Part Time Rate Increase Fiscal Committee March 3, 2014

1. Part Time Rate IncreaseFiscal CommitteeMarch 3, 2014

2. SEIU • In FY2013 EEC entered into negotiations with the SEIU. • The following language is an excerpt from Chapter 189 of the Acts of 2012 “Family child care providers shall be considered public employees for negotiation purposes for child care subsidized rates for low income families. The Department acting through the Commissioner, shall be the employer, solely for the purposes of saidchapter 150E and said sections 17A, 17G and 17J of said chapter 180 and deductions under said sections 17A, 17G and 17J of said chapter 180 may be made by any entity authorized by the commonwealth to compensate family child care providers under a rate structure for voucher and contracted payments.” • Included in the agreement is a increase to the part-time rate effective 7/1/14. • The rate for Family Child Care Providers will increase from 50% of the full time rate to 60% of the part time rate. • The increase is scheduled to occur when EEC’s new Child Care Financial Assistance System is implemented. If this occurs after 7/1/14, the increase will be retroactive.

3. History • In the past, EEC has reimbursed part-time providers for 60% or 70% of the full time rate in order to encourage providers to serve children with part time service needs. • These higher part time rates were phased as cost-reducing measures for years when the caseload appropriation was decreased. • The current part-time rate is 50% of the full-time rate for care provided for under 6 hours. • During the negotiations with SEIU, the Family Child Care Providers indicated most children are in care for almost 6 hours not the assumed time of 4 hours (2 PM to 6 PM). • The SEIU requested that we increase the part time rate to be 60% of the full time rates. • The providers are required to be open ten hours. Part-time care was defined as six hours, but we paid only 50% of the full time rate for the part time care.

4. Cost Analysis • The following assumptions were used to complete our cost analysis for increasing the part-time rate to 60% of the full-time rate: • EEC calculated the cost to increase the part time rate by 20% (50% to 60%). • We decided that if the part-time rate were to be increased for Family Child Care providers, it would be increased for all providers. The proposed change is to ensure consistency and rate equitability for providers serving the part-time child. • The data used is from is June 2013 caseload and was calculated using the current rate chart for comparison purposes. Including July 2013 and August 2013 would have lowered the calculated cost because most of the part time children were out of school and in full time care. • EEC assumes the number of business days is 261 and that absences and closure days follow current policy. • Average rates by Age Group were used to calculate cost.

5. Cost Analysis Assumptions Continued: • The Systems Admin Rate was not included in the cost estimate. • Data is subject to change based on caseload. Future demographic changes to caseload include but are not limited to region, age group, program type, and funding source and may impact future calculations. • School Age Children have been excluded for the Center Based Programs because there is no part-time for this category. • Parent Fees will be impacted. An additional cost will be passed on to families. Parent fees are correlated to the percentage EEC reimburses. Parent Fees could increase from 50% to 60% of the fee on the current fee schedule. • The increase in the part-time rate is ADDED onto the 3% rate increase presumed for FY15 • The increase in the part-time rate will be implemented when CCFA is in production. • The increase in the part-time fee will be retroactive to July 1, 2014. • The incremental increase in cost using June 2013 part time caseload data is $827K.

6. Recommendation • We recommend that the part-time rate be increased from 50% to 60% for all providers.