YOUR BUSINESS AUTHORITY
Springfield, MO
YOUR BUSINESS AUTHORITY
Springfield, MO
The seven-county Council of Local Elected Officials is taking note of the fractious relationship between the city of Springfield and the Ozark Region Workforce Development Board, which came to a head this month after city officials denied a funding request by the board.
“The CLEO has been concerned about the ongoing rocky relationship between the citizen board, comprised of regional business and union leaders, and some city departments for quite some time,” said Bob Dixon, presiding commissioner of Greene County and chair of CLEO.
The CLEO, comprising the presiding commissioners of Greene, Christian, Dallas, Polk, Stone, Taney and Webster counties, appoints Workforce Development Board members and weighs their recommendations in deciding on workforce issues for the region. Dixon said via email that strained relationships between the board and city departments dates from before he began in his role in 2019.
Currently, the CLEO is mulling that relationship, including the question of whether the public is best served by having the city of Springfield administer the Missouri Job Center and serve as fiscal agent for the Workforce Development Board, according to Dixon.
“This is ultimately what the WDB and the CLEO is attempting to determine through an open and public process of learning best practices around the state and nation along with recommendations for areas of improvement so that we can serve job seekers and employers at the absolute best of levels,” he said.
Procurement process issues
The WDB contracted in May 2024 with a consultant from New Orleans-based Dadco Consulting Services Inc. to consider the issues raised by Dixon in addition to crafting a strategic plan for regional workforce efforts. But that contract has created a problem, according to officials with the city’s Finance Department, which does not plan to fulfill the request from the board to pay a portion of the consultant fees, $27,900, through funds awarded to the WDB because of violations by the board of procurement procedures and city policies.
Jody Vernon, assistant director of finance for the city, told Springfield Business Journal, “Based on the information we have at this point, we do not anticipate paying those because of some of the concerns with the procurement process. We’re still kind of lining all of that out, but at this point, we cannot pay them as is.”
A request for proposals to hire a consultant was approved by the Workforce Development Board and then by the CLEO in a March 21, 2024, joint meeting of the two bodies, according to meeting minutes. Susan Johanson, board chair at the time, reported the action came out of a November 2023 joint retreat of the board and CLEO.
At a May 2024 meeting of the Springfield City Council, incoming board Chair Andrea Sitzes told council members that an introspective assessment at the retreat revealed a hard truth: “Nearly every single item that we are responsible for had room for improvement – significant room for improvement.”
In a Feb. 11 memo to Springfield City Council, Vernon and Amanda Ohlensehlen, director of Economic Vitality and Workforce Development, spelled out the problems with the payment request: “The city’s initial review of this request suggested that the consulting contract was not procured properly by ORWDB, and a subsequent initial review by an independent third-party adviser reached a similar conclusion.”
Here’s the timeline, according to the memo:
• Starting in winter 2023, the board began discussions to hire a consultant to form a strategic plan. Minutes show the board initially planned to fund the entire contract through private donations, which would negate the need to follow federal grant procurement requirements, which is managed by city officials in their role as fiscal agent of the board.
• A request for proposals was published in March 2024, and four proposals were received. The bids were not sealed. The board’s Priority Task Force Committee met to score the bids, and minutes say they did so as a group
• The contract was awarded to the highest bidder, Dadco, at $82,500.
• In June 2024, the board began discussing using federal funds provided through the Department of Labor Workforce Innovation and Opportunity Act to cover any remaining balance. “At that time, ORWDB was reminded by city staff that, in order to use WIOA funds, the proper procurement process needed to be followed,” the memo states, adding that property documentation would need to be provided – including individual scoring sheets.
• The board voted in October 2024 to use federal WIOA funds to cover up to $5,600 in consulting fees, then in November revised that amount to $27,900. The city did not receive all of its requested documentation until Jan. 22 of this year. This included, the memo states, “individual scoring sheets with nearly identical numerical ratings and phrasings, resulting in the initial review.”
“Due to these procurement irregularities, if the city pays these costs as requested by ORWDB, there is a significant risk that the costs will be disallowed, which means the costs will have to be paid with nonfederal dollars,” the memo states.
It adds that the city’s actions are taken to protect the city as well as the CLEO and Workforce Development Board.
Communication issues
From the WDB’s perspective, communication is at the heart of the problem, according to Sitzes – and this is not the first time a failure to communicate has made the news.
“It is unfortunate that the fiscal agent’s thoughts weren’t shared with the board before being sent to either the state or the outside third party [reviewer],” Sitzes said via email. “As fiscal agent, it is their responsibility to advise us on expenses. This all could have been a nonissue if our fiscal agent would have been transparent and direct in communication with the board.”
The city provides a staff member, accounting supervisor Toby Stevenson, to attend Workforce Development Board and CLEO meetings, as well as its executive and finance committee meetings, and provide advice as a liaison. City spokesperson Cora Scott said the liaison prepares financial reports and prepares and monitors the board’s budget for their review and approval. The liaison was not a participant in the May 16 meeting of the board’s Priority Task Force Committee, where responses to the consultant RFP were scored, she said.
Scott added that the city’s procurement process has been unchanged since 2014, and the board is well aware of it.
Alternately, paying for the consultant services through contributed funds held in the board’s Ozark Region Workforce Improvement Fund, an account maintained by Community Foundation of the Ozarks, does not require the same procurement processes.
SBJ contacted Sitzes via email to tell her the information Vernon said in her interview for this story: that the city did not anticipate paying the consultant fees.
Sitzes replied, “Not surprising, but it would have been good to hear this from our fiscal agent.”
