City Council members on Tuesday called for a review as to why a local nonprofit received hundreds of thousands in federal funding at the same time it was facing mounting financial problems.
The request came after the Glendale News-Press reported on the weak financial standing of New Horizons Family Center, whose founder had assured city officials she was ready to go on a new building, even though bank and other records showed otherwise.
"I want to know what exactly happened with the New Horizons application," Mayor Ara Najarian said Tuesday. "After reading the story in the News-Press, it's apparent there were some gross misrepresentations made to council...and I'd like to know how this happened. "
Founded in 1994 to provide childcare for low-income families, New Horizons has been the subject of scrutiny in recent months after founder Maria Rochart announced she had scrapped plans for a long-awaited expansion project after spending $300,000 in federal funding on pre-development costs.
Rochart recently placed the vacant properties for sale in order to help the center keep its doors open and repay the federal funds.
On Tuesday, Najarian also called out the organization's board of directors, who have so far declined to comment on the controversy.
Council members asked for a discussion on the financial vetting of proposals for federal Community Development Block Grants. City official staff review most grant proposals before they reachcommissioners and the City Council for recommendations and approval.
"I don't think it should be up to our boards or commissions to do that kind of vetting" said Councilwoman Laura Friedman. "And I think we need to have a review at council level of what the process is and how we can ensure that any nonprofit that comes to us for funding is on sound financial ground."
New Horizons' financial footing was less than secure when the City Council voted last year to allocate $131,000 in federal stimulus funding to the new building project. While Rochart assured city officials construction was ready to begin, financial records show the center owed hundreds of thousands in outstanding payroll taxes and personal loans.
City Manager Jim Starbird said city officials are now drafting a set of policies for vetting and managing projects that receive city funds. At the same time, officials will address the New Horizons situation specifically per the mayor's request.
"We kind of have the New Horizons situation as an example," Starbird said. "And we are going to, from that, indicate what we think would be policies to implement so we have less opportunity of something like that occurring."
The report is expected sometime in the next month.