Dane County Job Center
1819 Aberg Avenue, Room 7
Madison, WI 53704
Management: James Buchen, Bob Oyler, Earl Gustafson, Ed Lump and Daniel Petersen
Labor: Phil Neuenfeldt, Dennis Penkalski and Bob Lyons
Chair: Greg Frigo
Department staff present: Bob Whitaker, Carol Laudenbach, Dick Tillema, Phil Klun, Andrea Reid, Brian Bradley, Len Wroblewski, Mary Anderson Frey, Ann Scott, Lee Carter, Sue Lowry, Terese Wojick, Tom Smith and Michelle Kho
Others present: Jim Pflasterer of LIRC, Robert Anderson of WCCF, John Metcalf of WMC, Larry Smith of UC Management, Steve Krieser of Sen. Reynolds’ office, Mike Mikalsen of Rep. Nass’ office.
Frigo announced Lump would be arriving later in the meeting and that Bolton could not attend. Frigo introduced acting-UI Division Administrator Bob Whitaker. Frigo noted a letter to the Council from former UI Admin. Hagen, who recently left the Dept. to join the private sector, added that Hagen would join the Council for lunch prior to today’s public hearing. Frigo noted a plaque had been prepared on behalf of the Council to Hagen in honor of his long and faithful service.
Frigo announced research attorney Kho would be leaving to join DATCP on 4/26. Frigo noted Kho’s position had been eliminated as part of a state government directive to cut positions and identify positions to be cut, leaving BOLA with only one research attorney. He noted Kho could have remained as an ALJ, but felt the DATCP position more closely matched her legal interests.
Frigo introduced Laudenbach, who introduced a report on IT projects. She began highlighting changes and improvements to the UI Internet claims system. She noted a third of initial claims now begin via Internet, since its 11/01 launch, though not all can be completed. She noted Internet weekly (continued) claims began in 10/03 and now compose 16% of weekly claims. She predicted growth in both applications and subsequent cost savings.
Laudenbach reviewed three information sheets passed to the Council. She noted decreases in manual claims work speeds the process and saves money. Then she introduced a audio-visual demo by Anderson-Frey of the Internet UI claims system, touted application developer Scott.
Anderson-Frey highlighted system features while demonstrating each step of the process. Frigo noted, Anderson-Frey explained that if any claimant answer raises an eligibility issue, the claimant would be instructed how to resolve the issue and that claim would not be paid until the issue was settled.
Oyler asked why Internet claim numbers were so low. Anderson-Frey explained that most initial claims cannot be completed online, but noted numbers will rise with persistent use, said weekly claim use is inexplicably under-performing her expectations. She noted 95% of Internet claims are filed from home.
Petersen asked, Anderson-Frey explained that one-time Internet use does not bind claimant to online filing. Penkalski asked, she explained that claimants may not determine eligibility or benefit amount online, noted time and funds shortage prevented developing an individual claim inquiry system for Internet, as available by phone.
Laudenbach introduced Carter’s and Lowry’s update on EnABLES, the benefits and legal redesign. She overviewed the presentation, gave a brief chronology of the project, commented on the goals of user-friendly design with speed and accuracy, listed some claimant information to be accessible on EnABLES.
Laudenbach presented slides, commented on achieving the project’s goal while addressing state and federal funding and staffing cutbacks, meeting federal project requirements, creating an application that both claimants and UI workers find beneficial. Peterson asked, Laudenbach explained RJM (federal Resource Justification Model).
Buchen asked, Laudenbach explained weekly claims averages over time, described federal funding and workload changes in different time periods. Carter explained the historical state-federal interplay, explained how federal incentives and rewards have fostered inefficiency, hoped a stronger state voice at the federal level would make more rational policies.
Laudenbach touted a positive return on the project’s investment, supported a continued commitment to the project and its promising future.
Carter noted EnABLES is a DWD-controlled project, unlike some IT projects using Indian contractors. Using slides, he explained the features and benefits of the CURAM social-service software package, including its efficiencies, claim-handling and predictive capacities.
