Modesto City Council
May 24, 2022

Amended: X-X-22

CITY OF MODESTO

POLICIES & PROCEDURES FOR THE FORMATION, ANNEXATION AND ADMINISTRATION OF

COMMUNITY FACILITIES DISTRICTS CREATED PURSUANT TO
THE PROVISIONS OF THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982 1) Introduction.

The following policies and procedures (“Policies and Procedures”) for the use of the MelloRoos Community Facilities Act of 1982 (the “Act”) are established pursuant to Government Code Section 53312.7. These Policies and Procedures describe the application, formation, annexation, appropriate uses for and administration of any Community Facilities District (“CFD”) used to finance facilities or for the provision of allowable services.

The City of Modesto (the “City”) will consider developer or property-owner initiated applications requesting the formation of a CFD, and the possible issuance of bonds or the generation of revenues to finance eligible public facilities necessary to serve residential, commercial and/or industrial projects. The City may also establish CFDs which are initiated by the City.

Priority in using CFD funding will be given to capital projects that are regional in nature and have the broadest possible benefit to the land uses included in the CFD. While it is the City’s intent to use the Act to provide for the financing of City-owned and operated infrastructure and services, projects of a regional nature may include facilities to be owned and operated by other public agencies. In any event, only regional or community serving public facilities which directly benefit the CFD, and the provision of services (if applicable) may be eligible for CFD funding.

The City shall make the final determination as to whether or not a proposed CFD shall proceed under the provisions of the Act. The City may confer with the applicant and its consultants to learn of any unique district requirements, such as regional-serving facilities or long term development phasing prior to making any such final determination.

The Act may be used for the purchase, construction, expansion, rehabilitation, or acquisition of public improvements, or the provision of public services subject to the provisions of these Policies and Procedures and any subsequent amendments thereto, to the fullest extent permitted by the Act. The City shall use the Act to provide for the financing of City-owned and operated infrastructure and services, except as noted above.

The City will make the final determination whether or not the CFD will be a construction or acquisition district. All City and consultant costs incurred in the evaluation of CFD applications and the creation of CFDs must be paid in advance by the applicants in those instances where a CFD is initiated by a party or parties other than the City. However, the City may incur expenses for analyzing proposed districts where the City is the principal proponent of the CFD formation for financing of the CFD.

Expenses not legally reimbursable by the district shall be borne by the applicant. Both City costs and district consultant costs may be funded from bond proceeds. #8..
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For the purposes of reviewing activities undertaken pursuant to these Policies and Procedures, and to review proposed Mello-Roos financing, all relevant matters shall be referred to the Financial Policy Committee of the City Council.
2) Definitions.
a) Acquisition District. A CFD formed to finance the acquisition of infrastructure or public facilities where the applicant will be reimbursed for eligible construction related costs by means of tax credits or otherwise.
b) Amendment. A change, in any manner, to an adopted Public Report. c) Annexation. The addition of real property into a CFD which has already been formed, and for which a Public Report has already been prepared and adopted. “Annexation” in this context does not mean a change in organization as described in the Cortese-Knox Act of 1985 (Sections 56000 et seq., Division 3 of the Government Code). d) Applicant. Developer or landowner who initiates formation/annexation of a CFD. e) Bonds. Bonds authorized and issued under the Mello-Roos Community Facilities Act of 1982.
f) Bond Counsel. Outside counsel retained by the City to assure compliance with applicable federal and State tax and other laws and regulations relating to public financing. g) Bond Underwriter. The investment banker(s) retained by the City to design, develop and execute the sale of bonds in the market place.
h) Certificate of Completion: A written document provided to a facility provider by the District Engineer stating that the facility is complete and in good working order, and that the requirements of the facility acquisition agreement have been met. i) City. The City of Modesto.
j) City Attorney. City Attorney of the City of Modesto or his or her designee. k) City Manager. City Manager or his or her designee.
l) Community Facilities District (CFD). A special district formed pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982 as amended, to finance specific public improvements or public services, and where properties within the CFD are levied a special tax in accordance with the rate and method of apportionment adopted as part of the district proceedings.
m) Conclusion of Formation. The date a tax lien, for a specific CFD, is successfully recorded by the Stanislaus County Clerk Recorder.
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n) Credit. An offset against tax owed, or cash reimbursement for tax paid, as appropriate, calculated by subtracting from the Facility Cost Estimate any non-prepaid costs or incidental costs as defined in the Mello Roos Act, Section 53317(c) and (e), by means of a cash administrative cost offset. The administrative offset may be specified in the public report. o) CFD. A Community Facilities District created for the purpose of financing the costs of certain public facilities and services pursuant to the provisions of Chapter 2.5 of Part 1 of Division 2 of Title 5 (commencing with Section 53311) of the California Government Code. p) CFD Team. An interdepartmental City working group consisting of a representative of the City Attorney’s Office, the District Administrator and such other staff as the District Administrator may designate. Its function shall be to process CFD applications and the formation of CFDs, including elections as appropriate.
q) District Administrator. A subgroup of the CFD Formation Group composed of a City Manager or his or her designee. The District Administrator shall have the power to retain and consult with an outside consultant experienced in administering established CFDs in order to assure such administration is in accordance with City ordinances, resolutions, these Policies and Procedures as amended, and applicable law. The District Administrator shall also have the power to appoint an Acting District Administrator to serve in his or her absence.
r) District Engineer. A California registered professional engineer employed by the City of Modesto, or a City of Modesto CFD, who is responsible for making final engineering determinations on behalf of that CFD.
s) Facility. Any public works-type infrastructure for which tax is to be collected pursuant to the public report, which could be eligible for tax credit and is located within a CFD. t) Facility Cost Estimate. The facility (or facility segment) cost estimate, including contingency cost estimates relating to that facility (or segment) which are included in the tax stated directly, or by reference, in the public report, as that report may be amended or adjusted for inflation from time to time.
u) Facility Provider: Any person or entity constructing a facility. v) Fair Market Value, or Value. The amount of cash or its equivalent which property would bring if exposed for sale on the open market under conditions in which neither buyer nor seller could take advantage of the exigencies of the other and both have knowledge of all of the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions upon uses and purposes. w) Municipal Advisor. Financial consultant retained by the City to review, comment and advise on financial matters relating to CFDs.
w) Financial Advisor. Financial consultant retained by the City to review, comment and advise on financial matters relating to CFDs.
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x) Fiscal Feasibility Report. A study performed under the direction of the City to determine the financial viability of a proposed CFD.
y) Infrastructure and Public Facilities. Those public improvements including but not limited to major streets and arterials, highway improvements and freeways, freeway interchanges, right of way acquisitions, bridges, street lights, water, flood, sewer and drainage improvements, fire and police stations, parks, wetlands, telephone ducts, electrical conduits, libraries, transit improvements (including public parking facilities), and the provision of certain services (if applicable), that may be eligible for financing pursuant to these Policies and Procedures, and which are authorized improvements pursuant to provisions of the Mello-Roos Community Facilities Act of 1982 (“Act”).
z) In-tract Facilities. Infrastructure and public facilities which serve an individual CFD, such as local subdivision streets, local utilities and local drainage systems. Not all such infrastructure and public facilities may actually be located within the boundaries of the CFD. (Possible example: drainage system).
aa) Oversubscription. Oversubscription is the furnishing of land or facilities whose total value as set forth in the public report exceeds the total taxes attributable to a facility provider’s entire development within a CFD.
bb) Public Report. A report generally containing the following:
(1) A description of the public capital facilities and services proposed for the CFD. (2) A general description of the area to be served by said facilities; said areas being the boundaries of the CFD.
(3) A cost estimate, setting forth the costs and expenses for providing the public facilities and services to the properties within the boundaries of the CFD and the costs of any incidental expenses to be paid by the CFD. (4) The rate and method of apportionment of the special tax in sufficient detail to allow each landowner or resident within the proposed CFD to estimate the annual amount of payment;
(5) General Terms and conditions relating to the proceedings. (6) All exhibits and attachments to the resolution of formation of a CFD, and documents included therein by reference.
cc) Special Tax Consultant. A consultant retained by the City to develop the rate and method of apportionment and other special tax formulas and criteria for a Mello-Roos CFD. dd) Tax: Any facilities special tax specified in the public report for the CFD. ee) Value-to-Lien Ratio. The value of a parcel of land as determined by an MAI appraisal #8..
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relative to the amount for which land secured bonds may be sold for the parcel. 3) Application Process.
a) Application. The applicant shall submit an application in the form attached hereto as Example “A”, or as may be amended from time to time by the City Manager, to the City together with a nonrefundable fee as set forth herein and amended from time to time. The fee is for the purpose of application processing, other preliminary costs, retention of appropriate consultants, and the compensation of staff time devoted to the formation of the CFD.
b) Project Review. Applicant and the CFD Formation Group may discuss the application including but not limited to further information that might be required and other issues as necessary. If necessary, the applicant may be required to submit a revised application. Once the application is accepted by the CFD Formation Group, it may be reviewed by City Finance personnel or City consultants to determine the adequacy of the proposed financing.

CFD Formation Group may also forward the application to the City’s engineering staff for determination that the application package is in fact both complete and practicable.

Applicant and the CFD Formation Group may also conduct a face to face meeting between the applicant and the CFD Formation Group to “scope” the consultant work necessary to the formation of the CFD. However, the final authority to approve the scope of the consultant work to be performed in connection with the formation of any CFD and for the compensation of such services shall be solely within the authority of the CFD Formation Group.
c) Project Initiation. The application is accepted by the CFD Formation Group and the CFD Formation Group receives contracts, reimbursement agreements, bond documents and other pertinent items for consideration by the City Council, as required. d) Costs Incurred By The City Prior To Formation. All costs incurred by the City prior to formation of the CFD, including but not limited to consultant costs (e.g. legal counsel, engineer firms, appraisers, special tax consultants, financial advisors), City staff and administrative costs and related expenses, cost of providing notices, printing and publication costs, and all expenses directly or indirectly relating to these items, shall be reimbursed to the City by the applicant prior to the completion of formation. The CFD Formation Group shall utilize timekeeping computer software, as such may be updated from time to time, to track billable hours in 1/10 hour increments attributable to CFD formation, amendment, annexation or other modification, and CFD administration. The timekeeping process will be used both to audit time spent as appropriate, and to generate bills to applicants for formation costs. Such bills shall also contain, in so far as practicable, costs or estimates of costs incurred by CFD group members in connection with CFD formation and/or CFD administration.

From time to time the CFD Formation Group will review and re-evaluate the City’s fee/deposit requirements in light of the cost results of recent CFD formations for the purpose of recommending modifications of excessively high or low fee/deposit charges as required. The initial such review shall occur in September 1998. #8..
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e) Costs Incurred Prior To Bond Closing. If a CFD is formed, and if bonds are issued, the City may direct that all of its costs of formation be reimbursed from bond proceeds. f) Costs Incurred By The City Subsequent To Formation. All City administrative and consultant costs, including those of the District Administrator, related to administration of a CFD and incurred after formation shall be included within the special tax formula in accordance with applicable provisions of law.
g) Formation Reimbursement To Applicant.
(1) Where CFD is Not Formed, or where CFD is Formed and Bonds are Not Issued.

In the event that the CFD is not formed due to City disapproval or abandonment, or due to applicant abandonment, or due to nonpayment of any reimbursable fee, or the CFD is formed and bonds are not issued for any reason, the City will refund to the applicant any remaining unexpended and unobligated portion of advance deposits posted with the City, subject to the City’s prior and full reimbursement of all of its direct and indirect costs. In the event that the applicant’s advance deposit to the City is not sufficient to reimburse the City for all of its direct and indirect costs, the City will require an additional deposit by the applicant for the difference.

The City shall be entitled to pay any refund to the applicant listed on the application form without interest, irrespective of any changes in the ownership or compensation of the applicant.
(2) Where CFD is Formed and Bonds are Issued. If the CFD is formed and bonds are issued, bond proceeds shall be used to defray all approved costs and expenses incident to the proceedings in construction of the public facilities, subject to approval of the CFD Formation Group, including the Finance Department, in conjunction with Bond Counsel, and subject to any applicable restrictions contained in the Act as amended. With respect to applicant paid consultant costs, reimbursement shall be limited to those CFD-related consultant’s hired by the City or those hired by the applicant and expressly approved by the City in writing.

Eligibility for reimbursement of any otherwise-eligible expense is conditioned upon the applicant providing paid invoices therefore to the City, and the CFD Formation Group’s approval thereof. The applicant shall not be entitled to reimbursement from bond proceeds for any of the following reasons: interest expense incurred by the applicant during the planning or design of construction (subject to exception for construction-related interest expense, set forth below) of the public improvements and any other costs and expenses incurred by the applicant which are not legally authorized for reimbursement, or as to which Bond Counsel has declined approval for reimbursement.
(2) Where CFD is Formed and Bonds are Issued. If the CFD is formed and bonds are issued, bond proceeds shall be used to defray all approved costs and expenses incident to the proceedings in construction of the public facilities, subject to approval of the CFD Formation Group in conjunction with Bond Counsel, and subject to any applicable restrictions contained in the Act as amended. With respect to applicant paid consultant costs, reimbursement shall be limited to those CFD- #8..
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related consultant’s hired by the City or those hired by the applicant and expressly approved by the City in writing. Eligibility for reimbursement of any otherwiseeligible expense is conditioned upon the applicant providing paid invoices therefore to the City, and the CFD Formation Group’s approval thereof. The applicant shall not be entitled to reimbursement from bond proceeds for any of the following reasons: interest expense incurred by the applicant during the planning or design of construction (subject to exception for construction-related interest expense, set forth below) of the public improvements and any other costs and expenses incurred by the applicant which are not legally authorized for reimbursement, or as to which Bond Counsel has declined approval for reimbursement.
(3) Pursuant to Government Code Section 53314.9, the City Council may enter into an agreement, by resolution, with a person or entity advancing funds or work-in-kind for any authorized purpose, including, but not limited to, paying any cost incurred by the City in creating a CFD, without interest, under all of the following conditions:
(a) The reimbursement proposal is included in the resolution of intention to establish the CFD and in the resolution of formation to establish the CFD, or in the resolution of consideration adopted pursuant to Government Code Section 53334.
(b) The proposed special tax or change in a special tax is approved by the qualified electors of the CFD, or in the event that the electors do not approve the proposed special tax or change in a special tax, the City shall return any funds which have not been committed for any authorized purpose at the time of the election.
(c) Any work-in-kind accepted pursuant to this paragraph shall have been performed or constructed as if the work had been performed or constructed under the direction and supervision, or under the authority of, the City. (d) Any reimbursement agreement entered into pursuant to this paragraph and Government Code Section 53314.9, shall not constitute a debt or liability of the City or of the District.

The reimbursement procedure specified in Government Code Section 53314.9 and incorporated in this paragraph may be utilized both in the case where the requesting person or entity owns all of the land within a proposed CFD, and in the case in which the requesting person or entity owns less than all of the land within the proposed CFD. In the later event, consideration will be given to setting forth two (2) or more tax districts within the CFD in order to facilitate reimbursement of the person or entity which paid more than its pro-rata share of the formation costs from the proceeds of one time special facilities taxes paid by landowners in the tax district or districts that does/do not include the land owned by the person or entity that paid more than its prorata share of the CFD formation costs.
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(4) Where CFD is Formed and Bonds are Not Issued. With respect to advance formation fees pursuant to Paragraph 3.u. of these Policies and Procedures, any portion of such fee/deposit not paid out or obligated for the direct or indirect costs of CFD formation by the CFD Formation Group, may be further obligated by the CFD Formation Group based on its good faith estimate of the cost, including consultant costs, and other reasonable incidental costs as defined in the Act that may be incurred in the administration of the CFD during the period of time following its formation but prior to the City’s receipt of sufficient annual maintenance special taxes to provide for appropriate administration of the CFD. The remaining fee/deposit not paid out or obligated for the direct or indirect costs of the CFD formation or administration by the CFD Formation Group shall be returned to the applicant within ten (10) business days after the CFD Formation Group presents its written accounting and good faith estimate.

The accounting and good faith estimate shall be prepared within thirty (30) days after the CFD is formed.With respect to advance formation fees pursuant to Paragraph 3.u. of these Policies and Procedures, any portion of such fee/deposit not paid out or obligated for the direct or indirect costs of CFD formation by the CFD Formation Group, may be further obligated by the CFD Formation Group based on its good faith estimate of the cost, including consultant costs, and other reasonable incidental costs as defined in the Act that may be incurred in the administration of the CFD during the period of time following its formation but prior to the City’s receipt of sufficient annual maintenance special taxes to provide for appropriate administration of the CFD. The remaining fee/deposit not paid out or obligated for the direct or indirect costs of the CFD formation or administration by the CFD Formation Group shall be returned to the applicant within five (5) business days after the CFD Formation Group presents its written accounting and good faith estimate. The accounting and good faith estimate shall be prepared within thirty (30) days after the CFD is formed. (4)
(5)
(6)(5) “Dollar for Dollar” Credit Against One-Time Facility Tax. Where the applicant makes a timely request that CFD formation costs be included in the cost of infrastructure for the purpose of computing taxes due under the Rate and Method of Apportionment and the final tax formulas, such CFD formation costs, including the initial fee/deposit, may be recovered by crediting such formation costs against facilities special taxes which would otherwise be due from the applicant from the time when such taxes would initially be due until the subject formation costs to be credited are exhausted by facilities special taxes incurred. h) Agreements Required. Applicant will be required to enter into all necessary agreements incident to CFD proceedings in a form provided by the City and consistent with these Policies and Procedures. These agreements may include, but not be limited to:
(1) Acquisition and Shortfall Agreement
(2) Advance Deposit Agreement
(3) Land Dedication Agreement (where required)
(4) Acquisition and Disclosure Agreement
(5) Disposition and Development Agreement (where required) (6) Development Agreement
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(7) Other agreements (as required)
As a condition of the issuance and sale of bonds, all of the agreements required by the City shall be duly approved and executed by the parties thereto. Prior to execution of any such agreements, the agreements shall be reviewed and approved by the City Attorney.

They may also be reviewed by Bond Counsel and such other consultants as the City believes are appropriate.
i) Land Use Approvals. All projects within the proposed CFD, together with the infrastructure and public facilities, must be consistent with the City’s adopted General Plan and zoning classifications. All property within the proposed CFD must possess land use determinations or zoning classifications of sufficient certainty, and facility requirements of sufficient specificity that each parcel can be adequately assessed. j) Use of Consultants. The City shall employ any consultants necessary for the formation of a CFD, review of financing, the issuance and administration of bonds, including but not limited to underwriters and underwriter’s counsel, Bond Counsel, Financial Advisor, special tax consultant, engineers, appraisers, market absorption study consultant, or any other consultant deemed necessary by the CFD Formation Group in its judgment to complete the CFD proceedings and/or for issuance of bonds. The cost reimbursement provisions of these Policies and Procedures shall apply to all costs and expenses incurred by the CFD Formation Group in employing such consultants. An applicant may retain its own consultants for its own benefit, but must work only through those consultants hired by the City. In the event the applicant retains its own consultants, all costs associated therewith shall be borne by the applicant, without reimbursement from bond proceeds unless expressly agreed in writing by the CFD Formation Group.
k) Eligible Infrastructure and Public Facilities. Infrastructure and public facilities eligible for CFD financing are those public improvements which benefit properties within a proposed CFD and/or will mitigate impacts of that development upon areas of the City outside the proposed CFD, and which will be owned, operated and maintained by the City or another public agency expressly approved in writing by the City. Improvements which are or will be owned, operated or maintained by a private company or utility are not eligible, except for improvements to be owned by shareholder owned utility companies regulated by the California Public Utilities Commission and which comprise less than five (5%) percent of the project. In-tract facilities, exactions, or other public right of way easements and/or lands which are dedicated by applicant as a condition of a development entitlement will not be eligible for bond financing, except if they are expressly allowed in a development agreement or other agreement between the City and the applicant.
l) Bidding Process.
i) In retaining construction contractors for work which is reimbursable by a City of Modesto CFD and where the construction costs of the Acquisition and Shortfall Agreement (or other similar agreement) with the CFD are less than $300,000.00, the developer shall abide by the following bid process:
i) In retaining construction contractors for work which is reimburseable by a City of #8..
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Modesto CFD and where the construction costs of the Acquisition and Shortfall Agreement (or other similar agreement) with the CFD are less than $300,000.00, the developer shall abide by the following bid process:
(1) The developer shall provide three (3) competitive bids. If the developer desires to award to a contractor other than the low bidder, a written request must be submitted to the District Engineer. The District Engineer may allow this if the developer can provide adequate justification
(2) The developer shall make sure that all contractors and subcontractors are licensed in accordance with sections 7000 through 7145 inclusive, of the California Business and Professions Code and maintain adequate insurance for any work or services performed.
(3) In accordance with California Labor Code section 1770, developer shall require the payment of prevailing wages based on the rates determined by the California Director of Industrial Relations. Unless otherwise directed by the District Engineer, Developer’s construction schedule shall provide adequate time for completion of the work such that no holiday or overtime labor shall be required. The CFD shall not reimburse developer for any labor costs which exceed the normal and customary straight time rates as described in the City of Modesto General Provisions, Section

4.19, for the work performed unless the District Engineer authorizes the use of overtime or legal holiday time, in advance and in writing. (4) The District Engineer shall retain the right to be in attendance to inspect all bids and change orders. Any extra work or charges during construction for which reimbursement is sought shall be justified and documented. Except in the case of an emergency, any such charges shall be approved by the District Engineer in advance and in writing. In the case of an emergency, any such charges may be authorized by the District Engineer if the developer provides adequate justification that an emergency existed and that the extra work or charges incurred were reasonable. Said justification shall be provided within a reasonable time after the emergency ends and prior to reimbursement for any such charges.
(5) No permits shall be issued and no work shall commence until the developer and the District Administrator have executed an Acquisition and Shortfall Agreement for the improvements to be constructed.
(6) The developer shall maintain certified payroll records for all labor costs incurred on all CFD reimbursable work for a minimum period of four (4) years from the issuance of the Notice of Completion. Said payroll records shall be made available to the CFD or any state regulatory agency for review, audit, inspection or copying upon request.
(7) Developer shall indemnify and hold the City and the CFD harmless for ensuring that the project is bid and constructed in accordance with City and CFD standards, and in compliance with all applicable local, state and federal laws. Developer shall also #8..
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indemnify and hold the City and the CFD harmless for any damages, claims or actions arising out of said construction activities in a form approved by the City Attorney and the Risk Manager.
(8) Developer may be reimbursed for design costs incurred prior to the execution of an Acquisition and Shortfall Agreement for completed and accepted, CFD-funded facilities as determined and approved by the CFD Administrator and the CFD Engineer.
ii) In retaining construction contractors for work which is reimbursable by a City of Modesto CFD and where the construction costs of the Acquisition and Shortfall Agreement (or other similar agreement) with the CFD are $300,000.00 or greater, the developer shall abide by the following bid process:
ii) In retaining construction contractors for work which is reimburseable by a City of Modesto CFD and where the construction costs of the Acquisition and Shortfall Agreement (or other similar agreement) with the CFD are $300,000.00 or greater, the developer shall abide by the following bid process:
(1) Using a bid package approved by the City, the developer shall advertise for bids in the appropriate newspapers and periodicals, including but not limited to the local Builders Exchange and the Modesto Bee. Bid opening shall be no sooner than 7 days after the initial publication.
(2) The bid package shall include, and be based upon, improvement plans as stamped approved by the City Engineer or his or her designee (“City Engineer”), and the Community Facilities District Engineer or his or her designee (“District Engineer”). The bid package may not contain any alterations, deviations or exceptions to the improvement plans, unless the alteration, deviation or exception is approved in writing by the District Engineer and is advertised for a reasonable period prior to the bid opening.
(3) The developer shall only accept bids using a bid proposal form approved by the City. The developer shall ensure that copies of the form are made available to prospective bidders at a local business office located within Stanislaus County during reasonable business hours throughout the bid advertising period.

Contractors interested in submitting sealed bids for the project will be directed to do so on the approved form and at a specific date and time (e.g., at 9 a.m. on February 1, 2004, at the developer’s place of business). At this specified time, the District Engineer may be in attendance to receive the bid packages. (4) The bid packages will be opened immediately after the close of the specified time period. The bid opening shall be open to the public and may be in the presence of the District Engineer. All bids will be publicly announced at the bid opening.

The developer will then begin the process of executing a contract with the lowest responsible bidder.

If the developer desires to award to a contractor other than the low bidder, a #8..
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written request must be submitted to the District Engineer. The District Engineer may allow this if the developer can provide adequate justification. (5) The developer shall insure that all contractors and subcontractors are licensed in accordance with sections 7000 through 7145 inclusive, of the California Business and Professions Code and maintain adequate insurance for any work or services performed.
(6) In accordance with California Labor Code section 1770, developer shall require the payment of prevailing wages based on the rates determined by the California Director of Industrial Relations. Unless otherwise directed by the District Engineer, Developer’s construction schedule shall provide adequate time for completion of the work such that no holiday or overtime labor shall be required.

The CFD shall not reimburse developer for any labor costs which exceed the normal and customary straight time rates as described in the City of Modesto General Provisions, Section 4.19, for the work performed unless the District Engineer authorizes the use of overtime or legal holiday time, in advance and in writing.
(7) The District Engineer shall retain the right to be in attendance to receive the bid package, or to inspect all bids and change orders. Any extra work or charges during construction for which reimbursement is sought shall be justified and documented. Except in the case of an emergency, any such charges shall be approved by the District Engineer in advance and in writing. In the case of an emergency, any such charges may be authorized by the District Engineer if the developer provides adequate justification that an emergency existed and that the extra work or charges incurred were reasonable. Said justification shall be provided within a reasonable time after the emergency ends and prior to reimbursement for any such charges.
(8) No permits shall be issued and no work shall commence until the developer and the District Administrator have executed an Acquisition and Shortfall Agreement for the improvements to be constructed.
(9) The developer shall maintain certified payroll records for all labor costs incurred on all CFD reimbursable work for a minimum period of four (4) years from the issuance of the Notice of Completion. Said payroll records shall be made available in an electronic format to the CFD or any state regulatory agency for review, audit, inspection or copying upon request.
(9) The developer shall maintain certified payroll records for all labor costs incurred on all CFD reimbursable work for a minimum period of four (4) years from the issuance of the Notice of Completion. Said payroll records shall be made available to the CFD or any state regulatory agency for review, audit, inspection or copying upon request.
(10) Developer shall indemnify and hold the City and the CFD harmless for ensuring that the project is bid and constructed in accordance with City and CFD #8..
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standards, and in compliance with all applicable local, state and federal laws.

Developer shall also indemnify and hold the City and the CFD harmless for any damages, claims or actions arising out of said construction activities in a form approved by the City Attorney and the Risk Manager.
(11) Developer may be reimbursed for design costs incurred prior to the execution of an Acquisition and Shortfall Agreement for completed and accepted, CFDfunded facilities as determined and approved by the CFD Administrator and the CFD Engineer.
k) Designation of Spokesperson. The applicant(s) owners requesting preparation of a petition for formation of a CFD, if more than one, shall designate a spokesperson for all of them. The applicants’ spokesperson shall be responsible for the following. (1) Advising joint applicants to contact him or her for answers to their questions concerning CFD matters.
(2) Contacting appropriate City representatives to obtain answers to such questions as he or she is unable to answer. The appropriate City representatives are the members of the CFD Formation Group.
(3) Informing joint applicants that any estimated cost figures supplied to them prior to the estimate contained in the public report, as preliminarily approved by the CFD Formation Group, must not be relied upon as necessarily precise. l) Additional Advances. It is the policy of the City that applicants with properties improved through CFD proceedings pay all City and associated costs of such proceedings and other costs incurred in advance of CFD formation, or, in the case of the sale of bonds, before any bonds are sold. Therefore, with respect to all developer-initiated applications, if actual City costs exceed the amounts estimated below, the applicant will be required to advance additional monies to pay all costs incurred or to be incurred. Any failure to do so within ten (10) days of provision of written demand by the CFD Formation Group will be grounds for immediate termination of all activities by the CFD Formation Group, and by the consultants, if any, retained by the CFD Formation Group for the purpose of bond financing.
m) Boundary Map. A boundary map for each proposed CFD must be provided with the application. The boundary map should be provided in the following formats:
(1) 18” x 26” Mylar
(2) 8 ½ x 11” paper
(3) PDF
Assessor’s parcels maps may be compiled on which the project boundary and other required information are shown. The map must identify all Assessor’s parcels within the project boundary and the boundary of the area being annexed must follow existing parcel lines. The map must be certified by a licensed civil engineer. The CFD number to be included in the #8..
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map title and page numbers may be obtained from the CFD Formation Group. n) Registered Voter/Property Owner Certification. Any CFD election will be voted upon by property owners (one vote per acre) so long as there are fewer than twelve (12) registered voters residing within the proposed CFD area. The CFD Formation Group will not process registered voter elections absent special arrangements with the CFD proponent. Each of the property owners must designate a single proxy to cast their ballot. The civil engineer for the CFD applicant must verify the number of registered voters within the project and list all property owners showing APN and number of acres. The civil engineer must then file a certification suitable to the CFD Formation Group as part of the application package. This certification must be made within ninety (90) days prior to the hearing on the resolution of formation for the CFD.
o) Waiver and Consent. The qualified electors (property owners) must file a waiver and consent document suitable to the CFD Formation Group waiving some of the statutory election requirements, particularly the time lines. With this waiver, the election may take place sooner than otherwise.
p) Fiscal Feasibility Report. Prior to the formation of a CFD, a fiscal feasibility report may be required if a portion of the land within a CFD is substantially undeveloped. The report shall be prepared by or at the direction of the CFD Formation Group. All costs for preparing this report shall be borne by the applicant.
q) Special Taxes and Assessments. The projected special tax, when added to the ad valorem property tax and other direct and overlapping debt for the proposed CFD (including other benefit assessments, special taxes levied for authorized but unissued debt, and any other anticipated special assessments, taxes or charges which may be included on a property owner’s annual property tax bill), shall not exceed two (2%) percent of the projected assessed value of each improved parcel within the CFD. A backup special tax may be required to protect against changes in land use that may result in insufficient annual special tax revenues.
r) Special Tax Formula. The maximum special tax submitted to the qualified voters of the CFD shall not exceed one (1%) percent of the projected assessed value of the developed properties at the time of full build out of CFD formation. Furthermore, the total of the following shall not exceed two (2%) percent of the projected assessed value of the subject properties
(1) Ad valorem property taxes levied by the City.
(2) Voter approved ad valorem taxes levied by the City in excess of one (1%) percent of the assessed value.
(3) Special taxes levied by any existing CFD for the payment of bonded indebtedness or ongoing services.
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payment of bonded indebtedness or services.
(5) The maximum special tax for the proposed CFD.

The maximum special tax formula shall adhere to the following requirements:

1. The maximum special tax shall be established when a developed parcel is first subject to the tax and shall include the annual administrative costs to the City to administer the CFD.

2. Concerning that portion of the tax restricted to generating funds for maintenance of facilities, the special tax formula shall not include escalator rates allowing annual tax increases above four (4%) percent per year for developed parcels.

3. The City shall have discretion to allow a special tax in excess of the two (2%) percent maximum tax burden limits for any commercial or industrial lands within the CFD.

