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The Black Market Business of Daycare

3 year waiting lists, unlicensed carers and an unsupported middle class spells a very troubling child care situation



Last month, Bend police say they found seven children in an unlicensed day care, and their caregiver at a local tanning salon. It may be an extreme case, but it's part of the ongoing problem of finding quality childcare in Central Oregon.

The waiting lists can be upward of three years. The costs average $750 a month. And in the end, reputation and instinct are the only real tools to lean on when entrusting someone to take care of your child.

Ask any parent in Central Oregon, and they'll tell you: finding daycare is not only stressful, but tough.  

"For me, it was harder than giving birth," says Heather Gringley, a working mother of two. "At least labor had a finish line and you knew what you were getting in the end." Gringley is 18 months into a two-year wait list for a local reputable daycare. "It's like, even when I get Nathan in, I'll have to figure out how to pay for it each month. I'm literally paycheck-to-paycheck. So, the stress of getting him in doesn't end there—it's only the beginning." 

Gringley's situation is something of the norm here, where population increases have squeezed an already dire childcare situation into a state of near-crisis.

"The sad fact is that there aren't enough services to cover the need," says Dawn Woods, childcare director of the Oregon Department of Education's Early Learning Division. "We know that parents are in a pinch." 

Sue Stendahl, owner of The Cottage Day Care, notes the influx stemming back to "around 2009 – that's when things became a bit crazy," she says. Operating since 1978, The Cottage is one of the oldest facilities in Bend, currently with a three-year waiting list. "I get close to 10 calls a day from parents telling me nightmare scenarios and begging me to get their child in," Stendahl says. "It's really tough to say no."

A parent's worst nightmare

Woods estimates there are 1,000 licensed centers in the state and 700 certified family homes, with a total of 2,300 licensed or certified professionals. To put that in context, a 2015 population study from Portland State University estimates there were approximately 121,000 Oregonian children under the age of five. With an obvious shortage of licensed care, parents in need turn to the child care "black market," leaving the safety of their children in sometimes-unreliable hands. 

Last month, the parents of seven children in Bend experienced the shocking discovery that the care they'd found may not have been what they thought it was. Authorities say the children—some as young as four months old – had been drugged and left alone at their day care, often for hours at a time. January Irene Neatherlin, 31, owner and operator of Little Giggles – an unlicensed Bend daycare – faces 114 criminal charges including 76 counts of criminal mischief and 38 counts of reckless endangerment in connection to the case.

Acting on an anonymous tip, after repeated complaints to the state allegedly went unanswered, Bend Police carried out surveillance at a home on NE Blue Bush Court March 3 and again on March 15. There, police witnessed Neatherlin leaving at midday for tanning appointments at Tan Republic and workout sessions at a Crossfit gym. Court documents show that when officers entered the home, they found seven unsupervised children between the ages of four months and six years old. According to documents, the children were lethargic and sleepy and were taken to a nearby hospital for medical assessment. Kandy Gies, Deschutes County deputy district attorney, stated that since the arrest, parents and children have reported that Neatherlin had been drugging children and leaving them alone, often giving children "medicine" to help them go to sleep. Neatherlin is currently awaiting trial, her request to lower her $500,000 bail denied. 

Due diligence falls on stressed parents

The pending case involving Little Giggles may be a worst-case scenario, but ultimately the due diligence falls on parents—even those stressed and frantically searching for care. State records show Neatherlin had an expired business license and a revoked daycare provider license. Licensed briefly in 2013, Neatherlin's license was suspended six months later for reasons unknown. Woods notes that depending on the type of licensing, daycares usually face annual scheduled and unscheduled visits to ensure quality of care and health and safety. 

The masquerading of Little Giggles as a licensed daycare went as far as eluding OSU-Cascades, who had it listed under its subsidized childcare listings. The university's protocol is to include only state-registered facilities. University officials say they are now fact checking the other centers listed.

Concerned parents can use the search tool on the website to help them determine if a center is certified and if any complaints were filed against it. A search for Little Giggles this week yielded at least one complaint, stemming back to 2014 for "illegal care." Woods says that any complaints lodged to the state are investigated "within three days." Documents show the state was unable to move forward with an investigation due to Neatherlin being "uncooperative." 

Licensed vs unlicensed care

"Not all unlicensed care is illegal or low-quality care," says Karen Prow, associate director at NeighborImpact. A provider does not need to do any state licensing or certification requirements if they care for three children or fewer; therefore, many nannies and babysitters in Oregon are exempt. For this story, the Source spoke with five nannies – four of whom were unaware of the rule and at times, looked after four or more children without knowing they were breaking the law. Parents, too, were unaware of the requirements. A lack of certification can mean a nanny may not have undergone any child education or safety theory, or even basic first aid.

