1. 0 Transportation Costs Fiscal Committee November 7, 2011

2. EEC October Board Meeting Included among the recommendations from the Special Committee are the following: All Transportation Providers shall ensure that vehicles designed to transport 6+ children shall be equipped with approved electronic vehicle monitoring devices that prompt staff to inspect. Vehicle monitoring devices are not required for vehicles that carry an assigned monitor, that only transport school aged children, unless the children are developmentally or physically disabled, or on vehicles that are only used for occasional field trips or other similar trips. The Department shall develop customized transportation performance standards, based upon those created by the Human Service Transportation (HST) Office of EOHHS, to be incorporated into all contracts for transportation services. Standards must be adhered to by all Transportation Providers and are applicable to all Family Child Care Systems/Providers. 1

3. The Destination, With a Caveat The Destination It is possible or even likely that there will be additional costs related to the promulgation of regulations which strengthen our policy requirements, but it is not clear at this time what the sum of those costs will be. The EEC Board has requested that we present a report outlining costs at the next Board Meeting on November 8th. Discussion will ensue with a return to the discussion at the December Board Meeting. The Caveat ANF is reviewing FY13 Maintenance Plans as the sum of the FY12 appropriation plus 3%. Once costs are finalized, we will have to evaluate how and where we can absorb these costs. 2

4. Current Rate EEC reimburses IE and DTA providers at a rate of $9/Round Trip/day. EEC reimburses IE and DTA providers at a rate of $6/one way/day. EEC pays Supportive (DCF), Teen Parent, and Homeless providers an add-on rate of $17.22/day. This reimbursement rate includes the cost of transportation. 3

5. EEC Data: Number of Transported Children Number of IE and DTA Children PER MONTH on Average Receiving Transportation Infant 592.044 Toddler 1,752.132 PreSchool 3,419.257 School Age 7,559.567 TOTAL13,3221.000 Number of DCF Children PER MONTH on Average Receiving Transportation Using a factor of 80% of all children served in a month 4,552 (5,690 per month x 80%) Subtotal: 17,875 children on average per month receive transportation. However, this figure includes one way trips and/or kids who received service for the partial month. GRAND TOTAL: 15,382 children is the discounted on average per month number of children to receive transportation 4

6. EEC Data: Transportation Expenses Cost for Transporting IE and DTA Children PER MONTH on Average Infant $100,298.048 Toddler $306,073.146 PreSchool $582,328.277 School Age $1,111,795.529 TOTAL $2,100,4941.000 Cost for Transporting DCF Children PER MONTH on Average based on number of days in the month x $9 each day Using a factor of 80% of all children served in a month $910,920 Grand Total: $3,011,414 spent on transportation on average per month 5

7. How Much More Will It Cost to Provide Transportation? 6 This chart provides a summary of transportation costs from each source.

8. How Much More Will It Cost to Provide Transportation in DCF and DTA Accounts? 7

9. What is the Impact on IE? 8 We can measure the impact two ways: 1) Additional Funds Needed or 2) Fewer Children Served.

10. EOHHS Human Service Transportation The HST Office works to support and increase transportation options for consumers to access health care, jobs, social services, and a full range of opportunities within the community. The HST Office manages a large brokered transportation system for over 37,000 consumers of various state agencies. Select Regional Transit Authorities (RTA) implement transportation requests and subcontract with local transportation vendors in each of nine distinct HST areas encompassing all cities and towns in MA to provide over 5 million trips each year for eligible EOHHS consumers. Coordination is accomplished as each broker administers transportation services through subcontracting with qualified transportation providers in their HST areas. 9

