SPEAKER_05 0:09

Good morning, Boulder County. It's Wednesday, July 1st. I'm your host, Shay Castle. And this is the Frequency. A weekly local podcast covering the news, events, and voices shaping the Boulder Valley. Today's episode is brought to you by the Regional Air Quality Council. This summer, don't go it alone. Take simple steps for better air. Carpool or take transit where you need to go. Relax on the bus for your commute or catch the bus dang around the entire state. Road trips and errands are also more fun with company, and carpooling saves on gas. Know when it matters most by signing up for Ozone Alerts from the Regional Air Quality Council. Learn more at SimpleStepsbetterAir.org. Today, we attempt to answer a question many parents find themselves asking: Why is daycare so expensive? To show us where every dollar goes, two local childcare centers tell us exactly how much money they're making and what they spend it on. Even if you're not a parent, you won't want to miss this. But first, the headlines. Erie has agreed to allow oil and gas drilling under town property after a council member reversed his position on a previously rejected deal. Erie's town council first voted 3-3 on a proposal to allow SM Energy to drill under its land. In that initial vote, Mayor Andrew Moore and council members Brandon Bell and John Mortellaro voted in favor. Members Emily Baer, Brian O'Connor, and Anil Pessaramelli voted against, while Dan Hobak was not in attendance. Failed votes can be reconsidered at the request of a council member. Brian O'Connor did so and then changed his vote from no to yes, carrying the 4-3 decision. O'Connor said he was responding to feedback from residents who did not speak at the first meeting, saying they felt, quote, intimidated to do so. Nine News reported many more speakers were in favor of drilling at the second meeting, while the first was dominated by people opposed to oil and gas activity. Under the deal, Erie will allow SM Energy to drill on 180 acres of town property. In exchange, Erie will receive 160 acres of land, $4.5 million in cash, and a share of production revenue, estimated at $17 million. The DracoPad project was approved by state regulators last year. Operators need to drill under Erie's land to access mineral rights on the 4,000-acre site. The Draco Pad will have 26 wells and extend horizontally underground for more than four miles, crossing into Boulder County. Read more from Colorado Hometown Weekly at the link in our show notes. Superior has rejected annexation of 12 acres into town limits and building up to 300 rental apartments on that land over evacuation concerns following the Marshall Fire. The property is located at 7494 Marshall Road in northwestern Superior. The area was evacuated during the 2021 Marshall Fire, which destroyed nearly 400 homes and businesses in the small town. The proposed development would have slowed evacuation of existing neighborhoods, according to an analysis presented to the town board. Additional homes would add anywhere from 45 seconds to four minutes to existing evacuation times. Superiors Town Board rejected the proposal after hearing from worried neighbors. Read more from the Broomfield Enterprise at the link in our show notes. The Education Focus news outlet tracked the cost of full-time tuition and fees at more than two dozen colleges and universities across Colorado. Tuition and fees at CU Boulder in 2009 were roughly $8,000. By last year, that had risen to $15,000. Front Range Community College, which has a Longmont campus, charged $3,000 in 2009 and $6,000 last year for 30 credit hours. See the full report at chalkbeat.org slash Colorado from college tuition to daycare tuition. Let's get to our main story on the cost of child care.

SPEAKER_03 4:31

From the parent's perspective, they see, oh, you're just every year you just keep raising tuition. I think the average parent doesn't recognize how much the labor-dependent and labor-intensive it is in just kind of connecting the dots that, oh, I want my child to have many teachers who are paid well and really happy in their jobs here because that's good for my family. But then just connecting the dots that creates cost, right, for the family.

SPEAKER_01 4:59

We're not bringing in hundreds of thousands of dollars in profit. We're nonprofit, so we balance our income with our expenses. And we aim for roughly five to fifteen thousand dollars positive every year to give ourselves a little bit of buffer. But our general operating budget is always aiming for just above zero. So what we actually approved is $141 positive for the year.

