IN THE MATTER OF THE INTEREST ) ARBITRATOR’S
)
ARBITRATION BETWEEN ) OPINION
)
OFFICE OF FINANCIAL MANAGEMENT ) AND
STATE OF
) AWARD
“THE EMPLOYER” OR “THE STATE” )
)
AND )
)
SERVICE EMPLOYEES INTERNATIONAL )
UNION LOCAL 925 )
)
“THE
HEARING: October 11, 2006
October 16, 2006
7141 Cleanwater Dr. SW, Conference Room N454
October 18, 2006
October 24, 2006
CLOSING ORAL ARGUMENTS:
October 24, 2006
HEARING CLOSED: October 24, 2006
ARBITRATOR: Timothy D.W. Williams
REPRESENTING THE
Robert Lavitt, Attorney
Kim Cook, President SEIU 925
Karen Hart, Organizing Director SEIU 925
REPRESENTING THE EMPLOYER:
Rachelle Wills, Assistant Attorney General
Laura Wulf, Assistant Attorney General
Joe Olson, Labor Negotiator OFM
Jennifer Watsek, Paralegal
APPEARING AS WITNESSES FOR THE
Kursten Holabird, Senior Field Policy Researcher SEIU 925
Karen Hart, Organizing Director SEIU 925
Kim Cook, President SEIU 925
Frankie Meaders, License Exempt Provider
Nancy Gerber, Family Childcare Provider
Linda Ramuta, Childcare Provider
APPEARING AS WITNESSES FOR THE EMPLOYER:
Joe Olson, Labor Negotiator OFM
Wolfgang Opitz, Deputy Director OFM
Carol Holland, Senior WorkFirst Coordinator and Senior Budget Assistant to the Governor, OFM
Irv Lefberg, Assistant Director of OFM
Rachael Langen, Assistant Director of the Department of Early Learning
EXHIBITS
1. Letter from PERC certifying issues for interest arbitration
2. Union ’s proposal – Subsidy Rates for Licensed and Licensed Exempt Family Child Care Providers for 2007-2009 Biennium
3. State’s proposal
4. Chapter 41.56, RCW – Public Employees’ Collective Bargaining
5. Governor Gregoire’s Executive Directive to DSHS (September 16, 2005)
6. Family Child Care Collective Bargaining Bill, ESSHB 2353, (2006)
7. Description of Working Connections Child Care (WCCC) and a document showing the size of the program (60,000 kids per month)
8. Chart showing that 95% of the providers in the bargaining unit are in WCCC
9. WAC 388-165-108 – Describing Children’s Administration subsidy programs
10. Chapter 43.215, RCW – Department of Early Learning (DEL) statute establishes authority over subsidy policy and administration
11. Child Care and Development Fund; Final Rule, U.S. Department of Health & Human Services, 45 CFR Parts 98, 99, (1998)
12. Table – 80% of funding is federal and 20% state; DSHS data.
13. WAC 388-290-0125; 388-290-0130 – DSHS description of Licensed and Licensed- Exempt providers under WCCC.
14. WAC 170-296 – Table of Contents- Child care business regulations for family child care (DSHS).
15. Profile of Children Served by WCCC, including breakout by type of care. Shows SEIU 925 members care for children from TANF (42%) and Non-TANF (51%) eligible families.
16.
Non-Standard Hours – Licensed Child Care in
17.
Rural Care & Infant Care – Licensed Child
Care in
18.
Infant Care – Child Care in
19.
Special Needs – Licensed Child Care in
20.
Enhancing
Family Friend and Neighbor Caregiving Quality: The Research Case for Public
Engagement, Richard N. Brandon, Ph.D.,
21. 2006 Kids Count Data Book, Family, Friend, and Neighbor Care: Strengthening a Critical Resource to Help Young Children Succeed, (pages 6-23), The Annie E. Casey Foundation, 2006: (page 9), (page 10-15), (page 21).
22.
Current
Research Directions in Family, Friend, and Neighbor Care: An Interim Report,
Amy Susman-Stillman, Ph.D., Center for Early Education and Development,
23. WAC 388-290-0240 – DSHS Licensed Exempt providers earn $2.06/hr, and $1.03/hr for each additional sibling.
24.
