1. FY15 Aspirational Budget Presentation to the Fiscal Committee November 4, 2013

2. EEC State Budget History 2 (Amount in Millions)

3. FY14 EEC Budget 3

4. Ongoing Needs 4 We have many ongoing needs to consider, as follows: 1. Investment in Field Quality: Prior to the Consolidated Net Surplus (CNS) rate increase proposed for FY14, there had not been a rate increase since March 2009, which was less than 1%. The increase will add about $.78 to each of the rates, but this is still low and inadequate. 2. Access for Children: Voucher access opened in October 2013; it had been closed since February 2011. While we are placing approximately 3,300 children in new vouchers, the waitlist remains around 40,000. 3. Quality Programs: Investments in quality initiatives and programs must be sustained. 4. Transportation: Funding is needed to support the cost of transportation in the field. The last transportation rate increase was May 2006. 5. Staffing to Support Historical Deficit in Licensing, Monitoring, and Program Management.

5. Rate Increase 5 Key findings of the recently completed Market Rate Survey are: Prices for center-based care and family child care are highest in the Metro, Boston and Northeastern regions. Reimbursement rates are significantly below the 75th price percentiles for all age groups in all regions of the state. Consistent with 2010 results, prices decreased significantly in center-based settings as the age of the child increases, while prices in family child care settings decrease less as the age of child increases. The price changes for family child care since 2010 were less significant than those from 2008-2010 reported in the last market price survey. A comparison of EEC after-school rates and market prices finds that reimbursement rates are below the 75th price percentiles in all regions and are below the 50th percentiles in all regions, except for the Western Region. EEC rates are above the 25th percentile for after-school care in only three regions.

6. Results of Market Price Survey Center Based Child Care 6 RegionAge GroupEEC Rate 25th Percentile 30th Percentile 40th Percentile 50th Percentile 60th Percentile 75th Percentile Western Infant$47.90$47.13$47.65$50.00$51.93$53.00$55.75 Toddler$43.20$43.30$44.00$45.60$47.25$49.80$53.50 Preschool$33.40$34.75$35.00$37.00$38.00$39.00$44.06 Central Infant $49.20$50.00$51.64$54.00$55.00$56.00$59.50 Toddler $44.20$45.59$47.00$49.00$50.80$52.00$58.75 Preschool $33.40$36.87$37.91$40.00$41.00$44.00$45.50 Northeastern Infant$54.95$56.00$60.03$64.98$68.40$70.20$76.00 Toddler$52.85$54.00$55.90 $62.35$65.89$70.00 Preschool$36.70$39.90$40.00$44.00$47.00$50.56$59.70 Metro Infant $59.50$67.85$69.90$72.93$75.00$78.65$85.86 Toddler $52.85$60.00$62.00$64.88$70.20$73.83$80.70 Preschool $36.70$50.00$51.75$55.00$58.55$62.00$67.77 Southeastern Infant$47.90$50.00 $55.00$56.40$64.58 Toddler$44.20$46.00$48.00$49.00$50.00 $58.95 Preschool$33.40$37.00$37.50$40.00$42.00$45.91$51.00 Boston Infant $54.55$53.03$54.77$57.44$66.51$69.45$75.36 Toddler $48.40$50.50$52.00$53.35$60.00$64.06$71.40 Preschool $36.70$37.50$39.00$41.60$47.20$50.73$56.40

7. Results of Market Price Survey Family Child Care 7 RegionAge GroupEEC Rate 25th Percentile 50th Percentile 75th Percentile EEC Market Access Rate Western Infant$30.10$32.00$35.00$40.0022.1% Toddler$30.10$30.00$35.00$40.0033.3% Preschool$26.40$30.00$35.00$40.009.5% Central Infant$31.80$33.00$40.00$45.0017.1% Toddler$31.80$32.00$40.00$45.0024.5% Preschool$26.40$30.00$40.00$45.009.3% Northeastern Infant$31.50$34.25$45.00$50.0518.5% Toddler$31.50$32.50$44.00$54.3722.8% Preschool$27.85$30.00$40.00$50.0015.4% Metro Infant$34.35$45.00$56.50$65.003.8% Toddler$34.35$41.50$55.00$65.008.5% Preschool$27.85$41.50$55.00$65.258.1% Southeastern Infant$31.80$35.00$40.00$45.008.1% Toddler$31.80$35.00$40.00$45.0017.6% Preschool$26.40$30.00$38.00$54.753.7% Boston Infant$31.50$32.00$40.00$54.5017.4% Toddler$31.50$30.00$40.00$51.5031.1% Preschool$27.85$30.00$38.00$53.8811.5%

