PCC Deficit Paths and the May 27 Decision

Builds-on: pcc-closure-and-the-childcare-collapse Related: macro-force-vectors-april-2026

What the April Financial Meeting Added

The April PCC parent meeting (Joe Mazur, VP Business and Admin Services) put hard numbers on the situation the prior April 19 letter only signalled.

Three things in that list are doing work most readers will skim past.

First, the $378,628 against $4M three-year ratio implies the deficit is projected to accelerate: if year 1 is $378K and the three-year total is $4M, years 2 and 3 are projected at roughly $1.8M each. That is consistent with the July 2026 WCCC reimbursement drop (85% → 75% of Market Rate Value via HB 2689) and the SBCTC funding-model change that reclassified parent education out of state-fundable categories.

Second, the water pipe burst is being carried as a structural number, not a one-time write-off. A $120K hit that would normally be amortized or covered by reserves is sitting in the operating gap because the reserves are gone. That is the ARPA-cliff aftermath visible at the line-item level.

Third, the missing pre-March 2023 records are an audit problem. Even if the Board wanted to do clean root-cause work on whether this deficit is structural or operational, they cannot. The records were lost in a prior system hack. Decisions get made with what is legible; what is legible looks structural.

The constraint Mazur stated explicitly is the keystone of the entire analysis: SCC cannot use state operating funds for PCC because there is currently no early-childhood academic program integrated with the center. This is the structural reason "self-sustaining" is the operating mandate. PCC is fully tuition-funded by policy, not by choice.

The Structural Keystone: No ECE Academic Program

Shoreline's Early Childhood Education program stopped accepting new students in Winter 2021. From that moment, PCC ceased being a lab school in the academic sense. It became a licensed childcare center attached to a community college that has no curricular reason to subsidize it.

This matters because of how SBCTC (State Board for Community and Technical Colleges) directs operating money in 2025-26. State FTE allocation now flows only to programs with documented "ties to specific employment outcomes, technical advisory committees and demonstrated labor market demand." An ECE program with 30-40 FTE generates roughly $165K-$280K/year in supportable college overhead that can legitimately flow to an attached center via shared faculty, practicum supervision, and program administration.

Without that program, PCC cannot:

• Receive state operating-fund subsidy on any defensible basis
• Tap the Early Achievers Grant pipeline (explicitly funds students in ECE certificates and degrees)
• Make a credible direct-contractor case to DCYF for ECEAP slots (subcontractor route is open, direct contractor is not)
• Apply for foundation grants where "lab school" or "workforce pipeline" is the framing (most of them)

Every WA community-college childcare center that is currently solvent has an active ECE academic program: Bellevue College ELC, Edmonds College Center for Families, Skagit Valley's Sue Krienen Center, Tacoma CC ELC, Pierce, Centralia, Clover Park, LWTech. Every one. The pattern is unambiguous.

The mirror pattern is also unambiguous. The two WA community-college childcare programs in 2026 emergency-fundraising mode (North Seattle College co-op, South Seattle College co-op) are losing the parent-education subsidy that previously flowed without an ECE academic program tie, exactly because SBCTC's August 2025 funding-model change cut off non-workforce categories.

So the question for the May 27 recommendation is not really "can we close the $1.3M annual gap." It is "can we re-establish the academic program that would let any of these other levers actually work."

The Eight Floated Paths, With Dollar Magnitudes

The April meeting put eight ideas on the table (counting what the Board has already done). Here is what each one realistically delivers.

1. ECEAP subcontractor route

Mechanism: PCC enters as a subcontractor under an existing ECEAP contractor (typically an ESD, school district, or large nonprofit). After 12-24 months of demonstrated capacity, may graduate to direct contractor.

Dollar magnitude: Full-day ECEAP slot rate FY2025-26 is approximately $16,420/child/year after the 5% July 2025 increase (Inslee's Dec 2024 budget cited the prior $15,638 baseline). At 20 slots, ~$328K/year.

Time horizon: 6-9 months to first slots through subcontractor. Direct contractor 12-24 months. State slot allocations are contracting in 2025-27 not expanding.

What it does not fix: Subcontracting requires an existing contractor willing to take PCC on. PCC's lack of an ECE academic program weakens the case relative to the centers it would compete with for slot allocation.

Probability: Medium. ~$300-400K plausible if a contractor partner is willing.

2. Working Connections Child Care (WCCC) ramp

Mechanism: Enroll more income-qualified families paying via WCCC subsidy.

Dollar magnitude: Per-slot WCCC revenue under the new 75% MRV cap (effective July 1, 2026 via HB 2689) drops to roughly $1,800-$2,200/month infant, $1,400-$1,700 toddler, $1,200-$1,500 preschool. PCC's community private-pay rate is $1,608-$2,161/month depending on age. Subsidy slots run revenue-neutral to slightly negative versus private-pay community families under the new rates. They run positive only against SCC student rates (heavily discounted).

Time horizon: Immediate, but HB 2689 cuts kick in July 2026.

What it does not fix: Anything. This path is a placeholder once private-pay enrollment cannot be filled. It does not generate net revenue against the deficit; it absorbs vacancy.

Probability: This will happen as a fill-rate strategy regardless of the May 27 decision. It is not a deficit-closing lever.

3. ECE academic program restart

Mechanism: SCC stands up an Early Childhood Education AAS or stackable certificate sequence. PCC becomes the practicum site. State FTE flows.

Dollar magnitude: Direct cross-subsidy potential ~$165K-$280K/year once the program reaches steady-state enrollment (year 3+). More importantly, it unlocks ECEAP direct-contractor status, Early Achievers Grant pipeline, foundation grants, and the entire grant ecosystem that is closed to non-academic centers.

Time horizon: 18-30 months from kickoff to first cohort. SBCTC's program approval process is documented (Statement of Need → Letter of Intent → full proposal → workforce review → SBCTC approval → NWCCU substantive change for new degrees).

Cost to stand up: $150K-$400K in faculty/admin development, SBCTC fees, marketing.

What it does not fix: The 18-30 month gap. PCC has to survive that long without the program revenue, on the same broken math, while also funding the program startup.

Probability: Depends entirely on SCC presidential will. The fact that SCC closed ECE in Winter 2021 and would now be reversing that decision in 2026 is institutionally awkward but not blocking. No WA community college has stood up an ECE AAS from zero in 2020-2026; the closest precedents are stackable certificate work and BAS upgrades (LWTech ECE BAS, Pierce BAS Teacher Education).

4. Lab school partnerships with non-ECE departments (Nursing, Dental Hygiene, Education)

Mechanism: Nursing students do pediatric observation hours; Dental Hygiene students do screenings; Education students do classroom observation.

Dollar magnitude: Documented as service-only, not revenue-generating. State FTE generated belongs to the parent program (Nursing, Dental, Education), not to PCC.

What it does not fix: Anything financial. Real value: marginal community goodwill, possible recruiting visibility for those programs.

Probability: Will happen because it is cheap and signals "we tried." Should not be modeled as a revenue line.

5. Employer pre-paid contracts

Mechanism: Local employers (Swedish Edmonds, Northwest Hospital, T-Mobile, Premera, Boeing Everett) reserve and pre-pay slots, paying a 15-30% premium over retail tuition.

Dollar magnitude: Single anchor at 10 reserved infant slots @ $2,700/month (25% premium over $2,161): ~$324K/year.

Time horizon: 12-18 months from cold outreach to signed contract for one anchor.

What it does not fix: The competitive lane in north King County is already owned by Bright Horizons through their corporate back-up-care network. Swedish, Premera, and T-Mobile use Bright Horizons referral and back-up models, not full-time slot reservation deals. Boeing's Everett family center is Boeing-property + Bright Horizons turnkey. There is no precedent for a Bellevue College / Costco-style anchor relationship in PCC's geography. Closest comparable (Costco built Bellevue's center with capital, not just slot-reservation contracts).

Probability: Low without an existing relationship. PCC is not visible in the corporate-childcare procurement landscape. Real but not likely.

6. Friends-of-PCC 501(c)(3)

Mechanism: Form a separate nonprofit to fundraise for PCC operations, since SCC's auxiliary structure does not allow direct community fundraising.

Dollar magnitude:

• Year 1 net: $50-150K (formation costs, small donor base, no major-gift pipeline)
• Year 3 plausible ceiling: $200-400K recurring (with a clear story, board, and one major-gift relationship)
• Capital campaign one-time: $1-3M plausible against a building, equipment, or program-launch case (Skagit Valley raised $3M over five years for a capital build, anchored by an $800K Department of Commerce grant and $1.5M Head Start national office grant)

Time horizon: 6-12 months for formation and tax-exempt status. 24 months for first meaningful annual fund. 36+ months for major-gift cultivation.

What it does not fix: Recurring annual operating gap. Even a successful Friends-of-PCC plateaus around $300-400K/year recurring without a Costco-class anchor donor, which is not visible in PCC's network. The current emergency fundraising at North Seattle College ($1.4M needed) and South Seattle College ($600K needed, $2M emergency push by mid-May) shows the upper bound of what aggressive parent-led fundraising can attempt. Outcomes pending; the framing in coverage is "Hail Mary."

Probability: Will happen. Cannot be the primary lever.

