BILL ANALYSIS                                                                                                                                                                                                    

                              Senator Carol Liu, Chair
                                2015 - 2016  Regular 

          Bill No:              AB 833            
          |Author:    |Bonta                                                |
          |Version:   |June 16, 2015                              Hearing   |
          |           |Date:     June 24, 2015                              |
          |Urgency:   |No                     |Fiscal:     |Yes             |
          |Consultant:|Olgalilia Ramirez                                    |
          |           |                                                     |
          Subject:  Child care and development services:  individualized  
          county child care subsidy plan:  County of Alameda

          This bill authorizes the County of Alameda to establish a pilot  
          program for purposes of developing and implementing an  
          individualized county child care subsidy plan that meets the  
          particular needs of families in the community until January 1,  

          1)Existing law establishes the Child Care and Developmental  
            Services Act to provide child care and development services as  
            part of a coordinated, comprehensive, and cost-effective  
            system serving children from birth to 13 years old and their  
            parents including a full range of supervision, health, and  
            support services through full- and part-time programs.   
            (Education Code  8200, et seq.)
          2)Existing law states legislative intent that all families have  
            access to child care and development services, regardless of  
            demographic background or special needs, that families are  
            provided the opportunity to attain financial stability through  
            employment, while maximizing growth and development of their  
            children, and enhancing their parenting skills through  
            participation in child care and development programs, among  
            other things.  (EC  8202)


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          3)Existing law establishes several programs providing subsidized  
            child care and development services that service low-income  
            families who are working, seeking work, in training, or  
            providing community service. These programs are administered  
            by the California Department of Education (CDE) and require  
            the Superintendent of Public Instruction (SPI) to adopt rules  
            and regulations on eligibility, enrollment, family fees,  
            provider rates, and priority services.  (EC  8235 and 8263)

          4)Existing law authorizes a pilot project in San Mateo County  
            (since 2004) and San Francisco City and County (since 2006)  
            that allows the counties to develop and implement an  
            individualized county child care subsidy plan in recognition  
            of the high-cost of living in those counties. (EC  8235 and  

          This bill:

       1)Authorizes the County of Alameda to establish a 5-year pilot  
            program for purposes of developing and implementing an  
            individualized county child care subsidy plan that meets the  
            particular needs of families in the county, as specified, to  
            include the following: 

               a)        An assessment to identify the county's goal for  
               its subsidized child care system, as specified.

               b)        A local policy to eliminate state-imposed  
               regulatory barriers that constrain the county from meeting  
               its desired outcomes for subsidized child care, as  

               c)        Recognition that funding sources utilized by  
               direct child care service contractors in the county are  
               eligible to be included in the county's plan.


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               d)        Measurable outcomes to evaluate the success of  
               the plan in achieving county and state child care goals.

       2)Requires the plan to be submitted to the specified local planning  
            council, and upon approval the county board of supervisors  
            shall do all of the following:

            a)   Hold at least one public hearing before voting on the  

               b)        Submit an approved plan to Early Education and  
               Support Division (EESD) for review provided that board  
               votes in its favor. 

       3)Requires the California Department of Education's (CDE) Early  
            Education and Support Division (EESD) to review and either  
            approve or disapprove any modification of the plan within 30  
            days of receiving it. Specifies that the EESD may only  
            disapprove those portions of the plan that are not in  
            conformance with the provisions of this bill or that are in  
            conflict with federal law. 
       4)Requires the county to prepare and submit a report summarizing  
            the success of the county's plan, as specified, to the  
            Legislature, the Department of Social Services (DSS), and the  
            CDE each year. 

       5)Requires a participating contractor to receive any increases or  
            decrease in funding that the contractor would have received  
            had the contractor not participated in the plan. 

       6)Makes various legislative findings and declarations related to  
            the unique circumstances in the County of Alameda that  
            condition a special law including the high-cost of living. 

