May 18, 2004

SUBJECT: NOVA Fiscal Year 2003-2004 Voluntary Leave of Absence Program Related to Funding Gap

REPORT IN BRIEF

This report recommends adoption of a voluntary leave of absence program so that full-time and regular part-time NOVA employees, through the taking of paid (accrued vacation/paid time off (PTO)/paid leave) or unpaid leaves of absence, can provide funding to bridge a projected fiscal year funding gap of approximately $185,000.  If this funding gap is not bridged, it could result in the layoff of an estimated twenty-six employees in the Department of Employment Development for the remainder of Fiscal Year 2003-2004.

BACKGROUND

In October 2003, NOVA recognized that it may experience some difficulty in securing the amount of funding needed to operate all programs for the full fiscal year.  This realization was later substantiated by the reduction in the number of grants being made available, by the State of California acknowledging that it had over obligated the funds it had available, by a new Governor expressing concern about past fiscal policies with the state agencies, and by the Federal deficit that was ballooning above and beyond all predictions.

To manage this changing fiscal environment, the NOVA Workforce Board/Sunnyvale City Council adopted a two-prong approach to reduce expenditures and to increase revenues.  Reductions of expenditures included the delay/elimination of discretionary spending, adopting a selective hiring freeze, and the elimination of ten previously funded positions.  To increase revenues, several grant applications were submitted, some of which are still pending consideration.

With some grants not being approved or pending, a funding shortfall has been projected.  Several alternatives were considered, and the proposal which would result in the least disruption of services was a voluntary leave of absence program for NOVA employees to be available May 17 through June 30, 2004.

DISCUSSION

Meetings have occurred with City representatives and representatives of the Sunnyvale Employees Association (SEA) and the Service Employees International Union, Local 715 (SEIU) bargaining units.  The parties have reached agreement on the implementation of a voluntary leave of absence program for NOVA employees related to the Fiscal Year 2003-2004 Funding Gap.

This program would allow employees to schedule either paid or unpaid leaves of absence.  This program provides for certain exceptions to the consequences of an unpaid leave of absence, which exceptions are detailed in the program guidelines.  It is estimated that if, on average, each employee were to take six days off before the end of the fiscal year, the funding gap would be met.

This program in no way limits the actions of the City in the event that additional fiscal reductions are required.

FISCAL IMPACT

Since this action will be funded through voluntary leaves of absence, and since accrued leave is fully funded, there is no cost to the City other than staff time to implement and manage the program.

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 the City Clerk’s Office.

ALTERNATIVES

1.  Adopt the NOVA Fiscal Year 2003-2004 Voluntary Leave of Absence Program Related to Funding Gap, and authorize the Director of Human Resources, on behalf of the City, to execute the agreement to establish the program guidelines.

2. Do not adopt the NOVA Fiscal Year 2003-2004 Voluntary Leave of Absence Program Related to Funding Gap.

RECOMMENDATION

Staff recommends adoption of Alternative No. 1; Adopt the NOVA Fiscal Year 2003-2004 Voluntary Leave of Absence Program Related to Funding Gap, and authorize the Director of Human Resources, on behalf of the City, to execute the agreement to establish the program guidelines.

Prepared by:

Tammy M. Parkhurst
Senior Management Analyst

Reviewed by:

Mark Gregersen
Director, Human Resources

Reviewed by:

Michael Curran
Director, Employment Development

Approved by:

Amy Chan
City Manager

Attachments

A. Resolution

B. Program Guidelines for the NOVA Fiscal Year 2003-2004 Voluntary Leave of Absence Program Related to Funding Gap