BILL ANALYSIS �
AB 260
Page 1
ASSEMBLY THIRD READING
AB 260 (Gordon)
As Amended April 24, 2013
Majority vote
HUMAN SERVICES 7-0 APPROPRIATIONS 17-0
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|Ayes:|Stone, Maienschein, |Ayes:|Gatto, Harkey, Bigelow, |
| |Ammiano, | |Bocanegra, Bradford, Ian |
| |Ian Calderon, Garcia, | |Calderon, Campos, |
| |Grove, Hall | |Donnelly, Eggman, Gomez, |
| | | |Hall, Ammiano, Linder, |
| | | |Pan, Quirk, Wagner, Weber |
| | | | |
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SUMMARY : Makes permanent the individualized county child care
subsidy pilot plans (pilot) for San Mateo County and extends the
San Francisco County by two additional years until July 1, 2016.
Specifically, this bill :
1)Changes the sunset date for the San Mateo County pilot from
January 1, 2016, to July 1, 2014, and allows it to continue as
a permanent program thereafter.
2)Changes the statutory inoperative and repeal dates for the San
Mateo County pilot from January 1, 2016, to July 1, 2014, and
from January 1, 2016, to January 1, 2015, respectively.
3)Extends the San Francisco County program for an additional two
years, until July 1, 2016.
4)Requires both San Mateo and San Francisco Counties to submit a
report on the pilot project's operation to the Legislature,
the Department of Social Services (DSS) and the California
Department of Education (CDE) on or before December 31, 2014.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
Presumably, without the current pilot project that provides both
San Francisco and San Mateo to reimburse providers above the
current rate and allows them to extend eligibility to families
that would otherwise not qualify for subsidized child care, both
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counties would again return a portion of their funding each
year. If they were unable to spend their contracted amounts,
San Mateo and San Francisco would likely return a significant
amount of unspent child care funding. That funding would be
redistributed in subsequent budget years and would be a
combination of General Fund, Proposition 98 funding and federal
funds.
COMMENTS :
History of the pilot and challenges to provide subsidized child
care in high cost counties .
The San Mateo County pilot was established in 2004 and the San
Francisco pilot in 2006. Both were established in response to
the unintended consequences of living in a high cost county has
on needy and otherwise eligible families and the ability of
Title 5 programs to accept and serve them. On the one hand, a
low-income family who earns just enough money to meet the high
costs of housing could inadvertently be deemed as having too
high an income to qualify for subsidized child care. On the
other, the statutorily established State Reimbursement Rate
(SRR), which is the uniform statewide reimbursement rate for
subsidized care is wholly insufficient for agencies to cover
their program and operational costs.
As a result, child care subsidy funds allocated to these two
counties were not being fully expended because too many
low-income families were being deemed ineligible due to the high
cost of living, and provider reimbursement rates were
insufficient to cover the cost of care. Since slots went
unfilled, subsidies went unspent.
Through the pilot, San Mateo and San Francisco County are
provided limited local flexibility with increased state
oversight to revise their eligibility and need determinations,
adjust their reimbursement rates and family fees based upon a
local evaluation and assessment, and modify their funding
requirements, as specified.
This allows both counties to use the funds they would have
otherwise not earned and reinvest that into their providers
through increased reimbursement rates. For example, prior to
the pilot, San Mateo County returned upwards of 15% of their
overall subsidized child care allocation to the state. Using an
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ongoing estimation of how much money would go un-earned, in the
2010-11 fiscal year, San Mateo was able to reallocate those
funds amongst its agencies that were able to increase their
enrollment. They were also able to provide increased
reimbursement rates ranging from 1.5% to 8% above the SRR. In
San Francisco, the reimbursement rates were increased from
$34.38 to $36.63 for their center based agencies and $39.46 for
their programs operated by San Francisco Unified School
District, respectively.
Both counties are also able to adjust how they determine a
family to be eligible for subsidized care. In San Mateo County,
they switched from using the 75% of the "benchmark" state median
income to 85% of current state median income as published by the
U.S. Department of Health and Human Services, the maximum
allowable under federal regulations (which is the maximum
allowable under the pilot). According to San Mateo County in
their initial 2004 subsidy plan:
Although this represents a 39% increase in the income
eligibility threshold, this new threshold is only 67%
of San Mateo County's median income from the 2000
Census and still falls well below the County
self-sufficiency standards developed by Wider
Opportunities for Women, the San Mateo County Human
Services Agency or the California Budget Project.
In San Francisco, eligibility was set at 80% of state median
income, which allowed San Francisco to retain 392 children who
would have been otherwise deemed ineligible under the statewide
rate of 70% of state median income for the 2011-12 fiscal year.
Evaluation of the pilot programs :
San Mateo County : San Mateo County has been successful in
meeting the goals of the pilot. Over the first six years of the
pilot, San Mateo consistently increased their child days of
enrollment, which has helped to steadily increase their contract
earnings. According to their independent evaluation, they
increased their earnings percentage from 88% in the 2003-04
fiscal year, which was the year prior to the implementation of
the pilot, to 96% the following fiscal year. On average, San
Mateo earned just over 97% of their total direct service funds
over the first seven years of the pilot.
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Based upon this data and the independent evaluations of the San
Mateo County pilot, San Mateo County has continually met and
exceeded the goals of the pilot and merits having it made
permanent.
City and County of San Francisco : San Francisco has had a few
more challenges in implementing the pilot. Some of its
challenges can be attributed to how the pilot was implemented.
At the outset, San Francisco's pilot mirrored much of San
Mateo's, which, in retrospect was not the best use of the pilot
as it did not reflect the unique and different challenges facing
San Francisco. Although this was not the only challenge facing
its pilot, it was significant. As a result, San Francisco
decreased, rather than increased its contract earnings. They
dropped from 98% to an average of 93% over the first six years
of the pilot.
In response, San Francisco and the CDE conducted a holistic
review and adjustment of the pilot for the 2011-12 fiscal year.
As a result, the pilot was appropriately revised and a number of
revised elements were implemented. According to the independent
evaluation of San Francisco's 2011-12 fiscal year, the revised
pilot:
? draws upon lessons learned in the original pilot and
focuses on unique aspects of the San Francisco Pilot
project, such as technical assistance and the
beginning of an enhanced CEL called the San Francisco
Child Care Connection (SF3C).
In the first year of the revised pilot, San Francisco
considerably reduced their under-earned amount for the 2011-12
fiscal year to 1.7% of their countywide service allocation,
which is a substantial improvement. Additionally, according to
San Francisco, they are on track to further reduce the amount of
the under-earned service allocation for the current 2012-13
fiscal year. It should also be noted that San Francisco has
also steadily increased their child days of enrollment under the
revised pilot. However, one year is not a good measure of
year-over-year consistency and progress. By extending the pilot
for two more years, it provides San Francisco the opportunity to
demonstrate, under the revised pilot, year-over-year sustained
progress for at least three consecutive years. This extension
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will aide San Francisco and the state in determining whether the
pilot is truly effective and beneficial and is in San
Francisco's and the state's best interest to be made permanent.
Analysis Prepared by : Chris Reefe / HUM. S. / (916) 319-2089
FN: 0000993