25. 388-290-0205 – DSHS Licensed providers. Chart with subsidy rates by region and age.
26.
Percentiles According to Market Survey –
Licensed Child Care in
27. Chart – regional rates with market access percentile, DSHS data (November 2005)
28.
Market Access Percentile – Licensed child Care
in
29. No Place Like Home (October 2005) – SEIU 925 report examining actual costs and net income for licensed providers.
30. Chart – Statewide access percentile 91995-2005). Illustrates declining access to child care market for those who rely on DSHS subsidy, with source documents illustration breakdown of subsidy rates by age and region.
31. Charts of each of the six regions showing that many are quite flat.
32. Charts, by region, showing that the DSHS rate has not kept up with the market rates in many areas of the state.
33.
Licensed comparables: State comparison –
34.
State of
35.
Licensed comparables:
36.
Licensed comparables:
37.
License exempt: State comparison –
38.
Sylvia Skratek’s Neutral Third Party
Recommendations for
39.
License exempt:
40.
Supporting data for comparison tables – Rates in
41.
Licensed Child Care in
42. Child Care Cost & Quality, Future of Children, Financing Child Care Vol 6, No. 2 (1996).
43.
Family Child
Care Finances and Their Effect on Quality and Incentives, Helburn and
Morris,
44. Northwest Job Gap Study: Living Wage Jobs in the Economy (2005).
45.
WA Self Sufficiency Standard for
46. Federal poverty guidelines.
47. NCEDL Spotlights, No. 18 January 2000 “Teacher education, wages key to incomes:
48.
From
Neurons to Neighborhoods: The Science of Early Childhood Development,
49.
50.
51.
Child Care Is Not Child’s Play: The Economic
Impact of the Child Care and After-School Industry in
52.
Licensed Child Care in
53. Summary Cost Comparison of Parties’ Proposals
54. Cost of SEIU 925’s Subsidy Rate proposal (8% for year one; 7% for year two) – Licensed
55. Cost of SEIU 925’s Subsidy Rate proposal (8% for year one; 7% for year two) – Licensed Exempt
56. Cost of State’s Subsidy Rate proposal (4.5% and 2.5%) – Licensed
57. Cost of State’s Subsidy Rate proposal (3.5% and 2.5%) – License Exempt
58. Cost of SEIU 925’s Equal Funding for Siblings proposal – License Exempt
59. Cost of SEIU 925’s Training Incentive proposal – License Exempt
60. State’s Cost Analysis of setting rates for Licensed Providers at 75th Percentile
61. Financial Snapshot of Licensed Family Child Care Providers – Illustrates cost of cutting non-standard hours bonus, the infant bonus, and reducing subsidies by increasing parent co-pays.
62.
OFM Press Release, “
63. OFM, Six Year Outlook (June 2006)
64. CPI-U & CPI-W for West Urban, Bureau of Labor Statistics (2000-2006). Sum of CPI-U increases from 2000 through August 2006 totals 20.6%
65. Professional Activities of Nancy Gerber
Employer
1. SEIU 925 07-09 Contract TA’d Articles
2. Cost Model – Employer Proposal
3. Cost Model – SEIU Proposal
4. Cost Comparison Summary
5. Subsidy Rate Comparison Chart – Licensed Family Homes
6. Subsidy Rate Comparison Chart – Exempt Providers
7.
8.
9. California Regulations regarding Child Care Subsidy Rates
10.
State of
11.
September 2006 State of
12. Runzheimer Data – Cost of Living Report
13. Comparison of Rates with Cost of Living Adjustments (Licensed and Exempt)
14. Child Care Licensing – A Brief History
15. Child Care Subsidies – A Brief History
16. WCCC Program Description
17. Exempt Providers Description
18. Licensed Family Home Providers Description
19. Child Care Centers Description
20. WCCC Sample Documents
21. 2004 Licensed Child Care Market Rate Survey (Excerpts)
22. Graph – Number of Children by Provider Type (Represented only)
Graph – Number of Children by Provider Type (All)
23. Graph- Yearly Income Estimates for Providers
24. 55th Percentile Costs
25. Child Care Resource and Referral Network Survey
26. Copay Chart and History
27. Excerpt from State Plan for CCDF Services
28. Workfirst Reexamination Workgroup Report
29. Child Care Development Fund History
30. 2004 Income of Family Home Providers
31. RCW 74.15.010
32. WAC 170-295 Excerpts from Minimum Licensing Requirements for Child Care Centers
33. WAC 170-296 Excerpts from Child Care Business Regulations for Family Home Child Care
34. Child Care Subsidies – A Booklet for Licensed and Certified Child Care Providers
35. Child Care Cost and Quality
36. Costing on Licensed and License Exempt
37. Historical Subsidy Rates: Licensed and License Exempt
BACKGROUND
The Service Employees International
Union, Local 925 represents a statewide bargaining unit made up of licensed and
license exempt child care workers. The
Office of Financial Management of the State of
As an interest arbitration, the case was conducted under the authority of RCW 41.56.0228, as well as under the requirements of the various statutes that are referenced within that statute.
