Agenda packet, first session — Modesto City Council, December 13, 2022 (part 2 of 6)

Staff formally solicited proposals to law firms for Eminent Domain Legal Services for the State Route 132 West Freeway/Expressway Phase 1 Project in accordance with state and federal requirements. The scope of services includes:
 Commencement of eminent domain proceedings
 Orders for prejudgment possession
 Defense of right to take objections
On January 26, 2021, by Resolution No. 2021-028, Council approved a First Amendment to the Legal Services Agreement with Nossaman LLP to adjust the blended hourly rate from $385 to $425 to continue to provide Eminent Domain Legal Services for State Route 132 West Freeway/Expressway Phase 1 Project, with no increase to the not to exceed amount of $2,000,000 for the Agreement.

On December 6, 2021, pursuant to Article 2. “Period of Performance,” of the agreement, the City entered into a Second Amendment to the Legal Services Agreement with Nossaman, LLP to extend the termination date of the agreement to December 31, 2022.

DISCUSSION:

Nossaman provides legal services to the City at a blended rate of $425. A blended rate is beneficial to the City as it captures attorney services that would usually be charged at a higher rate. Nossaman charges the same reduced rate for associates and experienced partners at the firm. Nossaman has requested an increase to their rate by $13 an hour, to a new blended hourly rate of $438. When the City first entered into the agreement in 2018, the blended rate of $385 was based on the understanding that the acquisition work would last approximately 18 months to two years. The City is now extending into the fifth year of the agreement and Nossaman has only increased their rate once, in 2021. The proposed increase by Nossaman is based on a standard 3% annual cost of living increase. Nossaman typically seeks a 5% annual escalation for all other agencies; however, based on the continued successful relationship with the City, they are proposing a reduced increase. The not to exceed amount of the agreement will not increase based on the requested change to their hourly rate.

This amendment will also formally extend the agreement into its fifth and final year with the termination date of December 31, 2023.

FISCAL IMPACT:

Costs associated with the professional services agreement with Nossaman LLP are being paid from Project #100614 – State Route 132 West Expressway, with a total agreement budget of $2,000,000. Nossaman’s agreement has a remaining balance of $558,871. This amendment to will not increase the not to exceed amount; and it will only increase the blended rate. Invoices are paid from the Streets Capital Facility Fee Fund or are reimbursed by grant reimbursement, if applicable.

COMMITTEE RECOMMENDATION:

This item was not presented to a Council Committee.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving a Third Amendment to the Legal Services Agreement with Nossaman LLP #7..
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City Council, December 13, 2022
Third Amendment to Nossaman LLP Legal Services Agreement

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to adjust the blended hourly rate from $425 to $438 and extending the term of the Agreement to December 31, 2023, to continue to provide Eminent Domain Legal Services for State Route 132 West Freeway/Expressway Phase 1 Project, with no increase to the not to exceed amount of $2,000,000 for the Agreement and authorizing the City Manager, or his designee, to execute the Amendment.

Approved by:

Jose M. Sanchez, City Attorney
Jaylen French, Director of Community & Economic
Development Department
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Third Amendment to Legal Services Agreement with Nossaman LLP

3. Exhibit 1: Updated Price List Effective January 1, 2023 #7..
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MODESTO CITY COUNCIL
RESOLUTION NO. 2022-XX

RESOLUTION APPROVING A THIRD AMENDMENT TO THE LEGAL

SERVICES AGREEMENT WITH NOSSAMAN LLP TO ADJUST THE
BLENDED HOURLY RATE FROM $425 TO $438 AND EXTENDING THE TERM OF THE AGREEMENT TO DECEMBER 31, 2023, TO CONTINUE TO PROVIDE EMINENT DOMAIN LEGAL SERVICES FOR STATE ROUTE 132 WEST FREEWAY/EXPRESSWAY PHASE 1 PROJECT, WITH NO INCREASE TO THE NOT TO EXCEED AMOUNT OF $2,000,000 FOR THE AGREEMENT

AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO

EXECUTE THE AMENDMENT
WHEREAS, State Route (“SR”) 132 is an east-west highway that extends from I580 in the Central Valley, south of the City of Tracy, to SR 49 in the foothills of the Sierra Mountains, terminating in the town of Coulterville; and WHEREAS, SR 132 is a vital link through the Central Valley, serving local traffic from these communities and providing for regional traffic between the Bay Area and the mountains for the movement of traffic and goods and services, and provides access to the recreational areas east of Modesto via SR 49; and WHEREAS, the purpose of the Project is to improve regional and interregional circulation, relieve traffic congestion along existing SR 132, and enhance safety and operations for the existing and proposed transportation network; and WHEREAS, on September 4, 2018, by Resolution No. 2018- 381, Council approved a professional services agreement with Nossaman LLP of Los Angeles, California for Eminent Domain Legal Services for State Route 132 West Freeway/Expressway Phase 1 Project in an amount not to exceed $2,000,000; and WHEREAS, on January 26, 2021, by Resolution No. 2021-028, Council approved a First Amendment to the Legal Services Agreement with Nossaman LLP to adjust the blended hourly rate from $385 to $425, with no increase to the not to exceed amount of $2,000,000 for the Agreement; and
#7..
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WHEREAS, on December 6, 2021, pursuant to Article 2. “Period of Performance,” of the agreement, the City entered into a Second Amendment to the Legal Services Agreement with Nossaman, LLP to extend the termination date of the agreement to December 31, 2022; and
WHEREAS, Nossaman has provided legal services to the City at a blended rate of $425. A blended rate is beneficial to the City as it captures attorney services that would usually be charged at a higher rate; and
WHEREAS, Nossaman has requested an increase to their rate by $13 an hour to a new blended hourly rate of $438; and
WHEREAS, the not to exceed amount of the agreement will not increase based on their hourly rate; and
WHEREAS, this amendment will also formally extend the agreement into its fifth and final year with the termination date of December 31, 2023.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves a Third Amendment to the Legal Services Agreement with Nossaman LLP to adjust the blended hourly rate from $425 to $438 and extend the term of the agreement to December 31, 2023. to continue to provide Eminent Domain Legal Services for State Route 132 West Freeway/Expressway Phase 1 Project with no increase to the not to exceed amount of $2,000,000 for the Agreement.

BE IT FURTHER RESOLVED, that the City Manager or his designee, are hereby authorized to execute the amendment, 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 13th day of December 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:
#7..
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AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

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

BY: _________________________________
JOSE M. SANCHEZ, City Attorney
#7..
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THIRD AMENDMENT TO LEGAL SERVICES AGREEMENT
This Third Amendment to the Legal Services (this “Third Amendment”), is made and entered into on this 13th day of December 2022 (“Effective Date”), by and between the CITY OF MODESTO, a California Municipal Corporation (“City”), and NOSSAMAN LLP (“Attorney”), located at 777 South Figueroa Street, 34th Floor, Los Angeles, California 90017.

City and Attorney are hereinafter collectively referred to as the “Parties,” and singularly as “Party”.

RECITALS
WHEREAS, City and Attorney entered into a Legal Services Agreement (“Agreement”) to provide Eminent Domain Legal Services for the State Route 132 West Freeway/Expressway Project; and
WHEREAS, Attorney is specially trained, experienced and competent to perform such services; and
WHEREAS, the public interest, economy and general welfare will be served by the Agreement; and
WHEREAS, City and Attorney desire to amend the Agreement for further service by increasing the blended hourly rate from $425 to $438 and extending the agreement by one year, to December 31, 2023.

NOW, THEREFORE, it is hereby agreed that the Legal Services Agreement between the City of Modesto and Nossaman, LLP dated September 6, 2018, amended by Resolution No. 2021-028, and by the Second Amendment dated December 6, 2021 is amended as follows:

1. Article 2. “Period of Performance,” Section 2.1 is amended to read as follows:
“The Period of Performance by ATTORNEY under this Contract shall commence upon the Effective Date, unless agreed otherwise, and shall continue in full force and effect through December 31, 2023, or until otherwise terminated as provided in Article 16, or unless extended as hereinafter provided by written amendment, except that all indemnity and defense obligations hereunder shall survive termination of this Contract. ATTORNEY shall not be compensated for any work performed or costs incurred prior to issuance of the Effective Date.”

2. Article 3. “Compensation,” Section 3.3 is amended to read as follows:

Attachment B, “Price List Exhibit B for: Time and Materials”, is amended and replaced with the “ Price List Exhibit B for: (Time and Materials) Effective January 1, 2023”, attached hereto as Exhibit 1.
#7..
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3. Entire Agreement. The parties to this Third Amendment understand and agree that except as stated herein all terms and conditions of the original Agreement, dated September 6, 2018, remain in full force and effect to the extent they are not in conflict with this Third Amendment. This document, including all exhibits, contain the entire amendment to the Agreement between the Parties and supersedes whatever oral or written understanding they may have had prior to the execution of this Third Amendment. No alteration to the terms of this Third Amendment shall be valid unless approved in writing by Attorney and by City, in accordance with applicable provision of the Modesto City Code.

4. Authority. The person signing this Third Amendment for Attorney hereby represents and warrants that he/she is fully authorized to sign this Third Amendment on behalf of Attorney and to bind Attorney to the performance of its obligations hereunder.

IN WITNESS WHEREOF, the Parties have executed this Third Amendment as of the dates stated below.

CITY OF MODESTO,
A Municipal Corporation
By:

Print name: Joseph P. Lopez
Title: City Manager
APPROVED TO AS FORM:
_____________________________________
Jose M. Sanchez, City Attorney
ATTEST:
____________________________________
Diane Nayares-Perez, City Clerk
________________________________
Christina Alger, Director of Human Resources
[Signatures Continued on Next Page.]
#7..
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ATTORNEY:

NOSSAMAN, LLP
______________________________________
______________________________________
Federal I.D. No.
______________________________________
State I.D. No.
______________________________________
City of Modesto Business Op. Tax Cert. No.

TYPE OF BUSINESS ENTITY (check one):
_____ Individual/Sole Proprietor
_____ Partnership
_____ Corporation
_____ Limited Liability Company
_____ Other (please specify: ______________)
______________________________________
Signature of Authorized Person
______________________________________
Title
______________________________________
Additional Signature (if required)
______________________________________
Title
#7..
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61099098.v1
Price List Exhibit B for: (Time and Materials) Effective January 1, 2023 No.

Name Classification/Title Job Function Hourly Rate*
Artin Shaverdian Partner Project Manager/Team
Leader
$438
David Graeler Partner $438
Jill Jaffe Partner $438
Kristin Mendenhall Staff Attorney $438
Maya Hamouie Associate $438
Aleene Madikians Associate $438
Ren Smith Partner $438
Diana McMillin Paralegal $232
Philip Layzer Paralegal $232
*We will charge City one-half (1/2) attorneys’ applicable blended rate for any travel related to this project.

Other Direct Cost Schedule (ODC)
All ODC’s are to be proposed at cost-without mark-ups.

Type of ODC Unit Cost Estimated
Budget Amount
Air travel at cost but not first class or business select.

Lodging and other travel related expenses including ground transportation at cost.
$500/Trip $25,000
Computer assisted research expenses are charged at cost. $1,000/Case $5,000 We will pass on to the City postage-related charges at the actual cost, including overnight carrier and messenger fees as necessary.
$0.49/Ounce $5,000
We will pass on to the City direct cost of any filing fees charged by outside vendors for court filings, including fees for electronic court filings and service of process.
$8,000/Case $40,000
Photocopying will be passed on to the City at cost. $0.30/Copy $3,000 Experts $50,000/Expert $250,000
Proposer: Artin N. Shaverdian, Partner
Signature: Date: 11/23/2022
Exhibit 1 to Third Amendment to Nossaman LSA #7..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

December 13, 2022
Date: November 22, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jose M. Sanchez, City Attorney
Christina Alger, Director of Human Resources
SUBJECT: Second Amendment to Rivera, Hewitt, Paul LLP Legal Services Agreement for continued representation
CONTACT: Jose M. Sanchez, City Attorney, 209-577-5284, [email protected] DESCRIPTION:

Consider approving a Second Amendment to the Legal Services Agreement with Rivera, Hewitt Paul, LLP in the amount of $255,000, for a total Agreement amount not to exceed $400,000 for continued representation. (Funding Source: General Liability Insurance Fund) STRATEGIC PLAN ELEMENT:

This item supports the City’s 2020-2025 Strategic Plan Goals to build a high-performance organization and improve community safety.

BACKGROUND:

In 2014, in order to improve the transparency and delivery of legal services, our office prepared and Council approved a standard legal services contract. We have since used that agreement to enter into legal services. The City Attorney’s Office tracks the assigned budget and requests that Council amend the agreements when necessary.

DISCUSSION:

On April 14, 2021, the City entered into a standard legal services agreement with Rivera Hewitt Paul, LLP for litigation, trial counsel, legal advice, representation and assistance to the City in police related matters for an amount not to exceed $45,000. On November 9, 2021, by Resolution No. 2021-439, Council approved a First Amendment to this agreement, increasing the not to exceed amount to $145,000 for continued representation in police litigation matters.

Since our last amendment, Rivera, Hewitt, Paul have been assigned additional cases. An increase to the agreement budget is needed in the amount of $255,000 to support continued services in these cases, for a total agreement amount not to exceed $400,000. #8..
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City Council, December 13, 2022
Second Amendment to Rivera, Hewitt, Paul LLP Legal Services Agreement for continued representation

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In accordance with Modesto Municipal Code Sec. 8-3.204(a), Exceptions to Formal Bidding Requirements, this agreement is for professional services and, therefore, exempt from the bidding requirement. The approval of this amendment conforms to Modesto Municipal Code 8-

3.204, subsection (a) as they are providing professional legal services.

FISCAL IMPACT:

Costs for Rivera, Hewitt, Paul LLP will be absorbed within the General Liability Insurance Fund with a not to exceed amount of $400,000. The overall budget for the City Attorney’s Office will be set by Council as part of the budget process and the City Attorney will manage the office and services pursuant to that budget.

COMMITTEE RECOMMENDATION:

This item was not presented to a Council Committee.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving a Second Amendment to the Legal Services Agreement with Rivera Hewitt Paul, LLP in the amount of $255,000, for a total Agreement amount not to exceed $400,000, for continued representation in police litigation matters and authorizing the City Manager or his designee, to execute the Amendment.

Approved by:

Jose M. Sanchez, City Attorney
Christina Alger, Director of Human Resources
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Second Amendment to Legal Services Agreement with Rivera, Hewitt, Paul LLP #8..
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MODESTO CITY COUNCIL
RESOLUTION NO. 2022-XX

RESOLUTION APPROVING A SECOND AMENDMENT TO THE LEGAL

SERVICES AGREEMENT WITH RIVERA HEWITT PAUL, LLP IN THE
AMOUNT OF $255,000, FOR A TOTAL AGREEMENT AMOUNT NOT TO EXCEED $400,000, FOR CONTINUED REPRESENTATION IN POLICE

LITIGATION MATTERS AND AUTHORIZING THE CITY MANAGER OR HIS

DESIGNEE, TO EXECUTE THE AMENDMENT
WHEREAS, on April 14, 2021, the City entered into a standard legal services agreement with Rivera Hewitt Paul, LLP for litigation, trial counsel, legal advice, representation and assistance to the City in police related matters; and WHEREAS, on November 9, 2021, by Resolution No. 2021-439, Council approved a First Amendment to this agreement, increasing the not to exceed amount to $145,000 for continued representation; and
WHEREAS, our office is requesting an increase to the agreement budget in the amount of $255,000 to support continued services, for a total agreement amount not to exceed $400,000; and
WHEREAS, the City Attorney’s office has drafted a Second Amendment to the Legal Services agreement with Rivera Hewitt Paul, LLP for continued services.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves a Second Amendment to the Legal Services Agreement with Rivera Hewitt Paul, LLP, in the amount of $255,000, for a total agreement amount not to exceed $400,000 for continued representation in police litigation matters as provided in Exhibit A attached hereto and incorporated herein, and further authorizes the City Attorney to execute such agreement in a form substantially similar to Exhibit A.

BE IT FURTHER RESOLVED, that the City Manager or his designee, are hereby authorized to execute the agreement, in a form approved by the City Attorney. #8..
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The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the 13th day of December 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
#8..
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SECOND AMENDMENT TO LEGAL SERVICES AGREEMENT
This Second Amendment to the Legal Services (this “Second Amendment”), is made and entered into on 13th day of December 2022 (“Effective Date”), by and between the CITY OF MODESTO, a California Municipal Corporation (“City”), and RIVERA HEWITT PAUL, LLP (“Attorney”), located at 11341 Gold Express Drive, Suite 160, Gold River, California 95670. City and Attorney are hereinafter collectively referred to as the “Parties,” and singularly as “Party”.

RECITALS
WHEREAS, City and Attorney entered into a Legal Services Agreement (“Agreement”) to provide litigation, trial counsel, legal advice, representation and assistance to City in relation to police matters including use of force and the discharge of a weapon; and WHEREAS, Attorney is specially trained, experienced and competent to perform such services; and
WHEREAS, the public interest, economy and general welfare will be served by the Agreement; and
WHEREAS, City and Attorney desire to amend the Agreement for further service by increasing the previously approved amount of fees from $145,000 to $400,000.

NOW, THEREFORE, it is hereby agreed that the Legal Services Agreement between the City of Modesto and Rivera Hewitt Paul dated April 14, 2021, and amended by Resolution No. 2021-439 is amended as follows:

1. Section 2(a) of Paragraph 2, “Fees and Costs,” Hourly Rates is amended to state as follows:
“The total of all fees paid to Attorney for the performance of all services set forth in Section 1(thereafter the “Service”), and for all authorized Reimbursable Expenses (as defined hereafter), shall not exceed a total sum of four hundred thousand dollars ($400,000).”

2. Entire Agreement. The parties to this Second Amendment understand and agree that except as stated herein all terms and conditions of the original Agreement, dated April 14, 2021, remain in full force and effect to the extent they are not in conflict with this Second Amendment. This document, including all exhibits, contain the entire amendment to the Agreement between the Parties and supersedes whatever oral or written understanding they may have had prior to the execution of this Second Amendment. No alteration to the terms of this Second Amendment shall be valid unless approved in writing by Attorney and by City, in accordance with applicable provision of the Modesto City Code. #8..
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3. Authority. The person signing this Second Amendment for Attorney hereby represents and warrants that he/she is fully authorized to sign this Second Amendment on behalf of Attorney and to bind Attorney to the performance of its obligations hereunder.

IN WITNESS WHEREOF, the Parties have executed this Second Amendment as of the dates stated below.

CITY OF MODESTO,
A Municipal Corporation
By:

RIVERA HEWITT PAUL LLP
______________________________________
______________________________________
Federal I.D. No.
______________________________________
State I.D. No.
______________________________________
City of Modesto Business Op. Tax Cert. No.

CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

December 13, 2022
Date: November 3, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Scotty Douglass, Deputy City Manager
SUBJECT: Cannabis Equity Assessment Report, and Submission of a Grant Application for the Governor’s Office of Business and Economic Development Cannabis Equity Grants Program for Local Jurisdictions
CONTACT: Sean Rando, Business Analyst, [email protected], 209-577-5473 DESCRIPTION:

Consider accepting a Cannabis Equity Assessment Report, adopting a Cannabis Equity Program, and approving the submission of a Grant Application for the Governor’s Office of Business and Economic Development Cannabis Equity Grant Program for Local Jurisdictions. (Funding Source: General Fund)
STRATEGIC PLAN ELEMENT:

This item supports the City’s 2020-2025 Strategic Plan Initiative: Dive economic vitality though the success of a vibrant and economically sustainable business climate.

BACKGROUND:

On November 8, 2016, California voters approved Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act (AUMA). In its statement of purpose and intent, AUMA calls for regulating cannabis in a way that “reduces barriers to entry into the legal, regulated market.” Although a legal framework now exists to participate in the adult-use commercial cannabis industry, barriers to start a commercial cannabis business may still exclude some Modesto entrepreneurs from entering the legal cannabis market.

Individuals convicted of a cannabis offense during the era of prohibition and criminalization policies have a more difficult time entering the new adult-use cannabis industry due, in part, to a lack of access to capital, business space, technical support, and regulatory compliance assistance. The Department of Cannabis Control (DCC), in partnership with the Governor’s Office of Business and Economic Development (GO-Biz) established the Cannabis Equity Grants Program for Local Jurisdictions to address this challenge. The program is designed to promote economic opportunity for individuals negatively impacted by former cannabis prohibition and #9..
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criminalization policies by reducing barriers to enter the regulated cannabis industry for equity applicants and licensees.

There are two (2) types of grant applications with specific funding requirements for the program.

The award of funds for a Type 1 application may only be used for the purposes of conducting an equity assessment and/or developing an equity program. Assessments are conducted prior to the development of a program to help inform the needs of the program. The award of funds for a Type 2 application may only be used for the purpose of assisting equity applicants gain entry to the regulated cannabis marketplace by providing measures to help mitigate the barriers identified in the assessment.

On January 26, 2021, by Resolution No. 2021-024, Council directed staff to submit a Type 1 application for grant funding. In March 2021, GO-Biz announced that the City of Modesto application was selected for funding in the amount of $75,000. On April 27, 2021, by Resolution No. 2021-156, Council authorized the City Manager to execute a grant Agreement to accept the $75,000 grant to conduct a cannabis equity assessment and develop a cannabis equity program.

After receiving the grant, City staff began efforts to conduct and draft an objective equity assessment as a first step to developing a Cannabis Equity Program. The City sought the services of HdL Companies and California State University Stanislaus (CSUS) to assist staff in these efforts. HdL Companies has experience and expertise related to cannabis business permitting, financial and regulatory processes. They currently provide the City with ongoing administration and monitoring of permitted cannabis businesses located in the city including compliance inspections and annual financial audits.

HdL Companies and CSUS intended to collect and analyze data to help identify impacted individuals and populations that were adversely and disproportionally impacted by the prohibition of cannabis. During these efforts, it was discovered that an objective assessment could not be performed because available arrest data was permanently removed from the City’s database in compliance with AUMA. As a result, the City pivoted and sought to work with our community partners to identify a new approach.

The City engaged with an equal rights community group interested in helping to ensure the inclusion of individuals in our city linked to populations or neighborhoods negatively or disproportionately impacted by cannabis criminalization. In coordination with the community group, the City sought a contract with a cannabis equity consultant to help build upon the City’s initial assessment efforts. The intent was to include lived experiences to support the preparation of a subjective assessment.

On December 22, 2021, the City released an Informal Request for Proposals (RFP) soliciting proposals from 3 qualified consulting firms and/or individuals, with demonstrated experience in providing cannabis equity consulting services to conduct a cannabis equity assessment and development of a cannabis equity program. The RFP solicitation yielded one (1) response, and after a thorough interdepartmental review of the proposal, the City selected Brenda Davis Law Group, because of the businesses’ demonstrated experience in the assessment and development of cannabis equity programs.
#9..
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On March 17, 2022, under the City Manager’s authority pursuant to Modesto Municipal Code (MMC) 8-3.102, the City entered into an Agreement with Brenda Davis Law Group (BDLG) for a not to exceed amount of forty thousand dollars ($40,000). BDLG’s duties included the preparation of an equity assessment that consisted of community outreach and consensus building amongst individuals and communities that may have been disproportionally impacted by the prior cannabis prohibition.