4. Concerning that proportion of the tax restricted to generate funds for the payment of debt service, the special tax formula shall not include escalator rates allowing annual tax increases above two (2%) percent. s) CEQA Compliance. The CFD Formation Group shall be responsible for compliance with the California Environmental Quality Act with respect to each CFD formation analyzed or completed by it.
t) Based on substantial evidence presented to the City Council, it is determined that advance deposits in the following sums must be received in all cases, whether reimbursable or not, prior to an applicant’s application for a CFD being deemed complete by the CFD Formation Group.
(1) CFD is to be created at applicant's request and where bonds are issued - $64,500.00.

The Developer shall make additional advances to the City within ten (10) business days following receipt from the City of a request for an additional advance to cover the costs referred to herein.

The City Manager may approve inter-fund loans from the General Fund for the cost of formation for CFDs that pursue bond financing. The City will be reimbursed for all formation costs at the time that the CFD bonds are issued. (1) CFD is to be created at applicant's request and where bonds are issued - $64,500.00. The Developer shall make additional advances to the City within ten (10) days following receipt from the City of a request for an additional advance to cover the costs referred to herein. In lieu of the Developer providing the required deposit, the City Manager, in his or her discretion, may approve inter-fund loans #8..
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from the General Fund for the cost of formation for CFDs that pursue bond financing. The City will be reimbursed for all formation costs at the time that the CFD bonds are issued. The inter-fund loan may not exceed $150,000 per application and shall accrue interest at a rate equal the actual return earned by the City’s investment portfolio during the 12-month period immediately preceding the date the inter-fund loan is made.
(2) A CFD is to be created at applicant's request and where bonds are not to be issued - $64,500.00. The Developer shall make additional advances to the City within ten business (10) days following receipt from the City of a request for an additional advance to cover the costs referred to herein.
(2) $64,500.00. The Developer shall make additional advances to the City within ten (10) days following receipt from the City of a request for an additional advance to cover the costs referred to herein.
(3) In In the case of the creation of a “simple” annexation to an existing CFD, which does not require the preparation of a new public report, or the alteration of an existing Public Report or modification of any other CFD-related document for the existing CFD, and the annexation does not involve the sale of bonds - $9,500.00.

The Developer shall make additional advances to the City within ten (10) business days following receipt from the City of a request for an additional advance to cover the costs referred to herein.the case of the creation of a “simple” annexation to an existing CFD, which does not require the preparation of a new public report, or the alteration of an existing Public Report or modification of any other CFD-related document for the existing CFD, and the annexation does not involve the sale of bonds - $9,500.00. The Developer shall make additional advances to the City within ten (10) days following receipt from the City of a request for an additional advance to cover the costs referred to herein.
(4)(3) In the case of the creation of a “complex” annexation to an existing CFD, which requires an amendment to or modification of a Public Report or other CFDrelated document, and the annexation does not require the sale of bond - $20,500.00.

The Developer shall make additional advances to the City within ten (10) days following receipt from the City of a request for an additional advance to cover the costs referred to herein.
(5)(4) In the case of the creation of a “complex” annexation to an existing CFD, which requires an amendment to or modification of a Public Report or other CFDrelated document, and the annexation does not require the sale of bond - $20,500.00.

The Developer shall make additional advances to the City within ten (10) business days following receipt from the City of a request for an additional advance to cover the costs referred to herein.In the event that a "registered" voter election is required, an additional amount over and above the previously mentioned fees may be incurred.

The City Clerk will estimate the minimum time and material costs pertaining to such an election based on the facts known at the time the election becomes necessary, and payment of the estimated sum shall be required prior to initiation of such an election. #8..
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(6)(5) In the event that a "registered voter" election is both required and results in the nonformation/nonannexation of the subject CFD, the above-referenced fees and costs will not be refundable to the applicant save and except those amounts advanced by the applicant which are in excess of those obligated for the CFD Formation Group formation/annexation costs, consulting fees and other related expenses.
u) Resolution of Intention. When a CFD application and all related documents have been completed, the appropriate fee has been paid, and the CFD Formation Group has agreed to place the matter of the formation/annexation of the pertinent CFD before the City Council, the vehicle for such placement shall be the "Resolution of Intention" as required by the Act.

The City Council vote on the Resolution of Intention shall also be the City's final determination on the application. If the Resolution of Intention is approved, the CFD Formation Group will undertake the necessary steps to complete formation/annexation of the CFD, including, but not limited to, completion of appropriate contracts, legal documentation, bond documents, project schedule, and other pertinent items. v) Fiscal Year Planning. In the event that the fiscal year in which a CFD is commenced ends during the formation of the CFD, the Finance Department of the City shall carry forward any unused CFD funds to the next fiscal year in order to facilitate a smoothly continuous CFD formation/annexation process, and to permit prompt payment of ongoing expenditures.
w) Fiscal Authority. The CFD Formation Group has the inherent authority to receive and to appropriate CFD revenue and to direct the Finance Department of the City of Modesto to establish a new fund for each new CFD formation/annexation. 4) Terms and Conditions of Bonds.
a) All terms and conditions of bonds shall be established by the City. The City will control, manage and invest all CFD issued bond proceeds. Unless otherwise authorized by the City, the following shall serve as bond requirements:
(1) A debt service reserve fund equal to an amount not less than ten (10%) percent of the bond issue's par value, subject to federal tax regulations will be established. (2) The special taxes shall be levied for the first fiscal year following sale of the bonds for which they may be levied. Unless otherwise agreed to by the City, interest shall not be funded (capitalized) beyond the earliest interest payment date for which sufficient special tax revenues will be available for payment of interest. (3) Beginning with the commencement of the repayment of principal, annual debt service may be level or may escalate up to a maximum of two (2%) percent per year. #8..
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(4) The maximum special tax shall be established to assure that the annual revenue produced by levy of the maximum special tax shall be equal to at least one hundred ten (110%) percent of the average annual debt service.
(5) The initial maximum annual administration requirement shall be no more than two (2%) percent of the par amount of the bonds but may escalate up to a maximum of two (2%) percent per year.
(6) Prior to the issuance of bonds, the City shall authorize its Bond Counsel to commence and process to final judgment an action establishing the validity of the proceedings, special tax and issuance of bonds, unless advised to the contrary by such Bond Counsel.
(7) In instances where multiple series of bonds are to be issued, the City shall make a final determination as to which public facilities are of the highest priority and those public facilities which will be financed first, pursuant to funding availability and the proposed timing of facilities development, and will be subject to the earliest or most senior lien except, when concerning land-secured financings if the City and applicant agree separately.
(8) The City may require that each new CFD bond issue refund any prior issues, if they exist on properties included in the CFD, in order to avoid subordinated liens.

Instances where prior issues may not require refunding are:
(a) Where refunding of prior issues will result in higher interest costs; (b) Where there can be assurance that prior liens may pose no marketing problems for the new CFD bonds; or
(c) Where refunding of prior issues may present future administrative difficulties to the City or other affected public entities.
b) Security and Credit Enhancement.
(1) Financial Plan. Prior to City Council approval of the CFD, the applicant must submit a financial plan which demonstrates to the City’s satisfaction the applicant’s ability to pay all assessments and/or special taxes through build out of the project. (2) Credit Enhancement. In general, where credit enhancement is required for the bond issue as a whole, in the opinion of the City, the applicant shall provide such enhancement in such form as is approved by the City and the underwriters. Such enhancement may, for example, be required in cases where the value-to-lien ratio for property within the CFD is sufficient, and may take the form of letter of credit, policies of insurance, or other vehicles.
(3) Letter of Credit Requirements. In general, the following requirements apply to letters of credit.
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(a) The term shall be at least one (1) year, with automatic renewal unless canceled in writing by City.
(b) The amount the applicant is required to post shall be determined by the City. (c) The letter of credit must be posted with the City in final form, properly authorized and executed, prior to Council authorization to issue bonds for the CFD. Irrevocable credit commitments, commitment letters, in-lieu letter of credit guarantee forms, or other similar instruments, will not be accepted. (d) The letter of credit shall be irrevocable, and issued for the benefit of the City. (e) The issuer of any Letter of Credit or other credit enhancement shall be a bank legally operating within the State of California, and which has a Thompson Bank Watch rating of “C” or higher, or an equivalent rating by any other nationally recognized financial institution rating agency, and whose letters of credit are deemed marketable by the City for public financing purposes. (f) The City reserves the right to consider other forms of credit enhancement or bond guarantee which are determined by the City, in its sole discretion, to be a lawful and adequate substitute for a letter of credit.
c) Value-to-Lien Ratios.
(1) If the value-to-lien ratio is 3:1 or greater for the entire CFD and if there is a value-tolien ratio of 3:1 on at least ninety (90%) percent of vacant land in the CFD, the City may not require letters of credit or other security to secure payment of the special taxes to be levied annually on properties within the CFD. (2) If the value-to-lien ratio is less than 3:1 for the CFD as a whole or on at least ninety (90%) percent of vacant land in the CFD, the City may require either letters of credit or other security (assigned deposits, deposits to escrow) to secure payment of the special taxes/special assessments on properties within the CFD or may elect to abandon the CFD.
d) Market Absorption Study. The City in its discretion may require and may employ a consultant for the purpose of conducting a market absorption study. The study, if required, shall include and estimate the total number of units, land uses and rate of absorption, and will be used as a basis for verification that sufficient revenues can be generated, and to determine if the financing of the infrastructure and public facilities is appropriate given the projected level and pace of development.
e) Disclosure Requirements. The applicant shall be responsible for compliance with all applicable federal and state statutory disclosure requirements, as well as any additional City requirements, in transactions with purchasers of properties with the CFD. #8..
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f) Continuing Disclosure. The developer will comply with federal and State securities laws and SEC Rule 15c 2-12 requirements concerning secondary market disclosure as those requirements are interpreted by the City and its counsel. g) Refunding. The City will analyze outstanding bond issues for refunding opportunities. In addition, the City will accept refunding proposals from underwriting firms and financial advisors which the City will then analyze and verify. The City will refund outstanding bond issues if:
(1) The refunding will generate at least five (5%) percent net present value savings; or (2) There is another reason the City determines is compelling enough to complete a refunding (e.g. for the purpose of changing onerous legal requirements in a previous bond indenture or resolution).
h) Credit Quality to be Required of Bond Issues.
(1) Debt Service. Except for commercial or industrial property financings with no residential components, debt service shall be substantially level throughout the life of the bond issue or shall escalate at a rate generally not greater than two (2%) percent per year. Phased bond issuance shall not result in increased debt service to existing residential homeowners. Unless determined to be specifically required, debt service shall not exceed thirty (30 years) from the date of bond issuance. (2) Bond Redemptions. Maximum redemption premiums shall not exceed three percent (3%). Call protection provisions shall not exceed ten (10) years and no provision shall be made to restrict the ability of the City to refund any bond issue.

Consideration shall be given to allowing redemption of bonds at par (without premium) with surplus construction funds, or from the prepayment of the special tax. Provision shall be made to allow the City to purchase bonds on the open market at par plus accrued interest, in lieu of redemption of bonds. (3) Reserve Funds. A reserve fund shall be required (unless specifically exempted for cause) for every land-secured financing. The City will consider the substitution of other security, such as a letter of credit, for monies in the reserve fund. The reserve fund will be sized by the City with the advice of the financing team, and, for taxexempt financings, will not exceed the maximum prescribed by applicable federal tax law. Reserve fund earnings beyond maximum reserve fund size should be used to credit debt service and may be used to pay applicable rebate obligations under federal tax law. (The City may also determine to permit such reserve fund earnings to be transferred to the construction fund until the project is completed.) (4) Capitalized Interest. The City, with the advice of the financing team, will determine, on a case by case basis, the amount of capitalized interest for a particular financing. The amount of such interest will be determined based on factors such as the length of the construction period, the earliest date upon which tax roll collection may commence and the amount such interest will add to the total amount of the #8..
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financing, taking into account the restrictions on value to lien expressed herein, the ability of the owner(s) to defray the debt service, and applicable provisions of the Act.
(5) Foreclosure Covenants. Every land-secured financing bond issuance document shall provide for the judicial foreclosure of delinquent payments of assessments or special taxes. Such covenants may vary with the particular financings, but shall at the minimum generally provide for the institution of foreclosure not more than 150 days from April 10 of a calendar year and shall authorize the City Attorney or delegate thereof to commence foreclosure without further Council action upon notification of a delinquency. Provision may be made to allow deferral of foreclosure in the event the City advances funds to the reserve fund to maintain any specific reserve requirement.
(6) Discounts. In competitive bond sales, the amount of discount shall be determined by the City with the advice of its financial advisor. In negotiated sales, it shall be the burden on the underwriter to justify its discount as competitive and such justification must take into account any other compensation being paid to the underwriter.

Original issue discount will be allowed if it results in a lower true interest cost and will not adversely affect the ability to construct the public improvements. i) Information to Property Owners.
(1) Prospective Purchasers. The Director of Finance, or his/her designee shall be responsible for providing notice of special tax to prospective property owners pursuant to Section 53340.2 of the Act and, upon request of an applicant, or its agent or representative, information in order for such applicant, agent or representative to comply with Section 53341.5 of the Act.The Director of Finance shall be responsible for providing notice of special tax to prospective property owners pursuant to Section 53340.2 of the Act and, upon request of an applicant, or its agent or representative, information in order for such applicant, agent or representative to comply with Section 53341.5 of the Act. (1)
(2)
(3)(2) Existing Lenders. The City may require the consent of the existing deed of trust holders in any CFD to be formed by landowner (rather than registered voter) approval.
j) Criteria for Evaluating the Equity of the Special Tax Formula.

The proposed rate and method of apportionment shall comply with the following criteria:
(1) The rate and method of apportionment generally shall not provide for an annual increase in the maximum special tax for any classification. However, under limited circumstances an increase in the maximum special tax will be permitted, not to exceed two percent (2%) annually. As a general rule, escalation of the maximum annual special tax will be allowed when bonds are to be sold in several series over an #8..
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extended period of time.
(2) The total projected annual special tax revenues, less estimated annual administrative expenses, must exceed the projected annual gross debt service on the bonds by ten percent (10%). In structuring the special tax, projected annual interest earnings at current passbook savings rates on bond reserve funds may also be included as revenue for the purpose of this calculation. Reserve fund interest earnings credit in excess of the foregoing will only be permitted if an investment agreement, satisfactory to the City, is secured at the time any bonds are sold and delivered. (3) The projected annual tax revenues shall include reasonable annual administrative expenses and other direct costs to the CFD.
(4) All property not otherwise statutorily exempted or owned (or to be owned) by a public entity shall bear its appropriate share of the special tax liability. (5) The special tax shall be allocated and apportioned on the basis of reasonableness to all categories and classes of property receiving general or specific benefit within the CFD.
(6) A formula to prepay the special tax shall be considered. (7) The projected ad valorem property tax and other direct and overlapping debt for the proposed CFD (including estimated CFD charges, projected benefit assessments, levies for authorized but unissued debt and any other anticipated municipal charges which may be included on a property owner's annual tax bill), including the proposed maximum special tax, should not exceed two percent (2%) of the anticipated assessed value of each improved parcel upon completion of the public and private improvements. Any deviations from the foregoing will not be permitted unless specifically recommended by the CFD Formation Group and approved by the City Council.
(8) The special tax formula shall be structured to produce sufficient annual special tax revenue to pay annual debt service, administrative expenses, and "pay as you go" programs funded by the CFD special tax. To the extent a special tax is to be levied to pay for services, it should be separate from the special tax to pay for facilities. (9) The special tax formula shall be such that once the total special tax need is known, and the status of all properties within the CFD relative to that formula are known, the special tax on each parcel is determined purely by the application of the formula without the exercise of discretion on the part of any person. k) Criteria for the Sale of Bonds.

In order to ensure the long-term security of any bonds sold as the result of the formation of a CFD, the following policies shall be followed:
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(1) The ratio of the appraised value of the land to the value of the proposed bond issue, and any other overlapping debt, shall not be lower than 3-to-1 unless authorized by the City Council with specific findings in accordance with the Act. (2) Market absorption studies may be required at the City's discretion to determine if the financing of the infrastructure and public facilities is appropriate given the projected level and pace of development. The study may also be required by the appraiser for use in the appraisal process. The City will employ any market-absorption consultant. (3) All terms and conditions for the sale of bonds shall be established by the City. l) Continuing Disclosure. By being allowed to participate for a Mello-Roos proceeding, each owner of land therein must be willing to provide information deemed by the City and its financing team to be needed in order for the City and the underwriter to comply with applicable Federal and State securities laws, including continuing disclosure requirements imposed by S.E.C. Rule 15c 2-12.
m) The Appraisal Process. Appraisals undertaken to establish value-to-lien ratios for landsecured financings can be complex, requiring the appraiser to interpret the significance of various financial and demographic data. Because an appraisal essentially is an appraiser’s opinion of value, the City requires that the appraiser be qualified to render this opinion. (1) Credentials. The appraiser will be credentialed by the State of California Office of Real Estate Appraisers and be a member of the Appraisal Institute (MAI) or have similar training, experience and qualifications.
(2) Independence. The appraiser will be an independent contractor retained by the public agency, rather than a land owner/developer.
n) The Appraisal Problem. The appraiser will begin each assignment by defining the appraisal problem - that is, succinctly stating the objective of the appraisal. The statement of the appraisal problem will identify (1) the property rights to be valued, (2) the operative definition of value, and (3) the date of the value estimate. (1) Property Rights to be Valued. Appraisals undertaken to establish value-to-lien ratios in CFDs and assessment districts will value the fee simple estate within the established district and subject to the special tax or assessment lien. (2) Definition of Value. Appraisal undertaken to establish value-to-lien ratios in CFDs and assessment districts will estimate the market value of the subject property. The market value estimate will be the bulk sale value for all vacant properties - both unimproved properties and improved or partially improved but unoccupied properties. The bulk land value will include the property within the district as it is currently entitled with all appropriate zoning and in its current state of development, the value of the improvements to be financed with the proposed bond issue, if any, and the value of other improvements to be financed with any other cash escrow or security whose cash value is entirely controlled by the City. Paragraph O, which #8..
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follows, provides those valuation methods the City will allow an appraiser to use to estimate the bulk sale value.
(3) Date of the Value Estimate. The date of the value estimate should clearly be identified in the appraisal report. The period between the date of the appraisal and the financing should be no more than four months, to accurately represent land values to prospective investors.
o) Valuation Methods. The first three valuation methods discussed below - the Sales Comparison Approach to Value, the Cost Approach to Value, and the Income Capitalization Approach to Value - form the core of modern real estate appraisal practices. These valuation methods are appropriate for conventional appraisal assignments involving improved real property, but are less well-suited to the valuation of unimproved land.

Appraisals of unimproved CFDs and assessment districts will additionally employ a Discounted Cash Flow (DCF) analysis based upon the bulk land value of the property appraised, the fourth valuation method discussed in this section. This section concludes with a brief discussion of Mass Appraisal techniques and an assessed value approach alternative. An appraisal may include more than one appraisal method, depending on the status of the project.
(1) Sales Comparison Approach to Value. The Sales Comparison Approach to Value offers the best indication of the market value of the subject property, because it is based on actual sales data. This methodology is appropriate for most improved properties, but the absence of comparable sales data usually constrains its application to appraisals of unimproved CFDs and assessment districts. The Sales Comparison approach, however, provides the analytical basis for estimating a future retail value of presently unimproved properties which may be incorporated into a Discounted Cash Flow analysis.
(2) Cost Approach to Value. The Cost Approach to Value is not appropriate for appraisals undertaken to establish value-to-lien ratios in CFDs and assessment districts. Cost does not create value. The Cost Approach may be useful, however, for adjusting for physical differences between properties under the Sales Comparison Approach. Sales Comparison appraisals can be adjusted to reflect infrastructure differences between different projects.
(3) Income Capitalization Approach to Value. The Income Capitalization Approach to Value is appropriate for retail value calculations of income-producing properties.

It also may be appropriate for estimating the future retail values of incomeproducing properties for use in a Discounted Cash Flow analysis. (4) Discounted Cash Flow Analysis. Discounted Cash Flow Analysis is appropriate for bulk sale valuations of unimproved properties and improved or partially improved but unoccupied properties. Discounted Cash Flow valuations should rely on an absorption study to estimate how quickly properties can be developed and sold or leased to end users. The expense of converting raw land to finished product or improved lots must be deducted from gross cash flow to derive net cash flow #8..
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prior to discounting. The value of the public facilities to be financed with the contemplated bond financing will be included in the appraisal. The discount rate should reflect the rates of return needed to attract debt and equity participation in the project.
(5) Mass Appraisal Techniques. When an entire tract or project has been built and fully absorbed, the appraiser may employ mass appraisal techniques, utilizing conservative per dwelling unit estimates.
(6) Assessed Value. If, based upon assessed value, the value-to-lien ratio of the project and ninety (90%) percent of the undeveloped parcels is greater than 3:1, then a separate appraisal may not be required. If the assessed value of ninety (90%) percent of the undeveloped parcels is not greater than three times the amount of the lien then the City can require an appraisal to be completed on the undeveloped portion of the project while it uses the assessed value for the developed portion. p) Contents of Appraisal. The appropriate format and level of appraisal documentation can vary according to its complexity. A detailed appraisal will reflect nationally recognized appraisal standards, including, to the extent appropriate, the Uniform Standards of Professional Appraisal Practice. Appraisal methodology and presentation of the results of the appraisal shall be presented in writing in either form report or narrative report, as required, by the CFD Formation Group.

Appraisals should conform to the following specific criteria:
(1) Appraisals must be selected from a “pre-qualified” list of appraisers determined by the City.
(2) Appraisals must be in writing, using either a “form report” (Uniform Commercial and Industrial Appraisal Report - Existing Property) or a “narrative report.” (3) Each appraisal shall clearly state the purpose of the report; a definition of the estate being appraised (i.e. fee, leasehold, etc.); and a description of the limiting conditions and assumptions underlying the appraisal.
(4) Valuation dates shall be as determined by the City, but in no event earlier than 120 days prior to the sale of the bonds. To the extent practical, valuation dates on all properties shall be synchronized to a specific date, such as “October 1, 1999.” (5) A physical description of the property being appraised, along with a discussion of its “highest and best use,” land use regulations, present use and location. (6) An opinion of value which specifically considers the value of the property (including individual parcels) with the completed public facilities (bond proceeds and other financial guarantees).
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the property, along with a brief description of the appraiser’s qualifications. (8) Improvement description (to the extent information is practically available). (a) Land parcels which have been developed and subsequently sold should at a minimum indicate land parcel size, number of lots, density, number of plans, square footage, year construction was initiated, year of completion, and when sales were initiated.
(b) Land parcels with product under construction or with standing inventory, should be described as in (5) above and include a summary of the stage of development including: number of residential units or buildings completed, number of buildings, status of buildings under construction, finished lots and mass-graded or raw lots. In addition, a comment on the marketability of the building (architecture, size, etc.) is appropriate.
(c) Land parcels which have been developed with income-producing (or owneroccupied) commercial, industrial, offices, etc., should be described as follows:
(i) Commercial Retail. Land parcel size; basic construction type; typical tenant improvements (and who is responsible for their construction); leasable area, when construction was initiated; and date of completion. (ii) Industrial. Land parcel size; basic construction type, whether single or multi-tenant typical office build-out as percentage of total area, when construction was initiated; and date of completion.
(iii) Office. Land parcel size; basic construction type; typical tenant improvements/allowance; net rentable area, when construction was initiated; and date of completion.
(iv) Residential. Land parcel size; basic construction type; whether single or multi-family; when construction was initiated; and date of completion. 5) District Administrator.

Upon completion of the formation of or annexation to a CFD, the District Administrator shall oversee all post-formation/post-annexation administrative duties. Examples of said duties include but are not limited to the following:
a) Establish through the Finance Department of the City of Modesto the financing mechanism to receive, dispense and administer all monies received post-formation/post-annexation. b) Establish and administer a reserve fund.
c) File all appropriate notices.
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d) Take any and all actions necessary for prudent administration of all post-formation/postannexation CFDs, including but not limited to the expenditure or allocation of District funds, in strict accordance with Section 53343 of the Mello-Roos Act of 1982 as it may be amended, so that any such funds shall only be allocated or expended for facilities and services authorized by the Act. This shall include but not be limited to, creation of and modification to the Capital Improvement Project (CIP) budgets. 6) District Administration.
a) District Administration Requirement of Infrastructure/Credit Specification in Subdivision Agreements.

On or after December 1, 1998, it shall be City policy with respect to those subdivisions located within the boundaries of a proposed Community Facilities District, an existing Community Facilities District, or a proposed or existing annexation to a Community Facilities District that the subdivision agreement required by the City for each such subdivision specify the creditable infrastructure or infrastructure segment percentages to be provided by the Developer of that subdivision in detail, as well as proposed credit amounts associated with the subject infrastructure or infrastructure segment percentages. The infrastructure or infrastructure percentages shall be among those required to be completed by the Facility Master Plan or another similar infrastructure specification pertaining to the subdivision for which an agreement is sought.
b) District Administrator To Consult With Director Of Community Development Re Inclusion of Community Facilities Districts In Specific (Or Other) Plan Finance Plans.

When Specific or analogous Plans required by law for development are being prepared by the City, the City's Director of Community Development, after consultation with the City's Director of Engineering and Transportation and its District Administrator, shall determine whether or not a Community Facilities District shall be at least one means of financing infrastructure within any proposed Specific Plan on and after December 1, 1998, once the Director of Community Development has determined that a Community Facilities District shall be one means of financing such infrastructure, each subdivision within such a Plan shall have approval of its tentative subdivision map conditioned on the creation of or annexation to a Community Facilities District prior to final approval of its subdivision map, and the District Administrator shall assist the Director of Community Development in ensuring enforcement of this policy. c) Uncreditable Portion Of Contingency Estimates In Village One.

The District Administrator, in coordination with the City's Community Development Department, shall ensure that the contingency portion of each facility segment credit against the one-time facilities taxes otherwise due shall be #8..
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Amended: X-X-22
uncreditable, and received in cash, in an amount equivalent to 10.5% of the 25% contingency portion of each such facility segment credit, so that Village One developers will receive a net credit of 14.5% with respect to the contingency portion of each such facility segment credit against the appropriate one-time facilities tax. d) Uncreditable Portion Of Contingency Costs To Be Included In Future Community Facilities Districts.

The District Administrator, in coordination with the City's Community Development Department, shall insure that an uncreditable percentage of each future one-time facilities tax is incorporated into each of the City's future Community Facilities Districts by means of inclusion in the Public Report and in the Rate and Method of Apportionment of Taxes. In order to ensure that the City's sunk costs of planning and engineering, ongoing administration, indirect costs and consultant costs can be paid from cash on hand generated by this requirement, some portion of the estimated cost of each facility, facility segment, or unit cost of a facility shall be disallowed from presentation for credit against the special one-time facilities tax which would otherwise be due with respect to the provision of that facility.
e) Tax Credit Procedure
i) Facility providers may be permitted credits against taxes owed, or cash credits, as appropriate, and as set forth herein.
ii) In the case of oversubscription, cash up to the amount of the oversubscription may be paid to a facility provider as cash becomes available to the CFD through tax collection. iii) Taxes shall be payable at the time specified in the public report. Until January 1, 2000, the tax payable shall at least equal the administrative offset specified in the public report or otherwise.
iv) The district shall also be compensated from available tax monies for money and services advanced by it for the acquisition, construction, improvement or control of any or all of the facilities set forth in the public report, all in accordance with and subject to the Mello Roos Act (including, without limitation, Section 53314.9 of the Act), the resolution of formation of the CFD, the policies and procedures for administration of the CFD, the public report and other applicable law.
v) In no event shall cash advances, dedications, or construction of facilities become either a debt of the City, or a debt in excess of actual tax receipts, of the CFD. vi) All tax credits shall be made by the District Administrator pursuant to a valid, executed facility acquisition agreement in a form approved by the District Administrator. vii) Prior to January 1, 2000, with the approval of the District Administrator, credits may be furnished to a facility provider to offset taxes otherwise due if the facility provider has #8..
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Amended: X-X-22
furnished or is furnishing facilities which have not yet received a notice of completion.

Notwithstanding the foregoing, such discretionary credit shall be fully reimbursable to the CFD in cash by the facility provider in the event that a facility acquisition agreement is not executed by the facility provider, or if that facility provider does not receive a notice of completion from the District Engineer.
viii)On and after January 1, 2000:
(1) The District Administrator shall ensure that the full tax is collected as it becomes due from each provider of facilities or facility segments to the CFD until (a) a valid facility acquisition agreement exists between the CFD and the facility provider and, (b) the facility has been completed, and (c) a certificate of completion has been issued to the facility provider. The District Administrator shall then provide facility special tax credits or cash reimbursement, as appropriate, to that facility provider. (2) All facility providers shall be denied tax credit for any portion of an otherwise crediteligible facility constructed prior to execution by that provider of a facility acquisition agreement suitable to the District Administrator. Credit shall not be denied for planning or engineering costs included in a Facility Cost Estimate incurred prior to execution of that agreement.
(3) Credits shall be expended by the District Administrator in date order of the certificate of completion of the facility for which credits are requested, and each such facility shall be completely credited before the district administrator shall grant credits to a facility receiving a certificate of completion later in time. (4) Where apportionment is required, as with respect to a total facilities cost stated in the public report including two or more sub-facilities, or where more than one person or entity participates in the construction or furnishing of a facility, the determination of such apportionment and credit by the District Administrator or their designee shall be conclusive evidence of the amount of the credit derived thereby. #8..
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Updated 5/2/2022

CITY OF MODESTO
Community Facilities District Application
Instructions:

1. Please complete the following sections in the spaces provided.

2. Attach additional sheets if necessary.

3. Provide the requested documentation.

Applicant Information
Full Name:     Date:

Last First M.I.

Relationship to Owner:

Mailing Address:

Street Address Apartment/Unit #

City State ZIP Code
Contact: Title:

Last First
Phone: ( ) Fax: ( )
Email :

Landowner Information
Full Name:

Last First M.I.

