Elkader child care roundtable looks for solutions to financial, staffing issues
By Willis Patenaude, Times-Register
The Elkader Community Childcare & Learning Center Board recently held a roundtable involving community members, business owners, city officials and other individuals who were invited to begin a conversation about how to solve the city’s current daycare crisis, which threatens to shut down the only daycare facility in town.
The core of the problem is financial, consisting of both a lack of incoming revenue, budget shortfalls and the real need to raise wages in an effort to be competitive in the daycare industry, which has been historically plagued by low wages.
The Child Care Coalition argued wages are “at the root of the child care crisis” in Iowa, which is magnified by the fact it is the third lowest paid profession in the state, earning on average between $19,000 and $23,000 annually, according to the Bureau of Labor Statistics.
The same statistics concluded “many are overworked” as well, due to a dwindling workforce which started long before the COVID-19 pandemic began and intensified as Iowa suffered a loss of over 40 percent of its child care providers prior to the pandemic, according to the Iowa Women’s Foundation.
As a result, wages were a focus of the roundtable, highlighted by the board’s recent decision to increase the starting wage from $8 to $10 per hour. Sights are set on eventually increasing to $12, which would put the center on par with other area providers. As board president Amanda Schneider stated at the event, $10 is “not enough.”
Low wages also relate to staff retention, which has led to the center operating at less than 70 percent capacity, and it doesn’t always attract the best candidates. At the time of the roundtable, the daycare was operating at 68 percent capacity with just six full-time teachers, two part-time teachers and one full-time cook. Full capacity would be around 12 full-time employees.
The raise in wages—which took effect on March 27 and includes no benefits—is a short-term fix funded through grants received in 2022. In effect, it has created a $53,000 budget deficit moving forward. If additional funding is not received, the center will likely close within 24 months as funds become depleted. A closure would have a negative ripple effect throughout the local economy.
“We are hoping that 24 months is enough time to find support and assistance to get back to self sustainability,” Schneider said.
One way the center could achieve some financial stability would be to increase rates, which is seen as an unpopular method and would ultimately result in an increase of around $900 per year, per child. There’s also economic infeasibility attached to a rate increase. Schneider mentioned families are often “constrained by cost.”
That constraint is already laid bare by statistics from a U.S. Chamber of Commerce Foundation report which found a family earning the median household income was already spending over 11 percent of its income on child care costs. On average, working parents, of which Iowa leads the nation in, will miss almost five days of work in a six-month period. Setting aside the fact the same report found over 60 percent of parents are influenced by child care costs when it comes to career decisions, this problem is far reaching into multiple parts of the economy.
With raising rates almost a non-starter, the board turned to what’s being called the Community Partner Program (CPP)—a basic ask for financial sponsorship from businesses and individuals for a five-year period. This will assist the center in immediately raising wages, which should solve the retention issue and, in turn, give the center the opportunity to return to full operational capacity.
The CPP solution was reached after the board conducted market research, which involved contacting other facilities in the four-county area including Clayton, Fayette, Delaware and Winneshiek, all of which are seeing similar shortages.
What the CPP is asking for is an investment from the local businesses and the community, by way of donations or otherwise, of $100,000 every year for the next five years to achieve financial sustainability, return the center to full operational capacity, raise wages to $12 per hour and continue to keep pace with cost of living increases. It would provide spots for every child who needs one, most notably the 25 children who are currently on the wait list and the several part-time families who lost access.
What about year six and afterward, or if this number is not achieved with regularity over the course of the next five years? If the benchmark of $100,000 decreases after year one, the likelihood of closure once again increases in probability, Schneider explained. However, she also stated the program is designed to work even if that amount is not reached by year five. At that point, any decrease should not impact the future of the center.
Several reasons are given for this, starting with progress updates for partners who invested in the program, as well as “diligence in the center budget and proportionally timed wage increases to childcare rate increases,” in an effort to “ensure this doesn’t happen again,” Schneider said.
In addition to these updates, there are additional benefits to being a partner, which were presented at the roundtable. This includes priority on the wait list, public relation opportunities with local media and social media and tax deductibility. Perhaps the “ultimate benefit,” according to Schneider, is the center would be capable of continuing to serve Elkader and the surrounding area and do its part in taking care of the local economy and the families who live here.
One community leader in attendance was Central Principal Aaron Reinhart, who suggested a solution that would get more high school students involved.
“One of the solutions I would propose is working closely with the school to get more high school kids working at the center. We have several that are intending to pursue a career in education. Experience at the daycare center would be mutually beneficial,” he said.
Reinhart added that Central’s On-the-Job Training (OJT) program allows students to receive high school credit while working at a local business.
“I could see this partnership growing to include scholarships that are tied to students who work there,” he said. “[It’s a] tough situation, and I’m not sure everyone realizes the crisis level we have reached.”
The board has additionally reached out to several elected officials, including Anne Osmundson, Michael Bergan and Chad Ingles, though conversations have not led to anything actionable as of yet. According to Schneider, there is a “disconnect” between what they know about the daycare industry versus what is actually occurring.
It’s a disconnect Schneider said exists because, “if you aren’t directly impacted by a need such as daycare, there is no reason to keep up to date on what is happening in the industry.”
After a meeting with Osmundson, it was quite clear the board has “a lot of work to do at the local level to bring awareness to [the] legislators,” she added.
Since the roundtable, which was held over four weeks ago, the board has gotten commitments from four businesses: Garnavillo Mill, Gifford Insurance, Northeast Iowa Coin & Currency and Raymond James Financial Services. It should be noted that at least two of those have connections with current board members.
While Schneider is open about the fact a “multitude of factors” has led to the current crisis—some out of the board’s control and some within—the current board has developed a plan to combat factors like wages, retention, revenue and staffing. They are operating under the daunting presence of a ticking clock that expires in 24 months.
“I have full faith that our community will pull through and partner with us,” Schneider said. “I have that faith because of productive conversation that took place during the roundtable event. I have also had several one-on-one conversations with potential donors who have high interest in supporting the work our center does. At this point in time, there is no backup plan.”
