COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE ON COMMERCE AND ECONOMIC3 DEVELOPMENT4 5 6 Room 400, City Hall7 Philadelphia, Pennsylvania Wednesday, September 7, 20118 10:20 a.m. 9 10 PRESENT: COUNCILMAN W. WILSON GOODE, JR., CHAIR11 COUNCILMAN DARRELL CLARKE COUNCILMAN FRANK DiCICCO12 COUNCILMAN BILL GREEN COUNCILMAN CURTIS JONES, JR.13 COUNCILWOMAN MARIA D. QUINONES-SANCHEZ COUNCILWOMAN BLONDELL REYNOLDS BROWN14 15 RESOLUTION 110020 - Resolution authorizing the16 Committee on Commerce and Economic Development to hold hearings regarding a strategic17 assessment of the City's workforce agencies. 18 - - -19 20 21 22 23 24 25 2 1
Good2 morning. This hearing is called to3 order. This is a public hearing of the4 Commerce and Economic Development5 Committee on Resolution No. 110020. My6 name is W. Wilson Goode, Jr., Chair of7 the Committee.8 A quorum is not necessary, but9 a quorum is present. To my far left is10 Councilman Darrell Clarke. To his right11 is Councilman Bill Green. To his right12 is Councilman Curtis Jones, and to my13 right is Councilman Frank DiCicco and14 Councilwoman Maria Quinones-Sanchez.15 The title of Resolution No.16 110020, authorizing the Committee of17 Commerce and Economic Development to hold18 hearings regarding a strategic assessment19 of the City's workforce agencies.20 Our only scheduled witness is21 Mr. Mark Edwards. Please approach the22 witness table.23 (Witness approached witness24 table.)25 3 9/7/11 - COMMERCE - RES. 1100201
Good3 morning. Please state your name for the4 record and proceed with your testimony.5
My name is Mark6 Edwards. I'm President and CEO of the7 Philadelphia Workforce Development8 Corporation.9
Good morning,12 Councilman Goode, members of the13 Committee on Commerce and Economic14 Development. I am pleased to present15 this testimony on Resolution 110020.16 Today I wish to provide an overview of17 the workforce development efforts in18 Philadelphia and summarize some of our19 recent accomplishments related to that20 reorganization. Afterwards I will, of21 course, be happy to answer any questions22 you may have.23 The Mayor has a vision of a24 unified, well-coordinated workforce25 4 9/7/11 - COMMERCE - RES. 1100201 development system in Philadelphia. That2 vision includes improved results for3 people who are seeking jobs and companies4 who need workers. His vision also5 includes saving money.6 Fundamental to the vision of a7 unified workforce system is the merger of8 the Philadelphia Workforce Development9 Corporation and the Philadelphia10 Workforce Investment Board into a new11 agency that is to be named Philadelphia12 Works! Incorporated. The new entity will13 continue to manage federal and state14 employment and training funds for the15 City of Philadelphia. This includes16 contracting with and monitoring provider17 agencies, offering technical assistance,18 and collecting and analyzing job-related19 data. In FY12, Philadelphia Works! Inc.20 will continue to perform its duties but21 with less staff because of reductions in22 state and federal funding, including the23 ending of stimulus funding which occurred24 June 30th of 2011.25 5 9/7/11 - COMMERCE - RES. 1100201 Specifically, last year the2 PWDC budget was $127 million. This3 fiscal year it will be $50 million. As a4 result of this reduction, as an5 organization we were required to reduce6 our staff by 26 percent just this past7 summer.8 We also eliminated a number of9 expenses for the organization as a first10 approach to decreasing expenses. This11 included parking, except for federally12 mandated parking for disabled employees,13 and we significantly reduced other14 expenses such as cell phones, newspaper15 subscriptions, travel, et cetera. In16 addition, we have cut salaries of all17 executive staff, including myself, by 518 percent effective August 1st.19 In spite of the huge state and20 federal cuts, we have made progress in a21 number of areas. These include the22 changing of the leadership of both PWDC23 and the Philadelphia Workforce Investment24 Board as I began in November of 2010.25 6 9/7/11 - COMMERCE - RES. 1100201 The Mayor appointed a new Board for the2 newly unified organization. The Board3 commissioned an independent report by a4 nationally recognized non-profit5 organization to improve the effectiveness6 and efficiency of how we serve our7 clients. That report was issued in May8 of 2011 and is available on our website.9 We have already undertaken a10 number of steps in response to the11 report's recommendations, and these12 include assessing and restructuring our13 own finance division to identify areas14 that need improvement, as well as15 instituting strong new internal controls;16 beginning an overall of the contracting17 process, our own internal contracting18 process, to conform with leading19 practices in contract management;20 developing a plan to recommend to the21 state the integration of the EARN and22 CareerLink infrastructures. The combined23 system will be outsourced to providers24 through a competitive bidding process25 7 9/7/11 - COMMERCE - RES. 1100201 should the state agree. We've begun2 developing comprehensive service teams3 around customer services, and "customers"4 are defined as employers and jobseekers5 as well.6 The Mayor has, from the very7 beginning, been an advocate and driving8 force for the new and improved workforce9 system in Philadelphia, and this includes10 advocating with the Commonwealth to11 obtain the resources that we need in12 order to deliver high-quality services to13 our residents and our businesses.14 Thank you for this opportunity,15 and I'm prepared for any questions you16 may have.17
Thank you18 for your testimony, Mr. Edwards. We've19 had at least two or three conversations20 so far since coming on board, but first21 let me say publicly congratulations on22 your appointment. I look forward to23 working closely with you.24
You know my2 long-term interest in workforce3 development. I was trying to figure out4 how to get my arms around this5 legislatively. We are somewhat precluded6 from doing that because we are preempted,7 because it is really driven by federal8 law, but is an area which I think Council9 does have concerns, should have concern,10 and over my years here, I actually do not11 remember us actually having a hearing on12 workforce development and going through13 the type of review that I'd like to go14 through.15 So these questions are just for16 the record, but they actually begin to17 describe what my philosophy is and where18 I'm headed with this, and in this journey19 as we talk about how this agency will be20 unified and reformed and hopefully not21 just become more efficient but more22 effective, I think we'd like to offer23 some ideas.24
And so these2 are just questions, so don't take them3 the wrong way, but they're meant to4 really bring out what I believe to be the5 core issue.6 So the first question is,7 although there's a drop in funding from8 $127 million to $50 million, $50 million9 is still a lot of money.10
And so the12 question is, why not just give the money13 to businesses to train their workers?14 Why wouldn't that be a primary strategy?15
Well, because as16 you pointed out earlier, Councilman,17 these are federal dollars and the federal18 dollars come with a lot of guidelines and19 a lot of restrictions and they require20 close management to make sure that there21 is adherence to those guidelines.22 We also --23
I guess my24 question was in three different areas.25 10 9/7/11 - COMMERCE - RES. 1100201 You can technically give the money to2 businesses for customized training and3 on-the-job training. You can give the4 money to jobseekers in the form of5 individual training accounts. You can6 give the money to training providers.7 The question is, as a primary8 strategy of connecting jobseekers with9 jobs, why not give the money to10 businesses that have jobs?11
By that do you12 mean prioritize the investments that we13 make in companies to make sure that the14 jobs -- the preparation for jobs that are15 required for a given company are actually16 available for that company?17
To make sure18 that the workforce investment is directly19 linked to jobs.20
Oh, we would21 agree with that. That's a prudent22 strategy.23
So what24 percentage of workforce investment goes25 11 9/7/11 - COMMERCE - RES. 1100201 to businesses to train workers, what2 percentage goes to jobseekers in the form3 of individual training accounts, and what4 percentage goes to training providers?5
Well, the actual6 breakdown of those percentages I don't7 have with me right now. I can get those8 percentages and get them back to the9 Committee, but the individual training10 accounts are revenue numbers that are set11 by the state on an annual basis. And so12 we negotiate a budget with the state, but13 the state approves those dollars. So we14 don't just have carte blanche access or15 flexibility to dictate those dollars, the16 level of funding, in any one of those17 categories.18
Offhand do19 you know how much money, what percentage,20 you give to businesses versus training21 providers?22