The equity assessment data and information captured from the community survey, two (2) community orientation meetings, and lived experience interviews helped determine that there was a need to develop an equity program, leading to a decision to expand the scope of work in the Agreement with the BDLG to continue the development of a program.

On August 9, 2022, by Resolution No. 2022-334, the City Council approved the First Amendment to an Agreement with BDLG to provide cannabis equity consulting services for the development of a cannabis equity program, increasing the Agreement amount by forty-nine thousand and fifty dollars ($49,050) from forty thousand dollars ($40,000) to a total of eighty-nine thousand and fifty dollars ($89,050).

DISCUSSION:

Equity Assessment Report
The equity assessment report was completed in October 2022. BDLG emphasized multicultural community outreach and consensus building among individuals and neighborhoods that may have been disproportionally impacted by the prior cannabis prohibition. Their methodology provided for the following advantages:

1. Human-centered, data-driven insight into the history of impacts on individuals and their view of community deterioration and barriers created due to drug enforcement policies that focused on certain neighborhoods.

2. Findings to develop policy as the City of Modesto considers the implementation of a local cannabis equity program that intentionally advances economic justice for populations and communities disproportionately affected by cannabis prohibition.

BDLG worked with city staff and partnered with equal rights community groups and a diverse population of Modesto residents to produce the cannabis equity assessment report. This combined effort across a wide range of organizations identified the local negative impacts that criminalization of cannabis has had on various individuals in our community as it pertains to preventing entry into the cannabis industry.

Data was collected using:
 Two (2) bilingual surveys, a baseline and a secondary, conducted via SurveyMonkey, the first beginning in May 2022 and the second beginning in July 2022  Two (2) community forums that hosted a total of eighty-six (86) attendees convened on June 17 and July 21, 2022
 Thirteen (13) lived experience interviews conducted on July 9 and 23, 2022  Four (4) focus groups engaged on July 21, 2022
The assessment found that the historical impacts of cannabis prohibition on people and neighborhoods disproportionately marginalized by cannabis crime policies in the City could be #9..
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grouped into the following community defined barriers to entry into the commercial cannabis industry:

1. Education and technical training

2. Community reinvestment; and

3. Access to capital
Program Development
The program development process provides specific benefits to help address and mitigate the barriers to entry that were identified in the equity assessment. The State of California currently operates a dual licensing program for legal cannabis operations, which allows for regulations to be passed at both a State and local level. The DCC currently offers fee waivers and deferrals to equity applicants and licensees.

The City’s program will consider the recommendations provided in section 8 of the Assessment report as well as policies implemented by other local governments which were inspired by the Minority Cannabis Business Association’s (MCBA) ten model municipal social equity ordinances.

Additional detail regarding the Modesto Local Cannabis Equity Program can be found in the draft policy document (attachment 2) which will be subject to adjustments as Staff implements the program upon adoption by City Council.

Grant Application
The City has expended the initial Type 1 grant award of $75,000 during the equity assessment/program development stage.

On October 3, 2022, GO-Biz released the fiscal year 2022-2023 grant solicitation for the Cannabis Equity Grants Program for Local Jurisdictions1. The City is now eligible to apply for Type 2 funding to implement a local cannabis equity program.

To receive Type 2 grant funds, the state requires local jurisdictions:

1. To have previously conducted a cannabis equity assessment by the application due date

2. To have adopted or operate a local equity program by the application due date; and The grant timeline for fiscal year 2022-2023 is as follows:
 Application Due December 14, 2022
 Grant Evaluation and Award Announcement-December 15, 2022-January 20, 2023  Grant Agreements executed no later than: March 31, 2023  Grant Term- April 1, 2023 to October 31, 2024
The City of Modesto is eligible to apply for Type 2 funding and awards will be allocated using a point-based scoring system and funding formula. Two hundred (200) points are possible which are broken down into the following evaluation sections:

1. Local Equity Assessment Information-20 points

2. Local Equity Program Outputs and Outcomes-5 points

3. Local Equity Program Regulatory Framework-65 points

4. Local Equity Program Expected Outputs and Outcomes-10 points 1 Cannabis Equity Grants Program for Local Jurisdictions - https://static.business.ca.gov/wpcontent/uploads/2022/10/CEG-Program-Grant-Solicitation-FY-2022-23.pdf #9..
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5. Local Jurisdiction Population Size-22 points

6. Local Equity Program Components-53 points

7. Financial Question-25 points
a. Jurisdictions will receive additional points depending on a matching investment provided by City general fund appropriations:
i. $0-$99,999.99 (0 points)
ii. $100,000-$249,999.99 (5 points)
iii. $250,000-$999,999.99 (10 points)
iv. $1,000,000-$1,499,999.99 (15 points)
v. $1,500,000-$1,999,999.99 (20 points)
vi. $2,000,000 or more (25 points)
A minimum score of fifty (50) points is required to be considered in the full pool of other eligible applicants. If a locality scores below fifty (50) GO-Biz may offer the applicant an award not to exceed three hundred and fifty thousand dollars ($350,000).

Type two (2) funds may only be used for the following purposes:

1. To provide grants, no-interest loans, or low-interest loans to the jurisdiction’s local equity applicants and/or local equity licensees to assist with startup and ongoing costs.

2. To provide or fund direct technical assistance to the jurisdiction’s local equity applicants and/or local equity licensees. No more than ten (10) percent of the grant award may be used for direct technical assistance.
a. GO-Biz defines direct technical assistance as support to help cannabis equity applicants and licensees acquire the knowledge and/or skills necessary in order to gain entry to, and to successfully operate in, the regulated cannabis marketplace.

Examples of this assistance include:
i. One-on-one consulting and training, including direct interactions in group settings, to provide equity applicants and licensees the technical knowledge and expertise necessary to facilitate business ownership and employment in the cannabis industry.
ii. Small business support services, professional mentorship services, training and education regarding state cannabis licensing and regulatory requirements, manufacturing assistance, financial management, and business resilience such as emergency preparedness
If adopted, and the City is successful in receiving Type 2 funds, the City will continue to evaluate the adopted program and adjust as needed to provide benefit to equity applicants. The City can consider the submittal of subsequent applications when the opportunity becomes available to seek additional grant funds to assist with program implementation to help equity applicants gain entry to the regulated cannabis marketplace.

FISCAL IMPACT:

The City Staff costs to process the grant application will be absorbed within the current Community and Economic Development Department Fiscal Year 2022-2023 operating budget. Therefore, there is no additional impact to the General Fund for these costs as they are already reflected in the budget.
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City Council, December 13, 2022
Cannabis Equity Assessment Report, and Submission of a Grant Application for the Governor’s Office of Business and Economic Development Cannabis Equity Grants Program for Local Jurisdictions

Page 6 of 6 ends

The exact amount of the grant award is unknown at this time and will vary based on the results of the GO-Biz application scoring process. There is no matching requirement for this fiscal year’s solicitation period.

COMMITTEE RECOMMENDATION:

The program and staff recommended actions were presented to the Cannabis Program and Permit Review Committee on November 15, 2022, and the Committee recommended forwarding to Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution accepting the City of Modesto Cannabis Equity Assessment Report.

Resolution adopting a City of Modesto Cannabis Equity Program and authorizing the City Manager, or designee, to take all actions as may be required to implement this resolution and program, including but not limited to the establishment of internal controls, administrative functions, and application submittal processes as necessary.

Resolution authorizing the City Manager, or designee, to apply for a State of California Cannabis Equity Grant Program for Local Jurisdictions, for the purpose of funding a Cannabis Equity Program and to complete and submit the Grant Application and any subsequent application with the Governor’s Office of Business and Economic Development in relation thereto.

Approved by:

Scotty Douglass,
Deputy City Manager
Joseph P. Lopez, City Manager
Attachments:

1. Resolutions (3)

2. The Brenda Davis Law Group COM Cannabis Equity Assessment Report

3. Proposed Equity Program Policy
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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION ACCEPTING THE CITY OF MODESTO CANNABIS

EQUITY ASSESSMENT REPORT
WHEREAS, on November 8, 2016, California voters approved Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act (AUMA); and WHEREAS, funding has been allocated to the Governor’s Office of Business and Economic Development to provide grant funds to local governments pursuant to AB 97 (Stats. 2019, Ch. 40), for Cannabis Equity program purposes; and WHEREAS, the City Council has adopted a Commercial Cannabis Ordinance, Ordinance 3684-C.S., that established the City’s regulatory framework for commercial cannabis businesses; and
WHEREAS, the City of Modesto desired to assess a potential local equity program for prospective commercial cannabis business owners; and WHEREAS, the City Council of the City of Modesto supported the development of a local equity program; and
WHEREAS, on January 26, 2021, by Resolution No.2021-024, the City Council authorized the City Manager to apply for a State Cannabis Equity Grants Program for Local Jurisdictions, for an amount up to $75,000 for the purposes of funding a cannabis equity assessment and funding the potential development of a cannabis equity program; and
WHEREAS, in March of 2021, the Governor’s Office of Business and Economic Development announced that the City of Modesto application was selected for funding in the amount of $75,000; and
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2 WHEREAS, on April 27, 2021, by Resolution No. 2021-156, the City Council authorized the original grant agreement with the Governor’s Office of Business and Economic Development for the amount of $75,000 for the purposes of program assessment and development; and
WHEREAS, on December 22, 2021, the City released a Request for Proposal (RFP) soliciting qualifications from qualified consulting firms and/or individuals, with demonstrated experience in providing cannabis equity consulting services to conduct a cannabis equity assessment and/or assist with the development of a local equity program; and
WHEREAS, the Brenda Davis Law Group was selected through the solicitation process because of their demonstrated experience in providing cannabis equity consulting services to conduct a cannabis equity assessment and develop a cannabis equity program; and
WHEREAS, on March 17, 2022, under the City Manager’s authority pursuant to Modesto Municipal Code Section 8-3.102 the City entered into an agreement with the Brenda Davis Law Group for a not to exceed amount of $40,000; and WHEREAS, on August 9, 2022, by Resolution No.334, the City authorized a First Amendment to the agreement increasing the compensation amount by $49,050 from $40,000 to a total of $89,050 to continue the development of a cannabis equity program; and
WHEREAS, the equity assessment report, as shown in Exhibit 1 attached hereto, has been completed by the Brenda Davis Law Group in October of 2022 which provides the framework for a City of Modesto cannabis equity program. #9..
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3 NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby accepts the City of Modesto Cannabis Equity Assessment and Program Development Report.
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4 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held 13th day of December, 2022, by Councilmember XX, who moved its adoption, which motion being duly seconded by Councilmember XX, 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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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION ADOPTING A CITY OF MODESTO CANNABIS EQUITY

PROGRAM AND AUTHORIZING THE CITY MANAGER, OR DESIGNEE,

TO TAKE ALL ACTIONS AS MAY BE REQUIRED TO IMPLEMENT THIS

RESOLUTION AND PROGRAM, INCLUDING BUT NOT LIMITED TO THE

ESTABLISHMENT OF INTERNAL CONTROLS, ADMINISTRATIVE

FUNCTIONS, AND APPLICATION SUBMITTAL PROCESSES AS

NECESSARY
WHEREAS, on November 8, 2016, California voters approved Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act (AUMA); and WHEREAS, funding has been allocated to the Governor’s Office of Business and Economic Development to provide grant funds to local governments pursuant to AB 97 (Stats. 2019, Ch. 40), for Cannabis Equity program purposes; and WHEREAS, the City Council has adopted a Commercial Cannabis Ordinance, Ordinance 3684-C.S., that established the City’s regulatory framework for commercial cannabis businesses; and
WHEREAS, the City of Modesto desired to assess a potential local equity program for prospective commercial cannabis business owners; and WHEREAS, the City Council of the City of Modesto supported the development of a local equity program; and
WHEREAS, on January 26, 2021, by resolution No.2021-024, the City Council authorized the City Manager to apply for a State Cannabis Equity Grants Program for Local Jurisdictions, for an amount up to $75,000 for the purposes of funding a cannabis equity assessment and funding the potential development of a cannabis equity program; and
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2 WHEREAS, in March of 2021, the Governor’s Office of Business and Economic Development announced that the City of Modesto application was selected for funding in the amount of $75,000; and
WHEREAS, on April 27, 2021, by Resolution No. 2021-156, the City Council authorized the original grant agreement with the Governor’s Office of Business and Economic Development for the amount of $75,000 for the purposes of program assessment and development; and
WHEREAS, on December 22, 2021, the City released a Request for Proposal (RFP) soliciting qualifications from qualified consulting firms and/or individuals, with demonstrated experience in providing cannabis equity consulting services to conduct a cannabis equity assessment and/or assist with the development of a local equity program; and
WHEREAS, the Brenda Davis Law Group was selected through the solicitation process because of their demonstrated experience in providing cannabis equity consulting services to conduct a cannabis equity assessment and develop a cannabis equity program; and
WHEREAS, on March 17, 2022, under the City Manager’s authority pursuant to Modesto Municipal Code Section 8-3.102 the City entered into an agreement with the Brenda Davis Law Group for a not to exceed amount of $40,000; and WHEREAS, on August 9, 2022, by Resolution No.334, the City authorized a First Amendment to the agreement increasing the compensation amount by $49,050 from $40,000 to a total of $89,050 to continue the development of a cannabis equity program; and
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3 WHEREAS, the equity assessment report was completed by the Brenda Davis Law Group in October of 2022 which provides the framework for a City of Modesto cannabis equity program.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby adopts a City of Modesto Cannabis Equity Program.

BE IT FURTHER RESOLVED, that the City Manager, or designee, is authorized to take all actions as may be required to implement this resolution and program, including but not limited to the establishment of internal controls, administrative functions, and application submittal processes as necessary.
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4 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held 13th day of December, 2022, by Councilmember XX, who moved its adoption, which motion being duly seconded by Councilmember XX, 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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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION AUTHORIZING THE CITY MANAGER, OR DESIGNEE, TO

APPLY FOR A STATE OF CALIFORNIA CANNABIS EQUITY GRANT

PROGRAM FOR LOCAL JURISDICTIONS, FOR THE PURPOSE OF FUNDING

A CANNABIS EQUITY PROGRAM AND TO COMPLETE AND SUBMIT THE

GRANT APPLICATION AND ANY SUBSEQUENT APPLICATION WITH THE GOVERNOR’S OFFICE OF BUSINESS AND ECONOMIC DEVELOPMENT IN

RELATION THERETO
WHEREAS, on November 8, 2016, California voters approved Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act (AUMA); and WHEREAS, funding has been allocated to the Governor’s Office of Business and Economic Development to provide grant funds to local governments pursuant to AB 97 (Stats. 2019, Ch. 40), for Cannabis Equity program purposes; and WHEREAS, the City Council has adopted a Commercial Cannabis Ordinance, Ordinance 3684-C.S., that established the City’s regulatory framework for commercial cannabis businesses; and
WHEREAS, the City of Modesto desired to assess a potential local equity program for prospective commercial cannabis business owners; and WHEREAS, on January 26, 2021, by resolution No.2021-024, the City Council authorized the City Manager to apply for a State Cannabis Equity Grants Program for Local Jurisdictions, for an amount up to $75,000 for the purposes of funding a cannabis equity assessment and funding the potential development of a cannabis equity program; and
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2 WHEREAS, in March of 2021, the Governor’s Office of Business and Economic Development announced that the City of Modesto application was selected for funding in the amount of $75,000; and
WHEREAS, the City Council of the City of Modesto supported the development of a local equity program; and
WHEREAS, on April 27, 2021, by Resolution No. 2021-156, the City Council authorized the original grant agreement with the Governor’s Office of Business and Economic Development for the amount of $75,000 for the purposes of program assessment and development; and
WHEREAS, for fiscal year 2022-2023, the Cannabis Equity Grants Program for Local Jurisdictions was allocated $15,000,000 from the Cannabis Tax fund with $2,000,000 being made available for type 1 grants and $13,000,000 allocated to type 2 grants; and
WHEREAS, on December 13, 2022, by resolution No. 2022-XX, The City Council accepted the City of Modesto Cannabis Equity Assessment and Program Development Report, and by Resolution No.2022-XX, adopted a City of Modesto Cannabis Equity Program and authorized the City Manager, or designee, to take all actions as may be required to implement the resolution and program, including but not limited to the establishment of internal controls, administrative functions, and application submittal processes as necessary.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that the City Manager, or designee, is hereby authorized to apply for a State of California Cannabis Equity Grant Program for Local Jurisdictions, for the purpose of funding a #9..
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3 cannabis equity program and to complete and submit the grant application and any subsequent application with the Governor’s office of Business and Economic Development in relation thereto.
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4 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held 13th day of December, 2022, by Councilmember XX, who moved its adoption, which motion being duly seconded by Councilmember XX, 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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CANNABIS
EQUITY

ASSESSMENT
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ABSTRACT
Modesto is a city with rich agricultural roots and a dynamic multicultural mix of residents. Its name is Spanish for “modest,” yet its influence as a major transportation hub for Central Valley industrial and recreational pursuits is far-reaching. The city has made significant progress on its economic vitality goal of making downtown Modesto a regional destination for housing, businesses, events, and entertainment offerings. Cannabis businesses are expressly excluded from locating in the downtown area, however, and this report provides context for how this limitation may have emerged. It also identifies other areas where such businesses may be able to enhance economic vitality.

This City of Modesto Cannabis Equity Assessment (CEA or Assessment) provides human-centered, data-driven insight into the impacts of cannabis criminalization and the War on Drugs on communities within the city’s jurisdiction. The Assessment includes a Program Development section that provides preliminary findings to guide the establishment of a local cannabis equity program (LCEP). The LCEP is consistent with the City of Modesto’s policy on Diversity, Equity and Inclusion as it intends to advance economic justice for populations and communities disproportionately affected by cannabis prohibition.

ACKNOWLEDGEMENTS
It is our pleasure to recognize key community members, organizations, subject matter experts, and City of Modesto staff who have worked diligently to support our outreach and engagement efforts.

Each added critical resources and immense value to every step in this process. We offer a special thank you and owe incredible gratitude to the City of Modesto’s leadership and staff, including Scotty Douglass, Deputy City Manager, Jaylen French, Director of Community & Economic Development, Jorge Barrera, Economic Development Manager, Robert Kimball, Marketing Specialist, Marc Garcia, Office of the City Manager-Community & Media Relations; community volunteers provided by Wendy Byrd, President, NAACP Modesto-Stanislaus Branch, and Michael Baldwin, Chair, Criminal Justice Committee; meeting spaces provided by Dr. Perfecto Munoz, Director, King-Kennedy Memorial Center, and Pastor Nathaniel and Dorothea Green, Christ Unity Baptist Church; community members Eric Epson, LaPrice Reynolds, and George Kirk; and professional services provided by Marquis Townsend, Principal, MIXT Accounting Firm, Dr. Reggae T. Brown, CEO, Ascension Consulting & Multimedia LLC, her subject matter expert circles and media arts team. #9..
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TABLE OF CONTENTS
Section 1. Executive Summary ............................................................................................... 4

1.1 Key Findings ..................................................................................................................... 5 Section 2. Background ............................................................................................................ 6 Section 3. Overview ................................................................................................................ 8 Section 4. Equity Analysis .......................................................................................................11

4.1 Methodology ......................................................................................................................12

4.2 Impacts of Cannabis Criminalization in the City of Modesto .............................................13

4.3 Cannabis, Drug Arrest Rates and Racial Disproportionality in the City of Modesto, California, and the United States ............................................................................................ 21 Section 5. Current Conditions in the City of Modesto ............................................................. 26

5.1 Community Profile ….……………...................................................................................... 28 Section 6. Overview of the City of Modesto’s Cannabis License Process & Applicants .…... 32 Section 7. Barriers to Entry ..................................................................................................... 34 Section 8. Cannabis Equity Program Recommendations ....................................................... 38

8.1 Review of Other Jurisdictions’ Efforts to Promote Equity in Cannabis …………............... 48

8.2 References ........................................................................................................................ 53

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Section 1. EXECUTIVE SUMMARY
The City of Modesto started a Cannabis Equity Assessment (CEA or Assessment) effort to gather data on the people and neighborhoods disproportionately marginalized by prior cannabis criminalization policies. City staff responded to a Cannabis Equity Grants (CEG) Program Solicitation for Local Jurisdictions issued in October 2021 to help fund the CEA. In March of 2022, the City of Modesto contracted with a cannabis subject matter expert from The Brenda Davis Law Group to assist with gathering data and preparing an analysis and report. The effort to use arrest data as a starting point in the analysis continued throughout this process as we pursued access to expunged police data and alternative sources of information for all arrests and convictions for the sale, purchase, possession, or consumption of cannabis prior to the November 8, 2016 legalization of commercial cannabis in California (Prop 64). To round out the Assessment in areas where quantitative data were unavailable or underreported, The Brenda Davis Law Group team also developed a means to gather qualitative information, using surveys, community forums, focus groups, and lived experience interviews to create a robust and specific community profile.

The team emphasized multicultural community outreach and consensus building among individuals and neighborhoods that may have been disproportionately displaced by prior cannabis prohibition.

This approach has produced the following advantages:
o It provides human-centered, data-driven insight into the history of impacts on individuals and their view of community deterioration and barriers created due to drug enforcement policies that focused on certain neighborhoods.
o It provides findings to develop policy recommendations as the City of Modesto considers a local cannabis equity program (LCEP) that intentionally advances economic justice for populations and communities disproportionately affected by cannabis prohibition. #9..
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The City of Modesto can use the LCEP as a process for engaging communities to ensure that people with marginalized identities have the opportunity to gain experience, contribute, and develop consistently with its policy on Diversity, Equity and Inclusion. To accomplish the established scope of work, The Brenda Davis Law Group worked with city staff and partnered with the NAACP and a diverse population of Modesto residents to produce the CEA data and report. Our joint efforts helped the City of Modesto understand the local long-term negative impact that criminalization of cannabis has had on its communities.

Key Findings
The historical impacts of cannabis prohibition on people and neighborhoods disproportionately marginalized by prior cannabis criminalization policies in the City of Modesto occurred primarily in the 95350, 95351, 95354, and 95355 zip codes. These impacts can be grouped into three recurring themes about barriers to entry which emerged from community feedback from the surveys, community forums, focus groups, and lived experience interviews:

I. Education and Technical Training – the City of Modesto should help remove the stigma of prior criminalization and provide simple and clear cannabis business facts and instructions, access to ownership opportunities, support for skills transfers, training and mentoring on starting and running a legally compliant cannabis business or ancillary business.

II. Community Reinvestment – the City of Modesto should reinvest in the communities hardest hit by the War on Drugs by assisting community organizations with drug prevention and treatment services, family support for healing the effects of prior criminalization, grant writing services and tips and alerts to gain access to available city tax revenues and California Community Reinvestment Grants Program (CalCRG) opportunities.

III. Access to Capital – the City of Modesto should provide location assistance for access to commercial properties in the hardest hit communities and technical support and training on how to build wealth and qualify for available sources of small business financing.

Our findings are further discussed below in Section 7, and our recommendations appear below in Section 8. We considered data from all available sources, both quantitative and qualitative. #9..
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Section 2. BACKGROUND
California became the first state
to allow medicinal cannabis use
when voters passed the
Compassionate Use Act in 1996.

