financial pressure

Closure of Clayton Early Learning center in far northeast Denver exposes pain points in early childhood care

Preschoolers play at Clayton Early Learning in 2015.

When the news broke last week that Clayton Early Learning planned to shutter its child care center in Denver’s Green Valley Ranch neighborhood, dozens of parents voiced anger and surprise as they scrambled to line up new child care arrangements.

Behind the scenes, local and national early childhood advocates also took note.

Suddenly, one of the most well-respected names in early childhood education was downsizing. After just four years, Clayton was leaving an underserved city neighborhood, ending service for middle class tuition-paying families and retreating from its aspiration to provide quality child care to a mixed-income population.

“That is not a decision that we wanted to have to come to,” said Clayton’s President and CEO Charlotte Brantley. “We don’t believe it’s the right way to go to segregate kids based on their race, income or anything else.”

The move, however, illustrates just how financially tenuous the child care business can be — even for the biggest players in the game.

“It is concerning for Clayton, being a really well-known, high-functioning provider, to not be able to make it work,” said Emily Bustos, executive director of Denver’s Early Childhood Council.

Clayton, whose flagship school in northeast Denver is part of the national Educare network of child care centers serving at-risk children, doesn’t look like a place with money worries. Stately buildings dot its 20-acre campus, which long ago housed a boys orphanage and school. The organization also owns the 155-acre Park Hill Golf Club, which brings in about $650,000 a year after expenses.

Still, Clayton leaders and industry experts say top-notch child care is extremely expensive — costing tens of thousands of dollars a year per child. And help from government coffers is lagging.

“It’s an example of how underfunded high-quality programs in early childhood are,” said Cheryl Caldwell, director of early childhood education for Denver Public Schools.

Said Brantley: “The industry runs on an absolute shoestring budget.”

While Clayton is closing its far northeast Denver location, many of the approximately 100 children served there will be allowed to transfer to Clayton’s flagship campus on Martin Luther King Boulevard because they qualify for federally funded Head Start or Early Head Start. By combining Head Start funds with Denver Preschool Program funds and state money available to low-income families, the school can cover the cost of those slots more easily.

Up to 43 children, half of them infants or toddlers, will lose their spots at Clayton after Aug.18. They include 25 tuition-paying children at the main campus, three tuition-paying children at the far northeast site and possibly up to 15 low-income children at both sites who currently get state child care subsidies. Some of 15 children may be eligible for Head Start, which would allow them to stay at Clayton.

The closure will hit families with infants and toddlers particularly hard because there’s a chronic shortage of quality care for children that age in Denver.

While displaced preschoolers will probably be able to find other arrangements, “The infants and toddlers … they have basically nowhere to go,” Brantley said.

Some tuition-paying parents expressed their frustration at Clayton officials for not having being more proactive in addressing the financial challenges.

“You are the caretaker for the families because we don’t work with the budget,” Nate Paul, who has a 17-month-old in care at the main campus, and is expecting a baby who is already on the Clayton waitlist, told school officials at a recent meeting. “We don’t know what the cost per head is. We don’t have our hand on the gears and levers. You do. Your job is to make Clayton sustainable.”

Ryan Walsh, a father of two children served at Clayton’s main campus, said, “We’re not just a bunch of noise-making, smear campaign kind of people. We actually advocate for early childhood education, and this situation doesn’t benefit the community as a whole when we’re talking about early childhood and education funding advocacy in general.”

Brantley said about 30 staff members at the far northeast location will be able to transfer to jobs at the main campus, though some may take on somewhat different roles.

After operating its flagship campus for decades, Clayton Early Learning opened its second location in a building called Z Place in the Green Valley Ranch neighborhood in early 2013.

The additional space allowed both sites to begin accepting tuition-paying families. They had access to the same raft of benefits that Clayton’s Head Start families and those eligible for state child care subsidies did— small class sizes, extensive special services and lots of parent support.

But tuition — currently about $1,000 a month for full-day preschool and about $1,200 a month for full-day infant/toddler care — never covered the true cost of all that was provided, Brantley said.

Clayton covers $200,000 to $300,000 each year to close the gap between what tuition covers and what the program actually costs, Brantley said.

School officials launched the new location knowing that, but they hoped that more public funding would be coming to the early childhood field. At the time, a campaign was underway for a statewide ballot initiative that would raise millions for education, including preschool and full-day kindergarten. Voters soundly rejected the measure in November 2013.

There were other setbacks. In 2014, Colorado lost its bid for a federal grant that would have paid for new state preschool slots. Clayton would have been a partner in the effort.

Brantley said the state legislature’s perennial reluctance to increase education funding, combined with uncertainties about what will happen to federal early childhood funding under the Trump administration’s budget, also factored into the discussion to close the far northeast location.

In the midst of the deliberations, Clayton leaders learned that two separate grants that help fund other parts of the organization’s work — weekly “play and learn” groups for kids and caregivers, and coaching for other child care providers — would not be renewed.

