MEETING SUMMARY
GOVERNOR'S WORKFORCE DEVELOPMENT COUNCIL (GWDC)
9:00 am to 12:00 pm
Friday, October 12, 2001
St. Paul Job Corps Center
Council Members Present:
LaDonna Boyd
Wendy Brower
Representative Karen Clark
Don Gerdesmeier
Representative Bob Gunther
Roger Hale
Mary Haug
Chuck Johnson for Michael O’Keefe
Senator Arlene Lesewski
David MacKenzie
Larry Mareck
Peter Michalowski
Michael Murphy for Jim McCormick
Willie Negaard
Bob Niemiec
Dan Smith for Christine Jax
Commissioner Earl Wilson
Commissioner Rebecca Yanisch
Guests:
Mick Coleman
Joe Crowe
Jean Dunn
Howard Glad
Lee Helgen
Kelly Keegan
Elin Malmquist Skinner
Tom Norman
Carrie Thomas
Jerry Vitzthum
Terry Zurn
Council Staff:
Viola Curtis
Libby Starling
Kathy Sweeney
Luke Weisberg
Roger Hale called the meeting to order
at 9:10am. Chairman Hale welcomed the Council members and guests present at
today’s meeting and welcomed Representative Bob Gunther as a new member to the
Council.
1. Review and Approval of
6/15/01 Council Meeting Minutes
Chairman Hale called for approval of the meeting minutes from the June 15, 2001 meeting. Bob Niemic made a correction to note that he attended the meeting and that the meeting was held at the Dept of Human Services. A motion was made, seconded, and passed approving the minutes as amended.
Roger noted that in previous communication we neglected to identify Rep. Bob Gunther as a member of the Transition Team and as a new member of the GWDC as of June. Roger also said that the Preeminence document has now been circulated widely to Local Workforce Councils, key legislators, field managers, and other stakeholders. It continues to get positive attention and seems to be a needed focus now for workforce stakeholders. Roger suggested that we will review at future meetings progress in promoting both the concept of preeminence and the details of the document.
Earl explained that there were hearings following September 11th in both Washington and in Minnesota. He noted that the September 11th event has had the positive effect of opening lines of communication and lots of discussion among agencies and political leadership.
Rebecca highlighted her testimony (which was included in the mailing), noting that between the state strike and the 9/11 tragedy, this has been a very challenging time. Rebecca talked about her experience having a “labor representative” with her at the Congressional hearings. This was a Northwest Airlines baggage handler named Carrie who really brought out her own story and the impact of being laid off. Rebecca noted that because of the personal face she was able to put on the story, Rebecca’s oral testimony ended up being different from their written remarks.
At the hearing, Commissioner Yanisch made a request for financial assistance from Congress. This was supported by Senators Wellstone and Dayton who are helping to shepherd our formal request to the Secretary of Labor Elaine Chao for $24 million in emergency grants from the Secretary’s emergency fund. Rebecca noted that only one state, New York, came in ahead of us in requesting support.
General economic picture from surveying shows that 2001 was a tough year…with things getting a little better until September 11th. Rebecca said there are 170,000 people working in the travel industry now in MN. The outlook for the next six months is fairly bleak. Earl noted that since 9/11, MDES has processed about 23,000 claims for unemployment insurance. He said about 10% of that is airline related and that while everyone is focused on Northwest Airlines, the ripple effect is tremendous. Earl said there is general agreement that we are now in a recession. There were $175 million more in UI benefits paid out this year from this time last year. He also noted that the state worker strike is delaying UI benefit payments by a few days.
Rep. Gunther noted that Northwest was having trouble filling seats before the disaster. Roger and others agreed that this was not the beginning of Northwest’s difficulties, just now an exacerbating factor. Rep. Gunther also said he was concerned that people applying for unemployment from the airlines would not get answers to questions from live human beings or be directed to other assistance. Is there a way to direct UI claimants to their local WorkForce Center? LaDonna replied that the metro area WorkForce Centers have joined together with MnSCU to set up a metro consortium specifically for airline-related dislocations. Michael Murphy suggested this was a similar, but improved, effort to past team efforts like between Hibbing and Superior College, and the NE Minnesota Jobs and Training Office around dislocations on the Iron Range. Michael said that there was a strong effort among local service providers, MnSCU, union and management leaders from the airline industry to coordinate their efforts. He also suggested that the volatility of the airline industry generally means that industry reps are somewhat familiar with efforts like this.
