innovative local workforce delivery systems. A network of 37 WorkSource Oregon Centers located around the state focus on serving local communities. Oregon workforce system partners include regional and local training providers (Workforce Innovation and Opportunity Act Title I), the Oregon Workforce Investment Board, Local Workforce Development Boards, the Higher Education Coordinating Commission, the 1 P age
7 Department of Human Services (DHS), the Commission for the Blind, local economic development organizations, the seventeen Oregon community colleges, and others. Ongoing examination of the system with an overall goal of effective and cost efficient service delivery is a shared system goal and the basis of this request. The Supplemental Nutrition Assistance Program (SNAP) is a federally funded program which offers nutrition assistance to millions of eligible, low-income individuals and families across the nation. In Oregon, SNAP is administered by the DHS. The eligibility determination and issuance of benefits are provided through offices across the state. With one in five Oregonians on SNAP, together, DHS and the Employment Department are taking a very large step to improve Oregon s service delivery to a common customer. The Workforce Innovation and Opportunity Act (WIOA) provides a strategic framework for key workforce and education programs including those provided under SNAP. The U.S. Department of Labor and the U.S. Department of Agriculture s Food and Nutrition Service, have issued guidance that requires states to leverage resources and improve service delivery. Both federal agencies have expressed enthusiasm and optimism for Oregon s new service model, believing success may establish the basis for a national model. The request supports Governor Brown s vision and priorities to serve individuals with low income, move families out of poverty, and to align workforce policy and resources. With the highest possible visibility, right support, and a healthy level of caution, the project can fundamentally change and enhance how the state provides workforce services in Oregon. Agency Action Recently, the Employment Department began delivering additional employment and training services to SNAP clients on a statewide basis. This is a new paradigm for the Employment Department and DHS, as reflected in the Legislatively Adopted Budget, that authorized the agencies to work together to provide employment services. Currently, enhanced services are provided only to SNAP clients that volunteer to participate in the SNAP Training and Employment Program (STEP). This work is ongoing, and provides the foundation to address the core of this request to leverage resources to layer additional services for the citizens identified in the narrative below. During the Great Recession, the federal government waived SNAP work search requirements. The waiver has expired, and DHS must now require some SNAP recipients considered Able Bodied Adults Without Dependents (ABAWD) to spend 20 hours per week in job search activities. These additional requirements place compliance components on service delivery which cannot be met through the voluntary STEP services. 2 P age
8 The DHS has eliminated the SNAP ABAWD job search exemptions in Multnomah, Washington, and Clackamas counties where economic conditions improved first. In January, four more counties will lose their ABAWD exemption. This presents a significant challenge in that DHS cannot offer different ABAWD programs across the state, while ensuring the required consistency and compliance. After discussion with their federal partners, DHS reached out to the Employment Department to assess whether these services could be provided statewide through the department s network of WorkSource Oregon job centers. After analysis and further discussion, both agencies agree that leveraging the statewide STEP investment is critical in being better prepared for continued loss of the ABWAD waiver. The DHS is seeking to comply with federal requirements while, at the same time, improving employment services to SNAP recipients. Services will be funded under the federal SNAP Employment and Training program. By partnering in this effort, the Employment Department and DHS seek to optimize resources in order to provide more than case management for ABAWD participants. The agencies will provide comprehensive, individualized services for these clients including training. Similar services were provided in the past, but in limited locations, and to a limited number of participants. Based on this limited past experience, the level of work and monitoring required with the end of the federal waiver is anticipated to be significant. The proposed approach addresses several key policy objectives: to help ABAWD clients return to work; consolidate and coordinate services within the workforce system; and maximize federal and state investments in Oregon s workforce development system. The Employment Department will focus on job search and talent development components. DHS Self-Sufficiency will focus on getting benefits out to clients, ensuring program compliance, and providing every opportunity for clients to be successful. This approach aligns well with and capitalizes on the strengths and expertise of both agencies. The request builds upon the current scope of work for the Employment Department, and adds something new. The ABAWD work will be folded into the STEP work the Employment Department currently performs. This will allow ABAWD clients to access an array of services provided by multiple partners in a single location. In other words, citizens will have more access to more services from more partners, in just one stop. Participants will meet with designated staff to understand their labor market, build a plan to obtain work, pursue training, and track required participation hours. Clients can focus on being successful in their careers, instead of trying to sort out where to go for help. Program and management staff from both agencies used available data and professional experience to develop a base set of assumptions to estimate participation levels, staffing needs, and costs. Capacity and costs are based on historical DHS and Employment Department data, and are conservative in nature to allow flexibility and time for the new service model to mature. 3 P age
9 The DHS and Employment Department estimate an additional 6,645 clients per year will be served by Employment Department staff. Performing the work with existing resources is not possible; more capacity is needed to meet policy and service objectives. The population to be served has traditionally had more barriers to employment and required more intensive, one-onone services. The Employment Department currently provides individualized services to specific Oregonians, but on a much smaller scale. For services to be effective, the department must scale up. To meet these service demands, the Employment Department intends to enter into a contract with DHS to begin providing services to the new ABAWD customers on October 1, 2017, and continuing through the end of the biennium. Executives and program managers from both agencies will monitor activity monthly, and as further experience is gained, staffing will be adjusted accordingly. The main revenue source for this effort is Federal Funds available to the DHS and paid to the Employment Department through an inter-agency contract. Two reimbursement models will be used: 100% reimbursement for ABAWD services, and 50% reimbursement for Other Funds used to serve SNAP clients that participate in STEP. The DHS will reimburse the Employment Department at a 100% rate for ABAWD services. The Legislatively Adopted Budget for the Employment Department includes $3M in STEP revenue. STEP revenue in excess of the $3M budgeted will be used to fund additional STEP work. If federal funding levels change, service levels will be adjusted or reduced accordingly. Both the Employment Department and DHS are taking a conservative approach the rollout, and will continue to assess program outcomes. As this is a new program and service model, limited duration positions are requested. Action Requested The Employment Department is requesting an increase in Other Funds expenditure limitation of $5,574,000 and establishment of 22 limited duration Business and Employment Specialist 2 positions (19.25 FTE). Legislation Affected Increase Other Funds expenditure limitation established for the Oregon Employment Department by section 1(1), chapter 506, Oregon Laws 2017, Unemployment insurance, business and workforce development, and workforce and economic research by $5,574,000 for the biennium; and establish 22 limited duration positions (19.25 FTE) to provide additional employment services to Supplemental Nutrition Assistance Program (SNAP) eligible customers in cooperation with the Department of Human Services. 4 P age
10 Sincerely, Kay Erickson Director, Oregon Employment Department Clyde Saiki Director, Department of Human Services cc: George Naughton, DAS Chief Financial Office Michelle Lisper, DAS Chief Financial Office Ken Rocco, Legislative Fiscal Office Michelle Deister, Legislative Fiscal Office 5 P age
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