Today, cannabis is legal in
California for both medicinal and
adult (recreational) use. The
Medicinal and Adult Use
Cannabis Regulation and Safety
Act (MAUCRSA), established a
uniform licensing regime for both
medicinal and adult-use cannabis, effective January 1, 2018. MAUCRSA authorized a comprehensive system that provides the basic framework used by a number of local jurisdictions, including the City of Modesto, to regulate medicinal and recreational cannabis businesses. Local jurisdictions may ban cannabis businesses entirely or adopt more stringent requirements and limitations than state regulations may allow.

The City of Modesto adopted Ordinance 3684-C.S. legalizing certain types of commercial cannabis businesses in December 2017. Currently, the city allows up to 10 cannabis dispensaries and has no limit on the number of non-dispensary businesses. To date, the City of Modesto has approved 8 cannabis dispensary businesses, of which 7 are operational, and 6 non-dispensary cannabis businesses, of which 3 are operational, according to information provided by city staff on October 13, 2022. The Modesto City Council formed a Cannabis Permit Review Committee to which it delegated the authority to approve all cannabis businesses in 2021. This committee was renamed in 2022 and now advises the full council on all cannabis-related issues as the Cannabis Program and Permit Review Committee. Countywide, the Stanislaus County Board of Supervisors runs a separate permitting program that allows for 61 total Commercial Cannabis Business Licenses. This level of present and potential legal cannabis activity in the area affords an opportunity for Modesto to serve as a hub for retail, cultivation and other authorized cannabis businesses as it makes up 40% of the county population.

Modesto Arch This Photo by Unknown Author is licensed under CC BY-SA- #9..
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MAUCRSA permits adults, 21 years of age or older, to legally possess, transport, purchase, consume, or share up to one ounce (≤ 28.5g) of marijuana, and up to 8 grams of marijuana concentrates. It also permits adults, 21 years of age or older, to grow up to 6 marijuana plants per household out of public view. In addition to its legalization provisions, MAUCRSA reduces the penalty for many marijuana offenses. MAUCRSA also has a resentencing provision which permits persons previously convicted of designated marijuana offenses to obtain a reduced conviction or sentence. There is also a provision requiring the court to “dismiss and seal” the record of conviction.

MAUCRSA creates a marijuana tax to be imposed on purchasers of marijuana and marijuana products. The Governor's Office of Business and Economic Development (GO-Biz) currently allocates a portion of this tax revenue for local health departments and qualified community-based nonprofit organizations. In addition to the tax revenue made available to local communities, GO-Biz provides opportunities for cities and counties to receive grant funding to create cannabis social equity programs. As a result, several cities and counties have adopted cannabis equity ordinances.

Each ordinance supports equity applicants in diverse ways.

The City of Modesto intends to develop a local cannabis equity program (LCEP) designed to remove barriers to entry into the legal cannabis business for people who were negatively impacted by convictions or arrests during the War on Drugs. The community responses to surveys and participation in the community forums, focus groups and lived experience interviews painted a vivid picture of these barriers, as discussed in more detail below. The LCEP, when pursued with diligence by both the City of Modesto and the social equity participants, will help to reconcile the injustices suffered by those individuals who were criminalized and denied access to housing, employment, family stability, and other critical elements of a resilient community for engaging in the same activities that are now legal and highly profitable for others who do not face these barriers. Also, having a LCEP would position Modesto community organizations to better align themselves for access to a portion of the GO-Biz tax funds to provide drug prevention and treatment and youth and adult supportive services as reinvestments in individuals and their neighborhoods. #9..
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Section 3. OVERVIEW
The City of Modesto is located
in the heart of the California
Central Valley within Stanislaus
County. The city’s general
population accounts for 40% of
the residents of Stanislaus
County. This Assessment uses
available data sets and reviews
arrest and conviction rates by
race, ethnicity and geolocation.

The federal government
identified the Central Valley as
a High Intensity Drug
Trafficking Area (HIDTA) in
1999. The region includes metropolitan areas, such as Bakersfield, Fresno, Modesto, and Sacramento. Mexican Drug Trafficking Organizations (DTOs) played a major role in the reason the region received this HIDTA designation. When reviewing arrest and conviction data for this area, we found that Hispanic ethnicity is provided as a racial identity in the region, but not as an ethnicity within the local Modesto community. In fact, researchers at U.C. Davis in 2016 found it necessary to develop a formula for arrest rate analysis because reliable race-specific population estimates were and continue to be sparse. Figure 1a shows the results of applying this formula. Hispanic arrest rates appear in the data as a1:1 ratio. This ratio was calculated as follows: (TOTAL # ARRESTS FOR HISPANICS IN 2005/2009) / 5 (ACS 5-YEAR ESTIMATE OF THE HISPANIC POPULATION FOR 2005-09) / 100,000. The margin of error (MOE) for the Black-White ratio for each year was calculated in the following manner:

MOE (AB/AW * PW/PB) = AB/AW * MOE(PW/PB), where the MOE(PW/PB) was calculated using the MOE formula of the ratio from the 2016 American Community Survey (ACS) 5-year estimates for 2009-2016.

This ratio is highly inconsistent with conviction rates and leads us to believe a large number of Hispanic convictions reported in the California Department of Corrections and Rehabilitation (CDCR) Figure 1a - “When the Smoke Clears Report.” Racial Disparities in California’s Marijuana Arrests
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data may include Hispanics that were identified as “White” and distributed within the “White” category, as shown below in Figure 1b. In comparison, Blacks in Modesto were 3 to 4 times more likely to be arrested for drug felonies prior to 2010. Due to state reforms to reclassify felony drug offenses as misdemeanors, today the data show a steep decline in cannabis related arrests (see Figure 1a above.)
While the State of California bookends the War on Drugs as the period from 1980 to 2016, the CEA also considers the history of criminalization policies prior to 1980 and the negative impacts on individuals and communities that continue to the present day.

According to the 2019 ACS 1-year estimates, as shown in Figure 2a, over 70% of available employment opportunities are in the skilled trades, services, transportation, and labor industries.

Additionally, the City of Modesto has a 55% employment rate, with 16.2% of the population earning a bachelor’s degree or higher. The 2020 ACS 5-year estimates show the median household income in the City of Modesto was $60,254 in 2020. Figure 3 below provides QuickFacts taken from the 2020 ACS 5-year estimates regarding the key population characteristics of the City of Modesto.

Convictions Between 1980-2016 Percentage*
Other 139 2%
White 3283 53%
American Indian 65 1%
Black 675 11%
Hispanic 2014 32%
Asian or Pacific
Islander 25 0.4%
6201 100%
Figure 1b - California Department of Corrections and Rehabilitation - Stanislaus County Percentage of Convictions by Race/Ethnicity
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Figure 2a - Bureau, U. S. C. (n.d.). US Census. 2019 ACS 1-Year Estimates The multicultural mix in
Modesto is largely White
alone, followed by Hispanic or
Latino, then Black or African
American with the inclusion of
Two or More Races, as shown
in Figures 2a and 2b. Over half
the population is comprised of
homeowners who spend
slightly more on their
mortgages than the median
gross rent spent by nonhomeowners. A more detailed
snapshot of the Modesto
population appears in Figure 3.

Figure 2b - 2019 Census Data Modesto, California. (2020).

City of Modesto
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Figure 3 - QuickFacts - Key population characteristics of the City of Modesto in Stanislaus County We gleaned from these data that, overall, both equity and non-equity cannabis businesses can benefit from the high unemployment rate to tap into a properly trained workforce and increase community reinvestment as an additional major employer. Cannabis presents an opportunity to enhance all the sectors listed in the Employment Data shown above in Figure 2a. Also, these businesses can benefit from the locational value of the area as a Central Valley transportation hub.

Equity businesses in particular can learn from the experience and expertise shared by successful non-equity businesses that are currently operational in Modesto to bypass costly mistakes on the way to operating profitable businesses that provide employment, contribute to tax revenue, and enhance the means to reinvest in their own communities.

Section 4. EQUITY ANALYSIS
This analysis of equity addresses current conditions among people and communities criminalized in the City of Modesto and devastated by the War on Drugs. The data serves to identify individuals and neighborhoods targeted by enhanced law enforcement against drug users and drug related crimes.

In the Assessment, we focused on the self-identified victims of the War on Drugs who currently seek to become licensed owners or operators of legal cannabis businesses and ancillary businesses within the City of Modesto. Under this analysis, the term “equity” refers to fairness and justice, as distinguished from “equality”: As defined by the National Association of Colleges and Employers, “Whereas equality means providing the same to all, equity means recognizing that we do not all start #9..
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from the same place and must acknowledge and make adjustments to imbalances”.

4.1 Methodology
The goal of this Assessment is to provide a data-informed look at the impacts of cannabis criminalization and the War on Drugs on communities in the City of Modesto. The CEA effort focused on direct community interaction based on the UCLA Community Based Assessment model (see references in Section 8 below.) It was conducted by The Brenda Davis Law Group team with assistance from the NAACP and city staff to attain firsthand accounts and feedback from a multicultural mix of the populations disproportionately impacted by the War on Drugs. Means of engaging feedback included outreach via emails, phone calls, text messages, social media, and inperson activities. The City of Modesto also set up a cannabis equity assessment webpage, a dedicated phone line and email responder and added community forum dates to its public events calendar.

The team collected data by the following means:
o Two bilingual surveys, one baseline and one secondary, conducted via SurveyMonkey, the first beginning in May 2022 and the second beginning in July 2022 o Two community forums that hosted a total of 86 attendees convened on June 17 and July 21, 2022
o Thirteen lived experience interviews conducted on July 9 and 23, 2022 Figure 3b – Equality Vs. Equity This Photo by Unknown Author is licensed under CC By NC-JR #9..
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o Four focus groups engaged on July 21, 2022

4.2 Impacts of Cannabis Criminalization in the City of Modesto The War on Drugs significantly impacted communities in the City of Modesto; more specifically, the criminalization of cannabis. It is a rural city with a diverse community anchored in the agricultural and service industries. The
correlation between drugrelated enforcement and
people residing in the
poorest, most ethnically
diverse neighborhoods
directly impacted those
individuals and families
economically. California
began to impose harsher
sentencing for drug offenses
beginning in 1881, as shown
in Figure 4a, and what
followed was based on a
collection of biases and
myths. Patterns of
Police SWAT Team Drug Raid in West Side Modesto, California (Special Weapons & Tactics Team) July 21, 2014, United States Broadcasting
Figure 4 - “Central Valley California High Intensity Drug Trafficking Area.” Drug Market Analysis 2010
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misinformation began to spread which insisted that opiates, cocaine, and cannabis were equally dangerous, led to other crimes and were sold and used by immigrants and other despised groups.

As cultivation of Marijuana began to expand within the United States, the Drug Enforcement Administration (DEA) began a Domestic Cannabis Eradication and Suppression program in 1979 with only two states participating, California and Hawaii. According to a DEA 1975-1980 report “In 1979, an estimated 10-15,000 tons of marijuana were consumed in the US. It is believed that up to 10 percent of that amount was cultivated in U.S., a majority from California and Hawaii.” Modesto was an early transport hub for cannabis cultivation in the early 1980s. These routes were mostly controlled by Mexican drug trafficking organizations. Congress passed federal mandatory minimum sentencing legislation in 1986 which significantly intensified the War on Drugs.

As part of this heightened attention to drug law enforcement, the National Drug Intelligence Center (NDIC) was established by the Department of Defense Appropriations Act, 1993 (Public Law 102- 396), signed into law on October 6, 1992.The NDIC was placed under the direction and control of the U.S. Attorney General. The militarization of local law enforcement agencies, particularly as related to drug offenses, was now in full swing. California’s AB 971, which established Three-Strikes sentencing, was signed into law on March 7, 1994. In turn, those sentences produced some of the harshest sentence enhancements applied to felony offenses, more so than most other states. Under Three-Strikes, California law allowed sentences to be doubled for felony offenders regardless of whether the offense was classified as serious or violent.

In 1999, the White House Office of National Drug Control Policy designated the Central Valley a High Intensity Drug Trafficking Area (HIDTA). Prior to that, Modesto was renowned for its agriculture industry. The HIDTA designation allowed for up to $2.5 million in federal funding each year, plus additional law enforcement tools to combat drugs within the region.

After Three-Strikes, the extra money from the HIDTA designation placed Modesto in the prime position to target communities of color and apply longer and harsher sentences. Figure 4b below demonstrates the statewide consequences of this disproportionate law enforcement financed and encouraged by the War on Drugs. Again, the drug arrests among the “White” population may include Hispanics who identify as such. Most telling is the spectacularly high rate of drug arrests among the “Black” population.
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Figure 4b - State of
California Office of
the Attorney
General Bureau of
Criminal
Information and
Analysis Criminal
Justice Statistics
Center Report
Series Volume 2,
Number 2
December 2000
Report on Drug
Arrests in
California, from
1990 to 1999
In 2010, the NDIC published the Central Valley California High Intensity Drug Trafficking Area Drug Market Analysis and reported in the Strategic Drug Threat Development sections that “Cannabis cultivation has increased dramatically in the Central Valley HIDTA region over the past 5 years, making the area one of the most prominent marijuana production areas in the nation.” The Brenda Davis Law Group team conducted lived experience interviews on July 9 and July 23, 2022, at Christ Unity Baptist Church in Modesto. The lived experience interviews provided the team with local stakeholders’ recollections of how cannabis criminalization affected the City of Modesto.

These interviews were conducted within community comfort levels regarding access to gathered data due to overlying federal illegality of cannabis, language and immigration status concerns and the need for formal approval by governing bodies interested in partnering with the City of Modesto. * For the sake of privacy, all parties interviewed have been identified by their first and last initial, in addition to current residence zip code.

One testimonial from the interviews paints a picture of despair and ridicule:

Because of the increase[d] criminalization and the mandatory minimum. I was never given a second chance on life, when I was released back into community. The cannabis possession was a felony, and it was also my identity, that I was unable to escape. #9..
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Every application I had to identify and check the box that I was previously convicted. ~PP95350
Another stakeholder we interviewed reflected on her childhood and the lingering trauma in her adult life:

My mother was arrested for a simple cannabis offense, which was damaging in 1980’s. That was the beginning of continued repeated offenses which had her in and out of jail until she passed away.

Multiple members of my family have been arrested for cannabis offenses. To see progression of society and how it is accepted… now [I am] hurting because my mom’s life was changed due to the criminalization of cannabis. ~RP95368
As described in another lived experience interview, some arrests resulted in job losses and depleted income:

I always thought I was within my legal rights, until I found out I wasn’t. They took me to jail for a year with a 3-year suspended sentence. When I got out of jail, I couldn’t’ find a job and I lost one year of my life. I lost $10,000 to bail out of jail, another $10,000 in attorney fees, a year's worth of wages… so I lost at least $50,000 and served a hellacious year in jail for something I thought was legal and I had a prescription for. How do I get a year of my life back? ~JV95350

Another person we interviewed was visibly shaken while reliving the accounts shared:

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This is hard! We never talk about this stuff....
[The participant noted that a family member with mental health challenges chose to self-medicate with marijuana and was arrested many times as a result.]
As a child and even as an adult, my family member was never offered mental health services or treatment. She should have been evaluated and taking [sic] care of instead of criminalized. What's the hope after that? If we understand better, then we could have done better. If it wasn't so secretive my parents could have gotten her more help. If they would have understood that her problems were trauma-based rather than criminal. But they were so ashamed by the stigma around cannabis and how it was criminalized at the time. ~FC95307
Another stakeholder was very matter of fact about the chaos and loss of assets attributable to cannabis related enforcement actions:

I owned the house and let a friend rent it out. I dabbled a little bit with marijuana, but he was growing marijuana. So, I guess he went and opened up another house and started growing (a different house than mine). About 2 months later the police kicking my door in at my residence and arrest me for manufacturing, distribution, and cultivation. I honestly had nothing to do with my tenant’s activities. I was going through a divorce and didn't have the financial resources to fight with an attorney. So, I went on and took charges, that was probably 10 years ago. Now it's legal, but not legal. What's legal? There's a double standard here as to what is legal and what is not. It seems to be setup against us, not for us. It's in our neighborhoods, we're probably the highest paying customer but it seems like my people when it comes to business can't get in it, when it may cost $50,000 for an application. One or two people own majority of the #9..
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market. Affordability and information are needed. It's not fair…level the playing field. It's not equality. Whether you're smart or not or have the funds or not they take you through hell. ~EW95354 One stakeholder currently works in the cannabis industry, but recounted the harsh consequences of trying to run a cultivation business for medicinal uses during the War on Drugs:

I'm currently working for a dispensary here in Modesto Monday through Friday. In March 2006, my house was raided. I was cultivating cannabis. I was doing it medically but there was a lot of gray area. I was indicted in November that year. My wife (then girlfriend) was also arrested. She was charged, but as a part of my plea deal her charges were dropped and I would take the instead.

The Stanislaus County Criminal Grand Jury did the indictment. It was a multijurisdictional task force that originally did the raid. The FBI was involved but states took the case. I was charged with cultivation sales, and I think they added trafficking. I thought I had a good leg to stand on in court because I had paperwork and a wellknown cannabis attorney. At that time, he explained to me I was part of the war on drugs and unfortunately so many cases like mine had to happen before the laws would change. He said as much as it was bad hopefully some good would come out of it. Beyond the criminal charges I was charged civically [sic], under asset forfeiture they took our cars, jewelry, anything worth of value. I had to go to court separate for my criminal case and prove that these items were not bought with drug money. One of the vehicles was a gift from the family member and DMV records proved it. It still took a while to get the car back. They took all my wife’s’ tax money at the time (out of her purse). They froze our accounts. It was really a hardship. We #9..
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were both scarred and traumatized by the entire experience. ~CR95350
Additional interviews highlighted the
concepts of stigma and multigenerational
trauma, such as, negative effects on
household size that were associated with
cannabis and being stopped by police and,
as a reason, simply being told that the
smell of cannabis is present. Also, we
learned that the most marginalized areas
include the 95350, 95351, 95354, and
95355 zip codes.

Results from two local surveys allowed us additional insight into the complexities of those lives affected by the criminalization of cannabis. The baseline survey demonstrates a correlation between top zip codes for
residences in Modesto
and city arrest rates in
those zip codes, as
shown in Figures 5a
and 5b.

Figure 5a - Modesto Cannabis Equity Assessment Survey #1 Results, Question #2 #9..
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The second survey reveals 80% of its total respondents experienced arrests or convictions, as shown in Figure 6. All these individuals participated in the lived experience interviews.

We observed during the community
forums and focus group activities, via
comments shared there and during
follow up inquiries initiated by various
Modesto residents, that the 86 inperson participants represent a strong multicultural impetus to address what
the War on Drugs did to their families
and neighborhoods. The 125
residents polled expressed a keen
interest in having a local equity
program that they have a hand in
shaping which affords them access to
state and local grant funding and
Figure 6 - Modesto Cannabis Equity Assessment Survey #2 Results, Question #8
Figure 5b - Drug-crimes-per-capita-map-Modesto-CA, Crime Grade #9..
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hands-on business guidance and support. The discussion that follows takes a deeper dive into the characteristics common to those who were disproportionately criminalized by drug enforcement policies.

4.3 Cannabis, Drug Arrest Rates and Racial Disproportionality in the City of Modesto and Stanislaus County, California
To help illustrate the targeted approach to the War on Drugs within the communities of Modesto, Figure 7 below shows Black people being arrested 3 times more frequently than their White counterparts within the city’s jurisdiction. Blacks were arrested at a rate of 29% while making up less than 5% percent of the city’s population.

Law Enforcement
Agency
Black to White
Arrest Ratio (x)
Black to White
Margin of Error (+/-
)
Black
Arrest Rate
Huntington
Beach

5.58 0.46 152.93
Indio 18.37 4 36.96
Inglewood 2.41 0.11 101.38
Irvine 3.18 0.21 28.71
Livermore 6.35 0.89 12.86
Long Beach 8.15 0.1 306.54
Manteca 3.95 0.29 178.9
Merced 9.35 0.43 35.93
Milpitas 5.78 0.6 18.8
Modesto 2.87 0.11 29.54
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Moreno Valley 3.49 0.09 15.45
Mountain View 8.26 0.79 94.19
Murrieta 2.52 0.18 10.15
Napa 12.46 2.01 34.95
Newport Beach 12.43 2.6 421.83
Oakland 25.45 0.29 15.13
Oceanside 1.57 0.21 0.37
Ontario 1.96 0.09 26.09
Orange 7.21 0.44 82.88
Oxnard 1.65 0.1 16.29
Palo Alto 26.22 3.01 105.76
Pasadena 8.99 0.21 230.71
Perris 2.35 0.16 24.48
Pittsburg 2.42 0.08 210.94
Pleasanton 0.77 0.28 1.84
Pomona 4.36 0.12 94.83
Redding 5.99 0.4 111.87
Redlands 5.65 0.49 32.31
Redondo Beach 6.46 0.62 209.94
Redwood City 12.06 1.17 40.72
Rialto 2.17 0.11 9.22
Figure 7 – “When the Smoke Clears Report.” Racial Disparities in California’s Marijuana Arrests #9..
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For Stanislaus County, between the years 2000 and 2016, the rate of cannabis arrests increased to more than 300%, as shown in Figure 8a below. The cannabis and drug arrest rates relative to population size, also shown in Figure 8a, are noticeably higher in Hispanic or Latino, and Black or African American communities.

Figure 8a - “When the Smoke Clears Report.” Racial Disparities in California’s Marijuana Arrests #9..
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We also requested Modesto and Stanislaus County demographic data for drug related arrests between the years 1980 and 2016 from the California Department of Corrections and Rehabilitation (CDCR).

We reviewed arrest data for Stanislaus County from the UC Davis report on racial disparities, as shown in Figure 8a above, and CDCR’s response to our information request on arrests and convictions. While Figure 8a takes into account the census data for Stanislaus County during the 16-year period 2000 to 2016, the data provided by CDCR presents a bigger picture. CDCR reported data from 1980 to 2016, over 30 years of information, and focused on convictions by race.

Currently, Stanislaus County is more diverse than it was in 1980. As shown in Figure 8b, in 2016, the White population made up 83.7% of the population compared to 95.5% in 1980.

Between 1980 and 2016, the share of the population classified as Other grew the most, increasing by 9.6 percentage points to 12.9%. The Black population increased from 1.2% in 1980 to 3.4% in 2016. The CDCR data provided a breakdown of Stanislaus County marijuana related convictions by raw numbers. Figure 8c below shows the percentage of convictions among populations of Whites, Hispanics, and Blacks, among others.

Figure 8b – California Department of Corrections and Rehabilitation Stanislaus County Percentage of Convictions by Race #9..
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While representing only 3.4% of the county’s population in 2016, Black residents accounted for 11% of marijuana related convictions within the county between 1980 and 2016; nearly 3 times their population. This conviction rate supports the conclusion that arrests and convictions were higher within Black communities relative to population size. *Rounded to the nearest
percentages
Figure 8c - California
Department of Corrections
and Rehabilitation -
Stanislaus County
Percentage of Convictions by
Race/Ethnicity
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Section 5. COMMUNITY PROFILE BASED ON CURRENT

CONDITIONS IN THE CITY OF MODESTO
The United States Census Bureau 2019 Community Resilience Estimates (CRE) indicate the City of Modesto has high-risk factors for families in East, West, and South Modesto communities. The individuals and communities disproportionately harmed by cannabis prohibition commonly face challenges to resilience, such as, criminal records, poverty, housing instability, household size reduction, inadequate health care options, and an inability to avoid or absorb the external stresses of a disaster. These factors produce ongoing educational, economic, and psychosocial impacts on residents of the City of Modesto.

