goodbye paper and pencil

Improving care for the youngest by targeting the back office

Last fall, Roman Hollowell contemplated closing the small child care center he runs out of the first floor of his childhood home in Denver’s Whittier neighborhood. Enrollment at “Kids 4 Real, Inc.” was dwindling and he didn’t know if he could keep the lights on for much longer.

It was a tough decision for Hollowell. His mother Oneta had opened the center in 1993 and run it for nearly two decades until she died of a rare form of cancer in 2012. Although he’d never envisioned himself in the child care field, he was reluctant to abandon the business his mother began building when he was a sports-loving high school kid.

“It was important for me to continue her legacy,” said Hollowell on recent Monday morning at the center. “Something just kind of told me to hang in there and stay the course.”

What helped turn his intuition into action was a program called Early Learning Ventures Shared Services model, or ELV. The non-profit, launched in 2009 by the David and Laura Merage Foundation, aims to help Colorado child care providers save time and money by giving them the tools to operate more efficiently. In exchange for access to ELV’s web-based platform, providers pay a monthly fee ranging from $50 to $250.

Kids4Real Center

For many of the 556 licensed child care providers participating across that state, the program means discounts on supplies and services, online training for staff, computerized child-tracking systems, help with licensing documentation, and ready-made templates for things like parent handbooks. What helped Hollowell last fall however, was one of ELV’s marketing tools, which gave him access to the addresses of families with young children living near the center.

“That was amazing,” he said, perched on a blue-kid sized chair near shelves full of puzzles and games. “I was able to get my hands on 1,000 plus addresses.”

Hollowell subsequently sent out 400 letters advertising “Kids 4 Real” and enrollment picked up enough to keep the doors open.

A quality improvement strategy

Shared services is a relatively new approach in the early childhood arena, but one that is gaining momentum both in Colorado and nationally. Proponents believe the model will ultimately help providers—often small mom and pop shops—shed inefficient back-office practices so they can save time and money.

“The idea is not just to make director’s lives easier,” said Jonathan Godes, executive director of the Early Childhood Network in Glenwood Springs. “The idea is they take those time saving and money savings and reinvest them into the program.”

Shared services fits with the nationwide push to improve the quality of early childhood care and education, especially for low-income children. Currently, there are shared services efforts in about a third of states, though details—from the sponsoring organization to fee structures–vary widely.

“There are folks all across the country that are experimenting with shared services,” said Louise Stoney, co-founder of the Alliance for Early Childhood Finance and the Opportunities Exchange, a consulting group dedicated to advancing shared services alliances.

“Shared services is still a very new and unique movement in general,” she said.

cubbies at child care center

In Colorado, ELV leaders have big plans for the program, which cost around $7 million to build and administer. In addition to eventually enrolling 2,050 Colorado centers, they hope to become financially self-sustaining by the time they reach 1,950. They also hope to expand the ELV model to other states.

Currently under ELV’s model there are six regional alliances in Colorado. Each alliance is run by a local non-profit, which recruits providers to participate and helps them learn the platform. ELV’s Englewood headquarters provide financial and technical assistance to each alliance.

Providers interested in participating in ELV can sign up for one of three levels of service. So far, there are 485 providers in Tier 1, which offers basics such as purchasing discounts and online training. Tier 2, which adds a computerized child-management system and other services, has 57 providers and Tier 3, which adds billing and financial services, has 15.

Stoney said ELV’s Tier 3 offerings are one of the program’s distinctive elements.

“There’s really not anyone else in the country that’s doing the same thing,” she said. “It’ll be very interesting to see what kind of uptake they get.”

Their passion is children not accounting

While many other industries, including K-12 education, have robust administrative systems in place, early childhood is an exception. A look at the numbers tells part of the story.