Mailing Address:

Street Address Apartment/Unit #

City State ZIP Code
Contact: Title:

Last First
Phone: ( ) Fax: ( )
Email :

Project Engineer
Name:

Last First
Mailing Address:

Street Address Apartment/Unit #

City State ZIP Code
Contact: Title:

Last First
Phone: ( ) Fax: ( )
Email :
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Project Information
Name of Project: Number of Acres:

Project Land Use Summary (i.e. number of units/acres by land use category):

Additional Project Information:

1. Previous Names under which this project has been known or processed by the City (provide names and dates):

2. City planning approvals (subdivision approval received to date, dates of approval and current processing status):

3. All existing and proposed taxes, assessments, liens or other secured interests on all property within the proposed districts. (Provide a copy of recent property tax bill):

4. Prior experience developer/landowner has had with community facilities district financing:

5. Other land development ventures by landowner and/or developer in the City of Modesto and in California within the last five years (include location, land use summary, period of construction, etc.):

6. For all parcels within the proposed district, list the Assessor’s Parcel Number, zoning/land use, owner(s) and length of ownership:

7. State the future plans for the properties of the district (i.e. sale to merchants or builders, home buyers, etc.):

Documents Required
 Current Title Report
 Boundary Map – The boundary map shall identify all Assessor’s parcels within the project boundary and the boundary of the proposed district. The map must follow existing parcel lines and be certified by a licensed civil engineer. The wording to be provided on the Boundary Map is provided in the attachment entitled “Boundary Map Requirements.” The boundary map shall initially be provided in PDF and later in Mylar for recordation. #8..
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Updated 5/2/2022
The undersigned hereby declares that the property taxes and assessments are current for the properties included in this application and that the information contained in the application is accurate and complete to the best of the undersigned’s knowledge
In lieu of paying the required $64,500 application deposit, the undersigned applicant hereby agrees that the proceeds from any bonds issued in connection with the proposed community facilities district (“CFD”) shall be used to reimburse the City for the CFD formation cost, plus ____% annual interest. In the event the CFD is not formed and/or bonds are not issued within five (5) years from the date of this application, the undersigned applicant hereby agrees to reimburse the City for the CFD formation costs of $64,500 or the total costs incurred, whatever is higher. If applicant fails to reimburse the City after receipt of a written request, the City may pursue all available legal remedies to recover payment Submitted by:

Firm: Date:

Name: Title:

Last First
Signature:
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Office Use Only:

Proposed CFD No: CFD No Proposed CFD Name:

File No: Tidemark Case No:
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

May 24, 2022
Date: April 26, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jaylen French, Director of Community and Economic Development SUBJECT: Award of Administration Services for Community Facilities Districts CONTACT: Jessica Hill, Community Development Manager
[email protected], 209-577-5321
DESCRIPTION:

Consider approving the Award of Proposal and Agreement for Community Facilities Districts (CFDs) Administration Services to Goodwin Consulting Group, for a two-year Agreement with three one-year extension options, for an annual estimated amount of $90,000 and a total amount not to exceed $450,000 over five years. (Funding Source: Various Community Facilities Districts)
STRATEGIC PLAN ELEMENT:

The recommended action supports the City of Modesto’s 2020-2025 Strategic Plan Goal D to provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance and sustainability efforts.

BACKGROUND:

Capital Facilities Districts (CFDs) are special financing districts that provide a mechanism for funding specific facilities and services for new development areas. The City has determined that CFDs and Assessment Districts (ADs) are necessary funding mechanisms for new development areas. Since 1996, the City of Modesto has formed fifteen (15) CFDs pursuant to the Mello-Roos Community Facilities Act of 1982.

The annual administrative tasks performed for the CFDs typically include updating the CFD database, calculating annual special tax levies, providing CFD administration report preparation for State required reporting. Compiling a list of parcels in the CFD subject to the special tax levy and submitting taxes to the Auditor-Controller’s Office for inclusion on consolidated property tax bills. Monitoring the Auditor-Controller’s tax collection summaries and reporting on delinquent parcels, preparing and mailing letters to property owners with delinquent special taxes.

Responding to various parties’ questions regarding the special tax and other CFD related issues. Assisting with complying with provisions in the bond indenture or fiscal agent agreement in the event of foreclosure. Providing interested parties the prepayment amount required to pay #9..
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City Council, May 24, 2022
Award of Administration Services for Community Facilities Districts

down the special tax lien and ensuring prepayment checks are processed properly and allocated to the proper CFD accounts.

Additional tasks typically include working with parties where CFDs bonds have been issued, providing assistance with disclosure regulations, preparing annual or five-year arbitrage rebate calculations and On-Call Services.

DISCUSSION:

The Purchasing Division issued a formal Request for Proposals (RFP 2122-20) for the Administration Services for Community Facilities Districts on September 23, 2021. Prospective bidders were notified online and via email of the bid opportunity. Twenty-four (24) companies downloaded the RFP document. On November 16, 2021, proposals were formally opened in the City Clerk’s office. Two (2) companies responded, neither of which were local vendors. Both companies provided responsive and responsible proposals.

Proposals were evaluated based on references, qualifications, project plan and schedule, completeness of response and cost. Three (3) staff members1 from the City participated in the evaluation process and selection.

Modesto Municipal Code Section 8-3.203 generally requires all purchases that meet or exceed $50,000 for material, equipment or contractual services to follow the formal bid procedures. The award of RFP 2122-20 and agreement for Administration Services for Community Facilities Districts for the Community and Economic Development Department to Goodwin Consulting Group of Sacramento, CA, is a contract for professional services and is therefore exempt from such formal bid procedures pursuant to Modesto Municipal Code Section 8-3.204(a).

Nevertheless, the award of RFP 2122-20 conforms to the Modesto Municipal Code’s formal bid procedures because the City complied with the formal bid procedures and Goodwin Consulting Group was ranked highest among the bidders.

FISCAL IMPACT:

The Goodwin Consulting Group contract will be paid through the annual maintenance tax of each CFD. Funds are currently budgeted under professional services in each of the CFD funds in an average annual amount of $90,000 and not to exceed $450,000 over five years. Term of the contract will be for a period of two (2) years, with three (3) one-year extension options at the sole discretion of City, for a total of up to five (5) years.

Required Services Unit Price/Annually
Administration $34,100
On-Call Services $55,900
Annual Total $90,000
1 Community Development Manager, Community & Economic Development Department; Infrastructure Financing Program Supervisor, Community & Economic Development Department; Senior Financial Analyst, Finance Department.
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City Council, May 24, 2022
Award of Administration Services for Community Facilities Districts

COMMITTEE RECOMMENDATION:

This item was presented to the Economic Development Committee on April 4, 2022 and was forwarded to the City Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendation:

Resolution approving the Award of Proposal and Agreement for Community Facilities Districts (CFDs) Administration Services to Goodwin Consulting Group, for a two-year Agreement with three one-year extension options, for an annual estimated amount of $90,000 and a total amount not to exceed $450,000 over five years, and authorizing the City Manager, or his designee, to execute the Agreement.

Approved by:

Jaylen French,
Director of Community and Economic Development
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Consultant Agreement

3. Scope of Services

4. Pricing Schedule

5. Finanical Interest Disclosure

6. Scoring Abstract
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1 05/24/2022/C&EDD/JHill 2022-?

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION APPROVING THE AWARD OF PROPOSAL AND
AGREEMENT FOR COMMMUNITY FACILITIES DISTRICTS (CFDs)

ADMINISTRATION SERVICES TO GOODWIN CONSULTING GROUP, FOR A

TWO-YEAR AGREEMENT WITH THREE ONE-YEAR EXTENSION OPTIONS, FOR AN ANNUAL ESTIMATED AMOUNT OF $90,000 AND A TOTAL
AMOUNT NOT TO EXCEED $450,000 OVER FIVE YEARS, AND

AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE

THE AGREEMENT
WHEREAS, the City has determined that Community Facilities Districts (CFDs) and Assessment Districts (ADs) are necessary funding mechanisms to construct and maintain infrastructure for new development areas, and
WHEREAS, since 1996, the City of Modesto has formed fifteen Community Facilities Districts (“CFDs”) pursuant to the Mello-Roos Community Facilities Act of 1982, and
WHEREAS, the City has utilized a CFD consultant for all tasks related to, but not limited to, annual CFD administration services, forming CFDs and disclosure reporting, and
WHEREAS, after authorization, the Purchasing Division issued a formal Request for Proposals (RFP 2122-20) for the Administration Services for Community Facilities Districts on September 23, 2021. Prospective bidders were notified online and via email of the bid opportunity. Twenty-four (24) companies downloaded the RFP document, and WHEREAS, the award of RFP 2122-20 and agreement for Administration Services for Community Facilities Districts for the Community and Economic Development Department to Goodwin Consulting Group of Sacramento, CA, is a contract for professional services and is therefore exempt from such formal bid procedures pursuant to Modesto Municipal Code Section 8-3.204(a). Nevertheless, the award of RFP 2122-20 conforms #9..
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2 05/24/2022/C&EDD/JHill 2022-?
to the Modesto Municipal Code’s formal bid procedures because the City complied with the formal bid procedures and Goodwin Consulting Group was ranked highest among the bidders, and
WHEREAS, the City has been working with the Goodwin Consulting Group in the annual administration of fifteen CFDs since 2001, and WHEREAS, this item was presented to the Economic Development Committee on April 4, 2022 and was forwarded to Council for approval, and WHEREAS, the Goodwin Consulting Group contract will be paid through the annual maintenance tax of each CFD.

NOW, THEREFORE, BE IT RESOLVED approving an agreement with Goodwin Consulting Group, in an average annual amount of $90,000, not to exceed $450,000 over five years.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the agreement with Goodwin Consulting Group, in a form approved by the City Attorney.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 24th day of May, 2022, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST:

DIANE NAYERES-PEREZ,
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3 05/24/2022/C&EDD/JHill 2022-?
City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _______________________________
JOSE M. SANCHEZ, City Attorney
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1 STANDARD AGREEMENT

FOR ADMINISTRATION SERVICES FOR COMMUNITY FACILITIES DISTRICTS WITH GOODWIN CONSULTING GROUP, INC.

This Agreement, made and entered into in the City of Modesto, State of California, this ____ day of _________, 2022, by and between the City of Modesto, a municipal corporation of the State of California, hereinafter called CITY, and Goodwin Consulting Group, Inc., a California corporation, hereinafter called CONTRACTOR,
W I T N E S S E T H:

WHEREAS, the Modesto City Council adopted Resolution No. 2022-_____ authorizing the award of proposal and contract for the furnishing of Administration Services for Community Facilities Districts to Contractor, attached hereto as Exhibit “A” and made a part hereof, and
WHEREAS, the CONTRACTOR provided a responsive and responsible submittal that best meets the CITY needs, attached hereto as Exhibit “B” and made a part hereof, and WHEREAS, the CITY and CONTRACTOR shall enter into an agreement for the furnishing of ADMINISTRATION SERVICES FOR COMMUNITY FACILITIES DISTRICTS, as described in RFP No. 2122-20 – ADMINISTRATION SERVICES FOR COMMUNITY FACILITIES DISTRICTS, attached hereto as Exhibit “C” and made a part hereof, and NOW, THEREFORE, the parties hereto mutually agree as follows:

1. SCOPE OF WORK.
a. CONTRACTOR shall furnish ADMINISTRATION SERVICES
FOR COMMUNITY FACILITIES DISTRICTS insofar as such scope of services are specified in Exhibit “D”, and in strict accordance with the conditions of the complete Contract. b. CONTRACTOR shall do and perform the work contemplated #9..
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2 hereby in a good and workmanlike manner under the direction of and to the satisfaction of the City Representative.
c. CONTRACTOR shall furnish said services at the following contracted rates, estimated at $90,000 annually:

REQUIRED SERVICES Unit Price/Annually
Administration $34,100
On-Call Services $55,900
TOTAL $90,000

2. CITY REPRESENTATIVE:

Contract Administrator is: Infrastructure Financing Supervisor The City Representative is not authorized to commit the CITY to changes in specifications, requirements, or scope of work, changes in price(s), period of performance or delivery date(s) or method of shipment. Changes of a contractual or business nature shall be effected only by written change to the contract, issued by the City of Modesto, Purchasing Division.

3. TERM OF CONTRACT:

The term of the contract shall be for a period of two (2) years, with three (3) oneyear extension options at the sole discretion of CITY, for a total of up to five (5) years.

Year 1: July 1, 2022 through June 30, 2023
Year 2: July 1, 2023 through June 30, 2024
Year 3: July 1, 2024 through June 30, 2025
Year 4: July 1, 2025 through June 30, 2026
Year 5: July 1, 2026 through June 30, 2027
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3 Pricing as set forth in Section 1.c. above shall remain firm for the first two (2) years of the contract.

Price increases for subsequent contract years, number, number and number, shall not exceed the Consumer Price Index (CPI) for West Urban Area in any one contract year, and shall be negotiated through the Purchasing Division. Requests for price increases shall be submitted by CONTRACTOR in writing, sixty (60) days prior to the annual anniversary date of the contract to be effective for the subsequent year.

4. LIABILITY INSURANCE:

CONTRACTOR shall provide at its own expense and maintain at all times the following insurance with insurance companies licensed in the State of California and shall provide evidence of such insurance to CITY as may be required by the Risk Manager. The policies or certificates thereof shall provide that, thirty (30) days prior to cancellation or material change in the policy, notices of same shall be given to the Risk Manager of CITY by registered mail, return receipt requested, for all of the following stated insurance policies. (a) Workers' Compensation - In compliance with the statutes of the State of California, plus employer's liability with a minimum limit of liability of $1,000,000
(b) General Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. This insurance shall indicate on the certificate of insurance the following coverages and indicate the policy aggregate limit applying to:
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4 premises and operations; broad form contractual; independent consultants and subcontractors; products and completed operations as applicable. (c) Automobile Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. This insurance shall cover any automobile for bodily injury and property damage.
(d) Professional Liability - insurance with a minimum limit of $1,000,000 per claim and policy aggregate. If coverage is on a claims made basis it shall be maintained for at least three (3) years following completion of the work.

If at any time any of said policies shall be unsatisfactory to CITY, as to form or substance, or if a company issuing such policy shall be unsatisfactory to CITY, CONTRACTOR shall promptly obtain a new policy, submit the same to Risk Manager of CITY for approval and submit a certificate thereof as herein above provided. Upon failure of CONTRACTOR to furnish, deliver or maintain such insurance and certificates as above provided, this Agreement, at the election of CITY, may be forthwith declared suspended, or terminated. Failure of CONTRACTOR to obtain and/or maintain any required insurance shall not relieve CONTRACTOR from any liability under this Agreement, nor shall the insurance requirements be construed to conflict with or otherwise limit the obligations of CONTRACTOR concerning indemnification. CITY, and its agents, officers, employees, and volunteers shall be named as an additional insured on all insurance policies required herein, except Workers’ Compensation, Professional Liability and Financial Institution’s Fidelity.

The Workers’ Compensation insurer shall agree to waive all rights of subrogation against CITY, its agents, officers, employees, and volunteers for losses arising from work performed by CONTRACTOR for CITY. CONTRACTOR’S insurance policy(ies) #9..
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5 shall include a provision that the coverage is primary as respects CITY; shall include no special limitations to coverage provided to additional insured; and, shall be placed with insurer(s) with acceptable Best ’s rating of A:VII or with approval of the Risk Manager of CITY. The CONTRACTOR must deliver certificates evidencing existence of the insurance to the City prior to the time contract is signed.

CONTRACTOR agrees to provide CITY with a separate endorsement evidencing proof of City ’ s additional insured status required herein (both general and automobile liability) as well as a separate endorsement for the Workers’ Compensation insurer’s waiver of all subrogation rights as stated above. Every endorsement shall identify the policy number.

CONTRACTOR shall provide CITY with separate an endorsement evidencing proof of the CITY’s additional insured status as to the general liability insurance policy. In addition, CONTRACTOR shall provide CITY with a Workers Compensation subrogation waiver by way of a separate endorsement. All endorsements referenced above must include the applicable policy number.

For any claims related to this project, the CONTRACTOR’S insurance coverage shall be primary insurance as respects the Entity, its officers, officials, employees, and volunteers.

Any insurance or self-insurance maintained by the Entity, its officers, officials, employees, or volunteers shall be excess of the CONTRACTOR’S insurance and shall not contribute with it.

CONTRACTOR further agrees that the amount of insurance required may from time to time be adjusted by CITY’s Risk Manager and CONTRACTOR agrees to file a new insurance certificate with CITY’s City Clerk evidencing the new amounts after a thirty (30) day written notice from CITY’s Risk Manager.

5. INDEMNITY:
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6 The CONTRACTOR shall hold the CITY, its agents, officers, employees, and volunteers, harmless from and save, defend and indemnify them against any and all claims, losses, liabilities, judgments or damages from every cause, including but not limited to injury to person or property or wrongful death, including reasonable costs and expenses of defense of any judicial or administrative action, arising directly or indirectly out of any negligent or intentional act or omission of CONTRACTOR, or its agents, officers, employees, or volunteers relating to or during the performance of its obligations under this Agreement.

CONTRACTOR’s obligation to defend, indemnify, and hold the CITY, its agents, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this Agreement for CONTRACTOR to procure and maintain a policy of insurance.

6. ARBITRATION:

Any dispute or claim arising or related to this Agreement, its performance, breach, or interpretation (including issues about its validity or enforceability), shall be exclusively, (except as approved below) resolved by final binding arbitration before the American Arbitration Association (AAA), utilizing its Commercial Arbitration Rules. One Arbitrator shall be selected using AAA procedures. The Arbitrator shall use all reasonable efforts to minimize discovery and to complete the arbitration proceedings as expeditiously as possible. The Arbitrator shall render a written decision within thirty (30) calendar days of the hearing. The Arbitrator will not award attorney’s fees, or punitive, incidental, consequential, treble or other multiple or exemplary damages, and the parties hereby agree to waive and not seek such damages. Either party may seek judicial relief to compel the other party to comply with the provisions of this Section, or injunctive or other equitable relief to protect its intellectual property rights, provided (unless prohibited by applicable law) that the remainder of the dispute or claim is submitted to arbitration. The arbitration shall be held in Modesto California; both parties give their irrevocable consent to #9..
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7 jurisdiction of courts of or in the State of California, as well as processes of the AAA in California.

Awards shall be final, binding and non-appealable (except on the minimal grounds required under the Federal Arbitration Act or other applicable law). All awards may be filed with one or more courts, state, federal or foreign having jurisdiction over the party against whom such award is rendered or its property, as a basis of judgment and of the issuance of execution for its collection.

7. GOVERNING LAW:

This Agreement shall be deemed made in, governed by, performed in, and construed and enforced in accordance with the laws of the State of California, without giving effect to its conflicts of laws provisions or principles.

8. COMMENCEMENT AND COMPLETION OF THE WORK:

The work contemplated herein shall be commenced as immediately after receipt of the Notice to Proceed for this contract. The Notice to Proceed shall not be issued until the contract administrator receives and has on file:

Proofs of insurance (approved by Risk Management); and Executed Agreement and all exhibits thereto.

9. TERMINATION OF SERVICES:

Termination by City for Default of Contractor
Should Contractor default in the performance of this Agreement or materially breach any of its provisions, at its option, City may terminate this Agreement by giving written notification to Contractor. The termination date shall be the effective date of the notice. For the purposes of this section, material breach of this Agreement shall include, but not be limited to, any of the following: failure to perform required services or duties, willful destruction of City's property by Contractor, dishonesty or theft.

Termination by City for Convenience
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8 The City may also terminate the Contractor's performance under the Agreement, either in whole or in part, at its own discretion, or when conditions encountered during the Work make it impossible or impracticable to proceed, or when the City is prevented from proceeding with the Agreement by act of God, by law, or by official action of a public authority, or upon a determination by the City that such termination is in the best interest and convenience of the City, or whenever the City is prohibited from completing the Work for any reason. The City shall provide no less than ten (10) calendar day’s written notice of its intent to terminate the Agreement for convenience, and shall endeavor to provide the Contractor with consultation with the City prior to termination.

Post-Termination Procedure
Upon receipt of a written notice of termination pursuant to either of the foregoing paragraphs, the Contractor shall:
a. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, subcontractors and agents are notified of such termination and act as specified in the notice of termination;
b. Terminate all orders and Subcontractors except as necessary to complete any portion of the Work that is not terminated; c. If directed in writing by the City to do so, assign all right, title and interest in subcontracts and materials in progress to City, in which case the City will have the right at its discretion to settle, or pay any or all claims arising out of the termination of such subcontractors but in no event shall recovery by any Contractor or subcontractor include lost profits for portions of the Work not completed or undertaken, including materials not delivered; d. Deliver or otherwise make available to the City all data, drawings, #9..
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9 specifications, reports, estimates, summaries and such other information and material as may have been accumulated by the Contractor in performing the Work whether completed or in process; e. Settle outstanding liabilities and claims, subject to the approval of City;
f. Complete performance of such part of the Work as has not been terminated;
g. Take such other actions as may be necessary, or as may be directed by the City for the protection and preservation of the Work and/or property related to the Work;
h. If City so requests, and at City's cost, Contractor shall provide sufficient oral or written status reports to make City reasonably aware of the status of Contractor's work on the project. i. The Contractor understands and agrees that City may, in City's sole discretion, refuse to pay Contractor for that portion of Contractor's services which were performed by Contractor on the project prior to the termination date and which remain unacceptable and/or not useful to City as of the termination date.

City will pay Contractor an amount based on the percentage of satisfactory work completed in accordance with the notice of termination. The final payment to the Contractor after termination for convenience shall be limited to amounts due and owing under the Agreement at time of termination, including the following:
a. The cost of settling and paying valid claims arising out of the termination of the Work such as subcontractor agreements or contracts for materials;
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10 b. The Agreement price allocable to the portion of the Work properly performed or goods supplied to the work site by the Contractor as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums previously paid to the Contractor.

Authorization to Terminate Agreement
Termination of the Agreement may be invoked by the City Manager, or his/her designee, subject to the right of the Contractor to appeal the City Manager, or his/her designee’s, decision to the City Council. The Contractor shall appeal by notifying the City Clerk in writing within ten (10) calendar days of receipt of written notification from City of termination of the Agreement. In the event that termination of this Agreement is upheld by the City Council, any cessation of payment of delay claims, extended claims, Eichleay claims, or any other claims for delay shall be retroactive to the date of termination selected by the City Manager, or his/her designee.

10. COMPLIANCE WITH ALL LAWS:

CONTRACTOR hereby agrees that CONTRACTOR and its subcontractors, if any, in the performance of the work described, designated and shown upon the plans herein referred to, will comply with all federal, state, county and municipal laws, rules and regulations which may be applicable to the work herein contracted for, whether now in existence or hereafter adopted.

11. CONTRACT DOCUMENTS:

The complete contract between the parties hereto consists of this agreement and the following documents which are incorporated herein by this reference:
a. Resolution No. 2022-_______;
b. CONTRACTOR submittal;
d. Insurance Certificates,
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11 These documents include important legal requirements, procedures and restrictions and should be reviewed by CONTRACTOR. They are available for review during normal business hours in the Department of Finance, Purchasing Division). All documents specified above are intended to operate so that any work called for in any one and not mentioned in the other, or vice versa, is to be executed the same as if mentioned in all said documents.

12. NOTICES:

Any notice, payment or instrument required or permitted by this Contract to be given or delivered to either party shall be deemed to have been received when personally delivered, or one calendar week following deposit of the same in any United States Post Office, registered or certified mail, postage prepaid, addressed as follows:

CONTRACTOR: Goodwin Consulting Group
333 University Avenue, Suite 160
Sacramento, CA 95825
CITY: City of Modesto
Purchasing Division
P.O. Box 642
Modesto, CA 95353
Each party may change its address for delivery of notice by delivering written notice of such change of address to the other party.

13. SIGNATOR(IES) FOR CONTRACTOR:

The undersigned signator(ies) for CONTRACTOR warrant(s) and represent(s) that he/she/they is/are legally competent to execute the contract and has/have full authority to execute this contract.

14. ASSIGNMENT:

Neither this agreement nor any portion thereof shall be subcontracted or assigned without the written consent of the CITY in each and every instance. #9..
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12 15. WAIVER:

The waiver by any party to this Agreement of a breach of any provision hereof shall be in writing and shall not operate or be construed as a waiver of any other or subsequent breach hereof unless specifically stated in writing.
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13 16. HEADINGS NOT CONTROLLING:

Headings used in the Agreement are for reference purposes only and shall not be considered in construing this Agreement.

17. MISCELLANEOUS:

Time is of the essence in every provision of this contract.

18. ENTIRE AGREEMENT:

This Agreement and its exhibits contain the entire understanding between CONTRACTOR and CITY. Additional or new terms contained in this Agreement which vary from CONTRACTOR’S proposal are controlling and are deemed accepted by CONTRACTOR by shipment of any article or other commencement of performance hereunder. All previous proposals, offers and communications relative to this Agreement, whether oral or written, are hereby superseded except to the extent that they have been incorporated into this Agreement. No future waiver or exception to any of the terms, conditions, and provisions of this Agreement shall be considered valid unless specifically agreed to in writing by all the parties.

19. PARTIAL INVALIDITY:

If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.
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14 IN WITNESS WHEREOF, the CITY OF MODESTO, a municipal corporation, has authorized the execution of this Agreement by its City Manager and attested by its City Clerk under authority of Resolution No. 2022-_______, adopted by the Council of the City of Modesto on the _____________ day of _____________________, 2022 and Goodwin Consulting Group has caused this Agreement to be duly executed.
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EXHIBIT A

CITY OF MODESTO

ADMINISTRATION SERVICES FOR

COMMUNITY FACILITIES DISTRICTS

SCOPE OF WORK
Consultant will provide administration services to the City of Modesto (City) associated with the annual administration of Mello-Roos Community Facilities Districts (CFDs) that have been formed by the City for the following Community Facilities Districts.  Community Facilities District No. 1996-1 (Village One)  Community Facilities District No. 1997-1 (North Beyer Park)  Community Facilities District No. 1998-1 (Enterprise Business Park)  Community Facilities District No. 1998-2 (Carver/Bangs-Pelandale/Snyder)  Community Facilities District No. 2000-2 (Coffee-Claratina)  Community Facilities District No. 2001-1 (Northpointe)  Community Facilities District No. 2003-1 (Fairview Village)  Community Facilities District No. 2004-1 (Village One #2)  Community Facilities District No. 2007-1 (North Beyer Park #2)  Community Facilities District No. 2007-2 (Kiernan Business Park West)  Community Facilities District No. 2012-1 (Kiernan Business Park South)  Community Facilities District No. 2016-1 (Kiernan Business Park East #2)  Community Facilities District No. 2016-2 (The Vintage)  Community Facilities District No. 2021-1 (Woodglen)
The role of Administration of City Community Facilities Districts will be as follows:
 To serve as consultant for all CFDs
 To prepare the technical documents relating to the formation of CFDs  To administer the annual levies including tax enrollment, delinquency reporting, answering inquiries, cash flow analysis, coordination of foreclosure activities, bond redemption administration and disclosure regulations compliance  Formation and/or administration of a Community Facilities District Tasks will include, but not be limited to, the following.

Updating CFD Database: Gather pertinent information from City staff to calculate the annual special tax levy. This will include map & parcel research, building permit tracking and classification of property.

Annual Special Tax Levy: Calculate the special tax revenues of each CFD, and each taxable parcel within the CFD. Identify all CFD expenses, including annual debt service, budget for public services costs, CFD administrative expenses, and collection costs. #9..
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Annual CFD Administration Report Preparation: Prepare a special tax administration report for each CFD containing the results of parcel research and findings of the financial analysis. Provide AB 2107 and Government Code 12463.2 required data to be reported in the City’s Financial Transactions Report for the State Controller’s Office.

Annual Special Tax Enrollment: For each CFD, compile a list of parcels in the CFD that will be subject to the special tax levy and format it in compliance with the County Auditor-Controller’s Office. Submit such taxes on or before August 10 for inclusion on the consolidated property tax bills.

Delinquent Special Tax Reporting: Monitor Auditor-Controller’s tax collection summaries and report on delinquent parcels and corresponding delinquent taxes in each CFD. After discussion with the City, prepare and mail demand letters to property owners with delinquent special taxes. For infrastructure CFDs, work with the City to ensure the CFD’s compliance with any foreclosure covenants and provisions in the bond documents.

Answer Inquiries from Various Parties: Respond to property owners, realtors, title companies, appraisers and other parties’ questions regarding the special tax and other CFD related issues. As the listed contact for calls that are received by the Treasurer/Tax Collector’s Office.

Coordination of Foreclosure Activities (Infrastructure CFDs): At the City’s request, assist in complying with provisions in the bond indenture or fiscal agent agreement regarding actions to be taken in the event of foreclosure on a property due to tax delinquency. Coordinate with City staff and legal counsel to identify the parcels for which judicial foreclosure will be initiated.

Prepayment Calculations (Infrastructure CFDs): Provide developers, title agents and other interested parties with the prepayment amount required to pay down the special tax lien on their property. Cost of prepayment calculations and subsequent cancellation of the special tax lien will be included in the prepayment calculation and charged to the property owner.

Bond Redemption Administration (Infrastructure CFDs): Work with homebuilders, title agents and bond trustee to ensure prepayment checks are processed properly and the correct bond amount is redeemed at each interest payment date. Also ensure that prepayment amounts are allocated to the appropriate CFD accounts.

Disclosure Regulations: For each CFD for which bonds have been issued, provide information on the Municipal Securities Rulemaking Board (pursuant to S.E.C. regulations) and California Debt and Investment Advisory Commission (pursuant to Senate Bill 1464) and prepare special tax disclosure materials to home buyers as specified in Senate Bill 1464. Subtasks to include:
a. Prepare the annual Continuing Disclosure Report and respond to secondary information requirements set forth in SEC Section 15c2-12, as amended. #9..
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b. Submit the annual Fiscal Report as specified in Government Code Section 53359.5 to California Debt and Investment Advisory Commission by October of each year.

Prepare special tax disclosure materials on the City’s behalf for resale properties as required by Government Code Section 53340.2.

Arbitrage Rebate Calculations (Infrastructure CFDs): Prepare annual or five-year arbitrage rebate calculations. A report, identifying the rebate liability for each CFD, will be produced. Determine the amount, if any, that must be rebated to the federal government at each five-year interval.

On-Call Services: Provide on-call services to the City throughout the fiscal year. Such services will include any items not specifically stated above and will likely vary from yearto-year. On-call services may also include CFD formations, annexations and any work associated with bond issuances.
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EXHIBIT B

CITY OF MODESTO

ADMINISTRATION SERVICES FOR

COMMUNITY FACILITIES DISTRICES

PRICING STRUCTURE
Required Services Unit Price/Annually
Administration $34,100
On-Call Services $55,900
Annual Total $90,000
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ADMINISTRATION SERVICES FOR COMMUNITY FACILITIES DISTRICTS PROJECT NO. 2122-20

PROPOSAL SCORING ABSTRACT
Evaluation Committee Score Points
Possible
Regional
Government
Services
Authority
Goodwin
Consulting
Group, Inc.

General & Technical Specifications 30 13 28
Account Manager/Support Staff 30 27 29
Deliverables/Reports 15 3 14
References 10 0 10
Cost (Purchasing Evaluates/Scores) 15 4 15
Total 100 47 96
Ranking 2 1
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

May 24, 2022
Date: May 3, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Brandon Gillespie, Chief of Police
SUBJECT: Crisis Intervention Training Agreement
CONTACT: Chris Adams, Lieutenant, [email protected], 209-572-9500 DESCRIPTION:

Consider approving a two-year Agreement with Stanislaus County Behavioral Health and Recovery Services for the provision of a series of 40-hour Crisis Intervention and De-Escalation Training classes for an amount not to exceed $116,800. (Funding Source: Grants - Police) STRATEGIC PLAN ELEMENT:

This item is related to the 2020-2025 Strategic Plan goal of improving community safety and quality of life through a combination of prevention and intervention efforts that address safety and its underlying issues.

BACKGROUND:

In June of 2021, the U.S. Department of Justice, Office of Community Oriented Policing Services (COPS Office) announced it was seeking applications for funding for the COPS Office FY 2021 Community Policing Development (CPD) Program. This grant opportunity provided for two award categories:

1. Regional De-Escalation Training Centers – limited to accredited institutions of higher education. Maximum award amount: $1,250,000.

2. De-Escalation State, Local, and Tribal Law Enforcement Agency Grants – limited to local, state, tribal, and territorial law enforcement agencies. Maximum award amount:
$200,000.

