Four Sioux Falls childcare centers shutting down early next year

Four Sioux Falls childcare centers will be shutting down early next year, dropping the childcare capacity in the city by more than 800 spots.

Apple Tree Children's Centers informed parents of the decision in an email sent Thursday night, which stated the city's four centers would be shutting down no later than Jan. 12.

"Apple Tree has sought to serve the children and families of Sioux Falls for over 40 years," the email read. "Staff shortages, the impact of inflation, as well as occupancy costs have resulted in financial losses far too large to sustain. Regrettably, sadly, we are forced to suspend operations no later than Jan. 12, 2024."

More: Sioux Falls Childcare Collaborative shares in-depth look at childcare crisis, possible solutions

The letter is signed by Executive Director Randall Stewart, who said in an interview Friday that Apple Tree's four childcare centers were licensed to care for a little more than 800 children, though he did not say how many children were currently enrolled at the four centers.

Many, including EmBe CEO Kerri Tietgen, have said the city is in a childcare crisis even before the closure of Apple Tree, citing availability of childcare as well as its rising costs.

Federal guidelines say "affordable childcare," should cost no more than 7% of a family's total income, though at an average cost of $11,385 per child in Sioux Falls, a family would need to make $163,429 to meet that target. The median household income in Sioux Falls is $66,761.

According to a June 2023 report from Sioux Falls Thrive and the Sioux Falls Childcare Collaborative the city had 12,260 licensed slots for childcare, with approximately 12,904 children who had all available parents in the workforce.

The study also showed that 64% of childcare centers were unable to enroll to their licensed capacity due to staffing shortages, while noting that the mean hourly wage for Sioux Falls childcare workers was $12.34 an hour.

More: 'We're in a crisis,' childcare leaders warn as options remain unaffordable for many

The issue has come up recently in meetings of the Sioux Falls City Council, with Councilor Alex Jensen saying last month that he'd like to look at a professional services contract that could identify best practices around the country.

"We are in active conversations with our non profit partners to connect people in need of daycare with daycare providers," Jensen said in a text.

"The child care issue is a wage problem," said Councilor Pat Starr, who tried and failed to allocate $100,000 toward the city's health department to create an office of youth development during the most recent budget process. "If you work full time plus and the government has to subsidize your housing and childcare it's a wage problem."

"It only makes the crisis more acute," said Councilor Greg Neitzert. "The urgent question for the council is what if anything can the city do to make a meaningful and sustainable positive impact on the problem."

Councilor Rich Merkouris said in a text message that the closure "accelerates the Council conversations in my opinion," which he said "have been admittedly slow as it is very complicated and some of us including myself are struggling to determine the levels of public investment."

"The Apple Tree situation certainly magnifies the need for a conversation at the state & local level to try and find some ways to improve the system asap," said Councilor Marshall Selberg. "It's also a workforce issue as is the case in a number of industries."

"I believe the city should take pragmatic steps that help prospective childcare workers obtain licensure and certification," said Councilor David Barranco. "We must grow and educate our local workforce so childcare centers can more easily hire the competent and capable staff they need. We should also consider pathways for seniors and retirees to volunteer. These residents possess a wealth of energy and experience to contribute."

This article originally appeared on Sioux Falls Argus Leader: Four Sioux Falls childcare centers shutting down early next year