Calculating the cost of childcare

I must say that I am happy the cost of childcare is being at least tangentially discussed at the highest national political levels. Having been involved in the setting program fees for many many years, I would like to add my two cents to the debate. I should point out that my involvement was always in Preschool, ie the lowest ages in school programs, and not childcare which did affect what was done and thus costs and thus fees to parents.

Using one such program as an example, let's start with the easy stuff. My base fees assumption is $10,000 per school year, September - May, thus nine months' income and twelve months' expenses.

Building costs = we once rented a large building on an even larger piece of land needed for play-yard (program) and extensive parking (code compliance). it was $5000 a month, $60,000 a year, 6 students

We had to renovate and convert the building, build the carpark and play-yard, install bathrooms and HVAC etc etc. This cost $500,000 so over ten years, $50,000 year. Debt servicing was around $30.000 a year thus $80,000. 8 students

Insurance for liability, tenant improvements, equipment etc was around $5000. 0.5 students

Annual repairs, re-painting, HEPA filters, light-bulbs (not including upgrades and capital expenses), $25.000. 2.5 students

Cleaning, cleaning supplies, toilet paper, handsoap, $35,000. 3.5 students

Running Total = 20.5 students

For this number of students, state code required 4 teachers. As a Preschool attached to a G1-12 school, we hired credentialed teachers and pad them on the same scale. Four salaries, plus payroll taxes, medical insurance etc etc, $400.000. 40 students

We needed a receptionist. Salary plus payroll taxes etc, $60.000. 6 students

We also need a PreSchool Director, $150,000. 15 students

Additional teachers required for these 61 students, four (older students have a lower ratio thus the lower number), $400.000. 40 students

New Running Total = 121.5 students

Site maximum per code = 84 - 96 depending on age.

So, without any program or activity or equipment costs, without any contribution to reserves or capital sinking funds, or payments to owners and investors, we would have needed almost 50% more enrollment than the building was permitted to hold at a base fee of $10.000. This is the true cost of childcare. Cut costs (salaries. staff quality, program) or raise fees.

Why is childcare more expensive than college? Two reasons - my English 101 class had one professor and 900 students and used the lecture theater for two hours a week. My algebra 101 class was bigger. 

Secondly, families and alumni support colleges. They do not support childcare, which must therefore be 100% tuition dependent.

I am not discussing here who should be paying what or public v private or subsidized v market. My ring-bound hat is simply to show that the true cost of childcare has real numbers behind it.

**Please leave comments and questions below.**