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Emergency funding for childcare program requested

City Council hears presentation on worker retention bonuses

Childcare was on the agenda for the City Council of Webster City.

The council, led by Mayor Pro-tem Brian Miller, met via the Zoom teleconferencing platform Monday night. Mayor John Hawkins was absent from the proceedings.

McKinley Bailey, executive director of Building Families, explained that his agency is the Early Childhood Iowa area board for Hamilton, Humboldt and Wright counties. He gave a presentation to council on a proposed childcare worker retention bonus program.

Bailey said that over the past three years or so, the childcare situation in Hamilton County has been a “slow, simmering crisis,” including issues with the economic strucutre of the childcare system in the state.

He said that as the COVID-19 crisis has continued, the childcare situation in Hamilton County has worsened.

There are two centers in Webster City. One is at half capacity and the other is at nearly half capacity.

The reason for that is staffing, according to Bailey.

“They have the space for additional children, but they cannot staff it,” he said. “That’s because their starting wages are about $8.50 per hour. And at $8.50 per hour, you can’t compete for labor with McDonald’s, you can’t compete for labor with Kwik Star.

At Riverview Early Childhood Center in Webster City, the one year waiting list has now ballooned to three years.

“What’s happening and we see this trend across the state, is that women are simply exiting the labor force. They can’t find childcare and so they can’t work. That’s a huge issue for our economy as we move towards what we hope would will be recovery,” Bailey said.

One common question he encounter is why not just raise the rates for children attending the centers. Bailey said a recent rate survey of area childcare centers in smaller communities found that Riverview had some of the highest rates.

“So they are already charging more than any other center that was surveyed,” he said. “And to, you can start to price families out of childcare. If you have two kids in the center, you’re now talking over $10,000 for childcare.”

Building families looked at a model from a pilot project in Polk County and plans to do a similar plan for the eight childcare centers throughout Building Families’ coverage area of Hamilton, Humboldt and Wright counties.

The program would involve sign-on and retention bonuses. The proposed plan would allow childcare centers to pay $150 bonuses to workers who average between 20 to 29 hours of work at the end of the first four weeks, provided they have no unexcused absences. The centers would be allowed to pay $200 bonuses to workers averaging 30 or more hours of work at the end of the first four weeks.

The retention bonuses could be paid quarterly to workers that average a minimum of 29 hours a week or more during that quarter. Bonuses would be capped at $500 per quarter. No bonuses would be paid to workers with more than four unscheduled absences.

The award amount for each center would vary based on the the following factors:

¯ Contributions to the bonus program of employers and local governments in their community

¯ The number of children being served by the center on Oct. 1, 2020

¯ The number of children receiving childcare assistance that attend that facility.

“They’ve done the retention bonus for three years in Polk County and for two of those three years, their turnover was half of the statewide average. So they’ve seen considerable success with this,” Bailey said.

Bailey asked the council to consider providing $25,000 in emergency relief funding to get the program rolling. He told the council that the Board of Supervisors last week approved $20,000 in emergency funding, $10,000 in the current fiscal year and $10,000 in the next. Building Families have committed about $16,500 to the project.

“We will require the center to provide our contractor administrating the bonus program with tracking data to measure whether or not we’re moving the needle, that we are in fact reducing turnover, that we are in fact bringing in some new employees,” Bailey said. “We want to be able to come back to you and have that evidence.”

Bailey said that right now, there about 30 childcare workers who the number of hours to be eligible for the retention bonus, with 22 at Webster City centers.

“We project, if this is successful, next year we’ll have 34 workers,” he said.

Bailey said there are area businesses interested in the program and ideally would like to get to the point where a United Fund-type program could be re-established to help fund the bonuses in the future.

“I appreciate the effort you’re putting forth, the businesses recognize the need,” said Councilman Matt McKinney. “This is a stepping-stone. This is step one to looking at the ability to really compensate these workers of these care centers for the work that they are doing.”

Longterm, McKinney said he felt program needed to go even further.

“I’m constantly amazed that the people taking care of our hamburgers are making $3 more per hour than the people taking care of our children,” Bailey said. “It just doesn’t feel like the ‘Iowa’ way to do things.”

“We all know there is a need,” Councilman Brian Miller said. “What would be our next move?”

Community Vitality Director Lindsey Henderson said she had been involved in some of the meetings with Bailey and others, and had spoken with Mayor John Hawkins about the matter.

“It is an economic development issue and a community development issue,” she said, adding that the council could come back at another meeting to determine the funding level.

“They are requesting $25,000 from the city. What John (Hawkins) and I had discussed was that it would come out of the reserve fund for now. For longer term solutions, we would have to figure out where that comes from on an annual basis,” Henderson said.

Work session postponed

The council was scheduled to hold a work session on a law enforcement dispatching proposal from Hamilton County following the regular business meeting. Miller announced that the session would be postponed. No date was given for a rescheduled session.

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