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HomeMy WebLinkAboutAgenda - 04-21-2015 - 7c1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 21, 2015 Action Agenda Item No. 7 -c SUBJECT: Child Care Budget Planning Information DEPARTMENT: Social Services PUBLIC HEARING: (Y /N) No ATTACHMENT(S): Orange County Child Care Budget Planning Information INFORMATION CONTACT: Nancy Coston, 919 245 2800 Tina Clark, 919 245 2800 PURPOSE: To discuss funding needs and possible strategies for meeting the need for child care subsidy for Orange County families. BACKGROUND: The Orange County Department of Social Services (DSS) has offered subsidized child care to all children placed on the waitlist prior to January 1, 2015, as directed by the Orange County Board of County Commissioners (BOCC) using funds in the Social Services current fiscal year budget, state reallocations and funds made available by the BOCC. A new waiting list was started on January 1, 2015. Staff was asked to come back to the BOCC and present funding proposals for different child care subsidy scenarios for FY 2015 -16. Although some scenarios were developed for the March 5, 2015 work session that was cancelled due to inclement weather (see attached), additional trend analysis has now been included in the information being presented. The original cost estimate for Fiscal Year 2014 -2015 was based on an expectation of 820 children per month receiving subsidy. Due to some of the changes implemented for part time care and due to the time needed to enroll new children, the expenses for this year will be below the $5,023,956 and 820 children originally anticipated. The new estimate for children served during this fiscal year will be 724 per month and currently 807 are receiving subsidy. Although the original estimate for state child care revenue was $3.4 million, DSS has actually received $4.4 million after several reallocations. With these changes, the agency anticipates approximately $150,000 in county funds remaining in the child care fund on June 30, 2015. All estimates in this abstract also include the cost to continue serving the children impacted by the change in income eligibility and family composition implemented by the North Carolina General Assembly last year (school age children below 133% of the Federal Poverty Level and children living with relatives other than parents). Given that the children who have been served from the waitlist will continue to be served next year, the cost for next year is estimated at $4,342,500 assuming average attrition and taking no new children from the waitlist. Since the state estimate has again been reduced to $3.4 million, the budget approved by the Social Services Board and submitted to the County Manager includes an increase of $639,000 in County dollars to cover the cost of currently enrolled children. This estimate does not allow for clearing the current waitlist or serving children as attrition occurs. These funds, if appropriated, would serve an average of 724 children per month. There are currently 115 children on the waiting list and the agency estimates that 100 children would receive services if the waiting list was cleared through June 30, 2015. The Department has been studying ways to eliminate the current waitlist. Based on conversations with state officials, the Department anticipates receiving an additional $300,000 above the estimated $3.4 million in the DSS proposed 2015 -2016 budget. The Department believes that approximately 800 children per month could be served with the funds in the budget recommended by the Social Services Board. If there is some shortage of funds to meet this need, the Department could cover these costs by moving any unexpended funds from other line items during the year. Therefore the Department recommends clearing the current waitlist and continuing without a waitlist through June 30, 2015. Another stated goal of the Board of County Commissioners is to eliminate the waitlist on an ongoing basis. Trend data has been analyzed by the Department and the highest number of children served when there was no waitlist was 928. The trends also show that on average approximately thirty children are added to the waitlist each month and twelve terminate from subsidy each month. Based on this net increase of 18 children being added to the subsidy program each month (and therefore requiring varying amounts of support for the year), the Department estimates eliminating the waitlist would add $702,000 in county costs to the Fiscal Year 2015 -2016 budget. This amount would be in addition to the $928,615 in the proposed budget approved by the DSS Board. If more than $300,000 in reallocated funds are received from the state or if attrition proves higher than projected, these costs might be lower. If funds are not made available to eliminate the waitlist, children would be added to the waitlist beginning July 1, 2015. Only if the average number of children drops below 800 would children from the waitlist be served. Another strategy for addressing this need would be to increase the number of children served incrementally. The estimated annual cost to add 50 children to the monthly average of children served is $300,000 and this is based on each child receiving subsidy for all twelve months. By increasing the average number of children served, the Board could develop an alternative strategy to address the need and thereby reduce the length of time children are on the waitlist. FINANCIAL IMPACT: There is no impact to receiving and discussing this issue. The cost to provide care for children on the waitlist since January 2015 can be covered by funds already appropriated for Fiscal Year 