SPEAKER_05 5:29

The voices you just heard belong to two employees of child care centers in Boulder County. The first was Amy May, owner of Treehouse Learning in Louisville. The second was Sean d'Arcy, treasurer of the board for nonprofit Boulder Day Nursery. In case you didn't hear Sean clearly or couldn't believe what you heard, Boulder Day's 2026 budget plan is to end the year with $141 in net income. 141. Period. No extra zeros. Amy and Sean spoke candidly with me about the financials of running a licensed childcare facility in a story I wrote for the Colorado Sun. You can find that link in our show notes. Boulder is the most expensive county in the state for licensed childcare. Cost average nearly $20,000 per year per child. Today, we're cracking open the books, looking at the numbers, and showing you exactly where the money goes and why it's so expensive to pay for and provide childcare. It can be hard to follow dollars and cents in a podcast without seeing the numbers written down. So we're not going to go line by line through the budget. For that, you can read the Colorado Sun story. Instead, let's focus on a few key factors that make childcare such a tough industry, starting with the biggest expense for businesses of all kinds, employees.

SPEAKER_03 6:48

Of our expenses, close to between 60 and 70% is payroll. And that includes payroll taxes. It's not even just payroll itself, but it's kind of other benefits and compensation. We have, you know, 401k, we match 4%, paid holidays and PTO and other benefits. Overall, payroll is by far the biggest expense. I mean, this is anywhere in this industry.

SPEAKER_05 7:13

That's Amy again from Treehouse. Sean from Boulder Day says 76% of that organization's budget goes directly to payroll. Another 4% goes for food and supplies, like diapers and wipes. So 80 cents of every dollar goes directly to caring for children. Everything else has to come out of the remaining 20%. Here's Mary Newell, executive director of Boulder Day Nursery.

SPEAKER_02 7:36

When you're thinking about where you can cut costs, it's kind of always going to boil down to pay that wages category of like, do we cut hours so that we can pay less? Do we not do increases? Do we not do benefits? Do we do smaller vacations? Like the staff piece is really the bulk of your expense. Lights, utilities, paper towels, toilet paper, those are all fixed costs that you don't have any maneuverability with. It's just the margins are so thin.

SPEAKER_05 8:12

Childcare providers are some of the lowest paid workers in the state. Their salaries are so low, lawmakers passed a tax credit four years ago to bolster their earnings. Boulder Day and Treehouse pay their teachers fairly well. They have to, because it's so expensive to live and work in Boulder County. They also compete with Boulder Valley School District for staff. K-12 teachers are much better paid than daycare employees with bigger raises and more potential for higher lifelong earnings.

SPEAKER_01 8:40

We had a long push for three years to get to that point where we can make it feel like a career path rather than a temporary job for people. So we're striving to get to even with a elementary school teacher for BVSD in terms of both pay and for benefits. We're not quite there yet. So every year there's a 3% tuition increase, every year is a 3% payroll increase, and that kind of keeps everything going. It's not perfect. We haven't nailed exactly balancing, but it definitely stabilizes things, and it's very easy to if there's a tuition increase. Most parents are okay with oh, that all every dollar is going towards the teachers.

SPEAKER_05 9:24

While other businesses can cut staff during lean times, licensed daycares can't. The state requires a certain number of teachers per student, more for infants and fewer for older children. Boulder Day Nursery maintains credentials that require even more teachers than the state, signifying them as a high quality provider of childcare.

SPEAKER_04 9:43

The staff that we have is like relatively speaking, non-negotiable. So like you can't operate a childcare center with, you know, fewer than X number of teachers in the infant room. That ratio is not negotiable. And so that's, I think, something that isn't always clear for it. Wasn't clear for me as a parent originally. I don't think it's clear for folks who don't know that.

SPEAKER_05 10:06

That's Karen Manahan, president of the board of Boulder Day Nursery. She's been on the show before to talk about the challenges of running a child care facility. Providers have to walk a thin line of paying their staff well enough to attract and keep them. But not so much the care becomes unaffordable for all but the richest families. Here's Amy again from Treehouse.

SPEAKER_03 10:27

We know that a well-compensated staff is the number one predictor of quality. And again, there's not a lot of wiggle room to just pay our staff less, especially when Target or Trader Joe's, I mean, or a gas station, they're offering pretty equivalent kind of starting salaries for a lot less stressful job and a lot less required training and kind of ongoing training.

