BudgetBudget

FY2010 Update

Fiscal Sub-CommitteeJanuary 15, 2010

Table of Contents

I. FY10 Budget: Year to Date spending II. FY10 Caseload III. Income Eligible Surplus: Actions IV. Recommendations for the IE Surplus

• Open Access• Siblings: Children on the waitlist with

siblings in care;• 2,400 Children from the Waitlist;

• Schedule of Care V. License Plate Fund

• QRIS fiscal incentive funding

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*FY2010: Year to Date Spending

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Account # Descriptor FY2010 Budget 9C Reduction Post 9C Budget Year-to-date Spending % Spent of Total 3000-1000 Administration 11,797,898$ $ (322,492) $ 11,475,406 $ 5,791,389 50.5%3000-2000 Access Management 9,782,724$ $ (3,423,953) $ 6,358,771 $ 4,580,647 72.0%3000-3050 Supportive Child Care 77,836,888$ $ 77,836,888 $ 34,384,402 44.2%3000-4050 TANF Related Child Care 116,232,279$ $ - $ 116,232,279 $ 57,114,746 49.1%3000-4060 Low Income Child Care 273,572,478$ $ (12,617,806) $ 260,954,672 $ 95,296,227 36.5%3000-5000 Grants to Head Start 8,000,000$ $ 8,000,000 $ 3,556,621 44.5%3000-5075 UPK 8,000,000$ $ 8,000,000 $ 2,769,612 34.6%3000-6000 Quality Supports 14,080,868$ $ (48,300) $ 14,032,568 $ 5,783,629 41.2%3000-6075 Mental Health 1,000,000$ $ - $ 1,000,000 $ 449,449 44.9%

3000-7050Family Support and Engagement 5,000,000$ $ 5,000,000 $ 2,345,206 46.9%

Total: 525,303,135$ $ (16,412,551) $ 508,890,584 212,071,928$ 41.7%

Spending is as of January 13, 2010. The caseload

accounts, however, reflect only 5 months spending.

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Fiscal Year 2010Fiscal Year 2010Caseload – Supportive Care (3000-3050)Caseload – Supportive Care (3000-3050)

Month Kids Amount*July 6,404 7,073,214$ *August 6,595 6,547,689$ *September 6,295 6,543,841$ *October 5,720 6,433,155$ *November 6,133 6,287,227$ December 6,158 6,580,204$ January 6,183 6,511,859$ February 6,208 6,473,388$ March 6,233 6,653,841$ April 6,258 6,615,371$ May 6,283 6,575,388$ June 6,308 6,648,648$

78,943,826$ 77,836,888$ (1,106,938)$

Supportive Care (3000-3050)

AppropriatedProjected Deficiency*Actual as of November billing

Fiscal Year 2010Supportive Caseload Projected Cost

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• Current deficiency stand over $1.1M.• Light blue represents actuals (December billing has not come in yet).

FY10 (Post 9C) Approp: $77.8M

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Fiscal Year 2010Fiscal Year 2010Caseload – DTA Related (3000-4050)Caseload – DTA Related (3000-4050)

Month # of Vouchers Amount*July 17,005 $11,995,484

*August 16,921 $11,190,655*September 17,398 $10,937,323

*October 17,223 $11,649,182*November 17,392 $11,341,155December 17,092 $11,993,881January 16,922 $10,842,139February 17,059 $10,409,172

March 16,893 $11,854,044April 17,298 $11,610,848May 17,043 $10,919,321June 17,318 $11,623,990

$136,367,195$116,232,279(20,134,916)$

*Actual as of November billing

Amount Appropriated

DTA Related Caseload (3000-4050)

Projected Deficiency

FY2010DTA Caseload Projected Cost

FY10 Approp: $116.2M

•Current projected deficiency is $20.1M.•Light blue represents actual amounts processed. The remaining months amounts are projections.