8. Results of Market Price Survey Out of School 8 RegionAge GroupEEC Rate 25th Percentile 50th Percentile 75th Percentile EEC Market Access Rate Western Before School$7.25$6.77$8.00$10.0034.6% After School$15.25$14.16$15.00$18.5060.0% Full Day Holiday$30.70$29.00$30.70$34.0050.0% Full Day Summer$30.70$30.00$33.45$35.2537.1% Central Before School$7.25$7.63$9.97$10.9221.4% After School$15.25$14.00$18.68$21.0028.7% Full Day Holiday$30.70$33.00$35.00$42.0418.5% Full Day Summer$30.70$27.60$35.00$36.4933.5% Northeastern Before School$7.70$11.60$20.00$42.004.1% After School$17.05$17.55$21.60$24.9522.1% Full Day Holiday$31.75$30.75$40.00$50.0026.1% Full Day Summer$31.75$36.00$44.00$50.0016.7% Metro Before School$7.90$8.75$11.13$32.4219.3% After School$17.50$18.68$22.15$27.0012.0% Full Day Holiday$32.65$28.60$49.50$64.1527.1% Full Day Summer$32.65$31.80$41.00$52.5026.2% Southeastern Before School$7.25$9.75$16.75$19.064.7% After School$15.25$17.00$19.00$25.0013.5% Full Day Holiday$30.70$30.00$38.00$40.0027.0% Full Day Summer$30.70$30.00$35.00$38.0029.3% Boston Before School$7.90$7.95$8.80$9.5016.6% After School$17.50$15.70$19.00$22.0030.7% Full Day Holiday$32.65$22.08$30.00$37.5068.2% Full Day Summer$32.65$28.75$31.77$40.7551.3%

9. RATE INCREASE 9 FY14 Consolidated Net Increase EEC has received $11.5M as part of the Consolidated Net Surplus (CNS) to dedicate to an across the board rate increase for all center based, family child care providers, and family child care systems. This is roughly a raise of $.78 on the daily rate. The rate increase will be retroactive to July 1, 2013.

10. RATE INCREASE 10 Rate Increase: $13,657,652 The cost of a 3% rate increase as a separate cost for each of the caseload accounts is as follows: IE: $7,274,381 DTA: $4,031,960 DCF: $2,351,311 This is the equivalent of an $.82 addition to the daily rate. Prior to the rate increase to be implemented this year, the last rate increase was March 2009 when we gave.45%. We will implement the same policy for the rate increase as used in FY09: “This increase shall be directed to expenditures for salaries, benefits, and stipends for professional development of early education and care workers or other programmatic quality improvements.”

11. ACCESS: DCF 3000-3050 For supportive early education and care services; provided, that funds from this item shall only be expended for early education and care costs of children with active cases at the department of children and families; provided further, that the department of early education and care, in collaboration with the department of children and families, shall maintain a centralized list detailing the number of children eligible for services in this item, the number of supportive slots filled and the number of supportive slots available; provided further, that funds may be used to provide services during a transition period of 6 months for families upon the closure of their case; and provided further, that all children eligible for services under this item shall receive those services............$76,991,445 11

12. ACCESS: DCF We awarded 4,753 DCF slots to Contract Providers. As of last week 4,359 or 91.7% are filled. 801 expansion units are available for use. As of last week 783 or 97.7% are filled. In total, 5,554 slots are available. As of last week, 5,142 or 93% are filled. EEC is currently managing DCF through contracted and expansion slots. DCF, however has a waitlist. The DCF waitlist is maintained by 29 Area Offices who periodically report the waitlist number via Survey Monkey. The most recent exercise shows approximately 625 children on the “placement waitlist”. DCF has 22,000 open cases and believes that a large percentage of these open cases would receive child care if it were available. The question for consideration is: Should EEC manage to the contracted slots or to the waitlist? 12