“It’s this multitude of things that crashed together all at once,” said Brantley. “This was an incredibly difficult and disappointing decision to have to come to.”

Although Clayton owns the Park Hill Golf Club land and is in the midst of deciding whether and how to redevelop it, Brantley said it wouldn’t solve the problem of the far northeast site. For one thing, it will remain a golf course at least through the end of 2018, meaning no additional revenue is expected any time soon. In addition, any revenue from it would also need to support other aspects of Clayton’s large operation, which includes research, training and coaching.

Brantley said the fate of the seven classrooms at Z Place became clear in the spring as school leaders were developing the budget for the fiscal year that began July 1. The board voted to close the far northeast site in June.

Some of Clayton’s tuition-paying parents argued that they would have been willing to pay more if only school leaders had asked. But Clayton officials say the gap was too large.

Mike Burke, vice president of the Buffett Early Childhood Fund, a national Educare partner, said that he understands the parents’ instinct, but that it probably wasn’t a realistic request.

“An organization of Clayton’s caliber would have made it work if they could,” he said.

Educare programs have very robust staffing models “where you’re paying for degreed professionals, you’re paying for one, two, three teachers in the classrooms, family support workers, nurses, mental health consultants, speech and language consultants,” Burke said.

“When you start piecing it all together, you can see these cost-per-child averages raising, raising, raising.”

Burke said only a few of the country’s 21 Educare schools, including those in Miami, Maine and suburban Chicago, have classrooms that include children from tuition-paying families. But in most cases, it’s small-scale integration — only about 10 children.

Research on mixed-income preschool classrooms shows that such diversity has a positive influence on language development and social and emotional skills of low-income children. But Burke said early childhood financing structures aren’t set up to encourage socioeconomic integration because they come with strict eligibility requirements, often based on family income.

Locally, Mile High Early Learning, which like Clayton focuses on serving low-income families through Head Start and Early Head Start, draws around 7 percent of its 500 children from tuition-paying families.

But Pamela Harris, the organization’s executive director, knows how hard the balancing act is. Leaders there recently increased monthly tuition from $1,400 to $1,700 after a year of discussions.

That said, there’s still an invisible subsidy at work, Harris said — the discount that comes from paying child care workers a relatively low wage. Some in the field make so little they qualify for government assistance.

Overall, Harris believes there’s been progress on the early childhood front — gradual growth in Colorado’s state-funded preschool program, a new focus on early education in the federal Every Student Succeeds Act, and local efforts to connect the birth to five age span to the K-12 education system.

Against that backdrop though, Clayton’s plan to close its far northeast site “exposes the pain points that are still in early childhood,” she said.

A new floor

Colorado’s new minimum wage means raises for child care workers and tuition increases for parents

PHOTO: Ann Schimke
Loveland's Teaching Tree Early Childhood Learning Center was one of the first two centers in the state to get a Level 5 rating in the Colorado Shines rating system.

Child care teachers and assistants absolutely deserve the raises that come from Colorado’s new minimum wage of $10.20 an hour, their bosses say, but the pay increases also mean that many providers will pass on the new expenses to tuition-paying parents already stretched thin by child care costs.

“I don’t know how much more parents can pay,” said Diane Price, who heads a nonprofit network of seven centers in Colorado Springs.

In some parts of the state, early childhood advocates also worry that the raises mandated by the minimum wage hike will cause some workers to lose public benefits by pushing their income just above the eligibility threshold — making it harder, not easier to make ends meet.

In a field working to professionalize its ranks, pay its workers more, and raise awareness about the educational and economic value of quality child care, many observers say the minimum wage increase is a step in the right direction.

“It’s an important move,” said Christi Chadwick, director of the “Transforming the Early Childhood Workforce” project at the nonprofit Early Milestones Colorado. “The thing I struggle with is we’re still not getting people out of poverty and paying them on par with the public school system.”

Price, the president and CEO of Early Connections Learning Centers, said, “Shame on us that we even have to have this discussion that early educators are in a category that pays minimum wage.”

The latest minimum wage increase, which took effect Jan. 1, is the second of four annual increases mandated by a ballot measure approved by Colorado voters in 2016. The last step of the phase-in process will boost the minimum wage to $12 in 2020.

Colorado is among 29 states — most in the northeast and west — that have set a minimum wage higher than the federal rate of $7.25 an hour, according to the U.S. Department of Labor.

Child care providers here say advance planning and clear communication with parents have helped them incorporate raises into their budgets.

Price, who raised tuition slightly at her centers last August, said she anticipates a budget hit of about $600,000 over the four-year phase-in period.

But that’s not just because her lowest paid staff members are getting raises to comply with the minimum wage law. Like many other child care directors, she’s giving raises across the board out of fairness to veteran employees.

Price said she didn’t want entry-level employees to catch up with those who already hav a Child Development Associate credential or an associate’s degree.

Heather Griffith, who leads the for-profit Young Peoples Learning Center in Fort Collins, is taking the same approach. Her whole staff, except two brand new employees, have received raises.

