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ECONOMIC DEVELOPMENT & BUSINESS RETENTION COMMITTEE

April 8, 2002 - 10:30 a.m.  - 3:00 p.m.

MINUTES

Committee Members Present: Chair Scott Mendenhall, Jim Davison, Becky Erickson, Diane Ruff

Committee Members Absent: Webb Brown

Ad Hoc Members Present: Sheila Matt, Virginia Sloan, Dianne Lehm, Linda Beck, John Kramer, Evan Barrett, Scott Rickard, Tom Yoder

Staff Present: Desiree Taggart, Emily Haines

Guests Present: Mary Walsh, Kelly Chapman, Mark Bowlds, Ingrid Childress, Phil Brooks, Kathy Yankoff, Sue Mohr

I. Introduction of Members - At 10:30 a.m. Chair Scott Mendenhall welcomed everyone and invited committee members and guests to introduce themselves. 

II. Goals and Action Plans 2002 - Chair Scott Mendenhall reviewed the draft Governor's Workforce Board goals and asked for comments.  The following were the comments by the members and ad-hoc representatives.

• The board needs to focus on bringing Montanan's back to the state
• A suggestion to change bullet item two so that it encompasses skilled workers as well as educated ones. 
• Identify additional workforce funds and streams for recruitment and retention is important (these should be tied to specific wages and strategies).

Evan Barrett explained that the money Montana currently receives for recruitment and retention is federal and therefore does not give Montana an edge over other states.  He cautioned that use of the CDBG money limits the amount available to expand and support infrastructure needed for business.  Evan suggested that the committee find a way to identify other funding sources for Montana to utilize to train its workforce (other than federal funds).

John Kramer explained that these same issues have been discussed in many other states as well. Montana needs to help companies that bring wealth into the state (base industry/base business).  He explained that Montana does not have high paying jobs because there is a lack of base industry. Base industry expands business by 10%. John suggested that Montana implement a tax increment program  --off of the wages of trained employees to pay for training. He explained the tax increment as follows:

A base business commits in contract to provide X number of jobs at X wages

Training is paid for employees in committed positions

For the positions committed the increased income taxes are captured until the training debt is repaid or 10 years has passed. (Training is usually repaid in 5-7 years)

John added that Iowa developed the tax increment in 1984 and that North Dakota, Kansas, Nebraska, and Illinois are using it.  It was decided that staff would draft a position paper to present to the full board for recommendation to the Governor.

Virginia Sloan explained that the Flathead area has talked a lot about training issues and concluded that training and services need to be offered to all businesses, not just those that are in trouble.

III. Labor Studies - The committee discussed possible labor studies presented by John Kramer.

Items Discussed/Decisions

Cost Comparison and Employer Studies as defined in the hand out provided are the most important/urgent.  The labor availability studies should be conducted through telephone surveys with a statistically valid sample of individuals in zip codes.  Concern was expressed over how to accurately survey the reservations since many of the residents do not have telephones. Suggestions included physical studies (mailing).

It was noted that 80% of companies to relocate or expand are based on labor availability. The labor availability study is good for 1 year to 18 months and measures real labor availability and under employment.  The state could require that companies that use the data pay a fee to help pay for the costs.  It was also suggested that if implemented, a percentage of the tax increment funds could be used to update the statewide studies.

Chair Scott Mendenhall asked for a motion to fund a first year Labor Availability study if it will cost $75,000 or less.  Jim Davison so motioned and it was seconded.  The motion was carried uncontested.

Staff will report to the committee on the cost of the following studies at the next committee meeting:

• Workforce Forecast
• Workforce Leakage
• Cost Comparison Study
• Employer Study

It was decided that a state staffed sub-committee that will:

1. Recommend regional breakouts if studies are done by region
2. Assess a delivery mechanism to get data to local communities
3. Recommend a dollar amount for tax increment funding (maybe look at the last five years)
4. Funding Proposal
5. Time frame agreement for labor studies

IV. Layoff Aversion Strategies - Committee discussed various strategies in place in Montana and other states.Desiree will invite someone to speak about the last pre-feasability study that was done a few years ago. She will also report to the committee on the linkages in place in other states and how they are being used.

V. Workforce 20/20 - Jim Davison motioned to support the Workforce 20/20 efforts that the Governor's Economic Opportunity Office is currently supporting by trying to find funds to expand the project statewide.  The motion was seconded and was passed uncontested.

VI. Call to the Public - Chair Scott Mendenhall asked for comments from the public.  Ingrid Childress, Workforce Services Division, expressed her gratitude to the committee for their efforts.  Sue Mohr, Montana Job Training Partnership Incorporated, stated that as staff to both of the local workforce investment boards they are also interested and supportive of the committee's efforts in workforce development.

VII. Establish Next Meeting Date - Tuesday, May 14, 2002 from 10:30 AM to 3:00 PM.  A tentative meeting was scheduled for June 19, 2002

VIII. Adjourn - Meeting adjourned by Chair Scott Mendenhall at 3:05 PM