13. ACCESS: DCF EEC supports the construction of a credible DCF waitlist to build a long term financing model to support the need represented by the waitlist. We further support financing that supports DCF’s best estimate that satisfies their near term need. 13

14. ACCESS: DTA EEC recommends that we fund this account in FY15 at the proposed maintenance level of $ 134,398,656. 14

15. ACCESS: Income Eligible (IE) 15

16. Caseload Waitlist 11/2012 - 10/2013 16. Data Report created on October 30, 2013 ** Excludes Unborn children, Children 13 or older, “0” zip codes and towns out of state

17. ACCESS EEC Waitlist vs. IE Children Served 17 Spike in July 09 is due to 3A to 3D transitional children from DTA to IE.

18. Caseload Waitlist 11/2012 - 10/2013 18 Data Report created on October 30, 2013 ** Excludes Unborn children, Children 13 or older, “0” zip codes and towns out of state

19. ACCESS: HOW MUCH? ACCESS: $_______________ The Committee must decide if it wishes to serve the waitlist on a first come first serve basis or a specific age group of children. EEC proposes that we should open up access for the waitlist on a first come first serve basis. There are presently 42,000 children on the waitlist. We are presently serving just over 29,000 children in the IE caseload account as of September’s reports. We must decide how many more children we would like to serve and make that our “ask” in the Aspirational Budget. 19

20. QUALITY RATING AND IMPROVEMENT QUALITY PROGRAMS: $5,000,000 Massachusetts’ Quality Rating and Improvement System (QRIS) has been developed, funded, and implemented with full involvement of EEC’s community partners and EEC staff. MA has standards for quality in early education and care programs that are research-based, broadly understood, successfully implemented, culturally appropriate, and aligned with a quality-building support system. Approximately 5,700 programs/providers are participating in QRIS, representing half of our licensed programs. Additionally, we have 325 public school programs (license-exempt) also participating in QRIS. 1, 361 of these programs have been granted a Level 2 status, and 5 of these programs are rated a Level 3 pending the completion of their ERS classroom observations. 20

21. QUALITY RATING AND IMPROVEMENT Enrollment at the time of QRIS Application (self-reported by program/provider): 139,090 Children (full and part time) Infants: 7,480 Toddlers: 19,082 Preschoolers: 67,414 Kindergarteners: 5,430 School Aged Children: 39,684 Licensed capacity of programs is 138,133. Enrollment exceeds capacity because a full time slot may be utilized by more than one child on a part time basis. 44,037 of these children are on EEC Subsidies (contracted or voucher slots) Licensed capacity of program participating in QRIS: FCC: 26,564 Small Group: 135 Infant: 4,781 Toddler: 7,960 Preschool: 44,737 Kindergarten: 610 School Age: 32,708 Infant Toddler Mixed: 5,561 Toddler/Preschool Mixed: 2,853 Preschool Mixed: 8,235 Kindergarten/School Aged Mixed: 3,989 21

22. 22 QUALITY RATING AND IMPROVEMENT Based on 207 preschool classrooms, QRIS programs that have applied for Level 3 in MA are higher in quality in comparison to other studies of quality child in care. The chart below highlights the percent of preschool classrooms meeting the ERS standards for quality care as determined by a score within the Good to Excellent range. Research has indicated that classrooms meeting the good benchmark on the ERS are significantly more likely to have a positive impact on children’s outcomes. As can be seen from the chart, 84 percent of classrooms observed averaged an overall score in the good to excellent range. Over ¾ of classrooms averaged a score in the good to excellent range for the Space and Furnishings, Language, Interactions, Program Structures and Parents and Staff Subscales. As found in the vast majority of studies, programs did struggle with meeting the standards for Personal Care Routines. Programs also had difficulty meeting standards for the Activities Subscales. Comparing the current results to other general studies of care, results indicate that the programs that have applied for Level 3 status are of higher quality than the standard quality found in the general population of child care programs. This includes findings from MA specific studies, including the Boston Quality Inventory and the MA School Readiness Study. It is important to note that programs still need support in the areas of personal care routines and in providing children with a variety of play activities for a meaningful quantity of classroom time.