A copy of the letter dated October 9, 2006 was provided the Arbitrator. It contained a list of issues certified for interest arbitration by the Executive Director of PERC, Marvin L. Schurke, in accordance with RCW 74.39A.300. Those issues, as certified, are as follows:
Article 12 – SUBSIDY RATES (limited to Section 12.1 “Subsidy Rate Increases” and Section 12.3 “License exempt hourly rates”)
A hearing was held before
Arbitrator Timothy D.W. Williams over a period of four days and in three
different locations. The first day of
hearing, October 11, 2006 was held in
At the hearing, the Parties had full opportunity to make opening statements, examine and cross examine sworn witnesses, introduce documents, and make arguments in support of their positions. A transcript was made of the full proceeding and, due to the exemplary effort of the court reporter, each Party and the Arbitrator had a full copy by Friday, October 26.
At the close of the evidentiary portion of the hearing, the Parties agreed to provide closing oral arguments. Arguments were heard by the Arbitrator on the afternoon of October 24, 2006. Thus the award, in this case, is based on the evidence and argument presented during the hearing.
HISTORY
OF SEIU/STATE BARGAINING
SEIU Local 925 and the State of
Welfare
Reform
Federal legislation enacted in the mid 1990s initiated a process
for moving welfare recipients into the workforce. As many of these new workers were the primary
caregivers of young children, the emphasis on requiring parents on welfare to work
of necessity addressed the issue of providing affordable childcare. Government assistance paying for child-care
was provided based on total family income.
Where family income was low enough, child-care was subsidized at a rate
of 100%. As total family income grew,
the percentage of subsidization diminished.
Where child-care was subsidized at less than 100%, the parent(s) are
expected to pay the unsubsidized portion of the costs of child-care. When family income reaches a predetermined
figure, child-care subsidization is discontinued.
While the particulars were left up to the states, federal
participation in providing childcare was accomplished through the establishment
of Temporary Assistance for Needy Families (TANF) funds, granted as a block to
each state. The amounts of these annual TANF
grants have essentially remained unchanged since their inception, and they
constitute (among other things) the entirety of federal aid for state childcare
subsidy, the balance of which is provided in most cases from the general fund
of each state. In fiscal year ’05 the
state of
It was a statutory requirement that, as a recipient of TANF
funds, the states must show that the subsidized rate is sufficient to provide
access to 75% of childcare facilities as determined by a biennial market survey
(the 75th percentile requirement).
In 1996, the federal mandate of the 75% percentile was removed, though
the benchmark remained as the ideal point at which coverage would be
sufficient. Indeed, some states have set
goals exceeding this mark, most notably
Child
Care Facilities
In the state of
In the state of
This interest arbitration award focuses exclusively on in-home
child care, both licensed and license exempt.
Collective
Bargaining
House Bill 2353 enjoyed bipartisan support and easily passed
both houses of the legislature. It was
signed into law by Governor Christine Gregoire on March 15, 2006. At that time she stated:
Investing
in childcare workers and programs will lead to great results in the
future. The first five years are the
most important years for emotional, experiential, and intellectual development. They set the stage for the rest of life. This bill reflects the value we place on
early learning and the child-care experience.
