Transcript Infant Toddler Rate Increase November 2010 Infant Toddler Rate Analysis Based on the analysis of rates for educators in infant and toddler.

Infant Toddler Rate Increase
November 2010
Infant Toddler Rate Analysis
Based on the analysis of rates for educators in infant and toddler programs,
and in alignment with the implementation of multiple Department initiatives
focused on this age group, EEC proposes a 3% increase to rates paid to
educators serving infants and toddlers in Massachusetts. Upcoming
initiatives with increased expectations of educators include:

The Development of Infant and Toddler Learning Guidelines
These Guidelines are intended for all types of early education and care settings that
care for children from birth through thirty-six months of age. They describe how
programs and educators can best support the healthy development of infants and
toddlers. They are structured to facilitate their use for professional development,
are aligned with EEC’s existing Preschool Guidelines for Three and Four Year Olds
and with the EEC Core Competencies. They address brain development, emphasize
relationships as a key factor across all development domains, and reflect values
inherent in a strength based approach.

Birth to School Age Task Force Report Recommendations
Multiple recommendations speak to the need to for increased compensation for
providers and for quality services for infants and toddlers.

Quality Rating and Improvement System (QRIS)
Includes standards for increased qualifications for staff in high quality programs.
2
Historical Discussion Of Rate
Increase for Infants and Toddlers
2009
3

Massachusetts 2008 Child Care Market Rate Survey (June 2009)
This study collected/analyzed market prices by zip code and by the six EEC
regions for all program types to understand the distribution of daily published
prices of early education and care statewide and by region and by type of care
and age group and found the rate EEC paid was below 50% of the median.
 The study revealed that the rates paid to EEC supported programs was
below 50% of the median and the price of care was highest for infants (in
center based care).
 At this time, although interested, the Board was unable to respond to this
gap in funding due to the fiscal environment.

The Planning and Evaluation Committee discussed the desire to link future
rate increases to quality, but it was difficult to respond without a defined system
of quality (the QRIS system was not yet developed).
Historical Discussion Of Rate
Increase for Infants and Toddlers
2010


4
Prioritization of ARRA Funding to Support Infant Toddler Quality
ARRA funding required that a minimum of $1.15M be allocated to “Infant and Toddler
Quality Improvements”; the Department began implementing various strategies, with
the support of the Board, to increase quality for infants and toddlers, including:

Direct Spending Related to Infants and Toddlers ($925,000)
 Development of the Infant and Toddler Learning Guidelines ($50,000)
 Improvement of Physical Environments Grant ($500,000)
 Early Literacy Grant to Support Family Child Care Educators ($175,000)
 CSEFEL Professional Development (up to $200,000)

Spending Related to All Age Groups, Inclusive of Infants and Toddlers (~$1.6M)
 Communications Campaign ($498,500)
 Early Childhood Information System ($710,000)
 Readiness Centers ($400,000)
To this end, the Department would like to prioritize additional funding that is directly
linked to improving the quality of infant and toddler services; subject to future Board
approval of the Infant and Toddler rate increase proposal, the Board voted in
September to allow flexibility to spend ARRA funds (up to $3 million) to reduce the
market rate gap by providing a 3% rate increase to all EEC Infant and Toddler
educators across the Commonwealth.
Historical Discussion Of Rate
Increase for Infants and Toddlers
FY2010 - continued
The Policy and Fiscal Committee: engaged in on-going discussions relative to
supporting quality for this age group:

September 13, 2010 Discussion

Reviewed increased expectations for programs serving infants and toddlers (new
Guidelines, QRIS etc.)
October 4, 2010 Discussion

Agreement, in principle, that the rate increase is important for infants and toddlers

Interested in linking a potential increase to increased quality (via QRIS participation)

Interested in a plan for sustainability
November 1, 2010 Discussion

Discussed the constant balance of access versus quality, and discussed their concerns:
 Making recommendations about a Rate Increase without knowing the agency’s
spending cap; impact on the FY12 budget
 Whether the link to QRIS is strong enough to ensure there is a link to quality
(could potentially link to Level 2 or 3 on QRIS)
5

October Board Agenda Item – Tabled (one public comment provided favored the
proposed infant toddler rate increase)

November – Board Discussion
Infant Toddler Rate Analysis

Objective:
 Recommend to Board rate increase that:
1.
2.
3.
4.

The 2009 Child Care Market Survey results indicate EEC rates are
significantly below median by region & type of care.