SPEAKER_05 10:50

Let's return for a minute to the earlier point about daycares competing with public schools for employees. A huge amount of government funding goes to caring for and educating children over five years old. K-12 education is taxpayer funded, provided completely free to families. But there is very little support for the infrastructure that cares for and educate kids before they go to public school, even though those are the ages where the most brain development is happening. Instead, a patchwork of family, friends, nonprofit, and for-profit institutions are in charge. And by and large, it's parents who foot the bill. Research has shown care during this time has lifelong impacts, not only on learning, but on eventual employment and earnings. Casey Hedrick, head of the Boulder County Early Childhood Council, said the quality of child care has become just another advantage wealthy families give to their children, perhaps the most important one of all. I wasn't able to capture that audio, but Hedrick said, quote, income inequality starts day one. At that time when kids are positioned to learn the most is when we're investing least. Low-income parents aren't totally on their own, or at least they didn't used to be. The federally funded child care assistance program is supposed to cover the gap between what licensed facilities charge and what families can afford. In Colorado, the program is referred to as CCAP. But the funding has not kept pace with the reality of what teachers make. Many providers don't even accept CCAP, and those that do often limit the number of families receiving it because the subsidies aren't enough to cover the actual cost of providing care. Boulder Day Nursery used to get 35 to 40% of its revenue from CCAP. That's down to just 14% after enrollment was frozen in 2024. More than 900 families in Boulder County are on the wait list for CCAP. And Boulder Day has a decade-long plan to wean itself off the government subsidy entirely.

SPEAKER_01 12:43

We started to have to make plans for what does it look like if it never unfreezes? How do we get ourselves financially stable so that we're not reliant on things that might not be there? We also aim to have two-thirds of families receive some sort of financial assistance. When we were looking to increase the financial aid program to make up for CCAP this year, we were like, can we cut staff development programs? Could we cut back on trainings? It was like really things that we didn't want to have to cut. But the trade-off is like, we don't want just full paid tuition either. So there's really tough choices that we were kind of put into in order to support all the families that are there.

SPEAKER_05 13:32

Boulder County's early childhood council is trying to place a tax on this year's ballot that would replace CCAP funding locally, plus raise money for physical expansions and hiring and retention bonus for early childhood educators. If passed, the tax would generate $30 million per year. Of that, eight to ten million would be needed just to replace federal funds. If the tax fails, Hedrick said, this industry could very well collapse. I'll let Mary Newell, executive director of Boulder Day Nursery, have the last word on this subject.

SPEAKER_02 14:03

In the industry in general, it's always been a thin margin. There was stimulus money with COVID, and I think a lot of centers were able to do well, and we were one of those. And then when that money went away, it was back to reality and like we have to really buckle down our finances. And then the CCAP freeze came along. So it's just been like one hit after another.

SPEAKER_05 14:31

Thanks again to everyone who spoke with me for this story. Amy, Sean, Karen, Mary, and Casey. Listen to my full interview with Amy May on our Patreon at patreon.com slash boulder frequencypod. There was so much that didn't make it into my reporting, like the fact that Treehouse Learning pays $53,000 per year in property taxes. Give the Colorado Sun story a read for more of those details. That's it for this week. Regular listeners will know we like to end each episode with one more thing: a little sonic offering pulled together by audio guru Kelly Gary. Since we started the show, we've been asking the guests we interview to share one thing that's inspiring them or giving them hope. Now, we're gonna start sharing those with you. Our first contribution is Mark Beckhoff, a longtime collaborator of Jane Goodall. We interviewed Beckhoff in October when Goodall passed away. It seems appropriate, given today's topic, to use as our one more thing. Here's Beckhoff.

SPEAKER_00 15:36

So, one story I've told a number of times, it was a couple of summers ago I was riding back into Boulder on what was what it's called the Cottonwood Trail. And I came around a corner, and there were these kids there. It turned out they were about between five and seven years old, and they were on their hands and knees looking into the grasses. And so I stopped and I noticed this little girl had what looked to be like a cigar box. And so I stopped and I said, Oh, you know, what are you doing? And she just turned around and said, Well, I'm looking at the insects who live here, and we're trying to understand who they are and what kind of insects are here. And then without my saying a word, she said, and our teachers told us we have to put them back where we found them. I mean, seriously, over decades, that's as good of an example as any that gives me hope.