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California State officials who took over the Watts Health Foundation last year in response to the organization?s mismanagement and growing financial crisis, are now facing a potential labor relations crisis at the managed health-care company. 200 nurses, clinical assistants and clericals at the Foundation?s five clinics went out on a three-day strike yesterday, protesting a new contract proposal that would require the health care workers to make co-payments for their own medical care. State regulators insist that the concessions are necessary to save the 96,000 subscriber HMO which is currently struggling under a debt load of almost $60 million.