Eagle County Child Care Market Assessment Presentation of Key - - PowerPoint PPT Presentation

Presentation of Key Findings

Eagle County Child Care Market Assessment

Introduction

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Research Goals

What is the current

child care landscape?

What gaps, if any,

exist in child care?

What does the future

hold?

3 Eagle County Child Care Study

Approach

Demographic Research Interviews with Licensed Child Care Centers

> 18 interviews (attempted interviews with all licensed centers)

Interviews with Parents/Guardians

> 10 interviews with people who pay market rate for child care > 10 interviews with people who receive subsidized access to

child care

> 10 interviews with people who don’t use licensed child care > Within these, 10 were with Spanish speakers

Community Feedback Survey

> Gathered from postcards and the “Vail Moms” Facebook page

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Child Care Supply and Demand

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Factors Affecting Child Care Decisions

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Cost Convenience Quality Availability

Need

The decision to use child care occurs only when cost, quality, convenience, availability, and need all coincide.

If cost, quality, availability, and convenience don’t co-exist, need can potentially be negated by dropping

• ut of the work

force.

Segmentation

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All children under 6

4,300

Children in Child Care

1,200

Not in Child Care

3,100

Only about 25 percent of children meet all five criteria: need, cost, quality, availability, and convenience

Corona Insights Estimates From Various Sources

Need

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Segmentation

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All children under 6

4,300

Children in Child Care

1,200

Not in Child Care, Working Parent(s)

1,700

Not in Child Care, Non-Working Parent(s)

1,400 Do they want child care or do they really not need it?

Corona Insights Estimates From Various Sources

Work Force Participation

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Among those who do not participate in the work force, do they join or re-join the work force as their child grows

• lder?

 The answer appears to be no. We found no increase statewide in the

percent of people in the labor force with a six year old than with a five year old.

U.S. Census Bureau

Segmentation

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All children under 6

4,300

Children in Child Care

1,200

Not in Child Care, Working Parent(s)

1,700

Not in Child Care, Non-Working Parent(s)

1,400

Corona Insights Estimates From Various Sources

Why Does Potential Need Not Translate To Demand?

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Lots of Options – Some good, some bad

Unlicensed child care Alternate shifts Staying with other relatives or paramours Work from home parents Nannies Left alone or with siblings

Other arrangements

Why Does Potential Need Not Translate To Demand?

Cost and availability are likely drivers, quality and convenience less

• so. No reliable way to efficiently disentangle these factors.

 “I do know that quality is important, but if you can’t afford it, you can’t

pay for the quality. I think that is the reason why so many people take their kids to the neighbor next door where there are no licensed programs or structure, the kids are not as safe, but I believe this is all because people can’t afford to pay for other programs.” –Parent receiving

subsidies for licensed child care

 “We were looking at options before she was born and put in a couple

applications at facilities up here. The feedback we got was that there are long wait lists and it’s very expensive. Because of those two factors, we made a pact that we would figure it out and stay home with her.” –Parent not using licensed child care

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Factors Inhibiting Demand for Licensed Child Care

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Reasons for not using licensed child care among parent households with incomes of $75,000 or more Reasons for not using licensed child care among parent households with incomes under $75,000

Community Feedback Survey Sample Size = 19 Community Feedback Survey Sample Size = 12

Availability

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Child Care Markets

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There are effectively two Major Child Care Markets in Eagle County

U.S. Census Bureau

Facilities and Home-based Child-care

There 45 licensed child-care options in the Eagle River Valley

24 child-care facilities

> 14 up-valley



6 operated by Eagle County Schools > 10 down-valley



4 operated by Eagle County Schools

21 child-care home-based

> 8 up-valley > 13 down-valley

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Comparing Capacity to Enrollment

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27% 27% 46% 45% 5% 4% 22% 24% 0% 25% 50% 75% 100% Capacity Enrollment

Down-valley care for 3 to 5 Down-valley care for under 3 Up-valley care for 3 to 5 Up-valley care for under 3

~ 800 children under 6 are enrolled in up-valley facilities ~ 300 children under 6 are enrolled in down-valley facilities

Based on provider interviews

Infant Care

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Infant care is in short supply

Some parents who have not been able to find infant care have

had to pull their preschoolers out of a program because they could not work and they could not pay for care without working.

> “There is more infant and toddler care available up-valley, so more parents

take their infants up-valley, then when they start preschool, they stay local. But I think the preference is for local care.” –Child Care Provider Many parents put their infants on a waiting list as soon as they

get pregnant, but still may be unable to find a slot. This is one reason why some parents do not use a licensed provider for their child.

> “We’re on a couple waitlists and we’re not sure we’ll be able to get in. I got

• n a wait list about a month before my son was due, and we don’t need care

until he’s 4 months old and only need 2 days a week. If we don’t get into a place, I’ll work less until I find a place.” –Parent not using licensed care

Demographics and Availability

Availability

> Child-care facilities have faced challenges for several years.

 Great recession from 2007 through 2009  Demographic dip from 2010 through 2014.

• The number of children age 0-5 declined by 8 percent from 2009

through 2014, which is unprecedented since 1990 or earlier

• 2013 through 2015 are the “bottoming out” years

> The demographic trend is about to reverse, causing an increase

in demand

 There are about 4,200 children age 0-5 now, rising to 4,800 by 2020.  Increase of approximately 11 percent over the next five years

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Demographics and Availability

Availability

> If capacity doesn’t increase, the county will likely see…

 Increased pricing for residents  Decreased availability of licensed child care options for residents

> Availability is already too low for infant care

 Not profitable for providers  Wait lists already in place

Conclusion: Competition to obtain child care is going to go

up steadily over the next five years unless supply increases

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Convenience

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More than 80 percent of children under 6 live along the I-70 corridor from Gypsum to Vail

U.S. Census Bureau

24 Eagle County Child Care Study Based on community feedback survey and provider interviews

Location and Convenience

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Non-working parents are generally willing to commute

further for child care than working parents are, as the hours

• f child care restrict how much time they can spend

commuting to child care before/after work

While location does play some role in choosing a child-care

provider, many parents are willing to drive somewhat further than they are currently for a higher quality facility

Cost

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Cost Summary

Cost of Living Index in Eagle County School District (as

• f 2013)

> 7th Highest cost of living in the state (Index – 109.8)

Cost of Child Care in Eagle County School District

> 53% Higher than median across all school districts

Qualistar 2014 Study

> $11,100 annual cost for preschool care (10th in state) > $13,000 annual cost for infant/toddler care (12th in state)

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Providers Are Squeezed

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Providers have a hard time raising capital to sustain their business

“The problem is you can’t charge parents what it takes to care for

their kids” –Child Care Provider

Facilities report that between 75% and 95% of expenses are

teacher salaries. They have little budget for operating and maintenance.

“Preschool teacher pay is very low compared kindergarten or 1st

grade teachers, even though those kids are only one or two years

• lder than preschoolers” –Child Care Provider

Some providers pay a decent wage but no benefits, which makes

it hard to retain teachers.

Parents Are Squeezed

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Cost is a huge barrier for parents as well

There is a lack of affordable care for middle class families

with two working parents.

> Middle class families tend to feel there are many options for

low-income families, but child care is not affordable for middle class families because the cost of living in Eagle County is so high.

> “My main concern is the cost of living here. They look at the

scale on a nationwide base, and that’s unfair for getting assistance here. If we made that money in Denver it would be different, but cost of living is so expensive here and they don’t take that into consideration.” –Parent paying market price for child care

Parents Are Squeezed

Parents with more than one child often have to sacrifice quality

• r quantity of care because of price

> “We’re pretty happy, but the cost is hard. Eventually we’ll have to go

to more than 2 days a week, and with a second child, there is no way we could afford it. If we have a second child, I will probably have to quit my job.”—Parent paying market price for licensed care

Parents who receive a subsidy to help pay for child care would

likely not enroll their children in preschool if this was not available, as they would not be able to afford care

> “If I didn’t get financial aid, I would have to compromise quality. I

would not use licensed care, I would use family members or friends to help out.”—Parent receiving subsidies to pay for licensed care

