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www.prenatal5fiscal.org 17 Appendix

A. Understanding how a cost es=ma=on model can be used for alterna=ve methodology The process of developing a cost esDmaDon model for alternaDve methodology is more complex than conducDng a market rate survey and represents a significant change for many states that have been using the market rate survey approach for decades. Through work with mulDple states and communiDes over several years, Prenatal to Five Fiscal Strategies has idenDfied a four-stage approach to developing a cost esDmaDon model. This approach was uDlized in the three jurisdicDons that have implemented alternaDve methodology to date, and in each case has resulted in a cost esDmaDon model that is validated and understood by the community, informed by authenDc stakeholder engagement, and flexible to the changing needs of policymakers and the child care field. These four phases are illustrated in the graphic below and discussed in more detail following the graphic.

Cons0tuent Engagement Engaging mulDple consDtuents in the alternaDve methodology process and the development of a cost esDmaDon model can ensure that the model fully reflects the experience of child care providers and encompasses the many variaDons that may exist across the state. This engagement can also provide transparency into the process and help validate the results that are produced by the model. Unlike the market rate survey which requires reaching as much of the child care market as possible, the alternaDve methodology is focused on hearing from the diversity of provider types that exist, so that the model and subsequent rate senng can be inclusive of this diversity. By its very nature of being a model, it does not intend to capture every individual provider circumstance but rather capture the breadth of provider types that exist and reflect these experiences in the model.

It is important to engage a diversity of consDtuents who have an interest in the results of the cost modeling process. In addiDon to child care providers, those who support providers should also be included, such as Child Care Resource and Referral Agencies (CCR&Rs), licensing specialists, and quality support coaches or mentors. Offering opportuniDes to learn more at the beginning of the process is a key way to engage the community, providing educaDon about the cost model process and sharing details on the opportuniDes for program input and deeper engagement throughout the process. O1en states will form a technical or advisory workgroup that will guide the work of the project. This workgroup is comprised of representaDves of child care providers, from relevant state agencies, and other bodies with experDse to offer, and meets regularly throughout the process to review data, inform model assumpDons, and react to iniDal model results.

Data Collec0on The cost model requires data from child care providers related to both their expenses and revenues (in order to understand how programs are covering their current expenses) and their staffing paFerns. This data is o1en collected through an online survey, which should be available in mulDple languages, and distributed through mulDple avenues, including trusted partners, such as provider associaDons or advocacy groups. An online survey can be paired with input sessions or focus groups which allow for small group conversaDons to probe deeper into the main cost drivers and to discuss the challenges and barriers to providing child care and the resources needed to meet the needs of children and families. Across these acDviDes it is necessary to track parDcipaDon by provider type, geography, ages of children