(Office
of Governor Chris Gregoire, Press Release 3/15/06)
As a side note, Governor Gregoire’s above statement extolled the
virtues of early education. State witnesses
testified that the Governor has made the education of pre-kindergarten aged
children a central issue of import in her administration. Thus the rich and consistent quality of a
properly licensed facility’s educational program is viewed as more desirable to
the goals of the current government than the unregulated and more questionable
learning potentially provided in unlicensed facilities. The evidence and arguments of the State in
the arbitration proceedings focused in part on this fact.
House Bill 2353 identified itself as, “AN ACT Relating to
improving access to and the stability of quality child care through providing
collective bargaining and other representation rights for family child care
providers and licensees . . .” In
simple terms, House Bill 2353 granted home child care workers the right to form
a union and bargaining over their economic compensation, healthcare, training
and grievance procedure – to name a few.
The right of parents to choose a child care facility and legislative
prerogatives are among those items that are not negotiable.
Child-care centers are not covered under House Bill 2353. Home child care providers are typically one
person operations and each provider receives the State’s subsidy directly from
the State. The employer of record for
the staff of child care centers is the center itself. In most cases, the staff of the center could
form a into a bargaining unit and negotiate with their employer – not the
state.
In November of 2005, more than one third of
One of the unique features of House Bill 2353 is that it
extended RCW 41.56, the chapter governing bargaining for uniformed public
employees, to encompass child care workers.
As a result, the interest arbitration provision available to uniformed
public employees is also available to the home child care bargaining unit.
Negotiations over the issues of compensation posed an
insurmountable block to a bargained agreement.
Due to the requirement that Governor include the costs of the contract
in her budget proposal before the state legislature, the closing date for
bargaining was hard and fast. Spurred by
the statutory deadline of November 14, 2006, the two unresolved compensation
issues were submitted to interest arbitration.
Other
States
While the criterion of comparability is specifically discussed
at a later point in this decision, there are some general comments about
subsidized child care programs in other states that should be helpful in
understanding the overall environment within which the negotiations in the
instance case have proceeded.
ARBITRATOR’S
AUTHORITY
An Arbitrator’s authority to issue an interest award is
generally derived from statute. House
Bill 2353 gives the home child care bargaining unit access to the interest
arbitration and mediation provisions of RCW 41.56. RCW 41.56.450 to .465 establishes the Arbitrator’s
authority and sets out the requirements for conducting the hearing and issuing
an award.
RCW 41.56.465 required that the Arbitrator, in making his or her
decision, consider the following criteria:
(1) In making its determination, the
panel shall be mindful of the legislative purpose enumerated in RCW 41.56.430
and, as additional standards or guidelines to aid it in reaching a decision, it
shall take into consideration the following factors:
a.
The constitutional and statutory authority of
the employer;
b.
Stipulations of the parties;
c.
i.
For
employees listed in RCW 41.56.030(7)(a)
through (d), comparison of the wages, hours, and conditions of employment of
personnel involved in the proceedings with the wages, hours, and conditions of
employment of like personnel of like employers of similar size on the west
coast of the United States;
d.
For
employees listed in RCW 41.56.030(7)(e)
through (h), comparison of the wages, hours, and conditions of employment of
personnel involved in the proceedings with the wages, hours, and conditions of
employment of like personnel of public fire departments of similar size on the
west coast of the United States. However, when an adequate number of comparable
employers exists within the state of
e.
The
average consumer prices for goods and services, commonly known as the cost of
living;
f.
Changes
in any of the circumstances under (a) through (d) of this subsection during the
pendency of the proceedings; and
g. Such other factors, not confined to
the factors under (a) through (e) of this subsection, that are normally or traditionally
taken into consideration in the determination of wages, hours, and conditions
of employment. For those employees listed in RCW 41.56.030(7)(a)
who are employed by the governing body of a city or town with a population of
less than fifteen thousand, or a county with a population of less than seventy
thousand, consideration must also be given to regional differences in the cost
of living.
RCW 74.39A.270 provides, in pertinent part, that “the mediation
and interest arbitration provisions of RCA 41.56.430 through 41.56.470 and
41.56.480 apply” except that the interest Arbitrator is required to also
consider “the financial ability of the state to pay for the compensation and benefit
provisions of a collective bargaining agreement.” Thus, where RCW 41.56.465 limits
consideration to those “employees listed in RCW 41.56.030,” RCW
41.56.028 expands the list of applicable employees to include family child care
providers and extends the set of criteria to be used by the Arbitrator in
fashioning the decision
The Arbitrator is charged with the responsibility of carefully
weighing the factors outlined above when rendering his decision. As he worked his way through the two issues
in dispute, this Arbitrator has faithfully applied the above criteria. Additionally, he has been careful to give
special consideration to those criteria that were the focal points of the
discussion between the two parties.
