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HomeMy WebLinkAboutAgenda - 10-01-2024; 6-b - Child Care Subsidy Assistance Update 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: October 1, 2024 Action Agenda Item No. 6-b SUBJECT: Child Care Subsidy Assistance Update DEPARTMENT: Social Services ATTACHMENT(S): INFORMATION CONTACT: Nancy Coston, 919-245-2800 Tina Clark, 919-245-2800 PURPOSE: To receive an update on the current fund availability for childcare subsidy and to consider options for service delivery for the remainder of the fiscal year. BACKGROUND: Orange County's Department of Social Services (DSS) provides child care subsidy and social casework services for families, including information and referral services to help parents determine appropriate child care placements. The objectives of this program are to: • Provide subsidies for high quality child care for low-income working families, children involved in child welfare cases, and other at-risk children in Orange County. • Assure that eligible employed parents wait less than six months to receive child care subsidy. • Utilize all available federal and state funds to support child care needs of local children. In FY 2024-2025, Social Services will receive $6,700,396 in Federal and State funds, including $600,000 in Smart Start funds and $1,275,559 in County funds, for a total of$7,975,955 budgeted for child care subsidies. Through these funding sources, Orange County is currently serving approximately 637 children each month, including paying the parent portion of the fee for attendance. The average monthly cost per child for subsidy has increased significantly over time. In 2019, the DSS share averaged around $700 per month, and the current average is $1 ,100 per month. Several factors have impacted these costs, including a market rate increase in 2022 and changes in eligibility and parent fees for afterschool care. The previous averages had more afterschool children (who have lower costs) and now a larger portion of the children are 0-5 year olds with full time care. The rates vary based on age of the child and the star rating of the child care program. For example, the current market rate for 3-5 year old children in a four star program is $1 ,308 per month. During the pandemic, there was a decrease in demand for child care while there was an increase in funds available. Some of these funds were allowed to cover parent fees, helping low-income families return to employment. Orange County has continued paying parent fees to support low- 2 income working families at a cost of approximately $67,000 per month after Covid relief for fees ended. This combination has resulted in insufficient funding to continue the current level of child care subsidy service in Orange County. Orange County has a long history of supporting low-income families through childcare subsidies. The Board appointed a task force to study the issues in 2005 and has continued to recognize the importance of child care for employment, child safety, school readiness and child development. At times, the wait list for child care has grown to over 300 children with working families waiting for years to receive support. In Fiscal Year 2015-16, the BOCC increased County support for subsidy, and the waiting list was eliminated. Additional funds were added in subsequent years to address the increased demand. There has not been a wait list since 2017. The Social Services Board discussed the child care issue at its September 16, 2024 meeting, and voted to ask the Board of Commissioners to consider Option 2 in the Manager's Recommendations. FINANCIAL IMPACT: The financial impact will depend on the Option adopted by the Board of Commissioners. The financial costs associated with Options 2 and 3 are estimated based on projected enrollment growth. County staff will monitor enrollment monthly to determine the true cost to the County. Once additional funding is required, staff will present the necessary budget amendments utilizing fund balance to maintain funding for the selected Option. The impact of these Options on future fiscal years will require ongoing County support. ALIGNMENT WITH STRATEGIC PLAN: This item supports: • GOAL 2: HEALTHY COMMUNITY OBJECTIVE 3. Provide social safety net programming and the resources needed for our most vulnerable community members (e.g., veterans, unhoused people, foster children, older adults, etc.). • GOAL 5: PUBLIC EDUCATION/LEARNING COMMUNITY OBJECTIVE 2. Improve school readiness and educational outcomes by providing access, training, tools, technology, and other resources needed to thrive. RECOMMENDATION(S): The Manager recommends that the Board consider the following Options and associated costs: Option 1 — End parent fees effective November 30, 2024, and begin a waiting list for any families working or seeking employment or training. There would be no additional costs. Option 2— End parent fees effective November 30, 2024, and add up to twelve (12) children per month to try to avoid a waiting list. The cost of this would be an additional $726,000. Option 3 — Continue parent fees and add up to twelve (12) children per month to try to avoid a waiting list. The cost of this would be an additional $1,188,841.