The Social Services Unification Sub-Committee was given the task of developing a plan for the merger of the Winchester Department of Social Services and the Frederick County Department of Social Services. The Sub-committee was instructed to base its plan on the assumption that one unified governmental entity would exist.

The Social Services Sub-Committee conducted an in-depth study of the organizational structure, personnel, finance/ budgets, programs administered and facilities of the two departments as they now exist. The committee met with the Director of a consolidated agency (Harrisonburg/ Rockingham County Department of Social services) to learn from his experience. The committee reviewed the "Position Paper of the Virginia League of Social Service Executives on Consolidation of Local Departments of Social Services" dated October 4, 2002, and the "Report on the Study of Consolidation of Local Departments of Social Services" dated December 15, 2003, under the direction of Maurice A. Jones, Commissioner of Social Services, for presentation to the Governor and the General Assembly.

The following report is presented to the Unification Steering Committee based on the information cited above and the requirements of the State Board of Social Services and the Code of Virginia, Section 63.2-306 which outlines the legal requirements for consolidating two or more departments of social services. Attached to this report is the working manual of the Sub-Committee for reference by the Steering Committee.

In summary, the Subcommittee presents the following outline of issues, recommendations and timeline. Two flow charts for unification (with and without the consolidation of the two governments into one political jurisdiction) are attached.

Guiding Principles

It is the belief of the Social Services Unification Sub-Committee that the plan for the merger of the Winchester and Frederick County Departments of Social Services should incorporate the following core principles:

1. The residents of the City and County currently served by the Departments of Social Services should not be negatively impacted by the decision to merge into a unified agency. There should be no loss in benefits, services or programs for which clients are currently eligible. Special populations served by each of the separate agencies should continue to receive consideration by the unified agency.

2. Employees of each of the separate agencies should not lose salary and benefits due to the unification. It is understood that, as with any merger, some job responsibilities may change to better serve the new organization and the community. Employees of the unified agency would be granted the same benefits as granted to all employees of the new jurisdiction.

3. The two departments cannot operate as one unified agency until all staff members are located in one facility. That facility should be within walking distance to the Court and be accessible by bus route.

4. The merger of the two Departments of Social Services should present an opportunity to creatively design and implement a new, high functioning organization based on best practices for the delivery of social services and benefit programs. The staff members of both agencies should be actively involved in the merger, lending their professional in-put into decisions on program policies and procedures and unit organization. The State Department of Social Services should be utilized as a resource related to Human Resource issues as well as best practice models for program decisions.

It is recognized that there will be many challenges and every effort will be made to maximize staff involvement and minimize the fears and concerns that such a major reorganization inevitably produces. On-going communication with the staff members, Winchester Social Services' Advisory Board, Frederick County Social Services Board, the City Manager, County Administrator and the governing bodies of both jurisdictions will be a key factor in the successful implementation of the Unification Plan.

Organizational Structure

The first step in the Unification Plan would be for the newly constituted governing entity to determine the organizational structure of the merged Department of Social Services. Section 2 of the attached workbook (Local agency Organizational Structure) defines the types of Local Social Services Boards (pages 10 and 11) and describes their authority, duties and responsibilities (pages 24 and 25). The following information comes from the Orientation Handbook for New Local Social Services Directors:

Local departments are organized in different ways depending on their size, location, and community needs. In determining the organizational structure of a local department, the following should be considered.

A. Types of Local Social Services Boards

Local boards may serve a single county, city, or combination of political subdivisions. When there are combinations of counties or cities, one board serves those jurisdictions.

There are two types of boards - administrative and advisory. The local governing body appoints members of both.
1. Administrative Board
   All agencies have an administrative board. Members of administrative boards are usually residents of the locality; however, the local governing body may appoint a local governing official as the administrative board.
   An administrative board consisting of resident members is the most common type of board among agencies. With this, a county board consists of three or more, a city board consists of five, and when the two combine, there shall be three to nine members.
   When the administrative board is a local governing official, a local agency staff person (usually the director) is often designated to act as the board.
   