RCW 41.56.450 grants the Arbitrator 30 days from the conclusion
of the hearing to make “written findings of fact and a written determination of
the issues in dispute.” The instant
case, however, is quite different in that the parties, at the time that they
retained his services, fully informed the Arbitrator of the need for his
written findings by November 10, 2004.
The Arbitrator has worked to comply with that understanding.
In summary, the final decision is based on a thorough review of
the documentary and testimonial evidence that has been provided, a careful
study of the closing arguments and the faithfeul application of the statutory
criteria.
ISSUE
1
Article
12.1, Subsidy Rate Increases
Current Provisions:
Licensed Providers:
Daily
Full-Time Rates for Family Home Child Care
|
|
Region
1 |
Region
2 |
Region
3 |
Region
4 |
Region
5 |
Region
6 |
|
Infants |
21.29 |
21.29 |
30.88 |
31.94 |
23.42 |
23.42 |
|
Toddlers |
19.16 |
20.23 |
26.62 |
31.59 |
21.29 |
21.29 |
|
Pre-school |
19.16 |
18.10 |
23.42 |
26.62 |
20.23 |
21.29 |
|
School-age |
17.04 |
18.10 |
21.29 |
25.55 |
18.10 |
20.23 |
License Exempt Providers:
Hourly rate per child: $2.06/hr
Each additional child in the same
family: $1.03/hr
Subsidy rates for providers shall be
increased across the board by 8% effective July 1, 2007 and 7% effective July
1, 2008.
All Providers shall ensure that the
rate they charge the State is no greater than their usual private pay
rates. If a Provider charges the State a
higher amount than their private pay Consumers, the Provider agrees that an
overpayment has occurred and a reimbursement is owed to the State. This overpayment will not be subject to the
grievance procedure, but it is subject to the Fair Hearing Process.
Employer’s Proposed Language:
Subsidy rates for Licensed Providers
shall be increased across the board by 4.5% effective July 1, 2007 and 2.5%
effective July 1, 2008.
Subsidy rates for Exempt Providers shall
be increased by 3.5% effective July 1, 2007 and 2.5% effective July 1, 2008.
All Providers shall ensure that the
rate they charge the State is no greater than their usual private pay
rates. If a Provider charges the State a
higher amount than their private pay Consumers, the Provider agrees that an
overpayment has occurred and a reimbursement is owed to the State. This overpayment will not be subject to the
grievance procedure, but it is subject to the Fair Hearing Process.
Award
Subsidy rates for Licensed Providers
shall be increased across the board by 7% effective July 1, 2007 and 3%
effective July 1, 2008.
Subsidy rates for Exempt Providers
shall be increased by 4% effective July 1, 2007 and 3% effective July 1, 2008.
All Providers shall ensure that the
rate they charge the State is no greater than their usual private pay
Consumers, the Provider agrees that an overpayment has occurred and a
reimbursement is owed to the State. This
overpayment will not be subject to the grievance procedure, but it is subject
to the Fair Hearing Process.
ARGUMENT
Union’s Case
The
It is the
While training is a key to raising the level of service in the
industry, the
The compensation of licensed providers has been untouched since
2005, and before that the increases were inadequate. Taking into account the CPI market data, it
is clear that by and large the increase in childcare subsidy did not grow at an
equal rate. For all the percentage
increases in the subsidy, there were enough cuts in service to nearly mitigate
them. The 6% increase licensed providers
got in 2005 was mostly counterbalanced by a reduction in the subsidy for
nonstandard-hours care and a drop in the infant incentive. When the deficits are added into the
equation, the net increase in compensation becomes paltry indeed.
Added to the balance of deficits, the provider now collects a
larger portion of their copay directly from the child’s parent, with all the
problems of timeliness that entails.