Not offhand, no,23 but I will say, though, in relationship24 to the issue of -- I think what it seems25 12 9/7/11 - COMMERCE - RES. 1100201 to me you're getting at is a question of2 strategy of providing dollars for3 training providers for the sake of4 training when there are no jobs5 necessarily at the end of that training.6 The contracting process that I made7 reference to revamping in my testimony8 involves dealing with that very issue. I9 mean, one of the things that we talk10 about as a Board, as a newly seated Board11 and as a staff, is the importance of12 connecting the investments that we make13 in the system to training opportunities14 that directly have jobs at the end of the15 process. The way that we are attempting16 to do that now is to make sure that the17 approval of these training opportunities18 are directly informed by their ability,19 the provider's ability, to promise jobs20 in the contracting process. In addition21 to that, to make sure that the22 investments that we make in these23 training and employment -- employment and24 training opportunities connect to what25 13 9/7/11 - COMMERCE - RES. 1100201 the research tells us about the viability2 of the industry or the company or the3 type of job that that is and the future4 stability of it as well.5
So in some6 ways you're talking about placement and7 people's ability to secure jobs for8 trainees, but more general in terms of9 philosophy, how is the $50 million linked10 to job creation?11
Well, the $5012 million is really cut up into two pots.13 I mean, one is WIA, which is funding that14 is made available through the Workforce15 Investment Act, and then $30 million of16 it this year is TANF money that is used17 to fund the EARN system. Those are18 people who are receiving cash assistance19 who are required to engage in a certain20 number of hours of activities per week21 related to pursuit of jobs.22 All of the metrics or the23 guidelines associated with how we manage24 those funds on the EARN side, which is25 14 9/7/11 - COMMERCE - RES. 1100201 the lion's share of those dollars, are2 all directly dictated and prescribed by3 the state through what they call their4 Master Guidelines. That's how those5 dollars work.6 The state right now across the7 Commonwealth is rethinking its approach8 to the investment that it's making in the9 EARN system to move to what the new10 Secretary of Department of Welfare calls11 a "work first" philosophy. We are in the12 midst of discussions or really waiting13 for discussions with the state right now14 to figure out exactly what that means for15 Philadelphia.16 So we know that in the coming17 weeks and months that there is going to18 be a shift in terms of how the TANF19 dollars are invested in the City of20 Philadelphia, and the Commonwealth has21 yet to share those details with us, but22 we have a sense of the general direction23 that they're going into, which is24 consistent with this "work first"25 15 9/7/11 - COMMERCE - RES. 1100201 philosophy, which simply means that in2 order to continue to qualify for your3 cash benefits, you've got to be gainfully4 employed.5
Okay. Are6 there proven job creation strategies for7 workforce investment? Are there best8 practices you've seen around the country9 where workforce investment is more10 directly linked to job creation?11
Well, yeah. We12 are -- and we have one of those here in13 the City of Philadelphia through our14 Industry Partnership Program where we're15 working with the manufacturing industry16 to help them train their incumbent17 workers so that they can move up within18 the company's hierarchy and make19 available entry-level jobs within those20 companies. That's one of what's been21 perceived as a best practice.22 The other practices are really23 around the kinds of things that we are24 planning to do with regard to this whole25 16 9/7/11 - COMMERCE - RES. 1100201 merger. The CSW reports chronicles some2 of those best practices. Some of them3 seem sort of common sense, but they're4 the kinds of things that we're talking5 about, and, that is, to make sure that6 the employment and training investments7 are informed by what research tells us8 about the strongest economies within a9 given region and the support that -- that10 investment within those kinds of11 opportunities, and to make sure that the12 lines of communication and the working13 relationship between the business14 community and the public workforce system15 is prioritized, which is a part of the16 strategy that we are planning to17 implement as well.18 The last best practice I would19 say is related to connecting workforce20 development to economic development. I21 mean, the work of this Committee in and22 of itself. I mean, the City is typically23 or constantly talking to businesses,24 trying to attract businesses to the City25 17 9/7/11 - COMMERCE - RES. 1100201 of Philadelphia and to bring businesses2 into the region, and what better way to3 kind of sweeten the pot, if you will,4 than to be able to demonstrate its5 ability to deliver the public workforce6 system to help employers do that.7 Those are some of the best8 practices that we've seen, and we're9 always looking for others.10
For purposes11 of the record and for the Committee,12 could you explain the change from the Job13 Training and Partnership Act, JTPA, to14 the Workforce Investment Act and what the15 thought behind the Workforce Investment16 Act was in terms of a need to change?17
Can you19 explain the difference between JTPA, the20 Job Training and Partnership Act, and the21 Workforce Investment Act and why the22 Workforce Investment Act succeeded JTPA23 and what it was meant to accomplish in24 succeeding JTPA.25 18 9/7/11 - COMMERCE - RES. 1100201
Well, Councilman,2 that's a really good question, and those3 are some details of the history of the4 Act and the public workforce system that,5 to be honest with you, I'm still learning6 in this role, but --7
Is there8 someone along with you that could9 describe that?10
Please come13 to the mike.14 (Witness approached witness15 table.)16
A lot of -- the17 approach to the work that the Workforce18 Investment Act uses in relationship to19 the investments that we make in the20 public workforce system now is to make21 sure that the public dollars that are22 being invested are informed by research23 and by policy that is proven to be24 effective. That's why we have in this25 19 9/7/11 - COMMERCE - RES. 1100201 case in Philadelphia we have the2 Workforce Investment Board, who is3 responsible for doing that work. And so4 that's the policy-setting arm. That is5 also designed to make sure that its6 governance and its Boards are privately7 led. The Act requires a majority of the8 leadership of the Workforce Investment9 Board to be represented by private10 industry, and then that -- there are11 certain mandated partners that the Act12 provides that JTPA did not provide to be13 a part of the policy-setting approach14 that we use to make investments of these15 public dollars. Some of those mandated16 partners include Community College. They17 include, as I indicated, the level of18 private industry that is represented and19 other mandated partners that are all20 designed to make sure that we have a21 comprehensive approach to investments.22 On the fiscal agent side, the23 fiscal agent's responsibility is to24 actually invest the dollars in the25 20 9/7/11 - COMMERCE - RES. 1100201 system. And so in Philadelphia, those2 two functions heretofore have sort of3 worked together, but they haven't been as4 seamless and as purposeful as this reform5 effort is designed to create.6
I guess7 where I'm going is more where the8 philosophy and strategy is. The9 Workforce Investment Act caused the10 creation of the Workforce Investment11 Board here locally. That functioned in12 one way. PWDC existed for several13 decades before that and functioned in a14 slightly different way. The Workforce15 Investment Act, through my understanding,16 called for some philosophical changes in17 terms of a shift from social services to18 economic development, a shift to focusing19 on businesses and individuals rather than20 just training providers, a shift to more21 local and state control and those type of22 things.23 I'm really asking,24 philosophically what was the change that25 21 9/7/11 - COMMERCE - RES. 1100201 caused the creation of the WIB in2 addition to the Workforce Development3 Corporation?4 Please identify yourself for5 the record.6
My name is Sue7 Gutschow. I'm a Senior Vice-President of8 the Workforce Services Division at PWDC,9 and I have worked for this organization10 for 18 years now -- or 19 years. I'm11 sorry. Going into my 20th year. So I12 was there when JTPA was also the major13 part of our funding. And when we had14 JTPA funds, what we did typically was15 work with all customers, jobseekers16 together. So we would have both welfare17 recipients and the general population18 receiving the same services and in the19 same rooms.20 What happened when the21 Workforce Act came into being and at the22 same time the Welfare Reform Act started,23 there was a separation. So we on the WIA24 side saw strictly folks who were not25 22 9/7/11 - COMMERCE - RES. 1100201 receiving public assistance. And the2 mandate there was, as you said, to work3 with employers specifically to find them4 folks who are not only qualified for the5 jobs that they had but in many cases to6 try to train the people who would be the7 next workers that they could employ. And8 we started having centers where we would9 see folks -- I don't know whether you10 remember back -- this is 1999 probably11 when Governor Ridge started the12 CareerLink system in the whole state, and13 that's what we still have, and that14 was -- the intent of that was to get15 people to have a place to go. They could16 access services online as well as by17 going into the centers, but the intent18 was that we would have a place where both19 employers and jobseekers could come to be20 served.21 The welfare population at that22 point in time was served in a separate23 setting, and that was when we had24 regional centers. I don't know whether25 23 9/7/11 - COMMERCE - RES. 1100201 you remember that, but that's sort of the2 history there.3
