A discussion about raising Lexington's minimum wage will likely have to wait until an equally thorny regional fight over the fate of federal workforce dollars is settled, Urban County council members said last week.
Vice Mayor Steve Kay said there have been initial discussions about raising the minimum wage but he doesn't expect any movement on the issue soon.
"I have heard people talk about it," Kay said. "I would not be surprised that it's something people want to pursue, but right now there are no plans."
Council member Chris Ford, who has discussed the minimum wage issue with Louisville officials who recently passed a minimum wage increase, said the council is waiting to hear whether Lexington will be designated its own federal workforce development area.
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"Workforce development has really taken a great deal of our attention right now," Ford said.
At stake is up to $11 million in federal workforce investment dollars that flow through the Bluegrass Area Development District to the 17 member counties. Lexington has asked Gov. Steve Beshear and a state workforce board to establish a separate workforce development district so it can better focus job-training efforts in Lexington.
Lexington is not alone.
Warren County has also asked Beshear and the Kentucky Workforce Investment Board to designate a four-county region including Warren County as its own workforce investment area.
Beshear is expected to make a final determination in late spring. Late last week, the Education and Workforce Development Cabinet announced several public hearings across the state to discuss the creation of new workforce investment districts, including a hearing in Frankfort on Feb. 4.
If Lexington is designated its own workforce development district, it could be eligible for as much as half of the up to $11 million that currently goes to 17 counties.
The workforce development money is distributed based on population and poverty rates, said Kevin Atkins, Lexington's chief development officer.
Ford, who has led the two-year push to establish Lexington as its own workforce development district, said it's likely the newly sworn in council will have a workshop soon to bring the five new council members up to speed.
"We will be discussing it in committee," Ford said. "It will be an introduction for new council members and a follow-up for current council members. It's been two-plus years since we began."
Ford, whose First District includes pockets of unemployment as high as 20 percent, and others say more control of federal job training dollars is the first step to helping Lexington's workforce.
Lexington shuttered its workforce training center in 2007 under then-Mayor Jim Newberry. The federal workforce dollars that training center received were returned to the Bluegrass ADD.
But the needs of Lexington's workforce are different than its rural neighboring counties. The Lexington-area needs highly trained workers for its growing manufacturing base, Ford and others have said. Urban and rural workers also face very different challenges, they argue.
A change in the federal workforce law — which takes effect in July — allows for the creation of new workforce investment areas. Traditionally, many of the state's area development districts are the oversight agency for workforce investment areas.
There are 10 workforce investment areas in Kentucky. Eight are overseen by area development districts. Two areas — Louisville and parts of Eastern Kentucky — do not use an area development district as the fiscal agent for that money, said Cathy Lindsey, a spokeswoman for the Cabinet for Education and Workforce Development.
In total, Kentucky receives $49.8 million in federal workforce training dollars, Lindsey said.
Warren, Allen, Logan, Simpson counties and the city of Bowling Green have asked Beshear to designate them as a separate workforce investment area. There isn't a legal requirement for the workforce areas to follow ADD areas nor that the area development districts have to be fiscal agents for federal workforce dollars, said Meredith Robinson, COO of the Bowling Green Area Chamber of Commerce. That group supports a separate workforce area because they say the Barren River Area Development District, which controls the workforce money, refuses to be innovative with training programs.
"Fundamentally, ADDs were set up to be community planning organizations, but over time they've had scope creep, taking over aging funds and workforce funds to create their own fiefdoms," Robinson said.
Many ADDs —including Bluegrass and Barren River — have set up structures so that ADD officials control separate workforce boards and ADDs are also the fiscal agent that provides services, which sets up a conflict of interest, Robinson said.
Rodney Kirtley, executive director of the Barren River ADD, said ADDs should control the workforce money because it's the fairest way to divide the money and ADDs can provide the best services.
"There's a power struggle here that has nothing to do with services," Kirtley said. "There's a lot of money they would like to control; it's a power struggle for the money."
The Bluegrass region is having its own power struggle, one that emerged from a scathing investigation of the Bluegrass ADD by State Auditor Adam Edelen. That report found that former Bluegrass ADD Executive Director Lenny Stolz had created a structure where he essentially controlled board membership and major activities of the Bluegrass Area Workforce Investment Board.
After the auditor's report, several workforce board members asked to be allowed to request bids for service providers instead of the Bluegrass ADD.
Because of deeply complicated rules over board selection, a Bluegrass ADD board member is still in charge of picking new members of the workforce board. But Garrard County Judge-executive John Wilson says a new agreement — which Lexington has not yet signed — would allow the Lexington mayor and the 16 county judge-executives to choose board members and decide if the workforce board should have a new fiscal agent.
"We had an executive director who was exercising an oversized influence over the WIB and that's not how it's supposed to work," said Wilson, who would lead the new committee to oversee the WIB. "That's why we've created the separation and the system of checks and balances."
Wilson said that not all judge executives serve on the Bluegrass ADD board. Sometimes mayors from those counties serve instead, which creates distance between the two groups. He also defended the Bluegrass ADD's workforce services, saying the group has met all its benchmarks.
But Daryl Smith, the current chairman of the Bluegrass WIB, says it's not enough distance.
"I believe the system is entrenched in a culture filled with organizational conflicts of interest that impair the objectivity of local elected officials, resulting in biased ground rules that give a tremendous competitive advantage, in the Bluegrass region, to the Bluegrass Area Development District," he said. "I think the whole system needs to be looked at."
The only issue all sides agree on is the importance of workforce funding and training.
"As soon as we resolve these differences locally, you're going to see great things happen in Kentucky," Wilson said.