The Modesto Police Department (MPD) applied under the second category – De-Escalation State, Local and Tribal Law Enforcement Agency Grants. The application centered around three main goals: (1) train department trainers and key staff members in de-escalation methods; (2) create the infrastructure for an integrated training philosophy by re-developing the training documentation outline and updating documentation for approximately 50 training sessions across various topic areas; and (3) coordinate and hold four Crisis Intervention & De-Escalation Trainings to ensure all personnel on Patrol have been through intensive and localized training. #10..
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City Council, May 24, 2022
Crisis Intervention Training Agreement

In October of 2021, the MPD was awarded $198,366 as a result of a successful grant application.

DISCUSSION:

The COPS Office De-Escalation State, Local and Tribal Law Enforcement Agency Grant funding provides direct grants to state and local law enforcement agencies to support their ability to build and maintain their officers’ de-escalation proficiency. For train-the-trainer programs and internally provided training, the selected training provider or curriculum requires review and approval by the COPS Office prior to delivery. Since the award of this grant, MPD staff have been working with the COPS Office to obtain the necessary approvals for the grant goals outlined in the application.

The proposed Crisis Intervention and De-Escalation Training will be taught by behavioral health professionals from the Modesto community. This training is comprehensive and tailored specifically to the Modesto community using scenario-based instruction that involves a local psychologist, a local production company providing role-players and mothers of individuals who experience mental health crises. This focused training will ensure all personnel on Patrol have been through intensive and localized crisis intervention and de-escalation training. Tailoring the training to the local community and providers will enable officers and providers to work together in a training environment which will lead to greater collaboration in the field and during crises. In May of 2020, the COPS Office approved Stanislaus County Behavioral Health and Recovery Services (BHRS) as a vendor for the provision of crisis intervention and de-escalation training.

MPD and BHRS have developed an interagency agreement that outlines the roles and responsibilities of each agency in the partnership for the provision of the Crisis Intervention and De-Escalation Training classes. There will be four (4) classes with up to 25 personnel trained in each class, which will enable approximately 80-100 MPD personnel to be trained over the course of this grant. The agreement is attached to this agenda report.

Modesto Municipal Code (MMC) Section 8-203 generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to follow formal bid procedures.

However, in accordance with MMC Section 8-3.204(a), exceptions to formal bidding requirements, the agreement is for professional services and, therefore, exempt from the bidding requirement. The approval of an agreement with Stanislaus County Behavioral Health and Recovery Services conforms to MMC 8-3.204, subsection (a) as they are providing professional services of Crisis Intervention and De-Escalation Training to be taught by behavioral health professionals from the Modesto community.

FISCAL IMPACT:

As approved in the grant award 15JCOPS-21-GG-02447-SPPS, the following is a breakdown of the budget for this training agreement:
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City Council, May 24, 2022
Crisis Intervention Training Agreement

Description Per Class Rate Total Cost for 4 Classes
De-Escalation Expert $5,200 $20,800
Clinical Social Worker $6,000 + $2,250 for pre-class
prep work
$33,000
Forensic Psychologist $7,500 $30,000
Role Players $2,750 $11,000
Materials & Supplies $5,500 $22,000
Total cost not to exceed: $116,800
COMMITTEE RECOMMENDATION:

This item was not presented to a committee.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving a two-year Agreement with Stanislaus County Behavioral Health and Recovery Services for the provision of a series of 40-hour Crisis Intervention and De-Escalation Training classes for an amount not to exceed $116,800, and authorizing the City Manager, or his designee, to execute the Agreement.

Approved by:

Brandon Gillespie, Chief of Police
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Interagency Agreement – Crisis Intervention and De-Escalation Training

3. Bid Waiver
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MODESTO CITY COUNCIL
RESOLUTION NO. 2022-XX

RESOLUTION APPROVING A TWO-YEAR AGREEMENT WITH

STANISLAUS COUNTY BEHAVIORAL HEALTH AND RECOVERY
SERVICES FOR THE PROVISION OF A SERIES OF 40-HOUR CRISIS

INTERVENTION AND DE-ESCALATION TRAINING CLASSES FOR AN
AMOUNT NOT TO EXCEED $116,800, AND AUTHORIZING THE CITY

MANAGER, OR HIS DESIGNEE, TO EXECUTE THE AGREEMENT
WHEREAS, in June of 2021, the U.S. Department of Justice, Office of Community Oriented Policing Services (COPS Office) announced it was seeking applications for funding for the COPS Office FY 2021 Community Policing Development (CPD) Program; and
WHEREAS, the Modesto Police Department (MPD) applied under the De-Escalation State, Local, and Tribal Law Enforcement Agency Grants category; and
WHEREAS, in October of 2021, the MPD was awarded $198,366 as a result of its successful grant application; and
WHEREAS, the COPS Office De-Escalation State, Local and Tribal Law Enforcement Agency Grant funding provides direct grants to state and local law enforcement agencies to support their ability to build and maintain their officers’ de-escalation proficiency; and
WHEREAS, the proposed Crisis Intervention and De-Escalation Training will be taught by behavioral health professionals from the Modesto community; and
WHEREAS, MPD and the Stanislaus County Behavioral Health and Recovery Services (BHRS) have developed an interagency agreement that #10..
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outlines the roles and responsibilities of each agency in the partnership for the provision of the Crisis Intervention and De-Escalation Training classes; and WHEREAS, Modesto Municipal Code (MMC) Section 8-203 generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to follow formal bid procedures; and WHEREAS, however, in accordance with MMC Section 8-3.204(a), exceptions to formal bidding requirements, the agreement is for professional services and, therefore, exempt from the bidding requirement; and WHEREAS, the approval of an agreement with Stanislaus County Behavioral Health and Recovery Services conforms to MMC 8-3.204, subsection (a) as they are providing professional services of Crisis Intervention and DeEscalation Training to be taught by behavioral health professionals from the Modesto community.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves a two-year agreement with Stanislaus County Behavioral Health and Recovery Services for the provision of a series of 40-hour Crisis Intervention and De-Escalation Training classes for an amount not to exceed $116,800.

BE IT FURTHER RESOLVED, that the City Manager, or his designee, is hereby authorized to execute the agreement, in a form approved by the City Attorney.

The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the 24th day of May 2022, by Councilmember ________, who moved its adoption, which motion being duly seconded by Councilmember ______, was upon roll call carried and the resolution adopted by the following vote:
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AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _____________________________

DIANE NAYARES-PEREZ, CMC,
City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _________________________________
JOSE M. SANCHEZ, City Attorney
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MPD CIT FY 22/23

INTERAGENCY AGREEMENT
MODESTO POLICE DEPARTMENT– CRISIS INTERVENTION TRAINING (CIT) This Agreement is made and entered into in the City of Modesto, State of California, by and between Stanislaus County, through its Behavioral Health and Recovery Services – BHRS (County), and City of Modesto, Modesto Police Department - MPD (Contractor) hereinafter referred to as “County” and “Contractor”, for and in consideration of mutual promises, covenants, and agreements as are hereinafter set forth.

WHEREAS, County wishes to collaborate with Contractor, to coordinate and conduct a series of 40-hour Crisis Intervention (CIT) and De-Escalation training taught by subject matter experts familiar with the Modesto community.

NOW, THEREFORE, the parties agree:

TERMS AND CONDITIONS

1. ROLES, RESPONSIBILITIES, AND CONTRIBUTIONS:

1.1 County shall provide the following:

1.1.1 Four (4) sessions of 40-hour Crisis Intervention and De-Escalation Training for approximately 80 Law Enforcement and other first responder personnel.

There will be two (2) trainings per year over a two- year period.

1.1.1.1 The maximum capacity for each training session is twenty-five (25) participants.

1.1.2 Contact procurement for subject matter expert facilitators.

1.1.3 Materials for final day of training and graduation.

1.1.4 Training binders of presentation and reference material for each participant.

1.1.5 Invoices to contractor for services rendered and supplies for reimbursement.

1.1.6 Certificates of completion for all non-law enforcement personnel.

1.2 Contractor shall provide the following:

1.2.1 The training room, equipment including classroom set up, microphones, and IT support.

1.2.2 Payment for services received upon receipt of invoice from County.

1.2.3 Certificates of completion for POST for law Enforcement personnel.

1.3 Contractor shall report the following information:

1.3.1 Number of participants registered per session.

2. BUDGET NARRATIVE:

County shall provide the training sessions and Contractor shall remit payment on #10..
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MPD CIT FY 22/23
a reimbursement basis utilizing the COPS De-Escalation Grant Funding (Award # 15JCOPS-21-GG-02447-SPSS). Below is an outline of what each course compromises:

2.1 De-Escalation Expert - $5,200 or $1,040 per day of instruction

2.2 Clinical Social Worker - $6,000 or $1,200 per day of instruction, plus $2,250 for 15 hours of pre-work prior to the week of classes. Total per 40-hour course = $8,250

2.3 Forensic Psychologist-$7,500 or $1,500 per day of instruction

2.4 Role Players – There will be 10-12 role players each session. A flat rate of $2,750 per training is paid to a local theatre company for these role players.

2.5 Supplies – up to $5,500 per class. To include binders, dividers, paper and printing costs. Will be billed on an actual expense incurred basis.

2.6 Total not to exceed cost per class: $29,200

2.7 Total not to exceed cost for Procurement Contract category = $116,800

3. COMPENSATION

3.1 Contractor shall reimburse County for supplies and services associated with this Agreement during the term of this Agreement at an amount not to exceed $116,800 for four (4) forty- hour Crisis Intervention and De-Escalation Training sessions.

3.2 County shall submit invoices to Contractor by mail to the following address:

Modesto Police Department
Attn: Accounts Payable
PO Box 642
Modesto, CA 95354
At a minimum, invoices should identify the date(s) services were performed, a description of the services, and the total charge(s) for the services. The Contractor shall pay County within thirty (30) calendar days of receipt of undisputed invoice(s) by County.

4. TERM
This Agreement shall commence June 1, 2022 and continue through October 31, 2023.

Either party may terminate this Agreement by giving thirty (30) calendar days written notice to the other party. In the event this agreement is terminated, County shall reimburse Contractor for any and all expenses actually incurred by Contractor for services under this Agreement.

5. INDEMNIFICATION
Contractor shall indemnify, defend, and hold harmless County, its officers, agents and #10..
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MPD CIT FY 22/23
employees, from liability or loss resulting from the negligent acts or omissions, or willful misconduct, of Contractor, its agents or employees pertaining to the activities to be carried out pursuant to the obligations of this Agreement. County shall indemnify, defend, and hold harmless Contractor, its officers, agents and employees from liability or loss resulting from the negligent acts or omissions, or willful misconduct, of County, its officers, agents or employees pertaining to the activities to be carried out pursuant to the obligations of this Agreement. “Liability or loss” means claims, damages, judgments, expenses and other costs, including litigation costs and attorney fees.

6. RELATIONSHIP OF PARTIES
This is an Agreement by and between independent contractors and is not intended to, and shall not be construed to be, nor create the relationship of agent, servant, employee, partnership, joint venture, or any other similar association.

7. NOTICE
Any notice, communication, amendment, addition or deletion to this Agreement, including change of address of either party during the term of this Agreement, which County or Contractor shall be required or may desire to make shall be in writing and may be personally served, or alternatively, sent by prepaid first-class mail to the respective parties as follows:

To County: County of Stanislaus
Behavioral Health and Recovery Services
Attn: Contract Manager
800 Scenic Drive
Modesto, CA 95350
To Contractor: Modesto Police Department
Attn: Jessica Smart
600 Tenth Street
Modesto, CA 95354

8. REFERENCES TO LAWS AND RULES
In the event any law, regulation, or policy referred to in this Agreement is amended during the term hereof, the parties agree to comply with the amended provisions as of the effective date of such amendment.

9. ENTIRE AGREEMENT
This Agreement contains all the terms and conditions agreed upon by County and Contractor and no other understanding, oral or otherwise, regarding this Agreement, shall #10..
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MPD CIT FY 22/23
be deemed to exist or to bind any of the parties to this Agreement.

10. AMENDMENT
This Agreement may only be modified, amended, changed, added to, or subtracted from by mutual consent of the parties hereto if such amendment or change is in written form and executed with the same formalities as this Agreement and attached to the original Agreement to maintain continuity.

11. DUPLICATE COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same agreement.

12. SURVIVAL
Notwithstanding any other provision of this Agreement, the following clauses shall remain in full force and effect and shall survive the expiration or termination of this Agreement:

Paragraph 2, “Compensation”; and Paragraph 4, “Indemnification”.

13. ELECTRONIC SIGNATURES
Each party agrees that the electronic signatures, whether digital or encrypted, of the parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. “Electronic Signature” means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures, pursuant to the California Uniform Electronic Transactions Act (Cal. Civ. Code’§ 1633.1 et seq.) as amended from time to time.
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MPD CIT FY 22/23
IN WITNESS WEHREOF, the parties have executed this Agreement on the date(s) shown below. The parties hereby agree to the provisions of this Agreement and certify that the provisions made herein will be honored.

COUNTY OF STANISLAUS

BEHAVIORAL HEALTH AND

RECOVERY SERVICES
Ruben Imperial, MBA Date
Director
APPROVED AS TO FORM:

Thomas E. Boze, County Counsel
Marc Hartley Date
Deputy County Counsel

CITY OF MODESTO
Joseph P. Lopez Date
City Manager
APPROVED AS TO FORM:

Jose M. Sanchez, City Attorney
City Attorney Date
Joe F. Rodriguez Date
Risk Manager
Attest:

Diane Nayares-Perez, CMC Date
City Clerk
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r

CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

May 24, 2022
Date: May 2, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Brandon Gillespie, Chief of Police
SUBJECT: Police Officer Standards and Training Academy Services CONTACT: Chris Adams, Lieutenant, [email protected], 209.572.9500 DESCRIPTION:

Consider approving the addition of the Sacramento Police Academy to the agencies authorized to furnish Police Officer Standards and Training Academy services and increase the estimated annual cost by $25,000 to a new total of $125,000 and the total amount not to exceed to $625,000 over five years, and rescinding Resolution No. 2021-066. (Funding Source: General Fund)
STRATEGIC PLAN ELEMENT:

This item is related to the adopted City Council 2020-2025 Strategic Plan for Governance and Service Delivery by building community trust in city government through transparent and efficient service delivery.

BACKGROUND:

The Commission on Peace Officer Standards and Training (POST) is the training standard for police officers, deputy sheriffs, school district police officers, district attorney investigators, as well as other classifications of peace officers. The basic POST academy is both physically and mentally challenging. It includes a minimum of 664 hours of POST-developed training and testing in 42 separate areas of instruction.

The academy is designed to provide a demanding, rigorous, and interactive learning environment. The goal of every POST-certified academy is to ensure that those who graduate will be well-prepared for and successful in the Field Training Program and their career as California peace officers.

Police Officer Recruits hired by the Modesto Police Department (MPD) are paid a salary while they attend the POST Academy, the department also pays the tuition for the academy. If an academy is not local to Modesto (more than one hour away), then the department also pays for lodging, meals, and incidentals for each recruit. In a given fiscal year, the Department sends 20- 25 Police Officer Recruits through the POST Academy.
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City Council, May 24, 2022
Police Officer Standards and Training Academy Services

On February 23, 2021, the City Council adopted Resolution No. 2021-066 approving the payment for furnishing Police Officer Standards and Training Academy services with San Joaquin Delta College and/or Stanislaus County Sheriff’s Department Regional Training Division for an estimated annual cost of $100,000 and a total amount not to exceed $500,000 over five years. Since that time, the rate of attrition within MPD has grown tremendously and being competitive in the hiring of police officers continues to be a challenge not only in Modesto, but also nationally.

Many law enforcement agencies have seen a sharp decline in applicants interested in becoming sworn police officers. MPD saw 2,200 applicants for sworn positions in 2015. Each year that number has steadily declined and in 2021, MPD saw 605 applications. MPD currently has 26 vacant sworn positions out of its 210 allocations which has created a critical staffing issue. As MPD is not the only law enforcement agency having difficulty finding quality applicants, MPD constantly seeks ways to be competitive in the hiring process. It has been a recurring theme to have qualified candidates accept positions with the agency who is able to make an employment offer first.

DISCUSSION:

MPD’s recruitments have always been cyclical in nature due to retirements, separations and promotions. Hiring is an extensive process of which the Police Officer Recruit POST Academy is vital. In order to continuously recruit and hire to maintain proper staffing levels, the department’s ability to hire new Police Officers and get them into POST Academy training in a timely fashion is critical.

The Police Department primarily sends Police Officer Recruits to the Stanislaus County Sheriff’s Department Regional Academy as well as the San Joaquin Delta College Basic Peace Officer Academy. In the past the Police Department has utilized other academies in the State of California in order to send Police Recruits to a class in a timely fashion. This has included Long Beach, Sacramento County, Fresno, Alameda County, and Napa Valley. While there is an increased cost associated with recruits attending academies outside of the area, it is imperative to stay competitive in hiring. The Stanislaus and Delta academies only hold two full time academies a year, and they typically start and end at the same time, Fall (late September) and Spring (late March). This timing of academies creates a period of several months where MPD is not able to make offers of employment with an immediate start date. Instead, an offer may be given with a start date of up to three months out. If that same candidate were to be offered a position with a different law enforcement agency with an immediate start date, they may turn down the Modesto offer and accept with the other agency. Expanding our academy options will allow the Police Department to send recruits to an academy more frequently, which will allow us to offer jobs to recruits with immediate start dates more often and help reduce candidates selecting other agencies based on a start date.

The MPD has identified the Sacramento Police Academy as a viable option as a POST certified recruit academy. Academies with this agency are held in July and January, which would enable MPD to send recruits to an academy four different times each year for a total of 6 classes. This will enable MPD to be more competitive in an ever changing and difficult hiring market.

Modesto Municipal Code (MMC) Section 8-3.204 generally requires all purchases, in excess of fifty thousand dollars ($50,000) to follow formal bid procedures. However, MMC 8-3.204(b) #11..
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Police Officer Standards and Training Academy Services

provides that a purchase may be exempted from the City’s formal bidding requirement where the Purchasing Agency’s requirements can be met solely by a single article or process.

Additionally, MMC 8-3.204(d) provides that a purchase may also be exempted where the Purchasing Manager, in her discretion, determines that a process other than the formal bid procedure set forth in Section 8-3.203 will result in a procurement for the City at the lowest possible cost commensurate with the desired quality. Here, San Joaquin Delta College, Stanislaus County Sheriff’s Department Regional Training Division, and the Sacramento Police Academy should be exempt from the formal bidding procedure in accordance with Modesto Municipal Code 8-3.204(b) since they are the local POST training facilities which meet or exceed the standards of POST training for recruits. Additionally, San Joaquin Delta College, Stanislaus County Sheriff’s Department Regional Training Division, and the Sacramento Police Academy should be exempt from the formal bidding procedure in accordance with Modesto Municipal Code 8-3.204(d) as they are the lowest possible cost commensurate with the desired quality. Therefore, this purchase qualifies for exemption from the formal bidding procedures.

FISCAL IMPACT:

Below is a breakdown of estimated costs for four different POST Academies in closest proximity to Modesto:

Agency Name Tuition Lodging* Meals/Incidentals* Total Est. Cost per Recruit
Alameda Regional
Training Center
$5,200 $18,144 $7,128 $30,742
Stanislaus County Sheriff
Regional Training Division
$6,456 $0 $0 $6,456
Delta College $1,884** $0 $0 $1,884**
Sacramento Police
Academy
$1,591 $19,200*** $8,400 $29,191***
*costs are based on the FY 22U.S. General Services Administration Per Diem Rates and a six-month, 5 day per week academy
**The tuition cost for this academy has reduced by $1,500 per recruit since Reso No. 2021-066 was approved ***lodging for the Sacramento Police Academy would be shared between attendees and therefore not a cost per recruit.

The Stanislaus County Sheriff Department Regional Training Division has a letter of agreement in place with MPD that provides for the Police Department receiving credit for two slots in each academy class in exchange for access to the department’s Tactical Training Center Gun Range.

The MPD intends to have this academy be cost neutral as much as possible.

Funds for Police Officer Recruit Academies are budgeted in the current Police Department Fiscal Year Operating Budget in 0100-19420-53015 and 0100-19420-53025. Funds are budgeted each fiscal year for the provision of Police Officer Recruit academies as it is a fundamental requirement in the Department’s recruitment process.

COMMITTEE RECOMMENDATION:

This item was presented to the Safety & Communities Committee on May 9, 2022 and was recommended to forward to Council for approval.
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City Council, May 24, 2022
Police Officer Standards and Training Academy Services

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the addition of the Sacramento Police Academy to the agencies authorized to furnish Police Officer Standards and Training Academy services and increase the estimated annual cost by $25,000 to a new total of $125,000, and the total amount not to exceed to $625,000 over five years, and rescinding Resolution No. 2021-066.

Approved by:

Brandon Gillespie, Chief of Police
Joseph P. Lopez, City Manager
Attachments:

1. Resolution
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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2022-?

RESOLUTION APPROVING THE ADDITION OF THE SCRAMENTO POLICE

ACADEMY TO THE AGENCIES AUTHORIZED TO FURNISH POLICE

OFFICER STANDARDS AND TRAINING ACADEMY SERVICES, AND
INCREASE THE ESTIMATED ANNUAL COST BY $25,000 TO A NEW TOTAL OF $125,000, AND THE TOTAL AMOUNT NOT TO EXCEED $625,000 OVER FIVE YEARS, AND RESCINDING RESOLUTION 2021-066
WHEREAS, the Commission on Peace Officer Standards and Training (POST) is the training standard for police officers, deputy sheriffs, school district police officers, district attorney investigators, as well as other classifications of peace officers; and WHEREAS, the goal of every POST-certified academy is to ensure that those who graduate will be well-prepared for and successful in the Field Training Program and their career as California peace officers; and
WHEREAS, Modesto Police Department recruitments are cyclical in nature due to retirements, separations and promotions; and
WHEREAS, hiring is an extensive process of which the Police Officer Recruit POST Academy is vital; and
WHEREAS, the department’s ability to hire new Police Officers and get them into POST Academy training in a timely fashion is critical to maintaining proper staffing levels; and
WHEREAS, on February 23, 2021, the City Council adopted Resolution No. 2021-066 approving the payment for furnishing Police Officer Standards and Training Academy Services with San Joaquin Delta College and/or Stanislaus County Sheriff’s Department Regional Training Division for an estimated annual cost of $100,000 and a total amount to not exceed $500,000 over five years; and #11..
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2 WHEREAS, since that time, the rate of attrition with MPD has grown tremendously and being competitive in the hiring of police officers continues to be a challenge not only in Modesto, but nationally; and
WHEREAS, the Stanislaus and Delta academies only hold two full time academies per year, and they typically start and end at the same time, Fall (late September) and Spring (late March); and
WHEREAS, this timing of academies creates a period of several months where MPD is not able to make offers of employment with an immediate start date; and WHEREAS, the MPD has identified the Sacramento Police Academy as a viable option as a POST certified recruit academy; and
WHEREAS, this agency holds academies in July and January which would enable MPD to send recruits to an academy four different times each year for a total of six classes, thus making MPD more competitive in an ever changing and difficult hiring market; and
WHEREAS, Modesto Municipal Code (MMC) Section 8-3.204 generally requires all purchases, in excess of fifty thousand dollars ($50,000) to follow formal bid procedures; however, MMC 8-3.204(b) provides that a purchase may be exempt from the City’s formal bidding requirement where the Purchasing Agency’s requirements can be met solely by a single article or process; and
WHEREAS, additionally, MMC 8-3.204(d) provides that a purchase may also be exempted where the Purchasing Manager, in her discretion, determines that a process other than the formal bid procedure set forth in Section 8-3.203 will result in a #11..
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3 procurement for the City at the lowest possible cost commensurate with the desired quality; and
WHEREAS, here, San Joaquin Delta College, Stanislaus County Sheriff’s Department Regional Training Division, and the Sacramento Police Academy should be exempt from the formal bidding procedure in accordance with MMC 8-3.204(b) since they are the local POST training facilities which meet or exceed the standards of POST training for recruits; and
WHEREAS, San Joaquin Delta College, Stanislaus County Sheriff’s Department Regional Training Division, and the Sacramento Police Academy should be exempt from the formal bidding procedure in accordance with MMC 8-3.204(d) as they are the lowest possible cost commensurate with the desired quality; therefore, this purchase qualifies for exemption from the formal bidding procedures.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the payment for the furnishing of Police Officer Standards and Training Academy services with San Joaquin Delta College, Stanislaus County Sheriff’s Department Regional Training Division and/or the Sacramento Police Academy for an estimated annual cost of $125,000 and a total amount not to exceed $625,000 over five years.

BE IT FURTHER RESOLVED that Resolution 2021-066 is hereby rescinded.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 24th day of May, 2022, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:
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4 AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _______________________________

DIANE NAYARES-PEREZ, CMC,
City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _____________________________________
JOSE M. SANCHEZ, City Attorney
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

May 24, 2022
Date: April 14, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Bill Sandhu, Public Works Director
SUBJECT: 2022 Kiwanis Graffiti Parade and Car Show
CONTACT: Steve Fischio, Operations Manager, [email protected], 209-342-2222 DESCRIPTION:

Consider approving the City’s sponsorship of the 23rd Annual 2022 North Modesto Kiwanis Graffiti Parade and Car Show, including the waiver of City permit fees, Police Department overtime and vehicle costs, and Streets Division labor and equipment costs at an estimated cost of $82,430. (Funding Source: Surface Transportation Fund and General Fund) STRATEGIC PLAN ELEMENT:

This item is in conformance with the City’s Strategic Plan Area: Economic Vitality Goals and Strategies: “Retain and attract residential, commercial, and industrial development to meet the community’s needs today and for the next generation”; “Goal F: “build and promote recognizable and desirable identity for the City of Modesto.” BACKGROUND:

The Graffiti Parade and Car Show is a Modesto tradition. North Modesto Kiwanis has sponsored this event for 22 years, with over 1,500 classic cars at the last event and over 20,000 guests. The parade and car show raised over $100,000 to support local children’s charities through scholarships, grants, and multiple funding programs. The annual event draws participants and spectators from miles around that benefit Modesto lodging, restaurants, and entertainment venues.

DISCUSSION:

Staff is requesting approval from Council to sponsor the 23rd Annual 2022 North Modesto Kiwanis Graffiti Parade and Car Show. The sponsorship will include a waiver of the City permit fees, Police Department associated costs which include overtime and vehicle costs, and labor and equipment costs for the Streets Division.

On Friday, June 10, 2022, the parade starts at 6:00 PM in Downtown Modesto and continues on to McHenry Avenue with a turn-around at McHenry and Briggsmore Avenues. The car show on #12..
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City Council, May 24, 2022
2022 Kiwanis Graffiti Parade and Car Show

Saturday, June 11th and Sunday, June 12th is located at the Modesto Junior College East Campus.

The Police Department provides public safety coverage and traffic control throughout this weekend event. The Public Works Streets Division will set up road closures, signage, and assist the Modesto Police with traffic control.

FISCAL IMPACT:

The costs associated with the waiver of City permit fees, Police Department costs, and Streets Division costs for the 2022 parade and car show are estimated to be $82,430. These expenses will be absorbed in the departments’ respective current fiscal year budget.

Description Estimated Cost
Streets Division Staff / Equipment $17,940
City Permits Parade / Sound / Street Closure $53
Police Department Staff / Vehicles $63,659
Parking Centre Plaza Parking Lot Rental Fee $750
Parking Staff time Set-up and removal of barricades $28 Total $82,430
COMMITTEE RECOMMENDATION:

This item was presented to the Safety & Communities Committee on May 9, 2022, and recommended to forward to Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the City of Modesto sponsorship of the 23rd Annual 2022 North Modesto Kiwanis Graffiti Parade and Car show, including a waiver of City permit fees, Police Department overtime and vehicle costs, and Streets Division labor and equipment costs at an estimated total cost of $82,430, and authorizing the City Manager, or his designee, to execute any documents necessary related to the sponsorship.

Approved by:

Bill Sandhu, Public Works Director
Joseph P. Lopez, City Manager
Attachments:

1. Resolution
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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION APPROVING THE CITY OF MODESTO SPONSORSHIP OF THE 23RD ANNUAL 2022 NORTH MODESTO KIWANIS GRAFFITI PARADE

AND CAR SHOW, INCLUDING A WAIVER OF CITY PERMIT FEES, POLICE

DEPARTMENT OVERTIME AND VEHICLE COSTS, AND STREETS

DIVISION LABOR AND EQUIPMENT COSTS AT AN ESTIMATED TOTAL COST OF $82,430, AND AUTHORIZING THE CITY MANAGER, OR HIS

DESIGNEE, TO EXECUTE ANY DOCUMENTS NECESSARY RELATED TO

THE SPONSORSHIP
WHEREAS, the 23nd Annual 2022 North Modesto Kiwanis Graffiti Parade and Car Show is a Modesto tradition; and
WHEREAS, the North Modesto Kiwanis have sponsored this event for the past 22 years; and
WHEREAS, in 2021 there were 1,500 classic cars and over 20,000 spectators in attendance, that raised over $100,000 for support of local children’s’ charities through scholarships, grants, and multiple funding programs; and WHEREAS, this annual event draws participants and spectators from miles around that benefit Modesto lodging, restaurants, and entertainment venues; and WHEREAS, staff is requesting City Council’s approval to sponsor the 2022 North Modesto Kiwanis Graffiti Parade and Car Show; and
WHEREAS, the sponsorship will include a waiver of City permit fees, Police Department overtime and vehicle costs, and labor and equipment costs for the Streets Division; and
WHEREAS, the estimated expense to the City of Modesto to sponsor the 23rd Annual 2022 North Modesto Kiwanis Graffiti Parade and Car Show is approximately $82,430.
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2 NOW THEREFORE, BE IT RESOLVED by Council of the City of Modesto that it hereby approves the City of Modesto sponsorship of the 23rd Annual 2022 North Modesto Kiwanis Graffiti Parade and Car Show including waiver of City permit fees, Police Department costs, and Streets Division costs for an estimated total of $82,430.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the necessary documents related to the sponsorship.

The forgoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 24th day of May, 2022, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST:

DIANE NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

May 24, 2022
Date: May 4, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: William Wong, Director of Utilities
SUBJECT: Accept Del Rio Well 70 (Replacing Well 271) Surface Improvements as Complete CONTACT: Jesse Franco, Engineering Division Manager, [email protected] 209-571-5175
DESCRIPTION:

Consider accepting the Del Rio Well 70 (Replacing Well 271) Surface Improvements Project as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $2,444,787 to Conco-West, Inc., of Manteca, California. (Funding Source: Water Fund-CIP)
STRATEGIC PLAN ELEMENT:

The recommended action supports the 2020-2025 City of Modesto Strategic Plan Initiatives, Goal D: Provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance, and sustainability efforts.

BACKGROUND:

Existing Well 271 located in the Del Rio service area was originally acquired as part of the Del Este Water System purchased by the City in 1995. On September 14, 2010, by Resolution No. 2010-409, Well 271 was identified for replacement in the 2010 Water System Engineer’s Report to meet the needs of the existing Del Rio service area. The existing Well 271 site was not large enough for a replacement well and no property adjacent to the well site was available. A portion of the parcel at the northwest corner of McHenry Avenue and Stewart Road was identified as a proposed replacement well site.