Let me ask a4 more direct question then. Was the5 system ever broke and were we ever6 training people for jobs that didn't7 exist?8
And were we10 training people for jobs that didn't11 exist?12
I would have to13 guess that many years ago there was14 training that was done with the hope that15 there would be jobs at the end of the16 training. I truly believe that -- and17 maybe this is being very naive of me, but18 that we believed that we were doing19 training for the sake of putting people20 to work, and that was always our intent.21
That's a very24 difficult question, because on my side of25 24 9/7/11 - COMMERCE - RES. 1100201 the operation, I'm only looking at the2 Workforce Investment Act dollars, and3 Workforce Investment Act this year, we4 were talking before, this is the lowest5 amount we've had in probably ten years,6 so --7
That's what I was13 going to say. Historically, last year14 we've placed a total of about 8,00015 people in jobs, with the lion's share of16 those being through the EARN system.17
That answers18 my question.19 I have a few general questions,20 and these are very key questions for me,21 then I'll open it up to my colleagues on22 the Committee.23 In workforce investment, what24 is considered to be a responsible or good25 25 9/7/11 - COMMERCE - RES. 1100201 employer?2
An employer who3 pays -- well, depending on, again, the4 two sides of the system, there are5 certain wage requirements on the TANF6 side, and that's just over $8 an hour.7 Our average wage that we are able to see8 for the people that are placed through9 our system is just over $9 an hour. It's10 what we call a livable wage. It's a job11 that also has benefits. It's a job that12 offers a healthy work environment where13 there are no employment laws being14 broken, and it's an environment where15 there's upward mobility within the16 company. I mean, given the economy17 today, our focus, as much as we can, is18 just to put people in jobs within those19 parameters.20
I'm going to21 dig into that a lot deeper, but I'll ask22 the next question. What is considered a23 good job?24
A job that pays a25 26 9/7/11 - COMMERCE - RES. 1100201 salary. You know, a livable wage is2 defined by what I just described.3
I'm going to4 dig a little bit deeper, but specifically5 I'm interested in what's considered a6 good and responsible employer, what is7 considered a good job, how that is8 actually defined. I'd like you to9 forward that to the Committee through me10 in terms of what the parameters actually11 are. But I'll try to draw that out by12 asking a question.13 Do you follow the Economic14 Self-Sufficiency Standard, and what is15 that standard? I know the Workforce16 Investment Board did. In fact, they17 adopted the Economic Self-Sufficiency18 Standard that's set by Women's19 Alternative -- Women's Association for20 Women's Alternatives, and that that21 standard is still used to some extent.22 So I'm really asking what is23 the specific policy with regard to24 economic self-sufficiency? What does the25 27 9/7/11 - COMMERCE - RES. 1100201 employer have to provide and what type of2 job? And actually I'll just read from a3 WIB document. It says, Prior to the4 adoption of the Self-Sufficiency5 Standard, the Philadelphia Workforce6 Investment Board set a service policy7 that gave priority to anyone not making a8 self-sufficient wage or who is not on a9 career path that would reasonably lead to10 self-sufficiency in the local economy.11 Recognizing that the adoption of the12 Economic Self-Sufficiency Standard may13 have the consequence of creating a demand14 for services that cannot be currently15 met, the WIB further delineated this16 priority service policy. Therefore,17 should a shortage of funds necessitate a18 further delineation of priority of19 service, the following guidelines, in the20 order they are listed, will be in effect,21 and then it lays out guidelines for22 customers who receive TANF and then it23 lays out guidelines set up based upon the24 lower living standard income level, which25 28 9/7/11 - COMMERCE - RES. 1100201 is set by the federal government, and/or2 the policy adopted by the WIB, and the3 WIB in the past has adopted the4 Self-Sufficiency Standard.5 And so I guess my question is,6 what is that standard and is that the7 policy? And that standard, as I8 understand it, is not only above $8 or $99 an hour, but is actually above the City's10 living wage standard itself.11
Well, my12 colleague just informed me that that13 is -- what you're reading there are14 guidelines associated with the15 investments set by policy related to the16 WIB and the work that they do. On the17 TANF side, it's a bit different. Again,18 those are dictated by the state in the19 way in which I delineated.20 One of the things that we're21 seeking to do in this reform effort is to22 bring those two closer together, and that23 requires negotiation both with the state24 and with local policymakers as well.25 29 9/7/11 - COMMERCE - RES. 1100201
But I guess2 my question is really related to, what is3 the WIB policy, and if the two agencies4 are now being unified, what is the wage5 and benefits standard that is going to be6 set?7
Well, we don't8 have representatives of the WIB with us9 here today just due to some transition10 and some scheduling challenges there, but11 we can certainly provide you with a12 better response with your question13 related to the Economic Self-Sufficiency14 Standard set by the WIB.15 I can just say to you in the16 context of bringing the two organizations17 together, that as a result of our desire18 to connect the work of the WIB to the19 investments that are being made on the20 employment and training side, I mean, we21 are certainly intending to strengthen the22 connections so that they're done in a23 more sensible way.24 The question that you posed25 30 9/7/11 - COMMERCE - RES. 1100201 earlier with regard to whether the system2 was broken, I mean, I think a response to3 the way I would characterize that is,4 certainly there are opportunities to5 improve the system and this is one such6 example.7
I guess the8 question is, so is this one agency now?9 At what point will it become one agency?10 And how do we respond to questions about11 what standard is being set by the agency?12
Yeah. Well,13 right now the two organizations are14 legally separate and apart. They still15 function in their respective roles. I16 don't currently serve as the President17 and CEO of the WIB. The WIB has an18 Interim President and CEO. That person19 is Meg Shope Koppel. Meg was just20 scheduled out today, which is why she21 couldn't make it.22 We are working together across23 both organizations with a common Board24 over the next -- well, between now and25 31 9/7/11 - COMMERCE - RES. 1100201 July to merge the two organizations2 together through a combination of legal,3 human resources, financial and other4 decisions that need to be made about how5 to bring the two organizations together.6 So that's the internal aspect of the7 merger that we are going to be working on8 together. In the interim, the way that9 both organizations conduct its work is10 that we have representation of both11 organizations working with the other12 organization in terms of its committees13 and how its work is done on a day-to-day14 basis related to investments.15
But they're16 still essentially two separate programs,17 two separate clientele, with two separate18 standards in terms of wage and benefits?19
Thank you,23 Mr. Chairman, and thank you for taking on24 a daunting task in a recession to bring25 32 9/7/11 - COMMERCE - RES. 1100201 us out of the unemployment, jobless2 recovery we find ourselves in. I want to3 thank Chairman again for having the4 foresight to have this hearing right5 before Obama actually comes out with the6 master plan. Was that coincidence or7 brilliance, or both?8
You're a15 good Chairman.16 I have a couple of questions.17 I appreciate the thought given to the18 merger. A lot of this comes out of a19 report a long time ago called the Brophy20 report, which you probably never read,21 but talked about all of the alphabet22 organizations within and around23 government and how to codify them to give24 the customers, the taxpayers, a better25 33 9/7/11 - COMMERCE - RES. 1100201 service delivery.2 I have a few questions. We3 went from 127 million down to 50 million.4 Is that going to mean a reduction in5 staff?6
Is there a15 revised org chart that can be referred to16 this Committee --17
-- so that19 we can kind of get a roadmap of who to20 call when I need certain services?21 If I understood the questions22 that the Chairman asked, the direct flow23 comes from the federal government. What24 department?25 34 9/7/11 - COMMERCE - RES. 1100201
It goes to4 the state under the Department of Labor5 and Industry?6
That goes through11 the Department of Welfare. It's a bit of12 a circuitous route that the funding13 takes, but it goes from the federal14 government to the Department of Welfare,15 to Labor and Industry, to the local16 system.17
So it's very21 similar to the flow of the previous22 organizations?23
It's identical.24 That process hasn't changed.25 35 9/7/11 - COMMERCE - RES. 1100201 On the WIA side, it goes from2 the Department of Labor directly to the3 Department of L&I at the state, the4 federal Department of Labor.5
Is this6 merger -- and I guess you would call it7 rightsizing and reform -- is it going to8 mean less --9
You do not12 have to own it. I said it.13 Does that mean less14 subcontracts than in the past?15
If I17 understood how you work, you work with18 entities that may come up with a creative19 way to train a mechanic?20
