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HomeMy WebLinkAboutMINUTES - 06282011 - C.42PDF Return C. 42 To:Board of Supervisors From:Legislation Committee Date:June 28, 2011 Contra Costa County Subject:OPPOSE Unless Amended SB 776 (DeSaulnier): Local Workforce Investment Boards: Funding APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 06/28/2011 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Gayle B. Uilkema, District II Supervisor Mary N. Piepho, District III Supervisor Karen Mitchoff, District IV Supervisor Federal D. Glover, District V Supervisor Contact:Lara DeLaney, 925-335-1097 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: June 28, 2011 David Twa, BY:June McHuen , Deputy RECOMMENDATION(S): OPPOSE Unless Amended Senate Bill 776 (DeSaulnier): Local Workforce Investment Boards: Funding, a bill that requires local workforce investment boards to spend a certain percent of available federal funds for adults and dislocated workers on direct client services, workforce training programs, and supportive services, as recommended by the Legislation Committee. FISCAL IMPACT: This bill would have the following fiscal impacts on Contra Costa County's Workforce Investment Boards: FISCAL IMPACT: (CONT'D) 1. Require that at least 50 percent of funds provided to Local Workforce Investment Boards (LWIBs) for adults and dislocated workers under federal Workforce Investment Act funding be spent on workforce training programs and supportive services for persons enrolled in training, as specified. 2. Require that at least 75 percent of funds provided to LWIBs for adults and dislocated workers be spent on direct client services, as defined. Direct client services includes core, intensive and training services. BACKGROUND: Summary: SB 776 requires local workforce investment boards to spend a certain percent of available federal funds for adults and dislocated workers on direct client services, workforce training programs, and supportive services in a manner consistent with federal law. Specifically, SB 776 would: 1. Require that at least 50 percent of funds provided to Local Workforce Investment Boards (LWIBS) for adults and dislocated workers under WIA be spent on workforce training programs and supportive services for persons enrolled in training, as specified. 2. Require that at least 75 percent of funds provided to LWIBs for adults and dislocated workers be spent on direct client services, as defined. Direct client services includes core, intensive and training services. ARGUMENTS IN SUPPORT: According to the author, with declining state revenues and pressure on public resources it is crucial that every dollar of federal workforce funds are invested in high quality employment services that connect workers to good jobs. The author argues that despite the need for targeted and effective training, Employment Development Department data has shown that LWIBs spend very little of our local WIA funds on skills training. According to the author, on average, LWIBs in California invest just 20 percent of their federal funds on training services and a third spend less than 11 percent on training, while many invest nothing. According to the author, federal law provides states with significant latitude to adjust WIA and align it with a broader economic vision, something California has failed to take advantage of. Proponents argue that a vast majority of funds are going to support relatively less effective short-term "core" services (such as job search assistance) provided through a costly network of nearly 150 comprehensive One- Stop centers. The author and proponents believe that this bill is the first step in re-evaluating how these dollars are spent and ensuring that more money is invested in training programs that are effective and align with a the State plan for economic growth. In addition, proponents argue that the objective behind this bill is not to displace anyone that might be currently providing job services through the One-Stop Centers, but instead redirecting our overall efforts toward more effective training programs that result in permanent jobs for all displaced workers. In addition, proponents argue that other states like Florida, Illinois, Michigan and Wisconsin have all adopted policies that help drive more local WIA funds towards training. According to proponents, Florida already requires that WIBs spend at least 50 percent of their WIA funds on training. Proponents also argue that many will need a skilled workforce to replace the retiring baby boomer generation and to meet the demands of new emerging industries. This bill increases the share of local WIA resources that are committed to providing effective, longer-term job training. Proponents believe that this bill is yet another step toward ensuring that public dollars are spent appropriately and that more individuals are trained for these jobs. ARGUMENTS IN OPPOSITION: According to opponents, if passed, this bill closes career centers throughout the state, returns the public workforce system to an antiquated model of funding streams, and limits much needed services to job seekers and businesses during this recession. Opponents believe that this bill interferes with core tenants of the legislation, namely, local control and individual empowerment. Opponents argue that by imposing a 50 percent training threshold, this bill: 1. Forces the closure of one-stop career centers, at a time when California's unemployment rate exceeds 12 percent. 