Newly increased fees should help keep the doors open at Horizon Early Education Center but an attendance boost is also needed to sustain the long-running daycare program, according to a staff presentation at a recent Pleasanton Unified School District Board of Trustees meeting.
Fees for families with children enrolled in Horizon will now increase for all age levels, from $1,920 to $2,300 per month, with preference given to full-time students. Part-time fees are now $1,100 to $1,600 per month, depending on whether the student attends two or three days per week.
The fee increases were unanimously approved at the Aug. 12 board meeting to avoid staff layoffs from the program, which has offered reduced and subsidized services for qualifying families for more than 30 years. More recently, however, Horizon has struggled to stay afloat due to declining attendance and revenue.
"It's not sustainable if it's losing money year over year, and is that the business that the school district wants to be in," Board President Joan Laursen said that evening. "We can't cannibalize another program to support this one."
In May district staff recommended cutting six classified staff positions at Horizon -- five full-time early education positions including a lead early educator, plus an early education aide -- citing continued low enrollment and annual budget deficits, as well as an opportunity to save approximately $470,000 based on staffing allocations.
With the pandemic impacting the availability of child care, parents implored the district to consider alternative solutions to layoffs at Horizon. The board agreed to put the layoffs on hold, and asked staff for updated information about the program's solvency.
Horizon is licensed for up to 26 children, but currently has about 16 full-time attendees and has not reached enrollment capacity for the last three years. Because the district must maintain daily required staffing ratios but not all of the children are enrolled full time, less revenue has been generated in recent years. To run the program with the maximum capacity, staff said the district would need 8-9 employees.
With increased tuition and 20 children attending full time for 12 months, assistant superintendent of business services Ahmad Sheikholeslami said the program would generate around $550,000 in annual revenue but still fall short of breaking even, due to estimated annual expenditures of $600,000.
"If we were able to sustain an average of 24 students … it could close that gap," Sheikholeslami, adding the program "would probably also require some additional hourly staffing to bridge that gap."
"In the short term, we're not there yet but I believe, given what we see with Kids Club, that we're going to get there with our enrollment coming back," Sheikholeslami said.
Among the biggest cost factors for Horizon are salaries and benefits, and are likely to remain a concern in the future.
"Depending on salary movements and changes in both our benefits costs, we could be looking at 4-6% increases on an annual basis on salaries, which is the main driver of our costs for this program," Sheikholeslami told the board.
Revenues have been tough the past few years but "those numbers are improving," in part due to an account created by PUSD parents for accepting community donations and matching corporate funds, staff said. About $22,000 total has been raised so far and is scheduled to transfer to the district sometime this week, according to Sheikholeslami, but there's "no consistent data showing the district can rely on those donations annually."
Over the course of several town hall and community meetings in June, parents gave the district feedback and recommendations for revitalizing the Horizon program including increasing fees to local market rates, boosting full-time enrollment with a "multi-prong strategy," and marketing and operating Horizon and STEAM as a "comprehensive birth-to-kindergarten program."
In addition to raising tuition fees, staff also recommended continuing to enroll infants and toddlers, hiring staff, and improving marketing and advertising to support the program.
Trustee Kelly Mokashi asked, "Making a stronger connection between Horizon and STEAM, would that help with the revenue?"
Assistant superintendent of human resources Julio Hernandez replied, "If individual programs can sustain themselves, that would be our goal, but if not … another program would help."
When STEAM initially started, "one of the ideas was that we were going to be able to offer this," Laursen said, but "we didn't see an influx of children of our employees in the STEAM program."
"If it's a benefit to our employees, something we would be able to use as a recruitment tool … that would be a good thing," Laursen said. "And it might be worth being a little in the red because it would be a recruitment tool, but we cannot run the program in the red for very long."
Trustee Mark Miller said he wants "to see the real intents of benefitting the employees … making sure we have a clear path from Horizon to STEAM."
"But we're not getting revenue from the state to do this; we're doing it right now because out of the goodness of our hearts, quite honestly and as long as we can pay for it … it requires some thought," Miller said.
The board asked if discounts for employees or families with multiple children enrolled in Horizon were considered, to which Hernandez said the district "discussed many options and variables."
"We kept landing on the flat rate and we took a look at that, and we really needed to see how we can maintain a self-sustaining program, and those kinds of partial fees would impact our ability to do so," Hernandez said.