And then you22 subcontract with that individual entity?23
So does this25 36 9/7/11 - COMMERCE - RES. 1100201 merger mean less subcontracts, and to2 what degree?3
Yeah, the merger4 does mean fewer contracts, and as I5 indicated earlier, we are at a place6 right now with the state where7 Philadelphia has been given limited8 authorization to go forward with the9 public workforce system. We've been10 asked to contract with the providers that11 we did business with last year for a12 90-day period, which will take us through13 the end of September, at which time the14 state -- and we're told within about the15 next week or so -- the state will be16 meeting with us to describe to us exactly17 what their plans are for implementing the18 system going forward. At that point, we19 will learn exactly the details associated20 with how they want to contract the system21 or make it smaller.22
So there are23 service providers that may not know how24 to plan at this point and they're waiting25 37 9/7/11 - COMMERCE - RES. 1100201 with bated breath so that when you get2 word, you'll be able to inform them?3
Absolutely. I4 mean, we were all living in that world as5 late as the 30th of June. We didn't get6 our allocations -- we didn't find out7 what the allocation would be for Fiscal8 Year '12 until June 30th, which is not9 characteristic for the public workforce10 system. We would typically get that11 information around April or May.12
So my13 assumption is that you hope to streamline14 without reducing the outputs?15
I'm going to just17 give you that and the benefit of that.18 Let me ask some specific19 questions as in your private-sector20 effort, and I'll give you a couple of21 scenarios. There is a company called --22 I'm not going to name them, but there is23 a car re-leasing company, and basically24 the description of the business model is25 38 9/7/11 - COMMERCE - RES. 1100201 that when high-end cars go out to lease2 for three years, they come back, they3 refurbish them, they send them out on4 their second lease tour of duty. They5 used to be located right outside of King6 of Prussia and they are located, God7 willing and the creek don't rise, in the8 4th Councilmanic District in the9 industrial park area.10 That type of business, if I11 were to be asked by them how they plug in12 and what kinds of services/benefits to13 training, what would, A, be the place14 that they plug in? Would it be Commerce?15 Would it be you guys? And then what16 would be the average benefit for a new17 employee that they wanted to hire or18 train?19
The benefit would23 be determined by the employer once that24 employer hires that employee, if I25 39 9/7/11 - COMMERCE - RES. 1100201 understand your question.2
Is there any3 subsidy to the six-week training period,4 let's say hypothetically, and what would5 that kind of benefit equate to?6
Well, we have7 dollars that we invest under the category8 of on-the-job training that could be made9 available in a case-by-case basis, but10 that would need to be discussed with the11 owner and with our staff, and that's12 certainly plausible.13
And what are17 some of the parameters that are18 determining factors to what that benefit19 might be?20
Sure.22 Number one, this is not a job23 that just anybody off the street could24 walk into.25 40 9/7/11 - COMMERCE - RES. 1100201
Right. It would4 have to be something that needed specific5 skills for that employer and that the6 employer understood that he had to have a7 training plan for each person. They can8 get up to 50 percent of their wages9 subsidized. That's what you're asking,10 the bottom dollars. It could be 5011 percent of their wages for whatever the12 length of time is. Six weeks maybe for13 something like that is practical. There14 are some employers where it could be an15 even longer period of time depending on16 the technicality of the training.17
All right.18 That answers in part my question. Now,19 how do you convey that to agencies like20 the Commerce Department, PIDC and MOCS?21 How do you communicate that benefit to22 them in a formal way?23
We are a part of24 monthly meetings that the Commerce25 41 9/7/11 - COMMERCE - RES. 1100201 Department has with, I believe, all of2 the organizations you just mentioned,3 with the exception of MOCS, if I'm not4 mistaken, and that is the economic5 development meeting that's held in the6 Commerce Department on a monthly basis.7 And we are represented there at that8 meeting.9
And you're10 saying that there is a common knowledge11 as to this benefit to those respective12 agencies?13
Yeah. We're14 working to improve that now, but there15 are examples where we have worked16 together to deliver value consistent with17 the future model that we're trying to18 promote.19
This is one20 of those hearings where I'm all21 optimistic and happy that there is an22 effort to do that. That is important to23 me as a District Councilperson and I24 would assume other Councilpersons on this25 42 9/7/11 - COMMERCE - RES. 1100201 Committee and in this body, because that2 isn't commonly known.3
I just want4 to jump in and just illustrate a bit5 more. How many employers in Philadelphia6 do you believe knew that there were $1277 million out there and that a portion of8 that was available for customized9 training or on-the-job training that10 would pay for as much as it would?11
Well, the short12 answer to that, that would be not enough.13 I think we just need to do a better job14 of that. But there are some other15 perception issues out there that we have16 as a public workforce system that I also17 think impact the fact that we don't have18 the kind of relationship that we'd like19 to have with more employers, and I think20 that's more work that we have to do. And21 some of those challenges are -- and I've22 heard them directly from some23 employers -- are around strings, if you24 will, that come with the money, the25 43 9/7/11 - COMMERCE - RES. 1100201 hoops, if you will, that private2 employers have to jump through when they3 use public money. That's a reality of4 our business. I mean, we see that with5 regard to employers not always accessing6 some of the tax credits and other7 benefits that government has to offer.8 We just have to figure out a better way9 to do that job, and part of it I do10 believe given the swings that we're11 seeing in the economy could actually work12 in our favor. I mean, as business13 opportunities get tougher and tougher, I14 think if businesses see that we're15 willing to come to the table and meet16 them as far as we can in terms of not17 doing away with the red tape, because we18 have to live with the red tape, but maybe19 taking more of that responsibility on20 ourselves, I think that they would be21 more inclined to use the system.22
I just -- my23 Chairman here, again, this is a friendly24 acquaintance and we appreciate your25 44 9/7/11 - COMMERCE - RES. 1100201 effort. I mean that sincerely. But what2 the frustration I have is that in a quiet3 way -- and I'm not trumpeting my4 district -- that we've managed to, in5 particular parts, start to see the light6 at the end of the tunnel. What I mean by7 that is, there are actually, believe it8 or not, companies moving into my9 district. I mentioned an unnamed car10 company. That is a real scenario. I11 have existing businesses, and I won't --12 well, I will. Roxborough Hospital, for13 example, constantly is in a process of14 hiring and there's a lot of turnover15 sometimes in their industry and had no16 idea -- and this is fortuitous that we17 have this hearing, Mr. Chairman -- no18 idea about the benefit that they could19 receive on the training end.20 So those kind of connectivities21 that you are marking as a goal, I'm happy22 you're here, and I hope that as we mature23 in our back and forth relationship that24 that improves around budget time.25 45 9/7/11 - COMMERCE - RES. 1100201 So a couple of other questions2 and I'll give my colleagues an3 opportunity. On the public side, not the4 private-sector side that I just5 mentioned, do you remember the CETA6 program?7
-- to16 remember that, and I'm not claiming it17 and owning it --18
Right. And21 basically the City used it as a training22 program where we received funding from23 the federal government in almost a24 private-sector way to look at people that25 46 9/7/11 - COMMERCE - RES. 1100201 were looking at government opportunities.2 I mention this to keep an eye towards3 this if indeed this is a direction that4 Obama, the Obama Administration,5 President Obama is going in for you to be6 able to rapidly respond to that, because7 the Mayor convened a commission on some8 of the issues dealing with unemployment,9 particularly in the underserved10 communities and the African American male11 community that this may be an opportunity12 for.13 So my question becomes,14 describe for me the following tracks:15 the track where people that are college16 educated get trained and placed, but17 those people that are blue-collar, work18 with their hands, get jobbed and placed,19 and then ex-offenders, those particular20 groups.21
Right. Well, the22 people who are, as you say, college23 educated who lose their job through no24 fault of their own, through layoffs or25 47 9/7/11 - COMMERCE - RES. 1100201 what-have-you, they access the system2 through our CareerLink system, our3 Pennsylvania CareerLink system, and we4 have five of them that are geographically5 located around the City. And those6 people who are blue-collar workers7 actually access the system the same way.8 That's a universal system.9 The ex-offender community, we10 have a few programs and contracts with11 providers who do that. Perhaps Sue, my12 colleague, Sue Gutschow, can talk about13 that.14
