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HomeMy WebLinkAbout1998-07-14 - AGENDA REPORTS - CACT AT COLLEGE OF THE CYN (2)AGENDA REPORT NEW BUSINESS DATE: July 14, 1998 City Item to be presented by: Mike Haviland SUBJECT: REQUEST FOR FINANCIAL SUPPORT FOR THE CENTER FOR APPLIED COMPETITIVE TECHNOLOGY (CACT) AT COLLEGE OF THE CANYONS DEPARTMENT: . City Manager's Office RECOMMENDED ACTION City Council approve a one-time grant of up to $75,000 to College of the Canyons for partial funding of the Center for Applied Competitive Technologies (CACT). Make funds contingent on an amount equal to 50% of funds received (up to $75,000) in use tax revenues that is a direct result of a capital equipment purchase by Aerospace Dynamics Inc (ADI). Appropriate $75,000 from City Council Contingency Fund (Acct. No. 1240-7401). In early 1998, ADI approached the City seeking its participation in the funding of a unique training program. This program is aimed at addressing a critical labor shortage shared by local manufacturing businesses like ADI. Many local manufacturing companies have invested heavily in the latest state of the art machine tool equipment and design technologies but cannot find a qualified corresponding workforce with the specialized training required to operate this equipment. To address this critical shortage, ADI has partnered with College of the Canyons (COC) to establish what is now titled the Manufacturing Education Center Project. ADI requested that COC operate and provide infrastructure for the specialized training program and in turn ADI, in conjunction with other local manufacturing business, would provide the physical space, equipment and software required to run the program. Subsequently, COC applied.for, and received a five-year State grant to create the Center for Applied Competitive Technology, the program that oversees the Manufacturing Education Center Project. The program is currently in its first year of operation. -%PROVED Adenda Iten-ai. As a direct result of SB -110, and in an attempt to encourage the City's participation, ADI requested use tax allocation corrections of $75,000 be redirected to the City of Santa Clarita. Additionally, ADI is expected to self -direct another $75,000 in use tax to the City in the second part of this year. Had ADI not requested the correction, the City would have only received a portion of these funds from the County Pool. As these would be new use tax revenues coming to the City and not currently budgeted, ADI proposes that some part of these monies be directed toward the support of the College of the Canyons manufacturing training program. Use tax is similar to sales tax. It is a tax imposed primarily on the purchase of goods from out-of-state vendors who are not subject to the State sales tax. The use tax is the same rate as sales tax, however, the purchaser, not the seller, pays it. ALTERNATIVE ACTION 1. City Council take no action 2. Support the program and include a defined framework of what would be acceptable requirements for future requests 3. Authorize a reduced grant amount as determined by Council 4. Other action as determined by Council FISCAL IMPACT The City anticipates receiving $75,000 in use tax revenue from ADI's capital purchases in October. Furthermore, ADI projects making another capital purchase which would generate an additional $75,000 for the City in use tax revenues later this year. As ADI has requested only half of the use tax revenue be earmarked for the training program, the fiscal impact still remains a positive one for the City. ATTACHMENTS Pros & Cons Sheet Manufacturing Education Center Project Fact Sheet REQUEST FOR FINANCIAL SUPPORT FOR THE CENTER FOR APPLIED COMPETITIVE TECHNOLOGY (CACT) AT COLLEGE OF THE CANYONS PROS & CONS OF CITY PARTICIPATION Pros Cons This program is already established and is a Could set a precedent by which other State funded program that utilizes matching business would request similar use tax funds revenue credits There is no negative burden on City's Is "Training Business" an appropriate role General Fund. for the City? Investment on the part of the City in high If not directed to ADI, these funds would tech training programs creates a unique go into the City's General Fund and could "competitive advantage" to potentially be spent on other programs. attract other related high tech industry. This program is consistent with the City's economic development strategy to: • Attract high paying jobs to Santa Clarita Support high technology based employment in Santa Clarita Investment of City funds would provide low-cost training to a local broad-based public. College of the Canyons regards this program as an extremely important training tool. By supporting this program, the City will enable local employers to access a qualified, locally trained workforce. mm:`econdev-adi-pms.doc COLLEGE OF THE CANYONS MANUFACTURING EDUCATION CENTER PROJECT BaCkyrofund% The need for a better trained manufacturing workforce and more responsive, industry - based education programs is a message that College of the Canyons has heard clearly from more than 45 local companies during the past two years. In Southern California and across the nation, companies are experiencing a shortage of trained machine operators, computer