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HomeMy WebLinkAboutIR 7784 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7784 VORP To the Mayor and Members of the City Council December 21, 1993 xA Subject: Ff 71 OEA GRANT EXTENSION FOR ECONOMIC ADJUSTMENT PROGRAM On the agenda for the December 21, 1993 City Council meeting is,/m action item regarding the extension of the current grant from the federal 0 e of Economic Adjustment(OEA). If the M&C is approved,the City would equest that the grant be extended for one year and request an additional $239,880 i ederal funds to be matched locally with the dedication of City and Chamber staff to the project and providing office space and use of equipment in City Hall . This would amount to nearly$60,000 of in-kind time and facilities for the required 25% local match. While previous grants have required local CASH match, OEA will count city staff time devoted to this project towards the required 10%cash match. These federal funds would be used to hire three people to work full time on economic adjustment to defense cutbacks and would create a central point of contact for the community's businesses and workers impacted by defense cutbacks. OEA is the federal agency which works with communities experiencing significant defense downsizing. They first worked with Fort Worth regarding Carswell and are now helping us prepare for the community adjustment as a result of the cutbacks in defense industry dollars. Fort Worth has experienced significant reductions in defense industry related jobs and will most likely continue to experience job loss. Because our community is so heavily dependent on defense contracts, this job loss will have significant impact on our community if there is not new business growth. The existing OEA grant has been used for the consulting services of KPMG Peat Marwick and Taratec Corporation. What follows are points from the consultants'December 9th presentation regarding Fort Worth and its defense dependency (related charts are attached): 1) Tarrant County ranks among the highest counties nationally in dependence on defense contract dollars per worker—almost three times as high as LA County. (Please note on the enclosed chart that only St. Louis ranks higher than Tan-ant for contract dollar per worker.) 2) Tarrant County ranked third in the nation in the value of prime defense awards received in 1991. 3) GD/Lockheed prime contracts in Fort Worth account for nearly 30%of Texas contract DoD dollars. 4) The top Texas DoD contractors are located in the Metroplex. They are Lockheed, Texas Instrument, LTV,Bell-Textron and E Systems. The enclosed chart shows how Lockheed dwarfs the others. 5) Although there are no firm numbers available, it is estimated from national data that there are 7 subcontractor employees for every 10 prime contractor employees. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7784 L To the Mayor and Members of the City Council ux 0 December 21, 1993 Subject: Page 2 of 4 Gaza OEA GRANT EXTENSION FOR ECONOMIC ADJUSTMENT PROGRAM 6) Over the past 50 years, GD/Lockheed employment has peaked at 31,000 and declined to as low as 6,000. Lockheed noted that the peaks were in times of war or the cold war buildup. 7) The Career Transition Center has served over 12,000 displaced workers and 30% report finding jobs. 8) The economy has shown some ability to provide jobs for displaced workers but at lower compensation and in less challenging positions. 9) The manufacturing sector of the Fort Worth economy has experienced a loss of nearly 20,000 jobs since 1990. This was a more severe negative impact for the manufacturing sector in Fort Worth than that experienced in Texas or the U.S. 10) Per capita income has declined nearly 5%in Fort Worth compared to the national average. 11) The county may lose up to 30,000 additional manufacturing jobs as defense downsizing continues. Defense-related manufacturing has long been a foundation to Fort Worth's economy. It has been reported that in 1991 it was estimated that 40%of the Fort Worth/Tarrant County manufacturing base was related to the defense industry. Lockheed's primary product in Fort Worth has been and continues to be the F-16. The Defense Department's "Bottom Up" review recommended no more purchases of the F-16. With the large number of businesses and workers affected by the defense cutbacks, the current programs have been and will continue to be quickly overloaded. In addition, not all needs are being met with existing programs and there is concern that laid-off professionals will relocate and be a loss to our community. The community needs to be proactive in developing strategies to address this pressing need and take steps to be less dependent on defense funding. While the consultants'work has not progressed as quickly as originally planned, the work to date shows a need for the following: a) a central point of contact on defense adjustment in the community, and b) further scoping of defense adjustment strategies before a compete program can be put together. These new federal funds would be used to hire two professionals to devote their work full time to developing and helping implement defense adjustment strategies, including the preparation of grant applications, plus an Administrative Secretary and support services which would allow the professionals to devote their time to programs. .-ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7784 To the Mayor and Members of the City Council ex� Subject: 1 December 21, 1993 7 3 Page 3 of 4 OEA GRANT EXTENSION FOR ECONOMIC ADJUSTMNET PROGRAM It is planned that the persons funded by this grant would identify programs to better serve the needs of businesses and workers, addressing gaps in the current service delivery system and establishing a central point of contact for the community . A strategy session is planned in January of the current Community Oversight Board to identify and prioritize strategies for the initial work of these professionals. At that meeting the Oversight Board would reevaluate the role of the current board and recommend the format for the oversight board needed in this second phase of the project. A 1993 study by MBA students at TCU found that fewer than 30 out of 100 local businesses reported knowledge of the area's business assistance programs. The Business Program Coordinator would develop better outreach to ensure that more businesses knew of the assistance available, and would develop and/or recommend improvements to the current programs and service delivery system. The staff person would monitor the defense budget and determine its impact on the local economy. The Coordinator will examine establishing entrepreneurial programs such as an incubator, financial assistance programs and training and assistance in entering international markets. The other position to be funded by this grant is the Human Resources Coordinator who would work specifically with the issues facing the displaced defense worker. With traditional programs such as JTPA meeting capacity quickly and focus group outcomes identifying the frustrations of the displaced worker with the current system, this Coordinator would recommend improvements to the current situation and work to identify strategies and delivery mechanisms to meet worker needs. This Coordinator will make recommendations for expansion of current outreach and work with federal, state and local agencies in improving work force support. This grant funding would also provide the staff support of an Administrative Secretary. The Secretary will serve as a back-up person always available to the public during work hours to refer questions to the proper source. The Secretary will provide word processing and record keeping for the office. This three person "Office of Economic Adjustment" would be located in City Hall and would report to Assistant City Manager Ramon Guajardo who has been working with both Carswell and the defense industry adjustment program. While it is envisioned that the staff and office will be within City Hall for 1994, eventually this effort may evolve into a public-private organization with the office and staff outside City Hall. ,-ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No.- 7784 To the Mayor and Members of the City Council op *0 Subject: December 21, 1993 Page 4 of 4 OEA GRANT EXTENSION FOR ECONOMIC ADJUSTMENT PROGRAM If the M&C is approved at the December 21 City Council meeting, staff will formally submit the grant request and staff recruitment will begin. If you have questions or would like additional information, please contact me or Assistant City Manager Ramon Guajardo. 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