Where once the bulk of their subsidy came as a regular government
payment, providers now must directly appeal to parents who may not always be
able to pay on time. In order to receive
the full subsidy, they must expend a greater effort for a lesser guarantee of
schedule. Again, whatever small gains
that have been granted in the direct compensation have been negated this time
by extended duties and obligations.
There is precedent for substantial rate increases, both for
licensed and exempt providers. Two other
west-coast states have similar enough childcare subsidy programs that they can
be considered comparables. In
To the Employer’s anticipated claims that the requested
increases in compensation constitute absurd percentages, the
Employer’s Case
The Employer’s argument counters with a total 7% increase of
subsidy for licensed providers over the biennium and a 6% increase for license
exempt providers over the same period, with no change in the sibling
differential and no percentage incitement for optional training. It argues that this moderate increase is both
fair and fiscally responsible, particularly in as much as these increases will
have to be paid across the entire industry to ensure the effectiveness of the
subsidy program and the feasibility of the goal of 75th percentile
affordability. Were the State to not
extend the same subsidy to non-bargaining unit members, there would be no
incentive for them to enroll subsidized children, thus limiting further the
childcare options of subsidy-eligible parents.
Given this moderate and appropriate increase, the State can afford to
raise the value of subsidized children to all providers in all regions, whether
or not they are participants in the bargaining relationship.
Nor is
Arbitrator’s Analysis
Under the best of circumstances, writing an interest arbitration
decision can be challenging for no other reason then the sheer volume of
information that is usually placed on the record. This case is certainly no exception to that
general principle and is further hampered by restricted timeline within which
the Arbitrator agreed to provide his decision.
The Arbitrator spent his time first studying the transcript of the
proceedings while reviewing the evidence that was submitted. Particular
attention was paid to the closing arguments of each Party and the way in which
those arguments incorporated the evidence.
The Arbitrator begins his analysis by complimenting both Parties
on the clarity of their presentations, the civility with which the hearing
preceded and the overall quality of their work.
The Arbitrator’s only regret is that he is not able to provide a comprehensive
discussion of all the points that were raised.
Rather, he has limited his analysis to bulleting the key factors that
led to the specific terms of the decision.
§
The
Arbitrator’s award is to grant the licensed providers a 7% increase the first
year and the license exempt providers a 4% increase. In part the Arbitrator is persuaded by the
State of the need to focus dollars into licensed provider care. This is obviously made easier the first year
of the contract by the fact that the Arbitrator’s decision is also to equalize
the rate for siblings that receive care from license exempt providers.
§
The
second element of the Arbitrator’s award is to grant both the licensed and the
license exempt providers with a 3% increase the second year of the collective
bargaining agreement. The Arbitrator
believes that the substantial increases given the first year of the agreement
involves catch up and the second year is a matter of maintaining ground that
has been captured.
§
The
most significant reason, in the Arbitrator’s view, for granting a substantial
increase the first year lies in his understanding of the governor’s concerns
over improving early childhood learning as well as the legislative intent as
expressed in the bill itself. Since the
expressed intent of the legislation was to improve the level of
professionalism, the state simply has to make a stretch to do exactly
that. While additional money is not
always the answer to a problem, the current compensation levels for early
childhood education obviously are a deterrent to recruiting and retaining
qualified staff.
§
As
a matter of statute, the ability of the State to pay is a matter that must be
considered by the Arbitrator. With a
$1.7 billion surplus, the State clearly has the ability, if it chooses to do
so, to pay for the awarded increases.
While the State’s concerns over its economic future are reasonable, the
Arbitrator’s award is for the 2007, 2008 collective bargaining agreement. If the State’s financial condition takes a
turn for the worse, that problem can be addressed in future negotiations. Finally, while the Arbitrator has awarded
significantly more dollars then offered by the State, the award is still
substantially less than that requested by the
§
Comparablity
was difficult to use in this case. While the statute clearly limits the
Arbitrator to looking at
§
For
a number of reasons the Arbitrator does agree with the State that there is a need
to protect and encourage the use of licensed providers. Thus the 4%/7% split that is awarded. The license exempt providers, however, are
helped by the decision to eliminate the sibling differential.