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Bifurcation of Resources

99.6% of Eagle County kids were born in the U.S. However…

40% of kids have no native-born parent, and another 5%

have one foreign-born and one native-born parent

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Poverty Rates by Foreign Born Parents

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2/3rd of children under 18 in poverty have no native-born parents

Foreign Born Parents Percent of Children Under 18 Living in Poverty Two native-born parents 1.4% One native, one foreign parent 5.2% Two foreign-born parents 24.6% Single parent, native-born 28.8% Single parent, foreign-born 35.6%

Quality

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Employees

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Qualified employees are difficult to find

It is difficult to find teachers with early childhood education

certification (at least an associate degree in early childhood).

> Some programs pay teachers better than others, and as those

programs have expanded, they have poached the best teachers from other providers.

> Some smaller providers have felt lucky because they have not

had much turnover in staff, but they feel it would be difficult to replace staff if they did lose current staff.

Quality of Child Care

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Providers think quality is important, but think that parents have a hard time discerning quality.

> “There are limited options for high quality preschool. I hope

there is demand for high quality, but parents need to choose based on what works with the schedules and budgets. The biggest barriers to high quality early education are hours (not matching with work hours) and costs.” –Child Care Provider

> “There is a lack of quality facilities in Eagle County. There are

isolated quality facilities, but lots of low quality facilities around, too.” –Child Care Provider

Quality Criteria By Age of Child

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Parents of children under 3 generally don’t define quality by educational value

 Parents are more concerned about safety, cleanliness and attentiveness

to their child’s basic needs

 They believe that playtime and socialization are more important at this

age than education

> “For their first 2-3 years they just need someone watching them,

giving them toys, letting them be kids and not forcing them to be in a learning situation.” –Parent paying market price for licensed care

 Staff-child ratios are extremely important to parents of children this

age

 Parents rely heavily on recommendations from their family and friends,

as well as visiting the facility and watching how the caregivers interact with the children when making a decision on which provider to use

Quality Criteria By Age of Child

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Parents don’t believe having staff with advanced degrees is terribly important, especially for children under 3

They are more concerned that the caregivers are kind,

communicative, patient and have CPR training

Many parents consider continuing education classes in

Early Childhood Education to be enough

Quality Criteria by Age of Child

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Parents with children 3 and older become more concerned with the educational value of child care

 “Education is very important. My child is more prepared for

kindergarten now that he is attending this program compared to if he would stay home or attend a non-licensed child care provider.” –Parent

receiving subsidies to pay for licensed care

 Parents who do not use child care for their children under 3 often want

to find a preschool to enroll their child in when they are 3-4 years old so they are prepared for Kindergarten.

 Parents will also sometimes switch child care providers when their child

reaches this age to a facility that offers more educational value

> “We will take a serious look at things if he gets older and is moving and

talking more because I’m not sure what the education looks like at his current day care. If it’s not up to par, we might have to make a change.” – Parent paying market price for licensed care

Current Curricula Opinions

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Respondents who use licensed care are much more likely to believe their provider’s educational curriculum is strong.

Community Feedback Survey

Interest in Higher-Quality Model

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Only about one in three would pay more for a model that is superior

Question asked about interest in a proven model with major curriculum value using highly educated workers

Community Feedback Survey

Looking Ahead

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Population Growth

The population under age 5 is projected to increase to roughly 4,800 by 2020 and 5,600 by 2030

42 Eagle County Child Care Study U.S. Census Bureau and Colorado State Demographer

Population Growth

A recent short-term decline follows the national pattern

43 Eagle County Child Care Study U.S. Census Bureau and Colorado State Demographer

Colorado Population Trend Among 0-5 Year Olds

44 Eagle County Child Care Study

Colorado child care suffered two recessions back to back;

• ne economic and one demographic

Population Change, 5-year periods of 0-5 Year Olds 2000 – 2005 = +34,000 children 2005 – 2010 = +21,000 children 2011 – 2015 = -5,000 children 2015 – 2020 = +35,000 children 2020 – 2025 = +45,000 children 2025 – 2030 = +39,000 children

U.S. Census Bureau and Colorado State Demographer

Growth in Child Care Markets

Meeting Expected Demand Growth Wait lists are generally tilted 3 to 1 toward up valley Roughly 70 percent of subsidized enrollment is up valley Key Question: will up valley vs. down valley growth persist?

