PROGRAM STRUCTURE, GOVERNANCE & OPERATIONS
An independent nonprofit corporation, Denver Preschool Program, was established for the sole purpose of administering this program. The organization enters into an annual contract with the City and County of Denver to administer and expend Denver preschool tax revenue. While a private entity, DPP is contractually obligated and committed to public transparency and accountability and as such the organization operates in accordance with state transparency laws that apply to public entities.
When originally established, the City ordinance required the Denver Preschool Program to have a governing Board of Directors, consisting of seven members, including one member of the Denver City Council. All private citizen members of the Board are appointed by the Mayor and confirmed by City Council to serve three-year terms and are not permitted to serve more than three terms. The City Council representative on the Board is selected by City Council. The original ordinance also required the establishment of a 25-member Board of Advisors to make non-binding recommendations to Board of Directors on policy issues regarding early childhood education and administration of the program. They were, in essence, the content area experts.
When the ordinance was revisited ahead of the 2014 reauthorization campaign, two important changes were made to the governance. First, the Board of Directors was expanded from seven members to a minimum of 11 and a cap of 15 members. Second, the Board of Advisors was eliminated. While the Board of Advisors played a critical role during the start-up phase of the organization, it was not as relevant or necessary to the operations of the mature organization.
The 2006 measure established a .12 percent (12 pennies on a $100 purchase) sales tax increase. The 2014 measure increased the tax to .15 percent (15 pennies on a $100 purchase) sales tax. The increase was needed to meet the growing demand of students in full- and extended-day programming, to reinstate and sustain year-round programming and to keep up with the rising cost of preschool. All funds are collected by the City and County of Denver and are subject to annual appropriation by City Council. Sales tax revenue fluctuates and its performance is tied to economic conditions, which complicates projections, but historically the sales tax has generated approximately $9 - $12 million in revenue. With the increased tax rate approved in 2014, the tax is projected to generate approximately $18 - $20 million going forward.
There are pros and cons to any public funding mechanism. Sales taxes can be volatile and are subject to economic changes. The Denver Preschool Program certainly experienced the impact of sales tax declines during the Great Recession of 2008 and 2009, and was forced to take painful steps to contract the program accordingly. That said, sales tax bases tend to increase over time and create the opportunity for capacity growth in the program, whereas other public funding sources, including mill levies, grow relatively slowly and cannot similarly accommodate program growth.
The Denver preschool tax revenue can be used for seven explicit purposes, as laid out in the enabling ordinance:
- Administrative expenses – this includes salaries and office expenses, routine business expenses and reimbursement to Board members for expenses incurred in connection with their service on the Board. Administrative expenses were capped at 5 percent in the original ordinance and increased to 7 percent in the revised ordinance. This is the only expenditure that is explicitly limited by ordinance.
- Tuition credits.
- Outreach to parents and the Denver community.
- Assistance with preschool enrollment.
- Technical assistance and direct grants to preschool providers for the purpose of improving program and service quality.
- Contracting with qualified experts to design and help implement a quality improvement system for preschools.
- Establishment of independent evaluation in order to provide measurement of program performance and child outcomes and the preparation of associated performance reports.
While there are variances year-to-year, the organization’s budget typically follows this approximate revenue allocation model:
- Tuition credits – 70 percent of revenue
- Quality improvement – 10 percent of revenue
- Community outreach – 5 percent of revenue
- Enrollment support and customer service – 3 percent of revenue
- Evaluation – 3 percent of revenue
- Other contracted services – 2 percent of services
- Administration – 4 percent of revenue (limited in City Ordinance to 7 percent)
Additionally the organization maintains an operating reserve to help weather economic downturns and ensure there is revenue to close out the program should voters choose not to renew it at sunset.
Tax revenue is the primary funding source for the program; however, nothing in the enabling ordinance prohibits the Denver Preschool Program from securing private revenue to supplement public resources. While DPP is permitted to secure private contributions through grants or other sources, the organization has carefully considered its approach to private funders and limits requests to special projects that enhance its core programming.