23. TRANSPORTATION COST In June 2012 the Board voted as follows: Subject to a supplemental budget appropriation the Board approves an increased transportation provider reimbursement rate of $16.51 for round trip transportation and $11.11 for one- way transportation for all infants, toddlers, and preschool age children with the requirement that, if the recommended reimbursement rate increase is funded, entities that receive transportation payment from EEC for infants, toddlers, and preschool age children must dedicate one adult monitor on all vehicles. The transportation rate of $9.00 per day round trip and $6.00 per day for one way transportation will remain in effect for all transportation providers that transport school age children. 23

24. TRANSPORTATION TRANSPORTATION: $17,586,713 The last transportation rate increase was in May 2006 when the one way rate increased from $5 to $6 and the round trip rate increased from $7.50 to $9.00. The rate of $16.51 per round trip makes providers whole for the staff time already directed to satisfying the following recommendations: Management Responsibility Parent Notification Passenger Logs Secondary Vehicle Inspection AND places an adult monitor on vehicles based on the number of children, ages, and length of routes. Vehicle monitoring devices will not be required. 24

25. TRANSPORTATION COST An increase in the transportation cost would support the following expenses at roughly the percentages shown. Driver Expenses: 34.7% Monitor Expenses: 23.1% Gas and Maintenance: 24.9% Note that the sum for driver, monitor, and gas and maintenance expense is 82.7% of the total Equipment: 3.4% Insurance: 3.7% Training:.9% Contract Services: 3.1% Other:.2% Admin Expenses: 5.8% 25

26. INFRASTRUCTURE COST 26 In November, 2010, the Board recommended the staffing pattern presented below.

27. INFRASTRUCTURE: How Have We Done? Child Care Licensing Specialist (16): We are in the process of hiring 5 licensing specialists, but this does not bring us to 16. Chief of Staff (1): Just hired this position in October 2013. Direct of Community Partnership and Outreach (1): Position not filled; need currently being assessed. Director of Policy, Evaluation, and Research (1): Hired Carol Nolan as Director of Policy in February 2013. Deputy General Counsel (1): Hired Felicia Sullivan in September 2013. Policy Analyst – QRIS (1): Presently funded through RTTT. The position ends 12/31/15. Policy Analyst – Generalist (1): This position is filled. Family / Community Quality Specialist (2): One filled, the other is still needed. Educator Provider Support Specialist (2): Not clear that we still need these positions. Audit Resolution - Fiscal Monitor (3): One position funded through RTTT which ends 12/2015. 27

28. INFRASTRUCTURE: FTE Update 2014 At the beginning of FY14 we had 153.45 approved FTEs. (We have a discrepancy of.20 with ANF.) Administration and Finance has approved eight (8) additional positions as part of EEC’s FY14 budget: Chief of Staff: Hired Deputy General Counsel: Hired with early permission Licensors (5): Positions posted Caseload Budget Manager: Interviews in process Our revised current FTE total is 161.65 (prior to hiring fingerprinting staff). 28

29. INFRASTRUCTURE: Fingerprinting Update Chapter 459 of the Acts of 2012 (as amended by Chapter 77 of the Acts of 2013): Requires and authorizes EEC to conduct fingerprint-based checks of the state and national criminal history databases. Requires EEC to conduct Sex Offender Registry Information (SORI) checks. Effective September 1, 2013. In this new process EEC will review: SORI data (for all types of care). FBI (fingerprint) data (for all types of care including employees/volunteers/interns of EEC licensed and/or funded programs and transportation providers but excludes informal relative caregivers). CORI and DCF data (for family child care-related individuals, all Licensees and Reviewers, and in home, non-relative care providers). 29

30. INFRASTRUCTURE: Fingerprinting Update Because of the new responsibilities placed on EEC, Administration and Finance has approved eleven (11) additional positions to fulfill EEC’s responsibilities relative to fingerprinting as follows: Program Coordinators (5): These positions will handle the administrative aspect of the BRC process: tracking, updating, mailing, and filing results. They will provide TA to programs and applicants. Reviewers (5): These positions will review discretionary applications and review rationales for decisions. Application Developer: This position will build an enhanced database and maintain the CORI / BRC databases. 30

