Finance Highlights 2008 0729 - Laserfiche WebLink

Home

family childcare, and center-based care. Reimbursement or direct payment for childcare services for families is available based on income guidelines. The history of this program dates back to a pilot program that began in the late 1970s and was enacted permanently into law by Chapter 798, Statutes of 1980 (SB #863). The program is publicized statewide and on just about every County office and website. There have been budgetary and political battles over the program in the past, and this process is likely to continue indefinitely due to the nature of politics and social reform. This program is proposed for renewal with some budget cuts in the Governor's proposed 2008-09 budget, but due to a projected $16 Billion budget deficit projection, the Governor will be preparing a revised budget proposal on May 14, 2008. While we are not aware of any pending or proposed legislation that could negatively impact this program, the possibility remains that the political process may have unpredictable effects on the sustainability of this program. Operationally, the APP receives funds for qualified families to pay for childcare services on apre-determined ratio that sets provider payments at 80% of revenue. This pre- determined ratio should provide stability for the margins in this program and its continued financial success. Revenues in APP have grown at an annualized rate of 11.6% over the past four years. The contribution margin (revenue less variable expenses) has varied from a low of 4.4% to a high of 10.5% during these years, primarily as the result in changes in salaries. The Executive Director assures us that caseloads in this program are in good shape, they have recently hired an assistant director to manage expected growth, and there is plenty of capacity and potential for expansion. Accordingly, we have projected a 10% growth rate with a contribution margin of 8°l°. At these levels, the APP will continue to contribute significantly to the operating surplus. Health Services (11% of Revenue and Support): Health Services consists of the Mental Health program, which provides counseling services to deserving families through post-graduate interns coming from school placement, and Rotacare, which provides medical services at a clinic staffed with volunteers. Both programs have shown a small surplus over the 4-year period ($69,767 for Mental Health and $122,544 for Rotacare), and there is both a need and a desire to expand the services in this area. Although these programs only make a modest contribution to the current financial strength of the organization, they trended very positively in 2007, and further expansion in these programs will provide much-needed diversity away from the concentration in the APP. These programs represent real opportunities for growth in governmental and non-governmental grants and service revenues. Mental Health Services have exhibited a flat growth rate over the last 4 years at a contribution margin of 27.1%. Our projections show Mental Health gradually creeping slightly "into the red" a few thousand dollars a year over the next four years if current trends continue -not enough to cause any alarm. Sustainability Study: Davis Street Family Resource Center - 4/08 Page 9 of 96