After 45 years at the helm of Silicon Valley’s largest publicly funded child care agency, Alfredo Villaseñor has called it quits. Though the 73-year-old said his retirement has been years in the making, it comes at a time of unprecedented crisis for the county-linked nonprofit best known as 4Cs, or the 4C Council.
Despite decades of steady growth for the Community Child Care Council of Santa Clara County, the agency—tasked with spending $45 million a year in taxpayer dollars on subsidized care for more than 6,000 low-income children—is struggling to stay afloat. This summer, 4Cs became subject to five simultaneous audits, the latest and most consequential of those by order of California’s Joint Legislative Audit Committee.
In a bid to save funding for its 3,500 home daycare providers, 4Cs also gave up every last one of its five preschool centers. The first closed with little warning in the fall of 2015. The rest changed hands this past spring under pressure from the California Department of Education (CDE). Email correspondence between Villaseñor and the CDE indicates that he relinquished the licenses to avoid compromising the rest of his agency’s contracts.
All the while, Villaseñor has been locked in a bitter feud with employees, who voted two years ago to unionize and have yet to reach a deal on their labor contract. The fraught back-and-forth has led to a staffing exodus that slashed the number of frontline workers by about a third, as management replaced positions with non-unionized temps, according to several staffers. A few months ago, a federal mediator finally stepped in to help with the negotiations, which have left a considerable portion of the 150-member staff demoralized and struggling to keep up with service needs, several employees say.
Ben Menor, president of 4Cs’ board of trustees, blames the union battle for also holding up Villaseñor’s retirement.
“We have been planning for a succession change for almost over three years,” Menor said in a phone call last week, after more than a year of ducking interview requests from San Jose Inside. “It would be unfair to hold him any longer.”
Though the 4C Council has yet to find a permanent successor, Menor said he has full confidence in its interim director, a Solano County resident named Joseph Manarang.
“I think we have a capable person,” said Menor, a longtime friend of Manarang.
Manarang seems an odd choice to lead the embattled organization, as he admittedly has no experience running subsidized child care programs. The U.S. Air Force veteran spent the better part of his career as a special agent in the FBI’s counterterrorism division, where he said his investigations into kidnappings and organized crime took him to the Middle East, Latin America and Southeast Asia.
Upon retiring in 2012, Manarang said he helped his friends launch an ice cream company and academic fellowship in the Philippines while doing consulting work on the side. Menor said that the nonprofit’s board voted to appoint Manarang because of his familiarity with government contracting.
“We brought him in to help us with our compliance because, as you know, we’ve had audits, and additional audits,” said Menor, who dodged criminal charges nearly a decade ago because of compliance issues during his tenure as head of a San Jose community center. “It was important to have someone with his background in compliance.”
Before being appointed interim head of 4Cs, Manarang said, he spent five months consulting for the organization, although he declined to elaborate on the nature of that assignment. The law enforcement veteran gregariously described his experience dealing with international investigations, however, as well as his mastery of several languages, his work in media relations and his commitment to charitable giving. Leading 4Cs is a continuation of a lifetime of public service, he added.
“If you were to quote me on something, it should be, ‘Let’s continue the service of this institution, which has cared for single parents and their children,” Manarang said. “We don’t have many organizations like that. The word that is synonymous with 4Cs is ‘dedication’ and ‘service’ to the community.’”
When pressed about the agency’s financial health, he offered little in the way of details. Rather, Manarang took more of an interest in how San Jose Inside obtained an internal audit record from the CDE earlier this year.
“That was my biggest pet peeve,” Manarang chided, suggesting that someone at the CDE leaked a document to damage 4Cs’ credibility.
The CDE memo in question was published by San Jose Inside in March. It shows a dramatic decline in 4Cs’ net assets and an uptick in debt ratio from 2011 to 2015. Menor echoed Manarang’s claims that the nonprofit’s problems—including the preschool closures and surrendered licensing—stem from bad publicity and union meddling rather than mismanagement.
“Why did they all have to shut down? Because of your wonderful writing,” Menor said with a chuckle. “I’m not blaming you, I’m being facetious.”
But the board president continued to back Manarang’s assertion that San Jose Inside’s reporting on the CDE memo pressured public officials to investigate.
“That article created the cause and effect,” Menor said, “and that cause and effect allowed the union to have the undue pressure to respond and react to us in a different light.”
In fact, the fifth audit came by way of a recommendation from state Sen. Jim Beall (D-San Jose), who on June 28 joined a unanimous vote by the California’s Joint Legislative Audit Committee to investigate allegations of misspending at 4Cs. The probe, which kicked off in July, will look at all seven contracts, which total $40 million between the CDE and the South Bay nonprofit. The investigation will also examine the agency’s pension accounts, which became a point of concern for the union after a retiree’s checks were delayed for months until San Jose Inside wrote about the hold-up.
In addition to the audit ordered by legislators, 4Cs is undergoing reviews of the remaining several millions dollars in its budget by the Santa Clara County’s Social Services Agency, the U.S. Health and Human Services Financial Department and an internal assessment by a private accounting firm.
At the state committee hearing, Villaseñor spoke out against yet another audit, calling it a waste of taxpayer money and an affront to needy families.
“[It] detracts from our services to provide for these families,” he told the state committee. “That’s the worst thing that could happen to us.”
In an email to San Jose Inside, Villaseñor repeated his misgivings, saying the audit will cost an estimated $277,000 and divert valuable public resources. Further, he said, the scope of the state audit appears to overlap with the other ongoing reviews of the agency.
“However,” he added, “we shall gladly comply.”