Title
Subject: Workforce Investment Boards's Business Services Plan
From: Community and Economic Development Agency
Recommendation: Adopt a Resolution appropriating revenues generated through the implementation of the Oakland Workforce Investment Board's Business Services Plan to business services activities
Body
REPORT AND RESOLUTION APPROPRIATING REVENUES GENERATED THROUGH THE IMPLEMENTATON OF THE OAKLAND WORKFORCE INVESTMENT BOARD'S BUSINESS SERVICES PLAN TO BUSINESS SERVICES
ACTIVITIES
SUMMARY
In June of 2002, the Oakland Workforce Investment Board (WIB) adopted its Business Services
Plan, which describes a strategy for sustaining services to employers through revenue generating
activities. The Workforce Development Unit of the Economic Development Division of CEDA
oversees the implementation of the WIB's business services strategy and coordinates the
Enterprise Zone Hiring Tax Credit service, which is one of three primary service elements
defined in the Business Services Plan. The Fiscal Year 2003-2004, the Workforce Development
Unit anticipates receiving revenues in the form of commissions from the hiring tax credit and
human resource services as defined in the Business Services Plan. Staff is requesting
authorization to appropriate and allocate these revenues to support the activities that generated
the funds as required by regulations governing the Workforce Investment Act of 1998.
FISCAL IMPACTS
Staff expects to receive up to $300,000 in business services generated revenue in FY 2003-2004.
Revenues generated as a result of activities funded by the Workforce Investment Act (WIA)
must be used for similar activities within the same program as specified in 20 CFR, Section
667.200, 29 CFR, 95.24(a) and 29 CFR 97.25(g)(2). These anticipated revenues must be
appropriated to the WIA fund (2195) to support business services as articulated in the Oakland
WIB's Business Services Plan. Staff requests that all revenues be used for the following
purposes:
I . To cover all costs related to the processing of hiring tax credit vouchers (for FY '03-'04,
that is approximately $150,000 in personnel and 0 & M costs).
2. To fally automate the hiring tax credit vouchering and tracking process (estimated cost
for FY '03-'04 is $25,000).
3. To market the WIB's business services extensively to Oakland businesses (estimated
cost for FY '03-'04 is $50,000).
4. To allocate the remaining revenues to other business services and related activities
(estimated at $75,000 for FY '03 - '04). Vs
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Items 2 and 3 are one-time investments. Items I and 4 are ongoing, and should be supported
through revenues generated from business service activities for years to come. The funds
allocated to support the processing of hiring tax credit vouchers will off-set WIA funds (2195)
currently allocated to that function. The balance of funds allocated to other business services
activities will supplement the WIA funds approved by the Oakland WIB for staffing and training
services for the WIB's business and employee customers.
BACKGROUND
Unlike previous workforce development legislation, the Workforce Investment Act of 1998
(WIA) identifies employers as a primary customer. WIA requires that its funds be governed by
Workforce Investment Boards (WII3s), which by law must be comprised of majority business
sector leadership. The Oakland WIB has strong business sector leadership, which led the process
of developing a comprehensive Business Services Plan (Attachment A). The Plan articulates the
WIB's intent to provide a range of services to its business customers to improve employment and
advancement opportunities for Oakland job seekers and workers. Among these services are
staffing, customized training, hiring tax credit assistance, and other human resources solutions.
The Plan also addresses the concept of sustainability through revenue generation for the WIB's
business services, with the goal of developing demand for high quality service delivery.
Oakland's workforce development system is now beginning to realize the revenue from its
services.
KEY ISSUES AND IMPACTS
Funding for Oakland's workforce development system has decreased nearly 40% in the past
year. The Oakland PIC and the City's Workforce Development Unit have had to make difficult
staffing reductions. Despite these reductions, funding for direct services to job seeker and
business customers has also been significantly reduced. Revenue generating activities and
continued cost-cutting measures are the only ways to compensate for the current and anticipated
reductions in WIA funds for Oakland. The revenues generated by Business Services activities
must be "reinvested" in similar activities as required by the Workforce Investment Act of 1998
(Sec. 195 (7)(13)), 20 CFR, Section 667.200, 29 CFR, 95.24(a) and 29 CFR 97.25(g)(2). For
fiscal year 2004-2005 and beyond, these anticipated revenues will be incorporated in the
Oakland WIB's budget development and approval process. Because these revenue generating
activities are new and as yet untested, staff did not include any revenue assumptions in the City
of Oakland's FY 2003-2005 policy budget and cannot as yet make an accurate projection of the
commissions to be realized in the current fiscal year.
PROGRAM DESCRIPTION
The Oakland WIB, through the Workforce Development Unit of CEDA, can now generate
revenue in the following ways:
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1 . Processiny, of Entemrise Zone Hiriny Tax Credit Vouchers: The Workforce Development
Unit has launched a pilot program to cover the costs of processing the vouchers by
charging business clients $20 per voucher. This $20 commission represents less than 1%
of the State Income Tax savings that the businesses will realize. Staff estimates
generating $260,000 in voucher processing commissions.