7. Tuition increase

Mechanism: Raise community-family tuition.

Dollar magnitude: Raising 62 community slots by $200/month is ~$149K/year at static enrollment. By $400/month: $298K/year if no attrition.

Time horizon: Immediate.

What it does not fix: Attrition risk. PCC's $1,900-$2,161 community rate is already at Shoreline-area market median (Cedar School $2,592 sets the high end). Pushing to $2,400-$2,600 closes the math only at static demand, and demand has been softening (62/76 capacity is the symptom). The Jan 2025 fee increase is presumably already baked into the current run-rate; doing another now risks accelerating the very enrollment problem the Jan-Mar 2026 ad push was trying to fix.

Probability: Almost certainly part of any "extension" recommendation. Cannot close the gap alone.

8. Rebranding / SEO / parent support group

Mechanism: Top-of-funnel marketing work to fill the 14 empty slots.

Dollar magnitude: Filling 14 slots at average $1,900/month: ~$320K/year. This is the largest single mechanical lever after ECEAP, if it works.

Time horizon: 6-12 months for marketing to bear fruit, longer if local demand is structurally soft (which the broader childcare-desert data suggests it is not, but the Jan-Mar 2026 ad push results would be the actual signal).

What it does not fix: A demand-side fix only addresses ~14/62 of the gap. The remaining structural deficit ($1M+/year) sits underneath. Also: the ad push already ran. If results were strong, the meeting would have featured them.

Probability: Will continue. Cannot be the sole answer.

Stacked Best Case

Stacking the realistic ceilings of each path:

A diligently-stacked best case at year 3 lands near the deficit gap. But it requires:

• SCC presidential commitment to restart ECE (the keystone)
• 24+ months of execution while the deficit accumulates
• Multiple low-probability anchor wins (one employer, one major donor, one ECEAP partner)
• Holding enrollment through tuition increases that would normally accelerate attrition
• Weathering the July 2026 WCCC cut and the broader sector decline documented in pcc-closure-and-the-childcare-collapse

Year-1 net contribution at $50-350K against a $378K-$1.8M annual gap means PCC bleeds another $1-1.5M before any path matures. Someone has to fund that bridge. SCC carries a $15.6M inherited deficit on top of a separate $4M three-year college-wide shortfall. The bridge funding has to come from somewhere that is also under fiscal stress.

The May 27 Decision Tree

Three plausible recommendations from the SCC president, with rough probability:

A. Closure recommendation (~55%)

The path of least institutional resistance given:

• $1.3M average annual gap with no internal funding source
• ECE program closure in 2021 was a deliberate choice that this Board would have to reverse
• Faculty union deal (April 20) explicitly preserved faculty in exchange for "additional flexibility to evaluate and strengthen programs" — that is the pre-positioning for non-faculty program closures
• The political frame (only 11% of PCC kids are Shoreline students; $82K of ASG money subsidizes non-student families) is already in the public record from the April 19 letter
• Pre-March 2023 records being unavailable means there is no clean audit trail to defend continued operation

Timing: 60-90 day parent notice typical. Closure effective late August or September 2026 to align with academic year boundaries. Some risk of abrupt closure (precedent: Tarrant County College, 3 days notice) if the financial picture worsens between now and August.

What it means:

• 14 PCC staff displaced (not faculty union members)
• 62 families displaced into a Shoreline childcare market with limited capacity (NELC, St. Luke's, Cedar School, in-home options, all with waitlists)
• Building space repurposed for workforce-credential programs that qualify for state operating funds under the new SBCTC formula
• Signal effect: another data point in the documented closure cascade across WA community-college childcare programs (North Seattle, South Seattle co-ops at risk same window)
• Downstream SCC enrollment effect: families of current Shoreline employee-students lose on-site care, which historically reduces enrollment among parent-students

B. 12-month bridge with ECE restart commitment (~25%)

The "save it" path. SCC commits to:

• $400-600K bridge funding for FY2026-27 from college-wide reserves or Foundation
• Faculty hire and curriculum development for ECE AAS or stackable certificate
• Public commitment to the Board and community on a 24-30 month timeline to academic-program-attached operating model

What it means:

• PCC operates one more year on the current model with explicit deficit
• ECE program restart begins in summer 2026, first cohort fall 2027
• Year 3 (FY2027-28) is the crucial test: did academic-program FTE flow generate the cross-subsidy the model assumes?
• Real institutional risk: SCC commits the bridge, ECE program enrollment underperforms, and the Board has to revisit closure in 2027 from a worse financial position
• For the broader sector: would be one of the first community-college childcare recoveries in the 2025-26 closure wave. Watched precedent.