The CRE data set provides information about the nation, states, counties, and census tracts from three different data sources. These sources include the CRE, the ACS, and the Census Bureau’s Planning Database. Providing all this information in one data set affords the City of Modesto quick access to the data on a variety of topics concerning social vulnerability and equity, as shown below in Figure 9.

Figure 9 - 2019 Community Resilience Estimates for Equity and Disasters #9..
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The CRE program provides an easily understood metric for how at-risk every county and neighborhood (census tract) in the United States is to the impacts of disasters, including hurricanes, floods, earthquakes, wildfires, and pandemics, such as COVID-19. Modeled estimates are based on 10 resilience-related risk factors.

These estimates were modeled using 2019 ACS 1-year microdata, the Census Bureau’s Population Estimates Program (PEP), as well as small area modeling techniques. They revealed the number and percentage of residents living with 0 risk factors (Low Risk), 1-2 risk factors (Moderate Risk), and 3 or more risk factors (High Risk).

Modeling of individual and household characteristics from the 2019 ACS, in combination with data from the PEP, was used by the Census Bureau to create the CRE. Risk factors from the 2019 ACS include:
o Income to Poverty Ratio
o Single or Zero Caregiver Household
o Crowding
o Communication Barrier
o Households without Full-time, Year-round Employment
o Disability
o No Health Insurance
o Age 65+
o No Vehicle Access
o No Broadband Internet Access
CRE data indicate, considering the 10 risk factors listed above, over 70% of the Modesto population is facing a moderate to high vulnerability and impact rate. While this high risk, low resiliency profile is troubling, it underscores opportunities for improvement through cannabis as a recent and promising source of economic growth.
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5.1 Community Profile
The baseline survey respondents
gave us a snapshot of the most atrisk Modesto residents, as shown in Figure 10.

Currently, over 24,000 residences
live below the poverty level in the
City of Modesto. Survey results
revealed over 50% of residents who
responded to the specific question
Community gathering This Photo by Unknown Author is licensed under CC BY-SA-NC Figure 10 - Modesto Cannabis Equity Assessment Survey #1 Results, Question #4
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had household income less than or
equal to 60% of the current Area
Median Income in Stanislaus County.

Among the 125 residents polled, we
received 64 responses to the
baseline survey which provided
further illumination of the high
household poverty rate in Modesto.

As shown in Figure 11a, over 70% of
respondents who answered the
specific question were participants in
one of the listed government
assistance programs for low-income
households.

We used the information we gathered to compile a community profile for the Assessment, including public sources, such as U.S. Census data, Modesto and Stanislaus County drug crimes data and alternative sources of information, such as the CDCR and the HIDTA report, for all arrests and convictions for the sale, purchase, possession, and/or consumption of cannabis prior to November 8, 2016 (Prop 64) (when adult use of cannabis was legalized statewide.) To round out the Assessment in areas where quantitative data were unavailable or underreported, we also developed a means to gather qualitative information, using surveys, community forums, focus groups, and lived experience interviews to enhance the community profile.

This profile consists of the following components:

A. Risk factors from the 2019 ACS:

CRE data indicate, considering the 10 risk factors listed below, over 70% of the Modesto population is facing a moderate to high vulnerability and impact rate.

Figure 11a - Modesto Cannabis Equity Assessment Survey #1 Results, Question #5
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o Income to Poverty Ratio
o Single or Zero Caregiver Household
o Crowding
o Communication Barrier
o Households without Full-time, Year-round Employment
o Disability
o No Health Insurance
o Age 65+
o No Vehicle Access
o No Broadband Internet Access

The City of Modesto should address many of these risk factors for the most at-risk populations through a LCEP that provides new or expanded business opportunities, access to a trained workforce and tax revenue for community reinvestment.

B. Survey questions and responses:

Using the State of California’s equity criteria as a guide, we formulated several survey questions to provide feedback from online responses and encouraged participation through various means, including the City of Modesto’s website, emails, text messages, phone calls, social media, flyers, and other on-site communications at community forums convened by us and community partners like the NAACP.

1. Have you or anyone in your immediate family been arrested, detained of jailed for any cannabis offense between 1980 and 2016? The second survey reveals 80% of its total respondents experienced arrests or convictions, as shown above in Figure 6.

All these individuals participated in the lived experience interviews.

2. During your residence in the City of Modesto, was your household income less than or equal to the current Area Median Income in Stanislaus County? Currently, over 24,000 residences live below the poverty level in the City of Modesto. Survey results further revealed over 50% of residents who responded to the specific question had household income less than or equal to 60% of the current Area #9..
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Median Income in Stanislaus County.

3. During your residence in the City of Modesto, were you or your head of household eligible to receive financial aid through CalFresh, MediCal, CalWORKS, Supplemental Security Income, or Social Security Disability? Among the 125 residents polled, we received 64 responses to the baseline survey which showed the high household poverty rate in Modesto. As shown above in Figure 11a, over 70% of respondents who answered the specific question were participants in one of the listed government assistance programs for low-income households.

4. Did you reside in any of the following zip codes between 1980 and 2016? The baseline survey demonstrates a correlation between top zip codes for residences in Modesto and city arrest rates in those zip codes, specifically, 95350, 95351, 95354, and 95355, as shown above in Figure 5a.

These responses suggest a distinct population of Modesto residents who would benefit from an equity program that addresses the fallout from the War on Drugs.

C. Arrests and convictions for drug related offenses:

Blacks in Modesto were 3 to 4 times more likely to be arrested for drug felonies prior to 2016.

Despite a steep decline in cannabis related arrests after 2016 and the onset of MAUCRSA (see Figure 1a above), the negative impact of criminalization on housing, employment, family stability, and access to supportive services is ongoing. We learned from community feedback that it continues to be amplified among Black and Hispanic populations in the 95350, 95351, 95354, and 95355 zip codes.

D. Lived experience interviews:

Thirteen community volunteers participated in confidential lived experience interviews on July 9 and July 23, 2022, at Christ Unity Baptist Church in Modesto. They shared recollections of how cannabis criminalization affected their lives, families and neighborhoods #9..
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in the City of Modesto. These interviews highlighted the need for an equity program to help individuals overcome stigma and family trauma, understand the law and how it applies now, get back on their feet as contributing members of their families and communities, and reestablish a sense of belonging.

E. Community forums and focus groups:

We were able to provide community education and engagement on what cannabis social equity looks like and receive input at two well attended Community Orientations held on June 17, 2022, at the King-Kennedy Memorial Center and July 21, 2022, at Christ Unity Baptist Church. Attendance at both forums was multicultural and revealed a keen interest in having a program in the City of Modesto among the 86 participants. The attendees raised concerns that were echoed in the survey responses and lived experience interviews on a more intimate level. Using the worksheet shown in Figure 13, we were able to actively engage the community members in defining equity and suggesting ways to meet community needs to overcome barriers to entry into the legal cannabis business.

Based on this community profile, the hardest hit areas by zip code were 95350, 95351, 95354 and 95355. These areas also coincide with higher populations of Blacks and Hispanics, low-income neighborhoods, and drug related arrests.

Section 6. Overview of the City of Modesto’s Cannabis
License Process & Applicants
Title 10 of the Modesto Municipal Code governs “Commercial Cannabis Uses” and designates areas zoned for cannabis permitted operations. The application process has two phases: Phase 1 covers background checks and zoning clearances; Phase 2 covers all other permitting requirements, as detailed in Ordinance Number 3684-C.S. This ordinance became effective on February 15, 2018. The application process checklist and schedule of fees can be found on the City of Modesto’s website.
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As of June 30, 2021, the City of Modesto has earned $5,379,402 from Cannabis Taxes, according to its fiscal year 2020-2021 budget actuals. The city currently allows medicinal and recreational sales of cannabis through a limited number of retailers, but there are no restrictions on the number of NonRetail Commercial businesses. Modesto
now has about 8
approved retail permits.

As of December 20,
2021, Modesto city staff
reported about 18
approved businesses,
some of which are nonoperational, as shown in
Figure 11b. According to
California Department of
Tax and Fee
Administration (CDTFA)
reports, in 2021,
Stanislaus County
reported
$161,591,171.00 in Total
Taxable Sales. The
Stanislaus County Board
of Supervisors allows for
61 total Commercial
Cannabis Business
Licenses.

The statewide rules for sale, use and possession of cannabis are outlined below and apply in addition to any stricter limitations imposed by local jurisdictions:
18+ Medicinal Use - If you have a physician’s recommendation to use cannabis, you can:
o Buy cannabis products with more THC
Figure 11b.- City of Modesto Cannabis Business Locator
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o Buy more cannabis at a time, if needed for your medical condition o Possess more cannabis
o Grow more plants at home, if needed for your medical condition o Get a medical marijuana ID card (Even with a physician’s recommendation, you must follow laws about where you can use cannabis)
21+ Recreational Use - Adults aged 21 and older may:
o Possess up to 28.5 grams (about one ounce) of cannabis and up to 8 grams of concentrated cannabis, such as hash
o Use cannabis on private property but cannot consume cannabis in any public place where a city or county does not allow it
o Cannabis cannot be consumed or possessed on federal lands, such as national parks o Property owners and landlords may also ban the use and possession of cannabis on their properties
o Don’t Consume & Drive - Driving while under the influence is illegal. It doesn’t matter what substance you are using. If you are not sure whether you are impaired, do not drive.

Section 7. Barriers to Entry
What We Did – Research and Outreach
At the outset of this Assessment effort, The Brenda Davis Law Group team attempted to find and use arrest data in the analysis of who was disproportionately harmed by the War on Drugs in Modesto and what can be done to redress it. We pursued access to expunged police data and alternative sources of information for all arrests and convictions for the sale, purchase, possession, and/or consumption of cannabis prior to November 8, 2016 (Prop 64), when adult use of cannabis was legalized statewide. To round out the Assessment in areas where quantitative data were unavailable or underreported, we also developed a means to gather qualitative information, using #9..
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surveys, community forums, focus groups, and lived experience interviews to enhance the community profile.

What We Learned – Areas of Need
Community input identified the following needs to overcome barriers to entering the legal cannabis business in Modesto:

I. Education and Technical Training
A. Need for public education on cannabis to provide facts, remove stigma and shame and help people overcome fears; show legal side of business in ways in which people can understand the Dos and Don’ts and feel safe sharing information and supporting the existence of legal businesses (e.g., confidential communications, protected files). For example, equity community members suggested handing out business cards with QR Codes that contain basic informational fact sheets about legal cannabis statewide and direct potential equity applicants to a dedicated source of up-to-date information on opportunities available in Modesto; employ methods of communication that require minimum technical ability to gain access.

B. Need for access to ownership opportunities through affordable permits and licenses and clear, simplified instructions on how to become a legal cannabis operation (e.g., Frequently Asked Questions, infographics that diagram the permitting steps, land use and building code documentation requirements and review timelines). For example, equity community members suggested simple step by step guides and infographics could be posted on the website set up by the City of Modesto for this Assessment and accessible via QR Codes to show at a conversational level the opportunities available, potential timelines and the range of costs for entering the cannabis business. To help address community sensitivities around language, immigration status and gaps in technical proficiency, the community partners identified during this Assessment should be actively engaged as trusted resources.

C. Need for skills training in how to plan for, start up and run a business (e.g., business planning and development fundamentals). For example, equity community members want to be coached by subject matter experts on how to progress from an idea to a #9..
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workable plan for a business. They also want to be taught the essential technical and financial components of business ownership and how to use their transferable skills to advance from opening day through maintaining legal operations over the course of their 3-year, 5-year or longer planning horizons.

II. Community Reinvestment
A. Need for California Community Reinvestment Grants Program (CalCRG) and similar types of opportunities in Modesto to reinvest in communities hardest hit by the War on Drugs and provide access to youth and adult services (skills training, recreational activities, etc.), drug prevention and treatment services (e.g., access to grant writing services, workshops on creating and maintaining a nonprofit).For example, the City of Modesto’s resources, such as its website, social media posts and text messaging are critical to alert equity community members on timelines for participating in the latest round of CalCRG grant solicitations. Also, the City of Modesto should designate funding for similar community services to be provided by local organizations and funded locally by either cannabis fees or taxes paid by non-equity participants generally and equity participants once sufficiently profitable.

B. Need to focus on families to help heal the traumas of drug related arrests and convictions and overcome the loss of a sense of belonging to a community (e.g., Insight Treatment Programs: https://insighttreatment.com). For example, the City of Modesto should plan and schedule community activities that encourage family participation at parks and other public venues staffed by the City of Modesto and community partners. These events must include information kiosks and tables that tell the community about available drug treatment and prevention services and how to gain access to these resources.

III. Access to Capital
A. Need for stable sources or means of financing local small business operations, including location assistance for commercial properties in the hardest hit communities (e.g., information clearinghouse available online and via local free community papers).

For example, equity community members want the City of Modesto to assist them with #9..
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zoning requirements, smart investments and finding local real estate that adds value to the community and grows their profitability.

B. Need for access to and training on means of building personal sources of financing for small businesses, such as home ownership, asset acquisition and other foundational sources of wealth (e.g., information clearinghouse and mentoring services on identifying, valuing, and maintaining property in various forms). For example, the City of Modesto should educate equity community members on the fundamentals of business finance, such as pro formas, budgets, profit, and loss statements and how to leverage assets for business purposes. It is also imperative that the City of Modesto explain the details of handling cash without access to traditional banking resources.

What Should Come Next and Why – Being Attentive and Responsive This Assessment provides the City of Modesto with a community profile that shows devastating effects that linger to this day in its underserved communities where Census data shows high crime rates, poverty, and elevated risk factors for inability to recover from disasters of any kind. The harm caused by the War on Drugs is very evident in the hardest hit communities even with limited quantitative data. The
qualitative data collected by
The Brenda Davis Law
Group team helps put faces
and families into the
picture. We identify ways to
address cannabis inequities
by providing a business
driven response to solving
these problems and make
specific recommendations
on what would be most
useful to the local equity
community in Section 8
below.

Modesto Water Tower This Photo by Unknown Author is licensed under CC #9..
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Section 8. Cannabis Equity Program Recommendations
In March and April of 2022, the City of Modesto and The Brenda Davis Law Group team coordinated on various strategic planning efforts, designed a work plan, and began developing tools for building a community profile and engaging individuals and organizations in impacted neighborhoods. We designed this profile to assist the City of Modesto in identifying who should be served and the barriers to entering the legal cannabis market. We then worked with identified stakeholders to outline the array of benefits the city should consider for Program Development of the LCEP In May, June and July of 2022, the City of Modesto and The Brenda Davis Law Group team further developed a framework for addressing historical impacts of cannabis prohibition on people and neighborhoods disproportionately marginalized by prior cannabis criminalization policies in the city.

This framework addresses several key points and includes defining equity, setting eligibility criteria, and addressing common barriers to entry that emerged from extensive multicultural outreach and feedback, including community member surveys, community orientation meetings, lived experience interviews, and focus group activities.

In July of 2022, The Brenda Davis Law
Group continued to move forward with
collecting data. The community defined
equity and presented issues that we
grouped into three common themes for
the City of Modesto to potentially
address: 1) the need for education and
training on local and state cannabis
requirements and business development
for both industry and ancillary
businesses; 2) support for community
reinvestment in youth and adults
regarding prevention, treatment and trauma related health challenges due to the War on Drugs; and 3) assistance with access to capital from legally available sources. Figure 12a outlines the parameters of the community discussion about defining equity.

Figure 12a - Modesto Cannabis Equity Assessment Focus Group Activity
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I. Community Defined Equity
The City of Modesto and The Brenda Davis Law Group team continued moving forward on developing the equity program framework. We set discussion parameters (see Figure 12a) focusing on the overarching goal of increasing equity business ownership by defining equity and identifying specific barriers to entering the legal cannabis market as well as ancillary businesses. At the second Community Orientation on July 21, 2022, we engaged participants in a group setting that resulted in multicultural interaction in person and additional data via the second online survey.

A. Focus Groups – On July 21, 2022, The Brenda Davis Law Group team convened 4 Focus Groups and had them complete worksheets designed to elicit their definition of equity and the barriers to entry into the legal cannabis business. The community interaction was multicultural and very lively, as pictured below.

Figure 12b - Modesto Cannabis Equity Assessment Focus Group Activity Photographs #9..
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B. Survey Responses - Participating residents shared their views on local equity via the following responses shown in Figures 13 and 14 below.

What is your definition of equity?
Respondent ID Response Date Responses

1.18085E+11 Jul 23, 2022, 10:52 AM Payback for unnecessary arrest z1.18084E+11 Jul 21, 2022, 07:24 PM Equal for all

1.18084E+11 Jul 21, 2022, 07:22 PM Financial wealth

1.18084E+11 Jul 21, 2022, 07:21 PM Something that holds value

1.18084E+11 Jul 21, 2022, 07:18 PM Property

1.18084E+11 Jul 21, 2022, 06:32 PM Inclusive

1.18084E+11 Jul 21, 2022, 06:23 PM
Value of something. I have equity in my
home and as I know that is the value of
the home in which I do not have debt from
the loan.

1.18084E+11 Jul 21, 2022, 06:23 PM
Equity in business is basically your assets
not including your debt/liability of what you
might owe others

1.18084E+11 Jul 21, 2022, 06:11 PM
Being completely fair by giving people all
the information and access to perform a
task or make a decision; access an
opportunity.

1.18084E+11 Jul 21, 2022, 03:45 PM Business mentoring, access to capital, access to commercial property
Figure 13 - Modesto Cannabis Equity Assessment Survey #1 Results, Question #10 #9..
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Figure 14 - Modesto Cannabis Equity Assessment Survey #2 Results, Question #12 The community defined equity as all of the above options 70% of the time, as shown in Figure 14.

They also emphasized local and state assistance with start-up costs and access to capital. The top option selected encompassed business opportunities, technical training, and fee waivers. Based on this Assessment data, we recommend that the City of Modesto adopt the following definition: Equity means the City of Modesto will provide assistance with business ownership in a variety of forms, including skills training, technical support, funding sources, waivers and deferrals, mentoring, and family self-sufficiency support services. These services can be provided by city staff or by third party providers.

II. Eligibility Criteria
California’s dual licensing program for legal cannabis operations affords opportunities for government organizations to build in equity benefits at both the state and local levels. The Department of Cannabis Control is the state agency authorized to develop and implement a program to provide waivers for required licensing fees under Business and Professions Code section 26249.

We relied on the state’s official report on the rulemaking which explains and justifies the inclusion of Stanislaus County, among others, as an area with a population disproportionately impacted by #9..
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criminal justice policies implementing cannabis prohibition between 1980 and 2016. As stated above in Section 3, which provides an overview of the City of Modesto and Stanislaus County census data, Modesto makes up about 40% of Stanislaus County’s population and is thus a significant contributor to criminalization policies and impacts. Outlined below are first, the state’s equity criteria and second, the City of Modesto’s non-equity criteria for applicants and licensees.

A. *State of California defined criteria for equity participants - Currently, the Department of Cannabis Control is offering fee waivers and deferrals for eligible equity applicants and licensees. The pertinent regulations can be found here https://cannabis.ca.gov/applicants/equity-fee-waivers. Under the state’s regulatory scheme, the cannabis business must meet the following criteria:

1. Equity ownership: Individuals who meet the equity criteria own 50% or more of the business.

2. Gross revenues: The business has gross revenues of $5 million or less per year. If a new applicant, the business expects gross revenues of $5 million or less for the first year.

The state further provides – Equity owners must meet at least one of the following criteria (additional details appear on the state’s equity website):

1. Cannabis conviction or arrest: The owner was convicted of or arrested for a cannabis offense before November 8, 2016.

2. Household income: The owner’s household income is less than or equal to 60 percent of the Area Median Income for the local jurisdiction where they live. .

3. Neighborhood: The owner lived for at least five years between 1980 and 2016 in an area disproportionately impacted by past criminal justice policies implementing cannabis prohibition. Learn more about qualifying neighborhoods, or use our map tool to see if you lived in a qualifying area.

The State of California allows local jurisdictions to set up their own equity criteria. If equity applicants or licensees participate in a local jurisdiction’s equity program, they can #9..
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prove they meet the state’s equity criteria through an attestation on the state’s fee waiver form. Otherwise, the applicants or licensees who choose not to participate in their local equity program or are in a jurisdiction without an equity program can submit documents to the Department of Cannabis Control to show eligibility.

B. City of Modesto defined criteria for non-equity participants – Local jurisdictions are authorized to adopt criteria for their cannabis programs that are more restrictive than state requirements. On November 7, 2017, the city put forth a ballot measure, known as Measure T, that would approve the Modesto Cannabis Business Tax and authorize the City Council to establish a tax rate of up to ten percent (10%) on gross receipts on cannabis businesses if they are allowed to operate in the City in the future. This measure proceeded to the ballot on a 5-2 vote of Modesto City Council on June 27, 2017. The two dissenting councilmembers expressed a desire for Modesto to establish uniform regulations with Stanislaus County. Measure T was overwhelmingly approved by the voters by more than 82%.

After this vote, the City of Modesto chose to amend its municipal code to regulate and tax commercial cannabis businesses pursuant to Ordinance Number 3684-C.S., adopted on January 16, 2018, and effective on February 15, 2018. It was adopted along with related Ordinance Number 3683-C.S., which includes a land use zoning table designating areas available for commercial cannabis uses. See ordinances as adopted in archives for the year 2018 here. We reviewed the legislative history of these ordinances to illuminate public comments and the Modesto City Council’s motivation in legalizing cannabis operations in the city. See the 2018 legislative history here.

The existing regulatory scheme does not address equity considerations. There are model ordinances listed on the Department of Cannabis Control’s website which broadly capture basic equity considerations. Every local jurisdiction is different, however, and the City of Modesto should focus on its specific community profile, as laid out in Sections 3 through 5 above, when adopting equity measures designed to effectively address impacts of the War on Drugs on its local population and neighborhoods. The discussion below outlines Program Development recommendations to the City of Modesto based on the community profile compiled during this Assessment effort. #9..
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I. Education and Technical Training
Who needs it - Based on the above community profile, the equity eligibility criteria and populations served should include the hardest hit areas by zip code, which were 95350, 95351, 95354, and 95355. These zip codes encompass the least resilient communities, based on the U.S. Census Bureau’s community resilience estimates for equity and disasters, As mentioned in Section 5 above, these risk factors, verified in this Assessment, include the following:
o Income to Poverty Ratio
o Single or Zero Caregiver Household
o Crowding
o Communication Barrier
o Households without Full-time, Year-round Employment
o Disability
o No Health Insurance
o Age 65+
o No Vehicle Access
o No Broadband Internet Access
Eligible applicants should include those directly involved in cannabis operations as owners and the ancillary businesses that serve them, such as accountants, insurance brokers and realtors, to name a few.

