Private-Sector Financing of Child Development Centers.
Abstract
Because of the scarcity of funds for the construction and operation of Military Service child development centers (CDCs), Congress has directed the Military Departments to determine the feasibility of private-sector or so-called 'third-day' financing of the centers. In this arrangement, land is made available to a firm to design, build, and operate a CDC. Currently, the CDCs are financed through Military Construction, general operating funds, and nonappropriated funds. An initial test of the concept, conducted by the Department of the Army and based on a service contract arrangement, showed that private-sector financing was not feasible. Our review and analysis of a broader test by the Department of the Navy under a concession arrangement - where the private firm underwrites the costs but receives the revenues from the user fees - also showed the concept to be infeasible. Commercial firms do not wish to risk investment capital on CDC facilities on military bases. They are concerned about losing their facility in the event of base closures or cutbacks, operating CDCs where occupancy rates cannot be guaranteed, and providing more extensive child-care services than they normally provide. Commercial firms would need to charge prohibitively higher fees to military families for child care to cover expenses for building construction and maintenance, utilities, materials and supplies, and insurance and license fees, which are not directly borne by the Government when it operates CDCs.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 1987
- Accession Number
- ADA177884
Entities
People
- Douglas K. Ault
- Robert L. Crosslin
Organizations
- LMI