2014 -2015, but could impact funds needed for next year. Any proposal to reduce or eliminate the ongoing child care waitlist will require additional county funds. RECOMMENDATION(S): The Manager recommends that the Board discuss child care funding options, approve clearing the waitlist through June 30, 2015, and identify any other information needed to develop a long range budget proposal for child care subsidy and provide guidance to the Department regarding the current waitlist. K Orange County Child Care Budget Planning Information Joint Meeting of Social Services Board and Board of County Commissioners March 6, 2015 The Orange County Department of Social Services has offered subsidized child care to all children placed on the wait list prior to January 1, 2015 as directed by the Orange County Board of County Commissioners (BOCC) using funds in the Social Services current fiscal year budget, state reallocations and funds made available by the BOCC. A new waiting list was started on January 1, 2015. Staff were asked to come back to the BOCC and present funding proposals for different child care subsidy scenarios for FY 2015 -16. This report shows costs and available funds for the current fiscal year and outlines four funding scenarios for FY 2015 -16. • Scenario 1 — Continue to provide child care subsidy to the current children with no children coming off the wait list. • Scenario 2 — Continue to provide child care subsidy to the current children and allow new children to receive child care as attrition occurs. • Scenario 3 — Continue to provide child care subsidy to the current children and clear the waiting list again on July 1, 2015. A new wait list would start July 1, 2015. • Scenario 4 — Provide subsidy to all current children and continue to serve all children without a wait list next year. Current Year There are currently 771 children receiving child care subsidy through Social Services. The numbers below are based on an estimate of 820 children per month receiving subsidy services. The new rules passed by the General Assembly* eliminating prorated fees have created additional attrition. At the current rate of service, approximately $500,000 would be available to carry forward to FY 2015 -16. Funds Needed for FY 2014 -15 FY 2014 -15 Expenditures through January $2,973,956 Projected Costs March -June 2,050,000 Total Needed for FY 2014 -15 $5,023,956 Funds Allocated for FY 2014 -15 (Post state reallocations and addition of social justice funds) State Funds $4,410,595 County Funds $638,579 Total Funding $5,049,174 * That change is the only one of the General Assembly changes currently being implemented. Families impacted by the other changes are being served with county funds. Fiscal Year 2015 -2016 Current Budget and Potential Impacts for Child Care Subsidy" The estimates may be impacted by some or all of the following factors: • If attrition stays high in FY 2014 -15, next fiscal year will begin with a lower monthly total of children served which would lower the overall costs. M The current estimate from the state for FY 2015 -16 is $3.4 million, a decrease of $400,000 from the original allocation for this year of $3.8 million. If this reduction does not occur, more funds than proposed in the budget would be available. This year, Social Services also received reallocations resulting in a total state appropriation of $4.4 million, roughly $1 million more than is estimated by the state for FY 2015 -16. The all-time monthly high for children served by Social Services during a period without a wait list was 890. This would equate to an annual cost of approximately $5,340,000. The estimates in the funding scenarios may be high if there is a point where services are meeting demand. Natural attrition of 15 children per month ($577,500 annual savings) is included in next year's cost estimates. The proposed budget for FY 2015 -16 includes costs to continue serving the children currently receiving child care subsidy (Scenario 1). This will cost the county $928,615, an increase of $640,036 over the original approved budget for FY 2014 -15. Funding in Social Services Proposed Budget for FY 2015 -16 State Estimate $3,398,885 IV -E (Additional funding source) $15,000 County $928,615 Total $4,342,500 Scenarios for Fiscal Year 2015 -2016 Scenario 1: Continue to provide child care subsidy to the current children with no children coming off the wait list (This is the current Social Services budget proposal). County Costs $928,615 Total Cost $4,342,500 Scenario 2: Continue to provide child care subsidy to the current children and allow new children to receive child care as attrition occurs. County Costs $1,506,115 Total Cost $4,920,000 Additional County Funds Required $577,500 Scenario 3: Continue to provide child care subsidy to the current children and clear the waiting list again on July 1, 2015. The current wait list has 58 children. By July 1, 2015, an estimated 180 children will be waiting. To clear the wait list and serve these children for the whole year would add approximately $1,080,000 for FY 2015 -16. The wait list would also restart July 1, 2015. County Costs $2,008,614 Total Cost $5.422.499 Additional County Funds Required $1,079,999 Scenario 4: Provide subsidy to all current children and continue to serve all children without a wait list next year. Assuming that the wait list grows by 30 children per month, eliminating the wait list for all of next fiscal year would add $2,250,000. County Costs $3,178,615 Total Cost $6,592,550 Additional County Funds Required $2,250,000 * *In most instances, the highest estimates have been used so there is a possibility that any of these options may cost less than projected.