2. Likely results in putting fewer people into training to meet the training threshold. 3. Excludes the most vulnerable populations, including homeless, at risk youth, and others who can't afford to be in training. 4. Usurps the authority of the local workforce investment boards to set policy within their local areas. 5. Eliminates much needed career counseling and job search assistance. 6. Impedes the ability of the local boards to support the delivery of an array of services needed by area residents as identified in their local plans. 7. Interferes with the ability of the boards to meet the mandated requirement to establish and ensure the operation of a one-stop service delivery system. 8. Limits the ability to leverage multiple funding sources. STATUS: 02/18/2011 INTRODUCED. 03/10/2011 To SENATE Committee on LABOR AND INDUSTRIAL RELATIONS. 04/27/2011 From SENATE Committee on LABOR AND INDUSTRIAL RELATIONS: Do pass to Committee on APPROPRIATIONS. 05/09/2011 In SENATE Committee on APPROPRIATIONS: To Suspense File. 05/26/2011 From SENATE Committee on APPROPRIATIONS: Do pass. 05/27/2011 In SENATE. Read second time. To third reading. 06/01/2011 In SENATE. Read third time. Passed SENATE. *****To ASSEMBLY. 06/09/2011 To ASSEMBLY Committee on LABOR AND EMPLOYMENT. HEARING: 06/22/2011 1:30 pm, Room 447 The California Workforce Association has proposed amendments to the bill that staff understands have yet to be responded to either by the sponsors or the author’s office. In taking the lead from our state association, the Contra Costa WDB would support the attached amendments if they were accepted. CONSEQUENCE OF NEGATIVE ACTION: The County would not be on record opposing this bill. CHILDREN'S IMPACT STATEMENT: None. AgendaQuick©2005 - 2021 Destiny Software Inc., All Rights Reserved SENATE BILL No. 776 Introduced by Senator DeSaulnier February 18, 2011 An act to add Section 14211 to the Unemployment Insurance Code, relating to workforce development. legislative counsel’s digest SB 776, as introduced, DeSaulnier. Local workforce investment boards: funding. The federal Workforce Investment Act of 1998 provides for workforce investment activities, including activities in which states may participate. Existing law establishes the California Workforce Investment Board (CWIB), and specifies that the CWIB is responsible for assisting the Governor in the development, oversight, and continuous improvement of California’s workforce investment system. Existing law contains various programs for job training and employment investment, including work incentive programs, as specified, and establishes local workforce investment boards to perform various duties related to the implementation and coordination of local workforce investment activities. This bill would require local workforce investment boards to spend a certain percent of available federal funds for adults and dislocated workers on direct client services, workforce training programs, and supportive services in a manner consistent with federal law, as prescribed. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. 99 The people of the State of California do enact as follows: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 SECTION 1. Section 14211 is added to the Unemployment Insurance Code, to read: 14211. (a)  At least 75 percent of funds available under Title I of the federal Workforce Investment Act of 1998 provided to local workforce investment boards for adults and dislocated workers shall be spent on direct client services, as defined in Sections 2864(d)(2), 2864(d)(3)(C), and 2864(d)(4)(D) of Title 29 of the United States Code. Available funds include all annually allocated moneys plus any unspent funds carried over from prior years. (b)  (1)  At least 50 percent of funds available under Title I of the federal Workforce Investment Act of 1998 provided to local workforce investment boards for adults and dislocated workers shall be spent on workforce training programs and supportive services for persons enrolled in training. Only expenditures on those programs and services defined as training services under Section 2864(d)(4)(D) of Title 29 of the United States Code and Section 663.508 of Title 20 of the Code of Federal Regulations and supportive services defined in Sections 2801(46) and 2864(e)(2)-(3) of Title 29 of the United States Code, and provided in accordance with the relevant federal regulations (20 C.F.R. 663.800 to 20 C.F.R. 663.840, inclusive), shall count toward this minimum. Supportive services shall count toward this minimum only if the individuals receiving these services are enrolled in training or qualify under Section 663.830 of Title 20 of the Code of Federal Regulations. Available funds include all