The six regions percentage variance to median ranges are:
1.
2.

Center Based Child Care Blended Rate Ranges: 5.05% to 20.47%.
Family Child Care Rate Ranges: 5.94% to 33.94%.
EEC reviewed various rate scenarios
 Assumptions:
1.
2.
6
Reduces the gap between EEC Rates and Market Median.
Rate increase falls within available funding & budget
constrictions.
Rate increase is sustainable.
Maintain rates by region.
Blended Infant/Toddler rate used for region & type of care.
FY2010 average headcount was used to calculate forecasted
spending to account for attrition.
Infant Toddler Rate Analysis

EEC reviewed various rate scenarios
 Results:
1.
2.
3.
4.
5.
In order reduce the gap between the current EEC Rate &
Market Survey Median the percentage increase would vary
between region & type of care.
We reviewed percentage increases ranging from 1% to 12%.
Two of the six regions, Northeast and Greater Boston center
based blended rate currently has the largest gap to the
median and current child care rate is highest.
Three regions Northeast, Greater Boston and Boston family
child care blended rates have significant variances to the
median and also have the highest child care rate.
Annualized dollar impact at 3% increase ranges from
approximately $4.2 to $5.0 million.
Note: Projected dollar spending increase is dependent on no. of
children & infant/toddler headcount mix and the rate
(blended rate and/or Infant & Toddler individual rates)
that the percentage increase is applied.
7
Infant Toddler Rate Analysis

Recommendation:

Link the 3% infant toddler rate increase to the Quality Rating and Improvement
System (QRIS), as follows:
Fiscal Year Activity
FY2011
• Any program serving EEC supported infants and toddlers that is interested in
the 3% rate increase would be required to provide a self assessment of their
program’s quality by participating in the FY2011 QRIS (January - March 2011).
• Programs would be required to advance at least one level on the QRIS in 18
months to receive additional rate increase (January 2011 – July 2012)
• Consider possible exemptions to maximize participation (e.g. Professional
Development standards that cannot be made within the 18 month timeline)
• Participation in QRIS would be program-wide (not infant and toddler classroom
based).
• Rate increase would not be available until on or after April 2011.
8
FY2012
Revisit decision with current data and identify requirements for receiving a
potential rate increase in FY2013
FY2013
To sustain or receive rate increase funding, all EEC supported programs serving
infants and toddlers must be a verified QRIS Level 3 or 4.
Infant Toddler Rate Analysis
● EEC applied the following assumptions to determine who
from the universe of infant/toddler programs could
participate in QRIS in order to calculate financial impact.

Assumptions:
1.
2.
3.
4.

Results:
1.
9
100 % of the Center Based Programs provided self
assessments.
60% of Family Child Care – Independent & System
Programs provided services for families with contracts
provided self assessments.
40% of Family Child Care – Independent & System
Programs providing services for families with vouchers
provided self assessments.
Rate increase would be implemented April 2011.
Annualized dollar impact at a 3% increase when tied to
QRIS participation is approximately $3.4 million.
Infant Toddler Rate Analysis
● Implementation Recommendation
 In order to sustain the Infant Toddler rate increase in subsequent fiscal
years a reduction to the number of Infant/Toddler, Preschool, and School
Age Children may be necessary if additional funding is not available.
 Based on $3.4M (the annualized figure), approximately 504 fewer
children on average will be served in all age groups to offset the proposed
increase. This can be achieved as follows:
1.
2.
3.
Use attrition to manage reduction
Temporarily close wait list
Reduction will be proportionate to average headcount in all programs
funded by vouchers:
Child Care Funded by Voucher Program
Infant Toddler
Preschool
School Age
10
24.83%
29.66%
45.51%
100.00%
$
841,557
1,005,340
1,542,447
3,389,344
Headcount
76
130
297
504
Infant Toddler Rate Analysis
● EEC
is proposing two decisions that are needed to move
forward.
 Should we fund the infant/toddler rate increase?
 Under what conditions can we afford the infant/toddler
increase?
11
Infant Toddler Rate Analysis

Four center based facilities that provide infant/toddler programs
provided EEC with revenue/expense budgets.
1.
2.
3.

The EEC daily rate per child varies by region from $45.60 to $56.15. The
daily rate per child in the data provided for the 3 regions ranges from
$45.60 to $51.50.

The revenue for the four center based infant/toddler programs range
from $11.8K to $12.1K annually per child.