"There's a difference though between license exempt and running an illegal daycare," Prow points out, "Getting a business license is easy, getting licensed for childcare is not." The Cottage Day Care's director, Hannah St. John Stendahl, Sue Stendahl's daughter, observes, "It seems like each year they add another page to the book, another rule that we must follow."

Regardless of the level of certification, the quality of care varies from daycare to daycare. The variables are even greater with home care. A license-exempt 28-year-old nanny told us that most of her clients came from referrals from other families she had worked for. She is currently a "nanny-share" for several Bend families, a process in which families pool together and share the same nanny.

"I charge $15 for the first kid, $17 for the second and so on." She went on to list a rate for four children, unaware that she was not legally allowed to care for that many. "Mostly the parents just wanted to see how I would interact with their children," the nanny said. For one vegan family, her background in nutrition was a deciding factor. "I don't think they looked at my resume or called any of my references," she says. 

Opting for illegal care

"I remember feeling totally desperate and sad," says Liza Jones* about the process of finding childcare for her three-year old son. "It was very discouraging and stressful." Jones, a single mother who works part time at $13 an hour, relies on food assistance, and is behind on "four or five of my bills," she says.  

Jones opts for home care, run by a local woman who cares for approximately 10 children a day and who she knows is unlicensed. "She was upfront about it," says Jones, "and honestly, it doesn't matter." She was referred to the woman from a network of other moms. 

"Her space feels very educational yet cozy," something Jones says is missing at certified centers. "Even if the kids are at the same ratio in each classroom, there's something about your child being in this hectic, busy environment that holds 70 children. For me, that stressful energy isn't appealing. I'd rather the intimate nature of a home," says Jones. "Plus, my daycare is $25 a day. Half of what other centers wanted." 

Low income options

"We don't advertise our services because we're on a tight budget, but the Head Start program is a great resource for families," says Patty Wilson, early care and education deputy director at NeighborImpact. The program serves low-income families in the Central Oregon area and provides pre-school children four hours of care, four times a week – for free. 

In general, parents must make 100 percent of the federal poverty level or below. For a single parent, that translates to $16,240 a year or less. The program accepts applicants year round and is currently accepting applications to fill the remainder of the school term, as well as for September slots. "We have less than 10 children on our current waiting list," says Wilson, "The message we want families to know is don't be discouraged if you don't quite meet the income requirements. Families can still apply and it's relatively easy." 

For families that make 185 percent of the federal income poverty level, help comes in the form of Employment Related Day Care (ERDC) subsidies. Parents must meet work requirements and pay a designated "copay" amount, which varies on the number of hours and the type of childcare. Woods notes that in the last legislative session, eligibility protection was granted so that if a parent received a pay raise and made more than the allowed income level, they would still be protected for 12 months worth of care. St. John Stendahl says, "We work with a family that receives these subsidies and it's a hard system. The payout is often backdated and delayed." She tells of a mother who says that she "doesn't even want a raise at my work because I'll lose the subsidies." St John Stendahl exclaims, "I mean, how horrible is it to have that mindset?" 

The unsupported middle class

The median household income for a family of two in Bend is $59,400, according to the City of Bend. The Source spoke to numerous parents who said that in a two-parent household, it often doesn't make sense for both parents to work full time, due to the cost of care. The elder Stendahl says that if parents have three children at her center "they can be spending $1,800 a month on care." But quality care comes at a cost, and with no real market rate standardization, rates can fluctuate. Stendahl says her rates increase by three percent each September.  

The solutions, or lack thereof

With Central Oregon facing a property squeeze, new centers that do open face skyrocketing rental rates. The owners of one recently opened daycare on the west side of Bend say their rent was $7,000 a month, with reports of rent being as high as $15,000. Other hurdles include strict City of Bend zoning codes and state licensing requirements. Woods notes that the state is aware of the lengthy licensing issue and "works with unregistered providers, as best as they can, and tries to provide support for current daycares."

There is respite with nanny-share services gaining steam and an increase in in-home providers and apps such as, touted as a way to connect families with local, affordable care. Still, parents should be meticulous in their quest for quality care even when using such services.

"What we tell parents is to ask key questions," says Woods. "Ask if they are licensed and see how open they are. A provider should be happy to show you their space, be happy to answer any questions you may have. And always, trust your gut. It is amazing how much of this comes down to guttural instinct. Trust it." 

*name changed

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About The Author

Magdalena Bokowa

Freelancer at the Source Weekly

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