Officials to seek attorney general's opinion on control of $8 million in workforce funds

lblackford@herald-leader.comMay 5, 2014 

The Bluegrass Area Development District will retain control of $8 million in annual federal workforce investment funds for the next six months as officials ask the state attorney general to clarify who should be in charge.

Winchester Mayor Ed Burtner sent a letter Monday to state Workforce Investment Commissioner Beth Brinly recommending that the Bluegrass ADD remain the fiscal agent for the Bluegrass Workforce Investment Area while her office and others seek an opinion from the attorney general.

Burtner said the delay would give workforce officials time to figure out a process for obtaining a new fiscal agent, something the workforce board of directors and Lexington Mayor Jim Gray have said should happen.

"I do think there will be further consideration given to doing a procurement process, but that requires development of a mechanism that is fair and reasonable," Burtner said Monday.

Brinly will allow the extension, said Cathy Lindsey, a spokeswoman for the Education and Workforce Cabinet.

In March, State Auditor Adam Edelen issued a scathing review of the Bluegrass ADD for excessive spending and inefficiencies, including a conflict of interest between Bluegrass ADD and the Bluegrass Workforce Investment Board.

The Bluegrass ADD manages the workforce board's annual $8 million in federal funding and administers its programs across Central Kentucky. Those programs train employees, hold job fairs, help businesses find workers and study the region's labor economics.

Edelen found that Bluegrass ADD officials had tried to influence the workforce board's actions and possibly had misused some of its federal funding. Auditors noted that the Bluegrass ADD had written the agreement between the two bodies, making the Bluegrass ADD's executive board chairman or vice chairman the chief elected official of the Workforce Investment Board. That person — currently Burtner — chooses all members of the workforce board and makes all important decisions, although the workforce board has a chairman of its own.

Those rules could be changed easily if officials from the 17 counties that are part of the Bluegrass ADD and the Bluegrass Workforce Investment Area agreed to rewrite the agreement and change how decisions are made, Lindsey said.

"We've offered to provide examples of how other areas are doing it," Lindsey said.

Brinly also has issued a separate corrective plan for the Bluegrass Workforce Investment Area that calls for, among other things, a further review of how certain money has been spent.

Area development districts were created to assist local governments in regional planning for economic growth. The Bluegrass ADD, in Lexington, serves 17 counties in Central Kentucky. It has an annual budget of more than $24.4 million, 90 percent of which comes from federal and state grants.

Bluegrass ADD officials have lobbied to keep the workforce agreement in place, arguing in a meeting last month that it would be in both parties' best interest. Other county judge-executives and Gray have argued that the job of fiscal agent for the workforce board should be bid out.

Since the report was issued, workforce board chairman Daryl Smith, an economic development specialist for Kentucky Utilities, has asked Burtner to look for a new fiscal agent to replace Bluegrass ADD.

Smith and Bluegrass ADD director David Duttlinger declined to comment Monday.

Allison Martin, spokeswoman for Attorney General Jack Conway, said the office had not yet received a request.

Linda Blackford: (859) 231-1359Twitter: @lbblackford

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