2. Web-Based Hiring Tax Credit Service: In partnership with a private firm, Vervidian, the
Workforce Development Unit is piloting an innovative web-based hiring tax credit
services called HireCreditPro that is accessible through the Oakland W113's website
pay$10peremployeefiletheysetupthroughtheweb-basedsystem. Vervidianwillpay
20% of all revenues it generates as a result of business clients accessing HireCreditPro
through the Oakland WIB website. Staff estimates generating $30,000 in commissions
from Veridian.
3. Market Rate Human Resource Services: Per its agreement with the Oakland Private
Industry Council, Ultimate Staffing has agreed to pay the Oakland WIB up to a 5%
commission rate on all market rate revenues it generates as a result of its relationship
with business customers on behalf of, and subsidized by, the Oakland WIB. Staff
estimates generating $10,000 in commissions from Ultimate Staffing.
SUSTAINABLE DEVELOPMENT
Economic: This report details the Oakland WIB's vision for sustainable services through
innovative revenue generating services for its business customers. Oakland is unique in this
regard, and is on the Vanguard of the Department of Labor's recent initiative to create
public/private partnerships in local workforce development systems.
Environmental: This program has no direct impact on the environmental element of Sustainable
Development.
Social Equity: Relationships built with business customers and revenues generated through
business services will create job placement and training opportunities for Oakland job seekers
and under-employed workers. This is in keeping with the City Council's and the Oakland WIB's
goal of enabling workers to achieve self-sufficiency.
DISABILITY AND SENIOR CITIZEN ACCESS
This program has no direct impact on Disability and Senior Citizen Access.
RECOMMENDATIONS AND RATIONALE
Staff recommends that the City Council adopt the resolution authorizing the City Manager to
appropriate revenues generated through the Oakland WIB's business services and to allocate all
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such revenues to support workforce development related business services in accordance with
federal law.
In times of funding reductions for federal grants, Oakland should diversify its funding for
workforce development. Business customers are willing to pay for quality services, particularly
services that save them substantial time and money. The Oakland W113's Business Services
Plan, which was developed by its business leadership, articulated just this strategy. Staff is now
bringing the plan's revenue generating feature to fruition.
ACTION REQUESTED OF THE CITY COUNCIL
Adopt the attached resolution authorizing the appropriation of an estimated $300,000 in revenues
generated by business services activities and the allocation of said revenues to support current
and future business service activities in accordance with the Oakland W113's Business Services
Plan.
Respectfully submitted,
DANIEL VANDERPRIEM
Director of Redevelopment, Economic
Development and Housing
Prepared by:
Al Auletta, Workforce Development Manager
APPROVED AND FORWARDED TO THE
COMMUNITY AND ECONOMIC
DEVELOPMENT COMMITTEE
Office of the City Manag@r
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APPROVED AS TO FORM AND LEGALITY'
71=12
DEPUTY C174@@TTOFKEY
OAKLAND CITY COUNCIL
RESOLUTION No. C.M.S.
INTRODUCED BY THE CITY MANAGER
A RESOLUTION APPROPRIATING REVENUES GENERATED THROUGH
THE IMPLEMENTATON OF THE OAKLAND WORKFORCE INVESTMENT
BOARD'S BUSINESS SERVICES PLAN TO BUSINESS SERVICES
ACTIVITIES
WHEREAS, the Oakland Workforce Investment Board (WIB) is required under the
Workforce Investment Act of 1998 to set policy direction and oversee programs funded through
the Workforce Investment Act; and
WHEREAS, the Oakland WIB adopted a comprehensive Business Service Plan on June
20, 2002 that articulates strategies for serving business clients and generating revenues to sustain
these services; and
WHEREAS, the Workforce Development Unit of the City's Community and Economic
Development Agency's Economic Development Division coordinates on behalf of the Oakland
WIB the implementation of the Business Services Plan; and
WHEREAS, federal regulations require that revenues generated from activities funded
entirely or in part with Workforce tnvestment Act funds must be used to support similar activities
and programs as those through which the revenues were generated; now, therefore be it
RESOLVED: That the City Council hereby authorizes the appropriation of $300,000 in
revenues generated through the implementation of the Oakland WIB's Business Services Plan by
the City's Workforce Development Unit to directly support current and expanded Business Service
activities as follows:
$1 50,000 for the staff and operating costs associated with processing Enterprise Zone vouchers.
$25,000 to automate the Enterprise Zone voucher processing system.
$50,000 to market business services to the Oakland employer community.
$75,000 to support other business services and related activities in support of employers and job
seekers.
and be it further
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RESOLVED: That the City Manager and his or her designee is hereby authorized to
allocate said revenues to the Workforce Development Unit as appropriate and to take whatever
action is necessary with respect to said revenues consistent with this Resolution and its basic
purposes.
IN COUNCIL, OAKLAND, CALIFORNIA, 12003
PASSED BY THE FOLLOWING VOTE:
AYES- BROOKS, BRUNNER, CHANG, NADEL, QUAN, REID, WAN. AND PRESIDENT DE
LA FUENTE
NOES-
ABSENT-
ABSTENTION-
ATTEST:
CEDA FLOYD
City Clerk and Clerk of the Council
of the City of Oakland, California
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September23,2003