In contrast to Colorado’s 178 school districts, there are more than 4,000 licensed child care providers that provide regular care for the 0-5 set. To be sure, some are large programs run by school districts, national chains or sophisticated non-profits that may have specialized finance and operations staff. There are also some that use “off-the-shelf” products that provide some of the same services as the ELV platform. Still, there are huge numbers of small, independent providers that rely on shoestring budgets and paper-and-pencil methods.

Children at Kids 4 Real clown around before rest time.
Children at Kids 4 Real clown around before rest time.

Most get into the field because they love working with children, but the business side of the job can be a “real shock,” said Emily Bustos, executive director of Denver Early Childhood Council and board president of the Early Childhood Councils Leadership Alliance.

“That becomes the most challenging and time-intensive part of running a child care business,” she said.

In many cases, administrators rise to their positions through the teaching ranks and so while they may understand child development, they lack expertise in accounting, payroll, human resources and the regulatory environment.

“They just get thrown in and it’s kind of sink or swim,” said Godes, whose organization runs one of ELV’s six alliances.

There are plenty of anecdotes about rampant inefficiencies in the small preschools, child care centers and family child care homes that dot the early childhood landscape. Some providers go through the tedious process of hand tallying numbers for food program reimbursements or piecing together attendance records from paper sign-in sheets that some parents inevitably forget to fill out. Even drafting a parent letter when there’s a lice outbreak or a biting incident can turn into a time-consuming task.

Judy Williams, ELV’s program director, told of one rural child care center where the director and a staff member used to spend an entire day every month traveling to Denver to shop at Costco for supplies. It may have been cheaper than shopping local stores, but it cost far more than ordering supplies through ELV’s platform and getting next-day shipping.

Ultimately, many of these long-held practices either drain the budget or suck away the director’s time, keeping her busy with paperwork instead of working with teachers and kids in the classroom. That’s what happened to Kelly Esch when she became the director of the Little Red Schoolhouse in Snowmass Village last year.

She was working 50 hours a week, most of that shut away in her office. Since she began taking greater advantage of ELV’s tools, she’s cut her office work down to 30-35 hours, allowing her to spend more time assisting teachers, giving them breaks and helping them with lessons and activities.

“That way, they’re not so stressed out,” she said. “When you’re in the classroom 10 hours a day it’s hard to come up with fresh ideas,” she said.

Kathryn Hammerbeck, executive director of the Early Childhood Education Association of Colorado, believes ELV’s model may also help address her members’ most pressing problem: attracting and retaining high-quality employees.

“If you can control some of your overhead, some of your operational cost, then it frees it a little money to put into wages, which will help you attract and retain staff.”

At what price?

While many providers have gotten scholarships or partial scholarships to participate in ELV, especially for their first year, the prospect of eventually paying a monthly fee can be daunting.

“Early childhood education is a very, very price sensitive program,” said Stoney. “This is not a money-making field. It’s very, very difficult to charge fees for things.”

Currently, about 22 percent of participating providers receive full or partial scholarships to participate. In addition, the state plans to chip in about $500,000 for Tier 2 ELV scholarships over the next 14 months using federal Early Learning Challenge Grant money. The one-year scholarships will target 100 “high needs” providers that serve low-income children and English language learners, and generally do not have a quality rating from Qualistar.

Colin Tackett, business analyst at the Colorado Department of Human Services, said the hope is that the initial subsidies will allow providers to see the benefits of ELV and subsequently continue participating on their own dime.

According to a recent third-party return-on-investment study, there are concrete financial benefits to participating inELV, particularly for center-based programs. The results show that centers would save $84,000 to $114,000 over five years depending on which ELV tier they were in. The savings were smaller for home-based providers, with a five-year return of $270-$1,270.

Among current participants, there’s generally a feeling that the program generates significant financial savings. Hollowell, who has a partial scholarship for Tier 2 of ELV, said he pays $25 a month and realizes savings of about $100-150 a month, mostly due to discounts on office supplies and other equipment.

Esch, who pays $75 a month and has a scholarship to pay the other $100 for Tier 2, estimated similar savings. When other directors ask her if it’s worth it, her go-to example is the paper towel discount.

