Budget and Caseload Update

Policy and Fiscal CommitteeApril 4, 2011

Table of Contents FY11 Caseload OverviewFY11 Projected DeficiencyARRA Spending

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FY11 Caseload Overview

Supportive: The projected surplus was decreased slightly this month to $11.9M. The decrease in surplus from $12.3M incorporates historical trends in the increase in the number of children served in June 2010.

DTA-Related Caseload: The deficiency has decreased approximately $1M dollars from $7.5M to $6.5M.

Income Eligible: Restriction to voucher access became effective in February but total spending in February increased driving the daily cost to be the highest for the fiscal year (reference slide #5). As a result, the forecasted deficiency in IE has grown from $5.3M to $8.3M as of February billing.

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*Fiscal Year 2011 Income Eligible (3000-4060)

* Actual Figures Previous month projected a $5.4M deficiency.

FY11 Caseload OverviewIncome Eligible: There is a projected deficiency of $8.3M. This represents a significant increase compared with last months projected deficiency of $5.3M. The actual voucher cost in February is $1.1M higher than forecasted in February (for the March Committee Meeting).

Access was severely restricted beginning on February 4, 2011. (Some access was available to continuity of care.) EEC anticipated caseload expenditures to decrease accordingly, but the spending rose. Expenses were more than Januarys despite having fewer billable days and restricted access. Below is a list of the actual amounts billed (beginning in July), the number of billable days, the cost per day, and the percent change of the cost per day from the previous month:

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Fiscal Year 2011Income Eligible Caseload Projected Cost*FY11 Approp: $233.5MBlue represents actual amount billed

Current projections indicate that, even with transferability, EEC will be unable to meet the cost of June billing (processed in late July)

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*Fiscal Year 2011 DTA Related (3000-4050)

Previous month projected a $7.5M deficiency.

FY2011DTA Caseload Projected Cost*FY11 Approp: $127.3MBlue = Actual amount billedGreen = ProjectionWith the passage of transferability, EEC will be able to meet the deficiency.

*Fiscal Year 2011 Supportive Care (3000-3050)

Previous month projected a surplus of $12.3M.

Fiscal Year 2011Supportive Caseload Projected Cost*FY11 Approp: $85.7MBlue = Actual amount billed

FY11 Caseload Overview Summary*

FY11 Caseload OverviewThe following are last months proposed resolutions to reduce the net deficiency:

Step 1 - Supplemental Language: Section 23 of House Bill #37 (Governors proposed Supplemental budget) allows EEC to transfer the surplus from the Supportive account to the Income Eligible and DTA-Related caseload accounts. This would partially remedy the current projected deficiencies in both accounts.STATUS: House Approval 3/30/2011 Senate Approval 3/31/2011

Step 2 Further Caseload Closure Actions: EEC reported an overall net deficiency of $560K in last months caseload forecast.ActionsClose sibling access through vouchers and contract slots.Close contract slots for providers that are over 5% in the use of flex pool slots.STATUS: Implemented

Step 3 Transfer of Costs: EEC will transfer TSCC costs from the Income Eligible account to the Supportive Account. Status: Incorporated into current months discussion.

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Above the Line Recommendation to Reduce the DeficiencyForecasted Net DeficiencyDTA $ 6,531,142DCF $ 11,971,742IE $ 8,313,368 Net Deficiency $2,872,769 $2.873M

Recommendation Close Access for Teen and Homeless Contract Slots $402K effective 5/1/11. Adjusted Net Deficiency $2.471M

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Below the Line Recommendation to Offset the DeficiencyForecasted Net DeficiencyDTA $ 6,531,142DCF $ 11,971,742IE $ 8,313,368 Net Deficiency $2,872,769 $2.873MAdjusted Deficiency from Above the Line Recommendation $2.471M

Commissioner Recommendation Providers receiving reimbursement for Income Eligible funded services to cover cost of services provided to children. Reduction to be applied in May or June or split between both months. Example: IE Projected no. of children in care 33,612 Blended Avg. Daily Rate $25.98 Projected number of days 3 Projected Savings $2.620MAdjusted Projection Net Surplus $ 149K

Of the combined 44 billable days in May and June, the Department would require providers to support the cost of care for a certain number of days. The number of days required to cover the deficiency is subject to change based on actual spending. Each day not paying providers saves $873,393.

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Family Statistics

Number of families that have a child(ren) in income eligible contracted care Total number of families: 11,6428,641 with 1 child2,478 with 2 children447 with 3 children65 with 4 children9 with 5 children2 with 6 childrenNumber of families that have a child(ren) in care with a current voucherTotal number of families: 12,3265,336 with 1 child3,751 with 2 children1,514 with 3 children1,121 with 4 children320 with 5 children284 with 6 children

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*Value of Provider Non Payment

