The County of Santa Clara
California

Agreement/Amendment
89477

Consider recommendations relating to Child Care Services. (Social Services Agency)

Information

Department:Social Services AgencySponsors:
Category:Amendment to Agreement

Multiple Recommendations

Possible action:
a. Approve Third Amendment to Agreement with Community Child Care Council of Santa Clara County relating to providing child care resource and referral services increasing the maximum contract amount by $50,000 from $350,000 to $400,000, and extending the agreement for a three month period through June 30, 2018, that has been reviewed and approved by County Counsel as to form and legality.
b. Under advisement from September 12, 2017 (Item. No. 22): Receive report relating to County's provision of Child Care Services.
c. Under advisement from December 12, 2017 (Item. No. 28): Receive report relating to County's provision of CalWORKs Child Care Resource and Referral Services.





Body

FISCAL IMPLICATIONS

There is no new impact to the County General Fund as a result of Recommended Action (a).

The CalWORKs Child Care Resource and Referral Program cost of $50,000 for the period of April 1, 2018, to June 30, 2018, is 100% funded through California Work Opportunity and Responsibility to Kids (CalWORKs), a state and federally funded welfare program providing services and cash assistance to eligible needy families. The expenditure associated with the Recommended Action is included in the Agency’s Fiscal Year (FY) 2017-2018 Adopted Budget. No additional appropriation is required.

Although there is no impact to the County General Fund as a result of receiving report under Recommended Action (b), there will be a significant budget impact if the discussed child care services plan is implemented. The cost associated with implementation of child care services is estimated to be $66,420,142, which includes $1,123,500 in start-up costs, $33,396,642 in annual administration costs and $31,900,000 in direct client benefits costs to provide California Department of Education (CDE) funded Child Care services. The estimated annual funding from CDE is $42,500,000, of which up to $6,375,000 (15% of CDE estimated funding) can be used for administration cost and $31,900,000 for direct client benefits costs. The total reimbursable amount for direct client benefits and administration costs is $38,275,000. The difference between $38,275,000 and $42,500,000 is $4,225,000, which is available for future direct client benefits. The estimated net County cost is $28,145,142.

Estimated Child Care Services Project Cost and Reimbursement

Major Project Cost Category

Costs

Reimbursement

Net County Cost

Tenant Building Improvement

$997,500

 

 

Furniture

$31,500

 

 

Furniture Installation

$15,750

 

 

Information Systems

$36,750

 

 

Overtime Information System

$5,250

 

 

UPS

$36,750

 

 

Total Start-up Costs

$1,123,500

$0

$1,123,500

Staff Salary & Fringe Benefits (150 staff)

$18,780,535

 

 

Indirect Cost

$3,756,107

 

 

Administration Expense

$2,400,000

 

 

Rent

$8,250,000

 

 

Cabling

$42,000

 

 

Electrical

$52,500

 

 

Equipment Rental

$10,500

 

 

Security

$105,000

 

 

Total Annual Administration Cost1

$33,396,642

$6,375,000

$27,021,642

Direct Clients Benefits

$31,900,000

$31,900,000

$0

Total Annual Costs

$65,296,642

$38,275,000

$27,021,642

Total Annual Costs (including one-time start-up costs)

$66,420,142

$38,275,000

$28,145,142

 

The maximum reimbursement for administration cost is 15% of estimated CDE funding ($42,500,000).

There is no new impact to the County General Fund as a result of receiving report under Recommended Action (c).

CONTRACT HISTORY

Pursuant to Board Policy 5.6.5.1(B)(2) Formal Competitive Procurement for Professional Services, on February 1, 2017, the Social Services Agency (SSA) released a competitive Request for Proposal (RFP) for Child Care Resource and Referral Services.

The SSA received one proposal by the deadline of March 8, 2017. Following the review and selection process, the evaluation panel recommended the Community Child Care Council of Santa Clara County, Inc. (4C’s) proposal.

