BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
857 (Galgiani)
Hearing Date: 8/27/2009 Amended: 7/1/2009
Consultant: Bob Franzoia Policy Vote: L&IR 4-2
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BILL SUMMARY: AB 857 would require the Employment Development
Department (EDD), by July 1, 2010, to provide in-person
unemployment benefit assistance in at least one comprehensive
state one-stop career center in each workforce area of the
state. This bill would require that the unemployment benefit
assistance services required to be provided at these centers be
funded with existing moneys available to EDD for the
administration of the unemployment compensation program.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Statewide in-person Estimated $2,750 to $5,500 to redirect
Special*
unemployment benefit personnel resources one time; unknown
assistance likely similar reduction in on-line/call
center
services, increase in direct assistance
services
* Unemployment Administration Fund (7100-0870)
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STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Funding to administer the unemployment insurance (UI) program
has been declining for several years. As a result, EDD has been
moving from providing UI services in person to providing
electronic services. By investing in hiring additional staff
and not offices and related overhead, EDD has increased staff
available to provide direct services. The self service option
also allowed EDD more flexibility when needing to redirect
resources. This bill may commit EDD to a level of service that
may not be necessary when economic conditions improve and
workload funding is reduced.
The call center and adjudication center environment provides
flexibility in terms of shifting workload between centers. Work
can be processed in any center as needed, as opposed to the days
of in-person services, when one center might be overloaded with
customers while another center might have few customers.
Whether EDD should provide more direct, in-person, access to EDD
staff is a subject of much debate.
At this time, specific staffing has not been determined. For
example, it is unknown how many staff and managers would be
required to provide in-person services at up to 50 to 60
one-stop career centers in the workforce areas. The EDD has
estimated that a minimum of five staff are needed for a
comprehensive one-stop career center. Total potential
employment program representative staff could range up to 350
positions. At a cost of $106,775 (includes benefits) per
position, annual personnel costs could be up to $37 million.
Adding up to 60 employment program managers to supervise would
add an estimated $8 million.
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AB 857 (Galgiani)
EDD also notes there would be space, planning, and transition,
training and other implementation costs. The transition of 144
local field offices that provided in-person services to 14 UI
regional centers that provide services by telephone, mail, fax,
and Internet access took nearly three years to complete.
Whether EDD could redirect existing staff from call centers is
unknown. Granted, absent more funding, which this bill attempts
to prohibit, EDD would have no option but to redirect staff but
would first have to address staffing issues noted above and
physical plant issues noted below while attempting to do so in
the most cost effective manner.
EDD notes implementation would require the following specific
actions:
1) Contract renegotiations with leaseholders who currently
provide one-stop facilities with associated amenities.
2) Redesign of the comprehensive one-stop career centers and
workforce service offices that would allow customer service
privacy in establishing claims and other UI related activity.
3) Additional computers with access to confidential UI data
bases that currently establish and track claims. This would
also include additional telephone lines, cabling and modular
office installations.
4) Redirection of call center and adjudication staff from
established work places to a work location that might be beyond
current relocation limits. This would result in relocation
costs and potential bargaining issues.
5) Assigning of staff to meet requirements to provide bilingual
services to non-English speaking customers. The UI program had
no bilingual staffing deficiencies in 2008, but would likely not
be able to meet this mandate in the comprehensive one-stop
career centers and workforce service offices statewide.
6) Increased security at the comprehensive one-stop career
centers and workforce service offices as the UI process can be
stressful.
If EDD rellocated $50,000 to $100,000 per center to provide or
update office space and services, train staff, increase
compensation, hire as needed, and so forth, in order to offer
on-site UI assistance, reallocation costs would exceed
$2,750,000 (55 centers x $50,000) to $5,500,000 statewide. This
would result in a one time reduction in current services and
possible higher long term costs to operate the one stop centers.
To the extent on-site staff can resolve UI assistance inquiries
more efficiently, there may be savings and increased consumer
satisfaction.
The proposed amendment would state that the department shall
reallocate existing resources, including staff and equipment, to
achieve this statute. The department shall work with the
comprehensive state one-stop career center partners to use
existing office space in the comprehensive state one-stop career
center to accommodate unemployment insurance personnel.