annually allocated moneys plus any unspent funds carried over from prior years. (2)  Services defined as intensive services under Section 2964(d)(3)(C) of Title 29 of the United States Code and Section 663.200 of Title 20 of the Code of Federal Regulations and other applicable regulations, shall not be counted toward the minimum training expenditure. Supportive services as defined in Sections 2801(46) and 2864(e)(2)-(3) of Title 29 of the United States Code, and provided in accordance with relevant federal regulations (20 C.F.R. 663.800 to 20 C.F.R. 663.840, inclusive), to persons receiving intensive services shall count toward the mandatory training minimum only if the individuals receiving these services 99 — 2 —SB 776 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 are also enrolled in training as defined in Sections 2864(d)(4)(D) of Title 29 of the United States Code and 663.508 of Title 20 of the Code of Federal Regulations or who qualify under 663.830 of Title 20 of the Code of Federal Regulations. (3)  Services defined as core services under Section 2864(d)(2) of Title 29 of the United States Code and Section 663.150 or 663.165 of Title 20 of the Code of Federal Regulations and other applicable regulations shall not be counted toward the minimum training expenditures. Supportive services, as defined by Section 2801(46) and 2864(e)(2)-(3) of Title 29 of the United States Code and provided in accordance with relevant federal regulations (20 C.F.R. 663.800 to 20 C.F.R. 663.840, inclusive) to persons receiving core services shall count toward the mandatory training minimum only if the individuals receiving these services are also enrolled in training as defined in Section 2864(d)(4)(D) of Title 29 of the United States Code and 663.508 of Title 20 of the Code of Federal Regulations or who qualify under 663.830 of Title 20 of the Code of Federal Regulations. O 99 SB 776— 3 — BACKGROUND Senator DeSaulnier introduced S.B. 776 on February 18, 2011 with the backing of the California Federation of Labor, the California Building and Construction Trades Council, and the California Manufacturers and Technology Association. If enacted into law by the Legislature and the Governor,1 S.B. 776 will dictate that each Local Workforce Investment Area in California: Expend at least 75% of its available formula Workforce Investment Act (WIA) Adult and Dislocated Worker funds on direct client services as defined in WIA Section 2864 Expend at least 50% of its available formula Workforce Investment Act (WIA) Adult and Dislocated Worker funds on workforce training programs as defined in WIA Section 2864, and on supportive services for persons enrolled in training2 Available funds include all annual allocations and any carry-over/savings from the previous year. Training consists of the following: Occupational Skills Training On-the-Job Training Workplace Training in combination with Related Instruction, which may include Cooperative Education Private Sector Operated/Provided Training Skills Upgrading and Retraining Entrepreneurial Training Customized Training conducted with a commitment by an employer or group of employers to employ an individual upon successful completion of training Adult Education and Literacy in combination with any of the aforementioned training methodologies CURRENT STATUS On April 27, 2011, the Senate Labor and Industrial Relations (L&IR) Committee approved S.B. 776 by a vote of 6-0, and the Senate Appropriations Committee approved it on May 26, 2011. The bill was voted out of the full Senate by a 34-3 vote on June 1, 2011. ANTICIPATED LOCAL IMPACT On the face of things, SB 776 has the very laudable goal of stipulating that local workforce investment boards maximize their available funding to provide quality job training to unemployed individuals. However, there are several problems with the approach outlined in the bill as currently written, as it will require dramatic shifts in how the WDB allocates its resources to serve the more than 30,000 residents who utilize the local public workforce system annually. Specifically, in Contra Costa County, SB 776 could: Require the WDB to consolidate one or more of our four EASTBAY Works One-Stop Career Centers (current locations are in San Pablo, Concord, Antioch, and Brentwood) during a period of sustained high unemployment; 1 Senator DeSaulnier is attempting to add the provisions of S.B. 776 to the Unemployment Insurance Code as Section 14211. 