CSPP Family Fee Waiver and Temporary Rate Increase

Early Education Division Email

Date Sent: May 30, 2023

Expires: 

• Family Fee Waiver: September 30, 2023
• One-Time Temporary Rate Increase: Funds Issued in Fiscal Year (FY) 2023–24

Attention: Executive Directors and Program Directors of all California State Preschool Programs

This email is to notify California State Preschool Program (CSPP) contractors that the Governor signed Assembly Bills (AB) 100 (Chapter 3, Statutes of 2023) and AB 110 (Chapter 4, Statutes of 2023) on May 15, 2023.

• AB 100 allows for the California Department of Education (CDE) to use $5.3 million Proposition 98 (P98) General Fund (GF) and $4.4 million Non-P98 GF to support the extension of family fee waivers from July 1, 2023, to September 30, 2023.
• AB 110 includes statutory language to extend the current family fee waiver until September 30, 2023, and authorizes the CDE to issue temporary rate increases to contractors that exceed the existing contract reimbursement rates.

This email provides more detail on the CDE's implementation of these two provisions, in addition to initial guidance for contractors.

Family Fees Waived July 1, 2023, through September 30, 2023

AB 110 waives family fees and prohibits contractors from collecting family fees through September 30, 2023. AB 110 also requires contractors to reimburse subsidized childcare providers for the full amount of the certified schedule without deducting family fees during this extended period.

Contractor Requirements

As soon as possible, contractors must issue a Notice of Action (NOA) extending the fee waiver until September 30, 2023, for each family enrolled that has a family fee. On that NOA, contractors must state that the fees the family is assessed will be collected for services provided starting on and after October 1, 2023.

For any new families enrolled between July 1, 2023, and September 30, 2023, the contractors must assess the family fee at the time of enrollment and note on the NOA that fees will be waived through September 30, 2023, and families will be responsible to pay family fees again beginning October 1, 2023.

The CDE is in the process of finalizing the fee schedule for the 2023–24 year and will release that schedule as soon as possible. However, the CDE did not want to wait to release this message until the fee schedule is ready because the CDE understands that contractors need the information on the early action items that is available now.

Family Fee Waiver Reporting Requirements

Contractors must report the amount of family fees that were assessed and waived between July 1, 2023, and September 30, 2023, on the line Waived Family Fees for Certified Children of their fiscal year (FY) 2023–24 first quarter Enrollment, Attendance and Fiscal Report.

Allocations to Support Family Fee Waivers

California Code of Regulations, Title 5 (5 CCR) Section 17809 requires fees received from subsidized families be expended and earned before contract funds be claimed for reimbursement. In years that family fees are not waived, family fee revenue collected are in lieu of contract funds, which allows contractors to enroll additional children beyond the number of children the contract supports. Therefore, AB 110 provides additional funding authority to ensure contractors have sufficient funds to cover the cost of family fee waivers between July 1, 2023, and September 30, 2023, without needing to reduce services provided to children and families. As such, CSPP contractors will receive an allocation to cover the costs of the family fee waivers. Allocations for these family fee waivers will be included as part of the CSPP Budget Act Amendment, expected to be released in Fall 2023. The Budget Act Amendment will be released to CSPP contractors as an Allocation Letter and therefore will not require a signature from the contractor to be fully executed. Once the Budget Act amendment is processed, future payments will be calculated based on the normal apportionment schedule, while factoring in the contract’s new maximum reimbursable amount and projected earnings.

The Early Education and Nutrition Fiscal Services (EENFS) office will utilize family fee waiver data submitted in the FY 2023–24 first quarter Enrollment, Attendance, and Fiscal Reports as a basis for this allocation. It is imperative that contractors submit their first quarter report by the October 20, 2023, deadline to ensure that an accurate allocation is provided. If the first quarter report is not submitted by October 20, 2023, a contractor may not receive an allocation to cover the cost of any family fee waivers.

Enrollment, Attendance, and Fiscal Reports are available through the Child Development Provider Accounting Reporting Information System (CPARIS) web application located at https://cparis.cde.ca.gov/cparis/logon.aspx.

Temporary Rate Increases

Additionally, AB 110, commencing July 1, 2022, and subject to available funding, authorizes the CDE to issue temporary rate increases to contractors that exceed the existing contract reimbursement rates pursuant to Education Code (EC) Section 8242(c)(1) and the reimbursement rate supplements described in Section 51 of AB 185 (Chapter 571, Statutes of 2022). Below, we explain the methodology the CDE will use to implement this provision of state law.

Temporary rate increases will be funded by state P98 General Fund for local educational agencies (LEAs), while non-LEAs will receive federal American Rescue Plan Act (ARPA) of 2021 stabilization funds.

Contractor Requirements

In accordance with federal requirements and pursuant to EC Section 8242(c), recipients of the ARPA stabilization funding must complete an application or survey to ensure eligibility prior to receiving ARPA funding. As the lead agency of the Administration for Children and Families’ Child Care and Development Block Grant, the California Department of Social Services (CDSS) issued a revised ARPA survey on July 13, 2022. Non-LEA contractors who have not already completed this revised survey must submit a response for each site that CSPP services are provided at in order to be eligible for these temporary rate increases.

The deadline to complete the ARPA survey is August 15, 2023. Contractors who do not submit a survey for all sites by August 15, 2023, will not be eligible for these allocations.

Allocations to Support Temporary Rate Increases

The CDE intends to allocate one-time lump-sum payments to CSPP contractors in late Summer 2023. These one-time lump-sum payments may include two allocations:

1. A $1,442 per-child allocation to provide additional financial support to CSPP contractors. The CDE will utilize April 2022 enrollment data submitted on the Child Development Management Information System (CDMIS) CDD-801A Report. CSPP contractors who operate through a family childcare home education network (FCCHEN) will be required to distribute $1,442 to family childcare providers for every child that was served by that provider in April 2022. Contractors who operate a FCCHEN and distribute the $1,442 per-child allocation to CSPP family childcare home providers will receive an additional 10 percent to cover administrative costs of issuing payments to the providers in the FCCHEN.
2. An additional allocation to contractors who operate in counties where the FY 2022–23 contract reimbursement rate is established at the 75th percentile of the 2018 Regional Market Rate (RMR) survey, intended to temporarily bring reimbursement above the 75th percentile of the 2018 RMR survey. Current reimbursement rates are based on the greater of the 75th percentile of the 2018 RMR survey, or the contract per-child reimbursement amount as of December 31, 2021, increased by the cost-of-living adjustment. The CDE will allocate funds based on the difference between the current reimbursement rates as of July 1, 2022, and reimbursement at a higher percentile of the RMR. Note that not all CSPP contractors will receive an allocation due to their current rate exceeding the percentile attained by the allocation of these funds. These funds are intended to mitigate the 2022–23 cost-of-living adjustment that was only distributed to contractors whose FY 2022–23 contract reimbursement rate was based on the rate as of December 31, 2021.

Contractors will receive a one-time lump-sum payment which will not be provided as an augmentation to the CSPP contract, but rather will be paid in a separate check sent directly to the contractor, known as an apportionment payment. Funds provided via an apportionment payment to LEAs, including charter schools, must be distributed through the County Treasurer, and LEAs must contact their County Treasurer’s Office to coordinate the transfer of funds.

CSPP contractors will receive an email from their EENFS fiscal analyst identifying the amount of funds they will receive for each purpose, the expected date of payment, and any additional guidance related to these funds.

For more information on the bills, please visit:

• AB 100: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB100
• AB 110: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB110