As child care shortage hits employers, Worthington looks into local solutions

Editor's note: This is the third in a multi-part series on child care in the Worthington area. WORTHINGTON -- Nearly every child care provider in the Worthington area has an extensive waiting list. With those waiting lists come exasperated parent...

Editor’s note: This is the third in a multi-part series on child care in the Worthington area.


WORTHINGTON - Nearly every child care provider in the Worthington area has an extensive waiting list.


With those waiting lists come exasperated parents - and frustrated human resource managers.



All of the city’s largest employers, public and private, have suffered through the child care shortage, whether it’s seeing employees with young kids quitting, commuting long distances, missing work days or simply deciding not to take the job in the first place - as the unavailability of child care prevents workers from even considering Worthington.


“Young adults, young families, they’re not going to come to you just because of daycare,” said Abraham Algadi, Worthington Regional Economic Development Corp. director. “But that solution has to be there, and the ease of access for the family has to be there, for them to consider your community among many.”


Child care is widely considered one of the “big three” economic development roadblocks that impede young families from moving to or staying in Worthington, along with housing and things to do.

While the city of Worthington has worked to fill the lack of housing and amenities - even going so far as creating specific funds to support new family housing and to build new community features - it has just begun to explore a local solution to the child care shortage.

City council members recently split up and spoke with workers at three of the city’s biggest employers - Prairie Holdings Group, Bedford industries and District 518’s Prairie Elementary - about their wants and needs.



The lack of available child care, according to council members, came up constantly.


Worthington leaders agree burdensome regulations, paperwork and licensing - which drive up costs for providers and ultimately push providers out of the business - need to be looked at by the Minnesota Legislature. But they also don’t expect the legislature to move in a timely fashion, or get much of anything done during the 2018 legislative session.


“If we don’t fix it ourselves in Worthington, it’s not going to get fixed, not in a relatively short time frame,” said Worthington Mayor Mike Kuhle.


Kuhle, with help from Neal Steffl and Karen DeBoer of the Southwest Minnesota Opportunity Council, has drafted a concept to plug the economic development hole.  



The idea is a child care fund - made up of around $100,000 from public and private donations - that would offer grants or forgivable loans to small and medium-sized providers. The money would be used to both defray the cost of starting a daycare and combat unexpected costs that might threaten a child care provider.


Any grants or forgivable loans would likely come with a commitment from providers to stay open and provide spots, Kuhle said.


Furthermore, the child care shortage is a target of both Kuhle and the city council as it considers how to spend an estimated $16.5 million in bonding from its next half-cent sales tax (should voters approve one).


Kuhle suggested some of the potential sales tax money could go toward erecting a new building or purchasing a building for a new child care center that could provide 70 to 80 spots. The city would pay for the building and lease it to a nonprofit. Kuhle said multiple nonprofits have expressed interest in starting a daycare, but were concerned about the up-front costs.

One large employer in Worthington would be ready to contract for 30 to 40 daycare spots right away, Kuhle added.


“It’s really a two-way solution,” Kuhle said. “Rebuilding and retaining our network of small providers and adding one new large provider.”


Kuhle said he will ask both the business and agriculture communities to contribute to a daycare fund, as the issue heavily affects their workforce.


“It’s going to take all of us together,” Kuhle said. “All of us together is not a big burden for what we’re asking for.”

Over the last few years, in-home daycares have been closing shop across Minnesota, with child care centers, for the most part, replacing them. According to a study from the Center for Rural Policy and Development, Greater Minnesota lost 2,298 child care spots of in-home care in 2016 and gained an additional 2,009 spots from child care centers.

While Nobles County has seen its pool of in-home providers get cut in half over the last 20 years, there hasn’t been a large-enough increase in child care center capacity needed to make up the difference.

The market for daycare centers just isn’t there in rural areas, and most of them lose money, Worthington Community and Economic Development Director Jason Brisson said.

“Most of the new centers are popping up in the Twin Cities, where higher incomes can support them,” Brisson said. “You’re not seeing that in rural areas. It’s a market failure - the centers just don’t have the cash flow to get it done with our median incomes being so much lower.”


Several rural Minnesota communities have already come up with their own solutions to the daycare center crisis. In Benson, the school district partnered with the city, council and hospital to create a daycare center.


Harmony’s largest employer, Harmony Enterprises, opened its own daycare center for working families living in the small southeast Minnesota community. In Clarkfield, the city council took over an old building, upgraded it, then allowed an area provider to operate a new daycare center.


There are options, as other communities have proven. The hope, in Worthington, is that the community can form a public-private partnership to fight the daycare shortage.


“A lot of people are starting to look at daycare as a benefit, like a 401(k),” Brisson said. “So, it would be great to see private industry get involved, because they have the need. It may cost a lot, but it might be more profitable to make the investment instead of always having staffing issues.”

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