New York City’s publicly funded early childhood care and education system is sprawling. Nearly 56,000 of the city’s poorest children receive subsidized child care services through the primary child care subsidy agency, the Administration for Children’s Services (ACS). Free pre-kindergarten services reach another 48,000 low- and middle-income preschool-age children through the Department of Education (DOE). Thousands more receive free federal Head Start (a comprehensive child development program for 3- and 4-year-olds), some through ACS. Yet there are still 35,000 low-income working families on waiting lists, unable to take advantage of these early childhood opportunities that prepare kids for success in school and help parents work.

Traditionally, these critical programs have been operated separately, with funding, programming and planning done in silos, leading to contradictory eligibility requirements, overlaps in services and a waste of precious limited resources. But change is on the horizon.

For the first time in recent years, New York City is in a position to create an innovative early childhood care and education system that could be the best in the nation. At the end of January, Gov. Eliot Spitzer took a big step toward making pre-kindergarten a reality for thousands of children across the state when he unveiled his proposed 2007-2008 state budget, which included a large increase in funding for pre-kindergarten programming. In New York City, this means that approximately $60 million in new money will allow the city to take another step forward in making pre-k truly accessible to all preschool-age children.

The timing could not be better. As part of his bid for reelection in 2005, Mayor Bloomberg promised that he would expand New York City’s universal pre-kindergarten (UPK) program to serve all 3- and 4-year-olds in the city. His Commission on Economic Opportunity went a step further, recommending an expansion of care and early education services to meet the needs of families with young children. Implemented properly, the expansion of UPK can be a backbone upon which a comprehensive quality early childhood education and care system rests, meeting the needs of young children and their working parents.

How is the city taking advantage of this unique opportunity? Writer Suzanne Reisman, who served until last fall as manager of the Child Care Seed Fund at the Low Income Investment Fund, sat down Feb. 15 to discuss policy directions with some of the city’s major public and private players in the field. What follows is Reisman’s conversation with:
Jennifer Jones Austin, family services coordinator for the city of New York;
Kay Hendon, associate commissioner for child care operations, Administration for Children’s Services, division of child care and Head Start;
Nancy Kolben, executive director of Child Care, Inc.;
Claudia Siegman, manager of the New York Child Care Seed Fund of the Low Income Investment Fund;
Wendy Trull, acting director of program development, Administration for Children’s Services, division of child care and Head Start.

Creating a comprehensive early care and education system

JENNIFER JONES AUSTIN: About a month or so ago, we launched the Office of the Mayor’s Task Force on Early Childhood and Education. The task force is an internal group that is comprised of agency representatives from the Administration for Children’s Services (ACS), the Department of Education (DOE), the Department of Youth and Community Development (DYCD), and representatives from the Office of the Mayor. We are aimed at achieving a streamlined city early child care and education system. We began our efforts by taking a look at the campaign promises that the mayor spoke of, expanding services to primarily low-income children and families, and expanding universal pre-kindergarten (UPK).

To achieve greater coordination and integration between these systems, we began our conversations with: Are we all on the same page about what coordination and integration means? We need to have one vision for this city around early child care and education. We wanted to be able to have everybody at the table and agree that we’re all starting at the same place as they build that vision out, with very practical and concrete goals and objectives.

With the governor’s budget and the very real possibility of over $60 million coming to the City in this calendar year for UPK expansion, we’re now taking a dual-tracked approach. We’ve got to maximize those resources, but we’ve got to do so in a way that ensures that as we’re trying to spend that money, we don’t do it in a way that compromises this overall long-term strategy.

KAY HENDON: We’re also very excited about this new level of collaboration between agencies. It’s important to acknowledge that for several years, there has been collaboration between UPK and child care and Head Start. There are already some models there, but until now, we’ve kind of left it to the programs to figure out how to make this work rather than figuring out among the agencies how can we make this be a citywide approach to a system of early care and education. Some programs have done this, and they’ve done it very well.

Our whole UPK initiative here in the city of New York is somewhat unique across the country – or at least a leader across the country – in that so much of UPK programming has been placed in the community-based organizations [private and nonprofit licensed childcare and preschool facilities].

We have a wonderful foundation on which we can build, and we’ve learned a lot about what the missing pieces are. Now with the leadership from the mayor’s office and with $60 million, we are really ready to figure out a systemic approach to this. We can figure out what are the barriers to making this work for a broader community, and how can we take the burden off the child care programs that have been struggling with all the different rules and regulations, and all the needs from Head Start and child care and education.

So, I think we really are at a big turning point for the city. The UPK money is a way not only to build better services and more quality services for 4-year-old children, but it is a way to build a bigger and better early care and education system for the whole city.

