Children’s Center in fiscal crisis

• By Lauren Heaton
• Published: September 4, 2014

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Enrollment at the Yellow Springs Community Children’s Center took a dive at the beginning of 2013 that has sent the preschool into a tailspin of deficit spending over the past 20 months. According to a summary of the nonprofit’s finances, this summer the Children’s Center went below its target cash reserves of 25 percent, turning what former board Treasurer Derek Barker said was a critical situation into a “crisis.”

The board knew finances were tight last fall, when members circulated a memo from the treasurer saying, “It is time to consider prudent preventative action … Without a doubt, the underlying problem is a decline in enrollment.”

The sobering financial situation is the backdrop of last week’s unexpected decision by the board of trustees to terminate its executive director and longtime employee, Marlin Newell. The decision came as a surprise to both employees and parents, some of whom disagreed with the move and have felt left out of the board’s decision making process for some time. As of Tuesday, Aug. 26, the board had not officially announced Newell’s departure to parents and the community. Her termination contract was signed on Aug. 18, according to a teacher who witnessed the event.

Several parents said this week that they were disappointed in the board’s lack of communication with the school community about critically important financial and personnel issues. But Children’s Center board President Callie Cary-Devine said this week that the personnel issues were handled privately out of respect for the employees, and swiftly due to growing deficits that are currently threatening the survival of the 65-year-old school.

“There is no one on the board that doesn’t feel extraordinarily grateful for Marlin and everything she’s done for the center,” Devine said. “But we were feeling frustration around things that needed to be done and we didn’t feel the skill sets were available,” she said, referring to the immediate marketing and promotional work the center needed to raise revenue quickly.

The Children’s Center parents have called a meeting of the corporation on Aug. 27 at 4:45 p.m. at the center to discuss recent developments, including the dismissal of the executive director, plans to restructure the center and the composition of the board of trustees. The meeting may possibly include a vote of confidence or no confidence in the board of trustees.

The board will also hold a special meeting to discuss plans to install an interim director and begin a search for a new director on Wednesday, Sept. 3 at 6 p.m. in the Graham Conference Room at Mills Lawn School. The board will then hold its regularly scheduled monthly meeting the third Wednesday of the month. The school and broader community are encouraged to attend both events.

Enrollment, budget issues
Enrollment at the Children’s Center has fluctuated over the past 10 years, but the school generally had enough students to maintain fiscal solvency until 2013, when the numbers dropped precipitously.

According to a board memo, in 2011 the school had a steady enrollment all year of a little over 80 students. In the winter of 2012 the school enjoyed a bump of 104 students, which returned to the more typical number of 83 that fall. But by fall 2013, the Children’s Center recorded an enrollment of 65 students, which dropped to just below 50 kids this past summer. Currently enrollment is hovering at an all-time low of 34 students in the preschool, toddler and school-age programs. Though the After School Care program operated by the Children’s Center and housed at Mills Lawn will likely draw a few more students over the next few weeks, the total enrollment is still the lowest the current staff can remember it.

With an annual operating budget of about $480,000, the Children’s Center depends on tuition for approximately 56 percent of its revenue and federally subsidized Title XX for 28 percent of income. Grants through United Way and local donors cover the remaining expenses. But with enrollment dropping, earned income, as Devine put it, from both the federal program and paying students has fallen below expenses and caused the center to begin running an average monthly deficit of $4,300 in 2013. According to the board memo, the center finished the 2012–13 fiscal year $19,300 under revenue.

This year the monthly deficits have grown even larger, such that at an April board meeting the accountant reported a monthly deficit of over $7,000. According to Devine this week, by the summer the board wasn’t positive how much longer the center could keep operating.

“We didn’t feel we had many months left,” she said Monday. “So do we do nothing or do something that could potentially change our direction, our fiscal position and our identity within the community? We all decided we are not going to be the board that sits and does nothing.”

During its June and July meetings, the eight-member board discussed financial options and held several closed sessions to discuss restructuring the administration, a personnel issue that involved finding an executive director with the skills to market the Children’s Center in a wholly new way, Devine said.

The board felt the center needed someone who could look at a marketing and rebranding plan to reestablish the school as a competitor in the regional market. They also felt they needed an administrative staff with associate, bachelor or higher level degrees in order to raise the center’s Stand Up To Quality ratings beyond the one star it currently has and be able to qualify for more public grants and financial programs. Finally, the board needed the director to be able to reach out into the community to fundraise, establish partnerships with other educators and build capacity to revive an valuable organization that, for no obvious reason, is foundering.