Sure.15 In the past we have worked with16 RISE to fund some training for folks who17 come through the system. We've also done18 just straight job placement by referrals19 from the court system through our20 centers. That was never quite as21 beneficial as we would hope, because they22 don't show up as regularly as you would23 like. But we've always had a24 relationship with ex-offenders that you25 48 9/7/11 - COMMERCE - RES. 1100201 might be surprised at and might not be,2 too, because they're such a large3 population of folks in the City who have4 that background. So we do see a certain5 number. Without even having to go6 through a program like RISE or having to7 go through the Family Court system, we do8 see very many who come through our doors9 who just have a record.10
And my last11 question. Are you working with the12 public schools by way of shop training,13 those kinds of things, maybe a14 connectivity? I mentioned the car15 company. Could there be a program where16 a Dobbins, a trade school could connect17 with a company like that where there is a18 training program where a young person19 might get a stipend that could lead to a20 permanent job, similar to what they do in21 Germany? Daimler Chrysler works with22 schools where they go to school half a23 day and actually work in a mentorship24 fashion in the companies that they hope25 49 9/7/11 - COMMERCE - RES. 1100201 to get jobs from. Is there any2 discussion with the School Board --3 School Reform Commission? I'm sorry.4
That would5 typically be handled through the6 Philadelphia Youth Network. They work7 with the school system, and, in fact, I8 think they have probably a number of9 programs that do work with employers. I10 think they're always looking for new11 opportunities.12 The other connection that I13 know has been at least solidified in the14 last few years is with our industry15 partnerships, and as Mark mentioned16 earlier, the Advanced Manufacturing17 Industry Partnership is the one that is18 very, very active here in Philadelphia,19 and I know that we have at least one of20 the employers in that partnership who is21 working with a high school to get the --22 I think starting maybe even younger than23 juniors, could be sophomores, to get them24 to know what the manufacturing industry25 50 9/7/11 - COMMERCE - RES. 1100201 is. They have them do special training2 so that they might be ready to be hired3 as not just welders but other things that4 are available in that particular5 organization.6
I would love7 for your organization to help us with8 this thing. During our budget hearings,9 I heard the Gas Works tell me that10 they're having a problem retaining11 qualified skilled laborers. I've had the12 Water Department say to us that they're13 through attrition, through DROP and14 through other places, they're having a15 hard time retaining and recruiting16 engineers and other specialized skill17 sets. I've had the Personnel Department18 come in and say that because of that,19 they wanted to tinker with the residency20 requirement as it relates to how they21 look at a broader area to recruit.22 Our own stimulus package can be23 found and jobs can be found within the24 departments that are having a problem25 51 9/7/11 - COMMERCE - RES. 1100201 recruiting and retaining these type of2 employees. We might, you might want to3 meet with them to discuss linkages and a4 work relationship to be able to help them5 and help us with that particular problem.6 How do we have such a high unemployment7 rate and a wonderful job training program8 and can't make peanut butter meet jelly9 to solve that problem for a municipality10 that at the end of the day has jobs? So11 that's my final comment.12 Thank you, Mr. Chairman.13
Thank16 you. And welcome, Mark. This is your17 first time before us.18
Welcome.21 I echo Councilman Jones. This is a22 timely discussion for us. I think for a23 long time those of us in Council have not24 put our hands around what was going on in25 52 9/7/11 - COMMERCE - RES. 1100201 our employment and training. Having had2 one of my first professional jobs at the3 previous Private Industry Council, I'm4 very familiar with the evolution of PIC5 to PWDC, the WIB creation and PYN, the6 separation of PYN. So I think this is a7 timely discussion.8 I have some questions, some9 technical questions, and then I think10 that I would encourage us to have maybe11 not in such a formal public hearing but a12 discussion about the future of PWDC and13 encourage you to have that conversation14 with Council as much as possible because15 of the scenarios that Councilman Jones16 presented.17 One of the things that I know18 concerned Councilman Goode, and did me19 also, was the fact that there was $12720 million in stimulus and the fact that21 there's $50 million in employment22 training dollars that doesn't necessarily23 go through our budget process, so we24 don't see it. But you talked about25 53 9/7/11 - COMMERCE - RES. 1100201 downgrading or layoff of 41 employees to2 your current -- from your 160 to 119.3 How much of that was new stimulus jobs4 that you created to deal with stimulus5 and how much of it was duplicity because6 of the merger?7
None of it was8 duplicity because of the merger and none9 of it was related to the stimulus10 dollars. I mean, the stimulus dollars11 were primarily invested in opportunities12 for subsidies to go to employers, and13 then there were also dollars,14 administrative dollars, that we were able15 to get from the stimulus money to hire16 the additional staff to handle that17 additional workload. When the stimulus18 money ended, the staff that were hired as19 a result of that stimulus money went as20 well.21
The reduction in23 funding that we are experiencing right24 now with regard to our own internal25 54 9/7/11 - COMMERCE - RES. 1100201 process is a direct result in state cuts2 on the DPW side to the TANF system.3
So the4 number that you quoted, around 8,0005 people placed in jobs last year, is that6 the normal number on a yearly basis for7 PWDC or --8
I'm very14 concerned -- and, again, I think this is15 one of the places where we can be helpful16 in Council -- about the new direction17 that the state is going to take. As you18 know, the creation of WIB was part of the19 state getting more and more control of20 this and giving local municipalities like21 Philadelphia less and less control. So22 I'm very concerned about the discussion23 that's going on in Harrisburg, and to the24 extent that we could be helpful in25 55 9/7/11 - COMMERCE - RES. 1100201 getting our state legislators to2 understand how these decisions are hard3 to be made at the state, just because4 I've seen the evolution of CareerLink and5 EARN centers, and these are all great6 policy kind of ideas at the state, with7 no or very little input at the City about8 what we need and what we need to be9 doing. I'm particularly concerned now10 that Estelle Richman is not at Human11 Services about the TANF dollars in12 particular.13 How many people currently get14 served through TANF now?15
Right now we16 have -- well, as I testified earlier, we17 were asked by the state to maintain level18 activity. Last year on the TANF side19 alone, for example, last year on the TANF20 side alone we had a $50 million budget.21 This year we have a $30 million budget on22 the TANF side. Last year we were23 supporting 24,000 TANF clients, which is24 the largest population of TANF clients in25 56 9/7/11 - COMMERCE - RES. 1100201 a given county throughout the2 Commonwealth. This year our3 allocation -- and these numbers are given4 to us by the state. This year the5 allocation will support 24,000 -- I'm6 sorry; 14,000 clients. The flux in the7 10,000 clients, that's the conversation8 we're having with the state about where9 do they go.10
Are most11 of those TANF clients being provided12 workforce experience or most of that13 money is going to pay TANF folks on job14 experiences, or what's the majority of15 that money going to?16
That money is17 going to providers who are the18 organizations that are, in essence,19 providing the infrastructure, the EARN20 system itself. They are responsible for21 job development, so they have staff that22 are responsible for job development, job23 placement and a host of other training24 that would be needed for a given TANF25 57 9/7/11 - COMMERCE - RES. 1100201 client to be job ready, and it varies.2 So it's an entire infrastructure and3 system that supports it.4
So your5 average calls for a TANF client is about6 what?7 (Witness approached witness8 table.)9
This is my10 colleague, Ms. Daisy Rosa, who is11 Vice-President of our Transitional Work12 Division, and she oversees all of our13 work related to our TANF clients.14
My name is Daisy21 Rosa, Senior Vice-President for the22 Transitional Workforce Division.23
So24 you're saying the average training is25 58 9/7/11 - COMMERCE - RES. 1100201 4,100. So there's no TANF dollars going2 right to TANF clients for subsidies for3 work base experience?4
Our budget this8 year, we were allocated $3.8 million for9 wage subsidy.10
And how14 many clients are in that type of work15 ready?16
Well, we expect to17 serve about 1,500 this year. So we're18 actually now -- effective September 1st,19 we started to promote the wage subsidy,20 and we hope to serve about 1,500, place21 1,500 clients in jobs.22