During the final design of Del Rio Replacement Well 271, staff was informed by the Department of Water Resources that Well number 271 could not be re-used. New well numbers are required for replacement wells. Therefore, the project became Del Rio Well 70 (Replacing Well 271). This project constructed surface improvements, which enables the newly installed Del Rio Production Well (Well 70) increased service reliability of the City’s water system as described in the 2010 Water System Engineer’s Report.
#13..
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City Council May 24, 2022
Accept Del Rio Well 70 (Replacing Well 271)
Surface Improvements as Complete

The first phase of the project, which consisted of drilling the well, was awarded on April 10, 2018, and was completed on January 8, 2019. The final phase of the project for surface improvements consists of a new well head, new pump & motor, a new pump building and walled building enclosure, all necessary electrical controls, a chlorine room and a standby emergency generator.

Additionally, the project installed approximately 900 LF of 12” water pipe to the existing water system, 900 LF of 8” well flushing pipe and an air gap flushing structure.

In 2011, West Yost Associates, Inc. (West Yost), was selected in accordance with Administrative Directive 3.1 to provide hydrogeological, design and construction support for a test well on the proposed replacement well site.

On January 5, 2012, by Resolution Nos. 2012-35 and 2012-36, Council approved plans and specifications prepared by West Yost for the Del Rio Replacement Test Well project, approved an agreement with West Yost for construction oversight and analysis services, and awarded a contract with Dan’s Water Well & Pump Service, Inc. of Livermore, CA, to construct the test well.

On October 2, 2012, by Resolution No. 2012-402, Council accepted the work performed by Dan’s Water Well & Pump Service, Inc. for the Del Rio Replacement Test Well Project as complete.

On May 9, 2017, by Resolution No. 2017-187, Council approved an agreement with West Yost for the final design, bid period and well equipping support services for the Del Rio Replacement Well 271 Project.

Challenges with land acquisition and litigation resulted in project delays. On September 5, 2017, Council certified the Final EIR for the Del Rio Water System Improvements projects by Resolution No. 2017-347.

On January 16, 2018, by Resolution No. 2018-05, Council approved the sale and purchase of

0.52-acre portion of land located at 7121 McHenry Avenue for an amount $21,600 for the Del Rio Replacement Well 271 Project.

On March 14, 2018, by Resolution No. 2018-144, Council approved the plans and specifications for the Del Rio Replacement Well 271 project, accepted the bid and awarded a contract to Nor-Cal Pump & Well Drilling, Inc., of Yuba City, CA, to construct the subsurface improvements of Well 271.

DISCUSSION:

The project was advertised for bids on May 15, 2019. Bids were publicly opened on July 2, 2019, pursuant to Modesto Municipal Code section 8-3.403 and City Charter Section 1307. Six bids were received, and Conco-West, Inc., of Manteca, CA, was the lowest responsive bidder at

30.32% below the engineer’s estimate.

On August 13, 2019, by Resolution No. 219-376, Council awarded a contract to Conco-West, Inc., of Manteca, CA., for the construction of the Del Rio Well 70 (Replacing Well 271) Surface Improvements project in the amount of $2,320,450. The contractor received the Notice to Proceed with a first working day of October 14, 2019. All contract work was completed by July 21, 2021. #13..
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City Council May 24, 2022
Accept Del Rio Well 70 (Replacing Well 271)
Surface Improvements as Complete

By accepting this project as complete, the City officially accepts the improvements made and authorizes the Notice of Completion to be filed. The City Clerk is authorized to complete all necessary steps to file the appropriate notices and documents with the County Recorder, release securities, and authorize payments totaling $2,444,787. The work is covered by a one-year warranty for any issues that may arise.

Staff recommends the project for acceptance as the contractor has complied with all contract requirements for the project.

Generally, when projects are presented to Council for acceptance a Project Suspension Form is also submitted, which allows Finance to take the necessary steps towards capitalizing assets on the asset that is in-service. However; while this portion of the project has been completed, the well system is not yet operational. The well will require a subsequent treatment system that will require the project account remain in active status until the treatment system is completed.

FISCAL IMPACT:

The total project costs were $3,428,657 which included design, construction, and construction administration costs. The total project amount originally budgeted was $3,803,200 which included $2,506,086 for the construction contract and contingency with Conco-West, Inc., of Manteca, CA.

The City’s “Change Order Approval Policy” enacted by Council Resolution No. 94-443 on July 19, 1994, and updated by Resolution No. 2019-326 on July 9, 2019, states that a contract of at least $1,000,000 but less than $10,000,000 allows Directors Authority not to exceed eight percent (8%) of the contract amount. Therefore, the approved contingency amount for the contract was $185,636.

There were sixteen change orders resulting in an overall increase of $124,337 for change order work as listed on the attached change order log. A summary of the expenditures for the overall project is listed below:
101078 – UTL Water Engineering Design – “Del Rio Well 70 (Replacing Well 271) Surface Improvements)”
PROJECT EXPENDITURES:

Construction Contract (Conco-West, Inc.) $2,320,450
Construction Contingency (Change Orders) 5.36% $124,337 City Construction Forces 0.4% $1,000
Construction Administration – City Staff Support 12.14% $281,703 Engineering Design – West Yost & Assoc 24.90% $577,709
Engineering Design/Admin. – City Staff Support/Misc. 5.3% $123,458 TOTAL CONSTRUCTION EXPENDITURES: $3,428,657
*Percentages are based on Construction Contract amount.

COMMITTEE RECOMMENDATION:

On October 22, 2018 the Del Rio Well 70 (Replacing Well 271) Surface Improvements project was presented to the Finance Committee as a report on upcoming Capital Improvement #13..
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City Council May 24, 2022
Accept Del Rio Well 70 (Replacing Well 271)
Surface Improvements as Complete

construction projects and was recommended to forward to Council for future award of construction.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution accepting the Del Rio Well 70 (Replacing Well 271) Surface Improvements as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $2,444,787 to Conco-West, Inc. of Manteca, CA.

Approved by: _________________________________________
William Wong, Director of Utilities
_________________________________________
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. CCO Log
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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2022-XX
RESOLUTION ACCEPTING THE DEL RIO WELL 70 (REPLACING WELL 271)

SURFACE IMPROVEMENTS AS COMPLETE, AUTHORIZING ALL NECESSARY

STEPS TO FILE WITH THE COUNTY RECORDER, RELEASING SECURITIES, AND RELEASING PAYMENTS TOTALING $2,444,787 TO CONCO-WEST, INC. OF

MANTECA, CA
WHEREAS, existing Well 271 located in the Del Rio service area was originally acquired as part of the Del Este Water System purchased by the City in 1995; and WHEREAS, on September 14, 2010, by Resolution No. 2010-409, Well 271 was identified for replacement in the 2010 Water System Engineer’s Report to meet the needs of the existing Del Rio service area; and
WHEREAS, the existing Well 271 site was not large enough for a replacement well and no property adjacent to the well site was available; and WHEREAS, a portion of the parcel at the northwest corner of McHenry Avenue and Stewart Road was identified as a proposed replacement well site; and WHEREAS, during the final design of Del Rio Replacement Well 271, staff was informed by the Department of Water Resources that Well number 271 could not be re-used.

New well numbers are required for replacement wells. Therefore, the project became Del Rio Well 70 (Replacing Well 271). This project constructed surface improvements, which enables the newly installed Del Rio Production Well (Well 70) increased service reliability of the City’s water system as described in the 2010 Water System Engineer’s Report; and WHEREAS, the first phase of the project, which consisted of drilling the well, was awarded on April 10, 2018, and was completed on January 8, 2019; and WHEREAS, the final phase of the project for surface improvements consists of a new well head, new pump & motor, a new pump building and walled building enclosure, all #13..
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2 necessary electrical controls, a chlorine room and a standby emergency generator; and WHEREAS, on January 5, 2012, by Resolution Nos. 2012-35 and 2012-36, Council approved plans and specifications prepared by West Yost for the Del Rio Replacement Test Well project, approved an agreement with West Yost for construction oversight and analysis services, and awarded a contract with Dan’s Water Well & Pump Service, Inc. of Livermore, CA, to construct the test well, and
WHEREAS, on October 2, 2012, by Resolution No. 2012-402, Council accepted the work performed by Dan’s Water Well & Pump Service, Inc. for the Del Rio Replacement Test Well Project as complete; and
WHEREAS, on May 9, 2017, by Resolution No. 2017-187, Council approved an agreement with West Yost for the final design, bid period and well equipping support services for the Del Rio Replacement Well 271 Project; and WHEREAS, challenges with land acquisition and litigation resulted in project delays; and
WHEREAS, on September 5, 2017, Council certified the Final EIR for the Del Rio Water System Improvements projects by Resolution No. 2017-347; and WHEREAS, on January 16, 2018, by Resolution No. 2018-05, Council approved the sale and purchase of 0.52-acre portion of land located at 7121 McHenry Avenue for an amount $21,600 for the Del Rio Replacement Well 271 Project; and WHEREAS, on March 14, 2018, by Resolution No. 2018-144, Council approved the plans and specifications for the Del Rio Replacement Well 271 project, accepted the bid and awarded a contract to Nor-Cal Pump & Well Drilling, Inc., of Yuba City, CA, to construct the subsurface improvements of Well 271; and
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3 WHEREAS, bids were advertised on May 15, 2019, and were publicly opened on July 2, 2019, pursuant to Modesto Municipal Code Section 8-3.403 and Charter Section 1307; and WHEREAS, Conco-West, Inc., of Manteca, CA, was the apparent lowest responsible and responsive bidder; and
WHEREAS, on August 13, 2019, by Resolution No. 219-376, Council awarded a contract to Conco-West, Inc., of Manteca, CA., for the construction of the Del Rio Well 70 (Replacing Well 271) Surface Improvements project in the amount of $2,506,086; and WHEREAS, the contractor received the Notice to Proceed with a first working day of October 14, 2019. All contract work was completed by July 21, 2021; and WHEREAS, the total project costs were $3,428,657 which included design, construction, and construction administration costs. The total project amount originally budgeted was $3,803,200 which included $2,506,086 for the construction contract and contingency with ConcoWest, Inc., of Manteca, CA; and WHEREAS, the City’s “Change Order Approval Policy” enacted by Council Resolution No. 94-443 on July 19, 1994, and updated by Resolution No. 2019-326 on July 9, 2019, states that a contract of at least $1,000,000 but less than $10,000,000 allows Directors Authority not to exceed eight percent (8%) of the original contract price, therefore, the approved contingency amount for the contract was $185,636; and
WHEREAS, there were sixteen change orders on this project with an overall increase of $124,337; and
WHEREAS, by accepting this project as complete, the City officially accepts the improvements made and authorizes the Notice of Completion to be filed. #13..
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4 NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that the Del Rio Well 70 (Replacing Well 271) Surface Improvements is hereby accepted as complete from contractor, Conco-West, Inc. of Manteca, CA., and that the City Clerk is authorized to complete all necessary steps to file the appropriate notices and documents with the County Recorder, release securities, and authorize payments totaling $2,444,787.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 24th day of May 2022, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: ______________________________________
DIANE NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _______________________________
JOSE M. SANCHEZ, City Attorney
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CHANGE
ORDER
NO. DESCRIPTION EXECUTED AMOUNT
CAUSE

UNFORSEEN

CONDITIONS
DESIGN
ISSUE
ADDED
SCOPE

CONTRACT CHANGE ORDER LOG
Date: March 28, 2022
TIME
EXT.
2019/31 - Del Rio Well 70 (Replacing Well 271) Surface Improvements northwest corner of Stewart Road and McHenry Avenue
PROJECT NUMBER AND NAME:
01 Extra Work At Agreed Lump Sum: Well Head 04/26/20 $4,000.00 0 W.D. No No No 02 Revised Waterline Connection On Stewart Road And
On McHenry Road
06/05/20 $4,999.00 0 W.D. No No No
03 Remove and Replace French Drain From Dechler
Manhole to Basin
06/05/20 $6,668.19 0 W.D. No No No
04 City Requested HSQ Modifications 09/10/20 $11,060.00 0 W.D. No No No 05 Change Air Conditioning Units From Wall To Split Units 02/25/21 $28,757.77 0 W.D. Yes No No 06 Extra Work at Agreed Lump Sum: Relocate Key Switch 02/25/21 $1,007.85 0 W.D. No No Yes 07 Extra Work At Agreed Lump Sum 02/25/21 $4,500.00 0 W.D. No No Yes 08 Furnish and Install One (1) Solenoid Valve and Flow
Switch Per RFI 73 and PCO 16
04/15/21 $5,260.32 0 W.D. No No Yes
09 Extra Work At Agreed Lump Sum: Install Card Reader 04/15/21 $13,018.30 0 W.D. No No Yes 10 156 Additional Non-Compensatory Contract Work Days 04/15/21 $0.00 156 W.D. No No Yes 11 Extra Work To Move Antenna For The Third Time 05/28/21 $1,369.89 0 W.D. No Yes No 12 Extra Work At Agreed Lump Sum: Modify ARV Piping 06/21/21 $1,127.59 2 W.D. No Yes No 13 Extra Work At Agreed Lump Sum: Mid-Cal Extra Work
PCO 5,6, and 7
06/21/21 $45,865.00 5 W.D. No Yes No
14 Separate Circuit For Intrusion and VFD Chlorinator
MOD
08/20/21 $5,946.69 30 W.D. No Yes No
15 Credit for MID Primary Connection Changes and
Contractor Remobilization
08/20/21 -$2,793.90 0 W.D. No Yes No
16 Adjust Quantities Consistent With Field Conditions 01/28/22 -$6,450.00 0 W.D. No Yes No Total Change Orders Processed To Date: $124,336.70
Original Contract Amount: $2,320,450.00
IDA To:

Total Working Days Time Extension: 193
Original Director's CCO Authority: $185,636.00
IDA Date:
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

May 24, 2022
Date: May 2, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: William Wong, Director of Utilities
SUBJECT: Accept Rebid Codoni Lift Station Force Main Replacement Project as Complete CONTACT: Jesse Franco, Engineering Division Manager, [email protected] (209) 571-5175
DESCRIPTION:

Consider accepting the Rebid Codoni Lift Station Force Main Replacement Project as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $242,334 to Rolfe Construction Company, Inc., of Atwater, CA. (Funding Source: Wastewater Fund)
STRATEGIC PLAN ELEMENT:

The recommended action supports the 2020-2025 City of Modesto Strategic Plan Initiatives, Goal D: Provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance, and sustainability efforts.

BACKGROUND:

The Codoni Pump Station was built in 1995. The station was originally designed with the anticipation of heavy industrial development east of Codoni Avenue. However, the nearby industrial land was never developed and projected flows were not realized, resulting in a low flow environment. As a result, the pumps in the Codoni Lift Station were oversized as they were designed to handle flows from the entire build-out area. Low flows can be hard on both lift stations and piping systems since they can lead to long detention times. Subsequently, long detention times result in the build-up of hydrogen sulfides, which, when converted to sulfuric acid, creates a highly corrosive septic environment. The Codoni Lift Station discharge force main line, comprised of ductile iron (DIP), was subjected to the aforementioned conditions which led to corrosion of the line and ultimately failure.

On Monday, March 22, 2021, Wastewater staff discovered a sanitary sewer overflow (SSO) at the Codoni Lift Station discharge force main line (near Codoni/Finch). Wastewater Maintenance and Collections crews assembled on-site to locate the leaks in the existing pipe and monitor the lift #14..
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City Council May 24, 2022
Accept Rebid Codoni Lift Station Force Main Replacement Project as Complete

station. Over the week of March 22-March 26, Wastewater crews identified at least seven leaks within the pipe and performed spot repairs.

An immediate repair was necessary to prevent further SSOs to preserve health and safety and protect the adjacent businesses and public. Additionally, the repair is needed to prevent damage to the existing roadway and railroad tracks (Modesto, Empire & Traction).

Utilities Engineering prioritized this project and prepared an expedited design for the repair and coordinated with Modesto, Empire and Traction (ME&T) for approval of work. Considering the risk that the failing sewer force main posed to the City and the public, staff initiated an expedited and condensed formal bid period for this urgent replacement project.

The project was initially bid in April of 2021, however due to the discrepancy between the bids received, staff recommended the rejection of all bids and re-advertising at a different date. This allowed staff to re-evaluate the construction costs and scope of work to identify any necessary clarifications to the bid package and adjustments to the engineer’s estimate and project budget.

On June 8, 2021, by Resolution 2021-215, Council approved rejecting all bids for the Codoni Lift Station Force Main Replacement Project and authorizing staff to re-advertise the project for bids at a future date.

DISCUSSION:

The project was advertised for bids on June 15, 2021. Bids were publicly opened on June 29, 2021, pursuant to Modesto Municipal Code section 8-3.403 and City Charter Section 1307. Six bids were received, and Rolfe Construction Company Inc, of Atwater, CA, was the apparent lowest bidder at 23.07% below the engineer’s estimate.

On August 10, 2021 by Resolution No. 2021-328, Council awarded a contract to Rolfe Construction Company Inc, of Atwater, CA, for the construction of the Rebid Codoni Lift Station Force Main Replacement project in the amount of $269,238. The contractor received the Notice to Proceed with a first working day of October 18, 2021. All contract work was completed by December 22, 2021.

By accepting this project as complete, the City officially accepts the improvements made and authorizes the Notice of Completion to be filed. The City Clerk is authorized to complete all necessary steps to file the appropriate notices and documents with the County Recorder, release securities, and authorize payments totaling $242,334. The work is covered by a one-year warranty for any issues that may arise.

Staff recommends the project for acceptance as the contractor has complied with all contract requirements for the project.

FISCAL IMPACT:

The total project costs were $305,226 which included design, construction, and construction administration costs. The total project amount originally budgeted was $363,887 which included $296,162 for the construction contract and contingency with Rolfe Construction, Inc. of Atwater, CA.
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City Council May 24, 2022
Accept Rebid Codoni Lift Station Force Main Replacement Project as Complete

The City’s “Change Order Approval Policy” enacted by Council Resolution No. 94-443 on July 19, 1994, and updated by Resolution No. 2019-326 on July 9, 2019, states that for contracts that are less than $1,000,000, the Director’s Authority to issue change orders is up to ten percent (10%) of the contract amount. Therefore, the approved contingency amount for the project was $26,924.

There were two change orders resulting in an overall decrease of $26,904 for change order work as listed on the attached change order log. A summary of the expenditures for the overall project is listed below:
101321–Rebid Codoni Lift Station Force Main Replacement PROJECT EXPENDITURES:

Construction Contract (Rolfe Construction, Inc.) $269,238 Construction Contingency (Change Orders) -9.9% ($26,904) City Construction Forces 0.54% $1,456
Construction Administration – City Staff Support 12.86% $34,619 Engineering Design/Admin. – City Staff Support/Misc. 9.96% $26,817 TOTAL CONSTRUCTION EXPENDITURES: $305,226
COMMITTEE RECOMMENDATION:

There has been no Committee action taken on this item.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution accepting the Rebid Codoni Lift Station Force Main Replacement Project as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $242,334 to Rolfe Construction Company, Inc., of Atwater, CA.

Approved by: _________________________________________
William Wong, Director of Utilities
_________________________________________
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. CCO Log

3. Project Suspension Form
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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2022-XX

RESOLUTION ACCEPTING THE REBID CODONI LIFT STATION FORCE MAIN

REPLACEMENT PROJECT AS COMPLETE, AUTHORIZING ALL NECESSARY

STEPS TO FILE WITH THE COUNTY RECORDER, RELEASING SECURITIES, AND RELEASING PAYMENTS TOTALING $242,334 TO ROLFE CONSTRUCTION COMPANY, INC., OF ATWATER, CA
WHEREAS, the Codoni Pump Station was built in 1995; and WHEREAS, the station was originally designed with the anticipation of heavy industrial development east of Codoni Avenue. However, the nearby industrial land was never developed and projected flows were not realized, resulting in a low flow environment; and WHEREAS, the pumps in the Codoni Lift Station were oversized as they were designed to handle flows from the entire build-out area; and
WHEREAS, low flows can be hard on both lift stations and piping systems since they can lead to long detention times. Subsequently, long detention times result in the build-up of hydrogen sulfides, which, when converted to sulfuric acid, creates a highly corrosive septic environment; and
WHEREAS, the Codoni Lift Station discharge force main line, comprised of ductile iron (DIP), was subjected to the aforementioned conditions which led to corrosion of the line and ultimately failure; and
WHEREAS, on Monday, March 22, 2021, Wastewater staff discovered a sanitary sewer overflow (SSO) at the Codoni Lift Station discharge force main line (near Codoni/Finch); and
WHEREAS, over the week of March 22-March 26, Wastewater crews identified at least seven leaks within the pipe and performed spot repairs; and #14..
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2 WHEREAS, an immediate repair became necessary to prevent further SSOs, which would preserve and protect the health and safety of adjacent businesses and the public; and WHEREAS, additionally, a repair was needed to prevent damage to the existing roadway and railroad tracks (Modesto, Empire & Traction); and WHEREAS, Utilities Engineering prioritized this project and prepared an expedited design for the repair, in coordination with Modesto Empire and Traction (ME&T) for approval of the work; and
WHEREAS, considering the risk that the failing sewer force main posed to the City and the public, staff initiated an expedited and condensed formal bid period for this urgent replacement project; and
WHEREAS, the project was initially bid in April of 2021, however due to discrepancies between the bids received, staff recommended the rejection of all bids and readvertising at a future date; and WHEREAS, on June 8, 2021, by Resolution 2021-215, Council approved rejecting all bids for the Codoni Lift Station Force Main Replacement Project and authorizing staff to re-advertise the project for bids at a future date; and WHEREAS, bids were advertised on June 15, 2021. Bids were publicly opened on June 29, 2021, pursuant to Modesto Municipal Code section 8-3.403 and City Charter Section 1307; and
WHEREAS, six bids were received, and Rolfe Construction Company Inc, of Atwater, CA, was the apparent lowest bidder; and
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3 WHEREAS, on August 10, 2021 by Resolution No. 2021-328, Council awarded a contract to Rolfe Construction Company Inc., of Atwater, CA, for the construction of the Rebid Codoni Lift Station Force Main Replacement project in the amount of $269,238; and WHEREAS, the contractor received the Notice to Proceed with a first working day of October 18, 2021. All contract work was completed by December 22, 2021; and WHEREAS, the total project costs were $305,226 which included design, construction, and construction administration costs. The total project amount originally budgeted was $363,887 which included $296,162 for the construction contract and contingency with Rolfe Construction, Inc.; and
WHEREAS, the City’s “Change Order Approval Policy” enacted by Council Resolution No. 94-443 on July 19, 1994, and updated by Resolution No. 2019-326 on July 9, 2019, states that for contracts less than $1,000,000, the Director’s Authority to issue change orders is up to ten percent (10%) of the contract amount; and
WHEREAS, the approved contingency amount for the project was $26,924; and WHEREAS, there were two change orders on this project with an overall decrease of $26,904; and
WHEREAS, by accepting this project as complete, the City officially accepts the improvements made and authorizes the Notice of Completion to be filed.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that the Rebid Codoni Lift Station Force Main Replacement is hereby accepted as complete from contractor, Rolfe Construction, Inc. of Atwater, CA., and that the City Clerk is authorized to complete all necessary steps to file the appropriate notices and documents with the County Recorder, release securities, and authorize payments totaling $242,334. #14..
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4 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 24th day of May 2022, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: ____________________________________
DIANE NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _________________________________
JOSE M. SANCHEZ, City Attorney
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CHANGE
ORDER
NO. DESCRIPTION EXECUTED AMOUNT
CAUSE

UNFORSEEN

CONDITIONS
DESIGN
ISSUE
ADDED
SCOPE

CONTRACT CHANGE ORDER LOG
Date: April 20, 2022
TIME
EXT.
2021/22 - Codoni Sewer Lift Staton Force Main Replacement (101321) Rebid PROJECT NUMBER AND NAME:
01 Railroad Flaggers and Material Delays 02/11/22 $1,276.50 0 W.D. No Yes No 02 Adjust Quantities Consistent With Field Conditions 04/29/22 -$28,180.65 0 W.D. No Yes No Total Change Orders Processed To Date: -$26,904.15
Original Contract Amount: $269,238.00
IDA To:

Total Working Days Time Extension: 0
Original Director's CCO Authority: $26,924.00
IDA Date:
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

May 24, 2022
Date: April 21, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jaylen French, Director of Community and Economic Development SUBJECT: Capital Facilities Fees Exemption 835 California Avenue (Stanislaus County Affordable Housing Corporation)
CONTACT: Jessica Hill, Community Development Manager
[email protected], 209-577-5321
DESCRIPTION:

Hearing to consider approving a Capital Facilities Fees Exemption Agreement, in the amount of $62,100, with Stanislaus County Affordable Housing Corporation (STANCO) for a six-unit project located at 835 California Avenue. (Funding Source: Capital Facilities Fees Fund) STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto’s 2020-2025 Strategic Plan Goal C: Develop Homelessness and Housing Plan.

BACKGROUND:

The City of Modesto Capital Facilities Fees (CFF) Program was established in 1987.

The CFF Policies and Procedures states with respect to Very Low-Income Housing exemptions, the total number of housing exemptions granted are not to exceed two percent (2%) of the cumulative total CFF program housing units. However, it is acknowledged that during recessions and other times of low production of market-rate housing, the cumulative, exempt units may exceed two percent (2%) of the total units built.

Of the 15,689 residential building permits issues since 1989 (baseline year), and 770 of these permits were granted CFF exemptions. While the CFF Policies and Procedures states that this number shall not exceed two percent, it does allow for this number to exceed this cap during the recession and other times of low production of market rate housing.

DISCUSSION:

On February 22, 2022, the Stanislaus County Affordable Housing Corporation (STANCO), (Applicant) submitted a CFF Exemption Application for its project located at 835 California Avenue. This project was acquired by City of Modesto Community Development Block Grant – CARES (CDBG-CV) funds, and leveraging No Place Like Home (NPLH), and Homeless Housing and Assistance Project funds. The Project will provide six permanent supportive #15..
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City Council, May 24, 2022
Capital Facilities Fees Exemption 835 California Avenue (STANCO)Page 2 of 3 housing units for Very Low-Income families, thirty percent (30%) or less of the Area Median Income (AMI) with family members with serious mental illness. The property consists of six units, one (1) Efficiency Unit, three (3) one-bedroom units and two (2) two-bedroom units. They are requesting an exemption for six units. The CFF impact is $10,350 per unit for a total of $62,100 for the Project.

This Project location is located next to Courtney Manor, 901 California Avenue, which is another STANCO and BHRS managed property that provides 18 supportive transitional housing units for persons with mental health disabilities. Once at Courtney Manor, clients are assisted with either being integrated back into their previous living environment, if they have stabilized, or being placed into housing through the Behavioral Health and Recovery Services (BHRS) housing program. The units are leased to BHRS as entry level transitional housing clients.

With experienced staff nested in an existing office housed at Courtney Manor, the proximity to this property will allow staff to also serve clients in this proposed project. In addition, STANCO’s resident manager and maintenance hub for Courtney Manor has the ability to absorb the added units. This will result in the ability to quickly house, provide services and create long term operational savings making this project feasible. The Stanislaus County Affordable Housing Corporation has already received a letter for supportive services match funding in the amount of $7,000 per client per year.

Staff has reviewed and established that the CFF Exemption Application complies with the City’s CFF Policies and Procedures (Resolution 2020-407) to foster the development of residential units affordable to Very Low-Income households. Housing constructed or expanded will be made affordable to households earning fifty percent (50%) or less of the AMI. Residential units must be maintained as affordable to Very Low Income households for a period of 10 years. All eligible tenants total household income, at time of move-in, shall not exceed the thirty percent (30%) AMI limit for all assisted units.

This action also supports the City of Modesto Housing Element (2015-2023), Policy 5.2:
continue to provide financial incentives such as fee deferrals and exemptions for developments meeting the affordable and special housing needs of the community.

This item was publicly noticed as a Public Hearing in the Modesto Bee on May 13, 2022.

FISCAL IMPACT:

Approving the CFF Exemption will result in an exemption of $62,100 in Capital Facilities Fees.

COMMITTEE RECOMMENDATION:

This item was presented to the Citizens’ Housing & Community Development Committee on April 28, 2022 and was forwarded to the City Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendation:

Resolution approving a Capital Facilities Fees Exemption Agreement, in the amount of $62,100, with Stanislaus County Affordable Housing Corporation for the six-unit project located at 835 California Avenue, and authorizing the City Manager, or his designee, to execute the Agreement.
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City Council, May 24, 2022
Capital Facilities Fees Exemption 835 California Avenue (STANCO)Page 3 of 3 Approved by:

Jaylen French,
Director of Community and Economic Development
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. CFF Exemption Agreement
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05/24/2022/JHill 1 2022-?

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION APPROVING A CAPITAL FACILITIES FEES EXEMPTION AGREEMENT, IN THE AMOUNT OF $62,100, WITH STANISLAUS COUNTY

AFFORDABLE HOUSING CORPORATION FOR THE SIX-UNIT PROJECT LOCATED AT 835 CALIFORNIA AVENUE, AND AUTHORIZING THE CITY

MANAGER, OR HIS DESIGNEE, TO EXECUTE THE AGREEMENT
WHEREAS, in 1987, the City of Modesto established a Capital Facilities Fees (CFF) Program to mitigate the impacts of new development as outlined in §6600 of the California Government Code, and
WHEREAS, the current CFF Policies and Procedures state, with respect to very low- and low-income housing exemptions, the total number of housing exemptions granted are not to exceed two percent (2%) of the cumulative total CFF program housing units, and
WHEREAS, the CFF Policies and Procedures also allows for exemptions to foster the development of residential units affordable to very low-income households, as well as certain qualifying residential units affordable to low-income households, and WHEREAS, since the inception of the CFF Program, a total of 15,689 residential building permits have been issued of which 770 were granted CFF exemptions, and WHEREAS, when the CFF Program was established, it was assumed the total number of residential units programmed to be constructed at build-out would be 129,163, and
WHEREAS, when considering the total number of units to be constructed at build-out, only 0.59% of the programmed units have received exemptions, and #15..
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05/24/2022/JHill 2 2022-?
WHEREAS, on February 22, 2022, Stanislaus County Affordable Housing Corporation (STANCO) submitted a CFF Exemption Application for its project located at 835 California Avenue in Modesto, and
WHEREAS, staff reviewed STANCO’s CFF Exemption Application and found it complies with the CFF Policies & Procedures as all six units will be affordable to very low-income households, and
WHEREAS, this Project will provide six multi-family permanent supportive housing units (one efficiency, three one-bedroom, and two two-bedroom) for very lowincome households with family members with serious mental illness, and WHEREAS, all eligible tenant’s total household income, at time of move-in, shall not exceed the thirty percent (30%) Area Median Income (AMI) limit for all assisted units, and
WHEREAS, this exemption request was presented to the Citizens’ Housing & Community Development Committee on April 28, 2022 and was unanimously approved, and
WHEREAS, this item was publicly noticed as a Public Hearing in the Modesto Bee on May 13, 2022.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the CFF Exemption Agreement between the City of Modesto and Stanislaus County Affordable Housing Corporation for the exemption of $62,100 in Capital Facilities Fees for the project located at 835 California Avenue, Modesto. #15..
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05/24/2022/JHill 3 2022-?
BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the Capital Facilities Fees (CFF) Agreement, in a form approved by the City Attorney.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 24th day of May, 2022 by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST:
_________________________________
DIANE NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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835 California Street CFF Exemption Agreement
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Recording Requested by:

City of Modesto
Return to:

P.O. Box 642
Modesto, CA 95353

CAPITAL FACILITIES FEES EXEMPTION AGREEMENT
This Capital Facilities Fees Exemption Agreement (Agreement), is made and entered into in the City of Modesto, County of Stanislaus, State of California, effective this day of , 2022 (Effective Date), by and between the City of Modesto, a municipal corporation of the State of California (City) and Stanislaus County Affordable Housing Corporation (Owner).

