REPORT IN BRIEF

 

The U. S. Department of Labor has announced the availability of approximately $200 million in grant funds for skills training programs to address domestic skill shortages in high skill and high technology occupations.  NOVA has successfully applied for two H-1B grants in the past; one is now completed and one is scheduled to operate through December 15, 2003.  The new grants may operate for up to three years. It is recommended that the Sunnyvale City Council, on behalf of the seven NOVA consortium cities, approve the submission of a proposal to the Department of Labor for an H-1B Technical Skill Training Grant in an amount not to exceed $3 million.

 

BACKGROUND

 

The Department of Labor has made grant funds available for skills training programs for unemployed and employed workers.  User fees paid by employers for H-1B nonimmigrant visas finance these grants.  Their purpose is to “build our own workforce” and reduce business dependency on importing talent.  As a part of the H-1B Visa program, the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA), amended in 2000,  authorized these skills training programs. These grants are to be a long-term solution to domestic skill shortages in high skill and high technology occupations.

 

In March of 2000 NOVA was awarded a $1,320,938 grant to serve 202 participants over a two-year period.  This initial H-1B project was a notable success with 187 participants successfully completing training, and received national attention for producing the first employed graduates from any H-1B Technical Skill Training program in the nation.  Sun Microsystems was a key partner in the grant through its funding of Solaris training labs.

 

In 2001 the Sunnyvale City Council authorized NOVA to apply for a second H-1B Skills Training grant, which was awarded on December 15, 2001.  The grant, in the amount of $2,995,892, will operate through December 15, 2003 and provide 137 incumbent workers and 288 unemployed individuals with high-tech training through six training partners - Opportunities Industrialization Center West, Mission College, Evergreen College, University of California Santa Cruz Extension, San Jose State University, and the San Mateo Community College District – as well as through private training providers.  As of February 14, 2003, the H-1B grant was on target for enrollments, with 311 participants.

 

EXISTING POLICY

 

The proposed activities are consistent with the City of Sunnyvale's Socio-Economic Goal 5.1F: Provide job training and employment services within constraints of operative, federal regulations and available federal funding, to address the locally-determined employment and training needs of economically disadvantaged residents and others with special needs.

 

DISCUSSION

 

The H-1B Technical Skills Training program fills a vital role in maintaining and enhancing the hi-tech workforce of Silicon Valley businesses.  In these times of high unemployment, taking the opportunity and having the resources to enhance the skills of the local workforce is essential.  A large component in the success of this project has been the collaboration with community colleges, universities, and private training schools in the area to utilize existing courses for developing state of the art curricula to meet the needs of business.

 

Due to the current economy, recent graduates of training programs are not having the immediate success finding employment that graduates of the first grant experienced.  However, it is clear that possessing skills in the latest technologies benefits long-term employability of participants in this program.  Equally important, businesses will have a larger pool of talent from which to hire when they are ready to expand their production efforts in the coming months.

 

With the annual limit on H-1B visas increased to 195,000 annually (up from 107,500 in 2001), it is clear that the need for training to reduce dependence on skilled foreign workers continues to be a priority.  Further, of the top 100 companies in the United States that sponsor H-1B visas, 35 are located in Silicon Valley, with the vast majority of visas issued in the high technology, information technology, and biotechnology areas.  This latest round of H-1B funding expects to award 80 percent of the grants to projects that train workers in these skill areas.  Training is to be targeted toward employed and unemployed workers who can be trained and placed directly in highly skilled H-1B occupations or in the highest echelons of an H-1B career ladder.

 

As with previous grants, NOVA intends to consult with area businesses experiencing current high technology skills shortages to help develop an H-1B grant proposal that will meet business needs and to encourage the hiring and promotion of program graduates.  NOVA will also survey local education providers to ascertain high tech training areas that are currently showing strong demand or that they foresee will be in demand over the next two to three years.  NOVA seeks approval to submit a proposal for up to $3 million to operate a grant for up to three years.

 

Fiscal Impact

 

There will be no fiscal impact to the City because funds received will offset program expenditures.

 

PUBLIC CONTACT

 

1.      Public contact was made through posting of the Council agenda on the City's official notice bulletin board, posting of the agenda and report on the City's web page and the availability of the report in the Library and City Clerk's Office.

 

2.      Public meeting of the NOVA Workforce Board on January 22, 2003.

 

ALTERNATIVES

 

1.        Council approves application to U.S. Dept. of Labor for H-IB Technical  Skills Training Grant in the amount of $3 million.

 

2.        Council rejects application to U.S. Department of Labor for H-IB Technical Skills Training Grant in the amount of $3 million.

 

3.        Other action as determined by Council.

 

RECOMMENDATION

 

It is recommended by staff that the Sunnyvale City Council, on behalf of the NOVA seven-city consortium, adopt Alternative 1:  Council approves the submission of an application to the U.S. Department of Labor for an H-1B Technical Skills Training Grant in an amount not to exceed $3 million. It is further recommended that the City Manager or his designee be authorized to execute the necessary grant agreement.

 

 

Prepared by:
Tito Nacario, Administrative Aide
Department of Employment Development

 

Reviewed by:
Jeanette Langdell, Employment Training Manager
Department of Employment Development

 

Michael J. Curran, Director
Department of Employment Development

                      

 

Approved by:

Robert S. LaSala

City Manager