CLAUDIA SIEGMAN:I watched UPK being implemented mostly on a county-by-county basis in California, and I’ve been tracking it around the country. There’s usually a stated goal of doing a mixed-delivery system, which means taking advantage of the infrastructure that’s already there and delivering it as ideas coming through the education department for operations and capital implementation that goes to schools in the community. Now, there are some states where the community has never really gotten involved, but by and large, there’s this effort.

We need to seize the moment to do exactly what Jennifer and Kay said, which is to maximize access to all these available funds as they come available, but at the same time, always be keeping an eye on implications for the short-, mid- and long-term structures that really distributes the money the way that benefits most communities.

NANCY KOLBEN: Over time, we learned how disparate these varied systems are because of funding and regulations, what works, and what the challenges are. Things evolved both at the citywide level and at the program level based on people being invested as individuals and wanting to work together. In the early days, that actually served us quite well, because we didn’t kind of bind ourselves to particular structures.

But we have really reached a point where this is way too big and way too complicated to rely only on having a wonderful person in the Mayor’s Office, or a wonderful person at ACS or DOE who kind of gets all of these nuances. It’s not just universal pre-k expanded. The State Education Department (SED) is now also setting educational standards according to new guidance around a new pre-k program, and child care fits into this.

JENNIFER JONES AUSTIN: That’s again why I say we’ve got to do this coordination around this new funding being applied towards UPK in this next fiscal year, but we’ve got to make sure that we put the legs on it to make sure that it’s embedded in the infrastructure and working for the agencies. As we do this, we have to focus on the state as well. Not only the SED piece, but also the Office of Children and Family Services (OCFS), which oversees state child care funding. How do we work to enhance that relationship between SED and OCFS to make sure that OCFS sees the connection and is helping inform and shape, to influence UPK restrictions and performance standards. They need to be part of that dialogue.

NANCY KOLBEN: There is a big push at the state level among a very broad group of advocates to create an early learning commission that would really begin to address what are the governance issues at the state level, establish the priorities for this new administration, look at these potential linkages, and do it with the birth-to-5 agenda in mind. Right now we have these segmented pieces. We get this influx of money for 4-year-olds. And money comes part day, but what you really need is full-day, year-round.

It’s really interesting that at every level, government’s talking about this and the advocacy community has pulled itself together with an early care and education agenda. There’s not a pre-k coalition versus child care coalition. That is a very significant step.

Things are lining up in multiple ways, and now we really have to figure how to move quickly. We have to spend money. You have to have children in seats.

JENNIFER JONES AUSTIN: On the City level, one of the things that was confirmed for us recently was the barriers to work faced by parents of young children. We saw that in many instances, people didn’t have child care, or they didn’t have full-day child care. Often, they were pasting child care together – patching this here, patching that there – that kind of thing. That’s why we said, okay, we’ve got to emphasize child care. Through the Commission on Economic Opportunity – which is now the Center for Economic Opportunity – we provided resources to support this coordination effort. There is funding for coordination dedicated to ACS and DOE staff to work across the agencies and to work with the office of the mayor. We will be taskmasters on the various programs and activities and initiatives that we’ve put out there to be moved.

CLAUDIA SIEGMAN: Oversight from the mayor’s office is exactly what we need! Agencies operate in silos. To have this sort of mayoral mandate and the structural support to really start working together while they’re also fulfilling their agency missions is critical. That the Commission’s report talks about comprehensive care for working families, for poor working families, not just at the 3- and 4-year-old level, but for the younger kids is also essential.

NANCY KOLBEN: Right. We have these two agendas that we are clearly all trying to work on at the same time, and that is to expand UPK and services for children under 3. We know that care for infants and toddlers is a huge, huge shortage. It’s an enormous unmet need. As a resource and referral agency, we get 60 to 70 percent of our calls from parents who have babies and toddlers.

To fully utilize in the best way possible the pre-k money, we need a plan that embraces both of those goals from the city’s point of view. We need that plan in place really quickly. That’s an across-the-board issue.

KAY HENDON: This is an opportunity to “age down,” as we call it at ACS. We’re doing a lot of work on that already, converting slots where less preschool care is needed because of school-based programs or changing populations to bring in infant and toddlers’ slots. We’re very excited that we’ve had some success with that. It’s not easy to do for the program or even for ACS to do, but we intend to move forward on that further to build the system for the infants through the school-age children.

JENNIFER JONES AUSTIN: In order to do that, to create that one system where everybody recognizes their role, everybody’s got to agree upon what that system looks like. It’s taking form because agencies see how they’re bumping up against one another right now.