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Fiscal Year 2010Fiscal Year 2010Caseload - Caseload - Income Eligible (3000-4060)Income Eligible (3000-4060)

Month # of kids Amount # of kids Amount # of Kids Amount *July 17,802 9,969,686$ 13,430 8,929,378$ 31,232 18,899,064$ *August 16,878 9,030,006$ 13,400 8,043,733$ 30,278 17,073,739$ *September 15,797 7,735,237$ 13,921 8,269,989$ 29,718 16,005,226$ *October 15,286 7,809,914$ 13,399 8,493,585$ 28,685 16,303,499$ *November 15,079 7,308,348$ 13,276 8,030,431$ 28,355 15,338,778$ December 14,832 8,089,487$ 13,224 8,290,293$ 28,056 16,379,780$ January 14,621 7,632,627$ 13,289 8,290,293$ 27,910 15,922,920$ February 14,268 6,780,982$ 14,982 8,290,293$ 29,250 15,071,275$ March 13,935 7,605,484$ 15,051 8,290,293$ 28,986 15,895,777$ April 13,596 7,103,604$ 15,075 8,290,293$ 28,671 15,393,897$ May 13,252 6,615,167$ 15,067 8,290,293$ 28,319 14,905,460$ June 12,896 6,742,320$ 15,198 8,290,293$ 28,094 15,032,613$

92,422,862$ 99,799,167$ 192,222,029$ 10,398,282$

*Actual Amount 11,559,612$ 214,179,923$ 260,954,672$

46,774,749$

Total Proj. SpendingFY10 Appropriated (Less 9C)

Project Amount Available

Vouchers Contracts Total Population

GrantsFlex Pool

Also DTA and Supportive account are projecting deficiencies that this surplus may have to reconcile.

Income Eligible Caseload Projected Cost

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•Projected surplus, after November billing, is $46.7M.•Light blue represents actual amounts processed.

Fiscal Year 2010Fiscal Year 2010Caseload – Balance SheetCaseload – Balance Sheet

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FY2010 Caseload Spending FY2010 (Post 9C) Projection

Variance Projection vs.

BudgetIncome EligibleContract $99,483,515 $99,799,167 ($315,652)Flex Pool $19,914,983 $11,559,612 $8,355,371Voucher $131,157,892 $92,422,862 $38,735,030

Grants (Inclusive Classrooms and LPC:Supp Service) $10,398,282 $10,398,282 $0

$260,954,672 $214,179,923 $46,774,749DTAVoucher $116,232,279 $136,367,195 ($20,134,916)

SupportiveContract $50,728,305 $49,813,980 $914,325Flex $13,927,523 $15,429,616 ($1,502,093)Voucher $13,181,060 $13,700,230 ($519,170)

$77,836,888 $78,943,826 ($1,106,938)Total $455,023,839 $454,913,546 $25,532,895

Income Eligible Surplus – Action: Open Access for Certain Contract Slots

Allow New Contract Slot Utilization• Background: Contract awards were made to existing

providers for the number of slots which they previously held except for:

1. 435 center based slots that were awarded to new providers or existing providers that were awarded additional slots;

2. 279 family child care system slots that were awarded to Systems that had previously been contracted for those slots.

• Issue: • Families in contracted vendors without a new contract needed to

move to a contracted vendor by June 30, 2010.• Due to budget concerns in the beginning of FY10, EEC did not allow

new providers from filling their slots, thus 120 slots are unfilled (10 slots in within the slots awarded to new providers and 110 slots of the 279 slots awarded to existing recipients of IE slots).

• Solution: Allow these slots to be filled from waitlist. FY10 cost (assuming effective March 1) would be $373K and $1.1M in FY11.

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Income Eligible Surplus – Action: Amend FY10 Budget Language

Support the deficiencies in the DTA-Related and Supportive accounts, which project to be roughly $22M at the end of FY10. Barrier: Current line item language prevents any transfer

from the Income Eligible account that exceeds 3% of the appropriation to the DTA-Related account ($7.83M). Additionally, any transfer must come with a 30 day notice. This could cause bills to go unpaid for a month.