DAILY REIMBURSEMENT RATES (daily rates & 3 day example)CENTER-BASEDFAMILY CHILD CARE InfantInfant & ToddlerToddlerPre-SchoolProviders Under 2 Years of AgeProviders 2 Years of Age and OverSystems Under 2 Years of AgeSystems 2 Years of Age and OverREGION 1$47.90 $45.60 $43.20 $33.40 $30.10 $26.40 $40.60 $36.90 REGION 2$49.20 $46.70 $44.20 $33.40 $31.80 $26.40 $42.35 $36.90 REGION 3$54.95 $52.30 $49.55 $35.65 $31.50 $27.85 $41.95 $38.30 REGION 4$59.50 $56.15 $52.85 $36.70 $34.35 $27.85 $45.25 $38.65 REGION 5$47.90 $46.05 $44.20 $33.40 $31.80 $26.40 $42.35 $36.90 REGION 6$54.55 $51.50 $48.40 $36.70 $31.50 $27.85 $42.40 $38.65 3 daysREGION 1$143.70 $136.80 $129.60 $100.20 $90.30 $79.20 $121.80 $110.70 REGION 2$147.60 $140.10 $132.60 $100.20 $95.40 $79.20 $127.05 $110.70 REGION 3$164.85 $156.90 $148.65 $106.95 $94.50 $83.55 $125.85 $114.90 REGION 4$178.50 $168.45 $158.55 $110.10 $103.05 $83.55 $135.75 $115.95 REGION 5$143.70 $138.15 $132.60 $100.20 $95.40 $79.20 $127.05 $110.70 REGION 6$163.65 $154.50 $145.20 $110.10 $94.50 $83.55 $127.20 $115.95

*Value of Provider Non-Payment

DAILY REIMBURSEMENT RATES (daily rates & 3 day example)SCHOOL AGEKindergartenBefore School OnlyAfter School OnlyBefore and After School OnlyFull DayBlended BeforeAfterBefore and AfterFull DayREGION 1$7.25 $15.25 $22.45 $30.70 $19.85 $6.75 $20.10 $26.70 $33.40 REGION 2$7.25 $15.25 $22.45 $30.70 $19.85 $6.75 $20.10 $26.70 $33.40 REGION 3$7.70 $17.05 $24.60 $31.75 $21.60 $7.15 $21.40 $28.50 $35.65 REGION 4$7.90 $17.50 $25.20 $32.65 $22.15 $7.35 $22.05 $29.45 $36.70 REGION 5$7.25 $15.25 $22.45 $30.70 $19.85 $6.75 $20.10 $26.70 $33.40 REGION 6$7.90 $17.50 $25.20 $32.65 $22.15 $7.35 $22.05 $29.45 $36.70 3 DaysREGION 1$21.75 $45.75 $67.35 $92.10 $59.55 $20.25 $60.30 $80.10 $100.20 REGION 2$21.75 $45.75 $67.35 $92.10 $59.55 $20.25 $60.30 $80.10 $100.20 REGION 3$23.10 $51.15 $73.80 $95.25 $64.80 $21.45 $64.20 $85.50 $106.95 REGION 4$23.70 $52.50 $75.60 $97.95 $66.45 $22.05 $66.15 $88.35 $110.10 REGION 5$21.75 $45.75 $67.35 $92.10 $59.55 $20.25 $60.30 $80.10 $100.20 REGION 6$23.70 $52.50 $75.60 $97.95 $66.45 $22.05 $66.15 $88.35 $110.10

Additional Considerations *The following are additional ways we considered, but rejected, to reduce or eliminate the deficiency: Postpone reassessment placements until July 1, 2011. Calculated savings is at 50% to account for timing. Effective May 1, 2011 - projected savings for 2 months: $4.4M Effective June 1, 2011 - projected savings for 1 month: $2.1M

Postpone Access for Continuity of Care until July 1, 2011. Calculated savings is at 50% to account for timing. Effective May 1, 2011; projected savings fro 2 months: $557K Effective June 1, 2011; projected savings for 1 month: $226K

Remove Add-on Payment from Teen and Homeless filled contract slots effective 5/1/11: $770K

Reduce payment to 61 FCC systems from $10/day to $5/dayfor all slots effective 5/1/11: $1.462M

To eliminate the deficiency of $2.873M, 2,579 children would need to be removed from care effective May 1, 2011.

Additional Considerations*The following are additional considerations to address the deficiency:

Request Supplemental Funding from the Legislature. This would require notification to ANF and House and Senate Ways and Means.

Transfer Eligible Expenditures: Transfer TSCC related spending from the Income Eligible to the Supportive Care Account.

Apply ARRA Funds to Income Eligible funded childcare services for care that is not supplanted. Potential source is to identify the number of new preschool children in FY11 that were assigned to IE vouchers and/or contracts.

Allocate unspent grant balances: 1. Income Eligible - Inclusive Classroom SPED Grant 2. Supportive Mental Health Collaborative Grant

FY11 Caseload: Waitlist**As of March 31, 2011.This number is an increase of 1,940 children from the February update, or a 10.8% increase.

FY11 Caseload: Waitlist Since 9/2010*

ARRA Spending Update*

ARRA Spending UpdateWe have spent $11.226M in ARRA funds (46.82%) through March.

The goal was to have spent $11.6M by the end of March.

We missed our mark by $400K, but are confident we will recover this gap as caseload is beyond expectation. We are comfortable that the funds will be liquidated. *

***Data source:Data warehouse report server generates report via EEC Intranet\reports\Board Meeting ReportsUse http://eec-dwh-bos-001/ReportServer?%2fData+Warehouse&rs:Command=ListChildren and update spreadsheet below with the current month data

Spreadsheet framework location:Sysdevel\Fy2010 Reports Transfer\Board Reports specs\YYYYMMDD IE voucher attrition.xlsx; voucher IE attrition tab

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