In a bid to tackle the ongoing childcare crisis and address the pressing workforce shortage, the city of Hutchinson and Hutchinson Chamber of Commerce have launched a new program aimed at creating new childcare slots within the city.
The collaborative effort aims to alleviate the burden on parents without access to childcare and help businesses struggling to find qualified workers.
“We have 440 some children without childcare,” said Mary Hodson, president of the Hutchinson Area of Commerce and Tourism. “That means parents stay home and are not part of the workforce, or subsequently friends or family watch them and they’re not part of the workforce.”
The Hutchinson Chamber of Commerce and Economic Development Authority are focusing primarily on exploring ways to improve access to childcare and support working parents.
“Really, the economics of it are broken,” EDA Director Miles Seppelt said. “Because Mom and Dad can only pay a certain amount for childcare.”
The actual cost of providing childcare is substantially higher when considering factors like staffing ratios and other expenses such as food costs, according to Seppelt. As a result, profit margins for childcare providers are minimal, making it challenging to sustain the business.
“We saw the urgent need for a comprehensive childcare solution, and that’s when we launched the Rural Child Care Innovation Program in partnership with First Children’s Finance in August 2022,” Hodson said.
A national nonprofit organization, First Children’s Finance provides loans and business development assistance to childcare businesses.
The Hutchinson Child Care Coalition was established as a chamber committee that collaborated with the EDA and 3M to secure a $30,000 grant from FCF, which was matched by grants from the EDA and 3M, totaling $40,000. An additional $5,000 has been allocated to address smaller needs.
The grant, called “Childcare Business Assistance Forgivable Loan Program,” is structured as forgivable loans, which after completion of specific requirements become grants. In case of default on the agreement, repayment of the loan would be required.
Both existing and new childcare providers serving children from 6 weeks to 11 years old are eligible to apply for a forgivable loan of up to $10,000. The funds must be used for eligible expenses, such as safety equipment, facility improvements, room equipment, furniture, and active play materials.
To be eligible for loan forgiveness, childcare businesses must work with First Children’s Finance Development staff for at least two hours of technical assistance, provide documentation for qualified expenses, and expand the number of childcare slots available.
The funds cannot be used for certain business-related expenses like accounting and legal fees, advertising, salaries and utilities. All materials for safety and construction projects must be new and purchased from a retail store.
Chris Carrigan has been a family childcare provider in Hutchinson for 20 years. She currently cares for 12 children and has a waiting list.
“There’s a lot of infants that need care,” she said. “Most of them (daycares) are not taking infants, most of them are full. Waitlists can be one to two years to get in.”
Although the childcare grant might be beneficial for new providers, it does not address the challenges faced by exiting childcare businesses, Carrigan said.
“They want to give us money to expand,” Carrigan said. “I’m already at 12 (slots), I can’t expand anything, so I can’t get any of the money. I have nowhere to go. Even if I were to add another room, I can’t add any more children. Those grants are great for people that are starting, but it’s not helping the providers that are already going.”
Hutchinson has 32 licensed family childcare providers. Among those, two are inactive and are expected to close their licenses within the next month or so, according to Amy Berry family childcare licensing specialist for McLeod County.
Berry noted there is not a single core cause for the shortage but rather a combination of factors. One significant factor is that many experienced providers are reaching retirement age and leaving the industry. Additionally, some providers enter the field to be with their own children when they are young but leave when their children start school. A third factor can be the complex rules and statutes surrounding childcare.
“If we’re lucky, our little forgivable loan program might get us 10 slots or maybe a couple tens of slots, but the need is there,” Seppelt said. “This is just scratching the surface of the bigger problem. So, we got to figure out something a little bit bigger, broader, more meaningful.”
Program details and application forms are available at hutchinsoneda.com.