An Edina-based company, International Assessment Network, has come forward with an online assessment tool to be used by affected workers for the next month, and that such assessments will drive what kind of next employment and/or training opportunities are available to dislocated workers.
Tom Norman said he wanted to pledge the support and cooperation of the University of Minnesota in working with the airline industry consortium, and requested to be a participant in that effort.
There was additional conversation about where the economy was headed. Mary Haug noted that the recession was already felt in rural Minnesota and that it remained to be seen how the 9/11 events would impact Greater Minnesota. Roger said there was fairly strong economic theory that we were in kind of a lull before 9/11, that this terrible shock pushes us into a fairly short and sharp recession, and then we will move back to a strong economy. Rebecca said that Minnesota export statistics will be released next week and that the numbers may be strong.
Roger asked how and when we will learn about getting federal assistance in the wake of 9/11. Rebecca noted that there is $220 million in the Secretary’s Emergency Fund. New York is ahead of us with a $150 million request. It is expected that Washington State will follow closely behind us. Rebecca noted that being at the head of the line will certainly help us. She also explained that the money available now does not include money that is widely expected to be appropriated by Congress in the coming weeks. So, we imagine that we may get some or all of our request from the Secretary now and that there will be additional funding available later.
Senator Lesewski asked if a lot of the dislocated workers will get retraining, and if so, in what industries or jobs? Earl responded that in the Job Vacancy report for last quarter, 97,000 jobs were listed as unfilled, with a little over half those in the metro area. The issue here is the match. They can quickly determine from ISEEK and other tools, what skills they have and how those skills match to help them find a different job. Michael Murphy reiterated that this coordinated effort around the airline dislocation is a good template for expanding and replicating effort for future dislocations or workforce events.
Rebecca gave a brief update on the Transition Team’s work to date. She said that the team is still very much in “fact finding mode”, listening to presentations and discussing issues with no firm decisions made to date. She is hopeful that the next meeting will move the group more toward firm decisionmaking.
Willie added that there has been some tension between listening and information gathering and actually moving forward with a decisionmaking structure. He added that there has been a good deal of lobbying by stakeholders of the individual members of the Transition Team. His personal preference is to continue supporting more local control of resources and service delivery decisions. Bob Gunther added that there has been much discussion about what other states are doing and the general lack of buy-in or support by business for the public workforce system. Senator Lesewski reminded the group that we’ve made a lot of progress in developing our workforce system over the years and that we should take care to build on our strengths and not take steps backward with this reorganization effort. Both Willie and Bob agreed that the focus of this effort is to truly enhance our efforts in both workforce and economic development, not to eliminate our work or weaken our past successes.
Roger commented that a real challenge for the Transition Team is balancing the immediate needs presented by a recession from the long-term picture (out to 2005) that still suggests continuing labor shortages. Rebecca responded to say that the policies for long-term aren’t all that different from helping people now. The service is similar, but our challenge is to get a real state-level strategic focus.
Peter agreed saying that, in his own experience, he had 150 or so jobs that he could not fill. He is concerned that, state government can never make everyone happy and that we need to be careful what we’re basing our decisions on. We need to benchmark our successes and failures, make decisions based on those, and not try to make everyone happy. Senator Lesewski suggested that it would be useful to be able to see a chart of what each program is, and how it does, and then make decisions based on that kind of information.
Bob Niemiec asked about the timeline for the transition work, given that it got compressed given the special session by the Legislature. Roger asked Luke to remind the group of the timeline. Luke noted that the Transition Team still expects to finish in December, and that at their direction, staff are moving toward getting all the information gathered into a decision-making template and making sure that all the items that need discussion and action get covered.
