Financing Child Care in the United States - Ewing Marion Kauffman ...

• While Head Start is a primary source of funding for
KVCAP Child and Family Services, the program strives
to provide a broad, flexible, community support rather
than a narrowly focused child development program. In
general, KVCAP views Head Start as a funding stream,
rather than a discrete program.
• The focus on collaborative community–building has
resulted in some deep and lasting changes. One
example is the Madison school district, which recently
received state funds to build a new school. The district
invited KVCAP to join in designing the school and
added the cost of a preschool wing and community
gymnasium to the school referendum. The voters
approved the bond issuance. Once the new school is
completed, the Madison portable classroom will be
moved to another school to support a collaborative
early childhood program.
• KVCAP has successfully used the Community
Reinvestment Act (CRA) to help banks serve the
low–income community. Additionally, the agency gives
each of its projects (and co–sponsors) high visibility in
the community, through publicity in newspapers, and
community events and meetings.
• The community center is a unique collaboration — the
first of its kind in the State of Maine. The center is run
by its own board of directors, which has created a
memorandum of understanding with the local school
district to allow the school to use the facility during
normal school hours. The district pays all building
expenses. The board of directors oversees all
out–of–school–time programming.
OTHER SITES WITH SIMILAR STRATEGIES
The New York City Educare Centers, page 105, also mix
capital and operating funds.
CONTACTS
Patti Woolley
Director
KVCAP Child and Family Services
97 Water Street
P.O. Box 1529
Waterville, ME 04903
Phone (207) 873 2122
Fax (207) 873 0158
E–mail
pattiw@kvcap.org
Peter Duncombe
KVCAP Housing Program
97 Water Street
P.O. Box 1529
Waterville, ME 04903
Phone (207) 873 2122
Fax (207) 873 0158
TAX–EXEMPT BONDS (ILLINOIS)
DESCRIPTION
The Illinois Facilities Fund (IFF) borrowed funds through
tax–exempt bonds for the purpose of constructing five
and renovating two child care centers in Illinois. The
bonds were purchased by private investors and were
secured by an equity contribution from the IFF, a debt
service reserve fund raised by the IFF and a commitment
by the Illinois Department of Children and Family Services
to repay the debt over 10 years, subject to annual
appropriation. The IFF owns the buildings, although
ownership will revert to the child care programs when the
mortgages are repaid and leases them to child care
providers for $1 per year. The IFF is completely liable for
the debt if the state is unable or unwilling to pay.
WHEN ESTABLISHED
The bonds were issued in November 1992. Land
acquisition and design began immediately. The first
building opened in September 1992, and the sixth
opened in April 1993. The seventh, which was held up
due to environmental problems, opened in early 1994.
ANNUAL AMOUNT
The IFF bond issuance was for $13 million. Additional
fundraising was required from the participating child care
providers (10 percent of construction costs), and other
construction funds were raised by the IFF. In total, the
programs attracted $24 million, including $4 million for a
primary health clinic in one of the buildings. Each year,
the Illinois Legislature allocates approximately $1.5
million to repay the debt. Additionally, the state made
grants to the IFF totaling $900,000 over three years
(1991–93) to cover the administrative costs of the
program and the cost of creating management systems
for the centers.
SERVICES FUNDED
The bond issue funds covered all costs associated with
design and construction of five new buildings and
renovation of two buildings.
HOW FUNDS DISTRIBUTED
A request for proposals was issued jointly by the Illinois
Department of Children and Family Services and the IFF.
An internal committee, a screening committee and a final
panel were used to select the child care providers who
received the buildings.
POPULATION SERVED
The child care centers housed in the buildings serve
low–income working families and, in the case of four
Head Start classrooms, families who qualify for Head
Start.
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