City Funds Day-Care Center After Private Deal Collapses : Services: Officials say the firm didn’t obtain necessary state funding. The company says it withdrew because of threats to employees and divisiveness in the community.

City council members, who voted only three weeks ago to end funding for a city-run child care center, canceled the contract with a new operator Monday after that firm abruptly withdrew.

Faced with the changed circumstances, the council acted in a closed meeting and then emerged to announce the decision, which include plans to keep the Mini Center open at least one more year, before about 100 applauding parents at City Hall.

Options, an Alhambra day-care company, cited threats and community opposition in withdrawing from a city contract. But City Manager Raul Romero told the council in a memo Monday that Options had not secured the necessary state funding.

“We weren’t lied to; we just weren’t told the truth,” Councilman Jim Kelly said of Options. “We weren’t told all the facts. . . . But I’ll tell you this, I’ll never do this one again.”

The 18-year-old Mini Center at 1824 Newton Ave. provides preschool and after-school care for 123 children. In the past, the city spent more than $100,000 annually to run it. But with the current budget crunch, the center was dropped from city funding by a 3-2 council vote, with members Vera Valdiviez and Raul Pardo opposed.

Options, operator of a number of day-care centers in the San Gabriel Valley, was picked to run the center with independently obtained state money. That funding became an issue in the switch. Parents and a county official insisted that Options would not be able to operate in South El Monte because the Mini Center lies outside the territory assigned to Options by state and federal child-care funding agencies.

Options’ Executive Director Cliff Marcussen had assured the council that the funding was secure. And on Tuesday, he insisted that his firm has the money to run the center, despite Romero’s memo to the contrary.

The withdrawal was based partly out of concern for the safety of his employees, some of whom had received threatening telephone calls, Marcussen said. Also prompting the withdrawal was continuing divisiveness in the community, he said.

The Mini Center, which had delayed the start of its school year, will now swing into full operation, using a $215,000 state grant, $40,000 in federal Community Development Block Grant funds and $7,000 from the city’s General Fund, Director Debby Kelly said.

The council is expected to approve the funding during its regular meeting tonight.

But Mayor Art Olmos warned parents that funding problems could re-emerge next year because the $40,000 is a one-time-only use of block grant funds and will not be available next year.

Teresa Barrera, president of the center’s parent advisory council, said parents, whose volunteer efforts shaved $18,000 off operating costs last year, will battle to keep the center open. The parents are creating a nonprofit corporation to run the center.

“We’re just glad they finally came to their senses this year,” she said. “But it’s frustrating because we’re the only group in the city expected to do this.”