The annual reported cost for the infant toddler classroom for the 4
center based programs ranges from $106K to 166K. The per child
expense ranges from $15.2K to $18.5K.

Budgeted expenses include staffing salaries & benefits, supplies, and
occupancy, and a prorated administration expense.
1.
2.

12
One budget was provided by Region 1 – Central.
One budget was provided by Region 6 – Boston.
Two budgets were provided from Region 2 – Metro.
The total teacher per classroom (excluding substitutes) salaries and benefits for region 2
range from $75K to $98.5 annually.
The total teacher per classroom reported salaries (excluding substitutes) and benefits for
region 1 & 6 range from $97K to $99K.
The four center based infant/toddler programs reported a loss per child
ranging from $1,400 to $5,400 per child.
Infant Toddler Rate Analysis
Below is an example of a center based program’s revenues/expenses from one of
their Infant/Toddler Classrooms. In this program, EEC revenues total $84,994
annually, while expenses total $119,518, for a total loss of $34,524 annually
($4,951/child). This program serves eighty-seven EEC funded Infants and Toddlers,
which reflects a total annual loss of $430,737 to provide these services.
Current Annual Revenue/Classroom
# of Children
Rate per Day
$46.70
7
# Days
Total
260
$
84,994
Expenses
Staffing
13
Lead
Teacher
Teacher
Site Mgmt.
Benefits @
20%
Occupancy
Maint. &
Utilities
Mortgage Int.
Office Costs
Phones,
Computers,
Liability Ins.,
etc.
Supplies
Training
Depreciation
General Admin.
$
$
$
$
31,200
24,960
24,960
6,000
$87,120.00
$17,424.00
$ 2,500.00
$ 1,400.00
$ 2,000.00
$
800.00
$
750.00
$ 2,000.00
$ 5,524.61
Net Loss
Net Loss/Child/Day
Net Loss/Child/Year
$ 119,518.61
$ (34,524.61)
$
(18.97)
$ (4,951.06)
Infant Toddler Rate Analysis
Below is a second example of a center based program’s revenues/expenses from one
of their Infant/Toddler Classrooms. In this program, EEC revenues total $106,704
annually, while expenses total $155,506 for a total loss of $48,802 annually
($5,422/child). This program serves 147 EEC funded Infants and Toddlers, which
reflects a total annual loss of $$797,098 to provide these services.
Current Annual Revenue/Classroom
# of Children
Rate per Day
9
$45.60
# Days
Total
260
$
106,704
Expenses
Staffing
14
Lead
Teacher
Teacher
Substitutes
Site Mgmt.
Benefits @
25%
Occupancy
(includes
Depreciation)
Office Costs
Phones,
Computers,
Liability Ins.,
etc.
Supplies
General Admin.
$
$
$
$
$
28,000
22,000
22,000
5,775
6,250
$84,025.00
$21,006.00
$30,550.00
$ 1,950.00
$ 2,975.00
$15,000.00
Net Loss
Net Loss/Child/Day
$
$
$
155,506.00
(48,802.00)
(20.86)
Net Loss/Child/Year
$
(5,422.44)
Infant Toddler Rate Analysis
Below is a third example of a center based program’s revenues/expenses from one of
their Infant/Toddler Classrooms. In this program, EEC revenues total $93,985
annually, while expenses total $106,499 for a total loss per ($1,390/child).
Current Annual Revenue/Classroom
# of Children
Revenue EEC
Dept of Education
Rate per Day
7
7
$46.70
$4.94
# Days
260
260
Total
84,994
8,991
Expenses
Staffing
$
Lead Teacher
Teacher
Teacher
Site
management
Benefits
Occupancy
(includes
Depreciation)
$
$
$
29,432
17,680
14,677
$
4,102
$65,890.62
$13,178.12
$ 8,667.50
Direct Expenses
(food,supplies,t
raining)
$ 9,835.35
General Admin.
$ 8,927.18
Net Loss
Net Loss/Child/Day
Net Loss/Child/Year
15
93,985
$
$
$
$
106,498.77
(12,513.97)
(6.88)
(1,390.44)
Infant Toddler Rate Analysis
Below is a fourth example of a center based program’s revenues/expenses from one of their
Infant/Toddler Classrooms. In this program, EEC revenues total $120,973.50 annually, while
