Governor's Workforce Investment Board

ECONOMIC DEVELOPMENT & BUSINESS RETENTION

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

Staff Present: Desiree Taggart, Emily Haines

Guests Present: Mary Walsh, Connie Kinsey, Sue Mohr, Jay Reardon, Ingrid Childress, Gary Warren, Gordy Higgins

I. Roll Call - Chair Scott Mendenhall called the meeting to order at 9:40 AM. Role call was taken and a quorum was established.

II. Review and Approval Minutes - Following corrections to the minutes, it was moved and seconded to approve the minutes of the 5/14/02 meeting. Motion passed.

III. Update from the Governor's Office on Economic Opportunity

Dave Gibson, Chief Business Officer, for the Office of Economic Opportunity provided the committee with an update of the information he shared with the Legislative Economic Affairs Interim Committee. He outlined areas for possible legislation which included: 1) creation of an incumbent worker training program and creation of a funding stream to create new jobs and fund the program; 2) creation of a funding source similar to the bonding method used by North Dakota, which uses tax revenues created by new jobs to pay bonds; 3) growing Montana's distance learning system through the university system to increase student participation world wide without a great deal of cost. This program would include the two-year and four-year schools. He indicated that this last proposal may or may not require legislation and that this proposal will be presented to the Board of Regents at their November meeting.

Dave reported on the status of the Cluster study, which is being conducted for Montana by RTS. Results of the cluster analysis should be available January 2003. Once Montana's basic cluster industries are identified, our next steps will be to identify tools; examine the potential; start aligning programs; develop methodology; identify additional funds and implement. Primary industry involvement is important to help design and drive the cluster approach to economic development. This is a long-term effort (over several years). Scott Mendenhall suggested inviting potential funders (business, education, legislators, etc.) to RTS's final presentation to increase the awareness of the cluster-based approach.

IV. Status of UI Trust Fund. Ingrid Childress, Administrator of the Workforce Services Division, provided information in response to questions that had been asked previously about using a portion of the UI trust fund for programs. Ingrid reported that the trust fund was healthy due to the tax structure implemented by the state legislature in the 1980's. However, any further diversion of employer taxes from the trust fund for the purpose of funding programs would probably lead to a class rate increase for at least some of Montana's employers. Ingrid reported that a random sampling of employers showed that a $12 million diversion would trigger a rate class increase for all sampled employers and a $4 million diversion would trigger a rate class increase for a third of the sampled employers.

V. Tax Increment Data. Gordy Higgins, Chief of the Job Service Programs Bureau presented some information on tax increment systems.

A discussion was held regarding many of the decisions which will need to be made when/if Montana moves forward with a tax increment system, including what types of potential jobs, wages or special projects would be allowed.

Action: A motion was made by Jim Davison and seconded to set the wage rate based on the Governor's Workforce Investment Board's self-sufficiency policy. Webb Brown seconded the motion. The motion carried.

VI. Lay Off Aversion. Gary Warren, Chief of the Statewide Workforce Programs Bureau, provided information in response to questions previously asked about layoff aversion strategies. Gary presented an overview of plans by New York, Pennsylvania, Washington, Rhode Island and Michigan. Many of the states were still in the development stage of the program or did not have information on outcomes to report. Gary said that the key component to all of the reviewed state plans is the ability to obtain advanced notice and be pro-active in the strategy. The states surveyed list the sensitive and confidential nature of information to the business as the barrier most difficult to overcome.

Mr. Warren said Montana does not currently have an advanced notice system in place, but provided information on Montana's early warning network, which contributes information on layoffs whether actual or rumored obtained from a variety of sources, with rumors providing the majority of prior information. The Dislocated Worker/Rapid Response Unit coordinates rapid response activities based on information reported on the Initial Screening Contact Report (ISC). Gary reported that through August 2002, staff had contacted 391 employers, and offered assistance.

Chairman Mendenhall requested that staff update the contact and workers served information and review the New York and Pennsylvania strategies, specifically in regard to how they are able to obtain and track indicators of business distress, i.e., hiring freezes, slow or delayed payment of bills to suppliers or vendors, and lost contracts. He requested that staff continue to review the current rapid response system to: 1) determine if a more formalized system is necessary; 2) improve and provide increased education and promotion of the current network; 3) explore and strengthen initial contacts with businesses; 4) continue researching layoff aversion efforts by other states and report back to the committee.

Chairman Mendenhall suggested inviting Mary Walsh, Dislocated Worker/Rapid Response Unit, to the next EDAG conference to discuss the current rapid response process.

VII. Public Comment - Sue Mohr, Executive Director of Montana Job Training Inc. reported that the local boards are conducting "soft skills" training for their service providers and certifying staff as soft skills trainers. She also reported that MJTP's Board of Directors have established a Strategic Plan for the local boards for the coming year and have included some strategies about setting aside money to support new and expanding business opportunities.

VIII. Next meeting date - The Committee did not set a meeting date for the next Committee meeting.

Full board will meet on October 15, 2002 in Helena

IX. Adjourn - Meeting adjourned at 12:40 PM

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