2. Advisory Board
   If the administrative board is a local appointed official, an advisory board is appointed to assist the person in charge. An advisory board may consist of from five to thirteen county or city resident members.
   Currently in Frederick County, there is a seven member citizen Administrative Board, plus one member of the Board of Supervisors who serves as liaison to that body.
   Currently in Winchester, the City Manager serves as the Administrative Board. In addition, Winchester currently has a seven member citizen Advisory Board.
   It would be the responsibility of the newly constituted governing body to determine the organizational structure of the merged agency.
   

Recommendation: The committee believes that either organizational structure can be successful and recommends that the new governing body evaluate the relative merits of all options described herein, and adopt the board structure as a first step, followed by appointment of the new board.

Personnel

In Virginia, localities have the option of adhering to the personnel policies and procedures established by the State Department of Social Services (deemed "non-deviating agencies") or adhering to the personnel policies of the local jurisdiction (deemed "deviating agencies"). To further confuse the issue, agencies may choose to be deviating in some aspects of human resources management (e.g. compensation) but adhere to the State's policies and procedures of all other aspects.

Frederick County currently adheres to the personnel policies of the State Department of Social Services and is considered to be a non-deviating agency. Employment hiring procedures, compensation rates, job classifications, Affirmative Action Plans, etc. are in compliance with the policies set forth by the Virginia Department of Social Services. Winchester is a jurisdiction-wide deviating agency. Employment hiring procedures, compensation rates, job classifications, etc. are in compliance with personnel policies and procedures for the City of Winchester.

Regardless of whether the agency is a deviating or non-deviating agency, employees of all local departments of social services are considered to be employees of the local jurisdiction. When the two governments of Winchester and Frederick County merge into one political jurisdiction, the staff of the merged Department of Social Services would be employees of that governmental body. It would be the responsibility of the new Administrative Board to determine if the merged agency would be a deviating or non-deviating agency.

Based on best practices, and the experience of other jurisdictions, the committee does not anticipate a reduction in force as being either desirable or appropriate. For the most part, staffing levels are driven by caseload size and regulatory requirements imposed by state and federal programs. The two departments each have a Director responsible for leadership and oversight of all functions of the department as well as coordinating collaborative activities on a project-specific basis. The newly unified agency would only need one Director.

Recommendation 1: The committee recommends that the first act of the newly appointed Administrative Board should be to select a Director for the unified agency to participate in the subsequent management decisions to be made.

Recommendation 2: The committee recommends that the newly appointed Administrative Board and newly hired Director(as described above), in consultation with the local government HR specialist and representatives of the Human Resource Management Unit of the Virginia Department of Social Services, should evaluate the compensation, classification, leave schedules and benefits of both entities in order to choose the most advantageous for the new entity. The Administrative Board, should evaluate the merits of the merged agency becoming a non-deviating or a deviating agency in respect to the personnel policies and procedures of the State Department of Social Services. Criteria for making personnel decisions should incorporate the guiding principles set forth above, as well as present and future workforce considerations.

Facility Considerations

Facility location is perhaps the most challenging issue regarding the unification of the Departments of Social Services. The Social Services Unification Sub-Committee believes that consolidation of the two departments cannot be accomplished until the new agency is located in one facility.

The timing of the decision to unify is critical as Winchester is on the verge of a commitment to relocate its Department of Social Services to 15,000 square feet of space in the Phase II of the Our Health Complex on North Cameron Street. According to David Ziegler, Executive Director of Our Health, the anticipated completion date is March 2008. As currently envisioned, Phase II would include two buildings: a three story building of 15,000 square feet per floor and a second, two story building of 9,000 sq ,ft. per floor. In order to accommodate the employees of Frederick County Department of Social Services, the design would have to be increased to a four story building (15,000 sq. ft / floor) and a three story building of 9.000 sq. ft./floor. Mr. Ziegler anticipates that the maximum cost for the Our Health space would be $17.00 per square foot. If Our Health is successful in receiving State funds to off-set the cost of construction, this amount could decrease.

