I think, in consideration of not discussing in front of your b/a child, I would give Dad the letter at pick up. I would state in the letter that you notified them this way as you do not wish to discuss business in front of their child. Saying business leads you to the next part of your letter saying that your daycare will no longer be providing b/a care as you wish to grow your business and include another full day dck.
Do not apologize in your letter or cite safety reasons etc. This has been a business relationship. Do say how much you enjoyed caring for b/a child and that their child will be missed. 12 weeks notice in ample notice and you have nothing to feel bad about. Families leave us with 2 weeks notice without a bat of an eye.