       7)Defines county to mean County of Alameda for the purposes of this  

       1)Need for bill.  According to the author, families seeking quality  
            child care are adversely affected by the high cost of living  
            in Alameda County. The author further notes that families who  
            earn just enough to meet housing costs are deemed ineligible  


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            for subsidized child care, at the same time agencies receiving  
            insufficient state reimbursement rates are unable to cover  
            programing and operational costs.  As a result, child care  
            subsidy funds allocated to the county are not fully expended  
            thereby reducing access to quality child care.  This bill  
            seeks to maximize state allocated funding and efficiently use  
            child care subsidy funds to meet local conditions.

       2)Provider Reimbursement Rates.  California has established two  
            methodologies for determining the reimbursement rates for  
            child care and development services:

             a)   The Regional Market Rate (RMR) is determined by the RMR  
               survey and varies depending on the geographical location of  
               the provider.  The RMR is based on a survey of licensed  
               centers and family child care homes measuring child care  
               rates of similar socio-economic conditions.  Rate ceilings  
               are established for each county according to estimates of  
               the 85th percentile of rates for the various types of child  
               care settings. The county rate ceilings are differentiated  
               by the age of the child (infant, preschool, school age),  
               full-day or part-day care, and frequency of care (days per  
               week).  Families may choose a child care provider that  
               charges a rate above the RMR, but the provider would only  
               be reimbursed at the RMR.  Current law requires the RMR  
               survey to be updated every two years. The Budget Act of  
               2014 based the RMR on the 2009 survey, thereby providing a  
               lower rate than if based on the most recent survey.

             b)   Standard Reimbursement Rate (SRR).  Child care and  
               development providers that contract directly with the  
               California Department of Education (CDE) must meet Title 5  
               requirements in addition to those of Title 22 (have units  
               in Early Childhood Education, provide an educational  
               component to child care).  Title 5 providers are reimbursed  
               using the SRR, which is a specific rate established in  
               statute. The SRR is $36.10 per child per day for full-day  
               care and $21.22 per child per day for part-day care, or a  
               maximum of $9,025 per year based on 250 days of operation.   

       1)Why Alameda County?  According to the author, provider  
            reimbursement rates do not cover a reasonable amount of the  
            actual cost of care.  Child care costs vary based on the age  


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            of a child, with infant care representing the highest amount.  
            In Alameda, the average cost for full-time infant care in a  
            child care center is $13,330 per year. The cost of living in  
            Alameda is reported to be well above the state median.  A  
            family of three in Alameda County would need more than $67,000  
            for minimal housing, child care, food, transportation and  
            health care compared to state median of about $42,000 per year  
            for a family of three. Subsequently, to be eligible for  
            subsidized child care and development services state  
            regulations require a family's adjusted monthly income to be  
            at or below 75% of the state median income. The author assert  
            this pilot project will address the unintended consequences  
            that impact families living in a high cost county. As such,  
            this bill seeks to provide Alameda County limited local  
            flexibility to assess and address local conditions of working  
            families in the county through a child care subsidy pilot  
            Current law has authorized two other Bay Area pilot projects  
            in recognition of the high-cost of living in those counties.  
            This pilot project seeks similar recognition with the  
            increased state oversight, as specified in the bill.

       2)Unspent Allocation.  According to the Assembly Appropriations  
            Fiscal Effect, "this bill would allow Alameda County to retain  
            unspent child care funds that otherwise would revert to the  
            General Fund.  Between 2011-12 and 2013-14, The County was  
            unable to spend approximately 5% of its contracted amounts  
            each year, and returned over $10 million in unspent child care  
            funding to the state. That funding is a combination of GF,  
            Prop 98 funding and federal funds. Historically, such  
            reversions have been redistributed for child care purposes in  
            subsequent budget years." 
       3)Related Legislation.
            SB 311 (Beall, 2015) authorizes a pilot project at Alum Rock  
            Union Elementary School District, located in Santa Clara  
            County that allows the district to create a part-day  
            pre-school subsidy plan until January 1, 2022.  SB 311 was  
            approved by this Committee 8-0, and is currently in the  
            Assembly Education Committee. 



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          American Federation of State, County and Municipal Employees  
          California School Employees Association 
          Early Edge California 
          East Bay Association for Education of Young Children
          East Bay Community Foundation 
          Frist 5 Alameda County 
          National Association of Social Workers
          The Bay Area Council
          Via Nova Children's School

           None received.

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