In 2003, Frederick County relocated its Department of Social Services from the second floor to the third floor of the County Office Building. It now occupies 21,000 square feet of space specifically designed for its use. The Department of Social Services pays $10.00 per square foot to the County. ($80,850 of the $210,000 paid is reimbursed to the County through Federal Pass-through funds.) There is not sufficient space on the third floor to accommodate the staff from the Winchester Department of Social Services. In order to have sufficient space for the merged agency to be located at the County Office Building, departments currently located on the second floor would have to be vacated.

Recommendation: The committee suggests that a consultant may be needed to begin identifying appropriate space which, at a minimum: meets the current aggregate space need, is located within proximity to the courts, public transportation and parking, and takes into account the unique work space requirements generated by the confidential nature of the client services provided. Per the guiding principles, the implementation of a unified agency should not begin until appropriate space is available.

Finances

Finances Under One Merged Jurisdiction

If Winchester and Frederick County become one political jurisdiction, the resident taxpayers would share in the cost of the merged Agency. Based on the experience of other jurisdictions and assuming that the guiding principles are adopted, the Committee believes that the initial operating budget will fairly closely approximate the aggregate of the two departments' budgets with the following caveats:

1. IT Systems: Currently, the agencies use different IT systems for their finance and accounting processes, as well as different case management platforms. IT systems will need to be merged. This may represent a unique opportunity for business practice redesign prior to IT platform/software program selection. It will also generate the one-time cost of standardizing the IT systems.

2. Office Space: The fiscal impact of the merger will need to include the cost of renting sufficient space. Currently, Frederick County DSS pays $210,000 per year to Frederick County for the 21,000 square feet of the third floor of the County Office Building. Approximately $80,850 of this amount is reimbursed from State and Federal sources.

Currently, Winchester DSS pays $13,000 per year for office space. When Winchester DSS moves to the Our Health Complex, the rent will increase to a maximum of $255,000 (based on $17/sq. ft. x 15,000 sq. ft.). If Our Health is successful in obtaining a General Assembly direct appropriation, this amount could be greatly reduced.

If the decision is made to locate the merged Agency at Our Health, the increase for Frederick County will depend on the final cost per square foot charged by that organization. The maximum increase in rent to house the current Frederick County DSS employees would be $147,000 based on 21,000 sq. ft. x the difference between $17 and $10/sq. ft. If Our Health is successful in receiving a building appropriation, the annual rent increase may be significantly lower. The full amount of rent would be paid to Our Health and not back to the County as it is now.

If the decision is made to locate the merged Agency on the second and third floors of the County Office Building, revenue to the merged political jurisdiction would increase by the amount charged for the additional 15,000 square feet to house the current Winchester DSS employees.

Finances for a Merged DSS Department Under Two Political Jurisdictions

Although the Sub-Committee was charged with developing a plan for the unification of the agencies based on an assumption of one unified political jurisdiction, the following section is included for the Steering Committee's information. State law allows for the consolidation of two or more local Departments of Social Services with approval of the State Board and the Governor. The Code of Virginia, Section 63.2-306 states: "Administrative costs of a district board shall be borne by the participating local governments on the basis of population and caseload with equal weight being given to each factor or in such a manner as the respective governing bodies provide by agreement." Public Assistance payments made to or on behalf of residents are borne by that jurisdiction. The allocation formula for administrative costs would be reviewed annually and adjusted based on any change in population and caseloads.

Based on the State formula of 50% caseload and 50% population, the split of the local share of administrative costs of the merged Agency would be:
• 35% to be paid by Winchester
• 65% to be paid by Frederick County

Population:
• Winchester -- 25,000 -- 28%
• Frederick County -- 66,300 -- 72%
• Total: 91,800

Caseload
• Winchester -- 3,104 -- 42%
• Frederick County -- 4,283 -- 58%
• Total: 7,387

Combined Population and Caseload:
• Winchester : 28 + 42 =70 /200 = 35%
• Frederick : 72 + 58 =130/200 = 65%

If the population growth in the County continues to significantly outpace the growth in the City, Frederick County's share of administrative costs may increase. This may be off-set if Winchester's caseload totals increase at a higher rate than Frederick County's.