On June 20, 2017, the SSA requested approval of a new Agreement with 4C’s for the FY2017-18 program year. Action taken by the Board of Supervisors (Board) amended the existing FY2016-17 agreement and extended the term of the agreement through December 31, 2017.

On December 12, 2017, the SSA requested approval to amend the existing FY2016-17 Agreement with 4C’s to extend the contract term through June 30, 2018. Board action amended the existing agreement and extended the term of the agreement through March 31, 2018. 

REASONS FOR RECOMMENDATION

Recommended Action a: In order to prevent any disruptions to service for CalWORKs participants, Board approval of the amendment to extend the current contract with 4C’s through June 30, 2018 is requested. Approval of this amendment will allow SSA to work with 4C’s to provide child care resource information and referral services to CalWORKs families.  

Recommended Action b: At the meeting of September 12, 2017, the Board received a report from the Social Services Agency regarding CalWORKs Child Care services. The Board directed Administration to develop an implementation plan to prepare the County to take over Child Care services and report this plan to the Board along with any additional resources that would be needed to implement the plan. (Agenda Item #22, ID# 88160)

Recommended Action c: At the meeting of December 12, 2017, the Board extended the current CalWORKs Child Care Resource and Referral Services contract with the 4C’s for a period of 90 days and directed Administration to report back within 30 days regarding whether or not it was possible to absorb the program in-house including the current three employees that are funded by the contract.

Review of the County’s ability to assume the responsibilities of the Child Care Resource and Referral agency found that such action is contingent upon the State choosing to seek a new provider through a State-run competitive process. If the State were to pursue that course of action, the County may encounter difficulties in the selection process due to issues related to cost structure and significant gaps in the infrastructure needed to demonstrate capabilities that exceed those of other competitors.  Both areas are described in the narrative to follow in the “BACKGROUND” section of this report. 

CHILD IMPACT

The recommended actions would have a positive impact on children through the Safe and Stable Families indicator by informing families of child care options and improving access to child care.

SENIOR IMPACT

The recommended action will have no/neutral impact on seniors.

SUSTAINABILITY IMPLICATIONS

The recommended action will have no sustainability implications.

BACKGROUND

The California Department of Education (CDE) designates and funds an organization in each county in the state to serve as the local Child Care Resource and Referral Services (R&R) agency. As the CDE designated R&R agency, these organizations maintain comprehensive databases of child care providers in their communities and are given access to providers’ licensing status, the languages they speak, age groups they serve, schedules offered and the number of spaces they have available in their child care center or family child care home.

Consistent with the Board’s direction, staff reviewed child care/early child development services in Santa Clara County currently funded by CDE to estimate the impact on the County if the County assumed responsibility for providing such services.  The following are staff findings regarding the implications of assuming child care/early child development services and the implementation plan required to effect this change.

County Letter of Intent: As directed by the Board, on November 28, 2017, a letter was transmitted via email to CDE’s Early Education and Support Division, expressing the County’s interest and commitment to manage CDE funded child care/early childhood development services in Santa Clara County. CDE staff assigned to the region called to confirm receipt of the letter and to reiterate CDE’s required competitive process to replace a child care service provider/vendor should such an opportunity arise. 

Estimated Startup Expenses ($1,123,500): Expenses to establish the infrastructure to operate CDE funded child care services include, but are not limited to: the procurement of office space, tenant improvements, furniture, equipment, software, moving costs, etc. Startup expenses are one-time only costs that are in addition to the project’s ongoing operating costs. It is anticipated that startup expenses would be assumed by the County. Estimated fiscal impact to County: $1,123,500.

