Archive for the ‘money’ Category

The Petition is Filed

Word from City Hall is that Melanie Fiferlick filed a petition for referendum today with 48 signatures on it. The petition, if valid, would force the City to hold an election on a line item veto of the Daycare budget for 2007. If passed the referendum would, according to City staff, close the Montrose Community Daycare as we know it, effective January 1, 2007. The City would no longer be able to accept revenue or pay any expenses, and all 8 employees would lose their jobs as of that date.

There is a regular City Council meeting tonight at 7pm. Pat Waechter is on the agenda to ask questions about the daycare, and Carol Flickinger (City Finance Officer) will discuss the petition during her report.

I am working now to update the impact numbers as of Sept. 30. The Daycare has cost the City a net of $618 for this year so far. For the month of September, the Daycare has a net income of $1041.

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Is the Daycare a Business?

Well, no. It’s not. A business is an entity that exists to make money. They are here to turn a profit. Sure, some people start a business because it’s a dream or to keep a family tradition going or some other reason–but at the end of the day, it really comes down to “are we making money, or losing it?” I’ve coached a lot of business owners in my work, and have studied entrepreneurship’s best practices my entire adult life (I also run a profitable consulting business of my own). Sometimes when I coach a struggling business, we find something that is broken and fix it, turning that business around. Sometimes after trying a lot of things, we find that maybe the business model just won’t work. Wrong location, wrong customer base, wrong idea, wrong owner. It can be a lot of things. Then, after trying everything we can think of, I might tell that business owner that if I were in her or his shoes, I’d probably close up shop instead of continuing to lose money. It’s the truth–it’s what I would do.

Daycare is a different story. It’s very rarely a profitable idea, and there are few people willing to take the risk of starting a private daycare. As a coach, I’d advise someone looking to start a daycare to tread pretty lightly–to dig deep into her soul (and savings account) to be sure she was up to a potential heartbreak. It’s a labor of love, or a bankruptcy. I’d tell the same thing to anyone looking to start a for-profit swimming pool, or a softball park, or a community center. These are all services that are important for a community, but wouldn’t be provided at all if left to private businesses. That’s what  government is for–to provide services that the people need or want, but aren’t profitable enough to entice an entrepreneur to provide them.

Daycare is one of those services. I’m not saying a daycare owned and operated by the City is the only answer–or even the absolute best answer. But it is an answer for us in our little village in the valley. Without it, young families would look elsewhere, teachers and young couples would pass over Montrose as an option, and a significant economic impact would be lost (whatever that number is).  The biggest thing to go, in my mind, would be the unique partnership we’ve formed between the City and the school. I travel small communities all across the northern great plains. Trust me–what we have is special. In most towns I study, the City and School don’t even talk to each other about the future of the community, let alone partner financially to make a better one.

Comments are open–spark a conversation.

Great Math: Spend $1300 to Save $1032

Over $1300. That’s what a referendum election would cost the City of Montrose, according to Carol Flickinger’s (City Finance Officer) estimates. That’s legal fees, ballots, staffing the election, etc.

On the other hand, the tax dollars that would potentially be saved by getting the City out of the Daycare business would be about $1000, based on 2006 year-to-date expenses. And the trend for the past five months has been less and less net spending per month. So the savings could actually turn into zero.

Now, I didn’t graduate from good ‘ol MHS (I’m a Canistota Hawk), but that math doesn’t seem to make much sense to me. Especially when you consider the indirect effect of closing the Community Daycare.

  • 8 jobs: lost.
  • 13 preschoolers: out of luck.
  • 24 families who need daycare service: sorry.
  • $292,077 economic impact: gone.

Where will we, the “daycare families,” enroll our kids? I don’t know. Some parents will probably haul their kids to Humbolt, Hartford, Salem or Sioux Falls (and take their payments with them). Some have told me they would consider moving away from Montrose if we didn’t have daycare for them.

What about the school? Without the daycare on campus, parents don’t get familiar with the school and the education we can provide here. If they are new to Montrose, which many of the daycare families are, they are more likely to enroll their kids at West Central or McCook Central when it’s time for Kindergarten–if that’s where they’ve become used to going for daycare.

Bottom line: It’s a big deal for Montrose, folks.

292,077 Reasons = 1

The impact study is done. You can view the figures behind it by visiting the economic impact page. Based on my analysis, using multipliers figured by a USD/Citibank study on daycares in South Dakota in 2005, our little daycare made an impact on the community of $292,077 in the past 12 months. Not a bad investment of two grand, afterall. The thing is, that nearly 300 thousand dollars is just the tip of the impact the daycare makes on our community…

There are other numbers too: 8 jobs, 24 families served, 13 preschoolers, $2.16 annual cost per resident, etc (see all the numbers). There are the businesses in Montrose that benefit directly at the cash register from the daycare, like the General Store and the Irish Pub.

To me, the most important number of all is 1. As in the only one. No other town has recognized how important quality childcare is to a community quite like us. We’re the first one to get our City Council and our Public School District together to solve a critical problem, and to work together to provide a very important service to the community.

Forget about the numbers for a minute. What we have is a great story to tell! Our community leaders–our City and our School–work together to build a better future for Montrose. The City underwrites the modest expenses (roughly 90 bucks a month), the School provides the campus and great facilities. And both win. The City gets a huge return on that $90 a month investment in the form of a $292,077 economic impact. Jobs are created. Families move in or don’t move away because we have great daycare–right on the school campus so it’s safe and convenient. The school wins because teachers have daycare available right next door. Kindergartners (my Hope is one of ’em) are better prepared, thanks to the preschool. Families from outside Montrose can choose to enroll their kids in daycare and our school at the same spot. And school officials believe kids who attend our daycare are very likely to attend our school–with open enrollment, these are big things to think about.

So, all this great stuff is, well, great. But the biggest thing is still the very fact that our daycare exists the way it does–a cooperative, community-wide effort for a stronger Montrose. It’s not about the numbers or the client-families or the jobs or the City funding–it’s about our community.

Comments are open–post away…