As more and more resources come in for UPK, at some point you start to max out in terms of the number of kids and families that would seek UPK services. And then you start to max out on the facilities. And one day you may see a community-based organization where they have child care. The family comes in the door, and the child is an infant. And if they want to stay there, they can stay there until it’s time to go off to kindergarten.

KAY HENDON: We’re starting to do some of this already, but it would be much better if we had this across-the-board plan for how they can serve all ages in that one site.

NANCY KOLBEN: If we’re really going to a one-city strategy, we need to look more broadly at that community. On the one hand, the city has lots of rules and regulations for some programs. Also we have private programs that are really publicly funded systems. We have preschool special education programs. If we’re really looking at this whole mix, the issues are very different for the different components, but the goals have to be the same for children.

In a way, pre-k has the broadest reach into the diverse delivery system out of any of the programs out there, it opens a door for some of the issues that we want to work towards. For example, we find many more immigrant families enrolling in pre-k.

Also, if you just look right now at who even has access to child care subsidy in terms of their income, we have far too little for the very poorest families. But they, at least, have some access. UPK is helping the average low-middle-income working families who have no other assistance, but can’t afford to pay for care.

And the connection to education is really clear … A number of years ago in the Bronx, there were schools built, and they built an early childhood program as part of a public school at one site. The early childhood program is run by a community-based organization. They say it’s their best program for parents – it’s all in one location, it’s a new school building, it was designed for young children.

If we’re really aiming for a one-city strategy, how do we do more of this? That’s such an important piece, and it’s so hard because so much planning is driven from what agencies want and need and what programs want and need. At some point, parents have to fit in to those options. We ought to be driving this system for the range of things that really support families. An early childhood program in the community is a broad-based resource to families. Pre-k is the anchor because it is permanent, and it needs to guide services for all children. It helps programs to diversify their income base and provide a quality service where you can pay teachers appropriately. The reality is, just like the silos that developed within the big agency, those become separate programs because of the funding, as opposed to each one really supporting the other in a very fluid way. There are lots of opportunities to think about this.

The cost of quality care

JENNIFER JONES AUSTIN: We see the value of UPK as an anchor, and we are very glad and feel good about the infusion of the $60-plus million for UPK, but it only funds part-day [2.5 hours] right now. We wish that it was for the full day [five hours]. A lot of our families need full day. When you have to keep on doing this kind of blended model to create the full day, then it doesn’t allow us to do all that we want to do. It doesn’t allow us to do all we want to do at the child care level. It doesn’t allow us to age down, to increase the number of children who are receiving services, ages 0 to 3.

We’re looking at what are the options right now for this $63 million to draw as much of it down to expand UPK services and understand what it does to the child care dollars. In many instances we’re talking about the same pool of kids. I think that it’s incumbent upon us to better understand how many centers are already doing blended funding successfully. Not every program needs to look exactly the same, but when you build in performance and quality, we need some standards, and we need some understanding and agreement on the part of the providers that it’s got to have certain components to it. And that cost allocation and all those things are crucial.

Also, our understanding is that this year, the slot rate for UPK reimbursement is going to decrease. So we’ve gotten more money overall, but the costs associated with running these programs has certainly not decreased. As programs look to do more of the blending, it may take more child care resources to round out that half-day program.

SUZANNE REISMAN: This is the type of barrier that urgently needs to be examined. Are we robbing Peter to pay Paul when we don’t have a measure for the cost of quality care, and when one program’s shortfalls require another to shore them up? For example, for years, community programs have not allocated a portion of the rental cost to DOE. ACS always pays the full share of rent. It’s a free ride in the sense that space for their programs is thus very inexpensive for DOE. You are not actually expanding the system at all if, during conversations about cost allocation, one program declares that if expenses are allocated, they will provide as many slots. It’s got to be a bigger plan.

CLAUDIA SIEGMAN: Some of the pre-k money has to go not to expand more slots, but to actually make the reimbursement more equitable, in order for the system to be sustainable.

NANCY KOLBEN: This is a perfect example of where the understanding across systems is not happening. … The funding for UPK is supposed to be based on a foundation aid formula like the change in the funding for schools for K-6. But the money comes to New York City as a grants program. Since it was a grants program, the assumption is that that level of money is what it costs. Yet the state aid formula is not based on 100 percent of the cost. We need right away a way to say, “This is what it costs to provide a quality service.” Then agencies must understand how the others’ funding streams work and develop cost allocation rules accordingly.

KAY HENDON: We have to look at the cost of care and note the difference in the way that cost is calculated for an early childhood program versus the way that all these schools look at the cost of a single classroom, the latter being much lower because all of the surrounding administrative and support services and facilities are costs included.

