SR-602-000 (2)
RP:DTA:VR
October 14, 1986
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OCT 1 4 1986
Santa Monica, California J
TO:
Mayor and city council
FROM:
City staff
SUBJECT:
Recommendation to Establish Child Care Benefit
Program for city Employees
INTRODUCTION
As more women have entered the work force as full-time employees
and have continued to work during their childrens' early years,
the issue of employer supported child care benefits has emerged
as a response to changing family conditions.
Both private and
public employers have begun to design programs to address child
care needs in order to decrease turnover, increase productivity,
and enhance recruitment.
Begun as an outgrowth of affirmative
action programs aimed at bringing more women into all areas of
the work force, child care is now beginning to be viewed as an
important employee benefit by both men and women.
This staff report provides Council with information related to
the child care needs of City employees and recommends that
Council authorize the establishment of a comprehensive child care
benefit program for City employees to be created in three phases.
BACKGROUND
Interest in assessing the child care needs of City employees was
expressed in 1983 by the City's commission on the Status of
Women. An informal in-house survey was conducted in that year to
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OCT 1 4. 1986
poll those employees who had children about child care issues.
However the survey gathered only preliminary information and was
not utilized for developing policy in this area.
In March, 1986 the City Manager selected a child care consultant
firm, through a competitive process, to conduct a thorough survey
of City employees regarding child care needs as well as the
impact of those needs on productivity of the City work force.
After a careful analysis of the needs expressed by City
employees, a series of alternative child care benefits were
designed by the consultant team of Burud and Associates. From
these alternatives, a comprehensive plan was developed to address
the specific needs revealed by the employee survey. The plan
presented in this report for Council consideration is extremely
innovative in that it addresses several of the most critical
child care issues -- affordability of care, availability of care,
and care for children in the most difficult situations i.e. when
normal child care arrangements break down and when children are
mildly ill and unable to attend their regularly-scheduled
programs.
EMPLOYEE CHILD CARE NEEDS SURVEY OVERVIEW
Once the project was described to representatives of employee
bargaining units, Burud and Associates conducted a confidential
survey among all city employees to learn about the child care
difficulties which employees experience and the possible need for
child care assistance. A total of 1647 questionnaires were
distributed and 851 returned, a response rate of 52%. Of those
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who returned questionnaires, 249 (29%) have children 12 years or
younger and 602 (71%) have no children 12 or younger. 79
employees who do not presently have young children plan to have a
child within five years.
64% of parents surveyed use some form of childcare and 61% report
having a severe problem with at least one aspect of child care,
e.g. cost, hours or supply of care. The child care problems most
often cited were:
l. Alternate care when present care is not available
2. Finding care for ill children
3. Cost of child care
4. Child care hours and schedule flexibility
There were more parents of infants and school age children with
severe child care problems than parents of pre-schoolers.
IMPACT OF EMPLOYEE CHILD CARE NEEDS ON THE CITY
55% of parents reported that child care presented a severe
problem in at least one of the following areas:
1. Working overtime
2. Handling stress of work and family
3. Work-related training
4. Accepting promotions
5. Concentrating, being productive on the job
6. Returning after maternity leave.
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Turnover:
One in five parents have seriously considered leaving the City
due to child care difficulties.
Absenteeism:
$159,000 was paid last year to employees absent due to child care
related problems in the past 12 months. l46 parents missed some
work time in the past year due to ill children. 102 parents
missed work time in the past year because of a breakdown in child
care arrangements.
Recruitment:
259 employees reported knowing someone who would apply to work
for the City if child care assistance were available.
Reported by Supervisors:
The following percentages of supervisors reported that child care
had an impact on the employees they supervised in the following
areas:
70%
Arriving late and leaving early
Absenteeism
Scheduling
On-the-job performance
68%
57%
52%
Reported by Nonparent Employees:
59% of all nonparent employees reported that an improvement in
their own work environment would occur if the child care needs of
their co-workers were addressed.
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Employee Interest in Child Care Assistance:
Over half of responding parents were interested in a child care
reimbursement, child care center at or near work, summer program,
or access to community programs. 75-80% of parents expressing an
interest in these programs report a severe problem with child
care.
In summary, the child care needs survey indicated that child care
difficulties are widespread among employee parents, both male and
female. These difficulties impact City operations, interfere
with employee work performance, and affect the work environment
of nonparents. In addition, the availability of a child care
benefit plan is seen by employees as a positive factor in
employee recruitment.
PROPOSED EMPLOYEE CHILD CARE BENEFIT PROGRAM
In addition to conducting and analyzing the needs survey, Burud
and Associates was asked to present alternative approaches to the
provision of child care benefits for consideration by the City
based on the need expressed in the employee survey. These
alternative approaches were reviewed by city staff and the
following three-phased program was tailored to meet the specific
needs expressed by Santa Monica city employees:
Phase I (to be implemented within 3 months)
This phase is designed to address the issue of affordability of
care by providing tax relief to higher income employees and a
subsidy for lower-income employees. In addition the lack of
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caregivers for those periods when regular child care arrangements
break down is dealt with.