expenses total $166,080.00 for a total loss per ($5,011.83/child).
Infant/Toddler
CLASSROOM
BUDGET
COST CATEGORY
Personnel
Annual Basis
FTE
Program Director
Program Assistant
Lead Teacher
Teacher
50,000
30,000
33,000
27,000
0.20
0.20
1.00
1.00
10,000
6,000
33,000
27,000
Assumes a 5-classroom center, hence a 20% allocation per classroom.
Assumes a 5-classroom center, hence a 20% allocation per classroom.
Teacher Assistant
Total Salaries
22,000
0.80
17,600
93,600
Part time teacher provides coverage for lunch / breaks and accommodates the 10-hour service day.
$
$
23,868
Fringe includes FICA at 7.65%, Unemployment at 2%, WC at 1.5%, Health Insurance at 13%, Dental at
1%, Life/Disability at .35%, Retirement @ 3%.
Teacher Substitutes
$
11,424
Each teacher receives 30 days of compensated absences a year Vacation = 15, Sick = 12, Personal = 3.
Substitute coverage is estimated at 240 hours per FTE at a rate of $17 per hour.
Total Personnel
$
128,892
Other Operating Costs (ODC's)
$
5,400
Facilities/Occupancy
$
10,125
Total Direct Costs (TDC)
$
144,417
Fringe Benefits
25.5%
General Administrative (G&A) Overhead
Total Annual Cost Per Classroom
$
15% $
21,663
$
166,080
Number of Children per Classroom
16
COST ASSUMPTIONS
1=40
hrs/wk
Other operating expenses (i.e., supplies, training, equipment, rental, telecommnuication, printing etc. )
are estimated at $600 per child)]
Facilities cost is estimated at $15 per Gross Square Foot. Base rent plus facilities operations (i.e.
depreciation, utilities, cleaning, expendable repairs & maintenance, and property & general liability
insurance, etc.) is estimated at $10 SF. GSF per child is $75.
G&A overhead includes CEO, Accounting, HR,IT and Facilities Management. G&A is estimated here at
15% of Total Direct Costs (TDC).
9
Annual Cost per Child
$
18,453
DAILY COST PER CHILD
$
70.70
Current EEC Infant/Toddler Rate for Region 6
$
51.50
Assumes 261 service days per year.
Infant Toddler Rate Analysis
Region Total
Market Survey
Average
EEC Rate
Median Blended Headcount
Blended Rate
Rate
FY2010
1 - Western
Projected
April 1, 2011 Eligible
Sept 31, 2011
Headcount
6 Months
for Increase
2,293
Annualized
Increase in
Spending
Oct 1, 2011 June 30, 2012
9 Months
$
290,493
$
434,630
$
578,768
- Center Based Child Care
$45.60
$48.69
1,318
1,318
$
236,196
$
353,393
$
470,589
- Family Child Care
$30.10
$32.00
975
459
$
54,296
$
81,237
$
108,179
- Center Based Child Care
$46.70
$52.00
- Family Child Care
$31.80
$36.50
2 - Central
1,464
3 - Northeast
$
158,805
$
237,601
$
316,398
550
550
$
100,942
$
151,028
$
201,114
914
463
$
57,863
$
86,574
$
115,284
$
303,179
$
453,611
$
604,043
2,829
- Center Based Child Care
$52.30
$63.50
939
939
$
193,001
$
288,765
$
384,529
- Family Child Care
$31.50
$39.00
1,890
890
$
110,178
$
164,846
$
219,514
- Center Based Child Care
$56.15
$70.60
- Family Child Care
$34.35
$52.00
4 - Greater Boston
1,041
5 - Southeast
$
185,201
$
277,095
$
368,988
742
742
$
163,737
$
244,980
$
326,224
299
159
$
21,464
$
32,115
$
42,764
$
360,708
$
539,685
$
718,662
2,414
- Center Based Child Care
$46.05
$48.50
1,768
1,768
$
319,966
$
478,728
$
637,490
- Family Child Care
$31.80
$40.00
646
326
$
40,742
$
60,957
$
81,172
$
402,780
$
602,632
$
802,485
- Center Based Child Care
$51.50
$58.50
1,598
1,598
$
323,427
$
483,906
$
644,386
- Family Child Care
$31.50
$31.50
1,372
642
$
79,353
$
118,726
$
158,099
$
1,701,165
$
2,545,255
$
3,389,344
6 - Boston
2,970
12,915
* 3% increase over current blended rate for programs participating in the FY2011 QRIS & provides a self assessment.
17