How Eagle County’s rental assistance is helping keep some child care centers afloat

Melissa Reed opened Aspen Prep Center in 2019, helping fill a critical need for early childhood education in Eagle County. However, the center was immediately met with challenges of high rent, staffing and then, one year in, COVID-19.

Aspen Prep Center has been one of the only new child care centers or schools that has opened in Eagle County in the past 5 to 10 years, Reed said. The school serves children ages 1 to 6.

Initially, finding the right space and location was Reed’s biggest challenge — alongside lack of local real estate availability, state requirements place many limitations on what space and location makes a suitable child care center. Despite this, she was able to sign a lease in the old Treasures location in Eagle, which she felt was the “last space available,” around Eagle County, but in Eagle especially.

---

---

However, there was one challenge: rent for the 3,400-square foot space was “sky high,” she said.

“From my understanding, our rent is higher, more than double, than anyone else (in child care) in Eagle County,” Reed said. “When we opened, that’s what commercial rent was going for.”

---

---

Even still, Reed accepted this reality and pushed forward — working through zoning requirements, construction, building fees and more to open the school in 2019.

“Luckily, there’s such a need for a child care that we were able to get families in here that we were able to pay all of our bills,” Reed said. “And that’s where we’re at — we’re able to bring in enough money to pay the bills, to pay rent, to pay staff minimal.”

However, this did come at a cost. For starters, Reed, as the school’s owner and director, barely took a paycheck for the first two years and struggled to pay her staff competitive wages or offer them certain benefits like health insurance.

“I’ve lost staff because schools have called and offered $5 more an hour, something that we could never do, because I have such a high rent,” Reed said.

Rent is one challenge that — while not as ubiquitous as other challenges like recruiting and retaining qualified staff — affects a small percentage of child care providers in Eagle County.

“The vast majority of licensed child care programs in Eagle County are able to operate without the burden of rent and mortgages as a result of arrangements with businesses, government, churches, etc., and they still face financial obstacles that limit what they can do,” said Liz Costaldo, director of operations for Early Childhood Partners, an Edwards-based organization that provides support and programming for early childhood providers and educators.

However, for those that do have a rent or mortgage to pay, it can be incredibly burdensome as child care centers are already in a precarious financial position.

“All child care programs struggle with the fact that tuition is already a financial burden on most families, and it is also the only source of income to operate the businesses,” Costaldo said. “Many child care programs are forced to have bare-bones staffing because they cannot afford to employ as many teachers as they would like.”

This is because, Costaldo added, payroll is typically centers’ biggest expense. Therefore, when money is tight, it means fewer teachers are employed, teacher to child ratios increase, there’s less time for planning and activities and overall stress increases. All of which, she said, “can lead to increased teacher turnover.”

This is something that Mountain Tots’ Director Jess Deerr became intimately aware of in recent years.

“At Mountain Tots our biggest source of revenue is tuition. We have to balance keeping our rates affordable for families, paying teachers enough to have high quality teachers, and all the expenses that come with running a business such as rent, utilities, building upkeep, etc.,” Deerr said. “All of these challenges have gotten harder over the past few years: rent has increased, utilities have increased and finding qualified, reliable teachers has become harder and harder.”

Last summer, the school’s rent nearly doubled as it was struggling to find teachers, and its staff-to-student ratios were at their max.

“We didn’t have enough teachers to enroll any more children and the teachers we did have were struggling to keep our program at the level we strive for and not burn out completely,” she said. “We needed to have lower numbers to help the teachers create and maintain the high level of care we strive for and are known for, but we needed max enrollment to be able to keep the building running.”

Rental Assistance

Much-needed relief came at the end of 2021 for both Deerr and Reed when the county began working with partners on a rental assistance program for child care providers.

Eagle County has long been engaged in supporting child care centers through grants and funding to help ensure local families have access to high-quality child care.

“Child care and early child care development is within our strategic priorities about supporting our workforce. Child care is obviously a necessary commodity if you want to go to work,” said County Commissioner Jeanne McQueeney. “And so, for a long time we have supported child care with capacity and with quality.”