Solution: Requested ANF to amend, through a supplemental budget, the line item language to allow necessary transfer.

Timeline: Based on current projections, the DTA account will be deficient after April bills are submitted (May 20th). Generally, ANF files a supplemental budget that accompanies the House 1 budget.

Proposed amendment: • Eliminate the 3% transfer cap and allow only a 15 day

notice for said transfer.

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Income Eligible Surplus – Recommendation I: Open Access

Open Access Waitlist kids that have Siblings Already in Care• Income Eligible available money could still grow beyond the

amount necessary to cover the deficiencies in the DTA and Supportive accounts.

• If the Department acts in January, certain groups can have access to care beginning in February (with contracted vendors and in March with voucher families) and, with attrition continuing into FY11, sustain that care throughout FY11. Below are a few groups access could be extended in FY10:

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Type Avg Cost

# of kids on waitlist with sibling currently in care 5 month cost FY11 cost

Infants 13,199$ 672 3,695,653$ 8,869,567$ Preschoolers 9,249$ 127 489,451$ 1,174,682$ School Age 5,541$ 701 1,618,565$ 3,884,556$

1,500 5,803,669$ 13,928,806$

Income Eligible Surplus – Recommendation II: Open Access for 2,400 more kids

The remaining surplus and anticipated FY2011 appropriation; EEC to open access for 2,400 children from the waitlist (estimates assume children start care March 1st)

Infant/Toddlers: • 798 infant/toddlers from the waitlist • $3.9M in FY10 and • $10.5M in FY2011;

Preschool: • 798 preschool children from the waitlist • $2.4M in FY10 • 7.4M in FY2011

School Age Children: • 798 school age children from the waitlist • $1.5M in FY10 • $4.4M in FY2011.

Overall, EEC would open access to 2,394 children, which would cost $ 7.9M in FY10 and $22.3M in FY11.

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Income Eligible Surplus – Recommendation II: Open Access for 2,400 Children

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% of total waitlist # of infant Cost for 4 months FY11 CostBoston 23% 181 809,485$ 2,437,760$ Central 9% 70 285,202$ 858,884$ Metro 16% 130 1,107,097$ 1,910,256$ Northeast 23% 186 844,102$ 2,542,009$ Southeast 16% 124 498,531$ 1,501,323$ Western 13% 107 425,828$ 1,282,379$

798 3,970,246$ 10,532,611$

% of total waitlist# of Preschooler Cost for 4 months FY11 Cost

Boston 21% 170 541,760$ 1,631,507$ Central 9% 69 200,949$ 605,156$ Metro 20% 160 511,211$ 1,539,509$ Northeast 24% 191 593,498$ 1,787,316$ Southeast 16% 129 373,743$ 1,125,526$ Western 10% 79 229,806$ 692,061$

798 2,450,967$ 7,381,075$

% of total waitlist# of School Age Cost for 4 months FY11 Cost

Boston 21% 164 316,289$ 952,503$ Central 9% 73 126,232$ 380,147$ Metro 19% 156 299,694$ 902,528$ Northeast 22% 173 325,004$ 978,746$ Southeast 18% 140 241,310$ 726,704$ Western 12% 93 159,870$ 481,448$

798 1,468,400$ 4,422,077$ Total Kids 2,394 FY10 7,889,613$ FY11 22,335,762$

INFANT TODDLERS

Preschoolers

School Age

Income Eligible Surplus – Recommendation III – Schedule of Care

Purpose: Align the Voucher Schedule of Care with the Contract Schedule of Care. Currently, there are 5,106 voucher kids that have a full time authorization

but a placement of less than 5 days (but greater than part time). Schedule of Care – Current Contracts:

Subsidized families having a documented service need of 30 or more hours of care per week currently receive for full-time child; families with a documented service need of between 20 and 29 hours of care per week receive part time child care irrespective of whether or not the time of the service activity coincides with the time of the child care.