Recommendation: The committee suggests that due to the complexity of the IT systems, and the investment in existing legacy systems, a consultant may need to be hired to evaluate and make recommendations. If the decision is made consolidate the two agencies without the jurisdictions merging, a financial impact study should be completed.

Programs

The consolidated agency must function as one organization with one set of program policies that affect residents of both Winchester and Frederick County. An in-depth description of the programs administered by the two Departments of Social Services is contained in Section 5 of the attached manual.

Recommendation: The new Administrative Board, with in-put from the Director and Staff Program Teams, will review policies and procedures of each agency and will review statewide best practices in order to make decisions as to program changes for the merged agency.

Approval would be sought from the State Department of Social services to raise Frederick County to the same grouping as Winchester for the Medicaid and Temporary Assistance to Needy Families (TANF) programs.

Each of the following plans is developed by the local board. Each would have to be reviewed, consolidated and approved by the new Administrative Board. There is some question whether a combined agency would lose funding for those plans for which the state makes one grant award per agency. Historically, the state has not agreed to change an award amount to the aggregate of the two merging jurisdictions. This might have significant impact on the provision of services.

• Day Care
• Fraud
• Promoting Safe and Stable Families
• Respite Care
• Independent Living - Base Allocation
• Independent Living - Special Initiative
• Program Improvement Plan (PIP)
• VIEW
• General Relief
• Adult Services

Projected Benefits/ Opportunities of Unification:

The projected benefits of the merger of the two Departments of Social services include:
• Client families that move frequently between the County and the City would be served by one agency without having to transfer their case.
• There would be greater flexibility for coverage during employee vacancies and absences (training, vacation, illness, etc.). Supervisors could specialize in their area of expertise.
• There would be better support and back-up coverage for the smaller programs of TANF, VIEW, Day Care, Fraud, Adult Services and Adult Protective Services.
• The larger units of Child Protective Services and Foster Care would allow for the specialization of functions within the unit.
• There would be more staff available to handle on-call.
• There would be one fleet of agency vehicles.
• Currently each agency must develop its own budget, Affirmative Action Plan, Adult Services Plan, Independent Living Plan, Respite Services Plan, Child Day Care Plan, Fraud Plan, Program Improvement Plan, and Promoting Safe and Stable Families Plan. The combined agency would reduce the aggregate administrative time spent on the development of the budget and these plans.
• Possibly the Community Policy and Management Teams of Winchester and Frederick County would decide to merge.
• There could be shared workers for programs such as Fraud and for Information Technology.
• The agencies would not compete for qualified staff.
• There would be a consistency in case management and a consistency in policy interpretation and implementation based on collective training between all of the workers of the two agencies.

  Projected Concerns/Challenges of Unification:

• The potential for increased cost in obtaining sufficient space (and the corresponding loss of revenue to the County if the Department is moved from the County Office Building),
• The need for the State to standardize the Levels of Assistance between the jurisdictions.
• Concern by the County of increased financial responsibility for administrative costs based on the projected disproportionate population growth.
• Potentially increased local expenditures (City) for General Relief and Companion Services.
• Increased costs due to automation standardization.
• Demographic differences between the City and County create different priorities.
• Loss of some discretion in policy implementation that comes with increased standardization.
• Challenge of equitably merging two staffs which previously operated under different personnel systems with different compensation scales, position classifications and employment benefits.
• Challenge of selecting the best Board structure for the merged agency to meet local needs.

If the decision is made to merge the Winchester and Frederick County governments into one political jurisdiction, the two departments of social services will merge into one unified agency. It is well understood by both departments that the implementation of effective change management strategies would be critical to the transition from two independent entities into one consolidated agency.

If there is no decision to merge the local governments, the decision regarding whether or not to proceed with the consolidation of the departments of social services should be based on the following considerations:

• Will consolidation improve the quality of services to individuals and families?
• Will consolidation increase productivity?
• Will consolidation save money?
• Will consolidation cost money, at least up front?
• Is there a commitment from the relevant governmental officials to work together to make consolidation happen successfully?

The decision of whether or not to merge the departments of social services should be based on the projected benefits such a merger would have on the clients served by the two agencies, the local governments and all of the residents of Winchester and Frederick County.

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