The nonprofit organization slated to take over management of a Maine welfare-to-work program told state officials that it plans to hire 140 Maine residents to staff operations in the state.

But a top union official is warning that more than 50 state workers could be at risk under the outsourcing proposal – concerns that Gov. Paul LePage dismissed Tuesday as “hoopla.”

The Maine Department of Health and Human Services is finalizing a nearly $63 million contract with a New York nonprofit, Fedcap Rehabilitation Services, to operate the ASPIRE employment assistance program, which has repeatedly fallen short of meeting federal benchmarks. Now operated by DHHS, the program helps low-income individuals connect with job training, employers or education in order to transition them off the Temporary Assistance for Needy Families program.

Fedcap, which operates in nine states, has been steadily expanding its presence throughout New England and the Mid-Atlantic region in recent years, winning contracts to provide workforce development or welfare-to-work services. Fedcap officials did not return phone calls from the Press Herald on Monday or Tuesday. But in its contract bid submitted to the state, Fedcap said its mission “is consistent with ASPIRE’s goal of gainful employment and work participation” and that the agency has helped place more than 14,000 TANF or other individuals in jobs since 2013.

The organization stated that it plans to hire 140 Maine residents to work as Fedcap staff in 16 field offices.

But Ramona Welton, president of the Maine State Employees Association SEIU Local 1989, estimated that 51 workers now handling the ASPIRE program could lose their jobs. Welton said she does not believe the contract being negotiated between DHHS and Fedcap includes any language allowing current employees to transfer their jobs to the nonprofit.


“The lack of a guarantee is concerning,” Welton said on Monday.

LePage, speaking on a Bangor radio station, suggested that those employees could find work with the new agency.

“This isn’t about unions and management. This is about being efficient, effective,” LePage said on WVOM-FM’s George Hale and Ric Tyler Show. “What people don’t understand is, if this company comes in, they are going to hire Maine people. So the same people doing the job today, if they so desire, could be doing the job for this company. I just don’t understand what this whole hoopla is.”

DHHS officials awarded the bid to Fedcap in May after receiving two bids for the job. The department announced in January that it was seeking to hire a private contractor to run ASPIRE because the state was facing nearly $29 million in potential federal penalties for failing to meet requirements for the number of individuals who were placed in jobs, job training or other programs.

DHHS spokeswoman Samantha Edwards declined again this week to comment on the ASPIRE contract until the agreement with Fedcap has been finalized, likely within a month. Edwards referred back to the department’s statement in January about the shift that cited the need to bring the program into federal compliance and improve services to individuals on TANF.

But the state employee union and advocates for low-income Mainers have raised concerns about the move to privatize a service provided to individuals often struggling with disabilities or who do not have reliable transportation.


“Our primary concern … is are they going to be able to provide the services that are necessary?” said Chris Hastedt with Maine Equal Justice Partners. Hastedt said Fedcap’s proposal to the state raised some “red flags” with her organization. “We have provided our concerns to the department and have asked that those concerns be addressed in the final contract,” Hastedt said.

Fedcap’s application states that under the “Breaking the Cycle” program, caseworkers will either help place clients in jobs or direct them toward training, education or vocational programs “to assist people in obtaining their highest level of self-sufficiency.”

The application states that Fedcap already has made “cooperative arrangements with a number of partners around (Maine), several of whom have agreed to serve as job placement sites.”

In its Maine application, Fedcap draws comparisons between Maine’s ASPIRE program and a similar welfare-to-work program, known as WeCARE, that the nonprofit has operated in New York City for years.

“Much of the work performed at WeCARE is comparable to what is being requested in Maine,” the company stated. “Of our various practice areas – economic development, workforce development, education and occupational health – it is workforce development that makes Fedcap most qualified to assume responsibilities for ASPIRE in Maine.”

Greg Bass, a senior attorney at the National Center for Law and Economic Justice, said his organization has advocated for improvements to New York’s WeCARE program. Many individuals in these programs have multiple challenges to completing the necessary paperwork, traveling to appointments or holding jobs. Bass said the case management system in New York’s WeCARE system often has been ineffective in reaching out to these populations and making sure they receive the services they need.


“There has always been a consistently high dropout rate of folks who have been forced through the program,” Bass said.

Maine has failed to meet its federal benchmarks repeatedly in recent years because of the higher dropout rate or low “work participation” rates. The state met its work participation benchmark for all families in fiscal year 2014, but was still well below its goal for two-parent families, meaning the state was still liable to federal penalties.

Maine has never paid – and the federal government has never demanded payment of – those penalties. States can traditionally avoid payments by filing corrective action plans or showing improvement.

Welton, with the Maine State Employees Union, pointed to the recent compliance on the federal benchmark for families as proof that the current system is improving. She also pointed to past controversial outsourcing contracts at DHHS, most notably a contract to give rides to MaineCare patients who need to get to doctor appointments.

“Individuals all over the state were left without rides and were left stranded,” Welton said. “And this was another company coming in from out-of-state to provide services to Maine residents.”

LePage said the shift is aimed at increasing efficiency.

“The private sector creates jobs, they pay taxes,” LePage said. “Our responsibility as elected officials is to provide the most efficient, effective government at the lowest possible cost to the citizens of the state of Maine. And that’s what we are trying to do.”


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