Vouchers subsidized families, regardless of their full time or part time service need

are eligible for care and the number of hours only during the time that the parent(s) is/are involved in their service activity.

Schedule of Care: Proposed Align voucher placement rules with contracts

Cost to Implement: Align Full-Time at the time of reassessment, 5 day placements to the 5,106 voucher kids authorized for full time, but placed for less than 5 days ( for 3 or 4 days) be $2.8M in FY10 (assuming change is ready by March 1st) and $8.6M in FY11.

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Income Eligible Surplus

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FY2010 FY2011*Appropriation 260,954,672$ 233,130,662$ **Projected Need 214,179,923$ 185,179,923$ Projected Surplus 46,774,749$ 47,950,739$ Off-SetsFY10 DTA Deficiency (20,134,916)$ -$ FY10 Supportive Defiance (1,106,938)$ -$

Total FY2010 Deficiency (21,241,854)$ -$ Total Surplus Left after Defiance 25,532,895$ 47,950,739$

Reoccurring CostSchedule of Care 2,852,654$ 8,557,961$ Open Access - Siblings in Care 5,803,669$ 13,928,806$ New Contract Slot Utilization 373,200$ 1,119,600$ General Open Access - Max of 2,400 kids 7,889,613$ 22,335,762$

Total Reoccurring Cost 16,919,136$ 45,942,129$ Total Remaining Surplus 8,613,759$ 2,008,610$

One-Time ExpendituresQRIS -$ Total One-Time Expenditures -$

Total Remaining Surplus 8,613,759$ 2,008,610$

*FY11 appropriation based on the FY11 budget presented to the Board in November** FY11 projected need is using FY10 projected spending as a base and factoring the $29M attrition.

Income Eligible Surplus

The Income Eligible Surplus could change in the upcoming months based on several factors:1. Underutilization: Underutilization is the unused

dollars left in a maximum obligation contract after a vendor and/or provider has been paid in full. We assumed $8.1M, but this number is unpredictable, therefore could higher or lower.

2. DTA and Supportive Deficiencies: These deficiencies also could go higher or lower than currently projected. If there is a variance in projected vs. actual caseload in the next few months it could significantly alter either deficiency, thus impacting the IE surplus.

3. Attrition: If attrition rate increases/decreases from current levels this also could significantly alter the projected Income Eligible surplus.

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Benefits of EEC’s Recommendations

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Program Infant Prescoolers School Age TotalSibling in Care Access 672 127 701 1,500 General Opening of Access 798 798 798 2,394 New Contract Slot Utilization 40 40 40 120

1,510 965 1,539 4,014

Opening access to only those we can sustain into a very difficult FY2011 will result in care for over 4,000 kids currently on the waitlist: Below is a breakdown of by age group of those children:

The 4,000 kids we open access to from the waitlist would reduce the waitlist by 18.7% (Based on November waitlist numbers)

•Infant/Toddlers: reduced waitlist by 18.6% (8,169 to 6,619);•Preschool: reduced waitlist by 16.1% (6,009 children to 5,044); and •School Age: reduced waitlist by 20.6% (7,486 children to 5,947).

License Plate Fund– Possible Funding Stream for QRIS Quality Improvements:

Current Purpose: Currently, this fund is being used to support

quality improvements within programs to help them either get accredited, or for teacher training, etc. Programs submit proposals to EEC to receive license plate money.

Authorization: “Amounts credited to said fund shall be available for expenditure by the commissioner of early education and care for providing grants to not for profit child care organizations for the purpose of improving child care services…”

Revenue: Currently, $458K is in the trust fund. EEC has historically collected approximately $300K a year in license plate fees.

Recommendation: Allocate the trust fund for QRIS Quality Improvements.

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