Early Education and Support Division

Child Care Facilities Revolving Fund

General FacilitiesInformation

Authority

California Education Code (EC) Section 8278.3 established the Child Care FacilitiesRevolvingFund (CCFRF) to provide funding for the purchase of new relocatable child care facilitiesforlease to school districts and contracting agencies that provide child care anddevelopmentservices. The contracting agency must repay all funds advanced from the CCFRF over10years, with no interest. The CCFRF is not a grantprogram.

Funding

From Fiscal Years 1997–98 through 2001–02, program funds were appropriated throughtheannual State Budget Acts. Beginning in Fiscal Year 2002–03, funds have beencontinuously appropriated through the replenishment of money from repayments to theCCFRF.

ProgramAdministration

The CCFRF is administered by the California Department of Education (CDE), EarlyEducationand Support Division (EESD), in accordance with EC Section8278.3.

RelocatableBuilding

A relocatable building is designed and constructed to be relocatable and transportableoverpublic streets and can be relocated without the separation of the roof or floor from thebuilding.CCFRF participants are responsible for the design, purchase, transportation, and installationof relocatablebuildings.

Contract MaximumAllowance

The CCFRF participants are funded up to the contract maximum allowance for thepurchase, transportation, and installation of relocatable buildings, including architect and inspectionfees, site development, and site improvementcosts.

ProgramSpecifications

Eligibility

A.Contractors Providing CDE-Subsidized ChildCare

The CCFRF supports CDE-subsidized child care and development programs.Only current child care provider agencies serving CDE-subsidized children are eligibleforfunds through the CCFRF. These agencies may include school districts, countyofficesof education, community colleges, public agencies, and private nonprofit orfor-profitorganizations (hereinafter referenced as“contractor”).

B.Contractors with a CurrentNeed

Contractors must certify to having a current need for facilities in at least one ofthefollowingareas:

1.Class Size Reduction or other displacements: A new facility is neededbecause child care and development programs ended or services were reduced ormovedas a result of class size reduction or otherdisplacements.

2.Program Expansion: A new facility is needed because of program expansion,andthe contractor will serve currently unserved eligiblechildren

3.Substandard Facility, Health and Safety Hazard: A new facility isneededbecause the current facility is substandard presents a hazard to thehealth and safety of the children served, or will otherwise no longer be available forchild care programservices.

C.Contractors in Good Standing with theCDE

The EESD reviews each CCFRF application to ensure the contractor hasdemonstratedfiscal stability and programmatic soundness and is a contractor “in good standing”with the CDE. However, a contractor is not considered to be “in good standing” and is thereforenot eligible for funding if any of the followingconditions apply:

1.The contractor has outstanding debt to theCDE.

2.The contractor has received notification its contract has been terminated,asspecified in California Code of Regulations (5 CCR), Section18301.

3.The contractor has demonstrated fiscal and/or programmaticnoncompliance and has received final notification, as specified in 5 CCR, Title 5, Section18303,that (1) the contractor’s contract will be placed on conditional status or (2)the contractor will not be offered continuedfunding.

Use ofFunds

In accordance with EC Section 8278.3, the contractor must use the CCFRF forthepurchase, transportation, and installation of buildings for replacement and expansion ofcapacity for CDE-subsidized child care and development services. In addition to building costs,eligible costs include architect and inspection fees, site development, and site improvementcosts.

Funds may not be used for administrative and staffing costs,furniture,office or playground equipment, insurance, or maintenancecosts.

The CCFRF must be used to provide facilities for child care anddevelopmentservices delivered primarily to CDE-subsidized children for the entire term of theCCFRF contract. Nonsubsidized children may be served in the facility as long as at least 50 percentof the children served are in CDE-subsidizedprograms.

FundingLimitations

  • Funding is limited to actual project costs certified by the project architect, approvedbythe CDE, and subject to the Maximum Funding Allowance (MFA) defined in theCCFRF Contract and Lease to Own Agreement. The MFA isfurtherdescribed on page5.
  • Funding for the CCFRF is limited to relocatable buildings sited on or after the datetheapplication has been approved by the CDE. Contractors that incur costs prior toreceivingwritten notification from the CDE that their application has been approved andmeetsall other program requirements do so at their ownrisk.
  • Funding from the CCFRF cannot be used for relocation expenses or to refinanceanypreexistingdebt.
  • In terms of the General Facilities Application (referenced below), no one contractormay receive more than 10 percent of the CCFRF funding available for any given fiscalyear.

Application and Distribution ofFunds

A summary of the application process is describedbelow.

