Nov 26, 2022

Hays Area Children's Center searching for financial stability in rocky child care industry

Posted Nov 26, 2022 11:45 AM
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Hays Post

The Hays Area Children's Center is facing the difficult dilemma of trying to make up a funding gap without pricing its parents out of the market.

The nonprofit facility, which serves 79 children and 60 families, is operating in the red. The facility has to increase its rates, find alternative sources of revenue or some combination of both.

The current year's average tuition is $646 per month. Considering the center's current finances, it would have to increase tuition by $280 to $926 to bring the facility's budget to a break-even point.

"We are definitely needing to revamp how we run this center," said Jessamyn Staples, board member.

Raising the center's tuition the full $280 would likely price some families out of the child care market, Staples said. She said the board is trying to find alternative revenue sources that will help limit tuition hikes.

Workers dependent on child care

Seventy-four employers have employees who depend on the center for child care. HaysMed employees alone accounts for 8 percent of the families at the center.

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A study done by the Ellis County Child Care Task Force indicated 151 people would likely re-enter the workforce if they had affordable, adequate child care.

That same child care survey found Ellis County is in need of 600 child care slots to fill the current need, said Staples, who has also served on the child care task force.

Ellis County has one open child-care spot for every 10 children needing care. Ellis County is better off than many counties in northwest Kansas, which have no openings for infants or toddlers.

Staples, who has a daughter at the center, said if the center would have to sharply increase rates or, worst-case scenario close, more parents would be forced out of the workforce.

"We are cognizant of that. We are so mindful of that," she said of the effect on parents. "If this place doesn't exist as a whole, that's so much more of a disservice to our community versus having it pared down a little bit or making it a little smaller or raising our rates a little more to where we can be sustainable."

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Local employers are already struggling to fill vacancies with a 2 percent unemployment rate in Ellis County in October.

Staples said the board has discussed meeting with employers about having pay-to-play options. An employer would pay to reserve a spot for an employee as a benefit that could assist with recruitment and retention.

The board has also discussed reaching out to donors about funding scholarships at the center. The center can receive donations through the Heartland Community Foundation. Click HERE to donate.

Costs increasing for center

The center is facing many of the pressures that are facing all child care providers — increasing food costs, supply chain issues and a tight labor market.

SEE RELATED STORY: Local providers: Current child care system no longer sustainable

"Our expenses are not going down, they're going up," Staples said.

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In addition to inflation, one of the center's affordable food supplies was no longer able to supply the center because of supply chain issues. There were a few months the center had to use Dillons.

The Kansas Infant-Toddler Services (Part C) program, which served young children with disabilities had been housed in the Hays Area Children's Center. Although the services were separate and had separate budgets, the Part C program shared operating expenses.

That program has moved to Developmental Services of Northwest Kansas, which means the child care portion of the center has to cover the full burden of operational expenses.

Alternative sources of revenue

"Our board is actively looking at new solutions, going to the city, the county commissioners, the foundations and saying 'This is our situation right now. What can you recommend and how can you support us?' " she said.

One new potential revenue source could be a meal program the center could offer to other child care providers in the community. The Hays Area Children's Center has a full-service kitchen and chef. It provides hot breakfasts and lunches plus a snack.

The center already uses produce from an on-site garden, but Staples said the chef plans to expand the garden this spring in hopes of further cutting food costs.

The center could help other child care providers cut costs through bulk food purchasing, Staples said. The Ellis County Child Care Task Force has already discussed cooperative purchasing as a means of cutting costs for providers in the community.

Staples said the board has considered applying for grant funds for capital purchases that would be required to get the food service program running.

The center is also re-evaluating its enrollment policy. The center guarantees spots so children can age into the appropriate classroom level.

Holding open spots means the center is never at full capacity. This practice is costing the center $100,000 per year. The center has considered charging families a fee to hold spots open at the next level, Staples said.

Infant care doesn't pay

The center is also struggling with infant care. The state requires one care provider for every three infants. The infant care center has three staff members, which means it can have up to nine infants.

"Infant care is so needed, and it's so expensive," Staples said. "A lot of child care programs don't offer that care because it sinks you."

Staff costs are a significant portion of any child care facility's budget, but Staples said child care direct care workers already receive low wages.

"Our basic pay here is $11 per hour with no benefits. They are basically working here as a ministry," Staples said.

For most providers, infant care has to be subsidized by care for older children where staff ratios are higher. A preschool classroom can have 12 children supervised by a single adult.

To break even in the infant room, the center would have to charge more than $1,000 a month per infant. Staples said $1,200 per child per month for children of all ages is standard for child care in Kansas City.

"We don't want to pass these high prices on to our parents, but we might not have a choice," Staples said.

The center only has reserves to last through the summer. Closure is a possibility if nothing changes, she said.

"That's why we're trying to get this out now. In the next few months, [if we do things] like raising tuition or finding some temporary funding, it can help us get to our sustainability plan," Staples said.

"We also need to be open and transparent with our families and staff, because we want them to trust us. We don't want to send a panic."

Staffing shortages

The center is also struggling with a staffing shortage. The center will need to fill 17 positions by the end of the year. This includes part-time and full-time positions and the center's coordinator position. There are generally a mix of 25 to 35 part- and full-time total employees.

Some of the slots are open because the positions are filled by Fort Hays State University students who will be graduating in December.

Staples said she and the other members of the board hope they will be able to fill some of the positions when students return in January. The center is working with FHSU to try to establish a work-study program at the center.

However, this may leave the center critically short-staffed over the holidays. Illness has further affected the center's staffing levels.

Staples said the center is trying to find temporary staff, parents, grandparents or volunteers to help in classrooms so classrooms or the entire center can avoid temporary closure during the holidays.

The center has reached out to local high schools about temporary workers. Teens 16 and older can count toward the adult ratio in center classes.

Staples said consistent hours have been one of the center's strengths. The center is only closed for several holidays and a couple of in-service days per year. However, the center had to close earlier this week because of illness among children and staff.

"We know that child care is a market failure," Staples said. "There is a supply-and-demand issue. Even though we have a demand, it's so hard to make these things run. That's everywhere. How we survive is with our community's support."