NOVA’s current STAR grant (STAR XIV) for $2.9 million ends December 31, 2005 and its National Emergency Grant ends September 30, 2005. Existing dislocated worker allocated funds are not sufficient to meet the demand for services for the coming year. Neighboring workforce areas are facing a similar shortage of funding. It is recommended that the Sunnyvale City Council, on behalf of the NOVA Consortium cities, concur with the decision of the NOVA Workforce Board and authorize staff to submit grant proposals totaling up to $12 million to the State of California and/or the U. S. Department of Labor to provide for the continuation of dislocated worker services in 2005-06 in the Silicon Valley region.
BACKGROUND
The State of California initially funded NOVA’s STAR (Skills Testing, Assessment and Re-employment) services in the fall of 1989. NOVA has since received continuous funding through 14 major grants over a 16-year period. EDD has invested over $62 million in STAR to serve over 19,000 dislocated workers, and the grant has consistently met or exceeded its performance goals. In recent years, State discretionary funding has become more limited, and the State has not been able to continue its investment in STAR to the extent it has in the past.
NOVA’s current STAR XIV grant is for $2.9 million and plans to enroll a total of 586 clients in a myriad of services including extensive testing and assessment, occupational classroom training, re-employment workshops, ProMatch services, a computerized learning lab, and funding for appropriate one-stop services. STAR’s program model provides the basis for NOVA's service delivery system for dislocated workers. This funding runs through December 31, 2005. For the first time, the State placed a restriction on these funds that a minimum of 50 percent of the funding must be spent on training. This then leaves less funding available for creating networking opportunities and support systems.
In 2003, realizing the state of urgency that exists in the region relative to the re-employment efforts of dislocated workers, NOVA partnered with its neighboring workforce boards to submit a proposal for National Emergency Grant (NEG) funding to serve dislocated high-tech workers using our STAR model. NOVA’s proposal became part of a statewide proposal submitted to the Department of Labor. NOVA was originally awarded $903,018 in NEG funds, with the grant planned to end December 31, 2004. In July 2004, the Department of Labor approved the extension of the grant to March 31, 2005 and allowed more flexibility in the companies that were eligible to be served. NOVA submitted a revised plan for $4 million to serve 682 individuals. In October, the Department of Labor approved the State’s request to extend the enrollment period and grant term to September 30, 2005. Due to the large number of dislocated workers needing service, NOVA exceeded its enrollment goal and enrolled 738 participants. The State then agreed to provide an additional $305,076 in grant funding so that these individuals might complete services. NOVA has in place a standing request for any supplemental NEG funding that may come available through underutilization by other workforce boards. At this time, slightly over one-half of the participants have exited the grant with an entered employment rate of 72.4% and an average wage of $33.37 per hour, both measures of which exceed the plan.
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 demand for dislocated worker services in the NOVA area continues to be high. Although the unemployment rate has fallen from its peak in 2003, this is not due to a comparable increase in jobs and new hiring so much as it is to individuals falling outside the traditional definition of “labor force” or “unemployed.” NOVA projects a need for an additional $7.5 million in 2005-06 to serve a projected 4,700 clients.
This amount is in addition to $976,291 NOVA has been allocated in State dislocated workers funding for 2005-06, a decline of 20 percent from 2004-05. The reality of the Workforce Investment Act funding formula is that it allocates funds based on the rate of unemployment among residents of the local area. A full 50 percent of NOVA clients do not even reside in our area but choose to come to NOVA primarily because their companies are located here.
NOVA’s current STAR and NEG funding, combined with our allocated funds, simply cannot meet the continued demand for services through 2005-06. Therefore, NOVA is prepared to develop another proposal for National Emergency Grant funding and/or STAR funding.
Neighboring local workforce investment areas are experiencing a similar shortage of funding based on the state formula for allocation of dislocated worker funds. From 2003 through 2005, the four workforce boards serving Santa Clara, San Mateo, and San Benito Counties experienced mass layoffs that were over 15 percent of the statewide totals; however, these areas received only 8 percent of the allocated dislocated worker funds. In light of the fact that all four areas serve similar populations, it is desirable to submit a single grant application on behalf of the Silicon Valley community. The funding request will range from $8 million to $12 million, with proportionate shares of funding for each area based on numbers of individuals to be served.
At its meeting of May 25, 2005, the NOVA Workforce Board approved the submission of proposals for dislocated workers funding.
FISCAL IMPACT
There will be no fiscal impact to the City because funds received will offset program expenditures.
CONCLUSION
Existing dislocated worker allocated funds are not sufficient to meet the demand for services for the coming year. Neighboring workforce areas are facing a similar shortage of funding. Staff recommends the authorization of submission of grant proposals totaling from $8 to $12 million to provide for the continuation of dislocated worker services in 2005-06 in the Silicon Valley region.
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 submission of proposals not to exceed $12 million to the State of California and/or the U. S. Department of Labor for dislocated workers funding and authorizes the City Manager or her designee to execute the necessary grant agreement(s).
2. Council rejects submission of the proposals or requires the execution of the grant agreement to come back to Council.
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, and in concurrence with the NOVA Workforce Board, adopt Alternative 1: Council approves submission of proposals not to exceed $12 million to the State of California and/or the U. S. Department of Labor for dislocated workers funding and authorizes the City Manager or her designee to execute the necessary grant agreement(s).