31. INFRASTRUCTURE FY15 Request for New Positions FIELD STAFF Assistant Deputy Commissioner for Field Operations (1): $80,000 The Deputy Director of Field Operations for EEC is responsible for the management of the day to day operations of the licensing, policy implementation, and regional office functions for a geographical area of the Commonwealth. This management responsibility requires setting priorities, deploying resources, directing and guiding agency direct service staff, and assuring consistency in operations amongst regional offices and licensing units. This management responsibility also includes maintaining the integrity of the policy, licensing, investigations, and regulatory compliance functions through monitoring and maintaining effective internal controls and quality assurance processes. Licensors (5): $57,000 The licensing specialists will provide support to the programs the agency licenses in order to provide quality early learning environments for the 250,000 Massachusetts children the agency is responsible for. The current caseload ratio for family child care licensors is 280 licenses to 1 licensor. In group child care the ratio is 104 licenses to 1 licensor. The addition of 5 licensing staff will reduce the caseload ratios to approximately 250 to 1 for family child care and 85 to 1 for group child care. This would bring Massachusetts closer to the recommended national standards of 75 to 1 for family child care and 50 to 1 for group child care. 31

32. INFRASTRUCTURE FY15 Request for New Positions FINANCE UNIT Fiscal and Grant Monitors / Auditors (2): $66,000 Ensure that funding awarded by EEC through grants is spent according to the requirements of the grant, the terms and conditions of the contract, and according to the applicable regulations of the state oversight agency (Office of the State Comptroller, OSC) as well as federal regulations. Review grantee budgets and expenditures to ensure that the requirements of the grants are met. Conduct site visits to Contracted Providers and Child Care Resource and Referral agencies to determine compliance with the Commonwealth’s budgeting and pricing regulations and terms of the provider’s/CCRR contract. Conduct reviews of all contract provider and CCRR attendance and billing policies and providers oversight to any potential double billing occurrences. 32

33. INFRASTRUCTURE FY15 Request for New Positions Transportation Monitor (1): $54,000 Ensure that funding awarded by EEC for transportation services is spent according to the requirements of the grant, the terms and conditions of the contract, according to the applicable regulations of the state oversight agency (Office of the State Comptroller, OSC), Registry of Motor Vehicles and other federal regulations. Monitor transportation subcontract agreement between EEC Contract Providers, Child Care Resource and Referral agencies, and transportation companies to ensure that the requirements of the funding are met. Conduct site visits and desk review with contracted providers and Child Care Resource and Referral agencies to determine compliance with Transportation polices and oversight plans, passenger logs, billing, and attendance. Oversight of training requirements, monitoring of drivers in the PQR, and revision of policies as necessary. 33

34. INFRASTRUCTURE FY15 Request for New Positions POLICY UNIT Director of Workforce and Special Projects (1): $73,000 Oversee the Educator and Provider Regional Partnerships, which includes 5 Educator Provider Support (EPS) Regional grantees. Plan monthly EPS grantee meetings and EPS Liaison meetings. Supervise 3 EPS liaisons at Central Office and the Professional Qualifications Unit which includes 3 Teacher Qualifications Specialists. Coordinate and oversee all Professional Development opportunities including the PD Calendar and PQ Registry. 34

35. INFRASTRUCTURE FY15 Request for New Positions Director of QRIS (1): $68,000 Support the MA QRIS through analysis, project development, implementation, fiscal oversight, coordination and communication. Ensure that the five key elements of the MA QRIS are embedded in standards, plans, and policies that guide QRIS development across the mixed delivery system. Facilitate monthly program Quality Specialist Unit meetings, including development of agendas and assignments of QRIS related projects and tasks. Coordinate activities to produce RFP and other competitive bidding processes required for the implementation of the MA QRIS. Design public awareness and consumer education program to ensure families are knowledgeable about QRIS. Program Quality Specialists (2): $65,000 Provide technical assistance to educators and providers in an assigned region. Develop an understanding of unique community needs and act as a liaison for programs, providers, schools, EPS grantees, and Readiness Centers. Review QRIS applications by programs and verify self-assessed level of standards and documentation. In coordination with EEC regional Licensors, conducts site visits to programs to provide technical assistance for efforts to improve quality. Plan, prepare, and conduct QRIS training sessions. 35

36. Cost of New Positions 36

37. Proposed FY15 EEC Budget 37