Salt Lake County looking again to ‘Pay for Success’ (The Salt Lake Tribune)

By Mike Gorrell

Salt Lake County’s initial experience with "Pay for Success" has done well enough that council members are willing — with some reservations — to try it again.

On a 6-2 vote last week, the County Council approved Mayor Ben McAdams’ request to advance $150,000 from next year’s regional-development budget to hire a consultant, Third Sector Capital Partners, to help identify an area in which upfront spending now could save much more money over the long term.

Unlike the first go-round, when the effort focused from the get-go on beefing up preschool education in low-income Granite School District communities, this latest effort has not yet pinpointed a cause or two to underwrite.

The consultant will help the county do that and will lobby corporations and nonprofit organizations for the financial support to actually kick-start whatever programs are identified — and approved by the council.

"When I was elected, I pledged that wherever Salt Lake County functions didn’t match the reality of the world, we’ll change," said McAdams, describing why he believes "Pay for Success" is breaking ground on a new way of addressing ongoing problems — such as the revolving door of inmates returning to jail over and over again.

Through "Pay for Success," a private company and/or a nonprofit puts up the money to get a program running. A set number of years down the road, if the program’s results match expectations laid out in a contract with the county, then taxpayer funds will be expended to cover those private/nonprofit outlays.

If the results fall short, no tax moneys are forwarded. The private investors bear the cost, McAdams explained.

"We’ll be strict about what we expect to get out of it," he said. "This provides better accountability for use of taxpayer dollars."

Last year, Goldman Sachs and investor J.B. Pritzker loaned $1 million to United Way of Salt Lake to expand preschool programs for 600 disadvantaged kids. The idea is that educational benefits growing out of preschool programs make kids less likely to get into trouble later on, increasing county costs for criminal justice and behavioral health services.

The 3-year-olds who started the program last fall had their reading, writing and arithmetic abilities tested. They will be tested again when they are third-graders. If their scores keep pace with the general population, the county will repay the private/nonprofit investors.

In the second round, the consultant would pore through the county budget and help the administration identify areas where comparable hopes and expectations could be dealt with. While several possibilities exist, McAdams said, addressing jail recidivism is clearly a high-profile option.

Outgoing Democratic Councilman Randy Horiuchi concurred, calling the jail "a black hole for the last 20 years … where we’ve been spending good money after bad people. ... [This approach] would provide year-in and year-out savings. It’s probably worth the risk. In my mind it’s a pretty good way to do government."

Added Republican Councilwoman Aimee Winder Newton: "I love when government can be innovative and can work with the private sector to make our programs even better."

But two of her GOP colleagues, Richard Snelgrove and Steve DeBry, had reservations about committing county money to the program.

Snelgrove questioned the need to hire a consultant, arguing county officials know their programs better than anyone and already get paid to run those operations.

"I have confidence in your abilities, but here we’re hiring a consultant to achieve additional efficiencies," he said. "Isn’t that what we’re paying you to do?"

Added DeBry: "It’s a cart-before-the-horse concept for me, reallocating money from current programs in hopes of better outcomes. Taxpayers should know more about that before going ahead."

Deputy Mayor Nichole Dunn responded that the consultant is critical to attracting outside money. In addition, an outside evaluator (usually a university professor versed in the subject matter) is needed to gauge whether the programs meet expectations.

While DeBry and Snelgrove voted against the expenditure, they vowed to back the effort.

mikeg@sltrib.com  Twitter: @sltribmikeg