Carter touted CURAM’s successful use for all U.K. social services, said it has adapted well to Wisconsin’s UI program and exceeded expectations. He detailed the development process and the inadequacies of the IBM training system. He touted EnABLES’ release plan as a model for other state.
A labor caucus member asked for a simple language explanation of “release plan.” Carter noted it is how the department will implement EnABLES. Lowry noted EnABLES will replace every current application, so it will be implemented in pieces to reduce system risk. UI staff will work out the bugs before it goes public. She said implementation will begin with legal decision workflow, describing the process and benefits of the shift to total electronic storage of documents.
Petersen asked if UI staffers have complained about system constraints or loss of professional discretion. Lowry was unaware of any complaints so far, noted the system will prompt workers about due dates for certain work items. Carter said the e-system reduces the mundanity of processing paperwork, helps workers organize their processing.
Lump asked and Lowry explained the Dept.’s current limited capacity to accept electronic forms. Gustafson noted and described PSC’s successful shift to an internal electronic case management system. Lowry commented further on current and future implementation and destiny to serve the public.
Buchen asked about automatic adjudications. Lowry said simple decisions will be automated as much as possible, added that employers would be encouraged to send electronic claim data to speed decisions. She noted some quit and discharge decisions could never be automated.
Lowry commented on adjudicators’ arcane and inefficient paper processing, lauded the benefits of e-documents. Gustafson joked about the declining use of paper. Lowry noted Pflasterer said his LIRC staff does not want to stare at a computer screen all day, so some documents will be printed out during processing.
Lowry described further EnABLES releases, touted the efficiencies of electronic adjudication and appeal scheduling, described the customer relations management release. She commented on implementing federal TRA claims. She and Laudenbach noted TRA claims are a small but growing factor.
Lowry commented on implementing the disaster UI program, described New York’s experience. She commented on processing the small number of interstate claims. She described release #8, where EnABLES begins handling the bulk of intra-state claims, and the final phase of payroll processing.
Penkalski asked, Lowry noted EnABLES will run over three years along with the current application. She noted New York also recently bought CURAM for their whole UI system, but after 9/11 was dissatisfied with their original vendor. Laudenbach noted several other states are considering CURAM. Carter said Utah uses CURAM for the TANF program, Mexico uses it for food stamps, and one other state uses it. Kansas, Mississippi, Louisiana, Nebraska and New Jersey all use CURAM for UI.
Penkalski asked, Lowry explained the state’s proprietary rights to its UI system, while paying the CURAM licensing fee. Frigo noted the project is federally funded and would need to be shared.
Lowry noted CURAM first forayed into UI after 9/11 and is now building a UI application into their program, joked about the difference between UI and other social services.
Frigo commented about California’s troubled UI program, state employer’s facing a $5.1 billion UI tax bill in 2005, up from $2.59 billion in 2002. He highlighted at LA Times article quoting an employer who laid off half her 70 workers in 2003 after her Worker’s Comp premium almost doubled, then her UI tax bill rose $9,000 annually.
Frigo noted Cal. UI agency predicts $1.2 billion shortfall in 2004, $2.3 billion shortfall in 2005. He explained that the Cal. Legislature had boosted the maximum weekly benefit rate over 40% to $330 in 2002 and up to $450 in Jan. 2005, but lawmakers did not boost UI taxes, despite knowing the trust fund’s deficiency.
Frigo noted a nationwide inter-state interest in state’s uses of and plans for Reed Act funds, recalled conversation with Indiana UI administrator who was frustrated at Congress’ reprimanding states for not spending Reed Act funds, miffed at lawmakers’ failure to see value in placing the funds in trust. Frigo expected to hear criticism for not spending those funds.
Frigo noted the Hoosier UI administrator had seen Wisconsin listed by GAO as using Reed Act funds to pay supplemental benefits, which was untrue but could deflect criticism for not spending it.
Frigo introduced Klun’s fraud report, announced Klun’s retirement on May 28 after 35 years, paid tribute to Klun’s expertise and strong service. Klun referred Council members to the handout, commented on new hire cross match. Buchen questioned the timeliness of information on quarterly wage reports.