She’s already sent out a letter notifying parents that tuition will go up 6.5 percent on February 1 – that’s an additional $16 a week for a full-time preschool slot. It’s the second of three tuition hikes Griffith will institute during the minimum wage phase-in period.

While the higher costs are hard on parents, “it’s a lot tougher for these teachers to survive on non-livable wages,” Griffith said. “I’m 100 percent in support of this minimum wage hike.”

Griffith hasn’t gotten much pushback over the impending tuition increase. The thriving economy helps. Also, she said, parents like the care her centers provide and wouldn’t be able to find it for much less unless they switched to unlicensed care, which is mostly unregulated.

Anne Lance, who heads the non-profit Teaching Tree Early Childhood Learning Center in northern Colorado, said she began planning — and frontloading — wage increases for all staff shortly after the 2016 ballot measure passed.
Currently, her entry-level teaching assistants start at $10.50 an hour even though she’s only required to pay $10.20.

“I had to get way ahead of the game … so in a couple years when it gets closer to that $12, it’s not going to kill me,” said Lance, who operates one center in Loveland and one in Fort Collins.

While the center’s two sites serve many low-income children who qualify for state child care subsidies or state-funded preschool slots, there are some tuition-paying families in the mix, too.

It’s those parents who may feel the sting of the minimum wage increases over the next couple years. Lance said she’ll keep her tuition increases to a modest 3 percent this year, but may have to jump up to 5 percent in 2019 and 2020.

On average, lead teachers with several years of experience at Teaching Tree make about $13.50 an hour. While that’s above the minimum wage, it’s not much to live on for employees on their own or those who are single parents, Lance said.

In Colorado, about one-third of child care teachers qualify for some kind of public assistance to cover housing, food, health insurance, or child care costs, according to a 2017 survey of child care workers in the state.

Chadwick, of Early Milestones, said during visits last fall to the San Luis Valley and southeastern Colorado, early childhood leaders explained that some child care workers were quitting their jobs due to fears they would lose government benefits when minimum wage-related raises took effect.

To alleviate such concerns and make child care a profession that pays a living wage, more substantial raises are needed. But Chadwick and other leaders don’t expect further funding to come from a state-level effort.

Instead, they say it will be locally-funded initiatives — already underway in some Colorado communities — that pick up the slack.

“We have to pass things like mill levies and taxes that support early childhood,” said Griffith, of Young Peoples Learning Center. “We have to do it. We have to say yes to these things if what we want is a community that has educated kids ready to go into kindergarten.”

year in review

Early childhood discipline, child care deserts and funding challenges in the spotlight during 2017

Malanna Newell is a toddler teacher at the Mile High Early Learning center in Denver's Westwood neighborhood. She started as a teaching assistant before taking Mile High's Child Development Associate training last fall.

Amid national debate on the disproportionate number of suspensions and expulsions given out to young boys and children of color, Colorado lawmakers and educators grappled with the best approach to discipline in 2017.

The year kicked off with a bill in the legislature to curb suspensions for early elementary and preschool students — a shift that would have put Colorado on the forefront of school discipline reform, some observers said. Although the bill had a broad array of backers, a Republican-controlled Senate committee killed the proposal after last-minute opposition from a group of rural school district leaders. Some of those leaders said suspensions weren’t a “rural problem,” but a Chalkbeat analysis found otherwise.  

Despite the defeat, advocates of the bill expect a renewed push for the measure during the 2018 legislative session.

In the meantime, Colorado’s two largest school districts — Denver and Jeffco — spearheaded changes to reduce the number of suspension handed out to young children. In June, Denver’s school board instituted a policy limiting the suspension of preschool through third grade students, though some educators worried they weren’t being given enough support to handle kids who misbehave.

In Jeffco, after Chalkbeat wrote about the district’s high rate of early elementary suspensions, administrators commissioned a report on the issue with recommendations to increase the use of restorative justice practices and other alternatives to suspension.  

Also in 2017, local early childhood leaders launched or expanded efforts to address key problems in the field — including teacher recruitment and retention and kids’ sometimes rocky transition to kindergarten.

At the same time, some early childhood advocates were forced to reckon with the perennial lack of funding that plagues the industry and constricts families’ choices. One of Denver’s most well-known child care providers, Clayton Early Learning, closed one of its two facilities last summer — a move observers said spotlights the high cost of quality child care.

But there were also bright spots in the funding landscape — some growing out of local efforts in Colorado’s rural towns and resort communities. A preschool in Holyoke found a way to give staff members generous raises and a growing number of cities and towns are getting new dollars for early childhood programs through sales or property taxes.

In Denver, several efforts — using a combination of public and private funds — aim to improve child care options in the city’s Elyria-Swansea neighborhood, which is designated a “child care desert.”

At the state level, officials promoted recently-created financial incentives for child care centers with top quality ratings, though some providers say earning those ratings is too much work.

Looking ahead to 2018, early childhood advocates hope to renew a tax credit that helps child care providers make ends meet. Plus, winners of a new early childhood innovation competition will get financial help to scale up their ideas.