But once again, we sort of come back to the need for a plan for the city that looks at the cost of care for children ages 0 to school-age. And that we get all of those costs calculated into what we need to invest in these programs and into the planning of the programs, so we don’t just cut off this slice of what it costs to serve a 4-year-old or 5-year-old in a public school building.

This is a kind of mock model that I often talk about … Let’s say that they’re trying to provide Head Start and child care, and when a child loses eligibility for child care because their parent goes over income, or a public assistant parent fails to engage, that child can’t come to the child care program anymore, even though they may still be eligible for Head Start. The same thing happens with UPK.

So, programs in trying to plan this, have multiple challenges in how to keep a program together. Those challenges are largely tied to the restrictions of funding sources. I always think that our task is to make something as close as we can to a dream machine, a computer where when you put in all the information – through Access NYC, perhaps? – about a child and family and the dream computer calculates everyday which funding source works for this child today. When a child is temporarily ineligible for anything, providers can plan how to cover the next few days until the child becomes eligible for something else. The whole business of blending funding to serve children whose eligibility statuses are changing, and with multiple eligibilities for service, is an accounting task that a day care center director shouldn’t have to figure out and pay a bookkeeper to do. It’s a task that we should be able to figure out for them and make available to them.

NANCY KOLBEN:: Also, the child care contract piece is getting smaller and the voucher piece is getting much bigger. We need to really think about some different models.

KAY HENDON: Our new direction toward a more combined contract-voucher-private pay model and away from the fully funded contract program allows for more flexibility, which then makes adapting to changing communities a lot easier. While there’s never any guarantee when you’re talking about vouchers, that’s the mix you want.

WENDY TRULL: We also want to see some private pay, so we have a much more diverse base of revenue and families being served. Philosophically, that is something that we want to approach. There’s a market for private pay, and agencies really seem interested in that.

We’re working at ACS to really understand what those models are and to understand exactly how programs are using funding, and to what the extent they’re able to provide seamless service. There’s so much we learn just from our providers who’ve been able to deal with this successfully despite us. We have a lot of work to figure out: how do we make it easier, and how can we facilitate this. At the same time, there are so many providers who are doing this so well.

NANCY KOLBEN: Have you seen that report that was put out by the Early Learning Council through United Way? The Council did profiles of integrated service providers. I have the feeling it will be very useful because it took this from the point of view of an integrated service and we just talked about what kind of money went into that. It went beyond just the child care, Head Start, pre-k. In some cases it was dental money, health money and nutrition money. It created the model of comprehensive services. It identified the agencies which, from what I know, are the leading agencies in putting these pieces together.

CLAUDIA SIEGMAN: It’s a fundamental business tenet. We need to know how to do cost allocations, how to make all the budget streams dovetail seamlessly for the administrator. Early childhood operators are wonderful experts in early health and development, but not necessarily in business.

So, you need not only to figure out how to blend these different revenue streams and cost allocate, but then how to convey that information in a way that supports the operators so they can move really into the 21st century with these business skills. For example, I’m acutely sensitive to the tremendous costs of facilities in New York City. It’s a real estate proposition, and that is expensive. DOE is starting to absorb the cost of creating UPK in its elementary school. It has not yet thought through the cost allocation and the capital allocation for the programs that are being implemented in the communities. At the same time, ACS is also trying to both empower the operators to take this responsibility on.

Ultimately, however, it will make child care businesses more stable.

Public/private partnerships for early childhood facilities

CLAUDIA SIEGMAN: We need to map what the issues are for New York City. It’s annoyingly complicated, but it is, in fact, doable. These solutions happened in pieces elsewhere, but first you need the map.

There are people in the city who could provide a catalogue of solutions for each problem, and we could see what fits best and also what maximizes state resources. There’s bond financing. There’s the State Dormitory Authority. There’s financing that New York City has taken advantage of in the past. We just have to see what the menu of options is, but first we have to map what the challenges are.

NANCY KOLBEN: One of the things that struck me with the last influx of UPK money, which was just last year, was what happened when we talked to programs in the community. We asked programs, “Could you expand if the money was available? Do you know of space in the community? What would you need?”

I was struck with how much more conversation was going on than I had imagined. A community facility that was being built here. A housing development that was being built there. There’s a lot of stuff going on in communities and neighborhoods. We don’t know right now what’s stopping those childhood facilities projects dead in their tracks.

In the short run, we need to figure out what it would take to maximize what is out there. I’m not saying all those opportunities are doable, but I think some of them may well be. Even some of the stuff that you’re trying to do into the future, if there was a different understanding about the city’s commitment, it’s going to drive a really incredible potential investment of resources. We need to find a way to let people know the changes that are happening in early care and education.