“I don’t know if you’ve ever bought industrial paper towels, but they’re extremely expensive and kids use them like crazy,” she said.

Sticking points

While Early Learning Ventures certainly has many enthusiastic advocates, it can be a tough sell in some quarters of the early childhood world. Some providers are wary of one of its central themes—using technology to streamline and modernize operations.

“This is a big leap for them,” said Williams, a former child care provider herself.

Aside from the inevitable anxiety or confusion about web-based tools, there’s also the challenge of getting time-crunched administrators grappling with major state-level changes—including the launch of a new mandatory quality rating system later this year—to explore a voluntary program that costs money up front.

While Bustos believes there is a market and demand for ELV, she said the benefits must be clearly spelled out for providers.

“There’s way more hand-holding than you realize…to get someone to that next level of sufficiency.”

That point is not lost on Hammerbeck, who in January signed a contract with ELV to offer Tier 1 services as a benefit to members. Although it’s free for the 400 preschools and child care centers that belong to the association, she said only about 10 providers representing 25 sites have signed up.

“It’s a question of educating them…they don’t have the time to sit and read the information we sent them about it.”

Still, she said, ““It would help them so much in running their program.”

Doing mom proud

Just inside the front entrance of Kids 4 Real is a large framed photograph of a smiling Oneta Hollowell. Underneath it is a bulletin board featuring one of Roman Hollowell’s proudest accomplishments. It is a plastic-encased certificate showing the center’s four-star quality rating by Qualistar.

DSCN0890

That rating, the highest currently awarded, replaced the center’s previous three-star rating a couple months ago. Hollowell said meticulous preparation, including a walk-through by an ELV program manager, helped him get the points he needed.

“I was able to be hands on,” he said. “Our preparation in 2014 was perfect.”

It’s impossible to know whether Hollowell’s use of ELV’s purchasing discounts, its computerized sign-in/sign-out system, its address lists or anything else was critical to the four-star rating. Perhaps it all factored in to the equation.

What’s clear is that  Kids 4 Real realized exactly the type of improvement ELV leaders hope to see on a broader scale in the years to come.

School Finance

Teacher raises would survive $211 million cut from Indianapolis Public Schools funding request

PHOTO: Scott Elliott

Indianapolis’ largest school district cut about $211 million Tuesday from its request for extra funding, in a bid to win public support for the proposal.

That lower price tag comes with tradeoffs, district officials said. Even if voters approve the new plan, the district would dip into its cash reserves, put off building maintenance, and ditch expanded transportation plans, such as additional busing for students who move partway through the school year.

The new request also reduces how much the district would raise to pay for services for students with disabilities, though it was initially unclear by how much and how that could affect students.

But district officials said they still expected to be able to give raises to teachers if the referendums pass.

The scaled-back request would raise about $725 million over eight years, significantly less than the initial proposal of nearly $1 billion.

The board voted 6-0 in favor of reducing the amount of money the district is seeking, backing off the number members approved two months ago.

Board member Kelly Bentley said many school districts around the state have asked taxpayers for more money.

“We all own property in IPS. None of us want to see our taxes go up,” she said. But, she added, “I am confident that it’s money that’s going to be well spent, and it’s money that is necessary.”

Instead of pulling back spending on teachers and school staff, the district is making the new plan work by adjusting revenue expectations, said Chief Financial Manager Weston Young. The proposal is built on the assumption that state revenue will increase 1 percent each year, and the district will no longer hold as much money in reserves, he said.

“We are still committed to our students through our compensation for teachers and the wraparound services that serve those kids,” Young said.

Reducing the request could help build enthusiasm for the tax increase, which has not gotten much vocal community support. Instead, the referendums have been met with some concern over the size of the ask. But even though they have pared down their plan, district leaders will still need to persuade voters in May to raise their own taxes.

