BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 2368 (Gordon) - Child care and development services:   
          individualized county child care subsidy plan:  County of Santa  
          Clara
          
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          |Version: April 5, 2016          |Policy Vote: ED. 9 - 0, HUMAN   |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 1, 2016    |Consultant: Jillian Kissee      |
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          This bill meets the criteria for referral to the Suspense File.




          


          Bill  
          Summary:  This bill authorizes the County of Santa Clara 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.


          Fiscal  
          Impact:  
           Potentially significant loss in savings to the state due to  
            Santa Clara County being able to spend more of its allocation  
            under an individualized county child care subsidy plan.  The  







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            plan is allowed to supersede state law in specific areas which  
            would allow greater access to services within the county.   
            Without this bill these savings could otherwise be  
            redistributed for services in other counties.  See staff  
            comments.  (General Fund/Proposition 98)

           The California Department of Education (CDE) estimates that  
            this bill will result in initial costs to the CDE of $130,000  
            for the first year and $95,000 ongoing costs for work across  
            several positions to review and monitor the new plan.  This  
            estimate also includes travel costs.  Costs are expected to  
            decrease over time.  (General Fund)


          Background:  California offers a variety of subsidized child care and  
          development services that serve low-income families who are  
          working, seeking work, in training, or providing community  
          services.  Families participating in CalWORKs receive subsidies  
          through three stages of the CalWORKs child care program.  
          Non-CalWORKs families participate in the AP Program, General  
          Child Care, or State Preschool.  

          Existing law establishes the San Mateo County, San Francisco,  
          and Alameda County individualized county child care subsidy plan  
          pilot projects due to the similar barriers to services of living  
          in a high-cost area.  (EDC 8347, 8335, and 8340)  The sunset  
          date of the San Francisco plan has been extended three times.
          
          Alameda County, San Mateo County and San Francisco all have  
          individualized county child care subsidy plans that were  
          developed to address two significant issues facing subsidized  
          child care in high-cost counties: 1) that low-income families  
          earning just enough to afford housing in a high-cost area may be  
          deemed to earn too much to qualify for child care assistance  
          under statewide eligibility standards, and 2) that the  
          reimbursement rate paid to contracted child care centers and  
          family child care homes is often not sufficient to cover program  
          costs and overhead, particularly in high-cost areas of the  
          state.  Because of this child care subsidies received by  
          counties were unable to be fully expended.  Unexpended funds get  
          collected at the state level and reappropriated for another  
          purpose. 
           
          According to the author, this bill seeks to maximize state  








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          allocated funding and efficiently use child care subsidy funds  
          to meet local conditions.


          Proposed Law:  
            This bill authorizes the County of Santa Clara to develop and  
          implement an individualized county child care subsidy plan, as a  
          pilot.  The plan must ensure that child care subsidies received  
          are used to address local needs, conditions, and priorities of  
          working families in the community.
          The plan must include:


                 An assessment to identify the county's goals for its  
               subsidized child care system, examine whether the current  
               structure adequately supports working families in the  
               county and whether the county's goals coincide with the  
               state's requirements for funding, eligibility, priority,  
               and reimbursement, and examine barriers to reaching the  
               goals.  The assessment must take into consideration various  
               things such as the county's demographics, current supply of  
               subsidized child care, the needs for services, the county's  
               self-sufficiency income level, cost of providing care, and  
               other economic factors.


                 Development of a local policy to eliminate regulatory  
               barriers to the county's desired outcomes for subsidized  
               child care.


                  o         The local policy must do various things such  
                    as prioritize lowest income families first; follow the  
                    family fee schedule for families that are income  
                    eligible, as specified; identify existing policies  
                    that would be affected by the county's plan; authorize  
                    an agency that provides child care and development  
                    services in the county through a contract with the  
                    CDE, as specified.


                  o         The local policy may supersede state law  
                    concerning child care subsidy programs with regard to  
                    the following: 








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                       §              Eligibility criteria including age,  
                         family size, time limits, income level, special  
                         needs, and inclusion of former and current  
                         CalWORKs participants, as specified.


                       §              Fees


                       §              Reimbursement rates


                       §              Methods of maximizing the efficient  
                         use of subsidy funds, including, multiyear  
                         contracting with the CDE for center-based child  
                         care, and interagency agreements that allow for  
                         flexible and temporary transfer of funds among  
                         agencies.


                 Recognition that all funding sources used by direct  
               service contractors that provide child care and development  
               services in the county and contractors that contract with  
               licensed providers and centers are eligible to be included  
               in the county's plan.


                 Establishment of measurable outcomes to evaluate the  
               success of the plan to achieve the county's child care  
               goals, and to overcome any barriers identified in the  
               state's child care subsidy system.


          The plan is required to be submitted to the local planning  
          council for approval, and after at least one hearing, and if the  
          Board of Supervisors of the County of Santa Clara approves the  
          plan, it must be submitted to the CDE for review.  


          By the end of the first fiscal year of the pilot the county must  
          show an increase in the aggregate days of enrollment in child  
          care in the county as compared to the enrollment in 2015-16.








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          The requirements of this bill are scheduled to sunset January 1,  
          2022.




          Related  
          Legislation:  AB 833 (Bonta, Chapter 563, Statutes of 2015),  
          similar to this bill, authorized Alameda County to develop and  
          implement, as a pilot project, an individualized county child  
          care subsidy plan. 

          AB 260 (Gordon, Chapter 731, Statutes of 2013) extended the  
          sunset dates of the San Francisco and San Mateo County  
          individualized county child care subsidy plans to 2016 and 2018,  
          respectively. 


          Staff  
          Comments:  This bill establishes a fourth county-wide pilot.  It  
          allows Santa Clara County, a high-cost-of-living county, to  
          develop and implement an individualized county child care  
          subsidy plan for five years.  The plan may supersede state law  
          governing child care subsidy programs in certain specified  
          areas, including eligibility criteria.  For example, San Mateo  
          County and San Francisco currently set their income eligibility  
          thresholds at 85 percent of the current state median income,  
          compared to 70 percent as the state does.  This allows San Mateo  
          County and San Francisco to provide services to children with  
          family incomes above 70 percent, which they otherwise are not  
          permitted to do without special statutory authorization to  
          implement an individualized county child care subsidy plan.

          In the 2014-15 fiscal year Santa Clara County was unable to  
          expend $9.4 million of its contracted allocations, or 7.3  
          percent of the total.  As context, across all counties 6.9  
          percent of allocations went unspent.  However, in the 2012-13  
          and 2013-14 fiscal years Santa Clara County had 1.7 percent and  
          3.5 percent unexpended, as compared to 5.3 and 5.2 percent  
          statewide, respectively. 

          To the extent that implementation of this pilot enables Santa  








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          Clara County to spend more for additional child care and  
          development services, less unexpended funds would revert to the  
          state.  For example, if 5 percent of the county's $9.4 million  
          was able to be spent on local services, this would result in  
          about $470,000 less in savings to the state.





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