The city of Lexington and a group that controls more than $12.8 million have entered into a new agreement that will give Fayette County more oversight of how federal workforce dollars are spent and will require that management of that money be bid competitively, city officials said.
The new agreement was inked Wednesday after more than four hours of mediation between officials with the Bluegrass Area Development District — which controls the federal workforce dollars — and Lexington officials, including Mayor Jim Gray.
The five-year agreement must be approved by the Urban County Council and officials with 16 counties that make up the Bluegrass ADD, the quasi-governmental planning agency that has been the fiscal agent and service provider for the Bluegrass Workforce Investment Board for decades.
The workforce investment board is a separate group of business and community leaders that oversees the federal workforce funds. The Bluegrass ADD runs programs with that federal money for the workforce board, but those services have never been competitively bid.
Lexington had sought its own workforce investment area because of concerns about the oversight of the federal workforce funds. City officials also have complained that although 51 percent of the workforce in the 17-county region resides in Lexington, too few workforce training dollars were spent in Fayette County.
The city never signed the most recent 17-county agreement. Gov. Steve Beshear requested that the city and Bluegrass ADD officials go into mediation to try to work out differences.
"Our goal throughout this process has been to do the best we can to help people throughout the Bluegrass region find jobs or get the training they need to qualify for better jobs," Gray said.
"Many of the region's largest employers have been vocal in their complaints that the current system is not effective. We felt it was essential to expand and improve the work training we offer to meet the needs of regional businesses," he said.
Under the new agreement, the mayor of Lexington will co-chair the committee that oversees the workforce investment board. That will ensure that Fayette County's workforce interests are addressed, city officials said.
A new federal law that takes effect July 1 will prohibit any workforce board's fiscal agent from also providing services.
A scathing report of the Bluegrass ADD by state Auditor Adam Edelen in 2014 found that then-Bluegrass ADD executive director Lenny Stolz had created a structure in which he controlled board membership and major activities of the Bluegrass Area Workforce Investment Board. Stolz has since resigned.
After the auditor's report, several board members wanted to request bids for service providers instead of the Bluegrass ADD.
In January, several board members resigned — including chairman Daryl Smith. Board members said they were frustrated that the Bluegrass ADD continued to exert influence over the investment board and to thwart attempts to get bids to manage those federal workforce training funds.
P.G. Peeples, president of the Urban League, said he supported the new agreement because the previous agreement between the Bluegrass ADD and the workforce board was too cozy. Peeples had pushed for creation of a separate workforce district for Fayette County.
"The investigation of the Bluegrass ADD left suspicions about their ability to manage those dollars," he said. "I've always thought Lexington should be more responsible for managing and designing its workforce programs."
Garrard County Judge-Executive John Wilson, who represented the workforce board in the mediation between the city and the Bluegrass ADD, said he was optimistic about the board's future.
"I feel more optimistic than ever about the future of this region just based on the tenor of the mediation with Mayor Gray," Wilson said. "There's good synergy for this region."