Child Care Becomes Marketplace Issue in Orange County

By ERIC SCHINE

Dec. 27, 1988 12 AM PT

Times Staff Writer

By all measurements, 1988 marked a turning point in the way Orange County businesses view the issue of child care.

It was the year seven companies agreed to join forces to form a corporate child-care consortium in Irvine and the year hundreds of corporate personnel executives flocked to more than a half dozen conferences in the county to learn about child- care options.

“Corporate interest and awareness has skyrocketed in the past year,” said Nancy Noble, child-care coordinator for the city of Irvine. “A year ago, a lot of people didn’t give it much thought. That attitude has really changed.”

Many county corporations, once more than willing to cede the matter of child care to the privacy of individual families or to government public policy, now understand that in order to compete for workers in a tight labor market they, too, must come up with good day care for their workers, according to both corporate personnel directors and area child care experts.

“It’s not a women’s issue anymore, or even a family issue. Child care is really a marketplace issue now,” said Dennis Hudson, a consultant with Child Care Planning Associates of Irvine.

While corporate awareness clearly increased in 1988, it was also a year that saw both federal and local government offices take the lead in providing on-site child care for their employees, child-care experts agreed.

In June, the Laguna Niguel offices of the Internal Revenue Service opened up the Ziggurat Child Development Center, a facility for 95 children. In October, the city of Irvine opened up a new facility capable of handling 100 children.

Both these facilities are subsidized. At the IRS, the government paid start-up costs and provides free rent and utilities to the center. The center is open to people who live in the area, but IRS employees also receive about a 20% discounted rate from the standard tuition of $135 per week.

The city of Irvine’s day-care center cost $1.2 million to start. A quarter of the spaces are reserved for city employees, and the rest are available to city residents.

Although the private sector has generally been slower to move into the business of providing day care, there have been some notable exceptions.

Tracor Flight Systems, a Santa Ana defense and electronics subsidiary of Austin-based Tracor Inc., launched the first--and, at present, the only--on-site child-care center in the county in 1987, according to Hudson. The facility is licensed to care for 15 infants.

Currently, the program handles five children. But with several Tracor employees expecting babies over the winter, that number should rise to nine by June, said James Chislock, a vice president for administration and finance.

Chislock said that employees pay a flat weekly rate of $100. The company chips in another $25 to $35 a week per infant to cover costs of running the facility.

The company spent $7,500 to install a security system and to purchase toys, cribs and other items for the center, which is run by the Gerber Co. It is located in large space on the ground floor of the company’s two-story office.

Chislock maintains that Tracor’s working mothers using the facility are happier and doing better work.

“I believe we have a couple of employees who would have left the company and stayed at home if it weren’t for the center,” he said. “I’m talking about some very valuable employees: computer programmers, financial analysts, women who have been with the company for many years.”

Judy Radka, a financial analyst who has worked for Tracor for 9 years, said she would have chosen to stay at home and give up her job if not for the on-site day-care center.

When she had her baby, Corie, 14 months ago, Radka took a 4-month maternity leave. She returned to work nearly a year ago, baby in tow. Initially, Radka took breaks to breast-feed and check on Corie. Now she limits her visits to her lunch hour.

“Just knowing she’s there gives me a sense of comfort, a great sense of peace,” Radka said. “If she’s sick and needs medicine, I’m right here. If I need to work late to meet a deadline, I bring her up to the office and plop her down on a blanket in the corner.”

Perhaps the most innovative and far-reaching corporate child-care facility on the drawing board is the Irvine Chamber Child Corp. The nonprofit corporation was formed last spring by a consortium of seven companies located in the Irvine Business district: AST Research, Taco Bell, Global Engineering, Fred S. James, Perry Morris Corp., Ultrasystems and the Irvine Water District.

The companies plan to take over part of the soon-to-be vacated Irvine Civic Center and transform it into a day-care facility for 200 children, from infants to preschoolers.

About 35% of the spaces would be filled by children of consortium employees, said Howard Derman, director of human resources for AST Research. The other slots would be filled by the children of employees at other businesses in the area.

The program will cost about $850,000 to launch. The consortium has already taken bids for renovation of the space and has raised $14,000 to conduct a feasibility study.

Financing for the project could take a number of forms. Choosing the right one could spell the difference between success and failure, Derman said.

But Derman is confident that the money will be raised.

“We believe that we have a responsibility to the working parent who is dedicating a terrific amount of his or her fortunes to the success of our company. We have a social responsibility to do this,” Derman said.

In one possible financing scenario, the consortium would raise $300,000 by donating $1,500 for each of the 200 spaces available.

The remaining $550,000 could be raised through a long-term bank loan or bond offering. The seven corporate consortium members would then share in paying the interest expense of the loan, which Derman estimated would translate into a subsidy of about $30 per child each month.

Even with such donations and subsidies, day care won’t come cheap to the parents. Derman estimated that the cost to the employee will range from $93 to $130 a week, depending on the age of the child. That is at the high end of child-care costs, but in line with other recognized quality day-care operations in the county.

County real estate developers are also moving to incorporate child care into their commercial building projects.

The Santa Margarita Co. intends to build an on-site day-care facility for 200 children on its 400-acre Rancho Santa Margarita Business Park. The park will employ more than 26,000 people when fully occupied, said Brian Goodell, manager of sales for commercial and industrial properties.

Trammell Crow, which now owns the Fluor Corp. headquarters, also has an on-site day-care center on the drawing boards.

These projects are following the example set in 1986, when the Birtcher Co., a Laguna Niguel development company, included facilities for a day-care center as part of the Birtcher Orange County Tech Center, a business park in Santa Ana. Generally considered the first commercial real estate project in the county to provide such space, the park’s day-care center was intended as an amenity to attract buyers.

“It didn’t seem as if a lot of people were trying this, and we’d thought it might assist in making sales. I wouldn’t say that it closed deals, but it did help,” said Bill Kearns, a Birtcher executive.

The park houses the offices of a Dean Witter Reynolds branch office, United Resources and Greiner Engineering, among other large employers.

The day-care space is now leased to Children’s Village Learning Center. About 10% of the 82 children now enrolled have parents that work at the business park, said Connie Way, who owns and operates the center. The rest of the children live in neighboring residential areas.

Other companies have instituted financial assistance programs and referral services to help employees shoulder the burden of child care.

Taco Bell, based in Irvine, has started a program in which it will donate $100 to each employee who opens up a tax-free fund for child care. Employees can put up to $5,000 in these funds.

ICN Pharmaceuticals began a program in October that gives employees a 50% discount for child care at a nearby Kinder Care center, said David Calef, director of corporate communications. The program combines a group discount rate with a direct subsidy from the company. Employees end up paying from $45 to $65 a week.

Orange County is still behind some other areas of the country on the issue of day care, particularly on the East Coast, said Dennis Hudson. “But once it takes here in Orange County, it’s going to move like gang busters,” he said.

A LOOK AT CHILD CARE IN ORANGE COUNTY

NUMBER OF CHILDREN IN COUNTY:

474,947 children under age 14 (1980 census)

County’s child population will increase 17% between 1985 and 1995 *

CHILD CARE SPACES IN COUNTY: **

Total spaces: 51,300

Of the total:

37,225 are in child-care centers

9,331 are in licensed family child-care homes

How Spaces are Divided by Age Group:

35,811 for preschool

10,663 for school-age