A. What it includes - tips on industry specific and general business operations:

1. How to think like a business owner - for example, the City of Sacramento provided curriculum-based training on the entrepreneurial mindset

2. Business entity selection and formation – for example, the Secretary of State and the Franchise Tax Board provide information and resources on what to consider when starting a business
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3. Business plan development – for example, the California Capital Women’s Business Center provides templates for business plans and development assistance for small businesses (including cannabis training)

4. Location assistance – for example, give cannabis equity applicants the nextin-line option to lease or own surplus property after affordable housing

5. How to attract investors – for example, provide City of Modesto seed money and cooperative opportunities to invest in equity participants, including location assistance, marketing and branding, and training in grant writing

6. How to qualify for financing – for example, the City of Sacramento provided curriculum on how to create pro formas, how to create an income statement, and how to produce a profit and loss statement

7. Business management and workforce development – for example, the City of Sacramento provided curriculum on human resources, team building and incubator opportunities for hands on training

8. Navigating the permitting/licensing processes – for example, the City of Sacramento provided legal compliance curriculum that covered state and local processes, as well as non-cannabis requirements, such as intellectual property, labor (via the California Department of Food and Agriculture) employee safety (via the California Office of Safety and Health Administration), fire safety, and police security. The City of Modesto should also assist with background checks, as needed.

B. How to maintain compliance – for example, provide City of Modesto real time alerts and hold weekly workshops that are calendared and publicly available via Zoom links, similar to Mendocino County, and are specifically addressed to equity participants to provide updates and answer questions
C. How it advances equity - Removes elements of intimidation and isolation from process of engaging with government organizations – for example, start a City of Modesto public engagement campaign to provide a cannabis business forum that focuses on health and safety, current and pending licenses, locations suitable for commercial cannabis operations (available, affordable and properly zoned), and technical assistance that connects participants to workshops and other mentoring opportunities. #9..
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The City of Modesto should also ensure equity program features include expungement events and background check technical assistance held in disproportionately impacted neighborhoods. These efforts would help to advance equity by reducing obstacles to navigating the expungement process and mitigate one of the chief barriers to entry into the legal cannabis business, as shown in the community profile discussed above.

II. Community Reinvestment - This Assessment provides the City of Modesto with a community profile that strongly indicates the devastating effects that linger to this day in its underserved communities where various data underscores high crime rates, poverty, and elevated risk factors for inability to recover from disasters and maintain business resilience.

The harm caused by the War on Drugs continues to create blight and hurt families in the hardest hit communities. The City of Modesto should allocate resources from its cannabis tax revenues ($5,379,402 in Fiscal Year 2020-2021) and apply for the Type 2 GOBiz Cannabis Equity Grant Program funding (up to $5 million per local equity jurisdiction competing for a total state funding allocation of $15 million in Fiscal Year 2022-2023) available to assist these distressed individuals and neighborhoods identified in the community profile.

A. Who should benefit – individuals who were arrested or convicted and immediate family members who resided for 5 years between 1980 and 2016 in the most marginalized areas, specifically, the 95350, 95351, 95354, and 95355 zip codes, and intend to operate a business anywhere within the city limits. The City of Modesto has discretion to expand the window of eligibility to the current year, and we recommend they do so using the community profile in this Assessment that shows ongoing moderate to high risk factors for inability to recover from disasters and maintain business resilience. Businesses should only be eligible if they prove a minimum of 51% equity ownership.

B. How to access City of Modesto funding - set up documentation requirements that are easy to follow and practical and can be completed on line or in person – for example, during residency in the City of Modesto, show individual or household eligibility to receive government assistance, evidence of arrest, conviction or expungement or immediate family relationship to someone arrested or convicted, and three years of income less than or equal to 60% of the current Area Median Household Income for #9..
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Stanislaus County. Dedicate a staff member to screen completeness of documentation and set up a review committee to confidentially review and verify applicant eligibility.

C. How to measure impacts – for example, establish a baseline number that identifies businesses currently operating, both cannabis and non-cannabis, which would meet the established eligibility criteria compiled from a list of individuals who elect to apply for enrollment in the LCEP started by the City of Modesto.

1. Building on this list, set an overall goal for number of new or expanded cannabis and ancillary businesses with equity ownership of 51% or more that includes individuals who participate in the education and technical training program and add or expand at least 10 business operations by the end of the first three years of the program’s start. Reaching this goal depends entirely on the City of Modesto’s level of commitment to the program, both financial and instructive, and diligent pursuit of business success by the equity participant.

2. Monitor and report regularly on progress towards goal by measuring number of business plans completed, business locations identified through letters of intent, leases or commercial purchasing agreements, number of no interest loans or grants funded, number of full-time or part-time jobs created within the equity zip codes, number of equity participants who are incubated through existing non-equity businesses, and the proceeds from tax revenues generated by the non-equity businesses at 1% of gross revenues and set aside for reinvestment in the 95350, 95351, 95354, and 95355 zip codes.

Provide quarterly and annual reports on these outcomes to the Modesto City Council for consideration of program adjustments, as needed.

III. Access to Capital
A. Identify allowable cannabis finance sources – provide mentoring by a third-party provider on options beyond friends and family, such as state or local grants or no interest loans, benefits provided by tax and fee waivers or deferrals, existing cannabis businesses located anywhere in the State of California, real estate developers or investors.
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B. Identify funding readiness – provide mentoring on valuation and documentation by a third-party provider on how to compile a financial affidavit and how to interpret the current market value of an asset.

C. Provide solutions – engage with equity participants one-on-one through a third-party provider to assess what works and implement practical measures, as warranted.

8.1 Review of Other Jurisdictions’ Efforts to Promote Equity in Cannabis I. Facilitator Approach Example: City of Sacramento – Sac GreenEquity Program facilitated by the Greater Sacramento Urban League with program implementation by The Brenda Davis Law Group:

The facilitator approach has three key components: 1) setting up the eligibility screening process; 2) setting up/delivering curriculum; and 3) following up on measures to ensure business readiness and successful access to opportunities. We recommend the City of Modesto start by adopting very specific documentation requirements that support equity eligibility. For example, in the City of Sacramento, you must qualify under one or more of Classifications I – V as defined in the Cannabis Opportunity Reinvestment and Equity (CORE) program Resolution Number 2018-0323, as noted here https://sacgreenequity.wordpress.com.

This program identifies initial documentation requirements to process an equity application for admission into a cohort for business development training, technical support, and mentoring. Among the options identified, we recommend the following

1. 5 years proof of residence AND 3 years proof of household income for the years 1980--present

2. A copy of your identification and Social Security card (or any documentation that proves your employment eligibility in the United States)

3. A copy of your resume
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4. A copy of your business plan or completion of a business plan concept essay

5. Additional documentation as required to confirm eligibility (e.g., proof of name change due to marriage or any other event)

6. Assist with any expungements and background checks required in Phase 1 of the application process

7. Provide a means to upload all documents to a secure DropBox link Under this approach, a third-party provider would coordinate services via a twelve-week curriculum and certification of eligibility for all equity benefits but would not provide any direct financial assistance to eligible participants. The City of Modesto should administer all benefits, including permit fee waivers and deferrals, priority processing of land use, construction and business applications, community reinvestment via tax waivers, and direct financial assistance made available through GO-Biz funding. The City of Modesto should disburse all grant funding and monitor access to and use of direct financial assistance to equity participants.

II. In-House Approach Example: Humboldt County - Local Cannabis Equity Program:

If the City of Modesto chooses to commit staff resources to coordinate an equity program, Humboldt County provides an available example:

The Humboldt County Administrative Office – Economic Development Team (Economic Development) is authorized to enter into an interagency agreement, on behalf of the county, with qualifying internal or external agencies capable of providing the services described in SB 1294 (the California Cannabis Equity Act), the California Business and Professions Code and the Humboldt County Local Equity Program (LEP) Manual. Humboldt provides small business support services and direct financial assistance to eligible participants through the Project Trellis Local Equity Program V2.1 to help individuals in the local cannabis community enter and succeed in the commercial cannabis marketplace. #9..
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According to the LEP Manual, Humboldt works with the Project Trellis Citizens’ Advisory Committee (formerly Cannabis Micro-Grant and Loan Advisory Committee), which is authorized to promulgate any policies, procedures, and forms necessary for program administration and submit them to the Board of Supervisors for review and approval. Its membership, according to Resolution Number 19-45 (May 28, 2019), as amended by Resolution Numbers 20-33 (April 28, 2020), 21-06 (January 12, 2021), and 21-05 (January 11, 2022), consists of: (9) Nine total. (7) Seven voting members. (1) from each District Appointed by the Supervisor from that District, (2) At-Large (1 representing the cannabis industry and 1 representing an industry that is lateral to the cannabis industry such as finance or banking) and (2) Alternates Appointed by the Board of Supervisors (nonvoting unless needed).

As between the two approaches modeled above, we recommend the third-party facilitator approach to ensure a dedicated set of professionals is available to help the equity participants on a timely basis. The training and mentoring required to assist the populations identified in this Assessment as most in need of this type of program is best provided in an environment where businesses can develop quickly. We further recommend the City of Modesto assign a staff member to serve as the primary program coordinator to work with the third-party provider and expedite the licensing process to get these businesses up and running as soon as reasonably possible.

III. Sample Ordinances and Resolutions
Example 1. Sacramento Cannabis Opportunity Reinvestment and Equity (CORE) program Resolution Number 2018-0323 - establishes eligibility criteria and program benefits - https://www.cityofsacramento.org/City-Manager/Divisions-Programs/CannabisManagement/Core-Program Example 2. Humboldt County - Humboldt County Cannabis Local Equity Program Manual describes equity eligibility and benefits available - https://humboldtgov.org/2159/CommercialMedical-Marijuana-Permitting Example 3. San Diego - provides a comprehensive reference guide to all cannabis requirements and information in one convenient location, including a recently completed #9..
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Equity Assessment Report –
https://www.sandiego.gov/developmentservices/cannabis#equity IV. Comparative Lists of Equity Benefits
The jurisdictions noted below have cannabis equity programs that illustrate the kinds of benefits that could be useful to eligible participants and practical for the City of Modesto to implement.

Figure 15a – List of equity benefits from other states and local jurisdictions presented as examples at the second Community Orientation
This Photo by Unknown Author is licensed under CC BY
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Figure 15b - List of equity benefit factors from other local jurisdictions presented as examples at the second Community Orientation
As illustrated in the discussion above, the menu of options available to the City of Modesto to establish a cannabis equity program is rich and varied. The needs expressed by the community members as related in this analysis should help the city set priorities and funding levels to begin to address the harm caused by the War on Drugs in its most at-risk communities. We recommend the City of Modesto adopt the City of Sacramento Sac GreenEquity program model with the addition of items 1, 2, 3, 10, 11, 16, and 17 listed above in Figure 15a, which, in addition to the Sacramento program amenities, provide:
o exclusive access to permit license types, such as the remaining 2 dispensary licenses plus first right to apply for any of the other 8 if they become available in the next 3 years or any added dispensaries if the current cap of 10 is raised
o reserved rights to apply for up to 10 non-dispensary licenses before the non-equity population can apply for any additional licenses beyond the existing 6 o adopt a ratio of equity to non-equity applicants of 3:1 over a 10-year period from the launch of the first equity business
o professional development opportunities to learn and hone business management skills o assistance with team building and workforce development of managers and employees o reimbursement of startup costs
o networking opportunities, including memberships, mixers, travel assistance with conferences #9..
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o given the need for premises to support cannabis applications before a license can be completed, the City of Modesto should add funding or property for applicants located in areas zoned for such uses

8.2 REFERENCES
Figure 3 - Bureau, U. S. C. (n.d.). US Census. Last accessed on July 10, 2022, from https://data.census.gov/cedsci/profile?g=0600000US0609991980 and https://www.census.gov/quickfacts/fact/table/modestocitycalifornia/PST045221 Modesto, California. (2020). City of Modesto. Last accessed on May 10, 2022, from https://www.city-data.com/city/Modesto-California.html
“City of Modesto Facts and Figures.” City of Modesto, Dept of Census 2019 ACS 1-Year Estimate, 2019, www.modestogov.com/ImageRepository/Document?documentId=11748 “Performing a Community-Based Assessment.” UCLA Center for Health Policy Research. Last accessed on February 1, 2022, from healthpolicy.ucla.edu/programs/healthModesto Junior College This Photo by Unknown Author is licensed under CC BY #9..
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data/trainings/Pages/community-assessment.aspx
“Central Valley California High Intensity Drug Trafficking Area.” Drug Market Analysis 2010, bit.ly/3zQG5vG
U.S. Declares Central Valley a Drug-Trafficking Zone BY ERIC LICHTBLAU.

Last accessed on June 16, 1999, from https://www.latimes.com/archives/la-xpm-1999-jun-16-mn46939-story.html “When the Smoke Clears Report.” Racial Disparities in California’s Marijuana Arrests, Last accessed on June 15, 2022, from regionalchange.ucdavis.edu/sites/g/files/dgvnsk986/files/inlinefiles/When-the-Smoke-Clears_Report_FINAL.pdf 2019 Community Resilience Estimates for Equity and Disasters - Initial Release Date - August 10, 2021
https://experience.arcgis.com/experience/76f53fb6758b49dc87ef47687f9476cf Arrest Information
https://california.staterecords.org/stanislaus/modesto
https://www.scsdonline.com/crime-incident-reports.html
Report Request
https://www.modestogov.com/DocumentCenter/View/151/Request-to-Inspect-Records-PDF?bidId= Census
https://www.census.gov/quickfacts/fact/table/modestocitycalifornia/AGE775220#AGE775220 https://www.city-data.com/city/Modesto-California.html
Survey
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Please visit this survey link to provide your input on this project. https://www.surveymonkey.com/r/BWYDQXL

California Department of Corrections and Rehabilitation Data cdcr.ca.gov
National Association of Colleges and Employers
https://www.naceweb.org/about-us/equity-definition/
Validated Community Assessment Methodology
https://healthpolicy.ucla.edu/programs/health-data/trainings/Pages/community-assessment.aspx

Drug Enforcement Agency Information
https://www.dea.gov/press-releases/2011/10/06/modesto-cornfield-pot-growers-indicted https://search.dea.gov/search?affiliate=justice-dea&sort_by=&query=Modesto%2C+CA+marijuana Figure 3b – Equality Vs. Equity Retrieved October 30, 2022, from https://www.jamestharpe.com/equity/
Figure 4b - Report on drug arrests in California from 1990 to 1999. (n.d.). Retrieved October 27, 2022, from https://oag.ca.gov/sites/all/files/agweb/pdfs/cjsc/publications/misc/drugarrests-fullreport.pdf Figure 5 - Modesto Cannabis Equity Assessment Survey #1 Results, Question #2 https://www.surveymonkey.com/stories/SM-BcXm6234gOEHeproti_2BJWA_3D_3D/ Figure 6 - Modesto Cannabis Equity Assessment Survey #2 Results, Question #8 https://www.surveymonkey.com/stories/SM-enyKNJxoeNAZ7J_2BrpZgb_2Fg_3D_3D/ Figure 10 - Modesto Cannabis Equity Assessment Survey #1 Results, Question #4 https://www.surveymonkey.com/stories/SM-BcXm6234gOEHeproti_2BJWA_3D_3D/ #9..
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Figure 11a - Modesto Cannabis Equity Assessment Survey #1 Results, Question #5 https://www.surveymonkey.com/stories/SM-BcXm6234gOEHeproti_2BJWA_3D_3D/ Figure 12a - Modesto Cannabis Equity Assessment Focus Group Activity Figure 12b - Modesto Cannabis Equity Assessment Focus Group Activity Photographs Figure 13 - Modesto Cannabis Equity Assessment Survey #1 Results, Question #10 https://www.surveymonkey.com/stories/SM-BcXm6234gOEHeproti_2BJWA_3D_3D/ Figure 14 - Modesto Cannabis Equity Assessment Survey #2 Results, Question #12 https://www.surveymonkey.com/stories/SM-enyKNJxoeNAZ7J_2BrpZgb_2Fg_3D_3D/ Police SWAT Team Drug Raid In West Side Modesto, California (Special Weapons & Tactics Team) July 21, 2014, United States Broadcasting https://youtu.be/CD6XZcG3uNg Archive center • Ordinances as Adopted • civicengage. (n.d.). Last accessed on August 31, 2022, from https://www.modestogov.com/Archive.aspx?AMID=64
Archive center • Legislative History • civicengage. (n.d.). Last accessed on October 31, 2022, from https://www.modestogov.com/Archive.aspx?AMID=67
California.ca.gov. (n.d.). Equity Fee Waivers. Department of Cannabis Control. Last accessed on October 31, 2022, from https://cannabis.ca.gov/applicants/equity-fee-waivers Sac GreenEquity. Greater Sacramento Urban League, Facilitator for City of Sacramento Cannabis Opportunity Reinvestment and Equity (CORE) Program via SacGreenEquity. (n.d.). Last accessed on October 31, 2022, from https://sacgreenequity.wordpress.com/ Cannabis Opportunity Reinvestment and Equity (CORE) Program. City of Sacramento (n.d.). Last accessed on August 31, 2022, from https://www.cityofsacramento.org/City-Manager/DivisionsPrograms/Cannabis-Management/Core-Program #9..
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CANNABIS
EQUITY

ASSESSMENT
57 | P a g e
Commercial Marijuana Permitting | Humboldt County, CA - Official Website. (n.d.). Last accessed on August 31, 2022, from https://humboldtgov.org/2159/Commercial-Medical-Marijuana-Permitting The City of San Diego’s Development Services Cannabis Information | - Official Website. (n.d.). Last accessed on October 31, 2022, from https://www.sandiego.gov/developmentservices/cannabis#equity DEA.gov. DEA. (n.d.). Last accessed on October 31, 2022, from https://www.dea.gov/sites/default/files/2021-04/1975-1980_p_39-49.pdf

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Community & Economic
Development Department
P.O. Box 642
Modesto, California 95354
209.577.5267
Modestogov.com
City of Modesto Cannabis Equity Program Policy
The City of Modesto has determined, based on its 2022 Cannabis Equity Assessment, that a cannabis equity program should be adopted which will be dedicated to assisting communities who were subject to criminal law enforcement of cannabis related crimes disproportionately compared to the population at large within the City.

The policies set forth in the following program description will be monitored and subject to change as City Staff continue to develop internal controls and administrative functions to ensure the effective, efficient, and properly controlled distribution of funds to eligible equity applicants.

Applicability of Modesto Municipal Code: All Program participants are subject to the provisions of Modesto Municipal Code Section 10-3.700.

Definitions
a. "Ancillary business” means support business services (e.g., human resources or payroll and call centers).
b. "Applicant” means an individual or business who makes a formal application to be admitted in the Program.
c. "Business” means a firm, organization, association, partnership, business trust, corporation, company, or like entity.
d. "Cannabis Social Enterprise” or "CSE” means a cannabis business in the city that incubates and/or employs Classification 1 participants and uses commercial strategies to maximize improvements in financial, social, and environmental well-being of the disadvantaged community the organization sits in. This may include maximizing social impact alongside profits for external shareholders. CSEs can be structured as a for-profit or non-profit organization and may take the form of a co-operative, mutual organization, a disregarded entity, a social business, a benefit corporation, a community interest company, a company limited by guarantee, or a charity organization. They can also take more conventional structures. Social enterprises have both business goals and social goals. As a result, their social goals are embedded in their objective, which differentiates them from other organizations and corporations. e. "Equity share” means an ordinary share, including a fractional or part ownership in which a shareholder, as a fractional owner, undertakes the maximum entrepreneurial risk associated with a business venture. The holders of such shares are members of the company and have voting rights.
f. "Floor space” means at least 10%, but not less than 800 square feet, of building space. #9..
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g. "Host” means to rent or lease operations-ready building or floor space to a participant that resides in the city district where the cannabis business sits, if any, free of charge for two years, or at a rate of 30% of the market value for four years; and to provide that participant with business or technical assistance.
h. "Immediate family member” means a person in the first, second, or third degree of lineal or collateral kinship as defined in chapter 13 of Part 1 of Division 1 of the California Probate Code. i. "Incubate” means to assist one or more participants that reside in the city district where the cannabis business sits, if any, to enter the cannabis industry by hosting, providing training, technical assistance, and general business guidance. If no such participants exist, participants from other applicable areas shall be utilized.
j. "Incubator” means a cannabis business which as a condition for receiving priority processing, either:
i. Hosts a participant; 30% of its workforce are Classification 1 eligible participants, measured by hours worked; and contracts no less than 51% of its cannabis products or services and ancillary business support with eligible participants; or ii. Is a shared manufacturing cannabis business and donates at least 10% of its hours of operation to allow participant(s) to utilize 100% of its business’ floor space and equipment; or
iii. Is a cannabis business that sells, gives or otherwise transfers no less than a 33% equity share in the Incubator’s cannabis business to eligible participants; 30% of its workforce be Classification 1; and contracts no less than 30% of its cannabis and ancillary business with Classification 1 eligible participants.
k. "Individual” means a person.
l. "Low income household” has the same meaning provided in Modesto Municipal Code section 10-

8.402.
m. "Operations-ready” means a hosted building or floor space that is in compliance with the applicable health and safety laws and regulations and has the appropriate equipment and licensure to lawfully run or conduct any type of cannabis business. n. "Participant” means an individual or a business that has been admitted to participate in the Program.
o. "Priority processing” or "priority” means the City will review cannabis related business or conditional use permit applications or renewals of participants, if any, before any cannabis related business or conditional use application or renewal received by the City that would otherwise be processed on a first come, first served basis.
p. "Sits” means to be engaged in its cannabis business. q. “Direct Technical Assistance” refers to support to help cannabis equity applicants and licensees acquire the knowledge and/or skills necessary in order to gain entry to, and to successfully operate in, the regulated cannabis marketplace. Direct technical assistance includes:
i. One-on-one consulting and training, including direct interactions in group settings, to provide equity applicants and licensees the technical knowledge and expertise necessary to facilitate business ownership and employment in the cannabis industry. ii. Small business support services, professional mentorship services, training and education #9..
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regarding state cannabis licensing and regulatory requirements, manufacturing assistance, financial management, and business resilience such as emergency preparedness.

Applications

1. In addition to the information required per city code section 10-3.704 an applicant shall also provide the following with its application for the Program, in addition to any other documentation that the City deems necessary to determine the applicant’s eligibility:
a. Proof of Income: Proof of income shall be supported with federal and state tax returns and at least one of the following documents from the last five (5) years: two months of pay stubs; proof of current eligibility for General Assistance, food stamps, Medi-Cal/CalWORKS, supplemental security income, or social security disability, or similar documentation. b. Proof of residency: Proof of residency shall be supported by a minimum of two of the following documents: California driver’s or identification card records, property tax billings and payments, signed rental agreement, verified copies of state or federal tax returns with an address in the geographic area of the City of Modesto, school records, medical records, banking records, Housing Authority records, or utility, cable, or internet company billing and payment records. c. Proof of arrest or conviction of a cannabis related crime: Proof of an arrest or conviction of a cannabis related crime shall be demonstrated by federal or state court records indicating the disposition of the criminal matter, records expungement documentation, or any other applicable law enforcement record.

2. Individual
a. Must be lawfully able to work in the United States;
b. Twenty-one (21) years of age or older;

3. Business

1. A description of the statutory entity or business form that will serve as the legal structure for the applicant and a copy of its formation and organizing documents, including, but not limited to, articles of incorporation, certificate of amendment, statement of information, articles of association, bylaws, partnership agreement, operating agreement and fictitious business name statement.