11. HST: How It Works Through the HST Office’s brokerage operation, human service transportation is provided to eligible consumers via two models: “demand-response” and “program-based”: Demand-Response(“dial-a-ride”) transportation is provided on an as-needed basis for consumers to and from varying locations. This model is used primarily for MassHealth PT-1 non-emergency medical transportation services. Program-Based transportation operates on a daily or regularly scheduled basis in which consumers are picked up from their homes and transported to the same program facility on a grouped or shared-ride basis. This includes transportation for Department of Developmental Services, MassHealth-funded Day Habilitation programs, and the Department of Public Health’s early intervention programs. 10

12. HST: How It Works HST has developed universal standards that apply to everyone. They understand that there are unique standards that must also be applied. HST does not dictate to a system what it should or should not do. Devices are not required. Rates are established through the open market. FY10 overall cost per trip on average ONE WAY: $18 DPH Early Intervention (EI) is $28.16 one way. 11

13. EEC Vehicle Data Based on August billing data for IE only, EEC paid transportation fees for 91 vendors who had 105 contracts for the transportation of 3072 children. EEC released an informal survey to these programs asking three questions. We received 77 responses. Number of vans or buses you own or lease. ANSWER: 346 Do you subcontract to another vendor for all or some of your transportation services? ANSWER: 44 of the 77 subcontract If so, how many vans or buses do your subcontract vendors use? ANSWER: 271 12

14. More Vehicle Data Based on a review of billing data for IE Contracts, IE Vouchers, and DTA, it appears there are 660 vendors (contracts/vouchers)/providers (vouchers) that oversee 3217 providers ( actual provider name) who provide transportation. If 77 providers own 346 vehicles (4.49 vehicles per provider), it MIGHT follow that 661 providers (all of whom provide transportation) have 2,963 vehicles in their own fleet. 13

15. Cost of Monitoring Devices Presume that we reimburse for the cost of monitoring devices only for the vehicles we own. Presume 2,963 vehicles. Monitoring Devices Child Check Mate: Sleeping Child Check Monitor: $220 - $250 installed $250 x 2963 = $740,750 Provider Cost per Installed Monitor: $350 installed $350 x 2963 = $1,037,050 14

16. Conclusion A thorough, intensive, and directed review of policies and costs needs to occur before we understand precisely what the total cost to the caseload programs will be and, potentially, the number of children that might be unable to be served because of the increased cost in the absence of an increase to any and all of the caseload accounts. 15

17. Appendix The following slides are offered in the Appendix as support for the summary slides presented earlier. Some History: Supportive Bid One Provider’s Costs One Provider’s Costs, Continued One Provider’s Costs, Conclusion MADCA Cost Estimate #1 MADCA Cost Estimate #2 16

18. Some History: Supportive Bid In its FY10 RFR issued for Supportive Services (DCF, Teen Parents, Homeless), EEC asked respondents to respond to a survey asking about costs associated with the add-on rate of $17.22 per day. Among these costs is transportation. Here’s what we learned: The add-on rate is $17.22 is inadequate. It should be closer to $25.84 per day. The cost of transportation within the $25.84 is $11.98 or 46.3% of the total. The $11.98 is broken down as follows: Amount Paid to Another Provider: $ 4.32 or 36.07% Cost of Salary and Fringe: 35.88% or $4.30 Average Salary and Fringe: $21,639.50 per year Cost of Vehicles: 16.63% or $1.99 Cost of Fuel: 5.61% or $.67 Professional Development/Training:.08% or $.10 Other Costs: 5.0% or $.60 17

19. One Provider’s Costs EEC approached one large vendor (FCC system and Center Based) with a fleet of approximately 100 vehicles to assess costs and research policies. Here’s what we learned: Background Information Transports children from 4 months old to 12 years old Picks up at residence and drops off at school or FCC provider Approximately 2000 children in FY12. Van Information Owns 19 yellow buses. Subcontracts to one vendor. Owns 81 vans that are 8 passenger vans with center aisle. 12 and 15 passenger vans are not safe: no center aisle, not easy to reach children. Owns all vehicles in the fleet with no encumbrances (which eliminates lease or interest payments.) Maintenance of vehicles done 24/7 to provide vehicle access during day routes. 18