Roger responded to Bob that there’s about a 2 or 3 year history of fact-finding efforts that, when lined up, show that we are not uncovering a lot of new issues. It is easiest to think of this of as the culmination of years of discussion and now we need to put into action. In that sense, the timeline is not so compressed. Roger noted that the Transition Team’s work is, ultimately, a recommendation to the Legislature and that a bill will need to be passed. Luke added that while there are structural decisions will get made through the Transition Team and the Legislature, there’s a big window for change through the rest of the implementation period. The work certainly does not end on Dec 1st.
Roger suggested the group move ahead on the agenda.
5. Selected Committee Updates
Sustaining and Enhancing the Workforce Committee
LaDonna reported that the Sustaining and Enhancing Workforce committee has been very active, going through a strategic mapping process, starting at the bottom and using a technique that focuses on actions and then leads to strategic direction. She noted that the committee is focusing on objectives 1 and 1.2 from Getting To Preeminence and expects to have some work completed for the full Council to review in the spring that speaks to our “productivity” outcome in Preeminence.
LaDonna also noted that her committee and Mary’s committee will likely share an oversight role on the McKnight grant-funded work.
Roger reported that the Executive Committee has met twice since June, focusing on the tasks given to us by the Legislature. One task is to complete a WorkForce Center Strategic Plan, another is to develop performance standards for the WorkForce Centers, and the third is to move forward with cross-appointments between the GWDC and the MN Job Skills Partnership Board. Both of the products (strategic plan and performance standards) are due January 15th. Luke added that we should have a final product for the full Council to review at the January 18th 2002 meeting.
Don Gerdesmeier reported on the ad hoc committee that is looking at a few specific policy and implementation issues regarding the federal Workforce Investment Act (WIA). Don referred the group to the handout in the packet summarizing the committee’s discussions and recommendations.
Don noted that there were two separate recommendations. The first has to do with looking at expanding the “subsequent eligibility” policy for training providers under WIA so that in Minnesota, we would require providers to be on the “eligible list” regardless of how they are paid for their work (WIA, state, or other federal funds).
Rebecca noted that when she was in Washington, there was reference to a recent report by the federal General Accounting Office (GAO) that looks at challenges in WIA implementation. One of the main points of the report is that we are challenged to attract more trainers to provide services under WIA.
Luke added that the issue at hand is that the process in place required to “certify” programs as eligible to be paid for with WIA funds may not be the right process. However, the concept behind it is a good one in that we probably want some process that creates a “guarantee” that any program that a potential trainee or incumbent worker might enroll in (with the support of public funds) is a good program. So, the recommendation is to consider expanding a policy to cover providers regardless of the funding stream that pays them would help us in terms of measuring outcomes and ensuring wide access to quality training.
Don reaffirmed that the Ad hoc committee ended up saying, this is a good idea, but lets find out what the specifics are before moving forward. As a Council, the GWDC would need to look at changing the process, perhaps setting some performance thresholds, and then expanding it to cover a broader array of potential programs.
Rep. Gunther suggested that this kind of certification would allow us to get at criticisms from previous reports about ineffectiveness and duplication, and reward those programs that are doing well. The net result will be more money spent in more efficient ways. He said that his objective with the Inventory of Employment and Training programs a few years back was to develop criteria that someone can judge or certify job training partners.
Don noted that this was the second recommendation of the Ad Hoc committee, to revisit the Inventory a.k.a., the Gunther Report, and update the information. Roger asked if an update should be less costly than originally compiling the information? Earl responded that the staff person who did the work is still in the agency and could probably be made available. He also added that to make it an effective piece of work, one would still want to put the same analysis into each program, but that since the framework is in place, it could be generally less costly and time consuming than the first effort.
Libby said that while the Gunther Report and the previous discussion about subsequent eligibility have different scope, it would certainly be valuable to update and/or expand the Gunther report. Earl suggested that he could bring back and estimate of the time and funding needed to complete that work.