4. A statement dated and signed by the applicant, under penalty, affirming that the applicant meets the program eligibility requirements as applicable to the particular applicant.

Review Process
City Staff or qualified consultants, as designated by the City Manager, shall review and approve all program applications that meet the eligibility requirements described herein.

Eligibility for Equity Assistance Program
A. Classification 1: To be eligible for the Equity Assistance Program as an equity employee, an individual shall satisfy the following criteria:

1. Be a natural person; and

2. Be a current or former resident of the City of Modesto who previously resided or currently resides in a low-income household and was either: a) arrested or convicted for a cannabis #9..
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related crime in Modesto between the years 1980 and 2011; or is b) an immediate family member of an individual convicted for a cannabis related crime during that same period; and

3. The individual satisfies the following criteria:
a. Has lived for at least five (5) years, between the years of 1980 and 2011 in the following zip codes: 95355, 95354, 95350,95351; and one of the following:
b. Was arrested or convicted for a crime relating to the sale, possession, use, or cultivation of cannabis in California, excluding those offenses which would be disqualifying for cannabis licensure under current State law; or
c. Had a parent, guardian, child, or sibling convicted of a crime relating to the sale, possession, use, or cultivation of cannabis in California, excluding those offenses which would be disqualifying for cannabis licensure under current State law.

B. Classification 2: To be eligible for the Equity Assistance Program as an equity business owner, an individual shall satisfy the following criteria:

1. Be a natural person; and

2. In the year prior to submitting the application to be an equity business owner, the individual resided in a household with an income at or below 80% of the Area Median Income for Modesto; and

3. Holds a minimum of fifty-one percent (51%) or more ownership of the entity applying for a Cannabis Business Registration as an Equity Business Owner; and

4. Has lived for at least five years in one of the following zip codes: 95355, 95354, 95350, 95351; and

5. Already operates or intends to operate a commercial cannabis business in one of the previously mentioned zip codes within the incorporated limits of the City of Modesto

6. Meets one of the following criteria:
a. Has worked in the cannabis industry in Modesto for at least two years between 1996 and the present; or
b. Was arrested or convicted for a crime relating to the sale, possession, use, or cultivation of cannabis in California, excluding those offenses which would be disqualifying for cannabis licensure under current State law; or
c. Had a parent, guardian, child, or sibling convicted of a crime relating to the sale, possession, use, or cultivation of cannabis in the California, excluding those offenses which would be disqualifying for cannabis licensure under current State law; or C. Classification 3: A Cannabis Social Enterprise with not less than 51% ownership by individuals meeting the Classification 1 criteria.

Assistance Available to Equity Employees and Equity Business Owners Individuals applying as equity employees at a Cannabis Business or applying for a Cannabis Business Registration as an equity business owner or a Cannabis Social Enterprise applicant, may be eligible to receive benefits including but not limited to technical assistance, priority application processing, training for prospective employees, and other services dependent upon funding. #9..
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Regulations for Equity Assistance Program
The City Manager shall promulgate regulations further establishing an application process and procedures for the Equity Assistance Program. Such regulations may include but are not limited to eligibility verification procedures and registration requirements.
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

December 13, 2022
Date: November 14, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jaylen French, Director of Community and Economic Development SUBJECT: Adopt Section 24 (Davis-Bacon Labor Standards) and Section 25 (Minority Business Enterprise and Women Business Enterprise) and amend Section 6 (Homeowner Rehabilitation Program Policies) of the Housing and Urban Development Policies & Procedures Manual
CONTACT: Jessica Hill, Community Development Manager
[email protected], 209-577-5211
DESCRIPTION:

Consider adopting Section 24 (Davis Bacon Labor Standards) and Section 25 (Minority Business Enterprise and Women Business Enterprise) and amending Section 6 (Homeowner Rehabilitation Program Policies) of the Housing and Urban Development Policies & Procedures Manual. (Fundings Source: Not Applicable)
STRATEGIC PLAN ELEMENT:

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

BACKGROUND:

Each year, the City receives Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) funding from the U.S. Department of Housing and Urban Development (HUD) and Permanent Local Housing Allocation (PLHA) from the State of California’s Department of Housing and Community Development (HCD).

The objective of the CDBG Program is to develop viable urban communities through decent housing and a suitable living environment, and expanding economic opportunities, principally for low- and moderate-income persons by supporting activities such as public facilities improvements, social services, affordable housing, fair housing, economic development and addressing homelessness.

The HOME program supports a wide range of activities including building, buying, and/or rehabilitating affordable housing for rent or homeownership. #10..
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City Council, December 13, 2022
Adopt Section 24 (Davis-Bacon Labor Standards) and Section 25 (Minority Business Enterprise and Women Business Enterprise) and amend Section 6 (Homeowner Rehabilitation Program Policies) of the Housing and Urban Development Policies & Procedures Manual

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The PLHA program supports the building of affordable housing rental activities including acquisition, construction, and rehabilitation.

The City, as the recipient of this funding, has an obligation to ensure compliance with both Federal and State regulations related to the funding. To improve the rate of compliance, the City consolidated all the HUD related Policies and Procedures. In October 2016, the Council, by Resolution No. 2016-425, adopted a Housing & Urban Development Policies & Procedures Manual (HUD Manual).

HUD Manual updates happen periodically as regulations or funding amendments are needed.

The Section 6 policy was last updated on November 26, 2019, to comply with updates to the HUD regulations.

DISCUSSION:

As an entitlement community, the City is awarded annual funding from both HUD and HCD to address housing needs, improve and develop communities, and enforce fair housing laws.

Section 24 - Davis Bacon and Related Acts
HUD funding requires compliance with Davis Bacon and Related Acts (DBRA). DBRA directs the Secretary of Labor to determine local prevailing wage rates.1 Davis-Bacon labor standard requirements are triggered at different thresholds under the CDBG and HOME Program. These labor standards require that workers receive no less than the prevailing wages being paid for similar work in the same area. HUD should be contacted if there is any situation where the applicability of Davis-Bacon is in question. For projects utilizing Federal Funding, DBRA sets the local wages.

The City of Modesto is required to comply with DBRA by monitoring certified payrolls for projects that are subject to the law. This monitoring includes:
 Complete on-site labor interviews to confirm classifications align with work observed  Retention payments are released once the certified payroll review has been completed and interviews have been appropriately compared
 The City of Modesto is required to submit a Semi-Annual Labor Standards Enforcement Report (HUD form 4710)
The addition of Section 24 to the HUD Manual will dictate the City’s compliance for the monitoring practices.

Section 25 - Minority Business Enterprise and Women Business Enterprise Minority Business Enterprise (MBE) is defined as a company that is 51% owned by a minimum of one U.S. citizen whose ethnic background is at least 25% Asian-Indian, Asian-Pacific, Black, Hispanic, or Native American.

Women Business Enterprise (WBE) is defined as an independent business that is at least 51% owned and controlled by one or more women who are U.S. citizens or Legal Resident Aliens; 1 The Davis-Bacon Act (40 USC, Chapter 3, Section 276a-276a-5; and 29 CFR Parts 1, 3, 5, 6 and 7). #10..
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City Council, December 13, 2022
Adopt Section 24 (Davis-Bacon Labor Standards) and Section 25 (Minority Business Enterprise and Women Business Enterprise) and amend Section 6 (Homeowner Rehabilitation Program Policies) of the Housing and Urban Development Policies & Procedures Manual

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whose business formation and principal place of business are in the U.S or its territories; and whose management and daily operation is controlled by a woman with industry expertise.

Section 281 of the National Affordable Housing Act requires each contractor to prescribe procedures to establish and oversee a minority outreach program. The program shall include minority and women-owned businesses in all contracting activities entered into by the contractor to facilitate the provision of affordable housing authorized under this Act or any other federal housing law applicable to such jurisdiction. Therefore, minimum HUD standards require guidelines for contractor’s outreach effort to minority and women-owned businesses.

The City of Modesto is required to comply with MBE/WBE by enforcing appropriate procurement, which includes affirmative steps to assure that women-owned business and minority-owned business are afforded contracting opportunities. The policy outlines the steps the City takes to ensure procurement compliance. This includes but is not limited to the inclusion of the policy in Federal procurement packets, providing contractors and program participants the guidelines to be counted in the annual reporting.

The City of Modesto is required to submit an annual Minority Business Enterprise and Women’s Business Enterprise (MBE/WBE) Contract and Subcontract Activity Report (HUD Form 2516) to ensure compliance with MBE/WBE. In order to be recognized by the City as an MBE or WBE for the annual reports, the business will need to register with the Small Business Administration for the distinction. This policy is included as attachment 3.

Section 6 – Homeowner Rehabilitation Program
The City periodically updates sections of the HUD policy to align with current program guidelines and practices. In July 2022, the City staff was approached by the Housing Rehabilitation Loan Committee to review its Section 6 program policies. After taking into consideration the committee’s recommendations and reviewing updated HUD regulations staff presented the following amendments:
 Section 3.0: NPU verification to ensure no outstanding active violations  Section 8.0: Grant depreciation terms added
o Single family homes, 10% annually over the 10-year affordability term o Mobile homes, 20% annually over the 5-year affordability term  Section 9.0: Increased mobile home grant
o $25K, increased material costs
o Included a loan option if in the case project costs exceed grant amount (5 years at 0%)
 Section 13.0: Policy updates to conform to updated HUD guidance o UEI rather than DUNS number (contractor Federal identification number) The updated Homeowner Rehabilitation Program Policies & Procedures are included as attachment 4.

FISCAL IMPACTS:

The HUD Policies & Procedures Manual is only applicable to those loans and grants funded by projects managed by the Community Development Division. There is no General Fund impact. #10..
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City Council, December 13, 2022
Adopt Section 24 (Davis-Bacon Labor Standards) and Section 25 (Minority Business Enterprise and Women Business Enterprise) and amend Section 6 (Homeowner Rehabilitation Program Policies) of the Housing and Urban Development Policies & Procedures Manual

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COMMITTEE RECOMMENDATION:

This item was presented to the Citizen Housing and Community Development Committee on November 10, 2022 and recommended forwarding to Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendation:

Resolution approving the adoption of Section 24 (Labor Standards) and Section 25 (MBE/WBE) and the amendment of the Section 6 (Homeowner Rehabilitation Program Policies), within the Housing and Urban Development Policies & Procedures Manual.

1. Resolution

2. Section 24 – Labor Standards Policies and Procedures

3. Section 25 – Minority Business Enterprise and Women Business Enterprise (MBE/WBE) Policies and Procedures

4. Section 6 – Homeowner Rehabilitation Program Policies and Procedures #10..
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12/13/2022/C&ED/JHill 1 2022-

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-
RESOLUTION APPROVING THE ADOPTION OF SECTION 24 (LABOR
STANDARDS) AND SECTION 25 (MBE/WBE) AND THE AMENDMENT OF THE SECTION 6 (HOMEOWNER REHABILITATION PROGRAM POLICIES),

WITHIN THE HOUSING AND URBAN DEVELOPMENT POLICIES &

PROCEDURES MANUAL
WHEREAS, the City of Modesto is an entitlement community awarded Department of Housing and Urban Development (HUD) funds annually to address housing needs, improve and develop communities, and enforce fair housing laws, and WHEREAS, HUD funding requires compliance with Davis Bacon and Related Acts (DBRA), and
WHEREAS, Davis-Bacon labor standards requirements are triggered at different thresholds under the CDBG and HOME Program, and
WHEREAS, these labor standards require that workers receive no less than the prevailing wages being paid for similar work in the same area, and WHEREAS, HUD should be contacted if there is any situation where the applicability of Davis-Bacon is in question, and
WHEREAS, for projects utilizing Federal Funding DBRA sets the local wages, and
WHEREAS, the City of Modesto is required to comply with DBRA by monitoring certified payrolls for projects that are subject to the law, and WHEREAS, this monitoring includes:
 Complete on-site labor interviews to confirm classifications align with work observed
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12/13/2022/C&ED/JHill 2 2022-
 Retention payments are released once the certified payroll review has been completed and interviews have been appropriately compared  The City of Modesto is required to submit a Semi-Annual Labor Standards Enforcement Report (HUD form 4710), and
WHEREAS, as an entitlement jurisdiction, the City is required to establish policies and procedures to support equal opportunity programs related to minority business enterprises (MBE) and women business enterprises (WBE), and WHEREAS, Minority Business Enterprise (MBE) is defined as a company that is 51% owned by a minimum of one U.S. citizen whose ethnic background is at least 25% Asian-Indian, Asian-Pacific, Black, Hispanic, or Native American, and WHEREAS, Women Business Enterprise (WBE) is defined as an independent business that is at least 51% owned and controlled by one or more women who are U.S. citizens or Legal Resident Aliens; whose business formation and principal place of business are in the U.S or its territories; and whose management and daily operation is controlled by a woman with industry expertise, and
WHEREAS, Section 281 of the National Affordable Housing Act requires each contractor to prescribe procedures to establish and oversee a minority outreach program, and
WHEREAS, Section 281 of the National Affordable Housing Act requires each contractor to prescribe procedures to establish and oversee a minority outreach program, and
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12/13/2022/C&ED/JHill 3 2022-
WHEREAS, the program shall include minority and women-owned businesses in all contracting activities entered into by the contractor to facilitate the provision of affordable housing authorized under this Act or any other federal housing law applicable to such jurisdiction, and
WHEREAS, minimum HUD standards require guidelines for contractor’s outreach effort to minority and women-owned businesses, and WHEREAS, the City of Modesto is required to comply with MBE/WBE by enforcing appropriate procurement, which includes affirmative steps to assure that women-owned business and minority-owned business are afforded contracting opportunities, and
WHEREAS, the policy outlines the steps the City takes to ensure procurement compliance, which includes but is not limited to the inclusion of the policy in Federal procurement packets, providing contractors and program participants the guidelines to be counted in the annual reporting, and
WHEREAS, the City of Modesto is required to submit an annual Minority Business Enterprise and Women’s Business Enterprise (MBE/WBE) Contract and Subcontract Activity Report (HUD Form 2516) to ensure compliance with MBE/WBE, and
WHEREAS, in order to be recognized by the City as an MBE or WBE for the annual reports, the business will need to register with the Small Business Administration for the distinction, and
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12/13/2022/C&ED/JHill 4 2022-
WHEREAS, in July 2022, the City staff was approached by the Housing Rehabilitation Loan Committee to review its Section 6 program policies and after taking into consideration the committee’s recommendations and reviewing updated HUD regulations staff presented the following amendments, and WHEREAS, the policy changes include:
 Section 3.0: NPU verification to ensure no outstanding active violations,  Section 8.0: Grant depreciation terms added Single family homes, 10% annually over the 10-year affordability term Mobile homes, and 20% annually over the 5-year affordability term
 Section 9.0: Increased mobile home grant $25K, increased material costs Included a loan option if in the case project costs exceed grant amount (5 years at 0%)
 Section 13.0: Policy updates to conform to updated HUD guidance UEI rather than DUNS number (contractor Federal identification number) NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby authorizes a resolution approving the adoption of Section 24 (Labor Standards), Section 25 (MBE/WBE) and the amendment of the Section 6 (Homeowner Rehabilitation Program Policies), of the Housing and Urban Development Policies & Procedures Manual.
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12/13/2022/C&ED/JHill 5 2022-
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 13th day of December 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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Section 24 – Labor Standards
Policies and Procedures
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2 TABLE OF CONTENTS
Davis-Bacon Act Applicability……………………………………………………………….3 Bidding and contracting………………...…………………………………………………...4 Construction…………………………………………………………...…………………......6-8
Certified Payroll Review……………………………………………………………………...9
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3 Background
The City of Modesto is an entitlement community awarded Department of Housing and Urban Development (HUD) funds annually to address housing needs, improve and develop communities, and enforce fair housing laws. HUD funding requires compliance with Davis Bacon and Related Acts (DBRA).

Applicability of Davis Bacon and Related Acts (DBRA):

The Davis-Bacon Act (40 USC, Chapter 3, Section 276a-276a-5; and 29 CFR Parts 1, 3, 5, 6 and 7). Davis-Bacon labor standards requirements are triggered at different thresholds under the CDBG and HOME Program, which is defined below. These labor standards require that workers receive no less than the prevailing wages being paid for similar work in the same area. HUD should be contacted if there is any situation where the applicability of Davis-Bacon is in question.

The Copeland Anti-Kickback Act (40 USC, Chapter 3, Section 276c and 18 USC, Part 1, Chapter 41, Section 874; and 29 CFR Part 3) requires that workers be paid weekly, that deductions from workers’ pay be permissible, and that contractors and subcontractors maintain and submit weekly certified payrolls.

The Contract Work Hours and Safety Standards Act (CWHSSA) (40 USC, Chapter 5, Sections 326-332; and 29 CFR Part 4, 5, 6 and 8; 29 CFR Part 70 to 240) applies to prime contracts over $100,000 and any subcontracts let under the covered prime contract. CWHSSA requires that workers receive overtime compensation (time and one-half pay) for hours they have worked in excess of 40 hours in one week. Violations under this Act carry a liquidated damages penalty ($10 per day per violation).

Section 3 of the Housing and Urban Development Act of 1968, as amended requires the provision of opportunities for training and employment that arise through HUD- financed projects to lower-income residents of the project area. Also required is that contracts be awarded to businesses that provide economic opportunities for low- and very low-income persons residing in the area.

Please see the Fair Housing chapter of this manual for more information.

Applicability of Davis Bacon Labor Standards:

Community Development Block Grant (CDBG)
The labor laws that may apply to CDBG-funded construction work include the following: The DavisBacon Act (40 USC, Chapter 3, Section 276a-276a-5; and 29 CFR Parts 1, 3, 5, 6 and 7) is triggered when construction work over $2,000 is financed in whole or in part with CDBG funds. It requires that workers receive no less than the prevailing wages being paid for similar work in the same area. Davis-Bacon does not apply to the rehabilitation of residential structures containing less than eight units or force account labor (construction carried out by employees of the grantee). HUD should be contacted if there is any situation where the applicability of Davis-Bacon is in question. #10..
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4 HOME/HOME ARP Investment Partnership Program
The applicability of labor standard provisions under the HOME program is very different than under CDBG. Labor standards provisions apply to any contract for the construction of 12 or more HOMEassisted units. (Section 286, National Affordable Housing Act of 1990, as amended).

Bidding and Contracting:

Once it is determined that a construction project is subject to Federal labor standards requirements, certain the following must be taken to ensure compliance:

1. Labor Standards Officer (LSO) is informed of all projects assisted with HUD funds.

2. LSO must review and approve the project Bid Specifications to ensure it includes the HUD specific forms including but not limited to:
a. Davis Bacon Federal Wage Determination from US Department of Labor (WD available at time of bid release)
b. California Industrial Relations Wage Determination
c. Federal Labor Standards Provisions Form HUD-4010,
d. Federal Classification/Prevailing Wage Sheet
e. Section 3 Compliance Packet/Forms
f. MBE/WBE/Section 3 Contract & Subcontract Activity

3. Once the General Contractor is selected for the project, LSO obtains from the contractor a list of subcontractors (MBE/WBE/Section 3 Contract & Subcontract Activity list?)to be used on the project and verifies using Sam.gov that the contractor and subcontractors are not listed on the Federal government’s Excluded Parties List prior to contract execution by using each contractor/subcontractor’s DUNS number.
a. If a contractor/subcontractor does not have a DUNS Number, they must obtain one at:
https://fedgov.dnb.com/webform/

4. DUNS verification is maintained in file documentation.

5. The Davis-Bacon wage Determination that applies to a project at the time of bid request release and included within the Bid Specifications contains a schedule of work/job classifications and the minimum wage rates that must be paid to persons performing work on the project.
a. The City department responsible for preparing the Bid Specifications will download the applicable Federal Wage Determination from https://beta.sam.gov/content/home , and physically attach to the Bid Specifications.
b. LSO will use verify that the appropriate Federal wage determination was used during review of the Bid Specifications by checking https://beta.sam.gov/content/home . c. LSO will use also use DIR.CA.gov to determine the appropriate State wage determination. Although this is not a Federal requirement LSO ensures wages are paid in accordance with California Industrial Relations Wage Determination. d. Ten days prior to bid opening, LSO will verify any modifications made to the DavisBacon wage Determination and lock in the wage Determination using both Beta.SAM.gov.
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5 6. All federal job classifications to be used by the general contractor and subcontractors must be disclosed by the General Contractor upfront via submission of Federal Classification/Prevailing Wage Sheet included with its Bid. a. Upon selection of the General Contractor, any changes and/or addition of job classifications must be disclosed to the City’s HUD project manager to allow compliance monitoring.
b. The use of Apprentices and Trainees by the General Contractor and/or Subcontractors must be disclosed on the Federal Classification/Prevailing Wage sheet included with General Contractor’s bid.
i. Apprentices and trainees may be paid less than the journeyman's rate for their craft only if registered in a program approved by the US DOL or a state apprenticeship agency recognized by DOL. Apprentice and/or trainee pay rates must be disclosed with bid submission.

1. If apprentice and/or trainee is not registered in a US DOL approved program, the apprentice/trainee must be paid the journeyman’s rate of pay.
ii. Apprentice vs. Journeymen ratios must be disclosed by the General Contractor with its Bid submission.

1. LSO will review apprentice vs journeyman ration during the certified payroll review process.

7. The labor clauses, which are contained in HUD-4010, and the applicable wage rate Determination (and any additional classifications), must be a physical part of the bid package.

8. 9. The labor clauses obligate the contractor and subcontractors to comply with the DavisBacon wage and reporting requirements and provide remedies and sanctions should violations occur.

10. LSO examines subrecipient/subgrantee/subcontract management firm contract activity as required.

11. For contracts entered into pursuant to competitive bidding procedures, the bid opening date “locks-in” the wage decision provided that the contract is awarded within 90 days. If the contract is awarded more than 90 days after bid opening, the contract award date ‘locks-in’ the wage decision.
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6 Construction:

Pre-construction Conference:

LSO will attend the Pre-construction conference. The Pre-construction conference will review contractual requirements including labor and performance schedules. Items that should be covered at the pre- construction conference include:

1. LSO provides and reviews with the contractor a copy of the “Contractor's Guide to Prevailing Wage Requirements for Federally-Assisted Construction Projects.” This guide can be downloaded from at:
https://www.hud.gov/sites/documents/4812-LRGUIDE.PDF

2. LSO will review all required HUD/Labor compliance forms to be submitted during project construction.

3. LSO explains that the contractor must submit weekly payrolls and Statements of Compliance signed by an officer of the company, and that the prime contractor is responsible for obtaining and reviewing payrolls and Statements of Compliance from all subcontractors.

4. LSO explains that wages paid must conform to the Federal wage rate Determination included in the contract. Discuss the classifications to be used. If additional classifications are needed, contact the City HUD project manager immediately.

