April 25, 2012
Ralph J. Ciallella, Administrator
County of Essex
Hall of Records
465 Dr. Martin Luther King Blvd, Room 510
Newark, NJ, 07102
Re: Proposed Contract with Janus Solutions
Dear Mr. Ciallella:
As you and I discussed during our brief impromptu meeting within the hallway of the Hall of Records on April 19, 2012, CWA Local 1081 charily checked the proposed contract between the Essex County Division of Welfare and Janus Solutions the Administration has requested the Board of Chosen Freeholders approve this evening. The proposed pact is in the amount of $75,000 for Janus to examine areas of alleged deficiencies within our agency and to develop an action plan for the remediation of operational issues.
Based upon what our Union could glean from the attached financial documents contained within the considered contract, as prepared by LFL Veritas, LLC on behalf of Janus Solutions, we proffer our following observations:
1. The financials were for 2010 and 2009. They are over fifteen months old and, therefore, dated. There can have been significant changes since 2010.
2. There was a significant change in the business and the strength of the balance sheet from 2009 to 2010.
3. The company had a net loss of $191,000 in 2010 versus $59,000 in 2009. The important factor was that operations expended $80,000 in cash in 2010 versus providing $1,000 of positive cash in 2009.
4. The company borrowed an additional $157,000 in 2010. What is interesting is that $26,000 in 2010 was lent by the company to its shareholders and that an additional $44,000 from the loan proceeds were used to purchase an automobile.
5. The additional debt in 2010 reduced the debt to equity ratio (a measure of a company’s fiscal health) from 1.09 in 2009 to almost nil since the company only had $3,000 of equity (net worth). A sign of a healthy company is a debt to equity ratio greater than 1.20.
6. The equity of the company in 2010 can be considered a deficit of $44,000 if the $3,000 of equity is reduced by the $47,000 in loans owed by the shareholders to the company.
Our above cited recounting of the reported financials of Janus Solutions may well in no manner impact upon their ability to satisfactorily "examine the areas of deficiencies" reportedly cited by the New Jersey Department of Human Services, Division of Family Development "and issue a report outlining recommendations for remediation".
Operational deficiencies within the Essex County Division of Welfare have long been reported by CWA Local 1081 within a slew of grievances we have submitted to agency management and within letters our Union has written the Administration, the Board of Chosen Freeholders and the State of New Jersey. Supporting our lamentable line of argument is the just-released New Jersey Kids Count 2012 which starkly reveals that in 2010 nearly one in three New Jersey children -- 619,000 -- lived in families that earn too little to meet their basic needs, representing a fourteen percent increase since 2006. During roughly the same time, New Jersey households without enough food rose an alarming fifty-six percent coupled with a steep seventy-six percent jump in the number of children receiving food stamps.
As you are aware, one of every five residents in Essex County receives some form of assistance from the Essex County Division of Welfare resulting in our agency's protracted regrettable reign as the largest county provider of public social services within all of the State of New Jersey and the eighth-largest such entity within the entire nation.
Undaunted, CWA Local 1081 reiterates our desire stated to you we be appointed to "the small Steering Committee" Janus proposes to form "to oversee the consultation". Inasmuch as "the committee would represent the various organizational areas that represent the Division of Welfare staff members responsible for the service delivery system", the fact that CWA Local 1081 represents the vast majority of the employees of the Division of Welfare serves our Union substantial standing. Our Union's perennial appointment as a member of both the county's Workforce Investment Board (WIB) and its One Stop Partners Committee, combined with the consummately constructive component we have played within both, only serves to support our standing.
Sincerely,
David H. Weiner, President
CWA Local 1081