2 Similar WIA training expenditure requirements for Local Workforce Investment Areas have been adopted in Florida, Illinois, Kansas, Wisconsin, and other states. Significantly reduce the level and scope of career counseling and job search assistance resources available to job seekers; Hinder the WDB’s ability and flexibility to meet the needs of our local area to get people back to work by setting up a system that requires investment in training over other services; Unintentionally inflate per capita expenditures on training to meet higher training expenditure thresholds; Reduce the ability of the WDB to leverage other funding sources (including funding for training) that supports the local public workforce system With more than four job seekers for every one job opening in the current labor market, it is a risky assumption that additional investment of dollars into training as proposed under SB 776 will actually result in more people finding good jobs at good wages. Over the past couple of years, the WDB has invested between 10-20% of its available budget into training, but more than 50% of the people that it enrolled into WIA services actually participated in training. One of the reasons for this is that the WDB has successfully leveraged other funding sources to pay for the costs of training, such as a $1 million grant received by the Contra Costa Community College District to train 180 people in “green” jobs, as well as a $10,000 per person Trade Adjustment Act (TAA) limit accessible to all 324 Contra Costa County residents who lost their jobs as a result of the NUMMI plant closure in April 2010. Moreover, despite what some may see as a relatively low percentage of funds being invested into training, the WDB stands very proud of its track record with placement wages, as depicted in the chart below. WIA Customer Placements $18.33 $12.17 $17.43 $17.92 $16.37 $11.89 $13.41 $14.87 $20.99$17.58$20.32 $20.04 $16.72 $21.48 $18.98 $23.94 Q3 08-09 Q4 08-09 Q1 09-10 Q2 09-10 Q3 09-10 Q4 09-10 Q1 10-11 Q2 10-11 Quarter & Fiscal YearAverage Hourly Wage$0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 Adult Dislocated Worker The membership of the Workforce Development Board of Contra Costa County is in the best position to know the local environment to determine how to best balance its allocation of resources to meet local needs; by imposing a uniform requirement across California around how local workforce boards invest their limited funds, SB 776 eliminates the WDB’s ability to adjust the allocation of resources at the local level. RECOMMENDATION It is recommended that the Contra Costa County Board of Supervisors adopt an “oppose” position to SB 776. Per the attached, the California State Association of Counties (CSAC) has adopted this position in a letter dated June 10, 2011. DRAFT DRAFT DRAFT DRAFT DRAFT DRAFT BILL NUMBER: SB 776 INTRODUCED BILL TEXT INTRODUCED BY Senator DeSaulnier FEBRUARY 18, 2011 An act to add Section 14211 to the Unemployment Insurance Code,relating to workforce development. LEGISLATIVE COUNSEL'S DIGEST SB 776, as introduced, DeSaulnier. Local workforce investment boards: funding. The federal Workforce Investment Act of 1998 provides for workforce investment activities, including activities in which states may participate. Existing law establishes the California Workforce Investment Board (CWIB), and specifies that the CWIB is responsible for assisting the Governor in the development, oversight, and continuous improvement of California's workforce investment system. Existing law contains various programs for job training and employment investment, including work incentive programs, as specified, and establishes local workforce investment boards to perform various duties related to the implementation and coordination of local workforce investment activities. This bill would require Local Workforce Investment Boards to negotiate a job training expenditure percentage with the California Workforce Investment Board. local workforce investment boards to spend Training percentages would be negotiated between Local Workforce Investment Boards and the State Workforce Investment Board each year through the Local planning process. In determining training thresholds, Local Workforce Investment Boards would have to demonstrate that their percentages were based on local labor market demand. a certain percent of available federal funds for adults and dislocated workers on direct client services, workforce training programs, and supportive services in a manner consistent with federal law, as prescribed. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 14211 is added to the Unemployment Insurance Code, to read: 14211. (a) At least 75 percent of funds available under Title I of the federal Workforce Investment Act of 1998 provided to local workforce investment boards for adults and dislocated workers shall be spent on direct client services, as defined in Sections 2864(d) (2), 2864(d)(3)(C), and 2864(d)(4)(D) of Title 29 of the United States Code. Available funds include all annually allocated moneys plus any unspent funds carried over from prior years. (b) (1) At least 50 percent of It is the intent of the legislature that the fnumber of Californians entering workforce training programs unds available under Title I of increase and that Local Workforce Investment Boards meet minimum expenditure percentages to assist in meeting this goal. Training percentages shall be negotiated between Local Workforce Investment Boards and the State Workforce Investment Board each year through the Local Workforce Investment Board planning process. In determining training thresholds, Local Workforce Investment Boards shall demonstrate that their percentages are based on local labor market demand. the federal Workforce Investment Act of 1998 provided to local workforce investment boards for adults and dislocated workers shall be spent on workforce training programs and supportive services for persons enrolled in training increase. . The negotiated percentage may include leveraged funds from other One-Stop Career Center and community partners, including local, State, federal, philanthropic, and other funding sources. Section 134 (4) (B) of the Workforce Investment Act requires other funding sources to be used for training prior to using Workforce Investment Act funds: Qualification.