RECITALS
WHEREAS, Owner owns certain real property located within City, commonly known as 835 California Avenue, Modesto, CA 95351, Modesto, California, and more particularly described in Exhibit A, attached hereto (Property); and
WHEREAS, Owner intends to provide six affordable units for very low-income families with family members with serious mental illness (Project); and WHEREAS, the Project will be affordable residential units that must be maintained as affordable to very low-income households for a period of 10 years; and WHEREAS, on February 22, 2022, Stanislaus County Affordable Housing Corporation submitted a CFF Exemption Application for its Project; and
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835 California Street CFF Exemption Agreement
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WHEREAS, staff reviewed Stanislaus County Affordable Housing Corporation’s CFF Exemption Application and found it complies with the CFF Policies & Procedures; and WHEREAS, in consideration of Owner’s commitment, City and Owner desire to exempt the project from present payment of CFF in the amount of SIXTY-TWO THOUSAND, ONE HUNDRED DOLLARS AND NO CENTS ($62,100), which would be otherwise be due and payable at the time of issuance of the building permit for the Project; and
WHEREAS, the current CFF Policies and Procedures (Resolution 2020-407) state, with respect to low and very low-income housing exemptions, the total number of housing exemptions granted are not to exceed two percent (2%) of the cumulative total CFF program housing units; and WHEREAS, the CFF Policies and Procedures also allow a Stanislaus County Affordable Housing Corporation to submit an application and request CFF be waived on new affordable units for households earning fifty (50%) or less of the Area Median Income; and WHEREAS, since the inception of the CFF Program, a total of 15,689 residential building permits have been issued of which 763 were granted CFF exemptions; and WHEREAS, when the CFF Program was established, it was assumed the total number of residential units programmed to be constructed at build-out would be 129,163; and WHEREAS, when considering the total number of units to be constructed at build-out, only 0.59% of the programmed units have received exemptions.

NOW, THEREFORE, in consideration of the mutual covenants, agreements and promises set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Owner hereby agree as follows:
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835 California Street CFF Exemption Agreement
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1. EXEMPTION FROM CFF

1.1 The CFF applicable to the Project, at the current CFF rate, is SIXTY-TWO THOUSAND, ONE HUNDRED DOLLARS ($62,100),

1.2 Prior to, and as a condition of, issuance of a building permit for the Project, Owner shall execute and deliver to City the following documents:
a. A Promissory Note in favor of City, as holder, to provide for payment of the greater of (i) the principal amount SIXTY-TWO THOUSAND, ONE HUNDRED DOLLARS ($62,100) (Principal), plus all accrued interest due thereon as provided in Paragraph 1.3 below, or (ii) CFF at the rate in effect on the date of termination or default under this Agreement (collectively CFF Obligation), together with all other sums then due under this Agreement. The Promissory Note shall be in the form attached hereto as Exhibit B and incorporated herein by this reference (the Note).
b. A notarized Deed of Trust on the Property securing the amount of the Note, in the form of Exhibit C attached hereto and incorporated herein by this reference (Deed of Trust).

1.3 The Principal shall bear interest from the date a Final Certificate of Occupancy is first issued for the Project until the obligations of this Agreement are satisfied in full or extinguished in accordance with the terms of this Agreement, at the rate of EIGHTEEN PERCENT (18%) per annum, compounded annually.

1.4 In the event Owner abides by and fulfills all of its covenants as expressed in this Agreement, the Project’s CFF Obligation including all accrued interest, shall be fully waived exactly ten (10) years from the date of issuance of the Final Certificate of Occupancy for the Project. At that time, this entire Agreement shall become null and void and all obligations between the parties expressed in it shall be extinguished.
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835 California Street CFF Exemption Agreement
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2. EXEMPTION CONDITIONS

2.1 City agrees to conditionally exempt Owner from payment of all CFF for the Project which would otherwise be due and payable to City at the time a building permit is issued for the Project subject to the following conditions:
a. For ten (10) consecutive years immediately following the issuance of a Final Certificate of Occupancy for the Project (Period of Affordability), Owner shall continuously reserve the six Units within the Project for rental to very low-income families with family members with serious mental illness (Tenant or Tenants), as well as certain qualifying residential units affordable to Low Income households at rental rates solely affordable to such Tenants, based on single or double-occupancy of the Units. For purposes of this Agreement, low and very-low income persons are defined as persons earning fifty (50%) percent or less of the Area Median Income as determined from time to time by the HUD. b. Owner agrees that it shall not displace or evict any Tenant in lawful possession of any Unit within the Project except as provided by the terms of any rental or other agreement entitling such Tenant to possession.
c. Owner shall complete construction of the Project by August of 2023.

Construction of the Project shall be considered complete on the date Owner obtains a Final Certificate of Occupancy for the Project.
d. Each Unit shall be subject to the following Affordable Housing Covenant: Each Unit must be occupied by no more than two persons who are very low-income families with family members with serious mental illness and are eligible as low or very low-income persons. Each such Unit must meet the rental requirements set forth in subsections i-vi herein in order to qualify as an affordable housing Unit. Owner shall continuously comply with this Affordable Housing Covenant for the complete Period of Affordability.
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835 California Street CFF Exemption Agreement
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i. Rent Limitation. HUD provides the following maximum rent limits for low and very-low income persons. Each Unit must be occupied by no more than two Tenants and meet one of the following rent requirements:
(1) The rent does not exceed thirty percent (30%) of the annual income of a person whose income equals fifty percent (50%) of the median income for individuals in the area, as determined by HUD. HUD provides the rent limits, which include average occupancy per unit and adjusted income assumptions. However, if the rent determined under this subparagraph 2.1.d.i(1) is higher than the applicable rent under subparagraph 2.1.d.i(2), below, then the maximum rent for Rooms shall be calculated under subparagraph 2.1.d.i(2).
(2) The rent does not exceed thirty percent (30%) of the person’s adjusted income. If the Room receives Federal or State project-based rental subsidy and very-low income person pays a contribution toward rent of not more than thirty percent (30%) of the person’s adjusted income, then the maximum rent (i.e., Tenant contribution plus project-based rental subsidy) is the rent allowable under the Federal or State project-based rental subsidy program. ii. Initial Rents. Before renting any Unit in the Project, Owner shall submit the proposed initial rents to City for its review and approval. The initial rents shall be subject to the maximum rent limitations specified in this section and shall not exceed the maximum rent minus a monthly allowance for utilities.
iii. Subsequent Rents. Maximum rents for Units shall be calculated on a periodic basis subject to HUD determination of revised fair market rents and median incomes. Owner agrees to annually provide City with information on rents and occupancy of the Units to demonstrate compliance with this section. Owner agrees that any rent increases for the Units shall be subject to the provisions of any outstanding rental agreements, and Owner must provide Tenants of those Units not less than thirty (30) days prior written notice, before implementing any increase in rents. #15..
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835 California Street CFF Exemption Agreement
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iv. Nondiscrimination Against Rental Assistance Subsidy Holders. Owner cannot refuse to rent Rooms to a certificate or voucher holder under 24 CFR Part 982 B Section 8 Tenant Based Assistance: Unified Rule for Tenant-Based Assistance under the Section 8 Rental Certificate Program and the Section 8 Rental Voucher Program or to the holder of a comparable document evidencing participation in a Tenant-based rental assistance program because of the status of the prospective Tenant as a holder of such certificate, voucher, or comparable Tenant-based assistance document. v. Occupant Income. The income of each Tenant in a Unit must be determined initially in accordance with 24 CFR Section 92.203. In addition, each year during the Period of Affordability, Owner must re-examine each Tenant's annual income in accordance with one of the options in 24 CFR Section 92.203 as selected by the Owner. vi. Over-Income Tenants.
(1) Units continue to qualify as affordable housing Units despite temporary noncompliance caused by increases in the income of existing Tenants if actions satisfactory to the City are being taken to ensure that all vacancies are filled in accordance with this Paragraph 2.1 until the noncompliance is corrected.
(2) Tenants of Units who no longer qualify as low income persons must pay as rent the lesser of the amount payable by the Tenant under State or local law or thirty percent (30%) of the person's adjusted income until the earlier of (i) expiration of the existing rental agreement (exclusive of any extensions thereto) or (ii) voluntary vacation of the Unit by said Tenant. e. Operation of Units as Affordable Rental Housing.
i. Promptly after completion of the Project, Owner shall operate the Units as affordable units for very low-income families with family members with serious mental illness consistent with the affordability provisions and requirements set forth in this Agreement. #15..
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835 California Street CFF Exemption Agreement
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ii. Before renting any Unit in the Project, Owner shall submit its proposed form of rental agreement for City's review and approval. The term of the form of rental agreement shall not contain any provision which is prohibited by 24 CFR 92.253(b) and any modifications thereto. Any Owner termination of a rental agreement or refusal to renew must be in conformance with 24 CFR

92.253(c) and this Agreement, and must be preceded by written notice to the Tenant by Owner specifying the grounds for the action in accordance with the terms of the rental agreement. iii. Before renting any Unit in the Property, Owner must provide City, for its review and approval, with Owner’s written Tenant selection plan. Owner’s Tenant selection plan must, at a minimum, meet the requirements for Tenant selection set out in 24 CFR 92.253(e) and any modifications thereto.
iv. Before renting any Unit in the Project, Owner must provide City, for City's review and approval, Owner's affirmative marketing plan to affirmatively market the Units as provided for in 24 CFR 92.351.
v. Before renting any Unit in the Project, Owner must complete the requirements of the City of Modesto Crime Free Multi-Housing Program. vi. For each Unit in the Project, Owner shall certify each Tenant’s income on an annual basis.
f. Monitoring.
i. Owner shall maintain complete, accurate, and current records pertaining to the Units, including rental agreements, regarding the occupancy and rent levels for the Project, for a period of five (5) years after the creation of such records, and shall permit any duly-authorized representative of City to inspect and copy records, including records pertaining to income of all Tenants.

Such records shall include records regarding the occupancy and rental rates of the Units. Records must be kept accurate and current.
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ii. City shall notify Owner of any records City deems insufficient. Owner shall have thirty (30) calendar days after the receipt of such a notice to correct any deficiency in the records specified by City in such notice, or if a period longer than thirty (30) days is reasonably necessary to correct a deficiency, then Owner shall begin to correct the deficiency within thirty (30) days and correct the deficiency as soon as reasonably possible.
iii. Owner shall promptly comply with all requirements or conditions relating to notices, extensions, and other events required to be reported or requested. iv. Owner agrees that not less than annually, City shall have the right to review all records to ensure compliance with this Agreement. v. Owner agrees that not less than annually, City shall have access to the Project to inspect any and all of the Project Units to ensure compliance with the purpose and terms of this Agreement.
g. Restrictions on Transfer.
i. For purposes of this Agreement, "Transfer" shall mean any conveyance, sale, assignment, or transfer, whether voluntary or involuntary, of (i) any rights and/or duties under this Agreement, and/or (ii) any interest in the Property or the Project, including without limitation, a fee simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a security interest, or an interest evidenced by a land contract by which possession of the Property is transferred and Owner retains title. The term "Transfer" shall exclude the rental of any Unit in accordance with the terms of this Agreement.
ii. Upon any Transfer, including by gift, devise, descent, foreclosure, assignment, deed in lieu of foreclosure, condemnation, and voluntary or involuntary bankruptcy, of the Property or Project without the prior written approval of the City, the CFF Obligation for the Project will be immediately due and payable to the City, in addition to all other sums then payable under this Agreement.
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h. Nondiscrimination.

Owner shall not discriminate against any Tenant or prospective Tenant on the basis of race, religion, sex, age, disability, marital status, nor any other arbitrary factor in violation of any state, federal or local law governing discrimination in rental housing. i. Obligation to Refrain From Discrimination.

Owner covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or the Project, or any part thereof, that there shall be no discrimination against or segregation of any person, or group of persons on account of race, color, creed, religion, sex, age, marital status, ancestry, national origin, physical handicap or other arbitrary factor in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or the Project, or any part thereof, nor shall Owner itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of Tenants, lessees, subtenants, sublessees or vendees of the Property or the Project, or any part thereof. The foregoing covenants shall run with the land and shall remain in effect in perpetuity. j. Maintenance and Management.
(a) Owner is specifically responsible for all maintenance, repair, and management functions for the Units, including without limitation, selection of Tenants, re-certification of Tenant income, evictions, collection of rent, routine and extraordinary repairs and replacement of capital items. Owner shall maintain the Units and common areas of the Property in a safe and sanitary manner in accordance with local health, building, and housing codes, for the full Period of Affordability. (b) Owner agrees to maintain the improvements and landscaping on the Property in a clean and orderly condition and in good condition and repair and keep the Property free from any accumulation of debris and waste materials for the Period of Affordability. Nothing herein shall prohibit Owner from enforcing the terms of any rental agreement against a Tenant on the Property to ensure compliance with this subparagraph 2.1.j.
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k. Hazardous Materials.
i. Owner shall keep and maintain the Property in compliance with, and shall not cause or permit the Property to be in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property including, but not limited to, soil and groundwater conditions. Owner shall not use, generate, manufacture, store or dispose of, on, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limitation, any substances defined as or included in the definition of "hazardous substances", "hazardous wastes", "hazardous materials", or "toxic substances" under any applicable federal or state laws or regulations (collectively referred to hereinafter as "Hazardous Materials") except such of the foregoing as may be customarily kept and used in and about multi-family residential property. ii. Owner shall immediately advise City in writing if at any time it receives written notice of:
(1) Any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Owner or the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous Materials, ("Hazardous Materials Law");
(2) All claims made or threatened by any third party against Owner or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (1) and (2) above are hereinafter referred to as "Hazardous Materials Claims"); and
(3) Owners discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be classified as "border-zone property" under the provision of California Health and Safety Code, Sections 25220 et seq. or any regulation adopted #15..
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in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law.

3. ANTI-SPECULATION REQUIREMENTS

3.1 Owner covenants and agrees, for itself and its successors, assigns and transferees that the Property and the Project will be used exclusively as affordable units for very low-income families with family members with serious mental illness and not for any form of speculation or landholding. Owner further recognizes the importance to the general welfare of City of providing an affordable unit for very low-income families with family members with serious mental illness.

4. ACCELERATION OF OBLIGATION TO PAY CFF OBLIGATION

4.1 The CFF Obligation shall become due and immediately payable upon the occurrence of any of the following events during the Period of Affordability:
a. Except as otherwise provided herein, Owner’s sale or transfer, including without limitation the lease, gift, exchange or other disposition of the Property or Project, or any interest therein, whether voluntary or involuntary;
b. The filing for bankruptcy or dissolution of Owner.
c. The violation of this Agreement, failure by Owner to maintain the Units as affordable rental housing for the Period of Affordability, or any event of default as defined in Paragraph 9 below shall constitute a default under this Agreement. In the event that such default shall occur, City shall notify Owner that a default exists, the nature of the default, and that Owner must cure the specified default within thirty (30) days of the Notice of Default, or if a period longer than thirty (30) days is reasonably necessary to correct a default, then Owner shall begin to correct the default within thirty (30) days and cure the default as soon as reasonably possible thereafter. If Owner fails or delays in commencing to cure, correct or remedy the default with reasonable diligence following Notice of Default, then City may terminate this Agreement, in its sole discretion, and the CFF Obligation, shall become due and immediately payable by Owner to City, in addition to all other sums then payable under this Agreement. #15..
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5. DEFAULT OF AFFORDABILITY PROVISIONS

5.1 If as a result of any negligent act or omission of Owner, its agents, officers or employees, the Owner does not continuously hold out any Unit for rent only to low or very-low-income Tenants as required herein, Owner shall immediately pay to City or to City’s designee interest on the Principal for the period of time the Unit is not in compliance with the affordability provisions as set forth in Paragraph 2.1, in addition to all other sums then payable under this Agreement.

5.2 If as a result of any intentional or willful act or omission of Owner, its agents, officers or employees, Owner does not continuously hold out any Unit for rent only to low or very-low-income Tenants as provided herein, Owner shall immediately pay to City or to City’s designee one-half (1/2) of the Principal plus all accrued interest, in addition to all other sums then payable under this Agreement.

5.3 Notwithstanding Sections 5.1 and 5.2, above, if for six (6) months or longer, ten percent (10%) or more of the Unit are not in compliance with the affordability provisions as required herein, then City may terminate this Agreement and the CFF Obligation, shall become due and immediately payable by Owner to City, in addition to all other sums then payable under this Agreement.

6. MONITORING PROVISIONS

6.1 City may contract with the Stanislaus County Housing Authority to monitor compliance with the above default conditions at Owner’s sole cost and expense.

6.2 Owner will be required during the Period of Affordability to submit annual reports of tenancy in a manner satisfactory to City or, if contracted, the Stanislaus County Housing Authority.

6.3 If the Stanislaus County Housing Authority is contracted by City for its monitoring service, the fee for such services will be payable by Owner within thirty (30) days after City or the Stanislaus County Housing Authority gives Owner notice of any charges for such service.

7. INSPECTIONS. NO DUTY TO INSPECT
City shall not have any affirmative duty to make any inspection, to make any investigation, or to supervise or inform Owner or any third party as to any aspect of the construction or operation of the #15..
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Project and shall not incur any liability for failing to do so. Any inspection, investigation, or review undertaken by City shall be solely to determine whether Owner is properly discharging its obligations to City and may not be relied upon by Owner or any third party. Once having undertaken any such inspection, investigation or review, City shall not incur any liability for failing to do so properly or for failing to complete the same. City owes no duty of care to Owner or any third party to protect against, or to inform Owner or any third party of any negligent, faulty, inadequate or defective design, construction or operation of the Project.

8. INSURANCE

8.1 Owner shall maintain, during the Period of Affordability, an all-risk property insurance policy insuring the Property in an amount equal to the full replacement value of all structures, including but not limited to all Units, on the Property. The policy shall name City as loss payee and shall contain a statement of obligation on behalf of the carrier to notify City of any material change, cancellation or termination at least thirty (30) days in advance of the effective date of such material change, cancellation or termination.

8.2 Owner shall transmit a copy of the certificate of insurance and loss payee endorsement to City within thirty (30) days of the effective date of this Agreement, and Owner shall annually transmit to City a copy of the certificate of insurance and a loss payee endorsement, signed by an authorized agent of the insurance carrier setting forth the general provisions of coverage. A copy of the certificate of insurance and loss payee endorsement shall be transmitted to City as follows:

Community and Economic Development
City of Modesto
P.O. Box 642
Modesto, California 95353
Attn: CFF Administrator
Any certificate of insurance must be in a form, content, and with companies approved by City.

9. EVENT OF DEFAULT
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The occurrence of any of the following events shall constitute an event of default hereunder following notice to Owner by City, specifying (1) the applicable event, (2) the action required to cure the default and (3) a date, which shall be not fewer than thirty (30) days after the date the notice is mailed to Owner, by which such action must be taken by Owner to cure the default, or if a period longer than thirty (30) days is reasonably necessary to cure the default, then Owner shall begin to cure the default within thirty (30) days and correct and complete curing the default as soon as reasonably possible thereafter. a. Performance of Obligations. Owner’s default under any of the Loan Documents, or Owner’s failure to perform its obligations under this Agreement and, in each case, the expiration of any time provided for the remedy of such failure.
b. Representations and Warranties.
(I) Any of Owner’s representations or warranties in any of the Loan Documents or any statements, certificates or schedules furnished by Owner to City, shall prove to have been untrue in any material respect when made or Owner shall have intentionally concealed any material fact from City and City’s security is materially and adversely affected, (ii) Any of Owner’s representations or warranties in any of the Loan Documents or any statements, certificates or schedules furnished by Owner to City, other than representations, warranties, statements and certificates as to the financial condition of Owner or any other person, shall cease to be true and shall remain untrue for thirty (30) days after notice of such change to Owner by City.
c. Voluntary Bankruptcy; Insolvency; Dissolution. Owner’s (i) filing of a petition for relief under any state or federal law regarding bankruptcy, reorganization or other relief to debtors; (ii) filing any pleading in any involuntary proceeding under any state or federal law regarding bankruptcy, reorganization or other relief to debtors which admits the jurisdiction of the court or the petition’s material allegations regarding Owner’s insolvency; (iii) making a general assignment for the benefit of creditors; (iv) applying for, or the appointment of, a receiver, trustee, custodian or liquidator of Owner, or any of its properties; (v) #15..
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inability or admission in writing of its inability to pay its debts as they are due; or (vi) death, if an individual; or the filing by Owner of a petition seeking the liquidation or dissolution of Owner or the commencement of any other procedure to liquidate or dissolve Owner. d. Involuntary Bankruptcy. Owner’s failure to effect a full dismissal of any involuntary (i) petition under any state or federal law regarding bankruptcy, reorganization or other relief to debtor; (ii) proceeding for the appointment of a receiver, trustee or liquidator for Owner or all or a material part of the assets of Owner; or (iii) petition or proceeding under other state or federal law regarding bankruptcy, reorganization or other relief to debtors that is filed against Owner or in any way restrains or limits Owner or City regarding the Property, in any event prior to the earlier of the entry of an order granting relief sought in the involuntary petition or proceeding, or sixty (60) days after the date of filing of the petition or beginning of the proceeding.
e. Transfer. Any transfer, assignment or other conveyance of the Property, Project or any portion thereof without the prior written consent of City, which consent shall not be unreasonably withheld, and full compliance with the provisions of this Agreement. f. General. Owner’s breach of any condition, covenant, warranty, promise or representation contained in this Agreement not otherwise resulting in an event of default hereunder and the continuance of such breach for a period of thirty (30) days after written notice thereof to Owner, unless such breach cannot reasonably be cured within thirty (30) days after written notice thereof to Owner in which case Owner shall begin to cure the breach within thirty (30) days and complete the cure of the breach as soon as reasonably possible thereafter.
g. Affordable Residential Care Facility. Owner’s failure to maintain the Project as an affordable residential care facility for the developmentally disabled, affordable to low and very-low income persons as specified in Paragraph 2 of this Agreement for the Period of the Affordable Housing Covenant.

10. DEFAULT REMEDIES
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10.1 On the happening of an event of default, and the expiration of the applicable cure period, City may, in addition to other rights and remedies permitted by the Agreement or applicable law, proceed with any or all of the following remedies in any order or combination City may choose in its sole discretion:
a. Terminate this Agreement in which event the CFF Obligation, in addition to all other sums then payable under this Agreement, shall immediately become due and payable at the option of City.
b. Bring an action in equitable relief (i) seeking specific performance by Owner or its assignee of the terms and conditions of this Agreement, and/or (ii) enjoining, abating or preventing any violation of said terms and conditions of this Agreement or (iii) seeking declaratory relief. c. Institute legal action to cure, correct or remedy any default, to recover damages for any default or to obtain any other remedy consistent with the purpose of this Agreement. d. Initiate and pursue any private and/or judicial foreclosure action allowed under applicable law and the owner of sale provision in the Deed of Trust. e. Pursue any other remedy allowed at law or equity.

10.2 Nothing in this section is intended or shall be construed as precluding City from proceeding with a non-judicial foreclosure under the power of sale contained in the Deed of Trust in the event of default by Owner or its assignee.

11. LEGAL ACTIONS

11.1 In the event any party to this Agreement institutes a lawsuit or other action to enforce or interpret any part of the Agreement or for any breach of such documents, the prevailing party may recover, in addition to any other remedies, all costs of suit, including reasonable attorneys’ fees, including without limitation all costs of in-house attorneys, and costs.

12. INDEMNIFICATION
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12.1 Owner shall indemnify and hold City and its officers, agents, officials, and employees free and harmless against any losses, damages, liability, claims, demands, judgments, actions, court costs, and legal or other expenses, including without limitation all attorneys’ fees and costs, which arise out of or in connection with this Agreement or the construction or operation of the Project. This indemnity obligation shall not extend to any claim arising from the willful misconduct of City, its officers, agents, officials and employees. The provisions of this Paragraph 12 shall survive the expiration of the term of this Agreement.

13. REPRESENTATIONS, WARRANTIES AND CERTIFICATIONS

13.1 Owner represents, warrants, and certifies to City as follows:
a. Organization. Owner is duly organized, validly existing and in good standing under the laws of the State of California and has the power and authority to own the Property and construct, operate and maintain the Project.
b. Authority of Owner. Owner has full power and authority to execute and deliver this Agreement, the Note, the Deed of Trust, and all other Loan Documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above.
c. Authority of Persons Executing Documents. The Loan Documents and all documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of Owner. All actions required under Owner’s organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement, the other Loan Documents and all documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken. d. Valid Binding Agreements. The Loan Documents and all documents or instruments executed and delivered pursuant to or in connection with this Agreement constitute or, if not #15..
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yet executed or delivered, will when so executed and delivered, constitute legal, valid and binding obligations of Owner, enforceable against Owner in accordance with their respective terms. e. No Breach of Law or Agreement. None of the execution or delivery of the Loan Documents or of any document or instrument executed and delivered, or to be executed or delivered, pursuant to this Agreement, or the performance of any provision, condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission, or agency whatsoever binding on Owner or any provision of the organizational documents of Owner, will conflict with or constitute a breach of or a default under any agreement to which Owner is a party, or will result in the creation of imposition of any lien upon any assets or property of Owner, other than liens approved by City. f. Compliance with Laws: Consents and Approvals. Owner will comply with all applicable laws, ordinances, rules and regulations of federal, state and local governments and agencies having jurisdiction over Owner, the Project or the Property and with all applicable directions, rules and regulations of the fire marshal, health officer, building inspector and other officers of any such government or agency.
g. Permits. All permits, consents, permissions and licenses required by any federal, state or local government or agency to which Owner or the Property is subject, which may be necessary in relation to this Agreement or the development, construction, operation or ownership of the Property, at, prior, or subsequent to the commencement of construction, have been, or will be, obtained. h. Pending Proceedings. Owner is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of Owner, threatened against or affecting Owner or the Property, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to Owner, materially affect Owner’s ability to rehabilitate or operate the Property or pay the CFF Obligation should a default occur under this Agreement. #15..
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14. MISCELLANEOUS PROVISIONS

14.1. Owner shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any rights herein, nor make any total or partial sale, transfer, gift, conveyance, assignment, or lease of the whole or any part of the Property or the improvements thereon, without the prior written approval of City (which approval shall not be unreasonably withheld). The provisions of this subparagraph 14.2.a. shall not apply to the individual rental of any of the Units in the Project. a. Any such proposed buyer, transferee, conveyee, assignee or lessee, by instrument in writing satisfactory to City and in form recordable among the land records, for itself and its successors, heirs, and assigns, and for the benefit of City, shall expressly assume all of the obligations of Owner under this Agreement and agree to be subject to all conditions and restrictions to which Owner is subject. There shall be submitted to City for review all instruments and other legal documents proposed to affect any such sale, transfer, conveyance, assignment or lease, and, if approved by City, such approval shall be indicated to Owner in writing.
b. In the absence of specific written agreement by City, no such sale, transfer, gift, conveyance, assignment, or lease, or the approval thereof by City, shall be deemed to relieve Owner or any other party from any obligations under this Agreement.

14.2 All notices permitted or required to be given under this Agreement shall be in writing and shall be deemed duly given and effective (a) upon actual delivery if delivery is by personal delivery or (b) five (5) days after delivery into the United States mail if delivery is by postage prepaid, registered or certified mail, return receipt requested, to the respective addresses as set forth below or to any other address as the respective parties may designate from time to time.

For Owner: Stanislaus County Affordable Housing Corporation 909 15
th Street, Suite 6
Modesto, CA 95354
Attention: Steve Madison
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For City: Community and Economic Development
City of Modesto
P.O. Box 642
Modesto, California 95353
Attention: CFF Administrator

14.3 Nothing contained in this Agreement shall be interpreted or understood by any of the parties, or by any third person, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between City and Owner or its agents, employees or contractors. Except as City may specify in writing, Owner shall have no authority to act as an agent of City or to bind City to any obligation.

14.4 This Agreement, including any exhibits hereto, shall not be amended except in writing, signed by both parties. Any amendment or addendum to this Agreement shall expressly refer to this Agreement.

14.5 No member, official, employee or agent of City shall be personally liable to Owner in the event of any default or breach by City.

14.6 This Agreement shall be interpreted under and be governed by the laws of the State of California.

14.7 Should either party institute suit or arbitration for enforcement or interpretation of any provision contained herein, the venue of such action shall be in Stanislaus County, California.

14.8 Every provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired.

14.9 Any waiver by City of any obligation or condition in this Agreement must be in writing.

No waiver will be implied from any delay or failure by City to take action on any breach or default of Owner or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to Owner to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by City to any act or omission by Owner shall #15..
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not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for City's written consent to future waivers.

14.10 Any titles of the sections or subsections of this Agreement are inserted for convenience of reference only, and shall be disregarded in interpreting any part of the Agreement's provisions.

14.11 The language of each and all paragraphs, terms and/or provisions of this Agreement, shall, in all cases and for any and all purposes, and in any way and all circumstances whatsoever, be construed as a whole, according to its fair meaning, and not for or against any party hereto and with no regard whatsoever to the identity or status of any person or persons who drafted all or any portion of this Agreement.

14.12 City's execution of this Agreement in no way limits the discretion of City in the permit and approval process in connection with the construction of the Project or development of the Property or any improvements on the Property or in the issuance of any inspections, licenses or permits.

14.13 This Agreement and any exhibits attached hereto constitute the sole and entire Agreement of the parties hereto with respect to the matters herein and correctly sets forth the rights, duties, and obligations of each to the other as of the date first written above. There are no other agreements or understandings, written or oral, between the parties regarding this Agreement other than those set forth herein.

15. PARTIES BOUND; COVENANTS RUNNING WITH THE LAND; EFFECT AND DURATION OF COVENANTS.

15.1 Except as otherwise limited herein, the provisions of this Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, legal representatives, successors, transferees, and all assigns. This Agreement shall be recorded in the Office of the Recorder of Stanislaus County, California, at the expense of Owner, and shall constitute notice to all successors, heirs and assigns of title to the Property or Project. All rights and obligations set forth herein shall run with the land, shall constitute a lien against title and shall bind Owner and its successors and assigns in the Property #15..
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or the Project for the entire term regardless of any assignment, payment, prepayment, expiration, extinguishment of any loan or note, any reconveyance of deed of trust, or any conveyance or transfer of the Property or the Project, and the benefit hereof shall inure to the benefit of City and its successors and assigns.

15.2 The covenants established in this Agreement shall, without regard to technical classification and designation, be binding on the part of the Owner and any successors and assigns to the Property or the Project or any part thereof, and the Tenants, lessees, sublessees and occupants of the Property or the Project, for the benefit of and in favor of the City, and any successor in interest thereto.

15.3. Owner covenants that Owner has not, and shall not, enter into or execute any other agreement with provisions contrary to the provisions of this Agreement, or contrary to the intent of maintaining the affordability of the Units for the full Period of Affordability described in subparagraph

2.1.a., above.
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IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this Agreement in duplicate by its City Manager and attestation by its City Clerk by Resolution No. ___________ adopted by the Council of the City of Modesto on the ___ day of _________, 2022, and Owner has caused this Agreement to be duly executed.