Estimated Annual Costs ($65,296,642): Ongoing operating costs for the operation of the Child Care Services Department have been calculated in 2017 dollars using a staffing profile and service delivery model developed from publicly available information of the current contractor. Direct client benefit budgets and revenue estimates are based on historic models as ascertained through the same public information. In addition to staffing costs, the estimated annual operating cost includes, but is not limited to: indirect costs, administration, equipment, software licensing and support fees, direct client benefits, etc. Direct client benefit costs are estimated to be $31,900,000 with administration and operating costs estimated at $33,396,642 resulting in a total annual operating cost of $65,296,642. This amount exceeds the estimated revenue total of $42,500,000 million resulting in a variance of approximately $22,796,642. Please note that CDE limits administration costs, which include case management services, to no more than 15% of the total funding amount. Estimated fiscal impact to the County: $27,021,642 annually.

Scope of Services: CDE funded child care/early childhood development services include, but are not limited to: resource information and referral to appropriate child care providers for members of the general public seeking child care services in the county; child care fee subsidy programs for qualified low-income families; provider recruitment, training and retention programs for family child care providers; maintenance of a background check registry for local in-home child care providers; management of the Child Care Food Program to ensure that children receive nutritious well-balanced meals while in child care; and Early Head Start Program to promote healthy pregnancies, support positive parenting and enhance the development and growth of very young children.

Estimated Annual Revenue ($42,500,000): the most recent data available (i.e., FY2015-16) indicates that CDE child care/early child development program revenue totaled approximately $42,500,000.  

Selection of CDE Child Care Provider: The opportunity to provide CDE funded child care/early child development services is contingent on the incumbent agency terminating their existing agreement for convenience or the suspension or termination of their agreement by CDE for cause. If such a condition occurs, CDE staff confirmed that child care service contracts could not be granted to the County without first conducting a bid process open to all eligible parties (reference: Title V of the California Code of Regulations sections 18001, 18004 and 18024). Under the conditions outlined by CDE, the County would be subject to the same requirements as all other bidders and no special consideration would be granted as a unit of County government.  

Implementation Plan: Upon receipt of CDE grant(s) and approval of funding from the County’s General Fund to provide child care/early childhood development services, the following actions would be taken to initiate services.

Infrastructure (time required: 12 to 18 months): Establishment of the department’s infrastructure requires identifying and securing a facility that can accommodate a staff of approximately 150; tenant improvements to the selected site; procurement and installation of communications and data management systems; furniture and office equipment procurement and installation; and, software procurement, installation and testing.  

Staffing (time required: three to six months): includes the recruitment and hiring of staff; training of staff trainers; and orientation and training of all staff.

Transition Plan (time required: six to twelve months): A critical task in the changes made to the child care service delivery system will be the public information campaign to inform the public of the changes to the system and the new roles to be played by the County and the current vendor to the County in the delivery of child care services.

The County’s assumption of these services in-house and/or on a pilot basis would not be possible while the CDE designated R&R agency remains in operation without access to the essential operating requirements of the service (i.e., comprehensive child care provider database and access to detailed child care provider information) that allows assigned staff to perform the functions of an R&R agency and link family requests for child care services with appropriate local providers.

CONSEQUENCES OF NEGATIVE ACTION

Failure to approve the recommended action would prevent approval of the Third Amendment to the Agreement with Community Child Care Council of Santa Clara County, and the reports would not be received by the Board.

STEPS FOLLOWING APPROVAL

The Clerk of the Board of Supervisors will notify Natalie Allen from Social Services Agency upon completion.

 

 

Meeting History

Jan 23, 2018 9:30 AM Video Board of Supervisors Regular Meeting

Added to the Consent Calendar at the request of Vice President Chavez.

At the request of Vice President Chavez, the Board directed Administration to report to the Board within 30 days relating to detailed strategies for access to the comprehensive child care provider database; providing a cost breakdown of the estimated fiscal impact to the County of $27 million, annually, for operating costs; and, recommendations, if necessary, for government, nonprofit, or other provider structures to administer child care resources and referral services.

RESULT:APPROVED [UNANIMOUS]
MOVER:Cindy Chavez, Vice President
SECONDER:Mike Wasserman, Supervisor
AYES:Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian