City of Warren steps up to help solve child care shortage with Little Sprouts Learning Center expansion

(Editor’s note: This is part of a series on rural child care needs in the region.)
WARREN, Minn. — Years before shovels turned over dirt at the future site of Little Sprouts Learning Center in Warren, city leaders were breaking ground on ways to make child care in the community affordable.

Construction of the $2.6 million city-owned childcare center will be financed in part with a one-half cent local sales tax and the remainder through grants, loans and donations.

“We’re the first city in Minnesota to use local sales tax for childcare. We’re thinking, we’re probably the first in the nation,” said Shannon Mortenson, Warren city administrator.

The one-half cent sales tax, which will be collected at the point of sale, is expected to total $1.6 million in 20 years, the amount and duration of the city’s USDA Rural Development loan.

The remaining cost of the 10,000 square-feet child care center will be financed with grants and donations from individual businesses.

The city’s lack of debt will allow it to let Little Sprouts Learning Center use it rent-free, which will save the non-profit organization about $75,000 annually. The center plans to run at a rate of about $48 per child, per day.

The new child care center, when filled, will have capacity for 110 children, more than doubling the amount in the existing Little Sprouts Learning Center. The old center is licensed for 48 children, ages six weeks to school age.

Contributed / ARI

The center now employs a total of 14 full and part-time workers. The center’s board plans to increase its enrollment and staff numbers gradually as new staff are hired and attend training sessions.

The new child care center will have two toddler rooms, two preschool rooms and a large room for school-aged children, which will mostly be used during the summer for programs such as Head Start. Construction of the center is expected to begin in a few weeks and completed by December 2023. The estimated opening date is March 2024.

Construction of the new child care facility is essential because the building that now houses the Little Sprouts Learning Center is too small.

During the past eight years, the number of home day cares in the area dropped from 11 to two as their operators retired or experienced “burnout.”

Relying on extended family members to take care of the children isn’t an option for many people, either, because they live too far away from them.

Lindsey Buegler, Little Sprouts Learning Center board co-president and a board member since 2015, has worked for the past eight years to find solutions to the child care center shortage. Initially, she became involved with the issue because Little Sprouts Learning Center, where she and her husband's children were enrolled, ran into financial troubles and was closing.

Evan Girtz / Agweek

“We are not from here, so we would have had to leave to find somewhere with child care or closer to our family where someone could help us out,” she said.

Buegler and others with children at the center came up with a plan to run the day care as a non-profit organization.

The lack of child care is a serious problem for Warren’s economic development, because it discourages potential employees from moving to the city, said Philip Thompson, Warren Economic Development Authority chairman. For example, when the seven-member EDA board was interviewing an administrator for North Valley Health Center, a half dozen of them asked about whether there was child care available then, when they learned that it was difficult to find, withdrew their names from the hiring process.

Thompson, owner of Phil Thompson and Associates farm insurance, has witnessed firsthand the challenges some of his employees with young children face because of a shortage of child care.

“It’s not unusual for one or two of them to have to bring their kids to work during tax season or other times because their day care is not open,” Thompson said.

The Warren Economic Development Authority, Warren City Council and others, including school district staff and home day care providers, began holding meetings in 2016 to address the shortage, gather statistics and discuss solutions, Mortenson said.

In August 2019, the city applied for and was approved for a study conducted by First Children’s Finance Rural Child Care Innovation Program based in Minneapolis to study the child care issues. The nonprofit organization’s study, completed in October 2019, showed that there was a need for 187 child care slots within a 10-mile radius of Warren, Mortenson said.

The road to the new child care center in Warren has been long and fraught with obstacles that included a significant increase in construction costs during the planning stage and convincing Warren residents of the need for a child care center.

Between the summer of 2020 when construction costs were estimated and 2022 when the project was bid, the price rose by more than 60% from $1.6 million to $2.6 million. The United States Department of Agriculture Rural Development also shortened the amortization period of its 2% interest loans from 40 years to 20 years.

Evan Girtz / Agweek

“We could have easily walked away, but we said, ‘We need this daycare,'” Thompson said. City leaders asked the Minnesota Legislature to approve a one-half cent local sales tax, which is expected to total $70,000 annually, to finance the USDA Rural Development loan. The Legislature approved the request, and in November 2022 Warren voters approved the tax.

Hosting a town hall meeting and one-on-one meetings with residents that explained why the new child care center is needed was key to getting the sales tax, Mortenson said.

“It was important to tell people how it had changed, how the regulations had changed,” she said. “We had the day care task force, which is 12 people in the community, talk to their circles. I think that was the most beneficial.”

The remaining $1 million needed to finance the new child care center was raised through private donations, the same way that the city council members and other stakeholders raised money to help supplement the funding for Warren’s North Valley Health and Northstar Assisted Living.

The city council was determined that it would see the child care project through, despite the obstacles in its path.

“There was a point where the council said, “We’ve taken care of our aged population, now we need to take care of our youth,” Mortenson said.

During the past year, the city of Warren has received nationwide media coverage about its solution to its child care shortage and questions from city and county administrators in states including Wisconsin and Illinois about how they did it.

The potential stakeholders who are considering doing something similar to finance, build and own a child care center shouldn’t expect the road to be smooth, Mortenson said.

“You better have patience and better not get discouraged. You have to be OK with ups and downs and criticism. There’s always a lot of criticism , but you just have to have a lot of perseverance to just keep going … and at the end of the day, it’s going to be good for your community.”