North Routt Preschool pushes forward from budget crisis
November 12, 2011
Sept. 26, 2011: North Routt Preschool opened Monday after county bailout
Sept. 23, 2011: North Routt Preschool gets bailout from county
Sept. 22, 2011: North Routt Preschool closed indefinitely
Clark — Kerri Ann Crocker watched her daughter Emma slowly pedal her bicycle around the North Routt Preschool's playground Thursday as a small group of her classmates followed in close pursuit.
Supervising the group of animated preschoolers in Clark was a new role for Crocker, who last month announced she was leaving her job as an office manager at a nearby construction company to take the reins of the preschool that closed its doors for a week in September because of mounting debt.
Evidence of that previous vacancy was gone Thursday. Boxes of stuffed animals sat atop occupied cubbies, and walls were plastered with the fresh artwork of students. As she listened to the jovial yells and sporadic cries of the children, Crocker said it is evident what she and the school's new board of directors has been working for a month to sustain.
"Things are going well," Crocker said before she was interrupted by Emma, who ran anxiously to her mother from a nearby classroom to get some help opening a packet of string cheese. "We have a very active board of directors right now. We have hired some new staff members who are doing a wonderful job. We're confident we will become a sustainable business."
Crocker, who also helps to teach classes at the school in addition to her role as director, suggested her business background will be an asset at a school still fighting to be financially sustainable.
Saddled with debt and an inability to pay its teachers, the North Routt Preschool on Sept. 19 closed its doors a day after its former director and most members of its board of directors suddenly resigned.
A week later, an aggressive and hurried campaign led by a group of parents anxious to get the doors back open was successful. The Routt County Board of Commissioners on Sept. 23 voted unanimously to give the school a $25,000, zero-interest loan it said it needed to reopen, a loan the county acknowledged could become simply a gift.
Commissioner Nancy Stahoviak said Wednesday the loan was granted to support an important service in the North Routt community, but it also was approved because commissioners think they still are financially liable for a $330,000 grant provided to the school four years ago by a Colorado Department of Local Affairs Community Development Block Grant sponsored by Routt County.
"Technically, we think we're on the hook for another year," Stahoviak said. "We think if the preschool is discontinued, the county would have to pay for that grant."
Vickie Clark, director of the Routt County Department of Human Services, told the commissioners in September that according to Department of Local Affairs officials, the county and its taxpayers would not be held financially responsible if the preschool closed. But Stahoviak said commissioners have not received a guarantee of that in writing, and their financial liability for the school still is unclear because the grant was funded by federal, not state, dollars.
She added the county will continue to operate as if it would be responsible to pay back the grant if the preschool closed.
"We have told the North Routt Preschool they are still in a struggle, but they seem to have a community of committed parents who really want to have their children in preschool up there," she said. "They're doing all the right things, but it remains to be seen if North Routt is committed to having that facility in their community."
The preschool late last month also asked commissioners for an additional $10,000 to pay off more outstanding debt, but commissioners said the new board would need to continue combing through and sorting out their finances before such a request could be considered.
Running in the red
Stephanie Martin, program supervisor for First Impressions of Routt County's Early Childhood Council, said Thursday that like many early child care centers in Routt County, the North Routt Preschool was not self-sustaining and didn't receive enough from student tuition to continue running without additional sources of subsidies or revenue.
"A lot of child care programs are able to run in the red for years because of other sources of revenue or reserves, but because the North Routt Preschool is a newer program in a small community, they had less resources available to them," Martin said.
She said other child care programs in Routt County are able to dip into a reserve fund when their cash flow from tuition declines.
"None of the programs are moneymakers," she said, adding that 60 percent of parents with children enrolled in child care services in Routt County require some sort of tuition assistance.
First Impressions continues to provide scholarship support and some oversight for the preschool, but Stahoviak and Martin said the preschool's board of directors ultimately is responsible for the school's financial success or failure.
"The bottom line is they are a private nonprofit, and it is their challenge and their obligation to make that nonprofit successful without our intervention," Stahoviak said. "We cannot tell them what to do."
She said the financial reports submitted to the county indicate the school in Clark has been struggling financially for more than a year.
In the wake of the school's closure, the school's leaders are meeting with Martin and Clark every week to discuss their progress. The two groups previously had met only on a quarterly basis.
Planning for sustainability
The preschool's new board of directors and Crocker on Oct. 25 met with county commissioners to outline the extent of their debt and how they had spent the $25,000 loan they received from the county.
According to a financial report presented to commissioners, the preschool still is more than $19,000 in debt. That debt includes more than $7,000 owed to Mountain Valley Bank for a loan for teaching materials, $4,826 in payroll taxes, $2,800 to an accountant for a previous audit that has yet to be paid and $1,200 for snow plowing last winter, among other expenses.
Before it received the bailout from the county, the school's checking account balance was about $8,600 in the negative. The school now has a little more than $7,500 in that account after money from the county loan was used to pay for expenses ranging from past payrolls to energy costs.
The financial report was included in a five-page sustainability plan presented to commissioners last month. In it, the new board wrote that it is working to modestly increase the school's tuition rates, establish a minimum day requirement for enrolled students and enact staffing changes that will "drastically cut staffing cost."
As the sun set in Clark on Thursday and parents steadily began to pick up their children from the preschool, Crocker said she's thinking only about the future as she focuses on the day-to-day operations of the school.
"We by no means have solved all of the problems, and we're learning more every day," she said. "But we are confident we can operate this company as a solvent business."
She said she has no knowledge of how the finances run by the previous board reached the critical point that caused the school to close. She added only that the current board has found no evidence of foul play by the previous administration.
And after a number of parents were forced to move their children from the preschool to child care facilities in Steamboat Springs in the wake of its one-week closure, Crocker said enrollment in Clark has again stabilized to about 15 children. On Thursday, she said there are four toddlers and 12 preschool students utilizing the facility every week.
"The real focus is on the kids, and the kids are thriving," she said. "That's a real positive encouragement for all of us."
— To reach Scott Franz, call 970-871-4210 or email scottfranz@SteamboatToday.com