I was disappointed to read the latest report on the Bluegrass Area Development District. The story titled, “Bluegrass ADD awards lucrative $10M contract to itself” could not have been more wrong.
First, the Bluegrass ADD did not award the contract; second, the grant wasn’t for $10 million; and finally, there is nothing “lucrative” about it.
Perhaps the biggest misconception about the Bluegrass ADD is who we are. The Bluegrass ADD is not the federal government, nor the state government and certainly not a contractor. We are, in fact, a unit of local government; one of 15 serving specified regions of the state.
We serve the local governments as the regional planning council and the economic development department. We promote economic development through community planning, aging services and workforce development.
There is no contract here. There are, however, federal grants. The grants go to the local elected officials. The highest-ranking elected officials from each of the counties in each designated region make up the governing board, and that board must designate an agency to administer and execute the activities associated with the grant.
In Kentucky, and only in Kentucky, an additional requirement is added to this grant designation process: a procurement process. This requirement is aimed at increasing competition and ensuring local elected officials fully consider all options before awarding the grant. The procurement process, designed and administered by the state, requires an open bidding process which is publicly advertised and to which any entity can respond.
The local elected officials from the 17-county Bluegrass region complied precisely with the process and received three responses, including one from the Bluegrass ADD.
The bids were appropriately opened, scored and evaluated by an independent review committee — also designated by the state. That committee consisted of elected officials, private sector business representatives, the state Cabinet for Education and Workforce Development and a local finance officer. That committee recommended the Bluegrass ADD’s proposal.
But the amount of the grant is nowhere close to $10 million. The actual amount is around $4.8 million. That was the audited amount from fiscal year 2015. The figure could change somewhat for the next year based on the funds available, but there would not be a huge fluctuation.
In round numbers, this $4.8 million is utilized in the following manner: $2.9 million goes to contractors, $1 million goes to operating regional career centers, $564,000 goes to direct services (business, workforce and youth) and only $336,000 goes to administration. Federal law authorizes up to 10 percent of the funds for administration. The Bluegrass ADD uses only 7 percent.
Detailed audited numbers are public and available at the Bluegrass ADD for anyone to review. The audit clearly shows there is nothing lucrative about this grant. In fact, by federal law, the revenue and expenses must precisely match in this program, making it impossible for a profit to be made.
So if there is no money to be made, why would any entity do it?
The Workforce Act is not designed to be a money-making grant. It is also not intended to be a social-service program. It is, however, an important tool in economic development.
And therefore a part of the mission of the Bluegrass ADD.
David Duttlinger is executive director of the Bluegrass Area Development District.
At issue: Jan. 8 Herald-Leader article, “Bluegrass ADD awards lucrative $10M contract to itself”