Expanding access to and participation in preschool programs is one of two primary objectives of the Denver Preschool Program and tuition credits are the vehicle for reaching that objective. Any Denver resident who is a parent or legal guardian of a preschool-aged child who is also a Denver resident is eligible for a tuition credit to be used to enroll that child in preschool in the year prior to the year in which the child will be eligible for kindergarten. Because Colorado law states that the age eligibility for kindergarten is 5 years old, this practically means that the subsidy is available to families of 4-year-old children whose birthday is on or before October 1.
The City ordinance that was approved in the reauthorization campaign empowers the Denver Preschool Program Board of Directors to consider providing subsidies to younger children. While the Board has not yet exercised that option, it is newly available to them.
Tuition credits are administered on a sliding scale, with the amount of the credit being inversely related to the family income of the recipient and related to the quality of the preschool provider with whom the credit is used. As such, low-income families choosing high quality preschool programs are eligible for the highest subsidies. The average tuition credit distributed in 2014-2015 was $303 per month for a student attending a full-day program.
Tuition credits are provided to any participating preschool on behalf of the parent or guardian. The credits follow the child should the child move during the preschool year. Preschools are eligible to accept tuition credits if they are duly licensed under the Colorado Child Care Licensing Act, or are an early childhood education program administered by Denver Public Schools, and if they agree to participate in a three-part quality rating and improvement program.
In the early years, the Denver Preschool Program provided subsidies for year-round education programs. However, when the Denver economy suffered as part of the Great Recession, sales tax revenue took a significant hit. As a result, program leaders were forced to consider how to contract the program to meet lower-than-projected revenue. While the Board of Directors considered a number of policy options, they ultimately decided to reduce the number of months that coverage was provided. Instead of providing subsidies for year-round enrollment, the organization would subsidize only nine months of a preschool year. This was a painful decision for program leaders and it had a very real impact on Denver families, as well as Denver early childhood education programs.
The 2014 reauthorization increased the amount of the sales tax dedicated to the program, which allowed DPP to reinstate year-round subsidies, beginning in the summer of 2015. Further, as a result of this experience, and thanks to the increased investment of public resources, DPP established and funded a firm reserve target to buffer against future economic volatility. Fulfilling promises to the program’s key stakeholders – families and providers – is a key principle of how the Denver Preschool Program operates and the organization is committed to doing all it can to avoid having revenue fluctuations impact parent and provider experiences with the program.
QUALITY RATING AND IMPROVEMENT
Improving the quality of available child care and preschool options is the second primary objective of the program and so quality rating and improvement activities are embedded throughout the Denver Preschool Program. Most significantly, DPP makes participation in quality rating and improvement one of only two requirements for provider participation (the other being state licensure).
To implement the quality rating and improvement activities, the Denver Preschool Program used only the Qualistar Rating™ or the National Association for the Education of Young Children (NAEYC) accreditation framework from the 2007-2008 school year through 2012-2013 school year to rate providers and develop quality improvement plans for them. These systems focus on measuring the structural components of early learning, including characteristics of the learning environment, teacher / staff qualifications, ratio and group size and family partnerships. Qualistar used a star rating scale of zero (provisional) to four stars, with four stars being highest quality. DPP providers that attained NAEYC accreditation were given a rating equivalent to four-stars on the Qualistar Rating™ scale.
In the 2012-2013 school year, in response to a growing body of research about the importance of teacher-child interactions, including the findings of a DPP evaluation study, the Denver Preschool Program added significant investments in CLASS®, the Pre-K Classroom Assessment Scoring System, to its quality rating and improvement activities. CLASS® utilizes classroom observation to evaluate the nature of teacher-child interactions. CLASS® compliments the Qualistar Rating™ and NAEYC accreditation framework to provide a more complete picture of program quality. To implement this change, DPP created its own five-level quality rating system in the 2013-2014 school year, which combined the CLASS® with either the Qualistar Rating™ score or NAEYC accreditation, and began requiring that each DPP classroom receive the CLASS® observation once every two years.
In addition to requiring participation in quality rating, the Denver Preschool Program provides technical assistance and grant funding to child care providers to undertake quality improvement activities. These activities can include acquisition of learning materials, early childhood education coursework for providers and participation in conferences, training and coaching aligned with the provider’s quality improvement plan. DPP has worked to continuously review and improve its quality improvement resource offerings, leading to the creation of a new quality improvement framework in 2015 based on the core values of intentional teaching, highly effective teachers and positive teacher-child interactions. These core values are prioritized when supporting providers in creating their QI plans and in selecting how they will use their quality improvement funding allocation.
