I would let her know now that the situation is effecting the daycare more than you thought it was going to do and that once the winter snow comes it will be too much for waking/dressing/taking the toddlers out each day since you will have to allow even more time to get them ready and for the drive to the school. For that reason you will be unable to care for the children for the winter semester. The mom then has time to start now to find alternate care for the kids for January including putting her name onto wait lists for school based or similar programs. My guess is she maybe didn't look too hard in the summer hoping you would take them on so giving her a definite timeline of not taking them back ie following the Christmas school break she has something to work with.

If she comes and laments that she has found care but they want the kids now not in January then I woud also be prepared to let them go as school age care is hard to find in many areas.

If for any reason she puts it off and doesn't find someone and asks you to take them back in January just remind her that you will not be taking them to school - they either stay at your house all day at full fee and dont' go to school or she finds an alternative. The way the teacher negotiations are going this may turn out to be a possibility for many kids.

I only do kids not in school and I do not regret it one bit. I was afraid at first that there might be some opposition from parents by telling them right up front that they woud have to find alternate care only a couple years after starting with me but when I explained the advantages for their baby of not having naps interrupted or being outside in severe weather it became a selling point.