Multnomah County briefed on 'true cost of care' model for Preschool for All

Consultants contracted by Multnomah County presented preliminary results from a "true cost of care" model for the county's Preschool for All (PFA) program, estimating annual per‑child costs under different salary and program assumptions and identifying gaps between those modeled costs and current PFA payment rates.

Prenatal to 5 Fiscal Strategies (P5), which the county contracted to build the model, described the methodology as a customizable, scenario‑driven tool that converts program standards, local administrative payroll data and provider input into an annual cost per child. P5 said the model uses separate templates for center‑based and family child care settings and includes more than 30 non‑personnel line items, required licensing and FTE staffing calculations. P5 principal Simon Wertman said the model is intended for ongoing policy testing rather than producing a single definitive program price.

Using county payroll and program data from fall 2025 (about 1,398 staff records across roughly 170 contracted providers) plus qualitative input from 65 distinct PFA providers (13 input sessions and eight interviews), P5 ran two primary scenarios: current salary and step distributions, and a scenario that applies PFA's 2030 salary goals. Under those assumptions, P5 reported example outputs for a full‑day, full‑year center serving mixed ages (capacity 68): an annual cost per preschool child of about $27,372 using current salaries and about $31,251 using the PFA 2030 salary goals. Family child care equivalents were slightly lower in the presented scenarios. School‑day/school‑year scenarios produced lower per‑child results (P5 cited examples near $20,000 at current salaries and about $23,000 at goal salaries).

P5 also compared modeled costs to the county's payment rates and found that FY26 PFA rates covered approximately 91% of modeled center costs and about 94% of family child care costs; projected FY27 increases narrow the per‑child gap further (P5 estimated a remaining center gap on the order of $1,200–$1,300 per child in the examples shown). P5 stressed these comparisons depend on the specific assumptions used in each scenario and that the model can be adjusted to run additional policy options (for example pooling health insurance, defining employer share of premiums, or budgeting education incentives for staff).

County staff and commissioners pressed for clarifications. Commissioners asked for additional documentation of data sources and assumptions (P5 and PEL staff said a written report with detailed assumptions will follow), more information on how representative the engaged provider sample is relative to the ~300 providers in the PFA system, and how the model treats inclusion supports and children with higher needs. P5 described a default assumption in the presented outputs that 10% of children require baseline inclusion supports (modeled as FTE for inclusion aids and related coverage), with separate, additional funding mechanisms available for children with more intensive support needs.

Commissioners also raised workforce questions: how much it would cost to meet PFA's 2030 credential goals (for example, increasing the share of lead teachers with an AA degree), how the county could structure incentives or supports, and whether pay requirements and reporting can be used to ensure modeled dollars flow to classroom staff rather than being absorbed elsewhere. P5 and county staff said the model can simulate education incentives and that accountability can focus on personnel targets (for example, salary share of budgets and required reporting) rather than micro‑line items.

PEL director Denisa McLean and DCHS director Rachel Pearl said the briefing was intended to elicit board feedback that will be incorporated into the final tool and report; staff noted a PFA work session is scheduled for July 21 for a live demonstration of the model and further scenario requests. The county plans to publish a written report with detailed data sources and assumptions before finalizing the tool.

"This is a conversation," Pearl said, framing the briefing as an interim step. "Your voice and feedback is going to be really important to us."

Next steps: P5 and county staff will deliver the written report and modeling tool details, engage advisory bodies with the results, and run additional scenarios requested by board offices at the July 21 work session.