Santa Ana officials returned a $7M state grant for youth programs without telling the City Council

The city of Santa Ana gave up a $7 million grant from the state of California that would have created after-school programming and child care facilities — all outside the public eye and without consulting or informing the City Council. The move now is raising questions on why the city gave up on the much-needed funding for its youth.

Santa Ana Parks and Rec commissioner Roberto Herrera said the grant was a substantial amount of money and necessary for child care, tutoring, and youth centers.

“All of these things are what our youth need, especially in a poor park city, when so many of our youth are underserved, when so many of our youth need access and resources like this,” Herrera told LAist.

Why was this grant so important?

Santa Ana was awarded $6.7 million by the state in 2023 for child care and development programming. The money would pay for new staff, licensing, training, program equipment, community engagement, and state-required facility upgrades. That includes maintaining the overall operation of the program.

Santa Ana Mayor Valerie Amezcua, who did not respond to LAist’s request for comment, applauded the milestone in her 2023 State of the City address.

“It’s almost $7 million,” Amezcua said. “What are we going to do with it? I have a list.”

According to the department’s grant application, the program would have created seven child care facilities, serving more than 500 children, according to city documents.

The city was also set to use the funds for afterschool care for children ages 5 to 13 years old. The money was earmarked for full-day summer camp programming with a focus on serving low-income youth and kids at risk for drug use, gang violence, and crime.

The department originally was planned to start programming in fall 2023 but didn’t move on the funding until a year later.

In November 2024, the City Council unanimously approved $915,583 as the first round of funding to jumpstart the program.

Then, six months later, with no public discussion and without informing the City Council, the city gave up on the contract.

Why did the city quit?

Three months after giving up on the funds, City Manager Alvaro Nuñez explained to the mayor and the City Council in an Aug. 18 email that the Parks and Rec department was not adequately prepared to handle a program of this magnitude.

“While Parks & Recreation staff were actively working toward implementation, it became apparent that Title 22 regulations, which had not been previously addressed, would impose significant administrative and programmatic challenges to the agency,” Alvaro told council members.

Title 22 regulations are state rules that govern the licensing and operation of child care facilities, and when programs receive CDSS funding, they must follow those requirements. The requirements, Nuñez added, would have required “extensive” changes to the operation and staffing of the parks department.

Although Nuñez told the council that Title 22 regulations “had not been previously addressed,” records obtained by LAist show that the city had known about the requirements since June 2023 and that the city already was in the process of hiring a certified program director to license the park’s facilities.

Nuñez declined to speak with LAist.

Budget woes

Like many local governments, Santa Ana is looking for ways to tighten its budget amid slowing revenues and the looming threat of losing federal funds. The city is facing a $35 million budget deficit in the next four years.

In Nuñez’s email to the mayor and city council, he cited these fiscal uncertainties.

“Furthermore, with the potential for a reduction in the city’s sales tax revenue, the financial outlook does not indicate sufficient capacity to make the necessary physical improvements and sustain the program if restricted funding is reduced or eliminated,” Nuñez wrote to the council.

City Councilmember David Penaloza said he supports the city’s decision to give up on the money.

“All of these grants that we often get come with so many strings that municipalities across the state, not just Santa Ana, cannot commit to, and it's an ongoing burden on the city,” Penaloza said. “It is very wise for our city staff to take a pause and look at all these grants and look at the strings that are attached to it and say, 'Is this really worth it?'”

The move to return the grant money to the state was irresponsible, City Councilmember Johnathan Ryan Hernandez told LAist.

“I cannot say that is good governance, for us to relinquish $7 million in funding at a time where we desperately need it,” Hernandez said.

Unanswered questions

City Councilmember Jessie Lopez told LAist that Nuñez’s Aug. 18 email is not enough to make her understand how the city could give up on such significant funding.

“We've had such a can-do attitude, but when it comes to this, we couldn't do it. I don't know that I necessarily believe that,” Lopez said. “I would have wanted us to see this through because it would have been better, I think, for us to learn along the way than to say, well, we're not even going to entertain this because we don't think that we can do it.”

Lopez also questioned the lack of transparency before and after the city decided to pull out of the child care agreement. If the city manager's office did not feel they could take this on, “then they should have communicated that to the full council,” Lopez added, “The city is at a point where there isn't a lot of public trust and the city has done that to itself.”

What has the city lost?

In the city’s bid to California’s Department of Social Services, the city’s parks department said the grant would relieve parents who otherwise cannot afford after-school care or similar programming.

“Our City has a significant growing homeless and unhoused population, more than 30,000 students meet the criteria for being considered homeless and live highly unstable and often unsafe housing situations,” according to Santa Ana’s application for the grant.

Lopez said she consistently hears from constituents who are impacted by the cost of living and who can’t afford child care. In California, child care costs even more than in-state college tuition.

This state-funded program could have been life-changing, she added, and local governments should be thinking outside the box to address critical needs.

“It is about … understanding that there is a serious problem in our community and we must turn every stone to be able to provide the proper support for our families and the kids of our community that need it,” Lopez said.