County Said No to Money to Create Local Jobs

San Diego County turned down federal stimulus money to create jobs for out-of-work, low-income residents this year, one of a small number of California counties to do so.

Under a program lionized by both conservatives and liberals for its successes around the country, the federal government subsidizes local employers, paying all or some of the wages for welfare recipients placed in jobs. The states and counties set up and run the program.

In California, 47 of the 58 counties receive funds for the program. Statewide, the program has created about 20,000 temporarily subsidized jobs. Los Angeles has been awarded $62 million in federal funds. Santa Clara, $9 million. Fresno, $4.3 million.

San Diego, $0. The county was the biggest county that didn’t take advantage of the funds.

“I was shocked to learn that San Diego did not apply,” said Laura Chick, who as inspector general oversees federal stimulus money in California.

“It’s incomprehensible to me that that a large county hit by the recession, with such a problem with foreclosure rates and such high unemployment wouldn’t avail itself of a program that helps people get off welfare rolls and helps businesses by paying employer salaries,” Chick said.

County spokeswoman Lesley Kirk said in a written statement that the county’s Health and Human Services Agency did not pursue the funding “due to timing and risk.” The agency did not present the program to the Board of Supervisors before making that decision.

But in rejecting the federal funding, the county refused a temporary boost to the local economy and a reprieve for its swelling welfare rolls and 10 percent unemployment rate. The county turned down the chance for a shot in the arm to its overburdened welfare program.

Supervisor Ron Roberts did not know about the county’s rejection of the funding until contacted about it for this story. He said he is disappointed with the way the agency handled the decision about a program with the potential to bring so much money to San Diego.

“This should’ve come to the Board of Supervisors and it shouldn’t have been rejected out-of-hand,” Roberts said. “I’m working very hard to put people to work, and here was an opportunity to put people to work.”

The decision isn’t out of character for the county government.

A voiceofsandiego.org special report this year found that San Diego County ranks at or near the bottom among the state’s largest counties for providing key social welfare programs. The county has rebelled against state mandates to maintain the programs as the state has frozen funding for them.

Recently the county scaled back its ambitions for its welfare for families program, saying the recession had sapped the opportunities that once made the program a success.

Kirk, the agency spokeswoman, said it was in the middle of a major outsourcing effort for other functions when the money became available, which made the subsidized jobs program impossible to implement simultaneously. Additionally, when the county learned about the grant, state officials were “unable to provide clear and consistent information and instructions about how the funds could be used,” she said.

Kirk said the county would have to kick in local dollars to make the program effective. That’s a historically unpopular proposition for this group of supervisors.

“There are no known requirements for an agency to seek board action when not requesting stimulus funds,” Kirk said.

But Chick criticized the agency for not bringing the issue to the supervisors.

“That’s the most outrageous thing I’ve ever heard,” she said. “That is a decision for elected leaders to make — to turn down millions of dollars.”

Lawmakers and advocates on both sides of the aisle have lauded the subsidized jobs program in question since its inception last year as one of the only programs that directly does what stimulus programs promise: Creating jobs and infusing money directly into local, struggling economies.

As Chick has spoken to business owners and chambers of commerce around the state about the federal stimulus, she said, often the question comes: “Where’s the money?”

“One of the few really concrete positives for small businesses inside the Recovery Act was the subsidized employment,” she said.

The federal government reimburses 80 percent of county expenditures for the jobs program. Counties around the state have tried different ways of implementing it, like sponsoring summer jobs or part-time employment.

And they’ve gotten creative with how to come up with the 20 percent cost-sharing requirement. Some have paired with United Way chapters or chambers of commerce to find willing employers and get the word out.

It’s hard to know what the program would hypothetically look like in San Diego, or how much the county would be allocated.

But, for example, the county might be able to find a small business that’d laid off its receptionist, and place there a single mom who lost her job and had to apply for welfare.

The federal government would pay the lion’s share of her wage. She’d have a job; the small business would have an employee. It might be enough to get her on her feet and move her off of the welfare rolls. And by the time the money ran out, the business might decide to hire her permanently.

That kind of transition from subsidized to unsubsidized jobs has been happening around the state, said Frank Mecca, executive director of the statewide County Welfare Directors Association.

But it’s a daunting program to run because counties must network with employers to get them on board. Some counties were worried about being audited after spending money upfront without a clear picture of all of the rules that would come with the dollars, Mecca said.

“Counties and states who wanted to push the envelope in terms of subsidized employment were asked to kind of build the plane and fly the plane at the same time,” Mecca said.

Some counties like L.A. and San Francisco already had established programs. But others still applied to launch new relationships with private employers to give people temporary jobs.

The county’s refusal to apply for the funds will be the focus of several meetings and a press conference in San Diego on Thursday led by Voice of California, a nonprofit coalition that has been researching where stimulus funding has been going in the state, especially related to minority and low-income communities.

It’s too late for San Diego County to benefit from this round of funding, which was part of a package of programs that federal lawmakers failed to extend recently. Proponents are hopeful it will still be renewed. In the meantime, the expiry means counties like L.A. that had programs are shutting them down to make sure all of their participants get paid and they get reimbursed by the deadline.

Kirk said San Diego County plans to reconsider using the funds if federal lawmakers renew the program in the future.

Chick said by not pushing the subsidized jobs program — as well as other pieces of emergency aid for the welfare program — the state will be leaving hundreds of millions of dollars on the table that the federal government had allocated for California’s neediest residents. San Diego’s refusal to apply for these funds contributes to that, she said.

“Governor Schwarzenegger hired me because he wanted to make sure the (stimulus) money was spent wisely and well,” she said. “And that included that he didn’t want to see a single dollar being returned or not spent.”

Please contact Kelly Bennett directly at kelly.bennett@voiceofsandiego.org. Follow her on Twitter: @kellyrbennett.