5. LSO explains that employee interviews will be conducted periodically during the project.
a. The document used to capture interviews is the Form HUD-11. The form is to be used by HUD and local agency staff for recording information gathered during on-site interviews with laborers and mechanics employed on projects subject to Federal prevailing wage requirements. Typically, the staff that will conduct on-site interviews and use this form are HUD staff and fee construction inspectors, HUD Labor Relations staff, and local agency labor standards contract monitors.
b. Information recorded on the form HUD-11 is evaluated for general compliance and compared to certified payroll reports submitted by the respective employer. The comparison tests the veracity of the payroll reports and may be critical to the successful conclusion of enforcement actions in the event of labor standards violations. The thoroughness and accuracy of the information gathered during interviews is crucial. c. Note that the interview itself and the information collected on the form HUD-11
Note that the interview itself and the information collected on the form HUD11 are considered confidential. Interviews should be conducted individually and privately. All laborers and mechanics employed on the job site must be made available for interview at the interviewer’s request. The employee’s participation, however, is voluntary. Interviews shall be conducted in a manner and place that are conducive to the purposes of the interview and that cause the least inconvenience to the employer(s) and the employee(s). #10..
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7 6. LSO emphasizes that a copy of the Federal wage rate Determination must be posted at the job site.

7. LSO explains that apprentice or trainee rates cannot be paid unless the apprentice or training program is certified by the US Department of Labor. If apprentices or trainees are to be used, the contractor must provide the LSO with a copy of the DOL certification of his/her program.
a. LSO explains that apprentice or trainee must be paid journeyman rates if they are not registered with US DOL.

8. If the contract is $100,000 or greater, LSO explains that workers must be paid overtime if they work more than 40 hours in one week, and that failure to pay workers at least time and a half whenever overtime violates the Contract Work Hours and Safety Standards law. In addition to restitution, noncompliance with this law makes the contractor liable for liquidated damages of $10 per day for every day each worker exceeded 40 hours a week without being paid time and a half.

9. LSO explains that no payroll deductions can be made that are not specifically listed in the Copeland Anti-kickback Act provisions unless the contractor has obtained written permission of the employee. Unspecified payroll deductions are a serious discrepancy and must be resolved prior to further contractor payments.

10.LSO instructs contractor to obtain and post posters for the job site, such as the “Notice to All Employees Working on Federal or Federally Financed Construction Projects.” These posters and others that are required are available at:
http://www.dol.gov/whd/regs/compliance/posters/fedprojc.pdf.

11.LSO also describes the compliance monitoring that will be conducted during the project, and indicate that discrepancies and underpayments discovered as a result of compliance monitoring must be resolved prior to making further payment to the contractor. Remind the contractor that labor standards provisions are as legally binding as the technical specifications, and failure to pay specified wages will result in contractor payments being withheld until all such discrepancies are resolved and potentially restitution, liquidated damages and/or recommendation for debarment.

Notice to Proceed

1. Following execution of the contract documents and completion of the preconstruction conference, a Notice to Proceed is issued to the prime/general contractor to begin performance of the work. The Notice to Proceed establishes the construction start date and the scheduled completion date, and provides the basis for assessing liquidated damages. The construction period and basis for assessing liquidated damages is to be consistent with those sections of the contract documents.

On-Site Interviews

1. The labor standards requirements include periodically conducting job site interviews with workers. The purpose of the interviews is to capture observations of #10..
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8 the work being performed and to get direct information from the laborers and mechanics on the job as to the hours they work, the type of work they perform and the wage they receive.
o LSO performs monthly on-site interviews: one interview per craft per contractor per month, with a minimum of three prime contractor interviews each month and one interview per subcontractor each month.

2. Interviews should occur throughout the course of the construction and include a sufficient sample of job classifications represented on the job as well as workers from various companies to allow for a reasonable judgment as to compliance.

3. Target interviews will be conducted when deemed necessary due to potential or suspected violations.

4. Information gathered during an interview is recorded on the Record of Employee Interview form (HUD-11).
a. The interview should take place on the job site and conducted privately (this is a one-on- one basis).
b. LSO observes the duties of workers before initiating interviews. c. To initiate the interview, the LSO shall:
i. Properly identify himself/herself;
ii. Clearly state the purpose of interview; and
iii. Advise the worker that information given is confidential, and his/her identity will be disclosed to the employer only with the employee's written permission.
d. When conducting employee interviews, the LSO pays particular attention to:
i. The employee's full name;
ii. The employee's permanent mailing address;
iii. The last date the employee worked on that project and number of hours worked on that day. LSO clarifies that these questions relate solely to work on the project and not other work.
iv. The employee's hourly rate of pay. The aim is to determine if the worker is being paid at least the minimum required by the wage Determination.
1) The LSO ensures the worker is not quoting their net hourly rate or "take-home" pay.
2) If it appears the individual may be underpaid, the LSO closely questions the worker:
3) Ask for any records.
4) Arrange to re-interview the employee
5) In the case additional follow-up is required LSO will mail-out a questionnaire.
v. Enter the worker's statement of his/her classification. vi. Observe duties and tools used:
1) If worker's statements and observations made by the LSO indicate the individual is performing duties conforming to classification, indicate this on the Record of Employee Interview form.
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9 2) If there are discrepancies, detailed statements are necessary.
vii. Enter any comments necessary.
viii. Enter date interview took place.

5. The HUD-11s must be compared to the corresponding contractor and subcontractor payroll information, during certified payroll review. a.If no discrepancies appear, "None" is written in the comment space of the Payroll Examination Remarks Section (#16) and is signed by the LSO. b.If discrepancies do appear, write the observed discrepancies in the Payroll Examination Remarks Section (#16) and LSO initiates appropriate action. When necessary and these actions have been completed, the results must be noted on the interview form.

6. If there are wage complaints, the LSO completes the Federal Labor Standards Complaint Intake Form (HUD Form 4731). The complaint must be investigated and resolved and contact HUD as necessary.

Certified Payroll Review

1. Once construction is underway, the prime/general contractor should complete a weekly payroll report for its employees on the covered job and sign the Statement of Compliance. The prime/general contractor must also obtain weekly payrolls (including signed Statements of Compliance) from all subcontractors as they work on the project.

2. Certified payroll reports should be submitted by the prime/general contractor to the LSO within a reasonable timeframe so as to ensure compliance, typically no more than 10 working days following the end of the payroll period.

3. The HUD payroll form (WH-347) does not have to be used, but alternative payroll documentation must include all of the same elements in order to determine compliance with applicable regulations. The Statement of Compliance must be completed and signed by an authorized representative of the company and submitted in conjunction with the payroll form (or alternate equivalent payroll documentation).

4. The payrolls should be reviewed by the general contractor to ensure that there are no discrepancies or underpayments. Remember that the prime contractor is responsible for the full compliance of all subcontractors on the project and will be held accountable for any wage restitution that may be necessary. This includes restitution for underpayments and, potentially, liquidated damages that may be assessed for overtime violations.

5. LSO reviews payroll to ensure that workers are being paid no less than the prevailing Davis-Bacon wages and that there are no other falsifications using City of Modesto Payroll Checklist form.

6. Items to be spot- checked should include:
o The correct classification of workers;
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10 o A comparison between the classification and the wage determination to determine whether the rate of pay is at least equal to the rate required by the determination;
o A review to ensure that work by an employee in excess of 40 hours per week is being compensated for at rates not less than one and one-half times the basic rate of pay;
o Review of deductions for any non-permissible deductions; and o The Statement of Compliance has been signed by the owner or an officer of the firm.

7. Any discrepancies and/or falsification indicators must be reported to the state and HUD, along with the steps being taken by the LSO to resolve the discrepancies.

Where underpayments of wages have occurred, the LSO and state are responsible to make sure the correct wages are paid and that the employer will be required to pay wage restitution to the affected employees. Wage restitution must be paid promptly in the full amounts due, less permissible and authorized deductions. LSO and state should contact HUD for assistance if a violation occurs.

Payments

1. Upon receipt of requests for payment during construction, the LSO checks that labor standards compliance is being met.
a.All weekly payrolls and Statements of Compliance have been received, reviewed and any discrepancies resolved; and
b.Employee interviews have been conducted as necessary, checked against payrolls and the wage rate Determinations, and all discrepancies corrected.

2. Ten percent retention is held until after the certified payroll review process is complete, in case of any unresolved problems.
o All weekly payrolls and Statements of Compliance have been received and any discrepancies have been resolved;
o All discrepancies identified through job site interviews have been resolved; and o All files are complete.

Restitution for Underpayment of Wages

1. Where underpayments of wages have occurred, the employer will be required to pay wage restitution to the affected employees. Wage restitution must be paid promptly in the full amounts due, less permissible and authorized deductions.

2. Wage restitution is simply the difference between the wage rate paid to each affected employee and the wage rate required on the wage Determination for all hours worked where underpayments occurred. The difference in the wage rates is called the adjustment rate. The adjustment rate times the number of hours involved equals the gross amount of restitution due.

3. LSO will notify the prime contractor in writing of any underpayments that are found during payroll or other reviews. The notification should describe the underpayments and provide instructions for computing and documenting the #10..
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11 restitution to be paid. The prime contractor is allowed 30 days to correct the underpayments.

4. The employer is required to report the restitution paid on a correction certified payroll.

The correction payroll will reflect the period of time for which restitution is due. The correction payroll must list:
a.Each employee to whom restitution is due and their work classification; b.The total number of work hours;
c.The adjustment wage rate (the difference between the required wage rate and the wage rate paid);
d.The gross amount of restitution due;
e.Deductions; and
f. The net amount to be paid.

5. A signed Statement of Compliance must be attached to the corrected payroll form and each employee who has received restitution should sign the corrected payroll as evidence of their receipt of the payments.

6. The LSO reviews the correction payroll to ensure that full restitution was paid. The prime contractor shall be notified in writing of any discrepancies and will be required to make additional payments, if needed. Additional payments must be documented on a supplemental correction payroll within 30 days.

Documentation Requirements

7. The LSO maintains documentation to demonstrate compliance with the labor standards requirements including, but not limited to:
a.Bid and contract documents with the labor standards clause and wage Determination;
b.Payroll forms from the contractor and subcontractors, including signed statements of compliance;
c.Documentation of on-site job interviews and review of the corresponding payroll to detect any discrepancies;
d.Documentation of investigations and resolutions to issues that may have arisen and
e.Enforcement reports

8. The labor standards compliance documents are kept on file by LSO per project.

9. The standard compliance documents are preserved and retained for a period of five years following the completion of work.
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Section 25 – Minority Business
Enterprise and Women Business
Enterprise (MBE/WBE)
Policies and Procedures
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2 TABLE OF CONTENTS
Background.......................................................................................................................3 Governing Regulations .....................................................................................................3 Program Objective............................................................................................................4 MBE/WBE Certification.....................................................................................................5 Good Faith Effort ..............................................................................................................5 #10..
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3 Background
The City of Modesto (City) is an entitlement grantee under the Federal Community Development Block Grant Program (CDBG) and a Participating Jurisdiction (PJ) under the Home Investment Partnerships Act (HOME) program. As an entitlement jurisdiction, the City is required to establish policies and procedures to support equal opportunity programs related to minority business enterprises (MBE) and women business enterprises (WBE).

Governing Regulations
OMB Circular A-102
Contracting With Small and Minority Firms, Women's Business Enterprises and Labor Surplus Area Firms. It is national policy to award a fair share of contracts to small and minority business firms. Grantees shall take similar appropriate affirmative action to support of women's enterprises and are encouraged to procure goods and services from labor surplus areas.

Section 281 Equal Opportunity of the National Affordable Housing Act Solicitation of Contracts. -Each participating jurisdiction shall prescribe procedures acceptable to the Secretary to establish and oversee a minority outreach program within each such jurisdiction to ensure the inclusion, to the maximum extent possible, of minorities and women, and entities owned by minorities and women, including, without limitation, real estate firms, construction firms, appraisal firms, management firms, financial institutions, investment banking firms, underwriters, accountants, and providers of legal services, in all contracts, entered into by the participating jurisdiction with such persons or entities, public and private, in order to facilitate the activities of the participating jurisdiction to provide affordable housing authorized under this Act or any other Federal housing law applicable to such jurisdiction.

Housing and Urban Development Regulations
The HOME program regulations at 24 CFR 92.351(b) call for a minority outreach program inclusive of minority business enterprises (MBE) and women business enterprises (WBE). The Uniform Administrative Requirements of 24 CFR 85.36(e) require the City to “take all necessary affirmative steps to assure that minority firms, women’s business enterprises, and labor surplus area firms are used when possible.” This requirement is applicable to contracting and subcontracting opportunities funded in whole or in part with the federal housing and community development assistance provided to the City as a grantee and PJ.

Further, the City is required under §570.507(b) - Reports (24 CFR Part 570, CDBG Final Rule) to submit a report to the U.S. Department of Housing and Urban Development (HUD) on the City’s MBE- WBE contracting and subcontracting activity generated through the expenditure of HUD funds.
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4 Program Objective
This MBE-WBE plan establishes a program for the achievement of certain contracting and subcontracting goals related to contracts and subcontracts funded in whole or in part with federal housing and community development assistance. It is the intent of the City of Modesto to comply fully with the applicable federal policies on MBE-WBE contracting opportunity.

MBE and Who Qualifies
A Minority Business Enterprise (MBE) is a United States citizen minority group member (Asian, Black, Hispanic, Native American) that is at least 51% owner or in the case of a publicly- owned business, at least 51% of the stock is owned by one or more such individuals.

The management and daily operations are also controlled by those minority group member(s).

To qualify as an MBE a business must
 Company must be at least 51 percent owned, operated, and controlled by a minimum of one U.S. citizen whose ethnic background is at least 25 percent Asian-Indian, Asian- Pacific, Black, Hispanic, or Native American.

Minority Person
Persons who are citizens of the United States and who are Black Americans, Hispanic Americans, Native Americans, or Asian-Pacific Americans.  Black (African) Americans - Persons having origins from any of the Black groups of Africa. The term includes persons having origins in any of the original peoples of the Cape Verdes Islands.
 Hispanic Americans - Persons having their origins from one or more of the Spanish- speaking peoples of Mexico, Puerto Rico, Cuba, Central or South America or the Caribbean Islands.
 Native Americans - Persons having origins from one or more of the original peoples of North America and who are recognized as an Indian by a tribe or tribal organization.
 Asian-Pacific Americans - Persons having origins from one or more of the original peoples of the Far East, Southeast Asia or the Pacific Islands, including China, Japan, Korea, Samoa, and the Philippine Islands.

WBE and Who Qualifies
A Women’s Business Enterprise (WBE) is an independent business that is at least 51% owned and controlled by one or more women who are U.S. citizens or Legal Resident Aliens; whose business formation and principal place of business are in the U.S or its #10..
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5 territories; and whose management and daily operation is controlled by a woman with industry expertise.

To qualify as a WBE a business must
 Be a small business (Defined-Title 13 Part 121.201 of the Code of Federal Regulations)
 Be at least 51 percent owned and controlled by women who are U.S citizens or Legal Resident Aliens
 Have women manage day to day operations and also make long term decisions MBE/WBE Certification
WBE/MBE Certification is not required, but strongly encouraged.  Certification may be obtained at no cost at SBA.GOV or through a third-party entity
 Misrepresented businesses will be disqualified from future bidding opportunities Affirmative Steps
The Code of Regulations Title 40 Part 31.36(e), “Procurement”, requires the Recipient and Prime Contractor to take all necessary steps to assure that women-owned business and minority-owned business are afforded contracting opportunities.

The goal of this policy is to fully make WBE/MBE firms aware of contracting opportunities through outreach and recruitment activities. This will be achieved by the following steps
 Include qualified small and minority business and women’s business enterprises on solicitation lists
 Ensure women’s business and minority business are solicited whenever they are potential sources of products or services
 Divide total requirements, when economically feasible, into small tasks or quantities to permit maximum participation by women’s and minority businesses  Use services and assistance from partnerships, administrations, and agencies such as the Small Business Administration, and the Minority Business Development Agency.
 Require the Prime Contractor to take affirmative steps to subcontract with womanowned and minority- owned business if they subcontract.

Good Faith Effort
All Prime Contractors must provide documentation to support a “good faith” effort in the solicitation of MBE and WBE firms. A Prime Contractor is a business concern that #10..
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6 enters into written agreements directly with the Recipient which includes agreements to provide services (including engineering and legal), supplies, equipment and construction.

The submission of documentation to support a “good faith” effort in the solicitation of Small Business Enterprise is not required; however, the Prime Contractor must maintain this documentation in their files for possible future reference. Documentation may include the following:
 Copies of announcements/postings in newspapers or other media for specific contracting/subcontracting opportunities. Include language in announcements/postings that MBE/WBE firms are encouraged to bid.  Copies of announcements/postings of contracting/subcontracting opportunities in trade publications or minority media that target MBE and/or WBE firms.  Documentation of sources used to identify potential MBE/WBE firms  Documentation of contacts with MBE/WBE firms, including the firm name, address, telephone number dates of phone calls, letters and the contract results.  Copies of direct solicitation letters sent to all MBE/WBE firms.  Copies of the MBE/WBE certification documentation for ALL proposed prime and subcontractor MBE/WBE firms.
 Documentation showing Prime Contractor has made the six good faith efforts to seek qualified MBE/WBE subcontracts - to the extent they use subcontractors.

To ensure the City of Modesto is given credit for good-faith outreach efforts, the City will document the searches executed and the results of the searches, describe criteria used to determine who on the list(s) to directly solicit and describe any other resources used to seek qualified MBE/WBE firms to solicit.

The City of Modesto will maintain registered MBE/WBE certifications in the Neighborly Contractor Portal. The City will provide the list to Prime Contractors in an effort to assist with requirements to make good faith outreach efforts when searching for MBE/WBE subcontractors. Prime Contractors are also required to document their outreach efforts. #10..
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1 Section 6
Homeowner Rehabilitation Program
Policies & Procedures
[email protected]
Citizens Housing and Community Development Committee (CH&CDC) Approved November 11, 2022 City of Modesto City Council Approved by Resolution 2020-513 on November 26, 2019 *These policies supersede any previously adopted policies and are subject to review and revision by the City of Modesto Housing Rehabilitation Loan Committee.
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2 Table of Contents

1.0 APPLICABLE LAWS AND REGULATIONS................................................................................................3

2.0 ELIGIBLE REPAIRS (in order of priority) ......................................................................................................3

3.0 PROPERTY ELIGIBIILTY:.............................................................................................................................3

4.0 HOMEOWNER ELIGIBILITY:.......................................................................................................................4

5.0 MAXIMUM AMOUNT OF PROGRAM ASSISTANCE (24 CFR 570.208 (a)(3);(b), and 24 CF570.202):.6

6.0 MAXIMUM AFTER REHABILITATION VALUE........................................................................................6

7.0 MAXIMUM COMBINED LOAN TO VALUE RATIO:.................................................................................7

8.0 RATES AND TERMS OF PROGRAM ASSISTANCE: .................................................................................7

9.0 MANUFACTURED HOMES:..........................................................................................................................8

10.0 BID SOLICITATION: ......................................................................................................................................8

11.0 PROCUREMENT .............................................................................................................................................9

12.0 EMERGENCY REPAIRS PROCEDURE......................................................................................................12

13.0 CONTRACTOR ELIGIBILITY .....................................................................................................................13

14.0 COST REASONABLENESS AND SCOPE OF WORK:..............................................................................14

15.0 ENVIRONMENTAL REVIEW:.....................................................................................................................15

16.0 HOUSING REHABILITATION LOAN COMMITTEE (HRLC) APPROVAL: ..........................................15

17.0 WRITTEN AGREEMENTS: ..........................................................................................................................16

18.0 PROJECT CONTINGENCIES .......................................................................................................................16

19.0 CONTRACTOR LIST ....................................................................................................................................17

20.0 CONTRACTOR DISQUALIFICATION/REMOVAL FROM CONTRACTOR LIST.................................17

21.0 PROGRESS INSPECTIONS ..........................................................................................................................19

22.0 CONTRACTOR COMPENSATION..............................................................................................................19

23.0 NON-PROFIT SPONSORED HOUSING ACQUISITION AND/OR REHABILITATION ACTIVITIES .20

24.0 MONITORING ...............................................................................................................................................21

25.0 LEAD BASED PAINT OPERATING PROCEDURES FOR UNITS BUILT PRIOR TO 1978 ..................21

26.0 LOAN MODIFICATIONS .............................................................................................................................23 #10..
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3 Homeowner Rehabilitation Program Policies & Procedures

1.0 APPLICABLE LAWS AND REGULATIONS

1.1 All Housing Rehabilitation Program activities shall be conducted in accordance with all applicable federal, state, and local program funding standards, building codes, and zoning ordinance requirements.

1.2 All work conducted in accordance with an approved Housing Rehabilitation Program activity shall be consistent with program funding requirements and any locally approved repair and replacement standards including, but not limited to: site improvements, windows and doors, roofing, ventilation, electrical, plumbing systems, HVAC, accessibility, and abatement of hazardous materials (i.e. mold, lead based paint, etc.).

1.3 All terms used within these policies shall be as defined by applicable funding source(s) or other locally approved Housing Rehabilitation Program policies and/or standards.

1.4 All program applications will be processed in accordance to the date of receipt of a complete application and are subject to available funding.

2.0 ELIGIBLE REPAIRS (in order of priority)

2.1 Health and Safety repairs as determined by utilization of the City of Modesto HUD Housing Quality Standards (HQS) inspection analysis.

2.2 Spot Rehabilitation Eligible non-health and safety related repairs (e.g. - required by State or local Building Code).

Accessibility Repairs to make the home accessible for disabled household members.

2.3 Energy Efficiency Improvements may be conducted along with any of the eligible repairs listed above. Energy efficiency improvements may include, but are not limited to:

2.3.1 Replacing single pane windows with double pane windows;

2.3.2 Replacing antiquated water heater;

2.3.3 Replacing antiquated HVAC system;

2.3.4 Weatherization improvements.

2.4 Applicant is Encouraged to Explore Other Available Funding Sources in order to comply with program funding requirements. The applicant is encouraged to explore other viable program alternatives/resources that may provide assistance to address any of the above eligible repairs.

The Housing Finance Specialist in coordination with the Housing Rehabilitation Specialist shall conduct a resource coordination analysis to ensure the applicant has taken advantage of any other resources that may be available prior to receiving assistance via the City of Modesto’s Housing Rehabilitation Program.

3.0 PROPERTY ELIGIBIILTY:

3.1 The assisted property shall be located within the city limits of the City of Modesto. #10..
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4 3.2 The assisted property shall contain a legal residential structure intended for continued residential occupancy and meet applicable rehabilitation standards and ordinances at the time of project completion.

3.3 A manufactured home (mobile home) in a mobile home park or on leased land that is not on a permanent foundation may only qualify for a grant as allowed under MANUFACTURED HOMES Section of these policies.

3.4 The assisted property shall be owner-occupied and shall be the principal place of residency of owner-occupants (hereafter “Borrowers”) and hold legal title to the property.

3.5 The assisted property shall be run through the City of Modesto Neighborhood Preservation Unit database to ensure no outstanding violations.

4.0 HOMEOWNER ELIGIBILITY:

4.1 All Borrower households shall have incomes at or below 80 percent (80%) of the Stanislaus County Area Median Income (AMI), adjusted for household size, as published annually by the California State Department of Housing and Community Development (HCD) or United States Department of Housing and Urban Development (HUD). The applicable AMI shall be as required by available funding source(s).

4.2 Borrowers without a mortgage shall demonstrate a debt-to-income ratio sufficient to allow for the on-going annual payments of property tax and any insurance required as a result of the Housing Rehabilitation Program assistance.

