REPORT TO COUNCIL
SUBJECT
Title
FY 2017/18 NOVA Workforce Services Department Expenditure Update and Approval of Budget Modification No. 47
Report
BACKGROUND
The NOVA Workforce Services Department (NOVA) manages programs and services for the NOVA Job Training Consortium, an eight-jurisdiction region that includes northern Santa Clara County (the cities of Cupertino, Los Altos, Milpitas, Mountain View, Palo Alto, Santa Clara and Sunnyvale) and San Mateo County. The Joint Powers Agreement stipulates how the public agencies will work together. The City of Sunnyvale is the administrative entity for NOVA’s programs, on behalf of the Consortium. Neither the City, nor any of the other seven jurisdictions that comprise the JPA, provide any funding to NOVA.
NOVA receives funding several ways that includes federal Workforce Innovation and Opportunity Act (WIOA) allocations determined by specific formulas and distributed through the California Employment Development Department (EDD). These allocations have a two-year lifespan, providing flexibility with the expenditure of these funds. In addition, NOVA receives competitive grants from a variety of state and federal sources and corporate and foundation funding. These funds have different periods of performance, often multi-year.
When the City, through NOVA, applies for grants, contracts and contributions, it determines what services and service levels will be provided through the application process. The NOVA Workforce Board reviews and approves of these funding applications at regular Board meetings. The City Council has the authority to receive and expend funds that are awarded, on behalf of the NOVA consortium. When new programs affect the established expenditure and service levels defined in the departmental budget, a budget modification request is submitted. These requests can occur throughout the year and are submitted for consideration and approval by the City Council.
EXISTING POLICY
Council Policy 5.1.1: Socio-Economic - Goals and Policies: Education and Training 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.
Pursuant to Sunnyvale Charter Section 1305, at any meeting after the adoption of the budget, the City Council may amend or supplement the budget by motion adopted by affirmative votes of at least four members so as to authorize the transfer of unused balances appropriated for one purpose to another, or to appropriate available revenue not included in the budget.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental, organizational or administrative activity that will not result in direct or indirect changes in the environment.
DISCUSSION
When NOVA’s FY 2017/18 budget was being developed, several major projections were based on information that was not yet available at that time: the fiscal year was not yet complete; the WIOA formula funding allocations for the year had not been released; NOVA’s best estimate of the potential competitive grant awards that NOVA pursues to supplement its available resources had not been announced. Thus, the budget was developed with conservative spending and funding assumptions.
This year, NOVA was successful in being awarded several additional grants during the year, including a $1,450,000 State Additional Assistance Grant, a $500,000 WIOA Regional Business Services Grant, and $500,000 from the California Workforce Development Board to provide technical assistance for special projects to State-wide grant recipients. Some of these grant funds will be used for the current fiscal year and subsequent fiscal years depending on the grant periods.
In response to this increase in resources above budgeted amounts, NOVA is requesting that its current FY 2017/18 program budget of $10.5 million be increased to a revised budget of $11.7 million to align with actual allocations and awards and expenditures.
FISCAL IMPACT
As a result of the changes in the originally planned versus more recently projected expenditures, the operating budget for NOVA’s program needs to be revised. The NOVA operating program is funded in the Employment Development Fund, which has a current budget of $10.5 million. Staff recommends that the operating program expenditure budget be modified to accommodate the changes in the resource and expenditure mix. Budget Modification No. 47 has been prepared to change the Employment Development Fund expenditure budget as detailed below. This modification will increase the total FY 2017/18 budget for NOVA by $1,200,000. As grants received by NOVA generally span multiple fiscal years, the full amount does not need to be appropriated in the current year. Additionally, NOVA contributes to the General Fund to cover indirect costs incurred by the City in administering these grants. These contributions are derived as a percentage of specific expenditures by the department. Staff estimates this transfer will increase by $143,680, as a result of this increase in budget and expenditures.
Budget Modification No. 47
FY 2017/18
Increase
Current (Decrease) Revised
Employment Development Fund
Revenues
NOVA Grants and Contributions $10,500,000 $1,200,000 $11,700,000
Expenditures
Employment Services $10,249,975 $1,056,320 $11,306,295
Transfers Out
Transfer to General Fund $312,564 $143,680 $456,244
General Fund
Transfers In
Transfer from Employment $312,564 $143,680 $456,244
Development Fund
Reserves
Budget Stabilization Fund $32,032,331 $143,680 $32,176,011
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, at the Sunnyvale Senior Center, Community Center and Department of Public Safety; and by making the agenda and report available at the Sunnyvale Public Library, the Office of the City Clerk and on the City's website.
RECOMMENDATION
Recommendation
Approve Budget Modification No. 47 increasing revenues for the Employment Development Fund by $1,200,000 for new total revenues of $11,700,000, increasing expenditures by $1,056,320 and transfers to General Fund of $143,680 for the FY 2017/18 Budget.
Staff
Prepared by: Deborah Gamble, Employment Training Manager
Reviewed by: Kris Stadelman, Director, NOVA Workforce Services
Reviewed by: Timothy J. Kirby, Director, Department of Finance
Reviewed by: Teri Silva, Assistant City Manager
Approved by: Kent Steffens, City Manager