Funding could bolster day care facility improvement projects

Day care centers and family care providers, like most businesses, face the burden of ongoing facility maintenance.

Sponsored by Rep. Jim Davnie (DFL-Mpls), HF2420 would appropriate $2.5 million in both Fiscal Year 2020 and Fiscal Year 2021 for First Children’s Finance to make loans to improve child care facilities and early childhood education sites.

The bill was held over by the House Early Childhood Finance and Policy Division Tuesday for possible omnibus bill inclusion.

Rep. Jim Davnie

First Children’s Finance is a Minneapolis-based organization that provides loans, business-development assistance and consultation to child care businesses and entrepreneurs, according to Jerry Cutts, president and CEO.

“As Minnesota struggles with child care deserts, we can play an important role providing capital to incentivize child care businesses, and to grow the footprint of programs that are ready to expand,” he said.

The money could be used for loans to providers to plan, design, construct or expand licensed and legal unlicensed sites to increase the availability of child care or early childhood education. Cutts said early estimates indicate the funding would serve about 100 family child care providers and 20 child care centers per year. 

Rep. Laurie Pryor (DFL-Minnetonka) asked why First Children’s Finance should be the arbiter of the funding as opposed to a different organization or agency.

It currently receives its funding through several public, private, corporate and nonprofit partnerships, and Cutts said the organization’s longevity and proven experience make it well-suited for the role.  

“Since establishing our loan fund in 1997, we’ve funded almost $12 million to child care businesses including $3.5 million to child care programs in Greater Minnesota,” he said. “Our loans have created and preserved 12,635 child care spots and supported the creation of 1,791 jobs.”

The bill would require First Children’s Finance to report to the Department of Human Services — which would act as a conduit for the funding — on projects supported by the financing, an account of loans made during the calendar year, the program’s assets and liabilities, and an explanation of administrative expenses. It would also require the organization to annually submit a copy of an independent audit report.

The companion, SF2559, sponsored by Sen. Karin Housley (R-St. Marys Point), awaits action by the Senate Family Care and Aging Committee.