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HomeMy WebLinkAboutAgenda - 08-22-2006-9aORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: August 22, 2006 Action Agenda Item No. CI _ G SUBJECT: Request for Additional Childcare Subsidy Funding DEPARTMENT: Social Services PUBLIC HEARING: (Y/N) No ATTACHMENT (S): INFORMATION CONTACT: Nancy Coston, 245-2802 PURPOSE: To consider approving a reallocation of $100,000 from anticipated Medicaid savings to serve families waiting for child care subsidies. BACKGROUND: In recent years, the cost of childcare in Orange County has increased substantially. For example, in 2001, monthly child care costs for an infant was in the neighborhood of $700 compared to today s cost of $1,000. This increase coupled with increases in other day-to-day basic living expenses such as gasoline, food and clothing have taken its tall on everyone -especially low income employed families. While Orange County's childcare assistance program has received additional County, state, and federal funds, unfortunately, the increased funds from all sources have not kept up with the pace of rising needs far childcare assistance for those families most affected -the low income employed families with young children. Currently, there are 451 families (a total of 539 children) on Orange County's childcare assistance waiting list, and some of those working families have been on the list since March 2005. It is important to note that, in Orange County, the monthly cost of child care for all age groups, on average, ranges from $800 to $1,100. The average annual cost per child to the subsidy program after adjusting for the required parent fees is approximately $4,700. These averages include all children whether they receive full or part-time care.. The Board appointed a Child Care Task Force in 2005 to explore various community alternatives far assisting families in need.. While the Task Farce continues its work and plans to report its findings to the Commissioners in September, one area of consensus from all community stakeholders is that there is not sufficient funding to assist all families who are in need. Alternatives discussed by the Task Force to date include the need to increase the overall availability of childcare, including possible partnerships with businesses and other employers.. Prior to the time that the report is presented to the BOCC, a priority of the Department and the Social Services Board is to provide child care assistance, to the extent possible, to as many families as possible and reduce the waiting list. One option for addressing that priority is to reallocate $100,000 from the County's 2006-07 Medicaid appropriation to assist these families. Actions taken by the General Assembly this year (enacted after the County s budget was adopted) provide cone-time "Medicaid Relief' to counties. In essence, the "Relief' caps all County costs at the fiscal year 2005-06 expenditure level. Far Orange County, this amount totals $3,765,997 compared to the $4,024,800 included in the approved 2006-07 budget with the difference being $258,803. The DSS Board requests that Commissioners reallocate $100,000 of the $258,803 to provide additional child care assistance to families in need. There are a few concerns about the Medicaid Relief provision. • While the State plans to pick up projected costs in Medicaid, the General Assembly capped the amount that the State will pay at $27.4 million. Should statewide Medicaid spending during the current fiscal year grow beyond the increase projected by the State ($27.4 million), individual counties will have to pick up those excess costs and may ultimately have to spend more than its prior year expenditure. • The other caution to note is that the relief was funded with nonrecurring funds in the current year meaning that there is no promise that relief funding would continue beyond the current 2006-07 fiscal year. The General Assembly has agreed to a legislative study commission to examine alternatives to eliminate county financial participation in Medicaid services in future years. With General Assembly action this session, counties are required, for the first time in recent history, to match, at the rate of 15 percent, any daycare funding reallocations that the State may award during the year. Since this is a new requirement, the County's budget did not include monies to fund this new mandate. As a point of reference, the County received daycare reallocations totaling $250,675 in fiscal year 2005-06. Had the 15 percent match requirement been in place in that timeframe, the cost to the County would have been $37,600. As proposed, the reallocation of $100,000 would therefore serve as Orange County's match should the State reallocate daycare assistance funds.. The requested funds would allow Social Services to serve an additional twenty-one children far a full year. FINANCIAL IMPACT: As outlined in the Background section. RECOMMENDATION(S): The Manager recommends that the Board of County Commissioners accept the proposal from the Social Services Board and approve the reallocation of $100,000 from the Medicaid line item to the child care subsidy line item in the Social Services Budget.