Inter-Departmental Correspondence

Human Resources Department



September 29, 2010


October 19, 2010







Honorable Board of Supervisors


Donna Vaillancourt, Human Resources Director

Peter Bassett, Benefits Manager


Agreements with the City and County of San Francisco and Palcare for Expansion of Childcare Facilities



Adopt a Resolution:

    A) Waiving the Request for Proposal (RFP) process and authorizing an agreement with the City and County of San Francisco, through the Airport Commission, allowing the County to act as fiscal intermediary to facilitate expansion of Palcare’s childcare facilities from November 1, 2010 through June 30, 2018 in an amount not to exceed $450,000;

    B) Authorizing an agreement with Palcare for the provision of expanding the Palcare facility and supporting local childcare needs from November 1, 2010 through June 30, 2018 in the amount of $250,000;

    C) Authorizing an amendment to the Operating Agreement with Palcare extending the term through June 30, 2030 and maintaining the monthly rate of $11,084.90 through June 30, 2015, subject to periodic escalation;

    D) Authorizing the Human Resources Director or her designee to execute subsequent amendments and minor modifications, in an amount not to exceed $25,000.



Since 1991 the County has had collaborative agreements with the City and County of San Francisco, through its Airport Commission (“Airport”) and Palcare for the provision of childcare services by Airport employees and the community. Contract requirements imposed by the City/County of San Francisco make contracting directly with Palcare administratively burdensome for the Airport. In order to facilitate the delivery of childcare services, the County has agreed to act as a fiscal intermediary between the Airport and Palcare, allowing the Airport to subsidize childcare costs for its employees. The County benefits from this arrangement as children of County employees receive priority enrollment at Palcare (behind Airport employees). Palcare utilizes a County-owned facility at 945 California Drive to operate its childcare center and has a long-term Operating Agreement with the County. Funds from the County’s Agreement are used to subsidize the County’s onsite childcare center, Our Place, and to provide tuition assistance to County families.



At the end of 2010 and in early 2011, Palcare plans to renovate a portion of the first and second floors of the facility in order to increase childcare capacity. The Airport is contributing $450,000 toward this project to increase childcare spaces for Airport families. The County is also contributing $250,000 toward this project to support local childcare needs. The County is the fiscal intermediary for the Airport’s contribution to Palcare.

The Operating Agreement is being amended to extend the termination date from June 30, 2022 to June 30, 2030. The Agreement specifies that the compensation rate will remain unchanged until 2015 and then increase based on the Consumer Price Index, but in no event by more than 12.5% of the prior amount. The rate will increase thereafter in the same fashion every 5th year during the term.

Palcare’s current collective bargaining agreement does not offer pay for jury duty service to employees who live within San Mateo County. As Palcare is the sole source of the childcare services specified in this agreement, it is recommended that the Board waive this requirement. The contractor has assured compliance with all other contract provisions that are required by County ordinance and administrative memoranda, including but not limited to insurance, hold harmless, non-discrimination and equal benefits.

County Counsel has reviewed and approved the Resolution and Agreements as to form.

Approval of these Agreements contributes to Shared Vision 2025 of a Collaborative Community as the City and County of San Francisco, Palcare, and the County are working together to meet local childcare needs.


Performance Measure(s):


FY 2009-10

FY 2010-11

Number of children enrolled



Percent Airport enrollment



Percent County enrollment





The County will contribute $250,000 toward the cost of the PALCARE renovation project and temporarily will defer other General Fund projects in the Capital Projects budget to offset the cost. Deferred General Fund projects will be re-appropriated in FY 2011-12. There is no impact to Net County Cost.