numerical control programmers, and other technicians to support the expanding manufacturing industry. The Los Angeles Times recently reported that while nationwide manufacturing jobs have remained flat at about 18.5 million, in the past two years alone California has added 100,000 manufacturing jobs. In response to the shortage of skilled manufacturing technicians, College of the Canyons began developing programs to meet the education and training needs of the local manufacturing sector. Through an Employment Training Panel -funded contract with the state of Califbmia, the College and the Valencia Industrial Association developed two state-runded training contracts, which allow the College to provide training to eligible employers at no cost. In order to provide the level of training needed to prepare workers for local jobs, and to upgrade the skills of existing employees to meet the technical challenges of modern manufacturing however, the College anon realized that capital equipment would be needed. At the same time, Aerospace Dynamics Tntornational decided to aggressively address chronic labor shortages and stalling problems for high tech manufacturing jobs in its Valencia plant. Staffing shortages were having an impact on ADI's ability to maintain production schedules and meet customer demands for on-time shipment of products. ADT officials reasoned that they were not unique and that other local companies had similar needs. working with the College, ADI helped College ofthe Canyons Identify the equipment needed to develop a manufacturing education center with a sophisticated CAD/CAM system as its main component: State of the an equipment has been donated or offered to the College at deeply discounted fees, along with ftcc maintenance and reduced consulting costa for installation and troubleshooting. Thus far, over 150 College of the Canyons students have participated in classes in the Manufacturing Education Center. Next Steps: To have a major impact on the local labor shortage for high technology manufacturing technicians, the College must work with industry and government partners to expand the Manufacturing Education Center. Additional equipment and instructions] resources are needed to meet the skill requirements of most local manufitcturers. Meeting regularly with manufacturing managers from the community, the College has identified additional hardware and software, which are necessary to produce trained technicians for entry-level jobs. Additionally, this equipment is needed to provide upgrade training for workers already employed in manulicturing so that they can utilize current manufacturing technologies, increasing the competitiveness of local employers. Secondly, the College and its industry partners want to work with the local high schools to develop a 2+2 program which will link educational programs in manufacturing during the last two years of high school with manufacturing educational programs at the community college level. Internships will supplement formal classroom training so that students gain valuable real-world experiences that will lead to local employment. The College is currently working with the Booing Corporation to develop a 2+2 program, which matches a similar, highly successful program in Scuttle. The College is planning on kicking offplanning meetings for developing this aspect of the project in the fall of 1998. Developing a first class workfbrce is a key strategy for local economic development in the greater Santa Clarita Valley region. Industries can only grow in regions where there are skilled workers prepared to use new technologies in order to add value to their work. A skilled workforce is one of the most important assets a region can offer high wage, high technology employers. The Manufacturing Education Center is essential to the overall economic development of our region and will have a lasting impact upon this valley in the years to come. Attached is a list of companies who are participating in the College's manufacturing education programs. Manufacturing EducatioNTraining Consortium 1996-1998 Consisting of the Following Companies: Acoustic Authority Aerospace Dynamics International, Inc. Aircraft Hinge Answer Products Applied Companies Aquafinc Corporation Automatic Gate Supply Company AVM Technologies H&H Manufacturing Bayless Engineering Bertelsmann Industry Services Blue Cross Labs Boone Airparts, Inc. Brown, Bunyan, Moon & More Canyon, Engineering Products Childs and Albert Del West Engineering Delta Scientific Lrlectrofilm Manufacturing Company Forrest Machining GG Industries Graphics Research Gruber Systems Integral Pans ITT Aerospace Controls King Bros. Industries Lightway Industries Magic Plastics, Inc. Matthew Productions MetalPro Industries Microwave Communications Corp. Morton Manufacturing MTS Products Nestle USA Northern Magnetics Oupiin America, Inc. Pacific Industrial Components Corp. Paragon Precision Products PURA Inc. RAH Industries RAM Entorprises Regency Aluminum Products Semeo Instruments Sensor Tech Systems SK Machining & Mfg. Stoll Memicraft Sunvair, Inc. T.E.S.T. Kreashens Trac Dynamics TV Fanfare True Position Technologies Ultra Violet Devices, Inc. UTAK Laboratories V.M.P. Inc. Vista Controls Western Filter Corporation Williams Instruments