20. One Provider’s Costs, Continued Driver Payment On average, $14/hour, no benefits. Typically work a 40 hour week. Averages about 140 hours/week in overtime. CDL licenses earns $16 - $19/hour. Other Salary Costs Eight (8) coordinators do all routing and scheduling. Routes are constantly changing Different model of pick-up and delivery for FCC providers and center based programs. Two (2) quality control drivers. Two (2) dispatchers (who overlap in the middle of the day) Two (2) mechanics on staff. Payroll Costs One week’s payroll is approximately $53K (w/out benefits) Benefits, taxes, WC add $10,700 per week for a total weekly payroll of $64.2K (drivers, mechanics, routers, dispatchers) 19

21. One Provider’s Costs, Continued Monitors Monitors are on buses, but not on vans. A monitor on every van, working 40 hours per week and paid $8.50 per hour plus payment for FICA, SUTA, and W/C, would cost roughly $396 per week or $20,592 per year. If monitors were provided benefits, it would add $7,061 to the cost totaling $27,653 per year. If you pay benefits (vacation time, health insurance, etc.) you might attract a higher quality workforce and reduce turnover. 20

22. One Provider’s Costs, Continued Monitoring Devices The device comes with one button in the rear of the vehicle. The device is activated when the ignition is turned on so the engine has to be running to use it. When you go to the back of the bus and press the button at the back the alarm is deactivated. Then the ignition can be turned off without the alarm coming on. A device at the back of the bus does not require the driver to look under the seats. This provider installed another button under the seat so that both buttons would have to be pushed. This still does not ensure that the driver looks under all seats. Cost: $150/$350 installed. Conclusion: There is no central way to monitor whether a vehicle’s alarm system has, in fact, been deactivated. Broken devices are not reported. The devices pose a danger in requiring the engine to stay running while the driver leaves the driver’s seat. Any instances of a child left in a vehicle have been the result of human error, not paying attention to the policies. 21

23. One Provider’s Costs: Conclusion 22 Breakeven Cost with No Monitors and Drivers w/out benefits: $12.05 per child per day. Breakeven cost with benefits for drivers: $13.58 per child per day. Breakeven Cost with Monitor on Each Vehicle: $24.00 per child per day. The loss between the current rate of $9/day and the cost of $12.05/day is currently offset because of the Supportive add-on rate.

24. MADCA Cost Estimate #1 Presuming providing transportation to 268 children for 263 days (one year) and having a budget which requires the following: Director$ 59,125 Drivers and Monitors$820,627 Clerical$ 16,151 Fringe Benefits$207,756 Contract Services$ 54,186 Cleaning$ 1,513 Equipment$ 60,135 (Baby Seats/Electronic System) Insurance$ 65,231 Recruitment$ 1,626 Training$ 15,988 Dues/Licensing$ 1,742 Gas and Maintenance$434,109 Program Supplies$ 5,086 Office Supplies$ 1,387 Misc. Supplies$ 762 Uniforms$ 2,192 TOTAL: $1,754,282 The cost per child per day would be $25. 23

25. MADCA Cost Estimate #2: No Monitors Presuming providing transportation to 268 children for 263 days (one year) and having a budget which requires the following: Director$ 59,125 Drivers (No Monitors)$492,376 Reduction based on monitors being paid $10/hour. Clerical$ 16,151 Fringe Benefits$124,654 Contract Services$ 54,186 Cleaning$ 1,513 Equipment$ 60,135 (Baby Seats/Electronic System) Insurance$ 65,231 Recruitment$ 1,626 Training$ 15,988 Dues/Licensing$ 1,742 Gas and Maintenance$434,109 Program Supplies$ 5,086 Office Supplies$ 1,387 Misc. Supplies$ 762 Uniforms$ 2,192 TOTAL: $1,336,263 The cost per child per day would be $18.96. 24