As Orange County Supervisors approved nearly $22 million in homeless services contracts, one elected official wondered aloud if those contracted workers would need the very services they provide.
Questions surfaced over whether enough of that funding – awarded to the homeless services group known as Mercy House at the Board of Supervisors’ regular Tuesday meeting – would go to the very workers who would manage people’s cases directly.
And whether they would fall into poverty themselves.
“The staff who are dealing directly with the clients … It troubles me that we are paying people an hourly rate that actually will qualify them for public benefits services,” said OC Supervisor Katrina Foley during the public discussion.
“And that’s just not progress.”
Within the details of the agreements, salary proposals for Mercy House’s on-the-ground case managers caught Foley’s eye.
Whereas Mercy House CEO Larry Haynes’ maximum hourly rate is listed as more than $100 an hour under the contracts, the “Housing Solutions Case Managers” – engaging people often in multiple languages – will get as much as $23 an hour.
It kicked off a debate Tuesday morning among OC Supervisors over the true cost of living in the region – and public questions about how, exactly, homeless nonprofits are spending the millions in tax dollars they’ve received off a local and statewide homelessness crisis.
Or if the county is holding its million-dollar-contractors to high enough standards.
“We do need to look at how we are initiating the bids on these kinds of services. Because we can’t be part of creating a system that is keeping people in poverty, if we’re going to spend millions of dollars,” said Foley, adding that, “in this county, we spend $1.8 billion annually.”
Supervisor Andrew Do disagreed:
“I did some quick math, and maybe I’m wrong – $23 An hour translates to about $48,000 a year in salary, not including benefits … Maybe I need some education on what is poverty, because last time I checked, $48,000 a year isn’t poverty.”
Foley said that assessment may have been true “four years ago.”
“But right now, the cost of living in Orange County, and what is allowed to be eligible for government-subsidized low income housing for a single individual is $74,000 a year,” Foley added. “And so if we are using that as a barometer of what is expected from individuals who are trying to be able to pay rent, then $48,000 is not going to get there.”
She continued: “You can’t even pay rent for an average apartment in Orange County, at $48,000 a year.”
The debate centered on three county-approved Mercy House agreements to provide families in the child welfare system – and elderly and dependent adults in protective services – with rapid rehousing and supportive housing, as well as financial assistance to secure permanent housing or prevent homelessness.
The programs already exist and are funded through the state and federal government, but supervisors voted to consolidate them under agreements with a single contracted provider organization, Mercy House, which won out over other bidding homeless nonprofits, Illumination Foundation and 1736 Family Crisis Center.
Responding to questions in a Tuesday text message after the meeting, Haynes said, “I don’t know the exact context of the remarks, but in general, Supervisor Foley has correctly identified one of the biggest challenges to being a non-profit operator, namely compensation.”
“I appreciate her comments. We are of course constrained by our contracts. But this is an important issue and I look forward to working with her on solutions.”
Mercy House’s salary schedule prompted Foley to ask broader questions about county contracts:
“What can we do to require the vendors to increase their hourly rates for the individuals who are doing the work to help people stay out of poverty, but they’re remaining in poverty themselves?”
The leader of the OC Social Services Agency, Anh Tran, said his agency could “certainly revisit that, but that will require us to renegotiate the contract and to see if we can support the level of services that they are proposing if they are increasing the salaries.”
During Tuesday’s meeting, Tran said that to renegotiate case manager wages would be a “broader policy implication” for government contracts as to what the county would consider an “acceptable” living wage.
“I don’t know at this point in time what options we have without delaying the services and without delaying the execution of this contract,” Tran said. “But I also could certainly take a look and bring this back to the board at the next board meeting with some recommendations.”
Foley responded that she herself could think of a few places to rearrange costs, “because there’s a whole salary schedule. And I won’t get into the particular details, we’ve already talked about that.”
Do countered that increasing the case managers’ wages would mean taking the money “out of somewhere else.”
“That’s the difficult decision. And that’s a policy decision, as mentioned by Mr. Tran earlier, that is going to be ultimately up to this board to decide,” Do said.
One program which supervisors consolidated under Mercy House on Tuesday is known as Home Safe, a statewide program aimed at preventing seniors or dependent adults from becoming unhoused.
The County of Orange has run the program through state social services funding.
Since then, a total of 267 people in OC have been served, with 25 clients pending, as of April 30 this year, according to a county staff report attached to Tuesday’s contracts.
As of March, the wait time to receive services at Home Safe — which is already managed by Mercy House — varied from 30 to 45 days, with an average being 30 days, said county spokesperson Jamie Cargo in an emailed response to questions that month.
Asked for updated wait times on Tuesday, Cargo said she would look into it but didn’t provide that information as of the publication of this story.
The program doesn’t serve everyone, just people in Adult Protective Services — those at risk of neglect or elder abuse — or those in the process of qualifying.
“It’s a lot of money for a small number of people,” said Foley on Tuesday.
She also questioned the county’s standards for Mercy House and other contractors that morning.
For instance, one Mercy House agreement for homelessness prevention services — for families with children who receive public assistance — expresses the goal of finding permanent housing for 70% of the program’s approved clients.
“So let’s assume there’s 100 people that they’re working for. That means 30 people are not getting permanent housing. That’s a lot of people. So I feel like we need to get above a C average.”
Tran said it ultimately depends on the complex multitude of factors that fuel the region’s homelessness crisis:
“It’s not for the lack of trying. A lot of it is the availability of the whole housing inventory. And a lot of it is the ability of the clients who are going to have to engage into work activities in order for them to sustain that.”
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