"It will clean the slate for New Horizons at those locations," Perron said.
New Horizons received federal grant funds in 2005 and 2009 for its proposed Children's Village on Maryland Avenue. At the time New Horizons sought the grants, Prieto told the city she had the backing of various charitable foundations, but the funding never materialized.
Representatives of at least two foundations Prieto listed on grant applications said they never made any assurances to New Horizons. But Prieto said Tuesday that the deteriorating economy caused potential funders to pull out.
"They gave the promises but didn't come through," she said.
In August, New Horizons informed city officials that the Children's Village project was dead, and promised to repay the grant money by selling the properties.
A city report issued Friday determined that New Horizons is on the hook for only $240,000 of the $301,000. Nearly $61,000 went into city and Glendale Unified School District developer impact fees, which will be returned because the project was not built, according to the report.
The same report suggested the city adopt new rules to bolster oversight of nonprofit agencies that receive the competitive federal Community Development Block Grants. In the last 35 years, the city has approved more than $76 million in block grant funding.
The new rules would require representatives of charities and social service agencies to sign documents verifying the fiscal health of their organizations, including disclosure of assets and tax liens. The agencies would also be required to provide written proof of claimed financial backing from banks or grant providers and would have to submit third-party auditing reports.
The City Council was scheduled to take up the rules Tuesday, but delayed consideration because Councilman Frank Quintero was not present.
Prieto said that New Horizons is consolidating its operations at the headquarters at 744 S. Glendale Ave., and that she is focusing on serving Glendale families despite continuing challenges for nonprofits.
"I'm trying to do the right thing for New Horizons," she said.