Klun commented on a federal initiative to estimate state UI fraud and overpayments. Buchen asked about the methodology. Lump asked if the state recoups overpayments. Klun said the outstanding overpayments balance increases annually, commented on the collection strategy. Laudenbach asked, Klun commented on the 55% federal standard for collection, while the state collected 61% in 2003, expounded on the collection trend.
Buchen asked, Klun commented on prior year collections and contributions, noted losing 2 of his 4 fraud specialists, detailed the local law enforcement collection process. Lyons asked about any existing reports on employers’ fraud, underpaying tax or under-reporting wages. Klun knew of no employer fraud detection programs, noted some ways in which employer fraud is caught. Laudenbach, Reid commented.
Penkalski asked if UI worked with DOR to collect taxes on overpayments. Klun noted tax refund offset, said short staffing slows collections, mentioned offsetting future UI payments as a big collection tool, comprising 40% of total collections.
Buchen asked, others affirmed New Hire was set up to catch child support deadbeats. Buchen noted, Frigo commented on UI’s primary role as collector of New Hire info. Laudenbach commented further on New Hire, touted stronger detection tool to catch fraud early. Buchen noted, Laudenbach agreed that early detection saves money and increases collection success. Klun agreed.
Petersen asked, Klun noted New Hires are reported bi-weekly or every 20 days. Laudenbach noted it is a continuous process unlike quarterly wage reports.
Laudenbach noted federal rules do not reflect the Dept.’s desire to prevent fraud, cited fed rules requiring states to detect a percentage of overpayments from total benefits paid. Oyler noted there would always be overpayment fraud.
Klun relayed calls from people alleging UI claimants are working for cash, noted some fraudulent claimants also owe child support, cut deals with employers to get UI and cash payments to avoid child support. Klun said these deals are unstoppable without surveillance staff.
Frigo asked, Council moved for approval of five sets of UIAC minutes. All were approved without objection.
Frigo gave UI bill update, noted SB 340 passed and awaits signature by Gov. Doyle, tentatively on April 19. Frigo noted an amendment made some technical corrections and adjusted effective dates. Frigo noted signed bill must be published in newspaper to become effective, noted about 200 other bills await signature and publication. Buchen commented.
Neuenfeldt asked, Frigo explained there was no difference between Senate and Assembly bills. Buchen noted passing the Senate version was easier.
Frigo announced a lunch break, hoped Hagen would attend as planned.
Returning from lunch break, Frigo asked about the proposed home worker exemption, said UIAC minutes of the meeting captured the essence of the proposal, asked how the Council wanted to proceed. Neuenfeldt said the labor caucus was interested in knowing cost estimates but was not interested in forwarding the proposal in this bill cycle.
Petersen said that if labor was disinterested, management would defer to labor’s wishes, said he was opposed and additional info was unlikely to change his mind. Lump agreed, said the proposers were passionate but the proposal made little sense, praised the Council’s patience in listening. Buchen commented about their use of independent contractors, said they were approaching UI as a social service.
Frigo said more info would be forthcoming, listed options: wait for further contact from the proposers and ask for more information or send them a letter now. Petersen said they had promised more info and if they do not follow through, there is no reason to pursue it.
Lump and Frigo noted the proposers had not contacted the Council in the month since offering their proposal. Laudenbach said Mary Lang Sollinger had called within a week of the Council presentation, noted she had steered Sollinger toward DWS’ Francine Horton, a W-2 analyst.
Buchen said the Council need not take any action unless the proposers contact the Council. Frigo said the Council seemed disinclined to send a letter. Lump agreed, no further action unless they contact the Council.
Frigo introduced Laudenbach and Tillema on sequential charging. Laudenbach had nothing new, deferred to Tillema’s research, said she would answer any questions. Tillema said his prior estimate held up, that about 2.5% of total benefits, about $20 million, would move from the balancing account to employer accounts. He noted that including reimbursable employers increased the shift to $21 million, still about 2.5% of total benefits.
Today's information focused on the amount shifted as a percentage of employer-charged benefits. Tillema noted the $21 million is a larger percent of employer-charged benefits than it is of total benefits.
Tillema estimated benefit charges will increase an average of 3.2%, though agriculture, construction, services and reimbursables would increase more than 3.2%. He said wholesale trade, financial and real estate employers would pay less.
