The pod model day care is a new licensing method in Minnesota that allows up to four in-home day care providers to operate out of the same building. Instead of a single day care center operating out of the building, four independent day care businesses can run from the same location.

“What is exciting about this model, and New Ulm, is how they are in a creative way finding a place for four individual child care providers to have their businesses not at home, but under one building,” Smith said. 

New Ulm was not the first community in Minnesota to open a pod model day care, but it is unique in that it was a community and city project to push back against childcare shortage.

EDA Coordinator Heather Bregel said the city and EDA were working with First Children’s Finance to find a solution to the day care shortage. It was through First Children’s Finance, that New Ulm learned of the pod model option.

U.S. Senator Tina Smith tours New Ulm's pod model day care, Westridge Smith. During her visit she spoke with day care providers on the benefits of the pod model. Provider Alissa Kretsch spoke with the Senator about the USDA food programs reimbursement policy for home day cares. In picture (L to R) Sen. Tina Smith, New Ulm Mayor Kathleen Backer, New Ulm City Manager Chris Dalton and day care provider Alissa Kretsch.

Bregel said after learning of the pod model, she began looking for available buildings that could serve this need. A former real-estate property management building on Westridge was open and could be structured to hold four separate day care pods. 

New Ulm’s EDA board agreed to purchase the building if at least two providers would commit to operating from the building. Bregel quickly found two providers and the EDA authorized the purchase. Before long, two more providers agreed to join Westridge Place. The pod model day care officially opened to children in December with three providers. The fourth started in February.

Smith was excited to learn the creation of Westridge Place had helped retain one day care provider and convince another provider to restart her day care.

Day care provider Alissa Kretsch was the first in-home provider to sign on at Westridge. Kretsch had been an in-home provider for 11 years, but no longer had enough space at her home to run the day care.

Kretsch told Sen. Smith that had she not learned about the Westridge Place pod model, she would have quit day care. 

U.S. Senator Tina Smith visits pod model day care Westridge Place in New Ulm. Smith spoke with city officials and providers at Westridge about the benefits of the pod model.

Day care provider Tamara Miller-Como had quit the day care business after nine years. She too no longer wanted to run the business from her home. Westridge Place gave her the option to return to childcare without using her home. 

Bregel said it is something she found is common among providers. The ability to lock up the business at the end of the day and go home is a strong selling point. 

Westridge Place also attracted new day care providers. Sisters, Liz Delacruz and Rachel Ludewig, both considered opening day cares. Once they learned about the pod model option, they agreed to obtain their at-home license and rent pods out of Westridge.

Delacruz said she was not certain she could run a day care from her home. She said, “We have a good size house for our family, but I don’t know what space I would use just for childcare.”

Ludewig said it was a relief to have her home and business at separate locations. It also reduced the wear and tear on her house.

Another added benefit of the pod model is the providers can turn to each other for advice. Ludewig and Delacruz said it was great to have other experienced providers working in the same building. They are able to ask Kretsch and Miller-Como questions as they start their first year as providers.

Smith asked how foods and meals were provided in the pod model. Bregel said the individual providers bring in their own food and prepare it in the separate pods. 

Typically, in-home providers are eligible for a USDA food program that reimburses day cares. However, the food program requires day care providers to operate out of a residential location. Since Westridge Place is not a residential building, none of the providers can use the food program.

“When I was in my house I was on the food program, so I got reimbursed for the program,” Kretsch said “but now that I am here I can’t be on the food program. I really notice not having that money every month, because I am still providing nutritious meals but not getting reimbursed.”

Smith said she is working with the USDA to get a waiver for this regulation.

“It seems like a necessary hurdle to jump through to take advantage of that program,” Smith said. She was optimistic the USDA would be flexible with this waiver. “This is a new model, so I think they just don’t understand what it is,” she said.

Smith was also hopeful future child care projects like Westridge Place could receive funding through rural development funds. She believed child care projects could take precedence. 

“I do think we need to do more,” Smith said. The costs of childcare coverage continues to increase as providers struggle to break even. At the same time, some families are paying as much as $12,000 a year for day care. 

“The system isn’t working,” Smith said. “Young families don’t have those kinds of funds.” 

Smith praised the pod model as a creative method to stop the decline in the number of day care providers.

“It’s great for child care providers, but also works for the family who might not have access to this,” she said. “If you don’t have good access to child care in a community like this, people are going to choose not to work at all.

Smith believes child care is a key part of economic infrastructure and without childcare infrastructure, an economy cannot grow. 

“It is great to see this model and how it can be expanded through the state,” she said.