General FacilitiesApplication

Due to the revolving nature of the CCFRF, applications are continuously acceptedunder the General Facilities Application process provided program funding is available.TheEESD processes and funds these applications on a first-come, first-servedbasis.

When funding requests, established by the applications received, exceed theavailable funds, eligible applications will be placed on a waiting list for future funding. The EESDalso reserves the right to select program participants by lottery when the request forfunds, established by the applications received, exceed available funds. Future fundswill become available as repayments are made to the CCFRF. Repaymentsare continuously deposited into the CCFRF to meet new programneeds.

Maximum FundingAllowance

The Maximum Funding Allowance (MFA) for each application for a relocatable buildingincludes the following stipulations:

  • Basic Building: Up to $420,000 for a single, freestanding relocatable buildingtypicallyconsistingofthree12-by40-footmodulesmeasuringapproximately1,440squarefeetin size.
  • Enhanced Building (Basic Building with additional modules): If a single,freestandingbuilding contains more than one classroom, an additional allowance may be approvedbythe EESD based on increased capacity shown on the construction plans, according to theMultipleClassroom Building Allowance (MCBA) formula referencedbelow.
  • The MFA may include architect and engineering fees, building costs, transportationandinstallation, site development, site improvements, and inspection and testingfees.
  • The total cost for any project may not exceed the MFA established in theCCFRF ContractandLeasetoOwnAgreement.Allcostsmustbejustifiedbythearchitect’scertification of final costs upon project completion and approved by theEESD.
  • If the project cost exceeds the MFA, the contractor is responsible for funding theexcesscosts.
  • If the project is completed for less than the MFA, the contractor’s repayment costs willbeless.

Multiple Classroom BuildingAllowance

Relocatable classrooms are typically constructed of three 12-by 40-foot modules. TheCCFRFprovides for an MFA of up to $420,000 for a Basic Building (as defined above). The MFA maybeincreased and additional funds may be approved based on the number of modulesadded to increase capacity to serve additional students. The MCBA must be justified by(1) construction plans approved by the Division of the State Architect (DSA), if applicable, or bythelocal building department showing the size of the building and (2) the final certification ofcosts by the project architect. In addition, the MCBA is subject to a funding limit as describedbelow.

MCBAFormula:

  • Up to $420,000 for a BasicBuilding
  • Up to $140,000 for each additional 12- by 40-foot module for an EnhancedBuilding

Example of a BasicBuilding:

Up to three modules =$420,000

12' x40’ / 12' x40' / 12' x40'

Example of an EnhancedBuilding:

(Three modules = $420,000) + (one module @ $140,000) = fourmodulesfor $560,000total

12' x40' / 12' x40' / 12' x40' / 12' x40'

Contract and Lease to OwnAgreement

Once the contractor has been notified of eligibility to participate in the CCFRF andfundshave been reserved for the project, the CDE’s Contracts Office sends the Contract andLease to Own Agreement (CCFRF Agreement) specific to the project to thecontractor.

No commitments for funding will be made, and no funds will be released until theCDE’s Contracts Office has received the contracting agency’s signed CCFRF Agreement andthecontractor has submitted all required documentation needed for the initial and finalfund releases.

The CCFRF Agreement identifies the MFA for the project and defines the CDE’sresponsibilitiesconcerning fund releases, the schedule of repayments, contractor’s responsibilities in regardto repayments, contract terminations and transfer, interest earned on CCFRF funds,bidding requirements, maintenance, repairs and alteration, insurance, taxes and liens, legalexpenses, and other fiscal and legal provisions concerning the CCFRF Agreement and the facilityproject.

LandOwnership

If a school district owns the land on which the relocatable building will be placed, the EESDwillaccept a letter of certification of site ownership, signed by an authorized agent of theschooldistrict, permitting the building facility to occupy and use the land for 10 years ormore.

Ten-Year GroundLease

If the contractor does not own the land on which the relocatable building will be placed,anexecuted copy of a 10-year ground lease between the contractor and the property owner ofthesite must be submitted to the EESD for approval prior to the release of initialfunds.

An executed ground lease must meet the following CDE and CCFRFlegalrequirements:

  • Includes a lease term of not less than 10 years (from the date of the first repayment)to ensure that the contractor’s child care program can continue for the life of theCCFRF Agreement. The 10-year period does not include time for the planningandconstructionphases.
  • Recognizes the State holds title to the relocatable building until the contractor hasrepaid all funds advanced under the CCFRFAgreement.
  • Does not contain early termination provisions at the discretion of either party tothelease.
  • Does not contain conflicting provisions between the ground lease and theCCFRF Agreement.