Finally, as noted above, the amount of a family’s tuition credit is determined, in part, on the quality rating of the preschool they choose. This policy creates an incentive for parents to choose highly rated programs, thus driving consumer demand for quality in the market.
Quality rating in early learning programs is a quickly evolving area in the field of early childhood education. The State of Colorado launched a new quality rating and improvement system in 2015 tied to the state’s licensure of child care facilities. Known as Colorado Shines, the new state system assesses quality in five domains:
- Workforce Qualifications and Professional Development
- Family Partnerships
- Leadership, Management and Administration
- Learning Environment and
- Child Health Promotion.
While there are many similarities between Colorado Shines and the DPP Classroom Rating, there are also some key variations. As such, the Denver Preschool Program adopted a two-year plan to align its quality rating and improvement plan with the state’s system and move away from having its own DPP Classroom Rating. This extended transition period, now complete, was designed to ensure participating child care providers could benefit from the investments they have previously made to secure a quality rating and provide ample time for them to transition to the new system. While CLASS® was not recognized as part of the old Qualistar Rating™, providers can earn points within Colorado Shines if they achieve certain CLASS® observation benchmarks, which is one important reason why DPP chose to align with the state’s new rating system.
Remaining nimble and being prepared to respond to changes in the field of early education is another key principle of how the Denver Preschool Program operates, as is evident in the evolution of the quality rating and improvement activities of DPP.
Recognizing that Denver was undertaking an innovative approach to funding early education, measurement and evaluation has been a key tenant of the program since its inception. The Denver Preschool Program contracts with a small group of academic institutions and private companies to conduct a comprehensive annual evaluation to show, in measurable terms, how the program benefits Denver children. A key partner in this effort is Denver Public Schools (DPS), which provides achievement data for DPP and non-DPP students throughout their time in DPS used in the DPP longitudinal student outcomes study.
The evaluation looks at impact on student achievement, impact of preschool quality and program operations. Evaluation of student achievement centers around two primary questions: Are students ready to learn when they enter kindergarten? How long after preschool do its benefits last? Program evaluation looks at impact on availability of quality preschool programs and efficiency and efficacy of Denver Preschool Program operations.
More information about the impact of the program is available later in this paper, but the bottom line is that data shows that DPP students are ready to learn when they enter kindergarten and they are outperforming non-DPP student on reading, writing and math assessments when they reach third and fourth grades.
Recognizing that the field of early childhood education is developing and evolving rapidly, the annual data collected through this rigorous evaluation process is invaluable to informing program operations and supporting efforts to continuously learn and improve the Denver Preschool Program. In addition to informing internal operations, the student achievement and program operations evaluations are made available through annual reports to the Mayor, City Council, City Auditor and the public. As stated earlier, the data and research measuring impact of the program was particularly valuable in the 2014 campaign to secure continued public support for the program.
There are pros and cons to any public funding mechanism. Whatever public funding source is used, program leaders must be cognizant of potential pitfalls or limitations of that structure and be empowered to address them.
Employing a mixed-delivery system that empowers parents to choose the preschool program right for their child – public, private, community-based, school-based or faith-based programs – and leverages other public funding sources, including Head Start and the Colorado Preschool Program, have been key in DPP becoming a truly universal program that works for the vast majority of Denver’s families.
While the mixed-delivery system is a net strength of the program, it has created some administrative and policy challenges in working with and supporting both Denver Public School programs and community based providers. Leaders implementing a mixed-delivery system program must be sensitive to the differing opportunities and challenges facing the various provider types and must be nimble in establishing program parameters that work for all provider types.
The Denver Preschool Program operates in the context of the evolving field of early childhood education and is reliant on a public funding source that is subject to changing economic conditions. Organization leaders must have the authority, flexibility and courage to adapt to new research and best practices and manage through changing economic conditions. Further, they must support program partners – namely families and early childhood education providers – in understanding and adapting to the changing landscape.
Program evaluation has been critically important, not only in measuring effectiveness and revising the program as needed, but also in maintaining public support and making the case for continued investment during the reauthorization campaign.