Tillema said the share of charges per employer type would vary less than .5%, said burdens are not vastly altered by sequential charging. Oyler asked about the service sector, wondered if restaurants were included. Tillema said restaurants are considered retail.
Laudenbach asked, Tillema explained health care is included in services, but some are reimbursable, added government is mostly reimbursable. Gustafson asked, Tillema confirmed that insurance in included in financial and real estate.
Oyler asked how many businesses are in each sector, to gauge the average per-employer cost. Gustafson said that info would help gauge a rounded per-employee cost for each employer in each sector. Tillema said such info could be determined per-covered employer and employee.
Frigo asked, Laudenbach explained the time-pressure of deciding on sequential charging, in light of programming changes into EnABLES. She said the issue would arise at Release #4, scheduled to begin in early Feb. 2005. She noted that 2/05 was the middle of the bill cycle, but she could proceed on a verbal agreement to include changes in the bill. Frigo promised continued study.
Laudenbach began the UI workload update. Buchen asked about the probability of moving to the highest tax schedule. Frigo explained the benchmark for schedule change. Bradley said the schedule depends on benefit levels. Tillema said benefit level is about $50 million too high to stay in the present tax schedule, but noted claims are dropping each week compared to last year, so a more optimistic forecast is still a possibility.
Penkalski asked if claims were falling due to benefit exhaustion or finding job. Tillema said both are factors, noted it would require a look at the current exhaustion rate, which he had not yet done. Frigo said Laudenbach might be able to answer that. Laudenbach said she could give a 2003 year-end exhaustion rate, but not 2004. Tillema said he would bring exhaustion rate info to a future Council meeting.
Laudenbach said 2003 was busy, virtually identical to 2002. She highlighted her handout, including initial claims, continued claims. She noted that while claims are falling, they are still significantly higher than 2001. Buchen asked, she confirmed that initial claims for 01/04 and 02/04 are higher than 01/01 and 02/01 but 6% lower than 01/03 and 02/03. Laudenbach hoped to return to 2001 levels.
Buchen noted 4Q03 claims were lower than 4Q01 claims, showing a downward trend. Laudenbach noted she had tallied a 14% decrease, indicating a positive outlook for the economy. She noted 1Q04 initial claims are down 6%, continued claims are down 7% over 2003.
Laudenbach referred to the handout page concerning exhaustion rate. She noted that the rate is higher, as expected, as claimants exhaust TEUC benefits.
Laudenbach explained that the “% recalled” figure derives from the initial claim, when claimants are asked if they are expecting to be recalled to work within 12 weeks. She noted the figure does not change much, except during seasonal or holiday layoffs, such as Weeks 27, 51, 52. Buchen asked, Laudenbach explained the calculation and significance of exhaustion rates.
Laudenbach referred to the last page of her handout, regarding claim duration. Buchen noted average duration varied very little, regardless of the recession. Laudenbach agreed, though noted quite a jump between 2001 and 2002.
Laudenbach commented on the effect of the increased benefit rate. Penkalski asked why 2002 average benefit amount was blank. Laudenbach explained it was an intractable programming error. Buchen asked about “potential benefits.” Laudenbach explained maximum benefit amount, the total benefits payable if every claimant exhausted benefits.
Buchen asked, Laudenbach explained that “potential benefits” did not include all potential claimants, only actual claimants. She could not explain a couple Buchen questions regarding occurrences when actual benefits were higher than and potential benefits. Tillema said potential claims could include claimants starting new benefit years. Laudenbach said some discrepancies may occur due to differing federal and state definitions.
Frigo asked if anyone had more tax schedule questions for Bradley. Buchen asked, Bradley explained the difference between Schedule C and D. Gustafson asked if the next schedule change also increases rates for employers with negative balances. Frigo asked about the difference going from Schedule B to A.
Frigo noted the next three Council meetings and public hearings have been scheduled, after polling all Council members, said public hearings will occur regardless of reaching a quorum for Council meeting. He briefly discussed the next meeting in Pewaukee then closed the meeting to begin the public hearing.