Contractors are advised to review the ground lease agreement with their legal counsel toensure their own interests are protected aswell.

CodeRequirements

In addition to EC Section 8278.3, which governs the CCFRF, the following codes andregulationsalsoapply:

  • Structural Safety: For projects placed on school district property or any otherproperty under the jurisdiction of the DSA, the contractor must obtain approval of plansandinspection of the relocatable building by the DSA. For projects placed onnon-schooldistrict property or any other property not under DSA jurisdiction, the contractormust obtain approval of plans and inspection of the relocatable building by the local cityorcounty building department.
  • Department of Social Services Licensing Requirements: The child care program andthefacility must meet the licensing requirements of the Department of SocialServices(DSS), Community Care Licensing Division (CCLD). The CDE stronglyrecommends having the plans for the CCFRF project reviewed by the DSS, CCLD, early intheplanning process. For more information, visit the DSS Web site at (OutsideSource)
  • Public Contract Code: CCFRF contractors must meet the bidding requirements oftheapplicable Public Contract Code. See page 12 of the “Frequently AskedQuestions” section for more information on bidding requirements. Contractors should consultwith their legal counsel for questions about the Public ContractCode.
  • California Code of Regulations, Title 8, Section 3, Payment of Prevailing WagesuponPublicWorks.

FundReleases

The CDE will release funds in two phases, asfollows:

Phase I (Initial FundRelease)

The CDE will release 60 percent of the architect’s cost estimate or up to 60 percent of theMFA, whichever is less. This initial funding will be released upon the contractor’s submissionandCDE’s approval of the Phase I documents, which include but are not limited to thefollowing:

1.The Architect’s Cost Estimate (CCFRF-2)form

2.Detailed Scope ofWork

3.The Approval of Plans for Structural Safety: Construction plans approved by the DSAorlocal city or county buildingdepartment

4.A site ownership letter (for school districts) or a 10-year ground lease agreement,as specified on page6

5.The Certification of Repayment and Use of Funds (CCFRF-3)form

6.The signed CCFRFAgreement

Phase II (Final FundRelease)

The CDE will release the remaining funds (actual project costs up to the MFA specified intheCCFRF Agreement, as certified by the project architect) upon the receipt and approval ofthefollowing Phase II documents, which include, but are not limited to, thefollowing:

1.Structural Safety Inspection/Approval: The Certification and Close of File letter fromtheDSA or a final inspection and approval letter from the local buildingdepartment

2.The Architect’s Certification of Final Costs (CCFRF-4)form

3.Copies of receipts for all CCFRF project-relatedcosts

Interest

Any interest earned on advanced funds must be returned to the CDE. Localeducationalagencies (LEAs), such as school districts and county offices of education and otherpublic agencies, must annually self-certify the amount of interest accrued, if any, and remit thisamountto the CDE. For non-LEAs, such as private and nonprofit agencies, the annual auditwill determine the amount of interest accrued and remittance will be handled through theannualcontract closeoutprocess.

Repayment

All funds advanced under the CCFRF must be repaid in full by the contractor. Repaymentswill be amortized over a 10-year period without interest. The first payment is due 180 days afterthefinal fund release. LEAs are invoiced annually. Non-LEAs are invoiced monthly.Contractors should consider whether this periodic repayment would fit within theirbudget.

Transfer of BuildingOwnership

The building will transfer from the State to the contractor after the contractor has repaid theloaninfull.

CCFRF Process Outline – Planning Phase I

Step / Contractor / EESD / Other CDEDivisions
Application;Eligibility Determination;ProgrammaticandFiscalReview / Submits to theEESD:
  • ApplicationChecklist
  • CompletedCCFRF application
/ Reviewsapplicationforcompleteness, consults with assignedEESDconsultant,anddeterminesCCFRF participationeligibility / ChildDevelopmentFiscalServicesreviews andnotifiesthe EESDregardingthe contractor’sfiscal standing with CDE
Applicationapproval; Noticeto ProceedLetter; ReservationofFunds;CCFRF Agreement / Sends a Noticeto Proceed letterto approvedcontractorand notifiesContracts Office to preparetheCCFRFAgreementpackage / ContractsOffice coordinates withtheAccounting Officeto reserve fundsforapproved projectandsends theCCFRF Agreement tothecontractor
ProjectPlanningand Site Acquisition /
  • Hires architect
  • Secures site
  • Obtainsplanapproval
  • Contacts theDSS, CCLD forfacility licensing

