Glendale Federal Savings & Loan has decided to pull out of a financially troubled child-care cooperative it began a year ago, a company spokeswoman said last week.
The withdrawal of the thrift leaves the Glendale Employers Child Care Consortium with only three of its five original members and raises questions about the future of the child-care center.
Melissa Duncan, spokeswoman for Glendale Federal, said the company withdrew because its employees were barely using the center. Of the company's 1,200 Glendale-area employees, no more than two had children at the center at any time, and just one has a child enrolled now, Duncan said.
Glendale Federal sent a letter formalizing its decision to the consortium board of directors in November but did not make its decision public until last week. It takes effect in late January.
'Wasn't Going to Work'
Company officials have not determined why the center was not more popular with employees. "It doesn't really matter why they didn't use it," said Bob Proctor, vice president of employment and employee relations for Glendale Federal. "We decided that whatever the reasons our employees weren't using the center, they just weren't going to. It wasn't going to work."
Proctor said the thrift is reviewing other child-care options for its employees.
Glendale Federal approached four major Glendale employers in 1986 to propose an innovative child-care cooperative modeled after a program in Burbank that was the nation's first public-private consortium for child care.
Glendale Federal will pay off its share, estimated at $12,000, of a $60,000 deficit the center incurred over the past year. Glendale Federal's initial contribution to the consortium was $25,000, Duncan said.
The company's withdrawal adds another element of uncertainty to the future of the consortium. Glendale Unified School District decided last month to end its involvement both as manager and participant in the center.
With space for 90 children, enrollment stands at 52 and has been low since the center opened in January.
The consortium subsequently signed a three-year contract with National Pediatrics Support Services, based in Irvine, to manage the center beginning next month.
The transition and the withdrawal of Glendale Federal leaves the remaining consortium members--Verdugo Hills Hospital, Glendale Memorial Hospital and the City of Glendale--with major obstacles to overcome, board members acknowledged. But they are optimistic.
"It's crazy to say we're not going to have difficulties or some problems, but I don't view the fact that we're down to three members as a crisis," board President Beth Gardner said. "Now that we're going forward and have a reputable organization to run the program, we'll have this deficit stuff behind us and we'll be able to recruit new members."
Ramsay said the consortium board is recruiting other employers in the Glendale area, but has received no commitments yet.
Falling Into Place
"Obviously things that we planned for have fallen through, and other things still have to fall into place," said board member Jess Duran, an executive assistant with Glendale's Community Development Department. "We just have to be confident that those things do fall into place."
The consortium was founded to provide high-quality child care at competitive rates for its members' employees, but the fees average about $15 a week higher than other centers in the Glendale area, said Athel Herman, program supervisor for the school district.
When the new operator takes over under its three-year contract, fees for infants and toddlers will increase by $5 a week, but those for preschoolers will stay the same, National Pediatrics President Sheri Senter said.
Despite the fee increase, board members said they expect enrollment to increase once the new operator takes over.
"The key to the whole program is having a competent operator to run the program," Assistant City Manager Dave Ramsay said. "The concept is still in place. We're on solid ground."