June 17, 2003     

 

SUBJECT:

FY 2002/2003 Department of Employment Development Expenditure and  Revenue Update and Budget Modification No. 49

 

REPORT IN BRIEF

Budget Modification No. 49 has been prepared to modify the FY 2002/2003 budget for the programs administered by the Department of Employment Development (DED), also known as NOVA.  The appropriations to revenues and expenditures are necessary as a result of new grants, contracts and contributions received during the fiscal year.  All new grants, contracts, and contributions have been approved by Council during the course of the fiscal year at the time of application or award.  Therefore, this budget modification is an administrative procedure to align the revenues and expenditures in accordance with Council direction.  Staff recommends Council approve the budget modification as presented in this report.

BACKGROUND

The FY 2002/2003 adopted budget for DED was estimated based on available information regarding the outside grants, contracts and contributions it expected to receive during the year.   Subsequent to the FY 2002/2003 budget adoption, staff applied for and received additional grants that were not included in the FY 2002/2003 Adopted Budget.  DED is a unique department in the City in that it is funded solely from outside grants, contracts and contributions.  Each of the grants it receives is restricted to specific services that can be offered and is accompanied by specific performance standards. 

 

As the City, through NOVA, applies for these grants, contracts and contributions, it determines what services and service levels will be provided through the application process.  The determinations are reviewed and approved by the NOVA Workforce Board through Reports to the Workforce Board at regular Board meetings.  After Workforce Board approval, decisions to apply for funds must also be approved by the Sunnyvale City Council, on behalf of the seven cities of the NOVA consortium (Cupertino, Los Altos, Milpitas, Mountain View, Palo Alto, Santa Clara, Sunnyvale). These decisions occur throughout the year through Reports to Council at regular City Council meetings.  If the funding agent awards the funds, the City can then appropriate the monies through a budget modification.  For administrative ease, staff often presents one budget modification for several funding awards.

 

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

During FY 2002/2003, DED received grant funds not estimated at the time of budget adoption.  The sources of the funds are primarily from two funding agencies.  First, actual allocations received for NOVA's on-going grants under the Workforce Investment Act (WIA) are higher than originally budgeted.  WIA is a federal program that provides the framework for a unique national workforce preparation and employment system designed to meet both the needs of the nation’s businesses and the needs of job seekers and those who want to further their careers.

 

Secondly, NOVA’s Skills Testing Assessment and Re-Employment grant (STAR) was funded by the State of California for $8,000,000 beginning in October 2002.  This funding will be used to cover the STAR program operating expenses for both FY 2002/2003 and a portion of FY 2003/2004.

 

In accordance with the above-mentioned new awards, operating program budgets should be changed to correspond to actual allocations.  The following programs require modifications to their original appropriations:

 

Program 530 – WIA Title I Adults/WIA Administration provides employment and training opportunities for adults in the NOVA area.

 

Program 540 - Non-Workforce Investment Act incorporates all non-WIA funded grants.  These include:  (1) the Homeless Veterans project, providing employability and training programs for homeless veterans; (2) the Labor Market Information study which NOVA conducts for the State Employment Development Department (EDD); (3) Packard Foundation funding for welfare-to-work activities; (4) the H-1B Technical Skills Training grant from Department of Labor; (5) the Technology-to-Teaching project funded by DED; and (6) the Techforce project to train incumbent workers in IT skills, funded by the State Employment Training Panel.

 

Program 541 – Workforce Investment Act includes the Caregivers Training Initiative, a project to train entry-level healthcare workers.

 

Program 546 – WIA Title I Dislocated Workers provides employment and training services to eligible dislocated workers.

 

Program 552 - Rapid Response continues to provide workforce transition services to employers who are downsizing, as well as specialized labor market research.

 

Program 557 – WIA Title I Youth provides employment readiness and career preparation services to youth ages 14-24.

Program 580 – WIA STAR continues funding to provide testing, assessment, career advising, job development, and job referral for dislocated workers.  This grant will operate through December 31, 2003.

 

Program 555 - Proven People Program continues to provide employment services for older workers and local employers.  This is a non-WIA-funded program.

 

FISCAL IMPACT

 

As a result of the changes in actual allocations over the original budget and the shifting of staff time and other resources throughout the various programs, the program budgets should be changed accordingly. Staff requests Council recognize $5,743,572 in additional revenues and appropriate $1,869,350 in additional expenditures for DED.  This will bring the total FY 2002/2003 budget for DED to $12,689,683.

 

BUDGET MODIFICATION NO. 49 FISCAL YEAR 2002/2003
	Current		Increase (Decrease)		Revised
Employment Development Fund
Revenue
DED Grants and Contributions	$6,946,111		$5,743,572		$12,689,683
Expenditures
530 WIA Title I Adults	627,005		317,349		944,354
540 Non-Workforce Investment Act	3,807,989		(956,925)		2,851,064
541 Workforce Investment Act	1,175,166		(974,261)		200,905
546 WIA Title I Dislocated Workers	1,235,074		(346,439)		888,635
552 Rapid Response	-		702,345		702,345
555 Proven People	45,845		-		45,845
557 WIA Youth	325,574		82,590		408,164
570 DED Non-Admin Cost Pools	22,108		(22,108)		-
580 WIA STAR	3,581,572		3,066,799		6,648,371
Total Expenditures	$10,820,333		$1,869,350		$12,689,683

 

PUBLIC CONTACT

 

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.

 

 

ALTERNATIVES

 

1.    Council approves Budget Modification No. 49.

 

2.    Council rejects Budget Modification No. 49.

 

3.    Other action as determined by Council.

RECOMMENDATION

 

It is recommended by staff that the Sunnyvale City Council adopt Alternative No. 1:  Approve Budget Modification No. 49.

 

 

 

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

Reviewed by:
Michael J. Curran, Director
Department of Employment Development

 

Mary Bradley, Director
Department of Finance

 

Approved by:

Robert S. LaSala

City Manager