Documents RequiredforPhase I(Initial FundRelease) / Submits to theCDD:
  • Projectcost estimate
  • Approvedbuildingplans
  • Site ownershipletteror 10-yeargroundlease
  • Certificationof Repayment andUse of Fundsform
  • SignedCCFRF Contract andLease to OwnAgreement to CDE’sContracts Office
  • Detailed Scopeof Work
/ Reviews for completeness:
  • Projectcost estimate
  • Approvedbuildingplans
  • Siteownership letter or10-yeargroundlease
  • Certificationof Repayment andUse of Fundsform
Notifies thecontractorof any otherneededinformation / ContractsOffice reviews, approves, and signs theCCFRFContract and Leaseto OwnAgreement; sends anexecutedcopy to thecontractor

CCFRF Process Outline – Planning Phase I(Continued)

Step / Contractor / EESD / Other CDEDivisions
Phase I(Initial)Fund Release:60percent ofProjectCost Estimate or theMFA, whichever isless / Reviews andapproves thesubmitteddocuments notedabove;prepares afunddisbursement package forapproval; notifiestheAccounting OfficeforPhase I (Initial)fundrelease; sendstheInitial FundRelease notification letterto thecontractor / AccountingOffice processes the PhaseI (Initial)funddisbursementrequest to theState Controller’s Officeto issue payment tothe contractor

CCFRF Process Outline – Construction Phase II

Step / Contractor / EESD / Other CDEDivisions
Acquire andSite Relocatable Facility /
  • Preparessite
  • Purchases andsitestherelocatable building
  • Obtainsinspections

StructuralSafety Approval; ArchitectCertificationofFinalCosts / Submits to theEESD:
  • Approval of StructuralSafety ofbuilding
  • Architect’sCertification ofFinalCostsform
  • Copies of receipts for allCCFRFproject relatedcosts
/ Reviews for completeness:
  • Approval of StructuralSafety ofbuilding
  • Architect’sCertificationof Final Costsform
Notifies thecontractor of any otherneededinformation
Phase II(Final) FundRelease:FinalProjectCostsLessthe Phase IFunding, up to theMFA / Reviews andapproves thesubmitteddocuments notedabove;prepares afunddisbursement package forapproval; notifiestheAccounting OfficeforPhase II (Final)fundrelease; sendstheFinal FundRelease notification letterto the contractor;closes out thebuildingprojectfiles / The AccountingOffice processes thePhase II (Final)funddisbursementrequest to theState Controller’s Officeto issue payment tothe contractor; closesout the CCFRF Agreement; setsupfirst invoice billingto the contractor in180days

Frequently AskedQuestions

1.We do not currently provide CDE-subsidized child care and developmentservices.How can we take advantage of theCCFRF?

Child care providers may contact the CDE, EESD, by phone at 916-322-6233 forinformation about how to qualify for EESD child care and developmentprograms.

2.May nonstate-subsidized children be comingled with CDE-subsidized children inthefacilities funded by theCCFRF?

Yes. Funding under the CCFRF must be used to provide facilities for CDE-subsidizedchild care and development services for the entire lease period. Nonsubsidized children maybeserved in these facilities as long as at least 50 percent of the children served areinCDE-subsidizedprograms.

3.If we acquire several relocatables, may one be used foradministration?

No. A portion of each building funded under the CCFRF may be used for officespace;however, each building must primarily house CDE-subsidizedchildren.

4.May we use CCFRF funds to install aplayground?

The site work-related costs of putting in a playground are allowable costs. Thesesite-relatedcosts include site, grading, paving, fencing, and shade structures. However,playgroundequipment is not considered an allowablecost.

5.We are currently providing CDE-subsidized child care services. We have appliedto the CCFRF and want to get started as soon as possible. When can webegin?

There will be no commitment for funding until you have received a Notice to Proceedletter stating your application has been approved, and the CCFRF Agreement has beensignedand returned to the CDE. For project approval and release of funds, you must also submittothe EESD the documents specified in the CCFRF Agreement. Refer to page 9 for a listof these required documents. Contractors who incur costs prior to being approved asCCFRF participants and meeting all CCFRF requirements do so at their ownrisk.

6.We are currently providing CDE-subsidized child care services and have appliedforfunding under the General Facilities Application process. What happens ifCCFRF funds are insufficient to fund ourapplication?

Your application will be put on a waiting list until CCFRF funds become available inthefuture.

7.May we build permanent facilities with CCFRFfunds?

No. The legislation governing the CCFRF, EC Section 8278.3 specifies the funds beusedonly for the purchase of new relocatable child carefacilities.

8.What are the design standards for child carebuildings?