So, when Costaldo approached the county in 2021 with the idea of supporting providers in this way, the county jumped at the opportunity to fund the idea.

“As we review the multitude of needs the early childhood education community here has, we look for opportunities to fairly and equitably invest county funds. This presented itself as a way to address one financial burden that impacts different centers differently,” said Megan Burch, Eagle County’s director of Human Services.

“This program is a complementary program to the primary support grants the County provides to centers to support providing infant and toddler care, recruiting and retaining workforce, and meeting other health, safety, and quality-related needs,” Burch added.

So in late 2021, Eagle County launched a program to provide licensed early childhood providers with financial assistance for rent, mortgage, and similar overhead costs in 2021. It distributed over $313,000 in assistance — providing up to $3,000 per center for monthly support — to 13 programs in the county. These centers are located from Vail to Gypsum and serve over 500 children.

“Freeing up money for teachers rather than rent will allow many programs to adhere to nationally recognized high quality teacher to child ratios rather than state regulatory ratios,” Costaldo said. “Additionally, competitive wages, benefits and lower-stress work environments are proven to have less teacher turnover and less challenging behaviors among children in the child care industry, which is good for everyone — parents, children and child care providers.”

Through the rental assistance program, Reed received a reimbursement of $36,000, or $3,000 per month, at the end of 2021, which she said was a “huge, huge help.” With this assistance, Reed was able to completely pay off debt from building costs, provide her staff with a bonus and bring on another teacher.

All these things have helped Reed recruit and retain a group of qualified teachers and staff — which with the current demand for early childhood and child care, is crucial. Reed said that currently she has 158 children on her waitlist, with five additional families joining each week.

“I have families begging me to open more,” Reed said. “And we have nothing for this year; for 2022, I have zero spots opening.”

Deerr said the impact of this rental support has been huge for Mountain Tots.

“We have been able to slightly lower our ratios, offer better pay for current and new teachers, and have not had to raise tuition. Our program has gotten back to where we strive to have it at: high quality care,” Deerr said. “We were able to reallocate funds that would have gone to rent, to teacher pay and keeping our tuition cost the same, if we had not gotten the rental assistance we would have had to raise tuition, affecting our families.”

Two more years

Just this week, the county announced that through a grant from the Frechette Family Foundation, it is going to be able to extend the program through the next two years. A total of $516,032.52 per year in assistance will be distributed to the same 13 early childhood providers. And no, instead of capping the contributions at $3,000 per month, the program will cover each center’s total rent or mortgage costs.

When Reed got the news that the county was extending the program for two additional years, she started screaming.

“I made my husband read (the email) to me, because thought I was reading it wrong, I didn’t think it could be true,” Reed said. “We are just over the moon because there’s just so much that we are going to be able to do for our families and, really, for my teachers; and I’ll be able to give myself a decent paycheck.”

The first thing on Reed’s list is setting up some form of health insurance for her employees now that her rent is taken care of for the next two years.

Reed is not alone in the health insurance dilemma. In fact, McQueeney said that this is “the other big ticket item” Eagle County is attempting to problem solve for local child care providers.

“We are still problem solving that, trying to figure out a way to provide health benefits for child care providers, cause they’re small, they might have a small number of staff, and it’s difficult to find affordable health care,” McQueeney said.

In the meantime, Eagle County will continue looking for ways to support local providers and families through its grants and programs.

“We are hopeful to continue finding creative partnerships to continue supporting early childhood centers,” Burch said. “The community is clearly seeing how important our early childhood providers are to supporting our workforce. By highlighting opportunities such as these as ways businesses can support this critical industry, maybe new partnerships between providers and businesses can be formed.”

McQueeney said that having the next two years funded by the Frechette Family Foundation gives the county two years to mobilize as a community and figure out a sustainable funding source.

“Our goal is to really figure something out in these next two years to continue this program,” McQueeney said. “It’s really generous of them to invest for two years, that really gives us room to grow.”