ISSUE
2
Article
12.3, License Exempt Hourly rates
Current Provisions:
Hourly rate per child: $2.06/hr
Each additional child in the same family: $1.03/hr
License exempt providers who voluntarily take at least 10 hours
of STARS training during the life of this agreement will have their hourly rate
of pay increased by 10% at the completion of the training
OR
The hourly rate of pay of license exempt providers for each
child shall match the rate paid for the first child on top of the across the
board increases provided in section 1.
Employer’s Proposed Language:
None – No change in current practice
Award:
Effective July 1, 2007 the hourly rate of pay for license exempt
providers will match that given for the first child for all children to whom
services are provided.
ARGUMENT
Union’s Case
License exempt care in
These providers are an integral part of the childcare industry
and cannot be ignored or pushed aside for the more favored licensed
facilities. Allowing this choice to
parents and ensuring the quality of service is not only a Union request;
federal regulation mandates it.
The major disincentive to unlicensed care, currently, is the
familial subsidy discount, wherein a child will rate half the subsidy (figured
as an hourly wage) of their sibling, assuming that first child is compensated
for at the full rate. This discount has
no basis or precedent in statute or comparable example. Even at the full rate of $2.06 per child per
hour,
The
Should the sibling discount be upheld, the
Employer’s Case
The Employer brings forth an argument supporting the sibling
differential for exempt providers different from the
Currently, the differential saves the State an approximate $22
million in additional subsidy money drawn from the general fund, this on top of
the estimated $10 million per percentage point raise in subsidy. Even given the estimated $1.8 billion surplus
of this year, such rampant spending is unsustainable. The Employer introduced into evidence
projections on State finances going forward six years. Without figuring in the increases in subsidy
at issue here, the projected surplus for 2011 is only $10 million, a
precipitous drop from the seemingly fat purse of the State at this time. Add into that the projected increases bargained
on other State labor contracts and the financial prospects become tight indeed.
Should the rate differential be removed, argues the State, the
added drain on the general fund should then be considered when addressing the
across-the-board increases proposed by the
Arbitrator’s Analysis
As in the first issue, the Arbitrator’s analysis is bulleted.
§
First,
the Arbitrator is not convinced that the training option has merit at this
time. For one thing, it does not address
the merits of the sibling differential.
For a second, based on the testimony and discussion at hearing, the
Arbitrator does not believe that the Parties thinking with regard to providing
the training option is sufficiently mature for implementation. It seems much more reasonable to think about
it in the context of a project to be worked on for a subsequent collective
bargaining agreement.
§
Ultimately
the Arbitrator believes the sibling differential should be illuminated. Other than the fact that it is a cost savings
to the state, there seems to be no programmatic basis by which to justify
it. For example, based on the logic of
efficiency in numbers, it could be argued that a decreasing rate for multiple
children is justified. This logic,
however, would have nothing to do with whether not the children are
siblings. Currently, however, an exempt
provider receives the full rate of $6.18 per hour for the care of three
children so long as they’re not siblings but the rate of $4.12 per hour if the
three are siblings. As the
§
Previously
the Arbitrator has noted that comparability data was not very helpful. The sibling differential arena, however, was
the exception to this fact. Whether one
restricts comparability to the west coast as provided by statute or whether
data from
§
The
Arbitrator recognizes that the State does have a legitimate concern over
encouraging the use of licensed providers.
However, the discrepancy between caring for siblings versus non siblings
does not seem to the Arbitrator as a reasonable arena within which to attempt
to encourage the use of licensed providers.
AWARD SUMMARY
12.1 Subsidy Rate Increases
Subsidy rates for Licensed Providers
shall be increased across the board by 7% effective July 1, 2007 and 3%
effective July 1, 2008.
Subsidy rates for Exempt Providers shall
be increased by 4% effective July 1, 2007 and 3% effective July 1, 2008.
All Providers shall ensure that the
rate they charge the State is no greater than their usual private pay
rates. If a Provider charges the State a
higher amount than their private pay Consumers, the Provider agrees that an
overpayment has occurred and a reimbursement is owed to the State. This overpayment will not be subject to the
grievance procedure, but it is subject to the Fair Hearing Process.
12.3 License Exempt Hourly Rates
Effective July 1, 2007 the hourly
rate of pay for license exempt providers will match that given for the first
child for all children to whom services are provided.
This interest award is respectfully
given on this the 10th day of November, 2006 by,
Timothy D. W. Williams
Arbitrator