CITY OF MODESTO
A municipal corporation
By
JOSEPH P. LOPEZ,
City Manager

ATTEST:

By

DIANE NAYARES-PEREZ,
City Clerk
(SEAL)
APPROVED AS TO FORM:

JOSE M. SANCHEZ, City Attorney
By
APPROVED AS TO RISK MANAGEMENT:

By: ______________________________
JOE F. RODRIGUEZ, Risk Manager
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STANISLAUS COUNTY AFFORDABLE HOUSING CORPORATION
By: ___________________________________
Name: _________________________________
Title: __________________________________
By: ____________________________________
Name: __________________________________
Title: ___________________________________
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3336861.2

EXHIBIT A

LEGAL DESCRIPTION
The land referred to is situated in the County of Stanislaus, City of Modesto, State of California, and is described as follows:

A portion of Lot 13 of Spencer Colony, located in Section 31, Township 3 South, Range 9 East, Mount Diablo Base and Meriden, according to the Official Map thereof filed in the Office of the Recorder of Stanislaus County, California on December16, 1904 in Volume 2 of Maps, Page 3.

COMMENCING at the original Southeast corner of said Lot 13 of Spencer Colony, said corner being at the intersection of the East West one quarter section line through Section 31 with the centerline of Spencer Avenue, said corner bears South 89° 54' West, 1330.40 feet from the East one quarter of Section 31 and running thence North 0° 10' East, 10.00 feet, thence South 89° 54' West, 20.00 feet to the West line of Spencer Avenue, thence continuing South 89° 54' West, 665.00 feet along the North line of California Avenue to the true point of beginning, thence North 0° 10' East, 230.64 feet to a point on the South line of the North 7.00 acres of said Lot13, thence South 89° 54' West, along said South line, 70.00 feet; thence South 0° 10' West, 230.64 feet to a point on the North line of California Avenue, thence North 89° 54' East, 70.00 feet along said North line of California Avenue to the point of beginning.

Excepting therefrom all that portion conveyed to the City of Modesto by Deed recorded September 6, 1984, under Recorders File No. 11595.

APN: 030-008-011-000
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(Form Promissory Note – 835 California Ave.)

EXHIBIT B

FORM PROMISSORY NOTE

NOT FOR EXECUTION
$62,100 MONTH ___, 2022
Modesto, California
FOR VALUE RECEIVED, the undersigned, Stanislaus County Affordable Housing Corporation (“Applicant”), hereby promises to pay to the City of Modesto, a Municipal Corporation of the State of California (“City”) the principal sum of SIXTY-TWO THOUSAND, ONE HUNDRED DOLLARS ($62,100) pursuant to the terms of this Promissory Note (“Note”), and the Capital Facilities Fees Exemption Agreement.

This Note evidences the obligation of Borrower to City for the repayment of the exempt City’s Capital Facilities Fees (“CFF”) as more fully described in the Capital Facilities Fees Exemption Agreement (“Agreement”) between City and Borrower of even date herewith, the terms of which are incorporated fully herein.

The Note evidences the obligation of the Borrower to the City for the repayment of conditionally exempt capital facilities fees (“CFF”) by the City for the benefit of Borrower for the purpose of six affordable units for very low-income families with family members with serious mental illness (project), at 835 California Avenue, Modesto CA 95351, more particularly described in Exhibit A hereto and incorporated herein by this reference (“Property”).

1. Terms of Payment.
a. Payments of principal and interest shall be deferred for a ten (10) year period beginning MONTH, 2022 which is the date a Final Certificate of Occupancy was first issued for the six units (“Exemption Units”) as set forth in the Agreement. If the Agreement is terminated by the City for any default as provided in the Agreement, Borrower shall immediately pay to City or City’s designee the principal sum of SIXTY-TWO THOUSAND, ONE HUNDRED DOLLARS ($62,100) plus all accrued interest due thereon. If City declares any default pursuant to paragraph 5.1 of the Agreement, Borrower shall immediately pay to City or City’s designee any and all interest due for the period of said default. If City declares any default pursuant to paragraph 5.2 of the Agreement, Borrower shall immediately pay to City or City’s designee one half of the outstanding principal plus all accrued interest.
b. Interest will accrue on the unpaid principal at the rate of eighteen percent (18%) per annum from the date a certificate of occupancy is issued for the project of the Exempt Units until the full amount of the loan has been paid. All payments due #15..
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(Form Promissory Note – 835 California Ave.)

hereunder shall become due immediately upon the occurrence of any of the events set forth in Section 4 of this Note.
c. The Borrower shall have the right to prepay at any time all of any part of the outstanding balance without and pre-payment penalty.
d. The payments due under this Note shall be paid in currency of the United States of America, which at the time of payments is lawful for the payment of public and private debts.
e. The payments on this Note shall be made to the City of Modesto, Community and Economic Department, 1010 10th Street, Modesto, CA 95354 or to such other place as the City may designate in writing.

2. Acceleration.

The whole of the Note and the other payments due hereunder shall become due and be immediately payable to City by Borrower upon occurrence of any one of the following events:
a. If Borrower sells or transfers any or all of its interest in the Property, including, without limitation, lease, exchange or other disposition of the Property or any interest therein, whether voluntary or involuntary. This clause shall not apply to lease of any individual unit on the property.
b. The City terminates the Agreement for Borrower’s default under the Agreement. c. The filing for bankruptcy or dissolution of Borrower, or either one of them individually.
d. Failure to make any payment due hereunder in the full amount due or within the time allowed.

3. Security.

This Note shall be secured by a Deed of Trust (“Deed of Trust”) on Borrower’s interest in the property.

4. Default.
a. Any failure to pay in full any payment required under this Note or the Agreement shall constitute a default under this Note.
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(Form Promissory Note – 835 California Ave.)

b. Any event of default under the Agreement, Deed of Trust or this Note shall constitute a default under this Note.
c. Insolvency, general assignment for the benefit of creditors, filing of any petition of bankruptcy or for the relief under the provisions of the National Bankruptcy Act or any other law or laws for the relief of or relating to debts, or, by or against Borrower.
d. Appointment of a receiver or trustee to take possession of the Property. e. Attachment of an involuntary lien or liens, of any kind or character, to the Property.
f. Upon the occurrence of an event of default, City shall provide to Borrower written notice of said occurrence, consistent with Section 5 of this Note, and Borrower shall have thirty (30) days to cure the default, plus such additional time as City determines, in its sole discretion, is necessary to cure a nonmonetary default provided that within thirty (30) days Borrower has commenced and is diligently pursuing the cure. If, after the time provided in this subparagraph (f), Borrower has not cured the default, and City has not waived its rights under the Note, the entire unpaid principal balance, together with all other sums then payable under this Note, or all interest due if the default is pursuant to Paragraph 5.1 of the Agreement, or one half of the principal plus all accrued interest if the default is pursuant to Paragraph 5.2 of the Agreement, shall, at the option of the City, become immediately due and payable upon written notice by City to Borrower without further demand.
g. If an event of default shall occur and be continuing, City may pursue all rights and remedies available under this Note or as may otherwise be available to City.

5. Notices.

All notices permitted or required to be given under this Agreement shall be in writing and shall be deemed duly given and effective (1) upon actual delivery if delivery is by personal delivery or (2) five (5) days after delivery into the United States mail if delivery is by postage prepaid, registered or certified mail, return receipt requested, to the respective addresses as set forth below or to any other address as the respective parties may designate from time to time.
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(Form Promissory Note – 835 California Ave.)

For Borrower: Stanislaus County Affordable Housing Corporation 909 15th Street, Ste. 6
Modesto, CA 95354
Attention: Steve Madison
For Personal Delivery:

For City: City of Modesto
Community & Economic Development
1010 Tenth Street, Suite 3300
Modesto, California 95354
Attn: Community Development Manager
By Mail:

City of Modesto
Community & Economic Development
P O Box 642
Modesto, California 95353
Attn: Community Development Manager

6. No Offset.

Borrower hereby waives any rights of offset it now has or may hereafter have against City, its successors, and assigns, and agrees to make the payments called for herein accordance with the terms of this Note, the Deed of Trust and the Agreement.

7. Transfer.

This Note is not transferrable by Borrower. City, at its option, may negotiate transfer of assumption of this Note without necessity of obtaining Borrower’s consent.

8. Incorporation of Agreements.

This Note is subject to, and Borrower agrees to comply with, the terms and conditions of the Capital Facilities Fees Exemption Agreement between City and Borrower, and the Deed of Trust dated of even date herewith, and said Agreement and Deed of Trust are incorporated herein by this reference.

9. No Waiver.
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(Form Promissory Note – 835 California Ave.)

Any waiver by City of any obligation or condition in this Note must be in writing. No waiver will be implied from any delay or failure by City to take action on any breach or default of Borrower or to pursue any remedy allowed under this Note or applicable by law. Any extension of time granted to Borrower to perform any obligation under this Note shall not operate as a waiver or release from any of its obligations under this Note.

Consent by City to any act or omission by Borrower shall not be construed to be consent to any other or subsequent act or omission or to waive the requirement for City’s written consent to future waivers.

10. Amendment.

This Note, including any exhibits hereto, shall not be amended except in writing, signed by the parties. Any amendment or addendum to this Note shall expressly refer to this Note.

11. Applicable Law.

This Note shall be interpreted under and be governed by the laws of the State of California.

12. Venue.

Should either party institute suit or arbitration for enforcement or interpretation of any provision contained herein, the venue of such action shall be in Stanislaus County, California.

13. Legal Actions.

In addition to any other rights or remedies, City may institute legal action to cure, correct or remedy any default, to recover damages for any default or to obtain any other remedy consistent with the purpose of this Note or the Agreement. City may also, at its option, cure the breach and file a legal action to collect the reasonable costs incurred by virtue of curing or correcting Borrower’s breach. Further, City may file legal action to require Borrower to specifically perform the terms and conditions of this Agreement. In the event that either part institutes a lawsuit or arbitration to enforce any part of this Agreement, or for any breach of this Agreement, the prevailing party may recover, in addition to any other remedies, all costs of suit, including reasonable attorneys’ fees.

14. Severability.
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(Form Promissory Note – 835 California Ave.)

Every provision of this Note is intended to be severable. If any provision of this Note shall be held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired.

15. Title of Parts and Sections.

Any titles of these section or subsections of this Note are inserted for convenience or reference only and shall be disregarded in interpreting any part of the Note’s provisions.

16. Language Construction.

The language of each and all paragraphs, terms and/or provisions of this Note, shall, in all cases and for any and all purposes, and in any way and all circumstances whatsoever, be construed as a whole, according to their meaning, and any for or against either party and with no regard whatsoever to the identity of status of any person or persons who drafted all or any portion of this Note.

Stanislaus County Affordable Housing Corporation
A non-profit organization
By:

Title: ___________________________________
By:

Title: ___________________________________
*Corporations: signature of two (2) officers required OR one (1) officer plus corporate seal
*Partnership: signature of a partner required
*Sole Proprietorship: signature of proprietor required
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Exhibit C

FORM DEED OF TRUST

NOT FOR EXECUTION

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL
TO:

City of Modesto
Community and Economic
Development Department
1010 10th Street
Modesto, CA 95354
Attn.: Tina Rocha
SPACE ABOVE LINE FOR RECORDER’S USE (No Fee For Recording Pursuant to Government Code §27383)

DEED OF TRUST WITH ASSIGNMENT OF RENTS
This DEED OF TRUST, made __________________between Stanislaus County Affordable Housing Corporation, non-profit herein called TRUSTOR, whose address is 835 California Avenue, Modesto, California. herein called TRUSTEE, and The City of Modesto, herein called BENEFICIARY, Trustor irrevocably grants, transfers and assigns to Trustee in Trust, with Power of Sale of that property in Modesto, County of Stanislaus, State of California, described in the attached “Exhibit A.” Together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits.

For the purpose of Securing (1) payment of the sum of $62,100 with interest thereon according to the terms of a promissory note or notes of even date herewith made by Trustor, payable to order of the Beneficiary, and extensions or renewals thereof; (2) the performance of each agreement of Trustor incorporated by reference or contained herein or reciting it is so secured; (3) Payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or his or her successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust.

A. To protect the security of this Deed of Trust, and with respect to the property above described, Trustor agrees:
(1) To keep said property in good condition and repair; not to remove or demolish any building thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon aid property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which form the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general (2) To provide, maintain, and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney’s fees in a reasonable sum, in any action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust. (4) To pay: at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust.

Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligations do so and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights of powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge, or lien which in the judgement of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his or her reasonable fees. (5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the rate hereof, and to pay for any statement #15..
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(Form Deed of Trust) City Loan Doc.
provided for by law in effect at the date hereof regarding the obligation secured hereby, any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded.

B. It is mutually agreed:
(1) That any award of damages in connection with any condemnation for public use or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him or her in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance.
(2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his or her right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay.
(3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, Trustee may: re-convey any part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating the lien or charge hereof. (4) That upon written request of beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall re-convey, without warranty, the property then held hereunder. The recitals in such re-conveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such re-conveyance may be described as “the person or persons legally entitled thereto.”
(5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his or her own name sue for or otherwise collect such rents, issues and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney’s fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. (6) That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby.

After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale.

After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally entitled thereto. (7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name ad address of the new Trustee.
(8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby, whether or not named as Beneficiary herein, In this Deed, #15..
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(Form Deed of Trust) City Loan Doc.
whenever the context so requires, the masculine gender includes the feminine and/or the neuter, and the singular number includes the plural.
(9) The trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.

Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge thereof does not exceed the maximum allowed by laws.

The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him or her at his or her address hereinbefore set forth.

Signature of Trustor:

Stanislaus County Affordable Housing Corporation, a non-profit Date: _ __________ By:_________ _____________________
Name:____________________________
Title: _____________________________
By: _______________________________
Name:_____________________________
Title:_______________________________
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

May 24, 2022
Date: May 4, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jaylen French, Director of Community and Economic Development SUBJECT: Program Year 2021-2022 Annual Action Plan Amendment #1 CONTACT: Jessica Hill, Community Development Manager
[email protected], 209-577-5321
DESCRIPTION:

Hearing to consider approving the City of Modesto HOME-American Rescue Plan (ARP) as the Program Year 2021-2022 Annual Action Plan Amendment #1, accepting the HOME-ARP grant in the amount of $3,409,774, and amending the Fiscal Year 2021-2022 Multi-Year Fund Budget to program the HOME-ARP grant funds awarded to the City of Modesto. (Funding Source:

HOME-ARP Grant Funds)
STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto’s 2020-2025 Strategic Plan Goal C: Develop Homelessness and Housing Plan.

BACKGROUND:

The City of Modesto is an entitlement grantee under the U.S. Department of Housing and Urban Development (HUD) Office of Community Planning and Development (CPD) programs. HUD requires that entitlement grantees adopt a comprehensive, long‐term plan for the use of its HUD funds known as the Five‐Year “Consolidated Plan” (Con Plan) which analyzes the City’s housing and community development needs, with a priority focus on low‐ and moderate‐ income individuals, households, and neighborhoods, and describes long‐term strategies for meeting those needs. The City’s current Consolidated Plan covers Program Years 2020 to 2025 (July 1, 2020 to June 30, 2025).

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARP) into law, which provided over $1.9 trillion in relief to address the continued impact of the COVID-19 pandemic on the economy, public health, State and local governments, individuals, and businesses. To address the need for homelessness assistance and supportive services, Congress appropriated $5 billion in ARP funds to be administered through HOME Investment Partnership Program to perform four activities that must primarily benefit qualifying individuals and families who are homeless, at risk of homelessness, or in other vulnerable populations.

These activities include: (1) development and support of affordable housing, (2) tenant-based #16..
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City Council, May 24, 2022
Program Year 2021-2022 Annual Action Plan Amendment #1

rental assistance (TBRA), (3) provision of supportive services; and (4) acquisition and development of non-congregate shelter units. The program described in this notice for the use of the $5 billion in ARP funds is the HOME-American Rescue Plan or “HOME-ARP.” DISCUSSION:

As a HUD participating jurisdiction for the HUD HOME Partnership Investment Program (HOME), the City was eligible to receive a HOME-American Rescue Plan allocation. On April 8, 2021 HUD issued the direct allocation of $3,409,774 with an expenditure deadline of September 30, 2030. In order to allocate these funds, HUD requires the City to develop a plan that outlines the gaps in services and housing for the qualifying populations to be served with this funding and it will funding be programmed through the PY 2021-2022 Annual Action Plan.

The City of Modesto’s Program Year (PY) 2021-2022 Annual Action Plan represents the second (2nd) plan of the City of Modesto’s 2020-2025 Consolidated Plan.

The Plan
As required by HUD for the HOME ARP Plan development the City reviewed data from Local, State, and Federal sources and reports to determine who is homeless, what services are available, and what housing is available in Modesto. According to the 2021 Point-in time data there was 2,107 homeless individuals noted, with 76% of these individuals were reported in Modesto. In the analysis it was identified that in order to successfully house these individuals, the City would need to develop a minimum of 761 permanent supportive housing units.

Based on the full analysis in the gaps in housing and services in the HOME-ARP Plan (Attachment 1), this grant would best serve our community in the development of permanent HOME American Rescue Plan (HOME-ARP)
Funding $3,409,774 – Expenditure Deadline September 30, 2030 Uses • Homeless
• At-risk of homelessness
• Fleeing, or attempting to flee, domestic violence, dating violence, sexual assault, stalking, or human trafficking, as defined by the Secretary;
• In other populations that prevent the family’s homelessness or would serve those with the greatest risk of housing instability; • Veterans and Veteran families that include that meet one of the preceding criteria.

Eligible
Activities
• Production or Preservation of Affordable Housing
• Supportive Services, including services defined at 24 CFR 578.53(e), homeless prevention services, and housing counseling. • Purchase and Development of Non-Congregate Shelter. These structures can remain in use as non-congregate shelter or can be converted to: 1) emergency shelter under the Emergency Solutions Grant program; 2) permanent housing under the Continuum of Care; or 3) affordable housing under the HOME Program.
• Tenant-Based Rental Assistance (TBRA)
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City Council, May 24, 2022
Program Year 2021-2022 Annual Action Plan Amendment #1

affordable housing units. Lack of affordable housing in Modesto has created a bottleneck in getting individuals off the streets to further assist them in breaking the cycle of homelessness.

Program Allocations
Planned Uses Funding Amount
Development of Permanent
Affordable Housing
$ 2,898,308
Administration and Planning $ 511,466
Total HOME ARP Allocation $ 3,409,774
Citizen Participation Process
In accordance with HUD waivers to our Citizen Participation requirements, the public is afforded an opportunity to comment, for a minimum of 15 days, on the proposed Annual Action Plan Amendment HOME ARP Plan. Any public comments received in writing or at public meetings, will be considered by the City when preparing the Annual Action Plan Amendment. A summary of the comments, including a notation as to whether or not the comment was accepted and the reasoning behind the inclusion or exclusion, will be included within the Citizen Participation section of the Annual Action Plan Amendment.

A series of community meetings were held during the months of April and May 2022 to provide information about the City’s HUD programs and discuss the PY 2021-2022 Annual Action Plan Amendment and HOME ARP Plan. The following is a list of the community meetings. In order to minimize the spread of COVID-19, the meetings accommodated in-person and virtual audiences based on the request of the stakeholder organization that hosted the meeting:

Date Time Location
April 4, 2022 3:30 pm Airport Neighborhood Community Collaborative (Virtual)
April 20, 2022 5:30 pm West Modesto People of Action Committee (Hybrid)
April 21, 2022 9:00 am California Community Builders (Hybrid) April 21, 2022 2:30 pm Stanislaus Community System of Care (Virtual) May 11, 2022 5:30 pm Stanislaus Homeless Alliance (Virtual) May 12, 2022 12:00 pm CH&CDC Meeting (Virtual)
May 24, 2022 5:30 pm City Council Public Hearing (Hybrid) The public review period offers members of the public an opportunity to provide comments on the draft document and this process was opened on May 9, 2022 and is scheduled to close with a public hearing at the Council meeting on May 24, 2022. No public comments have been received to date.

Any comments received during the public review period or during the Council public hearing will be incorporated into the final Program Year 2021-2022 Annual Action Plan Amendment #1 – #16..
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City Council, May 24, 2022
Program Year 2021-2022 Annual Action Plan Amendment #1

Home-ARP Plan that is submitted to HUD. A copy of the Program Year 2021-2022 Annual Action Plan Amendment #1 – Home-ARP Plan is provided as Attachment 3.

As per the City’s Administrative Directive 7.2 on Grant Management, grant applications over $1,000,000 with no match requirements must be approved by Council. This item satisfies that requirement for these annual grants.

FISCAL IMPACT:

There is no impact to the General Fund. The U.S. Department of Housing and Urban Development Department HUD requires all recipients that were allocated HOME-ARP grant funds to prepare and submit an Annual Action Plan Amendment to the Program Year 2021- 2022. Failure to comply will result in the funds not being available to the City.

COMMITTEE RECOMMENDATION:

This item was presented to the Citizens’ Housing & Community Development Committee on May 12, 2022 and was forwarded to the City Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendation:

Resolution approving the City of Modesto HOME-American Rescue Plan as the Program Year 2021-2022 Annual Action Plan Amendment #1 and accepting the HOME-ARP grant in the amount of $3,409,774, and authorizing the City Manager, or his designee, to negotiate and execute any forms related to the acceptance of this grant.

Resolution amending the Fiscal Year 2021-2022 Multi-Year Fund Budget, amending the allocation of American Rescue Plan Act of 2021 HOME grant funds in the amount of $3,409,774 with the appropriate revenue and expenditure allocations and authorizing the City Manager, or his designee to accept the Federal Grant Funds and to take the necessary steps to implement the provisions of this resolution.

Approved by:

Jaylen French,
Director of Community and Economic Development
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Budget Resolution

3. HOME-ARP Plan
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5/24/2022/C&ED/JHill 1 2022-xxxx

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-xxxx

RESOLUTION APPROVING THE CITY OF MODESTO HOME-AMERICAN
RESCUE PLAN AS THE PROGRAM YEAR 2021-2022 ANNUAL ACTION PLAN AMENDMENT #1 AND ACCEPTING THE HOME-ARP GRANT IN THE
AMOUNT OF $3,409,774, AND AUTHORIZING THE CITY MANAGER, OR HIS

DESIGNEE, TO NEGOTIATE AND EXECUTE ANY FORMS RELATED TO

THE ACCEPTANCE OF THIS GRANT
WHEREAS, the City of Modesto is an entitlement grantee under the U.S.

Department of Housing and Urban Development (HUD) Office of Community Planning and Development (CPD) programs and HUD requires entitlement grantees adopt a comprehensive, long‐term plan for the use of its HUD funds known as the Five‐Year “Consolidated Plan” (Con Plan) which analyzes the City’s housing and community development needs, with a priority focus on low‐ and moderate‐ income individuals, households, and neighborhoods, and describes long‐term strategies for meeting those needs, and
WHEREAS, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARP) into law, which provided over $1.9 trillion in relief to address the continued impact of the COVID-19 pandemic on the economy, public health, State and local governments, individuals, and businesses, and WHEREAS, to address the need for homelessness assistance and supportive services, Congress appropriated $5 billion in ARP funds to be administered through HOME Investment Partnership Program to perform four activities that must primarily benefit qualifying individuals and families who are homeless, at risk of homelessness, or in other vulnerable populations, and
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5/24/2022/C&ED/JHill 2 2022-xxxx
WHEREAS, as a HUD participating jurisdiction for the HUD HOME Partnership Investment Program (HOME), the City was eligible to receive a HOME-American Rescue Plan allocation, and
WHEREAS, on April 8, 2021, HUD issued the direct allocation of $3,409,774 with an expenditure deadline of September 30, 2030. In order to allocate these funds, HUD requires the City to develop a plan that outlines the gaps in services and housing for the qualifying populations to be served with this funding and HUD requires that the funding be programmed through the PY 2021-2022 Annual Action Plan through an Amendment to this plan, and
WHEREAS, the City of Modesto’s Program Year (PY) 2021-2022 Annual Action Plan represents the second (2nd) plan of the City of Modesto’s 2020-2025 Consolidated Plan., and
WHEREAS, based on the full analysis in the gaps in housing and services in the HOME-ARP Plan, for those in our community that could be served with this funding, it was identified that this grant would best be served in the development of permanent supportive housing units, and
WHEREAS, lack of affordable housing in Modesto has created a bottleneck in getting individuals off the streets to further assist them in breaking the cycle of homelessness, and
WHEREAS, the HOME-ARP plan states that $2,898,308 dedicated to the development of permanent supportive housing and $511,466 to program administration and planning.
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5/24/2022/C&ED/JHill 3 2022-xxxx
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the City of Modesto HOME-American Rescue Plan as the Program Year 2021-2022 Annual Action Plan Amendment #1.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is authorized to accept the HOME-ARP grant in the amount of $3,409,774.

BE IT FURTHER RESOLVED that authorizing the City Manager, or his designee, to negotiate and execute any forms related to the acceptance of this grant.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 24th day of May, 2022, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers: ?
NOES: Councilmembers: ?
ABSENT: Councilmembers: ?
ATTEST: ________________________________
DIANE NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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5/24/2022/C&ED/JHill 1 2022-xxxx

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-xxxx
RESOLUTION AMENDING THE FISCAL YEAR 2021-2022 MULTI-YEAR

FUND BUDGET FOR THE ALLOCATION OF THE AMERICAN RESCUE
PLAN ACT OF 2021 HOME GRANT FUNDS IN THE AMOUNT OF $3,409,774

WITH THE APPROPRIATE REVENUE AND EXPENDITURE ALLOCATIONS

AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE TO ACCEPT

THE FEDERAL GRANT FUNDS AND TAKE THE NECESSARY STEPS TO

IMPLEMENT THE PROVISIONS OF THIS RESOLUTION
WHEREAS, the City of Modesto is an entitlement grantee under the U.S.

Department of Housing and Urban Development (HUD) Office of Community Planning and Development (CPD) programs, and
WHEREAS, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARP) into law, which provided over $1.9 trillion in relief to address the continued impact of the COVID-19 pandemic on the economy, public health, State and local governments, individuals, and businesses, and WHEREAS, to address the need for homelessness assistance and supportive services, Congress appropriated $5 billion in ARP funds to be administered through HOME Investment Partnership Program (HOME) to primarily benefit qualifying individuals and families who are homeless, at risk of homelessness, or in other vulnerable populations, and
WHEREAS, as a HUD participating jurisdiction, the City was eligible to receive a HOME-American Rescue Plan allocation, and
WHEREAS, on April 8, 2021, HUD issued the direct allocation of $3,409,774 with an expenditure deadline of September 30, 2030.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby amends the Fiscal Year 2021-2022 Multi-Year Fund Budget, to budget the #16..
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5/24/2022/C&ED/JHill 2 2022-xxxx
allocation of American Rescue Plan Act of 2021 grant funds from the U.S. Department of Housing and Urban Development with the appropriate revenue and expenditure allocations.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is authorized to accept the Federal grant funds in the amount of $3,409,774.

BE IT FURTHER RESOLVED that authorizing the City Manager, or his designee, to carry out administrative actions or execute any agreements required for the City to carry out the purpose and intent of this Resolution.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 24th day of May, 2022, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers: ?
NOES: Councilmembers: ?
ABSENT: Councilmembers: ?
ATTEST: ________________________________
DIANE NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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Prepared by:

Community and Economic Development Department
1 Draft
Annual Action Plan
Amendment #1
Fiscal Year 2021-2022
City of Modesto Consolidated
Plan2020-2024 - Year 2
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Participating Jurisdiction: City of Modesto Date: 05/09/2022 Consultation
Before developing its plan, a Participating Jurisdiction (PJ) must consult with the Continuum of Care(s) CoC(s) serving the jurisdiction's geographic area, homeless and domestic violence service providers, veterans' groups, public housing agencies (PHAs), public agencies that address the needs of the qualifying populations and public or private organizations that address fair housing, civil rights, and the needs of persons with disabilities, at a minimum. State PJs are not required to consult with every PHA or CoC within the state's boundaries; however, local PJs must consult with all PHAs (including statewide or regional PHAs) and CoCs serving the jurisdiction.

Summarize the consultation process:

The City of Modesto follows the Citizen Participation Plan that the City Council has approved as the guide for engaging with citizens and consultation with respective entities. The City of Modesto encourages citizen participation in the Annual Action Plan process and views itself as an active partner in the process; directly engaging with the public and facilitating opportunities for citizens and stakeholders to engage in the process.

As a part of the consultation process, the City analyzed system level data and report analysis provided by the Stanislaus Community System of Care. In addition to the review of the data, the City consulted with various organizations including service providers from private and public organizations that serve veterans, survivors of domestic violence, fair housing, civil rights, persons with disabilities, homeless families, and homeless youth. Consultation with service providers not only takes place during the development of this Annual Action plan amendment for the HOME- American Rescue Plan (HOME-ARP), but occurs throughout the year with the Community System of Care and other local community forums. The City realizes that consultation and collaboration with stakeholders is key to developing a comprehensive strategy that can have a meaningful impact in helping address the needs of the underserved, and to help ensure that HUD resources are used most effectively.

For the development and analysis of gaps and needs for the HOME-ARP Plan, City staff utilized feedback received during the development of the 2021 Regional Strategic Plan to Address Homelessness. This plan was vetted with the community and stakeholders during the development of this regional strategy. To further garner input specifically for the HOME ARP funds, the City issued targeted surveys, targeted emails, in-person and virtual meetings, focus group discussions, and a public hearing. Below is an outline of the feedback received:
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Consultation Summary
Agency/Org
Consulted
Type of Agency/Org Method of
Consultation
Key Themes from
Community Feedback
Airport
Neighborhood
Collaborative
Stakeholder Community
Group
Virtual Presentation
and Survey
The City needs
affordable
housing
West Modesto –
People of Action
Stakeholder Community
Group
In-Person /Virtual
Presentation and
Survey
The City needs to
focus on affordable
housing in areas
beyond West and
South Modesto.

West Modesto –
WestMo
Community
Builders
Stakeholder Community
Group
In-Person /Virtual
Presentation and
Survey
No comments
regarding the HOMEARP Funding.

Stanislaus
Community System
of Care – Local CoC
CoC Virtual
Presentation and
Survey
No comments
regarding the HOMEARP Funding.

Stanislaus Homeless
Alliance
Stakeholder Governance
Committee
In-person and attended
by individuals with
lived experience
Not comments
regarding the HOMEARP Funding.

Citizen’s Housing
and Community
Development
Committee
City Governance Committee Virtual Presentation Not comments regarding the HOMEARP Funding.

City Council
Targeted
Survey Data
Responses received
represented stakeholders from
the following:
• Homeless
• At-Risk of
Homelessness
• Fleeing or Attempting
to Flee Domestic
Violence
• Veterans and Veteran
Families
• Other populations at
risk for housing
Survey • 87.5 % state yes to
the Production and
Preservation of
Affordable
housing as the top
priority.
• 12.5% did not
offer any other
priorities.
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instability
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Public Participation
PJs must provide for and encourage citizen participation in the development of the HOME-ARP allocation plan. Before submission of the plan, PJs must provide residents with reasonable notice and an opportunity to comment on the proposed HOME-ARP of no less than 15 calendar days. The PJ must follow its adopted requirements for "reasonable notice and an opportunity to comment" for plan amendments in its current citizen participation plan. In addition, PJs must hold at least one public hearing during the development of the HOME-ARP allocation plan and prior submission. For the purposes of HOME-ARP, PJs are required to make the following information available to the public:
• The amount of HOME-ARP the PJ will receive,
• The range of activities the PJ may undertake.

