MEMBERS PRESENT:

Management: Robert Oyler, James Buchen, Daniel Petersen, Ed Lump, Earl Gustafson
Labor: Dennis Penkalski, Robert Lyons, Phil Neuenfeldt
Chair: Greg Frigo

Department staff present: Bill Clingan, Bruce Hagen, Al Jaloviar, Kim Markham, Richard Tillema, Carol Laudenbach, Mary Anderson, Carla Breber, Len Wroblewski, Michelle Kho, Tom Smith, Frances Healy, Peter Zeeh, Mark Rosas, Nadine Konrath.

Others present: Department of Revenue (DOR) staff Martha Gertsch, Beverly Scheuers and Sherrie Gates-Hendrix; Steve Krieser, Senator Tom Reynolds’ office; and John Metcalf, Wisconsin Manufacturers and Commerce.

1:00 p.m. – Frigo welcomed Council members and introduced new Unemployment Insurance (UI) Administrator Bill Clingan who said a few words to the Council. He mentioned he would like to meet with the Council members either individually or in groups in the coming months in order to get to know them and to hear their concerns. Frigo mentioned that Bruce Hagen is now officially the new deputy administrator of UI. Frigo introduced Steve Krieser, aide to Sen. Reynolds, the chair of the Senate Labor, Small Business Development and Consumer Affairs Committee and said we were looking forward to working with him and the Senator on future bills.

Frigo asked for approval of the January 7, 2003 Council minutes. Minutes were approved without objection.

Frigo introduced Martha Gertsch from DOR to address the Council regarding a proposal being pursued by DOR that would utilize resources in the Department of Workforce Development (DWD) Division of Unemployment Insurance. Gertsch introduced Beverly Scheuers (business analyst) and Sherrie Gates-Hendrix (legislative liaison) from DOR. Gertsch asked for the Council’s support to move the project forward. The proposal would consolidate the reporting of certain tax and wage information by employers to DWD. This information would then be transferred by DWD to DOR. Currently, employers are required to report this information to both departments. Gertsch provided additional details on the benefits of the proposal, outreach to employers that has been done to date and answered several questions. The Council is being asked to propose the necessary statutory changes to state law for the implementation of this project. Council members raised many questions and Buchen made a motion to send a letter to DOR outlining these concerns. It was seconded and passed unanimously. A letter will be drafted by DWD staff and shown to the Council for their approval. The Council will not take formal action on this initiative until both departments have been able to satisfactorily resolve the issues involved.

Frigo introduced Dick Tillema who provided a briefing on the UI Financial Outlook Report. Tillema covered the highlights in the report. Employment has grown just under 25% in the past eleven years and the state hourly wage has grown just under 50% in that period of time. Growth, employment and wages result in growth of total benefits. There has been a substantial decline in the percentage of benefits charged to employers at the maximum tax rate. In addition, there has been an increase in the percentage of benefits charged to the balancing account. This lessening of the experience rating principle increases the probability of borrowing in a severe downturn. Oyler, Penkalski and Neuenfeldt discussed the impact of claims going up, what assumptions were used for employment and wage growth (3% combined) and if we have information on people who have exhausted benefits (19%). Hagen discussed the UI trust fund balance in relation to the Financial Outlook Report to show where we have been and where we are going using a power point presentation showing the tables for past years and future projections. The weekly claims at the present time are 3% higher than they were last year. Hagen also noted that duration rates have gone up slightly.

Frigo introduced the DWD 100 rule change proposal changing the definition of full time work from 35 to 32 hours per week. The rule change was required in Wisconsin Act 35. The public hearings required by law have been held and the proposal is now at the secretary’s office awaiting sign off before being submitted to the Legislature. Smith asked that the rule be held until the Council gives its final approval. Two other rule changes up for the Council’s consideration were also discussed, the labor dispute rule and the attendance/misconduct rule. Buchen expressed concern about the Council taking action on one of these three rule changes and not the others when all three were negotiated and required as part of Wisconsin Act 35. It was decided to caucus for further discussion.

Frigo introduced the department law change proposals for 2003. Copies of the proposals were provided. Peter Zeeh presented a proposal to change the statute on recovery of benefit overpayments by offset to recovery by recoupment. Zeeh explained the proposed law change is only a change of terminology, it will not change what we are doing and does not create any new liability. Lump made a motion to move, Neuenfeldt seconded, and the vote was unanimous in favor.

Nadine Konrath discussed a proposal to extend the length of time a levy is in effect from one year to be continuous until the debt is paid or the levy is released. Konrath answered questions from Council members. Penkalski made a motion to adopt, Neuenfeldt seconded and the vote was unanimous to adopt the law change.

Frigo discussed having the 2003 Council bill ready to go to the legislature for their fall floor period. In order to allow sufficient time for drafting, the Council’s agreement is needed by July 1, 2003. Frigo asked the Council if they would be able to have their law change proposals ready by the March or April meeting in order to meet this timetable. It was agreed to schedule sufficient caucus time at upcoming meetings to accomplish this.

Carol Laudenbach discussed the 2002 Workload Review. A handout was provided. Laudenbach noted that federal TEUC eligibility is in effect through June with payments ending in August. Three million dollars a week is being paid out in TEUC, which is consistent with last year.

Mary Anderson did a brief update on the Tax and Accounting automation redesign. There are checkpoints along the way to make sure the redesign is on schedule and going in the right direction. Anderson estimated that approximately $1.8 million had been spent on the project through January 2003.

Laudenbach gave a brief presentation on the Benefits and Legal automation redesign. A handout was provided. Hagen gave a brief outline of the process involved with a promise that the Council will be given a more detailed overview of the status of the project, what it entails, the cost and who the vendor will be at the next meeting. Laudenbach explained they were replacing a 20-year-old IT system in order to become customer-centric. The current database is difficult to maintain, will not be supported by Department of Administration Infotech beyond 2004 and is not fiscally sound. Laudenbach outlined the benefits in terms of customer service, efficiency and being fiscally sound. Funding options for the project were discussed. It was noted that currently the department has sufficient funding for the first three of four phases of the project. It was also noted that the department may ask for a continuation of the administrative fee, to use a small amount of Reed Act funds and proposals for funding to the federal government which are not likely to be funded. Hagen indicated that the department would like to meet with each Council member in the next few months to provide greater details and that the project would be scheduled as an agenda item again for the May meeting possibly. Frigo introduced Lee Carter as the project manager for the benefits and legal redesign. Penkalski asked if there was a possibility of electronic deposit for benefit checks in the future. Hagen replied that the department is very interested in pursuing this and has recently begun discussions on the topic.

Frigo asked about the next meeting. Members settled on March 24 and May 5, 2003 at 10:00 a.m.

Adjourned.

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