C. Tuition increase + status-quo extension (~20%)

The kick-the-can recommendation. Raise tuition $200-400/month, accept some attrition, run the same model with smaller deficit.

What it means:

• Buys 12-18 months
• Forces the same decision in 2027 from a position of: smaller deficit but lower enrollment, no structural change, families who absorbed the increase now hit by HB 2689 and any further cuts
• Most likely path if the Board cannot agree on either A or B
• Does not solve anything. Reads as institutional unwillingness to make a clean call.

What the Board's framing will signal

The April 22 family meeting tone (referenced in pcc-closure-and-the-childcare-collapse) sets the precedent. Watch the May 27 recommendation language:

Cross-System Effects of Closure

If the recommendation is closure, the second-order effects extend past the 62 displaced families.

On the Shoreline childcare market. Adding 62 families to a market with documented capacity shortage compresses waitlists at every adjacent center. NELC, St. Luke's, Cedar School, in-home FFN providers, each absorb a fraction. Some families exit the labor force temporarily. Federal Reserve Bank of Kansas City measured a 43% increase in people reducing hours or leaving the labor force due to childcare between Q2 2023 and Q3 2024; PCC's closure feeds that number directly.

On SCC's enrollment. Parent-students who relied on PCC lose on-site care. Historical data from other community-college childcare closures shows a 15-30% short-term drop in parent-student retention in the affected cohort. Net college enrollment effect is small in percentage terms but compounds the existing fiscal pressure.

On the WA community-college childcare landscape. Closure adds to a pattern: North Seattle, South Seattle co-ops at risk in the same window; Bellevue, Edmonds, Skagit, Tacoma, Pierce stable but each one tied to active ECE academic programs. The lesson written into the data is that auxiliary childcare without academic-program integration is no longer a viable structure under the post-2025 SBCTC funding model. That lesson, once visible enough times, accelerates the next round of closures at peer colleges.

On the staff. PCC's staff are not faculty union members and have no parallel protection. Severance terms, accumulated PTO payout, and unemployment qualification are all at SCC's discretion. The 14 staff are employed in a labor market where ECE wages are still ~$13/hour median nationally and 1-in-4 ECE teachers leave the field annually. Closure pushes some out of the field.

On the building. A licensed early-learning facility with 76-child capacity that goes dark cannot easily be re-licensed for childcare by a different operator without significant DCYF re-inspection and license transfer. The most likely path is repurpose for SCC academic use. Disposition signals worth tracking after the May 27 vote.

Open Questions

1. Is there documented SCC presidential will to restart ECE? This is the single highest-leverage question. Without it, path B is rhetorical. With it, paths A and C become harder for the Board to recommend.

2. What did the Jan-Mar 2026 ad push actually deliver? If results were strong, they would have been featured in this meeting. Their absence is a signal.

3. What is the disposition plan for the building if PCC closes? "Repurpose for workforce-credential programs" is the implicit narrative but not the only possibility. A licensed childcare facility on a community-college campus is also leasable to a third-party operator (Bright Horizons, KinderCare). Has SCC explored that, or is the institutional preference to retake the space?

4. What are the signed terms of the April 20 faculty union agreement around "evaluating and strengthening programs"? That document defines the formal latitude the Board has for closures and restructurings outside the faculty bargaining unit.

5. Does the Friends-of-PCC group have an organizing nucleus, or is it still hypothetical? The April meeting put "parent support/focus group" on the list of ideas, which means it does not yet exist. Three weeks to May 27 is short for credible formation.

6. Is there a comparable 2026 closure already on the WA record (North Seattle, South Seattle co-ops, etc.) that would let the Board point to precedent? Probable closure outcomes elsewhere in the same 60-day window would give cover for the same recommendation at SCC.

Sources

• April 2026 PCC Financial Update Meeting (Joe Mazur, VP Business and Admin Services) — internal/parent meeting summary
• 2025-27 State Budget Impacts on Early Learning — DCYF
• Become an ECEAP Provider — DCYF
• WA House approves $100M cut to working families child care subsidies for 2027 — The Center Square
• Bellevue College Early Learning Center FAQ
• Edmonds College Center for Families earns Level 5 — My Edmonds News
• Skagit Valley College's new Early Learning and Childcare Center — NWCCU
• Co-op preschools' fundraisers planned to fend off closure — West Seattle Blog
• Shoreline ECE Program (closed Winter 2021)
• Shoreline College and Faculty Union Reach Agreement
• SBCTC Program Approval
• LWTech Early Childhood Education BAS Proposal — SBCTC
• Early Achievers Grant — SBCTC
• Boeing Bright Horizons subsidized rates
• Bright Horizons at Everett FAQ
• Tacoma Community College Early Learning Center
• North Seattle College Child Care