And though Newell didn’t want to leave the place she loves and has thrived for 25 years, she also didn’t want to do the kind of work the board was asking of her, she said in a brief interview this week before her last day of work on Aug. 31.

“This is my family here, I love it — it’s my home,” she said. “So no, I didn’t want to leave. But I can’t do what they’re asking.”

Parent concerns with process
The board may have come to a decision that a new director was needed, but according to staff and parents, they neither asked for others’ input, nor communicated the decision soon enough to the center community. Some parents also said the board never informed them of the seriousness of the enrollment and budget situation.

Newell signed her severence on Aug. 18 while she was on vacation. Staff learned about it the following day from a teacher who had been called into the room at the last minute to witness the event. And parents began to hear the news as they brought their children to school the next day. As of Tuesday this week, the board still had not made a formal announcement of the facts to the center’s families.

The informal and untimely delivery of news that Newell was leaving disappointed several parents who voiced their concern this week. Amber Botkin, who moved to Yellow Springs a year ago and enrolled her son at the Children’s Center in September, said that Newell’s absence will be hard for both her child and her family — a hardship that would have been made easier with some preparation.

“Marlin has been super supportive of my son and her rapport with my family has been fantastic,” Botkin said. “I love her, and she loves my son, so her dismissal without being asked for my input is upsetting.”

Another Yellow Springs parent who did not wish to be named expressed similar feelings.
“We came in to get our child the morning after Marlin was relieved and we had a letter that [the board is] restructuring, but to this day we’ve had no notice that Marlin was let go. Teachers let us know Marlin was gone,” the parent said. “We absolutely would have wanted to know that she was let go.”

Botkin also felt that the board didn’t share information about the financial situation.
“If you know that enrollment is dropping at such an alarming rate, wouldn’t you want to inform your families?” Botkin said, though she acknowledges that she did not attend board meetings because she didn’t know there was a problem.

All of the parents who spoke to the News this week understand that the Children’s Center is a business that needs to be fiscally solvent, but several still had trouble with the board’s problem-solving process. According to parent Steven Siff, several parents have asked to be on the board this year and haven’t gotten a response, even though the board has one less member than its bylaws require and parent members are under-represented and currently nonexistent.

And according to Siff, the board had inadvertently and temporarily opened a Google discussion group to the public, in which they were discussing Newell’s employment status outside of a publicly announced meeting. The board then cancelled the August meeting just before dismissing Newell. The sequence of events led him to question whether the board had indeed voted on the action and whether the board is following proper open meeting rules.

Devine declined to go into detail on the board’s process regarding personnel matters, saying that the board did what it needed to do to preserve the dignity of its employees. She also stated that the board has recently implemented a more robust vetting process for new members, which she said is necessary and appropriate for any public board.

Moving forward
Though the Children’s Center employees are devastated about Newell’s departure, long-time teacher Rob Campbell said this week, they are also concerned for their jobs and the future of their school. According to Campbell, the staff is committed to doing what is necessary to make the center robust again.

“The kids are going to be asking, ‘Where’s Marlin? Where’s Marlin?’ and that’s going to be devastating,” he said. “But we’ve been trying to create a new normal and we’re prepared for change in order to move forward.”

The board, too, is committed to getting help from parents, community members and partners to revive what has been the community’s only full-day public preschool/daycare — and the longest operating one, started by Arthur and Lucy Morgan in 1948. And the board realizes that the teachers are at the heart of that operation.

“The teachers do an incredible job — they are the shining stars,” Devine said. “Staff is the primary resource for us — please stick with us if you can. The teachers are critical.”

Though they haven’t figured out the cause of enrollment loss, everyone has theories that revolve around competition from other options that have opened up to parents of children ages 2 to 6. Just in the past five years, the Yellow Springs Montessori School has gone from six to 13 children. Now a second Children’s Montessori Cooperative has 17 students enrolled in its school located at Antioch College’s Sontag-Fels building. Most of the students at both schools are from Yellow Springs. Friends Preschool has about 30 students from Yellow Springs and Cedar Cliff districts, and the Antioch School preschool generally enrolls about a dozen students as well.

Despite the obvious challenges, Devine feels hopeful about the Children’s Center’s future. And she and the board hope that the community can step up and help turn that hope into a stronger, more stable school for early childhood development.

“If parents really want the Children’s Center to survive, then we need their input,” she said. “We’re open to all options because we want the center to stay open and to thrive.”

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