1. Salary Reduction Plan (a mechanism approved by the IRS in
which an employee can set-aside child care expenses out of
pre-tax earnings up to a $5,000 annual limit according to the new
tax reform bill)
a. Assists employees who are in higher tax bracket by
providing tax relief
b. Meets IRS requirements
c. Cost to the City - negligible
2. Reimbursement for Child Care Expenses $lOO/month per Eligible
Employee (Burud and Associates is knowledgeable about Federal and
State standards and employee needs and will be retained to help
set up the reimbursement portion of the child care benefit plan,
inform employees about how best to use it, and evaluate the
program after it is operational. Issues to be addressed include
maximum family income, what type of care is reimbursable, how
expenses would be verified, the annual limit per employee, a city
employment tenure requirement, etc. Representatives of employee
bargaining units will be involved in discussions regarding the
establishment of eligibility guidelines.)
a. Would be based on a sliding scale and have annual limit
per employee
b. Would serve estimated 80 employees/year
c. Cost to the City - estimated $100,000 maximum annual
expense ($5,000 will be spent this year to establish
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eligibility standards for this program with input from
employee organizations)
3. Identify and Recruit Emergency Care Providers (development
of a referral program for city employees whose normal child care
arrangement has broken down for some reason e.g. illness of the
provider)
a. Would serve 200 children over course of a year rather
than daily
b. Would be handled as extension of Connections for Children
contract
c. Cost to the City - $5,000 annual expense
Phase II (to be implemented within 6 months)
This phase addresses the lack of care for mildly sick children
who are not contagious but are not yet able to return to school.
The creation of a sick care room at a local center or health
organization is an innovative program which, once established,
would be available for use by community residents as well as City
employees through payment of an hourly or daily fee.
1. Add Sick Room Care to Local Center
a. Would serve 100 children over course of a year
b. RFP would be issued to locate provider
c. Would serve employees' and residents' children
d. Cost to the City - estimated $45,000 one-time expense
for start up of program and $6,500 annual operating
subsidy to reduce fees for City employees.
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Phase III (to be implemented within 12 months)
This program phase deals with the lack of available child care
and supports new services through the provision of one-time
funds. In return, city employees would receive priority
admissions for available positions. The School District has
indicated an interest in providing child care services to
pre-school age children and could be the provider in the two
programs described below:
1. Contract with Local Provider for the provision of Infant Care
a. Would serve 12 infants on a full time basis
b. Provider would be located through RFP process
c. Could contract with School District for provision of
this service
d. Cost to the City - estimated $86,000 one-time expense for
start up of program
2. Contract with Local Provider for provision of Pre-School Care
a. Would serve 40 children on a full time basis
b. Would provide priority enrollment for city employees
c. Could contract with School District for provision of
this service
d. Cost to the City - $30,000 one-time expense for priority
admissions to child care spaces
BUDGET/FINANCIAL IMPACT
Recurring costs of the child care benefit program will be borne
by the General fund and Enterprise funds based on percentages of
city employees.
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Funds currently are available in account #01-700-274-000-785 for
the expenditure of up to $5,000 for Burud and Associates to
develop the reimbursement program and $5,000 for the
identification and recruitment of emergency care providers
through Connections for Children. It is not possible at this
time to predict the funds necessary for the reimbursement program
for child care expenses because the eligibility levels have not
been established. Once established, Council will be asked to
authorize funds for this aspect of Phase I of the program.
Authorization to expend funds for Phase II of the child care
benefit program, the establishment of a child care program for
mildly ill children, will be requested after a program is
selected through a competitive RFP process. Estimated costs for
this program would involve one-time start up expenses of $45,000
and an annual operating subsidy of approximately $6,500.
Funds associated with Phase III of the child care employee
benefit program will be requested as part of the 1987-88 city
budget submitted to the Council by the City Manager.
The overall financial impact of the proposed program has the
potential for providing savings to the City in reduced
absenteeism, reduced turnover, and increased productivity as well
as in enhanced opportunities for recruitment of qualified staff
members.
RECOMMENDATIONS
Staff recommends that Council:
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1. Approve the establishment of an employee child care benefit
program to be developed in three phases as outlined in this
report
2. Approve the expenditure from account #01-700-274-000-785 of
up to $5,000 for consultant services to establish the eligibility
criteria for Phase I of the program and $5,000 to contract with
Connections for Children for the identification and recruitment
of emergency care providers for use by City employees
3. Authorize the City Manager to issue a Request for Proposal
for a local provider to offer child care to mildly ill children
for a start up of cost not to exceed $45,000 and an operating
subsidy of $6,500 annually.
4. Authorize the City Manager to initiate discussions with the
Santa Monica/Malibu School District regarding the establishment
of Phase III of the employee child care benefit program as
outlined in this report.
Prepared by: Vivian Rothstein
Assistant to the Director
Recreation and Parks
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