Actually, it's an25 59 9/7/11 - COMMERCE - RES. 1100201 increase. This Administration in2 previous years, they gave us less funds3 for wage subsidy and they gave us -- they4 funded us more subsidy for paid work5 experience. That's where clients are6 placed in an internship for 20 hours at7 minimum wage. So they actually this year8 gave us $3.8 million and 1.4 for paid9 work. So there's -- you can obviously10 see that there's a different -- there's a11 shift in the sort of philosophy of making12 sure that clients are placed in jobs,13 work first.14
So the15 3.8 goes right to the client, to the16 participants?17
Well, that would go18 to the employer that hires the19 participant, yes.20
This is21 important, because I think it goes back22 to Wilson Goode in terms of trying to23 follow the philosophical trend. And so24 we're taking dollars that went to the25 60 9/7/11 - COMMERCE - RES. 1100201 TANF clients and now we're giving subsidy2 to the employers, a greater number3 weighted on the employer?4
Well, the difference5 is that with paid work, it went to the6 client, but it was funded -- it was an7 internship and the participant was not8 yet hired. With the wage subsidy, it9 goes to the employer, but it's still10 going to the client as wages.11
Do you12 from your experience -- and then I'll end13 with this, because I can have tons more14 questions. From your experience, the15 fact that the recipient gets a check from16 the employer versus you, does that add to17 the motivation or it gets employers more18 committed? What's the retention on that?19
Absolutely. If the20 client is hired with the wage subsidy,21 they're hired with the employer. Under22 paid work, it's an internship that we are23 the employer of record, so --24
What's25 61 9/7/11 - COMMERCE - RES. 1100201 the retention rate on that so far, in2 your experience?3
Paid work? It's not6 a retention per se, because our goal is7 to make sure -- with the paid work8 experience is for the participants to9 gain skills so that they can move to a10 job, and about 30 percent of our clients11 move from an internship to a job.12 With the wage subsidy, they're13 permanently hired, and the goal is that14 at the end of the subsidy, that employers15 will retain the client in the job, and16 about 51 percent of our employers do17 retain -- 51 percent of the clients18 placed in subsidy are retained in jobs.19
So we're20 spending -- so how is the shift of the21 $4,100 in training being shifted?22 Because you're going to serve less23 people. That's a pretty big number.24
Well, our25 62 9/7/11 - COMMERCE - RES. 1100201 allocation, like Mark alluded, was cut to2 $26 million from $40 million in the past,3 and we will have less funds for training4 and even perhaps for EARN operators as5 well.6
Okay.7 Well, thank you. I look forward to the8 conversation. This is extremely helpful9 to us in terms of getting the10 information, and we're going to need to11 again monitor this at the state level.12 I'm very concerned about what happens13 with the boots on the ground.14 Thank you.15
Yes. Good18 morning. Let me repeat Councilman Jones'19 comment that this is fortuitous that this20 hearing would happen today before21 President Barack Obama's address22 tomorrow, which we know is going to focus23 on jobs. And I want to first underscore24 the question raised by Councilman Jones25 63 9/7/11 - COMMERCE - RES. 1100201 around schooling, because that was one of2 my questions as well.3
Schools5 and partnerships with schools.6 Councilwoman Jannie Blackwell hosted a7 gathering this morning with our new8 Acting CEO and Superintendent of the9 schools, Dr. Leroy Nunnery, and he10 mentioned a number of action steps in his11 work plan, and one of them was or is that12 he wants to change, shift the paradigm13 around technical schools and what is not14 happening.15 So to get some additional16 specifics on Councilman Jones' question,17 what is the answer? That currently there18 is no relationship, partnership,19 interface with the School District of20 Philadelphia around trade schools, and if21 not, why? Is there an age limitation or22 what? I'm just trying to get a handle on23 what exists now.24
Around trade25 64 9/7/11 - COMMERCE - RES. 1100201 schools?2
Yes. And3 if not trade schools, technical training4 in the construction trades, for example,5 where we know only 45 percent of our kids6 are graduating and a fewer number than7 that are going on to college. So what do8 we as a city put in place to capture that9 segment of young people who for whatever10 reason do not see college as an option11 but are still smart and bright and just12 have -- we want to offer them some other13 alternatives.14
Right. Well, I15 think as we continue the dialogue going16 forward -- and this has been very17 informative to me in a lot of ways and on18 a lot of levels, so I can just tell you19 we'll have a very different conversation20 going forward, I think a far deeper21 dialogue.22 But the way the system is23 structured, Councilwoman Brown, is that24 we have the Philadelphia Workforce25 65 9/7/11 - COMMERCE - RES. 1100201 Development Corporation, which is2 currently the fiscal agent. Technically3 our job is to do nothing more essentially4 than just write checks and establish5 contracts and make sure that the contract6 guidelines are consistent with the7 funding source.8
The WIB's job is10 to set this broader policy and strategy11 about the system and how investments12 should be made for the public workforce13 system and what's sensible and what are14 the needs of business and industry, and15 that's what we're really trying to bring16 together. A part of the WIB's structure,17 however, is PYN, the Philadelphia Youth18 Network. They are -- the WIB and PWDC,19 we are what we refer to as the adult20 system.21
And then PYN is23 the youth system, but they're connected24 to us in that --25 66 9/7/11 - COMMERCE - RES. 1100201
All of their4 money comes through us and we contract5 with them. PWDC is the fiscal agent.6
Clear as mud.8 And through the Council for Career9 College Access -- and PYN staffs that10 function within the WIB's work. All of11 the policy work around what investments12 are made in the youth system, the role of13 the Philadelphia public school system,14 the community colleges, Temple University15 and the broader educational community,16 they're all -- the leaders are literally17 all very involved. Dr. Ackerman was a18 member of that committee. Dr. Nunnery19 was on that committee. I attend those20 meetings with them, both the quarterly21 meetings and the related committee22 meetings associated with that work. So23 that group gets together and develops a24 strategy for how to get our young people25 67 9/7/11 - COMMERCE - RES. 1100201 into jobs, and as a part of the role of2 the fiscal agent, our job is to then be a3 part of the conversation, understand4 where it's going, its connection to the5 guidelines associated with the money that6 we invest, and then we make that7 investment.8
So as this10 conversation evolves, I think having PYN11 at the table as well to have this12 philosophical discussion about what are13 the kinds of employment and training14 opportunities that we want to prioritize15 for our youth and why are we prioritizing16 the ones that we are right now is part of17 the dialogue, but I'm not -- that's as18 far as I can take it.19
Sure.20 Well, we would urge -- "we," members of21 Council -- would urge that dialogue. To22 do the dialogue, that's important. To23 have the strategy discussions, that's24 important. But then work product, I25 68 9/7/11 - COMMERCE - RES. 1100201 mean, what happens after that, and if2 there are no tangible trade/technical3 programs -- and I've been hearing for the4 12 years I'm here, there are fewer5 technical skills, how and where we fill6 in the gap. I would submit that the gap7 is huge, and there may exist an8 opportunity for your agency to help fix9 that going forward. That's what we would10 ask. So that's number one.11 The second is, I and a number12 of members of Council have interns in our13 office 365 days a year, and oftentimes14 I've been -- my office has been fortunate15 enough to get interns from SITE (ph),16 which has a real track record of placing17 women on welfare in successful18 career-oriented positions.19 So if you could -- what is the20 RFP process, just give a thumbnail Cliffs21 Notes sketch of what happens with the22 OICs of the world and SITEs and others23 that serve these very special24 populations, from the RFP, the date that25 69 9/7/11 - COMMERCE - RES. 1100201 that's rolled out to receipt of acts, to2 notification of awards, to time for3 execution of awards, just a real4 thumbnail just for our own understanding5 here.6
This year we didn't7 issue an RFP. The last RFP we issued was8 a year past. That was in 2009. We9 issued an RFP -- I'm sorry; 2010. And we10 asked for a number of providers that11 would be interested in providing12 training. And, of course, what we do is13 that we issue the RFP and we have a14 bidder's conference. We hold a bidder's15 conference, and we have providers attend,16 and we provide information. And those17 that are interested submit a proposal to18 us. It's reviewed. We actually have a19 number of reviewers that consist of20 individuals from PWC and other21 stakeholders. And then providers are22 selected and they're notified and they're23 awarded contracts. And SITE actually has24 two contracts with us currently offering25 70 9/7/11 - COMMERCE - RES. 1100201 medical billing and computer2 applications.3