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Number of Net New Enrollees Up Valley Down Valley 5-Year Increase in Source Demand 25 105 Preferred Location of Increased Capacity 35 95 Potential Workable Location of Increased Capacity 66 64

Corona Insights Estimates From Multiple Sources

How Would A Capacity Expansion Play Out?

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Existing Facilities New Facilities or Capacity Balancing

• f Market

Share

How Would A Capacity Expansion Play Out?

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Expansion Up Valley

Expand Capacity by… Growing Demand* Demand Creation From Alternatives Largest Wait List Satisfied Current Enrollment Market Dilution (Expansion

• f Supply)

Market Shuffle Toward New Capacity Negative Impact on Current Providers 25 35 104 801 3% 24 50 35 104 801 6% 47 75 66 104 801 9% 69 100 66 104 801 11% 89 150 66 104 801 16% 126 200 66 104 801 20% 160 30 300 66 104 801 27% 218 130 500 66 104 801 38% 308 308 * Assume migration of 10% of growing down valley demand, rising to 40% for larger expansions Corona Insights Estimates From Multiple Sources

How Would A Capacity Expansion Play Out?

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Expansion Down Valley

Expand Capacity by… Growing Demand Demand Creation From Alternatives Largest Wait List Satisfied Current Enrollment Market Dilution (Expansion

• f Supply)

Market Shuffle Toward New Capacity Negative Impact on Current Down Valley Providers* Negative Impact

• n Current Up

Valley Providers* ** 25 95 23 312 7% 23 50 95 23 312 14% 43 75 95 23 312 19% 60 100 95 23 312 24% 76 150 95 23 312 32% 101 0 to 21 32 to 11 200 95 23 312 39% 122 0 to 55 82 to 27 300 95 23 312 49% 153 41 to 102 112 to 51 500 95 23 312 62% 192 80 to 128 112 to 64

Corona Insights Estimates From Multiple Sources

Discussion?

49 Eagle County Child Care Study

About Corona Insights

Our founder named the company Corona because the word means “a ring of light.” It’s the knowledge that surrounds and illuminates an issue; exactly what we do. Our firm’s mission is to provide accurate and unbiased information and counsel to decision makers. We provide market research, data analysis, and strategic consulting for organizations both small and large. Learn more and watch an overview video at www.CoronaInsights.com

50 Eagle County Child Care Study

1580 Lincoln Street Suite 600 Denver, CO 80203 Phone: 303.894.8246 Fax: 303.894.9651

kevin@coronainsights.com

Child-care Capacity

Reported operating capacity of child-care facilities in Eagle Valley

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Eagle Valley Up-valley Down-valley

Total 1,066 780 286 0-2 year olds 338 288 51 3-5 year olds 728 493 236

Child-care Enrollment

Reported current enrollment in child-care facilities in Eagle Valley

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Eagle County Up-valley Down-valley

Enrolled Subsidized Enrolled Subsidized Enrolled Subsidized Total

1,113

217 (19%)

801

150 (19%)

312

67 (21%)

0-2 years 345

56 (16%)

298

53 (18%)

47

3 (6%)

3-5 years 768

161 (21%)

503

97 (19%)

265

64 (24%) “Subsidized” is defined as families receiving CCAP , CPP , Head Start, or Early Head Start, accounting for children who are enrolled in multiple programs. Subsidies are attributed to the school location. Roughly another 100 are enrolled in in-home centers.

Child Care Labor Force

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Median wage of a childcare worker in Northcentral Colorado was $24,090 in 2014. Wages create a challenge in attracting and retaining a work force.

40% 15% 50% 26% 43% 10% 14% 0% 25% 50% 75% 100% Eagle County Colorado

Education Level of Child-care Workers (2010)

Graduate or professional degree Bachelor's degree Some college or associates degree High school graduate or GED Not high school graduate Bureau of Labor Statistics U.S. Census Bureau