There's no reason you can't put together a successful performance of (random sample program) Nottingham Castle, Conviction, and Majestic March by March-April.
Yes, your kids are behind - but treat even your Varsity ensemble like you would a weaker NV ensemble in "normal" years. DO NOT OVER-PROGRAM. Under-program if need be! You can do it! TEACH!
As for the beginner issue - you have to fight to get that change rolled back. YES it is easier to schedule heterogeneous beginners. But if you want your program to thrive, you HAVE TO make like-classes work. Even if you allow them to schedule "beginning band" - set it up so that one section is your brass class, another is woodwinds, and fit percussion in during second semester or into a third section. Yes, your kids may not get their "choice" instrument this way - but you CAN work around this issue if you want.