I see. I4 see. Okay. That's very, very helpful5 just to get a handle on what the process6 is, knowing that all of the funding7 agencies follow their own script.8 I'm just thinking of the9 Philadelphia Visitors -- the Convention10 Center and what that is, the type of11 persons they employ. Here's the12 question: To what extent does your13 agency link up with representatives from14 the next representatives who are going to15 generate jobs, like the Airport, a16 ten-year, what, $5.2 billion enterprise17 that's going to happen over the next ten18 years, or the Philadelphia Port19 Corporation where that's coming online,20 or the expansion of 95, where there are21 going to be lots of jobs, and to the22 extent that we make sure that23 Philadelphians are included in the pool,24 Philadelphians who are prepared, who know25 71 9/7/11 - COMMERCE - RES. 1100201 how to fill out the app and come with the2 skill sets. To what extent is there a3 link, an association, a relationship,4 dialogue with those folks who represent5 those major engines, economic engines,6 that are coming down the pipeline so that7 then there can be training programs8 online where once those young people,9 adults, get the training, they can be10 pushed right to those pipelines?11 Anything happening along those lines12 currently, still taking into13 consideration that for all intents and14 purposes you're new on the team there and15 it's a big elephant. But is there that16 kind of thinking happening at this policy17 level you're talking about?18
Absolutely, and I19 think it's really on two fronts. I mean,20 we talked about one of them earlier, and21 that is just communication, getting the22 word out. I think we can certainly do a23 better job at doing that, and, again,24 that's part of the strategy.25 72 9/7/11 - COMMERCE - RES. 1100201 For those of you who may not2 have had an opportunity to review it yet3 because you may not have been aware of4 it, but on our website at www.pwdc.org,5 there is an executive summary of the6 assessment, this independent assessment7 that was done of our local system, with8 recommendations of how we might improve9 it. That's really what's informing the10 transition that we're taking right now.11
And, again, in13 there are listed some best practices.14 That's just an executive15 summary, but for those who may be16 interested in the detail, there's a17 fuller report, about a 180-page document18 that goes into detail in every one of19 those categories listed there as20 priorities, and making sure that there is21 a stronger connection between the public22 workforce system and the City's five-year23 plan or five-year strategy is one of24 those priorities, strengthening the25 73 9/7/11 - COMMERCE - RES. 1100201 connection between workforce and economic2 development, which includes the work that3 PIDC does and others. I mean, I've only4 been to, I think, maybe two or three5 meetings -- my first meeting was about6 two or three meetings ago with the7 Department of Commerce that I described8 earlier and it was, I don't know, it was9 just a real good meeting. I think it's10 the kind of thing that you're looking11 for. You got PHA at the table, you got12 OHCD at the table, you got the public13 workforce system, you got PIDC, you have14 the Commerce Department, you got the RDA.15 You got all of the drivers of commerce16 and industry in the City. I mean, and17 arguably perhaps there could be more, but18 we're at the table and we're beginning19 that dialogue now, and we do see some20 good examples of what we have been able21 to achieve.22 We have our Board meeting of23 our newly appointed Board, a Board24 meeting tomorrow morning, and in that25 74 9/7/11 - COMMERCE - RES. 1100201 meeting we're having representatives from2 the Mark Group, which is a company that I3 think at least for me coming into this4 role really represents the kind of thing5 that I'd like to see more of. Here is a6 company that originated in discussion7 with the Department of Commerce about how8 they could support this company's9 activities here in the City of10 Philadelphia to provide employment and11 training opportunities and place people12 directly in the jobs. The connection was13 made with the public workforce system.14 We provided some employment and training15 dollars to train employees. They got16 their employees directly out of the17 CareerLink center. So people who, you18 know, would come into your councilmanic19 offices that you would direct to our20 CareerLinks would go in and register in21 our CareerLinks. They pulled the people22 from there, and I think at last count23 they were up to about 42 or 45 employees24 that they've actually hired as a result25 75 9/7/11 - COMMERCE - RES. 1100201 of the training investment that we made.2 And the training investment we made I3 think was probably at the level of about4 $120,000 for the training.5
So far for those7 42 employees, and they're going to train8 more. They're not stopping at the 42,9 without asking for more money right now.10 I think the current contract takes them11 through November. They provide12 weatherization services, where they can13 go into a home and they can do an14 assessment about how a home can be more15 energy efficient, and then they actually16 do the work. That's a good example.17
That came about20 as a result of the kind of coordinated21 effort between the public workforce22 system and in this case the Commerce23 Department.24
Well, that25 76 9/7/11 - COMMERCE - RES. 1100201 is an excellent example, and we would be2 thrilled for that type of tangible -- the3 dialogue is good and healthy, but it4 means nothing if there is no outcome that5 you can look, feel and touch.6 So we would continue to7 encourage that. The only sector I did8 not hear in that mix of organizations you9 mentioned are the chambers, the African10 American Chamber, Hispanic Chamber. I11 don't want to misstate --12
Women's13 Chamber.14 COUNCILWOMAN BROWN:15 Unfortunately, I don't think we have16 that, Councilman Jones.17
Along, of20 course, with the Greater Philadelphia21 Chamber. But there may be --22
We have chamber23 representation. I just didn't mention24 it. We have chamber representation on25 77 9/7/11 - COMMERCE - RES. 1100201 the Board, the Philadelphia Chamber of2 Commerce. We have representatives from3 the Hispanic Chamber of Commerce as well.4
I'm not sure if6 we have anybody from the African American7 Chamber of Commerce. I'm not sure.8
Thank you,14 Mr. Chairman.15 I apologize, I got a little bit16 distracted by the Chairman promoting17 another issue very important to the18 workforce in Philadelphia while19 Councilwoman Quinones-Sanchez was20 speaking, asking you some questions, and21 so I'm not sure she touched this. I22 don't think she did, but what was your23 budget prior to the stimulus? What was24 the budget of the combined PWDC and WIB25 78 9/7/11 - COMMERCE - RES. 1100201 prior to the --2
One hundred10 million. Eighty million dollars of that11 was TANF all in, and about another $2012 million on the WIA side.13
And so the14 big reduction from -- the essentially 5015 million reduction from pre-stimulus16 funding is not a lack of federal funds17 but is a lack of state funds?18
And how many25 79 9/7/11 - COMMERCE - RES. 1100201 employees were there in both2 organizations prior to the stimulus?3
On the PWDC side4 we had 160, and at the WIB I think we had5 total of about 20.6
And how many11 are you going to have with only $5012 million? What is the total number of13 employees that you'll have now?14
Well, as of15 today, we have 119 on the PWDC side, and16 on the WIB side I think we're down to17 about nine.18
With a 5024 percent drop in funding?25 80 9/7/11 - COMMERCE - RES. 1100201
Correct. I can2 just -- I just want to manage the3 Committee's expectations around earlier4 discussions about conversations that5 we're having with the state. There could6 likely be more.7
Well, I'll8 get to that in a second, but so I just9 wanted to understand sort of whether or10 not the reduction in staff has been11 commensurate with the reduction in12 dollars. Obviously if they don't reduce13 50 percent if you have a 50 percent14 reduction, there's fewer dollars15 available to actually go to corporations16 to train people, as Councilman Goode17 suggests, or other things, right? We're18 spending it on administration and not19 getting people trained.20
Yeah. There is a21 direct relationship between the amount of22 investment that we have administratively,23 from the state administratively, and the24 demand that we have to serve. So as the25 81 9/7/11 - COMMERCE - RES. 1100201 demand shrinks, then the administrative2 overhead shrinks.3
Well, on the EARN10 side, the demand on the EARN side is11 defined as people who receive cash12 assistance from the state.13
But the14 demand doesn't decrease; we just have15 less money to give out?16
No. You're20 absolutely right. I mean, there's still21 a question of the 10,000 clients,22 where do --23
I mean, in24 theory, the demand should be increased25 82 9/7/11 - COMMERCE - RES. 1100201 compared to pre-stimulus because the2 economy is in far worse shape, we have3 far higher employment, et cetera.4
So I'm7 wondering when you described the mission8 of PWDC versus WIB, it seemed to me that9 the mission of PWDC is almost entirely10 administrative and the mission of WIB,11 the way you described it, was sort of the12 policy arm.13
It seems to15 me to be an extraordinary number of16 people on the administrative side of the17 house of workforce development and I'm18 just wondering why you need that kind of19 staff to manage inflows and outflows of20 dollars. I understand you said you have21 to monitor contracts and other stuff, but22 I'm just wondering what kind of systems23 you have in place to eliminate24 unnecessary workflow processes and allow25 83 9/7/11 - COMMERCE - RES. 1100201 more of this to be sort of online or2 computer driven rather than paper based.3
