LSS no longer offering childcare for young kids

Simplified: Nearly 60 infants, toddlers and preschoolers are losing their childcare center in a couple weeks. Lutheran Social Services announced Monday they’ll be discontinuing childcare services at all locations — though their after-school services are unaffected.

Why it matters

• This is the latest casualty in the ongoing childcare crisis in Sioux Falls. Last fall, Apple Tree announced that it was closing, and scores of in-home daycares have closed in the last decade. LSS will no longer provide care to infants, toddlers and preschool-aged children starting August 16. 
  • This will affect 57 kids and a total of 43 families.
• LSS cited “financial sustainability challenges” as the reason for the closure. In a statement, LSS President and CEO Rebecca Kiesow-Knudsen said pandemic relief funds helped keep the program afloat in recent years, but as those funds expire, LSS can no longer afford to keep sustaining childcare for young children. 
  • Kiesow-Knudsen declined an interview request to discuss this decision further.
• It’s well documented that childcare businesses in the city have a difficult — if not impossible — task in trying to balance providing childcare that’s affordable to families while also paying providers enough to be competitive in the workforce. Sioux Falls Thrive conducted a months-long, in-depth study last year looking at the complexities of childcare and possible solutions. 
  • Since those study results were presented last summer, though, neither the business community nor the city have made meaningful investments in solutions.

"We don't support our families, and as a society, we'll pay for it," said Michelle Erpenbach, president of Sioux Falls Thrive, the group behind extensive research into the local childcare crisis.

Tell me more about the childcare crisis

If you don't know, now you know.

TL;DR – The business model for childcare is unsustainable. Parents can't afford continuously rising costs, and providers already aren't charging enough to cover the actual costs of care.

What does this mean for parents?

Local teacher Kali Sloup got the email that her 2-year-old daughter's childcare center at LSS Southern Hills was closing while she was at a banquet at a work conference Monday night.

"I dropped my fork," she said. "I looked at the other teachers around me and said, 'I've gotta step out.'"

• Sloup has lived in Sioux Falls since 2021. She said finding the opening for her daughter at LSS was "a miracle."

"She was not quite a month old when I found out they had a spot," Sloup said. "We had been on two other waitlists, and several other places, I contacted and never got any responses."

The facility was close to the school where Sloup teaches, her husband's work and the family's pediatrician. Sloup said they were paying $300 per week for childcare for their daughter.

Now, she's worried about finding a spot before childcare runs out the same week she needs to be back in the classroom.

• She's also worried about how she'll explain to her daughter why she doesn't get to see the teachers she knows and loves because she's been with them since she was three months old.

"When we start at a new program she's gonna wonder where her friends are – 'This isn't my school, mommy,'" Sloup said.

Is the city doing anything to help?

Yes and no.

Earlier this year, the council allocated $450,000 for scholarships for childcare providers at Southeast Technical College in an effort to bolster the childcare workforce.

The council also paid $75,000 to Woods Fuller to further research three main priorities:

1. Look at regulatory challenges or potential incentives that would lead to more in-home daycares.
2. Develop a pilot program of a tri-share model (similar to what they're testing out in Rapid City)
3. Find ways to connect more families with existing state and federal childcare assistance.

That said, those findings are expected to be presented later this fall, after the 2025 budget has already been approved.

• As it stands now, there is nothing in next year's city budget earmarked to address this ongoing childcare crisis.

City Councilor Rich Merkouris said he's not at all surprised to see the city lose another childcare option. That said, he doesn't expect to see any changes from a city standpoint in the next year because nothing is in the 2025 city budget.

• Merkouris also noted that he's not sure if the business community is on board to support any potential solutions.

Councilor David Barranco said he's learned a lot about the crisis over the last year on the council, but there's more work to be done.

"Recently, I’ve heard some local partners may discontinue childcare services," Barranco said in a statement. "In that case, we must redouble efforts to incubate new centers as well as expand the capacity of superb local facilities that offer reasonable rates and show a record of success."

What happens next?

LSS discontinues childcare services Aug. 16. They'll continue to have after-school care.