NEW ULM — A day care crisis is impacting Minnesota — not enough providers to meet current demand is preventing some parents from returning to the workforce.

The New Ulm Economic Development Authority has researched different methods for expanding access to child care in the community. Last month, the board discussed the pod model of day care.

This model is different from the home day care model and day care center model. Under the pod model, multiple family child care providers operate different providers under the same roof. The idea would be to have two or more child care businesses operate in the same space, using some share resources.

The EDA requested more information on the pod model. Amber English of Children’s First Finance gave a presentation breaking down how the pod model could work. She gave an example of a hypothetical day care operating with four class pods. In this scenario, each pod was run by a different provider with a different business structure. This means each pod can charge a different fee for day care or choose to be part of the state-run food program.

In each scenario, the individual pods has 12 kids each; one infant, two toddlers, five preschoolers and two school-agers during the school year and two school-agers during the summer. This is the maximum number of children a single provider can watch. Annual expenses set the same for each pod. Some expenses could be shared between the providers, such as Wi-Fi access, kitchen space and playground equipment

In the first pod, the provider had the lowest weekly rate at $140 for an infant; $135 for a toddler; $130 for preschooler; $125 for school-ager during the summer and $42 for school-ager during the school year. This provider does not charge any addition activity fee and is not on the state’s food program.

English said this example was not sustainable. A business operating in a pod would lose money with costs this low and no food program funding.

The second example charged higher prices with $150 for infants, decreasing $5 a week for older kids. The second example was part of the food program and also charged an activity fee of $500. English said this provider would see a profit at the end of the year.

The third scenario starts at $155 for infants, charges an annual activity with no food program. This provider would nearly break even.

The fourth scenario charges $162 for infants per week, reducing down as the child ages. This example had annual fee for activities and is on the food program. English said this is the most profitable of the businesses, estimating an annual profit of $7,000.

Chairman Daniel Braam asked if there was a financial benefit for a family license providers to be in a pod compared to operating in their home.

English said there was not necessarily a financial benefit to operate in a pod. Providers would lose out on tax reductions by not operating out of home. The benefit of the pod model is it allows day care people to run a business if they don’t have the space for it. She believed this was the type of person most likely to work in the pod model.

English said some families like sending kids to pod day care because potential backup care is available. If one the provider in the pod is not available, one of the other providers might be able to serve as backup if they have opening that day.

Asked why some providers might not be on the food program, English said the food program requires providers take an additional ste. They must log food menus and some foods are restricted.

English said there is a change to day care licensing coming this summer. Currently, a different owner must own each pod even if it is in the same building with a separate address. Starting in July, an individual could be the owner of all pods.

English said the biggest difference between the pod model and a day care center is ratio of staff to children. Cash flow could be a problem for the smaller day care centers. At a center, the ratio is one adult to four infants. A center will often lose money on infant care.

The preschool kids is where day care operations make profit and can offset the loss on infant care. The school-aged kids can be a source of profit too, but many are involved in after-school programs, and day care is not needed.

The pod model has the same restriction as a family license provider and there is more flexibility in mixed-aged groups and can usually get up and running faster than a center.