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NEW ULM -- The New Ulm Economic Development Authority (EDA) discussed options for assisting local childcare providers, Tuesday.
The EDA held a special meeting with local childcare providers on July 28 to discuss options for dealing with childcare shortages. Childcare shortages are a major economic concern in New Ulm and across the nation. The lack of childcare has prevented some families from returning to the workforce.
Since the childcare shortages impact the economy, the EDA is seeking methods to grow the number of providers.
From the meeting, the board identified two areas they could move quickly on to assist. This included the creation of an insurance consortium and finding childcare substitutes.
City Manager Chris Dalton said daycare providers could form an association and find an insurance provider who could create coverage in the association. Home daycare providers are self-employed and typically cannot obtain group coverage.
Dalton said the city's insurance broker was optimistic about creating an insurance association but said this was up to insurance providers. The city's broker will report back on whether insurance providers were interested. If interested insurance providers were available, that information would be brought back to the next EDA meeting to determine the next steps.
Board member Les Schultz said the EDA could choose to offset some of the cost of insurance. He said even if an insurance association was created, daycare providers might stills struggle to afford coverage.
Daycare substitutes were another area the EDA could assist. Dalton said the staff was looking to create a website where potential substitutes could register with certifications and days available. A provider could then log on to the website and find an available substitute.
Other long-term assistant programs were helping providers expand. The EDA could rehab an older building for a provider to take over with a center or help expand an existing daycare.
Dalton said the EDA could even create its own daycare setter and hire city employees to run the facility. The downside to this option is it would take away from daycare providers working at other centers because the city can afford to pay these employees a higher wage.
Mayor Terry Sveine suggested developing a corp of senior citizen substitutes. Retired seniors could fill in as daycare substitutes. Training would be required for seniors, costing $120. Sveine suggested the EDA could cover this training cost if it helped create additional substitutes. Sveine said he would continue looking into this option to determine interest among the senior community.
Schultz said this option would help retain the number of daycare providers, but thought the board needed to think bigger and grow the number of providers. He believed a city-owned building, rented to a provider, could create more daycare options.
EDA Chair Daniel Braam said the focus needed to be growing daycare centers. He agreed the home daycare providers were important, but the laws limited how many infants could be watched at in-home daycares. Daycare centers can take on more infants. Braam suggested working to expand existing centers because they were already established.
Braam said the economics of operating a daycare was another factor. He said the reimbursement rate for daycare assistance provided by the county sets the benchmark for the county. There is a discrepancy between the centers and in-home providers. Centers are reimbursed regularly, but in-home providers are reimbursed once a month. Running a home-based business with only a check from the county once a month puts them at a disadvantage. Braam wanted to know if this reimbursement issue could be addressed with the county.
Dalton said the EDA could develop a loan method to help daycares. The question was how specifically the daycare providers wanted to expand; whether it was a physical expansion of business or hire additional staff.
Board member Susan Fix suggested contacting area providers to determine how many want to expand. The EDA will need a survey to know to start the process.
The board agreed to review all options and bring the topic back for the next EDA meeting.
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The board approved a lease agreement allowing storage of a food truck at 326 N. Broadway. Sozial partners requested renting the location for three to four days beginning in mid-Aug through mid-November. Sozial does not intend to sell food at this location, only to park and plug in the refrigerators when the trailer is not in use.
The EDA already allows a food stand to operate out of this location with a $150 a month lease. The board was willing to allow Sozial to store the trailer at this location because it would not be competing with the existing food stand with this location. Since the Sozial trailer would not be selling food and the utility usage was less, the board believed the rental cost could be reduced from $150.
The board approved the agreement for a $125 a month agreement on the condition the trailer does not sell food at this location.