The decision does not change anything for the board, according to Sitzes, who said the first three phases of the four-phase consultancy will be paid for out of its CFO account. “Any future steps will be discussed at our next meeting,” she said.
At the Feb. 5 WDB meeting, members tabled consideration of agenda items and proposed a special meeting before the end of February once the payment decision was known. A meeting date has not been shared with SBJ by press time.
A communication breakdown was also reported on in SBJ City Council coverage from May 2024. As council considered a bond measure to cover expenses to move the Missouri Job Center from its Sunshine Avenue site to a new Workforce Development operations building, Sitzes informed them that the WDB had only been informed of the planned move less than a week previously.
She told council at the time that the board had not had a chance to vet the information about the move or discuss it with the CLEO, which had likewise not been informed – even though repayment of the proposed bonds was dependent upon rental income from the board.
At the time, Sitzes told council, “What we’re really looking for is a true partner with us that can be collaborative in those services and in those decisions.”
Other issues
In his email to SBJ, Dixon brought up other issues experienced by the board and CLEO in their relationship with the city. The most difficult of these was in working out new state-mandated firewall agreements in conjunction with two of its contracted pacts with the city: its administrative agreement to administer WIOA funds and its fiscal agency agreement. The situation resulted in the board spending over $100,000 of WIOA funds on attorney fees because of difficulties in coming to agreeable terms, he said.
Such firewall agreements are intended to provide clear separation of duties when an employee answers to two organizations.
Asked if the city’s role as fiscal agent is at risk, Dixon said that’s a decision to be made by the CLEO with board input.
“This decision will not be made until we have all had an opportunity to review the report, best practices and recommendations of the professional consultant,” he said.
For its fiscal agent services, the city receives $197,081 annually – 10% of the federal WIOA allocation of almost $2 million – and this covers 2.4 full-time equivalent employees, paid for through WIOA funds, according to Scott.
According to WIOA legislation, the role of a fiscal agent is to receive funds, ensure fiscal accountability for expenditures, respond to audit findings, maintain proper accounting records, prepare financial reports and provide technical assistance on fiscal issues.
Scott added that in total, fiscal services combined with the remaining administrative and operational services expenses, total $1,970,812 annually, which includes 19.5 full-time equivalent employees for the current year funded through the WIOA allocation.
“Many of these employees are long-time public servants, vested in the pension program and highly committed to providing workforce development services to the people of the region,” Scott said.
Following the incident last May to move the Job Center with little notice given to the WDB, the city offered to provide fiscal agent services at no charge to the board as a make-good. However, the board declined the city’s offer and is paying for the services.
Dixon said in addition to reexamining the fiscal agent agreement, there is also a chance that the CLEO will look outside the Springfield government to operate its Missouri Job Center.
“Certainly, that possibility exists, as does the possibility of repairing the current relationship, if that can be done,” he said.
Dixon said the board’s action in requesting a payment of $27,900 from WIOA funds was simply to inquire as to whether those funds could be used to pay the consultant.
“A simple answer to the board of yes or no would have been professional and operationally done in good faith,” he said. “Requests for guidance were made early on, and the board chair had to resort to reading the city’s purchasing manual to get answers.”
He added that the first attempt from the city to stop the use of WIOA funds was not to communicate with the board but rather to report the matter to the state Department of Higher Education and Workforce Development for review.
That department responded that the city should make the decision without the state’s intervention, he said, quoting an email from Rebecca Fletcher, assistant director for program performance in that state office.
“The entire mess seems to stem from a toxic culture of silos, fear and self-preservation, which does not serve the taxpayers, job seekers or employers at the highest and best standard, which we all expect,” Dixon said.
Asked if there are any conditions for a path forward, Dixon said there are not; this is merely his assessment of where things stand, he said. He added he has reached out to interim City Manager Collin Quigley to engage in dialogue about the current situation.
He said the matter is unfortunate, but it will be resolved, one way or another.
“I hope the relationship can be repaired,” he said. “In order for that to occur, we all need to be honest about what is not working well.”
Next steps
Because of Springfield’s nonpayment of the board’s bills, at its Feb. 5 meeting, the WDB tabled renewal of four agreements it has with the city. A one-stop operator agreement allows the city to run the board’s Missouri Job Center, where job hunters go to obtain services. In addition to that and the fiscal agent agreement, there are agreements in place for a youth program and administrative services for federal grants, and all are set to expire at the end of this month.
The board has been approving short-term agreements throughout the consultancy period.
The board agreed to call a special meeting to approve agreements if the city decides to pay the consultant fees.
Thomas Douglas of JMark Business Solutions Inc., vice president of the board and a small-business representative, said during the Feb. 5 meeting that the payment discussion was emblematic of why possible changes to the agreements between the board and the city are on the table at all.
“I feel like we’re stuck between a rock and a hard place in terms of decisions in this situation,” he said.
At the same meeting, Bill Skains, a Branson Board of Aldermen member and board consultant (though not the Dadco consultant whose payment is being contested), raised a broader concern, which is the uncertainty over federal WIOA funds, which pay for the board’s services.
“We’re looking at real possible cuts in allocations moving forward,” he said, noting that the White House may make deep cuts to WIOA. “We have no idea how much money you’re talking about in this that’s going to be available. … This is the biggest limbo situation I’ve ever seen in my life.”
Dame Chiropractic LLC emerged as the new name of Harshman Chiropractic Clinic LLC with the purchase of the business; Leo Kim added a second venture, Keikeu LLC, to 14 Mill Market; and Mercy Springfield Communities opened its second primary care clinic in Ozark.