Dan Smith noted that providing information for youth-related programs in the first iteration of the Gunther report was problematic because many programs have many objectives beyond workforce development. So, in providing data the first time, it looked as though many youth programs either did not provide data as requested, or that that the data were incomplete. He asked to please keep this in mind if the GWDC revises the report. Roger asked Dan for more ideas about how to better represent youth-related programs. Dan noted that the state would like to have better information about what kids do regarding work and education once they leave K-12, but that data collection, data privacy issues, and other issues may complicate that. Sandra Peterson said that this suggests there will certainly be costs to improving the data and we need to be mindful of what those costs are and who will pay for them.
Kathy noted that the original Gunther Report also had no information on programs serving employer customers and that we should consider adding that in as well. The Ad Hoc report also mentions better data on programs that serve people with disabilities. There were additional questions about what kind of employer programs. Members generally agreed that we should pursue an expanded and updated report.
Roger returned the Council to the first recommendation of the Ad Hoc group regarding an expanded certification policy. A motion was made and seconded to accept the recommendation and asked staff to move forward with it. Roger also noted that we will likely have WIA performance information for review and discussion by the time we meet in January 2002.
6. Review and Discussion of Dislocated Worker policy issues
Roger introduced the next item, Dislocated Worker Policy Issues, and referred members to the peach colored handout (Discussion Document: Minnesota’s Dislocated Worker Efforts). He emphasized that the goal of raising this was simply to get some broad opinion from the GWDC to, hopefully, inform discussions at the MN Job Skills Partnership Board (MJSPB). This has become a somewhat contentious issue for many Workforce Service Areas (WSAs) and Roger felt it might be helpful to have some input from the GWDC on these issues.
Rebecca called attention to the policy questions at the bottom of the handout and clarified that
small layoffs have been done by formula, sending a formula allotment to the WSAs. Since she has served as Chair of the Job Skills Partnership Board, Rebecca noted that a new process has been put in place. Since the August JSPB meeting, a decision was made to change the small layoff program so that 35% of funds will be allocated by formula to the WSAs. A decision was made to reserve 5% for special needs, and set aside 10% for small group layoffs, incensing more competition for some of the special services. So, we now have a separate pot of funding that the Local Workforce Councils can compete for, complementing the formula funds.
Bob Gunther gave some background, saying that the Legislature changed the allocation of state funds to create more flexibility. This was in response, in part, to about a one-third of the WSAs always running out of formula money during the fiscal year. Further, for smaller layoffs, many members of the Legislature felt there ought to be competition for delivering training to those workers. The goal was to put the most money we could out to train laid off employees.
Senator Lesewski asked how the competition had gone thus far. Commissioner Yanisch said that there had been three small competitive small layoff grants given, one each in a rural, urban, and suburban area. Arlene said that when you get in a rural area, you don’t have those kinds of competitive opportunities due to scarcity of potential service providers. She urged caution that we don’t introduce competition only to find that there are no competitors and so certain areas of the state lose out. Bob Gunther suggested that this balances out in the formula appropriations, where dollars are evenly distributed. Senator Lesewski said she was concerned also because there are so many layoffs in her district by firms that have less than 10 people.
Jerry Vitzthum suggested that the balance is really between competition and cooperation.
He said the concerns that the local boards have is that they support competition, and feel that local boards already effectively monitor competitive vendors, evaluate their work, and then make decisions. If they like the service being provided, they keep them, if they aren’t happy with the services, they replace them. This change moves that decisionmaking authority away from the local boards. Further, he explained that small layoffs are occurring very quickly, so the situation often ends up with customers showing up in WorkForce Centers seeking services, only to be told that they are to get services elsewhere from a vendor chosen by someone else. We’ve taken the choice away from the customer, whereas the intent is for workers to choose. Jerry reiterated that under the new system, there’s not a lot of choice.
Luke added that, in Jerry’s explanation the role of the Local Workforce Council is to support all program delivery in a given area, not just Dislocated Workers and that we need to distinguish between local councils around the state that provide many services directly, vs other local councils, where the relationship is really as a broker vendoring out services.
