With Child Care Centers in Crisis, New York Pledges to Speed Payments - The New York Times

Child care providers and parents have grown frustrated over millions of dollars in delayed payments, and one major center is closing.

Following complaints from New York City child care providers that delays in city payments nearly forced some to close down, school officials will announce a plan Thursday to expedite payments.

The city and nation were already facing an acute child care crisis, after the pandemic decimated the child care business and as a competitive labor market drew away workers. For months, child care providers have complained that the city was compounding the strain on the industry by not paying them on time or at all for publicly funded prekindergarten and 3-K programs.

Now, the schools chancellor, David C. Banks, said in an interview that he would deploy a “rapid response team” to child care centers to sort out payment issues.

“I hear them, I see them, I feel them, and I’m doing everything I can to come to their aid,” Mr. Banks said. “We need them desperately. I don’t want to see any of these groups go out of business.”

School officials will also guarantee that child care providers who work with the city to properly file invoices will receive at least 75 percent of their contract for the fiscal year ending in June, even if enrollment was lower than expected.

Child care providers have been raising the alarm that they are not being paid by the city for prekindergarten and 3-K services for months. At least one major provider, Sheltering Arms, which serves roughly 400 children across six preschool sites in the Bronx, Queens and Manhattan, is shutting down next month.

As centers have alerted parents about their uncertain future, parents have worried about losing the free city preschool services that they rely on. Some City Council members have also criticized staffing changes at the city’s Division of Early Childhood Education, which has lost more than 100 workers this year.

Sasha Maslouski, the operator of Snapdragon Place, a home-based preschool in central Brooklyn that joined the city’s 3-K program this year, said “the whole experience has been very difficult, very nerve wracking, very unstable and a huge disappointment.”

She expected to receive a check before the school year began in September to help cover rent, food, payroll and supplies. It did not come until the end of October, and Ms. Maslouski had to spend $60,000 to keep the program running.

“I feel like we’ve been disregarded,” she added. “We should not have to scream, yell and protest to get paid.”

Mr. Banks blamed the payment problems on the administration of Bill de Blasio and said that schools officials had failed to create a simple payment system, instead focusing on quickly expanding 3-K spots, even though many of the current spots are not filled.

“That is the reality we inherited — a deeply flawed system that we have been working to uncover and fix,” Mr. Banks said.

One of Mr. de Blasio’s signature policy achievements was free universal prekindergarten for 4-year-olds. He followed this by expanding it to 3-year-olds and pledged to make 3-K universal by 2023, by offering 60,000 spots. But his successor, Mayor Eric Adams, is less committed to making 3-K universal by next school year.

Josh Wallack, a deputy schools chancellor under Mr. de Blasio who oversaw universal prekindergarten, has defended the previous administration’s approach. He said that the payment system had worked for years, and the Adams administration has had 10 months to address any problems.

“The workers in these centers carried our children through a pandemic — literally,” Mr. Wallack said on Twitter last month. “Until each one of them has been paid, this is an emergency — not only for them, but for all of us.”

The city owes child care providers about $140 million for the fiscal year that ended in June, school officials said. About $120 million of that money was delayed because invoices were not submitted by providers, and about 480 child care centers are having difficulty submitting invoices.

At the same time, some centers have fewer children enrolled than they anticipated. The city set aside funding for about 55,000 seats for 3-K, but centers filled only about 38,000 this year, school officials said. If a provider signs a contract to serve 50 students but only enrolls 15, it must adjust their budget, and will be paid less than expected.

Elizabeth McCarthy, chief executive officer at Sheltering Arms, said that the de Blasio administration told her that if her preschools struggled to fill classes during the pandemic they would not incur heavy penalties. But current school officials agreed only to reimburse roughly 75 percent of the spending from last year, about $2 million on the six contracts, which included fixed costs like rent.

“If we hadn’t been around during Covid, many of these families would have struggled even more,” she said. “Thinking about not being part of the neighborhood, and part of the support system for families who very much live on the margin, it’s really heartbreaking.”

More than 100 Sheltering Arms workers could lose their jobs, though some are expected to move to other programs within the organization.

The announcement on Thursday comes two weeks after Simone Hawkins, a top official in the agency’s early childhood division who managed payments to contracted preschools, left the Education Department. Ms. Hawkins did not return requests for comment, and Mr. Banks said that she left for “personal reasons.”

At a City Council hearing last month that focused heavily on late payments to providers, Ms. Hawkins and Kara Ahmed, the deputy chancellor of early childhood education, said that more than $930 million had been paid out in reimbursements to providers for last school year.

Dan Weisberg, the first deputy schools chancellor, said that the new rapid response team would include 20 to 25 current staffers from the Education Department and that City Hall would provide additional staffers.

Mr. Banks said that he had spoken to Mr. Adams about the payment delays, and they were both committed to fixing the problem.

“This is not an issue of do we have the dollars,” Mr. Banks said. “The dollars have been budgeted. We have the dollars.”

Some operators who have not received anticipated reimbursements have launched GoFundMe campaigns or applied for personal loans to help cover expenses.

Fela Barclift, the founder of Little Sun People, which has been in Brooklyn for more than four decades, said the payment system was “horrendous.” Ms. Barclift said her organization did not receive payments from the department between August 2021 and March 2022, because the building they operated had not received occupancy approval from the city. She said she had to borrow more than $55,000 from her mother and cut teachers’ hours last school year as a result.

“We don’t have endowments or huge dollar budgets that we can lean on while we wait for these issues to be resolved,” she said. “We’re literally struggling every single day to try to make sure we meet payroll.”

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