Background
California Welfare Reform provides for three stages of child care services and payment systems. Stage One is mandated and funded by the California Department of Social Services (CDSS) and begins upon entry of a person into the CalWORKs or CalLearn Public Assistance Programs. The recommended action will increase the compensation to Child Action, Inc. for providing Stage One child care services to eligible Yolo County CalWORKs and CalLearn families. $1,800,000 was budgeted for fiscal year 2015-2016. In the past few years, demand for child care has decreased in the CalWORKs program; however, this year, the demand for child care has increased, resulting in increased costs for providing child care services. An additional $1,500,000 is required for costs in the second half of this fiscal year, covering January 2016 - June 2016.


















Reasons for Increased Costs
There are three reasons that child care costs have exceeded original projections.
1. Increase in the number of families served with Stage 1 child care services;
2. Increase in children in licensed care v. license exempt care; and
3. Increase in licensed care rates effective October 1, 2015.

The increase in number of children served by the Stage One child care program has been due to increased participation by Welfare-to-Work eligible adults in allowable activities. There has been a 32% increase in the number of children and families served by the Stage One child care program in fiscal year 2015 - 2016, as shown in the chart below.




































There has also been an increase in the percentage of children receiving Stage One services from licensed child care as opposed to license exempt care. Licensed child care is provided by child care centers or licensed family day care homes. Licensed exempt care is provided in the participant's home by a friend or a relative. The rates paid are higher for licensed child care than licensed exempt care. The percentage of children in licensed care is approximately four times more than children received license exempt care, as shown in the chart below. This also contributes to increased Stage One program expenditure. 

CDSS increased the rates paid to providers of Stage One child care services, effective October 1, 2015. Licensed care rates increased 4.5% and license exempt rates increased 13%. The rate increase, in combination with the increase in families served and utilizing licensed care, are the contributing factors to the agreement amendment request of $1,500,000 for Stage One child care services.

Original agreement is on file with the Clerk of the Board.