Jean Dunn noted that the idea of competition needs to be retained as the threat of competition makes folks more accountable for their work. She said the Teamsters Service Bureau works cooperatively with the WSAs all the time. This is not an either/or issue, its just about managing competition and quality. Tom Norman added that the universe of vendors often does not include many other potential competitors (like the University of MN) and asked if this was an opportunity to increase the number of competitors among education and possibly private-for-profit vendors?
Willie added that he feels we have sixteen very competent WSAs who can do this work, and that the current system requires more time for state staff to manage the competition. Why not simply return this to the WSAs? Arlene concurred, saying that the real issue is that decisions have to be made in a very timely way. She remains very concerned about small companies in this system. Rebecca noted that the Dislocated Worker group used to meet monthly, and are now meeting weekly to respond to requests.
Roger asked if the problem being addressed by the new system was that areas were running out of money, the formula allocation wasn’t right, or is it something bigger? Rebecca said it was primarily that there is greater demand and that the fed/state formula actually is about the same amount as last year. Unless $24M from federal request comes in, we will be unable to hand out a lot more to each WSA.
Roger reminded the group that a few years ago, the MN Chamber of Commerce objected to the Dislocated Worker Fund partly because they felt they had not benefited directly, but more so because money was being skimmed off for the General Fund. The revenue was earmarked for a specific purpose, but then taken away so the funds are not available for businesses and workers.
Don asked about the financial projections handed out. There was discussion about the projected downturn in dislocated worker revenue. Rebecca noted that another estimate will be done in November. Karen Clark added that historically, as the chief author of the original bill, there were months of public debate about the structure of the tax but that perhaps we need to revisit it. She remains very frustrated that we have had excess balances in the fund while at the same time people who needed the money weren’t getting it. She feels we need to revisit the tax and the way the services are delivered. Bob Gunther noted that although the revenue projection was down, it appeared as though there was a good deal of carryover funding for the current year.
Willie suggested we go back to the General Fund and get back funding that had been taken out in years past. Senator Lesewski said that while we can’t do that, we certainly can try to avoid skimming off more funds in the future. The dollars are collected to retrain dislocated workers and should do just that -- not allocate funds to the General Fund.
Roger noted that we had a productive discussion, but that there are obviously more issues to resolve. He suggested that perhaps he would put together a group of people, mostly from this group as well as the Job Skills Partnership Board to try to address this issue, to come up with a recommendation regarding this issue to pass along to the Job Skills Partnership Board. He believes that members have useful opinions and knowledge, and that perhaps a specific statement of what we believe can be prepared for the Governor. Roger suggested that this will come back at the January 2002 or a future meeting.
7. Update on Families Forward (McKnight grant)
Kathy handed out some material with background on the work, noting that the task in front of us now is to find “Community Coaches” to work with the grantees as part of the project. The material included a description of the role as well as an Executive Summary of the project. Kathy noted that there are 10 grantees, 4 of whom are Local Workforce Councils, one is a MnSCU campus, and others are community-based organizations. All have created partnerships to help working families advance up the career ladder.
Roger said he was passing the description along to some of his associates and urged members to do the same. If members have information or ideas to share, please talk with Kathy and Luke.
Roger reiterated that workforce development is a major issue for McKnight. At their August board meeting, Roger was an “outside guest” invited to speak about workforce issues. The Board then toured several grantee organizations. This was a first-time activity for the Board, apparently. So, he feels that this is a big focal point for them and repeated that it was significant that the GWDC was granted funds to help McKnight in this early stage of work in this area. This is a real strong opportunity to make this a very positive difference.
8. Announcements / New items for future meetings
Roger announced that the next full Council meeting will be January 18th 2002. We will likely have at least one and possibly two Executive Committee meetings before this to review the products due to the Legislature in January.
Other dates are the Spring Leadership Institute on April 10th and 11th, and full Council meetings on April 12th and July 12th. The meeting was adjourned at 11:45 am.