--(i) Requirement.--Except as provided in clause (ii)provision of such training services shall be limited to individuals who-- (I) are unable to obtain other grant assistance for such services, including Federal Pell Grants established under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.); or (II) require assistance beyond the assistance made available under other grant assistance programs, including Federal Pell Grants. (ii) Reimbursements.--Training services may be provided under this paragraph to an individual who otherwise meets the requirements of this paragraph while an application for a Federal Pell Grant is pending, except that if such individual is subsequently awarded a Federal Pell Grant, appropriate reimbursement shall be made to the local area from such Federal Pell Grant. Only expenditures on those programs and services defined as training services under Section 2864(d)(4)(D) of Title 29 of the United States Code and Section 663.508 of Title 20 of the Code of Federal Regulations and supportive services defined in Sections 2801(46) and 2864(e)(2)-(3) of Title 29 of the United States Code, and provided in accordance with the relevant federal regulations (20 C.F.R. 663.800 to 20 C.F.R. 663.840, inclusive), shall count toward this minimum.Training services shall include: occupational classroom training through Individual Training Accounts; Occupational classroom training, other than ITAs, including contracted training; academic remediation and pre-vocational services; books, materials and related expenses; customized training; on-the-job training, participant support, such as transportation, child care, tutoring, and mentoring, including support services to customers whose training is paid for with non-WIA funds, including Pell Grants; incumbent worker training; work experience;, including internships, and occupational bridge programs, which are training programs that blend workplace competencies, career exploration, and adult education, including basic literacy and math skills in an occupational context. The State shall provide technical assistance to Local Workforce Investment Boards to assist them in meeting their negotiated training percentages. If Local Workforce Investment Boards do not meet the minimum negotiated training requirement, the State shall work with those Boards to develop corrective action plans. The State shall provide data fields to collect information on training expenditures from multiple funding sources. Supportive services shall count toward this minimum only if the individuals receiving these services are enrolled in training or qualify under Section 663.830 of Title 20 of the Code of Federal Regulations. Available funds include all annually allocated moneys plus any unspent funds carried over from prior years. (2) Services defined as intensive services under Section 2964(d) (3)(C) of Title 29 of the United States Code and Section 663.200 of Title 20 of the Code of Federal Regulations and other applicable regulations, shall not be counted toward the minimum training expenditure. Supportive services as defined in Sections 2801(46) and 2864(e)(2)-(3) of Title 29 of the United States Code, and provided in accordance with relevant federal regulations (20 C.F.R. 663.800 to 20 C.F.R. 663.840, inclusive), to persons receiving intensive services shall count toward the mandatory training minimum only if the individuals receiving these services are also enrolled in training as defined in Sections 2864(d)(4)(D) of Title 29 of the United States Code and 663.508 of Title 20 of the Code of Federal Regulations or who qualify under 663.830 of Title 20 of the Code of Federal Regulations. (3) Services defined as core services under Section 2864(d)(2) of Title 29 of the United States Code and Section 663.150 or 663.165 of Title 20 of the Code of Federal Regulations and other applicable regulations shall not be counted toward the minimum training expenditures. Supportive services, as defined by Section 2801(46) and2864(e)(2)-(3) of Title 29 of the United States Code and provided iaccordance with relevant federal regulations (20 C.F.R. 663.800 to 20 C.F.R. 663.840, inclusive) to persons receiving core services shall count toward the mandatory training minimum only if the individuals receiving these services are also enrolled in training as defined in Section 2864(d)(4)(D) of Title 29 of the United States Code and 663.508 of Title 20 of the Code of Federal Regulations or who qualify under 663.830 of Title 20 of the Code of Federal Regulations.