CLAUDIA SIEGMAN:This is an example. Last year, my organization did a series of two-day trainings for affordable housing developers on how to incorporate child care centers in housing developments. We helped them understand the world of child care: all the regulatory stuff; what the funding streams were; what the culture of child care is; how many kids you might expect to come to your development versus the community; the age and income thresholds might be for different types of subsidies; what design requirements are, both in terms of quality and in terms of licensing; how to put the financing together. There are some housing financing that you can you use, there’s a lot that you can’t. It was a big time commitment, over 25 people came. And that was with really minimal advertising. The interest was out there.

What you’re trying to do is get enough capital subsidy into the project so that the ongoing cost of paying for that project is low enough that everybody can take a little risk here.

KAY HENDON: We need to help developers and programs to serve subsidized children as well as non-subsidized. This has been done in other places, too. We don’t have much of that kind of mixed model in New York City, but given what’s happening to our city, the rapid gentrification, we have to find a way.

CLAUDIA SIEGMAN: Facilities are infrastructure investment. Let’s get back to the housing thing for a moment here. When you build your neighborhoods, you’re increasing your multi-family populations. Schools get planned; early childhood doesn’t. We need to see this infrastructure planned upfront.

Collectively we have to look at early childhood in the schools and in the community as infrastructure that will endure. The same way the city has its amazing 10-year housing plan, we actually need an early childhood plan. There’s a good document that ACS created , “Building Blocks,” that starts to explore this concept.

Acknowledging that early childhood facilities are infrastructure gives you the ability then to start tapping capital resources from the state that may be bond authority. But, again, the planning is so key, because it’s a substantial investment. It’s real estate. You need to know where you’re putting your money.

SUZANNE REISMAN: When you think of it as infrastructure, it doesn’t really matter what income level kids are going to be over time and who’s coming in. It’s like schools – you just know there’s a school for children, and it was planned to serve whoever was living in that neighborhood, and you built the buildings for that. That’s how a child care center should be. You plan the building to serve kids and families, and the population shifts change which programs are offered in it, and funding changes as populations change. You can’t necessarily tie the idea of building a building to how it’s going to be funded years from now.

JENNIFER JONES AUSTIN: You really have to be able to understand populations and communities. I would venture to say that income and resources bring about choice. Parents may travel a little farther than you otherwise would for the quality program that you desire.

NANCY KOLBEN:The gentrification of neighborhoods obviously carries with it the loss of the ability of programs that were operating in those communities to remain. Programs are closing because they can afford the facilities cost. We want to have early childhood capacity in the community. If the neighborhood changes, those people have children, too.

CLAUDIA SIEGMAN: You want public investment to be strategic. The reason I like the model of working with community developers is that you then get long-term tenure and affordability guarantee. It means that the providers had input into the design, and the operating cost implications of a quality design are tremendous.

If your teacher has to walk the kid down the hall to the bathroom, we figured out for a classroom of 15 kids with two average trips a day, that teacher loses two and a half hours of time just walking the kids to the bathroom. Whereas if you design up to quality standards and have bathrooms in the classroom with good visibility, you are saving that teacher time and all the disruptions.

You need good-sized classrooms that are preferably scaled for the age group to be served, which also has tremendous bottom line operating implications. If you have standard school-quality green design, it makes a difference. A huge cause of asthma attacks and respiratory illness in kids is off-gassing from the rugs and all of the solvents and stuff. Very simple principles that most people don’t know about yet. That’s what advocates are trying to convey, and the community developers are the ones who absorb this information for their affordable housing development. They understand the value added for their clients and their neighborhoods of quality affordable child care.

Affordable housing developers also have the capacity to build things. For most child care operators, real estate development is not something they really need in their skill set; they need to know how to manage their occupancy rates, not to build a project. They need input on that project, and they need someone facilitating the input, but not sole responsibility.

It’s not the only approach, just one approach that’s quite viable. All this stuff has been tried elsewhere, so we’ve learned from other people’s experiments. Retrofitting space for child care is not cost effective. Planning it from the beginning is.

WENDY TRULL: We’re trying to pull together exactly how can we use our capital money to leverage it. We have some pretty serious major challenges in figuring how can we do private-public partnerships to develop facilities and how can we use our capital money. I know you’re able to do a lot in San Francisco, and it sounds like maybe the capital restrictions were a little looser.

The good news is that we’ve been doing a lot of work on the mapping piece to really understand, where are the population shifts? Where are eligible children? Working ver