Superintendent Lewis Ferebee said the new plan is a balancing act between what taxpayers can bear and the cost of providing the level of service that families need. Ultimately, he said, the tax increase would pay dividends by helping the district prepare students for college and careers.

“This is one of those situations where you pay now or you pay later,” he said.

The move cut the potential tax increase for homeowners in IPS to $0.58 per $100 of assessed value, down from the initial proposal of $0.73. For taxpayers with houses at the district’s median value — $123,500 — the new plan would increase property taxes by $17.70 per month for operating expenses and $5.54 per month for building improvements, according to the district.

The referendum the board reduced would pay for operating expenses, such as teacher salaries, and under the new request, it would raise about $66 million per year for eight years. That’s down from the initial request of about $92 million per year.

Under the new plan, about $49 million of the money raised each year would go to staff pay, while the remaining $17 million would help pay for services and supplies, regular maintenance, and transportation.

A second measure, which was not changed, would pay for about $200 million in improvements to buildings, primarily safety updates such as new lighting and door security. Both measures are expected to go before voters in May.

hope on the horizon

With promise of new federal money, more low-income Colorado families could get help with child care

PHOTO: Meghan Mangrum

Thousands of additional Colorado families might be able to pay for child care if a federal spending bill due in March fulfills the pledge of a recently approved budget deal.

That’s because the deal, passed by Congress and signed by President Trump earlier this month, promised new money for a subsidy program that helps low-income parents pay for child care. In Colorado, the program is oversubscribed with more than 1,300 children on waitlists statewide.

While the spending bill won’t be finalized until March 23, advocates in Colorado say they think there’s a good chance the new child care money — $2.9 billion for the whole country over two years — will survive the negotiation process.

“I think that we will see this go through,” said Bill Jaeger, vice president of early childhood initiatives for the Colorado Children’s Campaign.

“I don’t think that child care and the block grant will be the major point of contention,” he said, referring to the federal grant that helps fund the subsidies.

(Trump’s own budget proposal, released three days after he signed the budget deal, doesn’t include increased child care block grant funding, but some observers say the budget deal holds more sway.)

If the two-year spending bill passes with the new child care funding included, Colorado could gain around $35 million, according to an estimate from the national anti-poverty group CLASP. That’s on top of the $150 million Colorado would get over the two-year period if the program’s funding simply stayed flat.

Practically speaking, the additional $35 million could mean child care subsidies for an additional 2,700 Colorado children over two years, according to a separate CLASP analysis.

State officials declined to comment on the federal budget proposal, saying in an email, “It is possible that, if approved, we could see an increase in services, but right now it’s all theoretical.”

Low-income parents who are working, looking for work, or in school make up the largest chunk of people eligible for child care subsidies, which are offered through the Colorado Child Care Assistance Program and administered by the state’s counties. About 31,000 children were served through the program last year.

In addition to child care subsidies, the federal block grant helps pay for a number of other programs, including child care licensing and the state’s child care rating system, Colorado Shines.

El Paso County officials say the new federal money could help them eliminate the waitlist for subsidies they had to start for the first time in January. There are 196 children on the list, and it’s growing steadily.

Julie Krow, executive director of the county’s human service department, said some parents may opt for unlicensed child care if they can’t get a subsidy, sending their children to stay with relatives or neighbors during the workday.

The quality of such care varies widely and is mostly unregulated by the state.

“We don’t want to see kids left in unsafe situations because of this,” Krow said, referring to the shortage of subsidies.

When early childhood programs are underfunded, she said, child abuse and neglect cases, which are also in her department’s purview, can rise.

The new federal child care dollars would help reduce or eliminate subsidy waitlists across Colorado, but wouldn’t completely satisfy the need. That’s because the number of children on waitlists represents only a fraction of those eligible for subsidies but not served.

For now, Krow is hopeful the new money will be approved and sent quickly to states and then to counties.

“It’s a program I really believe in,” she said. “As soon as those federal dollars come out, I’m hoping the state has a plan and they are out the door.”