Well, let me just4 talk a little bit more about the role5 that PWDC plays. I mean, it's one thing6 to characterize it as administrative.7 That's a broad brush. That's my8 language. I used it. But let me just9 talk a little bit more about what we do10 in the capacity of the administrative11 role.12 We monitor the system to make13 sure that there is compliance, that there14 is no fraud, that there is no theft at15 the local level. So that when we do the16 contracting that we do -- and we do17 roughly several hundred, close to about18 500 contracts in the course of a year.19
Five hundred20 contracts with training organizations or21 with employers?22
With a host of23 employers, training providers, EARN24 providers, the whole host of --25 84 9/7/11 - COMMERCE - RES. 1100201
Number of6 contracts and amount of dollars for each7 of those categories you mentioned,8 contracts with employers, as Councilman9 Goode suggested, versus contracts with10 training providers versus contracts with11 the EARN people.12
The EARN, we have13 nine EARN providers, and the contracts14 with the EARN providers range from $315 to -- $2 to $3 million. We contract with16 PYN, Philadelphia Youth Network. That's17 a fairly large contract that we do with18 those guys. If I'm not mistaken, that19 contract on an annual basis, about $1020 million on an annual basis out of the 50.21 We contract with a host of smaller22 job-specific skills training providers.23 I don't have that number right offhand,24 Councilman.25 85 9/7/11 - COMMERCE - RES. 1100201
To do what,6 Councilwoman Blondell Reynolds Brown is7 asking me and I'm redirecting the8 question at you.9
To provide the10 employment and training services for a11 host of programs that they operate, in12 concert with the School District and some13 of the other things that we've talked14 about. And they get other privately15 raised dollars as well, but that's what16 they contract with us to do.17
I don't want18 to waste the -- if you could provide the19 answers to all of those questions I just20 asked in terms of the dollars, how21 they're spent in each organization,22 especially if PYN is going to get23 one-fifth of now what's available for all24 workforce development dollars. We have a25 86 9/7/11 - COMMERCE - RES. 1100201 serious -- obviously training our youth2 and employing our youth is very3 important, but there are a lot of adults4 who need work skills who have families to5 support, and I question whether, without6 knowing more, and I look forward to7 getting your information, whether or not8 that makes sense given that we're taking9 that spending from 10 percent of the10 total to 20 percent of the total now with11 the reduction in dollars.12 So just provide information13 about where all the money goes, the14 percentage of contracts, who gets the ten15 largest contracts in each category and16 how much money that is and then also in17 the aggregate that money.18 I'm just wondering -- and this19 is sort of along the line of Councilman20 Jones' questions and Councilman Goode's21 questions about existing employers. Do22 you know how many jobs we lose every23 decade, net jobs?24
Every3 decade. The City of Philadelphia loses4 40,000 to 50,000 jobs every decade. They5 have since the '50s. That's 4,000 or6 5,000 net jobs a year. People are7 creating new jobs in the City, like the8 example Councilman Jones mentioned, but9 for every new job, we have lost jobs that10 are in excess of those new jobs, and it11 seems to me that the lowest hanging fruit12 for the City of Philadelphia in terms of13 its workforce is to keep the jobs we14 already have. And based on a response to15 an earlier question that was asked, which16 was how many companies that are here know17 you exist, you said not enough, the18 number one thing you can do to get people19 employed is to keep the jobs that are20 here, make workforce dollars available to21 companies that are still here that are22 struggling to stay here because of our23 tax burden and other things and help them24 develop training programs that have them25 88 9/7/11 - COMMERCE - RES. 1100201 want to stay in the City of Philadelphia2 rather than leave.3 We're losing potentially 4004 manufacturing jobs from Sunoco -- 1,5005 jobs from Sunoco if they close down those6 plants. Sunoco pays net income tax to7 the City of Philadelphia based on those8 1,500 employees and all of that property,9 even though they lose money in the10 refinery operations because of our sales11 factor apportionment formula, they've12 paid $30 million to the City of13 Philadelphia while they're losing money.14 So that's something we can deal with, but15 making it easier for companies like that16 to train new employees, making it less17 expensive for them to do business here is18 something you guys can do that can have a19 real impact, and I'd like -- I don't want20 you to answer the question now, but the21 next time -- I'm sure Councilman Goode22 will have you back -- the next time23 you're before us, I would like a thought24 from you about how you can engage25 89 9/7/11 - COMMERCE - RES. 1100201 existing companies in the City of2 Philadelphia and have a plan to let them3 know that you want to help them get new4 employees on board and pay for them. I5 think that's the biggest bang we could6 get for your dollar based on sort of7 everything I've heard here today.8 So I'm hopeful that the9 combination of your organizations will10 meet the goals you have. I'd also like11 you to present to the Chair what the12 deliverables will be for the combined13 organization in terms of actual goals,14 how you define the outcomes that we15 should expect for $50 million, and16 present that in writing to the Chair so17 that when you come back in a year or two18 years, we can take a look at what you19 said you'd accomplish with the dollars20 available compared to what is delivered.21 I have one final question and,22 that is, are you combining the workforce23 dollars that are not available currently24 within PWDC and WIB into your25 90 9/7/11 - COMMERCE - RES. 1100201 organization or are the other workforce2 dollars -- and there's lots of people who3 get workforce dollars in the City that4 are not PWDC or WIB. Are you combining5 them into your new organization or are6 they still going to have scattershot7 workforce dollars that are not integrated8 into a unified strategy?9
We're not10 combining them. That's the purview of11 the funders, but what we are doing as a12 result of this is aligning our strategies13 with them.14
So what are15 you doing with MOCS, which I think gets16 $8 million and dollars that could be used17 for workforce development?18
MOCS is a part of19 our internal structure that we assemble20 when we come together to talk about how21 we plan to implement the system.22
They're part of25 91 9/7/11 - COMMERCE - RES. 1100201 the PWDC structure as it stands right2 now, and I fully anticipate them3 continuing that role.4
Okay.5 Because it seems to me they waste -- is6 their budget part of the 50 million7 you're mentioning?8
Well, that's10 what I'm talking about. They spend a lot11 of money on strategies that aren't at all12 related to any of the good ideas that13 we've been talking about here today.14
And what16 you're saying is that spending, that17 strategy, will not be part of your18 bailiwick. So that there's still a lot19 of dollars out there that are being20 spent, in my view, wasted on things that21 don't create jobs that are called22 workforce dollars.23
Yeah. Well, I24 can tell you that it is our goal to try25 92 9/7/11 - COMMERCE - RES. 1100201 to rein in and align as much of that as2 we can within the purview of our sphere3 of influence, either through our4 organization, our Boards, or through the5 Mayor's Office of the City of6 Philadelphia.7
Well, I8 think that has to be done. I hope this9 is going to be an effective10 consolidation. I don't think it is if it11 doesn't include the other workforce12 dollars and organizations that are out13 there so that there can be one14 coordinated, unified strategy that can15 then be held accountable by this body and16 others.17 If I have a criticism of the18 Administration, it's all sizzle, no19 steak, and here we are coming up with a20 new name, combining two new21 organizations. We had a CTO. Now we22 have a CIO. Now we have a Director of23 Innovation, but nothing has changed in24 the way that operates. We've had three25 93 9/7/11 - COMMERCE - RES. 1100201 new titles, three new press conferences.2 I just want to see you be on a path so3 that I'm not able to say that about you4 next year.5 Thank you very much.6
I guess8 there are no other questions from members9 of the Committee. Are there any other10 witnesses to testify?11 (No response.)12
Thank you13 very much. This is a very good start.14 We look forward to continuing these15 hearings. Also as Councilwoman Sanchez16 suggested, probably some informal17 meetings with the Committee and/or the18 full Council, but as you see, Council is19 very interested in this issue and looks20 forward to working with you.21
Thank you.25 94 9/7/11 - COMMERCE - RES. 1100201 (Committee on Commerce and2 Economic Development recessed at 11:453 a.m.)4 - - -5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 95 1 CERTIFICATE2 I HEREBY CERTIFY that the3 proceedings, evidence and objections are4 contained fully and accurately in the5 stenographic notes taken by me upon the6 foregoing matter on September 7, 2011, and7 that this is a true and correct transcript of8 same.9 10 11 12 13 --------------------14 MICHELE L. MURPHY15 RPR-Notary Public16 17 18 19 (The foregoing certification of this20 transcript does not apply to any reproduction21 of the same by any means, unless under the22 direct control and/or supervision of the23 certifying reporter.)24 25