Describe the public participation process, including information about and the dates of the public comment period and public hearing(s) held during the development of the plan:
• Public comment period: Start date – 05/09/2022 End date – 05/24/2022 • Public Hearing: 05/24/2022
Describe any efforts to broaden public participation:

It is the goal of the City to have continuous dialogue with the community regarding funding projects or community goals pertaining to the use of Housing and Urban Development grants.

In 2020 and 2021 the Stanislaus Community System of Care, local CoC, began drafting the Stanislaus 2021 Regional Strategic Plan to Address Homelessness1(Attachment 1). The 1,021 survey respondents that comprised of residents and stakeholders were:
• 137 people with lived experience
• 481 know/knew people experiencing homelessness
• 107 city/county employees
• 126 business owners
• 620 property owners
• 136 individuals affiliated with faith-based organizations • 127 individuals affiliated with service providers including domestic violence, veteran service, and youth service providers.
• 87 individuals affiliated with neighborhood groups or coalitions.

Of the above respondents Modesto residents comprised 63.89% of survey respondents. In addition, feedback on homelessness was provided by City Council members and members of the public on April 5, 2021 for additional review and comment.

The public had an opportunity to provide feedback on the plan at public committee meetings and review the Stanislaus 2021 Regional Strategic Plan to Address Homelessness. The opportunities to provide feedback were made available through social media, community forums, and targeted surveys. Staff implemented

1 1 Regional Homeless Strategic Plan for Stanislaus – CSOC (csocstan.com) – Plan documents available in both English and Spanish
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various strategies to increase engagement from the community with the intent of meeting community stakeholders in a forum and manner that was culturally sensitive and comfortable to foster engagement.

This workgroup, with the input of residents and stakeholders, drafted the regional plan that was adopted by the CoC and Stanislaus County as the CoC lead Agency on September 30, 2022.

Summarize the comments and recommendations received through the public participation process:

See Consultation Summary
Summarize any comments or recommendations not accepted and state the reasons why:

All comments or recommendations received during this process were accepted.

Needs Assessment and Gaps Analysis
PJs must evaluate the size and demographic composition of qualifying populations within its boundaries and assess the unmet needs of those populations. In addition, a PJ must identify any gaps within its current shelter and housing inventory as well as the service delivery system. A PJ should use current data, including point in time count, housing inventory count, or other data available through CoCs, and consultations with service providers to quantify the individua ls and families in the qualifying populations and their need for additional housing, shelter, or services. The PJ may use the optional tables provided below and/or attach additional data tables to this template.

The below table (Homeless Needs Inventory and Gap Analysis Table) includes data from the HUD 2020 Continuum of Care Housing Inventory Count Report (attachment 2) and includes data for 510 Stanislaus County CoC.
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Homeless Needs Inventory and Gap Analysis Table
Homeless
Current Inventory Homeless Population Gap Analysis
Family Adults Only Vets Family HH
(at least 1
child)
Adult HH
(w/o
child)
Vets Victims
of DV
Family Adults Only
# of
Beds
# of
Units
# of
Beds
# of
Units
# of
Bed
s
# of
Beds
# of
Units
# of
Beds
# of
Units
Emergency
Shelter 214 N/A 537 N/A N/A
Transitional
Housing 34 96 152 N/A 15
Permanent
Supportive
Housing
N/A 309 N/A 390 271
Other Permanent
Housing 0 0 0 0
Sheltered
Homeless 204 511 43 88
Unsheltered
Homeless 18 908 56 73
Current Gap
see
narrative
below
see
narrative
below
see
narrative
below
see
narrative
below
Data Sources: PointinTime Count(PIT);2. Continuum ofCareHousing InventoryCount(HIC);

3. Consultation
Housing Needs Inventory and Gap Analysis Table
Non-Homeless
Current Inventory Level of Need Gap Analysis
# of Units # of Households # of Households
Total Rental Units 33,849
Rental Units Affordable to HH at 30%
AMI (At-Risk of Homelessness) 1,778
Rental Units Affordable to HH at 50%
AMI (Other Populations) 2,718
0%-30% AMIRenterHHw/ 1 ormore
severe housingproblems
(At-Risk of Homelessness)
685
30%-50% AMI Renter HH w/ 1 or more
severe housing problems
(Other Populations)
881
Current Gaps See Narrative
Data Sources: CHAS, ACS, https://statewide-housing-plan-cahcd.hub.arcgis.com/

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Describe the size and demographic composition of qualifying populations within the PJ's boundaries:

The PIT data is quantified by Stanislaus County’s Community Services Agency as the collaborative applicant lead for our CoC. The data is representative of the entire County where the City of Modesto is the largest City within the County with an overall population of approximately 218,464, according to 2020 census data. According to the 2020 PIT count a total of 2,106 homeless individuals were noted within the region. In reviewing the data from the 2020 PIT Count, which was a physical count, it was identified that a majority of individuals who are experiencing homelessness reside in Modesto, accounting for roughly 76% of the County’s homeless population.

Population Experiencing Homelessness:

HMIS data shows that a majority of people within the system of care are households consisting of one adult, or single adults. In FY 2020, single adults represented 75% of the total population served, a 4% increase from the year prior where they represented 71% of the total population served. In comparison, households with children represented 15% for single parents and 7% for two or more adults with children, equating to decreases of 4% and 1% respectively from their prior reporting year. Below is a breakdown of the homeless populations including indicators such as gender, race, ethnicity, and age:
2020 Snapshot of Homelessness PIT
Traditional Point in Time
Household Composition
• Family Households – 365
• Households without Children – 1,608
• Households with only children – 7
• Unaccompanied Youth – 113
• Parenting Youth Households – 47
• Veterans– 110
Gender
• Male (65%)
• Female (35%)
• Transgender (<1%)
• Non-conforming (<1%)
Race
• White (78%)
• Black/African American (12%)
• Multiple Races (4%)
• Asian (2%)
• American Indian/Alaska Native (3%)
• Native Hawaiian/Other Pacific Islander (1%)
Ethnicity
• Hispanic (29%)
• Non-Hispanic (71%)
Age
• Under 18 (10%)
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• 18-24 (7%)
• Over 24 (83%)
2020 Sheltered and Unsheltered Count by Zip Code
• Modesto 1,592 (76%)
• Turlock 232 (11%)
• Patterson 77 (4%)
• Empire 77 (4%)
• Oakdale 36 (2%)
• Ceres 29 (1%)
• Riverbank 26 (1%)
• Newman 21 (1%)
• Denair 7 (<1%)
• Waterford 6 (<1%)
• Salida/Hughson/Hickman/Keyes 3 (<1%)
Population at Risk of Homelessness:

As the community begins to exit the COVID-19 pandemic, the number of individuals at risk for homelessness and those that are at risk for housing instability is anticipated to rise. The City has already seen evidence of this through initiatives such as Camp2Home, Emergency Rental Assistance Programs, Homeless Prevention, and Rapid Rehousing programs. Some populations see a significantly higher risk of vulnerability such as individuals/families that are fleeing or are victims of domestic violence, those that suffer from mental health, and those that are spending more than 30% of their income on their rent or mortgage.

Based on the HMIS data in 2020, there were 2,738 households that were served by our homeless system. On average, these households remained identified as ‘homeless’ for 104 days. HUD strives for an average of 90 days; however, the lack of housing creates a bottleneck within the pathways of the homeless system. Noted in the Stella mapping, within six months of exiting the homeless system only 7% returned to the system. This is a small snapshot of our system as a whole from October 1, 2020 to September 30, 2021, and serves as a good representation of the instability that is created by a lack of housing.
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Stella Map 2020-2021
Stella Mapping 10/01/2020-09/30/2021 for all household types and all pathways Populations at Risk for Homelessness - Based on the Stella Map, only 603 (22%) households make receive housing including those that are entered into the transitional housing programs. This includes 122 households in the rapid rehousing, 21 in permanent supportive housing, 309 in transitional housing, and 15 for all other pathways that are still identified as part of the system.

Each one of these individuals represent households that are at risk for homelessness and housing instability where 80% households rely on some type of additional assistance after exiting the homelessness system. The system has existing resources in place to serve the approximately 35% households needing longer term assistance.

Victims of Domestic Violence – From January 2020 to April 2022, there were a total of 1,576 unduplicated Domestic Violence (DV) victims serviced by emergency shelters and throughout 2020, there were 1,417 victims of domestic violence who experienced unsheltered homelessness at some point during the year.

Individuals incarcerated in Stanislaus County jails as well as those receiving behavioral health services, including substance abuse disorder services, may also be at risk of homelessness upon discharge. These numbers are not readily available because multiple service providers serve these populations and the discharge status varies. Some may be discharged to a shelter and others may be housed for up to 30 days by homeless service providers and may be provided additional services such as transitional or permanent housing after the initial 30-day period. #16..
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Emergency Rental Assistance Program (ERAP) in 2021 for Stanislaus County served 323 households with rental assistance to prevent eviction and/or maintain stable housing before transferring to the State of California. The ERAP program as a whole served 2,800 families. Of the number of families served, more than 50% or 1400 families had incomes at or below 30% AMI; approximately 800 had incomes between 30% and 50% AMI. The racial/ethnic demographics are as follows: Black or African-American – 12.31%, White – 53.73%, Multi-Racial – 17.06%, American Indian or Alaska Native – 2.6%; Hispanic – 36.03%.

State of California ERAP Dashboard 03/29/2022
The State of California enacted an eviction moratorium that shielded tenants from eviction if they had paid at least 25% of their rent between Sept. 1, 2020 and Sept. 30, 2021. Tenants could not be evicted for rent owed between March 1, 2020, and Aug. 31, 2020. This program protected many tenants from returning to homelessness. Local CARES and ESG allocation resources were not utilized to serve those eligible for the ERAP program. The City of Modesto currently has over $200,000 earmarked to assist households not eligible under other homeless prevention programs.

To date approximately 33 individuals were served with Homeless Prevention funds.

The City has also prioritized Rapid Re-Housing through the Camp2Home initiative funded with Emergency Solutions Grant funds. This includes allocations from both entitlement grants and CARES Act funding. The program has housed 9 individuals with Rapid Re-Housing to-date.

Collectively, Homeless Prevention and Rapid Rehousing, have served, 42 individuals with incomes at or below 30% AMI. The racial/ethnic demographics are as follows: Black or African-American – 12 (28%), White – 23 (55%), Other 7 (17%); Hispanic – 20 (48%), and non-Hispanic 22 (28%). #16..
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Describe the unmet housing and service needs of qualifying populations, including but not limited to:
• Sheltered and unsheltered homeless populations;
• Those currently housed populations at risk of homelessness; • Other families requiring services or housing assistance or to prevent homelessness; and,
• Those at greatest risk of housing instability or in unstable housing situations:

Population Experiencing Homelessness:

Currently, there are 3,215 households actively seeking housing through the Stanislaus County’s Coordinated Entry process. The following describes the system’s housing need to stably house all 3,215 households that account for the households currently experiencing homelessness within Stanislaus County:
• 1,237 households need short to mid-term supportive housing interventions (such as diversion/rapid exit resources, rapid rehousing vouchers, etc.) or long-term rental assistance vouchers, such as Emergency Housing Choice Vouchers.
• 901 chronic households (Disability & 1+ year of homeless experience) need Permanent Supportive Housing.
• 1,002 non-chronic households need Permanent Supportive Housing due to having limited, static income and a disability. This group currently has less than 1 year of homeless experience, which is why they are currently “non-chronic”, but are at high risk of becoming chronically homeless if not quickly exited to permanent supportive housing.
• 75 households need “other housing” types, such as RVs, shared housing, tiny homes, etc. • Homeless Prevention: This past year between ERAP Program and Emergency Solutions Grants approximately 2,920 households were served.
• Unstable Housing Situations: Housing burden is any household that pays more than 30% of its income to rent or mortgage. According to Fred.stlouisfed.org, it is estimated that 38% of Stanislaus County’s households are burdened. This is approximately 27,500 households. What this means for many of these households is that at any moment they can find themselves in a situation that will put them at-risk for homelessness.

According to the Analysis of the Stanislaus County Regional Homeless Plan, renters and providers know, the Fair Market Rent amounts are often not enough to cover the real-world rental prices on the market, and according to the California Housing Partnership, 15,485 low-income renter households in the County do not have access to an affordable home.2Since it can often be difficult to find housing available at the HUD FMR rates, it can also be helpful to make comparisons to the median monthly gross rent figures. In 2019, the median monthly gross rent3in Stanislaus County was $1,231 according to the Census American Community Survey (ACS).

2 California Housing Partnership, Stanislaus County 2020 Affordable Housing Needs Report. (2020). 3 According to the American Community Survey Subject Definitions, “The data on gross rent were obtained from answers to Housing Questions 14 a-d and 18a in the 2019 American Community Survey (ACS). Gross rent is the contract rent plus the estimated average monthly cost of utilities (electricity, gas, and water and sewer) and fuels (oil, coal, kerosene, wood, etc.) if these are paid by the renter (or paid for the renter by someone else). Gross rent is intended to eliminate differentials that result from varying practices with respect to the inclusion of utilities and fuels as part of the rental payment.” #16..
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Since this is the ACS gross rent estimate, it includes the contract rent and adds the estimated average monthly cost of utilities like electricity, gas, water, and sewer, and excludes internet and cell phone expenses. According to the United States Bureau of Labor Statistics Consumer Price Index, this represents an increase of 4.41% from the previous year and 13.46% over 3 years. Comparatively for the same time frame, the California increases were 4.33% and 12.08%, respectively. This means the median gross rent in Stanislaus County is increasing at a rate higher than the state average. As reflected by the National Low Income Coalition, below is a compilation of data as comparing the cost of housing to the state .

National Low Income Coalition Rental Data https://reports.nlihc.org/oor/california Similarly, wages in the county have not kept up with the increases in rent, and minimum wage in Stanislaus County follows the statewide minimum wage level between $13 and $14 per hour depending on the number of employees at the business. At these rates, gross monthly income4for a full-time employee working at minimum wage falls between $2,253 and $2,427 respectively, well below the gross monthly income HUD recommends, with a minimum of $4,123 in order for housing costs to be no more than 30% of

4 Gross income refers to total compensation before taxes or other kinds of deductions. For hourly employees, the standard calculation for monthly gross income is found by multiplying the hourly wage by the number of hours worked each week, then multiplied by 52, the total number of weeks in a year. This gives the annual gross income, which is then divided by 12 to find the monthly amount. #16..
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overall income of the Median Gross Rent amount. Notably, someone working two full-time, minimum wage jobs amounting to 80 hours a week would only be $383 worth of gross monthly income over the recommended HUD amount in Stanislaus County for Median Gross Rent.

Within Stanislaus County, a renter would need to make approximately $23.79/hour to be able to afford the Real Median Gross Rent, substantially higher than the $13/hour rate currently in effect. To put this in perspective, a family of three with the head of household earning minimum wage would be severely costburdened, meaning that over 50% of their income would be going towards housing costs for the Real Median Gross Rent amount.

In fact, many households in the county are considered either cost-burdened or severely cost-burdened. For extremely low-income households,5 86% are considered severely cost burdened.

Households considered homeless typically have extremely low incomes and often rely on a combination of Social Security, public benefits, or minimum wage. Among renter households at the extremely low-income level nationally, 36% are in the labor force, 30% are seniors, 18% have a member in their household with a disability, and another 7% are students or single-adult caregivers to a young child or household member with a disability themselves.
6 Even when factoring in the amounts of benefits available and potential minimum wage earnings, this combination is often not enough to afford the high cost of housing in the county.

5 There are currently several income standards defined by HUD that are used both for demographic characterization, and to determine program eligibility. Income standards are typically referred to as a proportion of Area Median Income (AMI). In this standard, Extremely Low-Income is defined as up to 30% of AMI, Very Low-Income defined at up to 50% AMI, and Low-Income defined at up to 80% AMI. 6 National Low Income Housing Coalition, The GAP. (March 2021). 93%
87%
66%
37%
4%
86%
47%
18%
4% 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Extremely LowIncomeVery Low-Income Low-Income Moderate-Income Above ModerateIncome Cost Burdened Households Severly Cost Burdened Households #16..
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Identify and consider the current resources available to assist qualifying populations, including congregate and non-congregate shelter units, supportive services, TBRA, and affordable and permanent supportive rental housing:

The City of Modesto is an entitlement community and receives direct funding from HUD approximately $164,000 in Emergency Solutions Grant (ESG), $1,800,000 in Community Development Block Grant (CDBG), and $950,000 in HOME Investment Partnership Grant (HOME) annually. Through this Entitlement distinction the City was awarded through the State of California Permanent Local Housing Allocation (PLHA) the City has been awarded $2,477,034 to date. Recently, the City was able to successfully layer funding to be awarded the State of California’s Homekey $5,600,000 grant to fund the development of new units in the community.

The City utilizes its 15% CDBG public service to partners with a number of non-profits to assist the qualifying populations. Based on a system-wide analysis through the Stanislaus Regional Homeless Plan below are the resources identified for the City.

The City does not currently fund any TBRA type programs. Due to the lack of available units, many with existing vouchers in the community cannot currently be housed.

The following is a non-exhaustive list of some key homeless and housing programs and services available within Stanislaus County. One recommendation of this plan is to build out an online and paper format homeless resource guide for the county that is regularly updated, this list may serve as a good starting point.

Type of Service Agency Program Name
Known Populations
Served
Emergency Shelter
Community Housing and
Shelter Services Homeless Families
Emergency Shelter
Family Promise of
Greater Modesto
Interfaith Hospitality
Network Homeless Families
Emergency Shelter Modesto Gospel Mission
Men's Shelter
Program
Homeless Single Adult
Men
Emergency Shelter Modesto Gospel Mission
Women and
Children's Shelter
Homeless Women and
Families
Emergency Shelter Salvation Army Berberian Shelter
Homeless Individuals and
Families
Emergency Shelter Haven Women's Center Haven Center
Fleeing, or attempting to
flee, domestic violence,
dating violence, sexual
assault, stalking, or human
trafficking, as defined by
the Secretary
Emergency Shelter Turning Point Golden Gate Respite
Homeless; At-Risk for
Homelessness Individuals
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Emergency Shelter Children's Crisis Center
Sawyer, Guardian,
Verda, Marsha, and
Audrey's House Youth
Emergency Shelter
Stanislaus County
Affordable Housing Corp Women's REST Homeless Women
Emergency Shelter
Center for Human
Services Hutten house
Homeless; At-Risk for
Homelessness Youth and
Families
Transitional Housing
Center for Human
Services Pathways
Homeless; At-Risk for
Homelessness Transitional
Age Youth
Transitional Housing
Community Impact
Central Valley Transitional Housing
At-risk of homelessness
Families
Rapid Re-Housing
Center for Human
Services HCD RRH
Other Populations; At-Risk
for homelessness Families
Rapid Re-Housing Family Promise City of Modesto RRH
Other Populations; At-Risk
for homelessness Families
Rapid Re-Housing
Community Housing and
Shelter Services Rental Assistance
Other Populations; At-Risk
for homelessness Families
Permanent Supportive
Housing
Community Housing and
Shelter Services
Permanent Housing
for Chronically
Homeless Program
Chronically homeless
families
Permanent Supportive
Housing
Community Housing and
Shelter Services
Households in
Recovery
Other Populations; At-Risk
for homelessness Families
in Recovery
Permanent Supportive
Housing
Community Housing and
Shelter Services
Permanent
Supportive Housing
for Families with
Children 1&2
Chronically homeless
families
Permanent Supportive
Housing
Stanislaus County
Affordable Housing Corp
Supportive Housing
Outreach Project
Other Populations; At-Risk
for homelessness Adults
and Families
Permanent Supportive
Housing
Stanislaus County
Affordable Housing Corp
Permanent Housing
#1
Other Populations; At-Risk
for homelessness Adults
and Families
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Permanent Supportive
Housing
Community Impact
Central Valley HALO 1, 3, 5, Chronically homeless
Permanent Supportive
Housing
Community Impact
Central Valley Halo RCC Vet
Chronically homeless
veterans and their families
Permanent Supportive
Housing
Stanislaus County
Housing Authority Shelter Plus Care
Other Populations; At-Risk
for homelessness Adults
and Families
Permanent Supportive
Housing
Stanislaus County
Housing Authority
Glendale Annex,
Palm Valley, Kansas
House
Chronically homeless
veterans and their families
Crisis Line Haven Women's Center 24-Hour Crisis Line
Fleeing, or attempting to
flee, domestic violence,
dating violence, sexual
assault, stalking, or human
trafficking, as defined by
the Secretary
Navigation Center
Center for Human
Services
Youth Navigation
Center
Homeless; At-Risk for
Homelessness Transitional
Age Youth, Youth
Triage and Assessment Turning Point
Triage and
Engagement Program Adults
Triage and Assessment,
Coordinated Entry Turning Point
Housing Assessment
Team All Populations
Based on the providers above the following identifies the number of units/beds available across the continuum to serve the qualifying populations.

Affordable Housing
Type
Unit Type Capacity Populations Served
Emergency Shelter Bed 54
Homeless Women and
Families
Emergency Shelter Bed 548 Homeless Single Adults
Emergency Shelter Beds 53 Youth
Emergency Shelter Beds 32
Fleeing, or attempting
to flee, domestic
violence, dating
violence, sexual assault,
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stalking, or human
trafficking, as defined by
the Secretary
Transitional Housing Units 16
Homeless; At-Risk for
Homelessness
Transitional Age Youth
Transitional Housing Units 6
Other Populations; AtRisk for homelessness
Families
Permanent Supportive
Housing Units 155
Chronically homeless
families, Other
Populations; At-Risk for
homelessness Families
Total Units/Beds 864
Active Units/Beds
Available to all
qualifying populations
Identify any gaps within the current shelter and housing inventory as well as the service delivery system:

Though there are agencies that can serve all the qualifying populations, looking at the numbers identified above as the baseline for this analysis. Currently, there are 3,215 households actively seeking housing through Stanislaus County’s Coordinated Entry process. The following describes the system’s housing need to house all 3,215 households that account for the households currently experiencing homelessness within Stanislaus County:
• 1,237 households need short to mid-term supportive housing interventions (such as diversion/rapid exit resources, rapid rehousing vouchers, etc.) or long-term rental assistance vouchers, such as Emergency Housing Choice Vouchers.
• 901 chronic households (Disability & 1+ year of homeless experience) need Permanent Supportive Housing.
• 1,002 non-chronic households need Permanent Supportive Housing due to having limited, static income and a disability. This group currently has less than 1 year of homeless experience, which is why they are currently “non-chronic”, but are at high risk of becoming chronically homeless if not quickly exited to permanent supportive housing.
• 75 households need “other housing” types, such as RVs, shared housing, tiny homes, etc. • Homeless Prevention: This past year between ERAP Program and Emergency Solutions Grants approximately 2,920 households were served.
• Unstable Housing Situations: Housing burden is any household that pays more than 30% of its income to rent or mortgage. According to Fred.stlouisfed.org, it is estimated that 38% of Stanislaus County’s households are burdened. This is approximately 27,500 households. What this means for #16..
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many of these households is that at any moment they can find themselves in a situation that will put them at-risk for homelessness.

In order to house all the individuals currently experiencing homelessness in the City of Modesto, the entire continuum will need an additional 948 units (130 for chronic households + 761 for “at risk of chronic” + 57 for households needing “other housing” types).

Once we are able to house all households currently experiencing homelessness in City of Modesto, the community’s housing response system will undergo a “system reset” and will have enough existing housing resources to quickly house all new households who enter into homelessness each month. If ARPA funding is used to fund 948 additional housing units dedicated to people experiencing homelessness, our homeless services system will be able to reach and maintain in functional zero (monthly inflow = monthly outflow).

Description Total CoC
Area
Estimated for
Modesto (Based
on 76% from PIT)
Available per
Stanislaus
Housing Plan
GAP Per
Analysis
Total Population
October 2021
(Households) 3,215 2,443
Short-Mid-term
Supportive Housing
Need or Long-term
rental Assistance 1237 940 248 692
Permanent Supportive
Housing Need for
Chronically Homeless 901 685 555 130
Permanent Supportive
Housing Needs for
Non-Chronic
Homeless/At-risk of
chronicity) 1002 761 0 761
Other Housing Needs 75 57 0 57
Identify the characteristics of housing associated with instability and an increased risk of homelessness if the PJ will include such conditions in its definition of “other populations” as established in the HOME-ARP Notice:

Not Applicable, The City does not plan to formally adopt a definition of “other populations” #16..
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HOME-ARP Activities
Describe the method for soliciting applications for funding and/or selecting developers, service providers, subrecipients and/or contractors and whether the PJ will administer eligible activities directly:

The City of Modesto releases Notices of Funding Availability (NOFA) in order to have a continual pipeline of projects that are in various stages in the development process to ensure that when funding is available to layer with other resources, so that we have the greatest impact on the community with the dollars awarded to the City.

The City will be releasing a NOFA summer 2022 to solicit project that will meet the qualifying activities within the HOME ARP program. The NOFA will include the selection of developers, services providers, subrecipients and/or contractors.

If any portion of the PJ’s HOME-ARP administrative funds were provided to a subrecipient or contractor prior to HUD’s acceptance of the HOME-ARP allocation plan because the subrecipient or contractor is responsible for the administration of the PJ’s entire HOME-ARP grant, identify the subrecipient or contractor and describe its role and responsibilities in administering all of the PJ’s HOME-ARP program:

Not Applicable
PJs must indicate the amount of HOME-ARP funding that is planned for each eligible HOME- ARP activity type and demonstrate that any planned funding for nonprofit organization operating assistance, nonprofit capacity building, and administrative costs is within HOME-ARP limits.

Use of HOME-ARP Funding
Funding Amount Percent of the
Grant
Statutory
Limit
Supportive Services $ 0
Acquisition and Development of NonCongregate Shelters
$ 0
Tenant Based Rental Assistance (TBRA) $ 0
Development of Affordable Rental Housing $ 2,898,308
Non-Profit Operating $ 0 0% 5%
Non-Profit Capacity Building $ 0 0% 5%
Administration and Planning $ 511,466 15% 15%
Total HOME ARP Allocation $ 3,409,774
Describe how the characteristics of the shelter and housing inventory, service delivery system, and the needs identified in the gap analysis provided a rationale for the plan to fund eligible activities:

The Stanislaus Regional Homeless Strategic Plan completed in 2021 identified eight goals for the region. The goal that received the most feedback from the community outreach was the need for additional affordable rental units in the community. In alignment with this feedback, the City has several active initiatives like Camp2Home that streamline individuals from encampment to shelter. Whether sheltered or unsheltered, there are partnerships that assist these individuals in job training, job and housing readiness, and help them #16..
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secure housing through supportive case management. However, as evidenced with the data and in practice there are many individuals who are not able to secure permanent housing because there is a significant shortage of available units. The City has noted in all of its plans, including this one that the development of affordable housing is its top priority.

HOME-ARP Production Housing Goals
Estimate the number of affordable rental housing units for qualifying populations that the PJ will produce or support with its HOME-ARP allocation:

The City would like to produce 102 new units to the community that will serve the qualifying populations.

To produce this number the City will layer its other resources to ensure project feasibility.

Describe the specific affordable rental housing production goal that the PJ hopes to achieve and describe how it will address the PJ’s priority needs
The City will solicit contractors and/or non-profits developers that can deliver projects either through conversion or development of new units that will serve the qualifying populations.

Preferences
Identify whether the PJ intends to give preference to one or more qualifying populations or a subpopulation within one or more qualifying populations for any eligible activity or project:
• Preferences cannot violate any applicable fair housing, civil rights, and nondiscrimination requirements, including but not limited to those requirements listed in 24 CFR 5.105(a). • PJs are not required to describe specific projects to which the preferences will apply.

The City does not intend to give preference.

If a preference was identified, explain how the use of a preference or method of prioritization will address the unmet need or gap in benefits and services received by individuals and families in the qualifying population or category of qualifying population, consistent with the PJ’s needs assessment and gap analysis:

Not Applicable
If a preference was identified, describe how the PJ will use HOME-ARP funds to address the unmet needs or gaps in benefits and services of the other qualifying populations that are not included in the preference:

Not Applicable
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HOME-ARP Refinancing Guidelines
If the PJ intends to use HOME-ARP funds to refinance existing debt secured by multifamily rental housing that is being rehabilitated with HOME-ARP funds, the PJ must state its HOME- ARP refinancing guidelines in accordance with 24 CFR 92.206(b). The guidelines must describe the conditions under with the PJ will refinance existing debt for a HOME-ARP rental project, including:
• Establish a minimum level of rehabilitation per unit or a required ratio between rehabilitation and refinancing to demonstrate that rehabilitation of HOME-ARP rental housing is the primary eligible activity
City of Modesto does not intend to use HOME-ARP funds to refinance existing debt. • Require a review of management practices to demonstrate that disinvestment in the property has not occurred; that the long-term needs of the project can be met; and that the feasibility of serving qualified populations for the minimum compliance period can be demonstrated.

Not Applicable
• State whether the new investment is being made to maintain current affordable units, create additional affordable units, or both.

Not Applicable
• Specify the required compliance period, whether it is the minimum 15 years or longer.

Not Applicable
• State that HOME-ARP funds cannot be used to refinance multifamily loans made or insured by any federal program, including CDBG.

Not Applicable
• Other requirements in the PJ’s guidelines, if applicable:

Not Applicable

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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

May 24, 2022
Date: May 5, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jaylen French, Director of Community and Economic Development SUBJECT: Program Year 2022-2023 Annual Action Plan
CONTACT: Jessica Hill, Community Development Manager
[email protected], 209-577-5321
DESCRIPTION:

Hearing to approve the City of Modesto Program Year 2022-2023 Annual Action Plan and amending the City of Modesto’s Fiscal Year 2022-2023 annual operating, multi-year and capital improvement project budgets to reflect the allocation of funds outlined in the program year 2022-2023 Annual Action Plan. (Funding Source: Community Development Block Grant, HOME Investment Partnerships and Emergency Solutions Grant Funds) STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto’s 2020-2025 Strategic Plan Goal C: Develop Homelessness and Housing Plan.

BACKGROUND:

The City of Modesto is an entitlement grantee under the U.S. Department of Housing and Urban Development (HUD) Office of Community Planning and Development (CPD) programs. HUD requires entitlement grantees adopt a comprehensive, long‐term plan for the use of its HUD funds known as the Five‐Year “Consolidated Plan” (Con Plan) which analyzes the City’s housing and community development needs, with a priority focus on low‐ and moderate‐ income individuals, households, and neighborhoods, and describes long‐term strategies for meeting those needs. The City’s current Consolidated Plan covers Program Years 2020 to 2025 (July 1, 2020 to June 30, 2025).

As a HUD entitlement community, the City is required to develop an Annual Action Plan that describes proposed projects that will be funded with HUD’s CPD programs including Community Development Block Grant (CDBG), HOME Investment Partnerships (HOME), and Emergency Solutions Grant (ESG) funds. The Annual Action Plan (AAP) must align and support the priorities in the City’s 2020-2025 Consolidated Plan.
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City Council, May 24, 2022
Program Year 2022-2023 Annual Action Plan