4.3 Borrowers with Reverse Mortgages will be considered on a case by case basis. Borrower is responsible for providing the creditor’s acceptance of subordination to the City of Modesto.

Borrower must comply with program loan to value requirements.

4.4 Borrowers with a mortgage shall show that all mortgage, property tax, and insurance payments are current, and meet both of the following debt-to-income ratios:

4.4.1 Front end (housing) debt-to-income ratio shall not exceed 35 percent (35%) and is the percentage of a Borrower’s gross monthly income that would cover the cost of the loan principal and interest payment, property taxes, property insurance, mortgage insurance, and HOA dues, if any.

4.4.2 Back-end (total debt obligation) debt-to-income ratio shall not exceed 45 percent (45%), and is the percentage of the borrower’s gross monthly income that includes the cost of housing as described in the Front-End ratio above, plus any other monthly debt payments such as car loans, personal loans, credit card debt, or child support and alimony payments.

4.5 Credit Report and Liabilities

4.5.1 The Housing Financial Specialist (HFS) must obtain a signed “Authorization to Verify Information” and/or “Eligibility Release Form” from the applicant authorizing the City to pull a credit report and verify any information with a third party.

4.5.2 The HFS shall pull the applicant(s) credit report within three business days of determining income eligibility. The HFS shall order a credit report through the City of Modesto’s #10..
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5 secure account held with a major credit bureau (e.g. Equifax, Experian, or Transunion). A credit report shall be pulled for all program applicants.

4.5.3 If the applicant is eligible for a loan, the credit report should be reviewed to determine if any public liens will be in prior position to the City loan, or to compare the applicant’s actual credit liabilities with the liabilities listed on the application. The credit report should be used for verification of information. The credit score is not relevant for a deferred payment loan. Debt-to-income guidelines should be used to demonstrate the household’s ability to continue to live in the home.

4.5.4 If the applicant is eligible for an amortized loan, the credit report should be analyzed for a credit score, verification of debts, and ability and willingness to repay the loan. The HFS shall use debt-to-income ratios allowable under this policy as a guideline for payment affordability.

4.5.5 Special Note: Household income must be collected on all qualifying adult household members per HUD guidelines. However, only the credit liabilities of the applicant will be used in the credit liability calculation. Adult members of the household who are not on title are not a party to the loan transaction.

4.6 Borrowers shall meet the following credit worthiness criteria:

4.6.1 No outstanding judgments or liens at the time of loan approval or loan execution. As part of application for assistance, Borrower shall disclose any personal liens that may attach to the property. Failure to disclose any pertinent information that may affect eligibility may be grounds for denial of assistance and application withdrawal. To identify any personal liens, a Judgment and Tax Lien Guarantee search of Borrowers and Preliminary Title Report search on the property shall be conducted after Housing Rehabilitation Loan Committee (HRLC) approval.

4.6.2 Outstanding collections must be paid prior to HRLC approval, unless the HRLC determines, on a case by case basis, that the circumstances that led to collection were outside of the applicant’s control, and the payment of the outstanding collection(s) will not impact the applicant’s ability to financially retain ownership.

4.6.3 Late payments due to extenuating circumstances will be considered as part of the approval process. Factors leading to late payments will be reviewed and considered on a case by case basis.

4.6.4 Borrower shall not have filed bankruptcy, or received a bankruptcy discharge, in the last three (3) years prior to date of application.

4.6.5 Homeowner Eligibility – the Housing Rehabilitation Loan Committee (HRLC) will consider applications on a case by case basis. The HRLC will have the discretion to consider any extenuating circumstances for a homeowner who may not meet the Homeowner Eligibility Guidelines and may decide to approve the application based on such extenuating circumstances.

4.6.5.1 Applicants with Debt to Income ratios outside the limits established within these policies may be considered for assistance if the Debt to Income ratio is within 10% of the current Homeowner Rehabilitation Program Policies & Procedures guidelines.

4.6.5.2 Applicants who have defaulted on their property taxes may be considered for assistance if a payment plan has been established with the Stanislaus County Treasurer/Tax Collector’s Department and applicant is current on those payments. #10..
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6 4.7 If at any time the Borrowers filed bankruptcy that resulted in a discharge of any debt owed to City of Modesto, or the former City of Modesto Redevelopment Agency, for housing rehabilitation or down payment assistance, the HRLC shall evaluate the circumstances of the bankruptcy in order to determine if further assistance may be provided without further risk to funding investment.

4.8 Borrowers shall not be a person, or the immediate family of any person, who is in a decisionmaking position relative to the Housing Rehabilitation Program.

4.9 Process:

4.9.1 Housing Finance Specialist determines general program eligibility, including income limits and lending loan-to-value ratios along with a process to determine all other funding opportunities have been explored (technical assistance);

4.9.2 Housing Rehabilitation Specialist determines properties needs via Housing Quality Standards (HQS) inspection (pre-1978 visual Lead Based Paint Inspection conducted);

4.9.3 Housing Rehabilitation Specialist scope of work and budget to Housing Rehabilitation Supervisor;

4.9.4 HRLC reviews for consideration and approval of the overall project proposal;

4.9.5 Housing Rehabilitation Specialist processes approved projects through the bid process;

4.9.6 Application inquiry through program completion within approximately 90-days, unless there are extenuating circumstances beyond staff control (e.g. – rain delays);

4.9.7 Quarterly program updates provided to HRLC.

5.0 MAXIMUM AMOUNT OF PROGRAM ASSISTANCE (24 CFR 570.208 (a)(3);(b), and 24 CFR 570.202):

5.1 Single Family Residence: An eligible Borrower may qualify for the full cost of rehabilitation/reconstruction work needed to address any Eligible Repairs outlined in ELIGIBLE REPAIRS Section, and/or comply with state and local codes and ordinances; however, the maximum assistance shall not exceed any maximum subsidy established by the funding source(s) utilized to fund the project.

5.1.1 Reconstruction shall only be authorized when the cost of rehabilitation will exceed 75 percent of the current estimated value of the property, as determined by the Housing Financial Specialist;

5.1.2 Loan amount is determined by the repairs/modifications that are required or eligible, as requested and approved by the owner, Community Development Manager or his/her designee.

5.1.3 Maximum amounts are as follows:

5.1.3.1 Grants up to $10,000 require HRLC acknowledgement in order for staff to proceed;

5.1.3.2 Loans up to $49,999 require HRLC approval in order for staff to proceed;

5.1.3.3 Loans of $50,000 or more require HRLC approval and subsequent City Council approval in order for staff to proceed.

5.1.4 Additional loans may be granted within applicants’ overall loan-to-value ratios;

5.1.5 Emergency repairs of up to $5,000 may be authorized by the Director of Community and Economic Development if it poses an “extreme health and safety related emergency (e.g. – plumbing or electrical hazards).

6.0 MAXIMUM AFTER REHABILITATION VALUE
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7 The after-rehabilitation value of a home assisted under this program shall not exceed 100% of the current median sales price of a single-family home listed for the City of Modesto. This information may be obtained by collecting comparable sales data from sources including but not limited to Zillow, Trulia, Data Quick, Realty Trac, Real Quest, Epraisal.com, or FHA 203(b) loan limits. If necessary, the after-rehabilitation value may be determined by ordering a professional appraisal. An After-Rehabilitation Value Limit Worksheet must be completed and certified by the housing rehabilitation specialist and placed in the project file.

7.0 MAXIMUM COMBINED LOAN TO VALUE RATIO:

7.1 For CDBG funded loans, the total indebtedness against the assisted property shall not exceed 100% of the estimated after-rehabilitation value of the property as determined by “Estimates of Value” conducted by program staff using a Comparable Sales Approach, or an appraisal by a licensed appraiser if required by funding source.

7.2 As part of application for assistance, Borrower shall disclose any personal liens that may attach to the property (failure to disclose any pertinent information that may affect eligibility may be grounds for denial of assistance and application withdrawal). To determine the total indebtedness assigned against the property, a title search of the property and Borrowers (for the purpose of verifying any personal liens that may attach to the property) shall be conducted after HRLC project approval.

7.3 An “Estimates of Value” using a Comparable Sales Approach shall be based on the sale prices of at least three (3) comparable properties, sold within the last twelve months and located within a one-mile radius if available or reasonable radius of the subject property. Any alternative methodology for determining estimated value must be approved by the HRLC.

7.4 In the case of a reconstruction, as allowed under Section MAXIUM AMOUNT OF PROGRAM ASSISTANCE Section, the HRLC may consider approval of projects that exceed the CLTV limit.

Provided all other criteria for assistance is met and the City of Modesto will be in first lien position.

8.0 RATES AND TERMS OF PROGRAM ASSISTANCE:

8.1 Eligible homeowners may receive a deferred payment loan evidenced by a Promissory Note and secured by a Deed of Trust, with no payback required for 20 years unless the borrower sells or transfers title or discontinues residence in the dwelling.

8.1.1 Term of Grant Agreement: The following grant agreement term will apply to those projects with a grant and loan combination, 10 years. During the Grant Agreement term, the homeowner must comply with all Grant Agreement requirements.

8.1.1.1 Grant assistance will be 20% of total project cost or $10,000 whichever is less. 10% of the total Grant amount will be forgiven each year the home is owned and continuously occupied by the borrower.

8.2 The homeowner will be able to choose one of the following interest terms prior to contract and loan signing:

8.2.1 Loans will be due at a 20-year maturity date.

8.2.1.1 0% interest for borrowers making consistent monthly payments,

8.2.1.1.1 If in the case monthly payments are not made timely late fees will be incurred per agreement specifications.

8.2.1.2 3% interest for borrowers not making monthly payments. #10..
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8 8.3 City of Modesto may accept voluntary payments on deferred loans. Loan payments will be credited to the principal first and then to interest. The borrower may repay the loan balance at any time with no pre-payment penalty. If it is determined by the City of Modesto that repayment of the loan at the maturity date causes a hardship to the homeowner, the City of Modesto may opt, with HRLC approval, the following:

8.3.1 Amend the Promissory Note and Deed of Trust to defer repayment of the amount due at maturity, that is the balance of the original principal plus the accrued interest, for up to an additional 20 years (at 0 percent additional interest). This may be offered one time; or,

8.3.2 Convert the debt to loan maturity; that is the balance of the original principal plus any accrued interest, to an amortized loan, repayable in 20 years at 0 percent additional interest.

8.4 In the event that a homeowner sells, transfers title, or discontinues residence in the rehabilitated property for any reason, the loan shall become due and payable.

8.5 Any other transfer of interest, due to homeowner death or other circumstances shall be subject to the requirements of the funding source(s) and shall be defined within the Promissory Note and/or Deed of Trust.

8.6 The HRLC may approve a request to subordinate a loan, in order for the owner to refinance the property. Refer to City of Modesto Subordination Policy for subordination approval criteria.

9.0 MANUFACTURED HOMES:

9.1 Assistance to manufactured homes on a non-permanent foundation will be provided as follows:

9.1.1 The total assistance provided to a manufactured home shall not exceed $25,000 (combined total of all grants, if multiples).

9.1.1.1 If additional Health and Safety repairs are discovered after the project commences that will exceed the $25,000- staff can bring a recommendation forward on a case-by-case basis to the Committee for an exception.

9.1.1.2 If approved, this funding would be considered a loan secured by a Loan Agreement. Funding would be amortized for a maximum of five years and bear zero percent interest.

9.1.2 Assistance to manufactured homes will be a one-time grant, with the exception of emergency health and safety repairs. This additional assistance will be determined on a case-by-case basis.

9.1.3 Replacement shall only be considered when the cost of rehabilitation will exceed 75 percent of the current estimated value of the property, as determined by the Housing Financial Specialist.

9.2 Assistance to manufactured homes will be reflected via the execution of a Grant Agreement.

9.3 Length of Grant Agreement: The grant agreement will be in effect for five (5) years from the date of execution; 20% of the total Grant amount will be forgiven each year the home is owned and continuously occupied by the borrower.

9.4 During the Grant Agreement term, the mobile homeowner must comply with all Grant Agreement requirements.

10.0 BID SOLICITATION:
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9 10.1 A detailed scope of work and project independent cost estimate developed by the Housing Rehabilitation Specialist (HRS) based on eligible repairs as listed in ELIGIBLE REPAIRS Section

2.0 shall be prepared prior to consideration for HRLC and bid submittal. The Scope of Work shall be approved by the Housing Rehabilitation Supervisor and Borrower.

10.1.1 The independent cost estimate shall be established utilizing local market data and published construction cost guidelines.

10.1.2 The Housing Rehabilitation Supervisor will review the independent cost estimate prepared by the HRS to ensure the cost estimate is reasonable based on local market data. See COST REASONABLENESS Section for further details on Cost Reasonableness.

10.2 To comply with HUD requirements, a minimum of three bids by California Licensed Contractors shall be obtained prior to bid approval consideration. The City of Modesto will make every attempt to obtain the highest number of bids possible for every project.

10.3 Bids in excess of 15% of the HRLC approved amount must be brought back to HRLC for approval consideration.

10.3.1 If determined appropriate by Housing Rehabilitation Specialist, bids solicitations may be requested from multiple contractors with different disciplines (i.e. general, electrical, roofing, and plumbing, etc.). This approach may be considered as a cost savings measure, if approved by the Housing Rehabilitation Supervisor.

11.0 PROCUREMENT

11.1 Procurement projects under this program will occur after Housing Rehabilitation Loan Committee project approval. The HRLC will approve each project based on Housing Rehabilitation Cost Estimates. Upon project approval, project procurement will occur in alignment with the 15% cost reasonableness rule identified in COST REASONABLENESS Section.

11.2 Projects procured under the Homeowner Rehabilitation Program will be conducted in a manner that promotes full and open competition and avoid arbitrary action in the procurement process.

The following procurement process will be followed by the City:

11.2.1 Procurement of contractors or other services related to the development of housing through either new construction or rehabilitation must be made on the basis of soliciting competitive bids. Advertisements for bids must include the following language: “This is a HUD funded project; Section 3 businesses and/or business that employ Section 3 residents are encouraged to respond.”

11.2.2 The projects will be publicly advertised through the City’s PlanetBid system, when timing permits. All contractors registered on the City’s PlanetBid system will receive notification of project availability.

11.2.2.1 The Community Development Division will notify prospective bidders, when feasible, to encourage as wide a response as possible.

11.2.3 The bid solicitation will include a scope of work, project address, date of mandatory walkthrough, and date bids are due.
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10 11.2.4 Contracts will be awarded to responsible contractors who possess the ability to perform successfully under the terms and conditions of the proposed procurement. Nonresponsible contractors will not be allowed to bid on City projects under this program for the duration of the program year.

11.2.5 Rehabilitation projects below $50,000:

11.2.5.1 Contracts under $50,000 are considered a “Small Purchase” under the City’s purchasing policies and HUD’s procurement guidelines.

11.2.5.2 The policy aligns with OMB Guidance Section 200.319 and 200.320

11.2.5.3 Projects under $50,000 shall be purchased with three quotes, with public advertising through PlanetBid, if time permitted.

11.2.5.4 The mandatory walkthrough will take place eight (8) business days from the date of bid posting. Contractors will have the opportunity to view project items to be repaired and ask any questions for clarification of bid specifications.

11.2.5.5 Depending on the nature of questions addressed and clarification provided at the mandatory walkthrough, the Housing Rehab Specialist (HRS) may need to amend the project’s Scope of Work. If this occurs, the HRS will issue an amended Scope of Work and release to all contractors who attended the mandatory walkthrough.

11.2.5.6 Bid proposals from contractors will be due 8 calendar days from the mandatory walkthrough.

11.2.5.7 All bids from contractors must be sent via email to [email protected], or dropped off in person to 1010 10th Street, Suite 3100, Modesto CA 95354

11.2.5.8 All bids will be reviewed by a program supervisor (e.g. Housing Rehabilitation Supervisor or Senior Community Development Program Specialist) and recorded by a program specialist (e.g. Housing Financial Specialist or Housing Rehab Specialist).

11.2.5.9 The HRS will summarize the lowest responsible bid results on the “Work Specification” document

11.2.5.10 If less than three written quotes are obtained, an exception may be granted with justification documented and approved by the Purchasing Manager.

11.2.6 The applicant will be required to accept the lowest responsible bid with certain exceptions. Rejection of the low bidder without cause will result in cancellation of the project.

11.2.6.1 If on the basis of references, or the inability to start work within a reasonable timeframe, the property owner request to reject the low bidder, he/she must do so in writing. Upon confirmation of the reason for #10..
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11 rejection by City staff, the low bidder will be rejected, and the next lowest bidder will be considered.

11.2.7 Upon selection of lowest responsible bidder, the HRS will prepare the respective documents for contractor, homeowner signatures, and City signatures (e.g. Housing Rehabilitation Contract and Grant/Loan Documents).

11.2.8 Once contracts are executed, City Staff will record loan documents with the Stanislaus County Recorder’s Office.

11.2.9 Upon receipt of recorded documents, the Housing Rehabilitation Supervisor will:

11.2.9.1 Issue a Notice to Proceed to the contractor. The contractor will have seven (5) calendar days to begin work from the date of issuance.

11.2.9.2 Route contracts for encumbrance the City’s financial system.

11.3 Rehabilitation Projects over $50,000:

11.3.1 In alignment with the City’s Procurement policy, all projects in excess of $50,000 will require HRLC approval and subsequent City Council approval, and must follow the City’s Formal Bids/Proposals policy process as follows

11.3.1.1 Projects over $50,000 shall be purchased through the sealed bid process with the requirement of obtaining three quotes, with public advertising through PlanetBid

11.3.1.2 Procurement of contractors or other services related to the development of housing through either new construction or rehabilitation must be made on the basis of soliciting competitive sealed bids. Advertisements for bid must include the following language: “This is a HUD funded project; Section 3 businesses and/or business that employ Section 3 residents are encouraged to respond.”

11.3.1.3 The projects will be publicly advertised through the City’s PlanetBid system. All contractors registered on the City’s PlanetBid system will receive notification of project availability.

11.3.1.3.1 The Community Development Division will notify prospective bidders, when feasible, to encourage as wide a response as possible.

11.3.1.3.2 11.3.1.4 The mandatory walkthrough will take place eight (8) business days from the date of bid posting. Contractors will have the opportunity to view project items to be repaired and ask any questions for clarification of bid specifications.

11.3.1.5 Depending on the nature of questions addressed and clarification provided at the mandatory walkthrough, the Housing Rehab Specialist (HRS) may need to amend the project’s Scope of Work. If this occurs, the HRS will issue an amended Scope of Work and release to all contractors who attended the mandatory walkthrough.

11.3.1.6 Sealed bids from contractors will be due sixteen (16) calendar days from the mandatory walkthrough at the following location: 1010 10th Street, Suite 3100, Modesto CA 95354
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12 11.3.1.7 The bid opening will be held in a public forum at a City location announced in the Bid solicitation.

11.3.1.8 All bids will be opened by a program supervisor (e.g. Housing Rehabilitation Supervisor or Senior Community Development Program Specialist) and recorded by a program specialist (e.g. Housing Financial Specialist or Housing Rehab Specialist).

11.3.1.9 The HRS will summarize the lowest responsible bid results on the “Work Specification” document provided to the homeowner.

11.3.2 The applicant will be required to accept the lowest responsible bid with certain exceptions. Rejection of the low bidder without cause will result in cancellation of the project.

11.3.2.1 If on the basis of references, or the inability to start work within a reasonable timeframe, the property owner request to reject the low bidder, he/she must do so in writing. Upon confirmation of the reason for rejection by City staff, the low bidder will be rejected, and the next lowest bidder will be considered.

11.3.3 Upon selection of lowest responsible bidder, the HRS will prepare the respective documents for contractor, homeowner signatures, and City signatures (e.g. Housing Rehabilitation Contract and Grant/Loan Documents).

11.3.4 Once contracts are executed, City Staff will record loan documents with the Stanislaus County Recorder’s Office.

11.3.5 Upon receipt of recorded documents, the HFS will:

11.3.5.1 Issue a Notice to Proceed to the contractor. The contractor will have seven (5) calendar days to begin work from the date of issuance.

11.3.5.2 Route contracts for encumbrance the City’s financial system.

12.0 EMERGENCY REPAIRS PROCEDURE

12.1.1 Per MAXIMUM AMOUNT OF PROGRAM ASSISTANCE Section, emergency repairs of up to $5,000 may be authorized by the Director of Community and Economic Development if it poses an “extreme health and safety related emergency in line with Modesto Municipal Code 8-3.301.

12.1.2 From time to time, City of Modesto residents will contact the city with repair requests that constitute an immediate threat to their health and safety. Such cases will be treated as Emergency repairs; e.g. broken sewer line, broken water line, leaking roof (during rainy season), broken HVAC system (during summer/winter), and unsafe electrical and or plumbing conditions.

12.1.3 These cases will be given priority over other non-emergency projects.

12.1.4 Upon homeowner contact with the City’s Housing Division, the HFS will conduct a prescreening of the prospect applicant and collect pertinent emergency case facts. #10..
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13 12.1.5 After pre-screening, the HFS will collect the application and eligibility documentation from the homeowner; the HFS will inform the Housing Rehab Specialist immediately after collecting the pertinent facts.

12.1.6 The HFS shall determine program eligibility within three (3) business days of collecting a completed application packet.

12.1.7 Upon determining eligibility, the Housing Rehab Specialist shall communicate with the homeowner and will schedule and conduct a property inspection and determine/prepare a detailed scope of work and independent cost estimate within three (3) business days of eligibility determination, depending on the severity of the emergency.

12.1.8 Upon completion of the Emergency Repair Scope of Work, the HRS will submit an “Emergency Repair Request” packet which includes the Scope of Work and related case facts to the Housing Rehabilitation Supervisor for review and approval to proceed with procurement for the Emergency Project.

12.1.9 Upon approval by the Housing Rehabilitation Supervisor, HRS shall obtain a minimum of three (3) informal bids and shall be awarded to the lowest responsible bidder.

12.1.9.1 Bid documentation will be kept in the file record.

12.1.10 Upon contractor selection, the HRS shall prepare the Advanced Payment Agreement and all required loan documentation for homeowner, contractor, and Director of Community and Economic Development execution within three (3) business days of contractor selection. The Notice to Proceed will be issued upon contract execution by all parties. The rehabilitation contract shall specify the number of days for project completion.

12.1.10.1 A homeowner cannot enter into an Advanced Payment Agreement, unless the homeowner meets the homeowner eligibility guidelines as described in Section 4.0 – Homeowner Eligibility.

12.1.11 Routine Progress inspections shall be conducted as specified in PROGRESS INSPECTIONS Section; frequency of progress inspections may be increased as needed for emergency repairs.

12.1.12 All emergency rehabilitation projects will be presented to the Housing Rehabilitation Loan Committee (HRLC) at the next available HRLC meeting for formal approval.

13.0 CONTRACTOR ELIGIBILITY

13.1 All prospective Contractors must submit or must have submitted, within the past 3 years, a Contractor Application to the City which will allow the City to collect all pertinent information to determine contractor eligibility (i.e. DUNS number, Tax ID, etc.).

13.1.1 Contractor failure to submit a Contractor Application may result in a “non-responsive” bid and disqualify the contractor from consideration.

13.2 Upon Receipt of bids from prospective contractors, the Housing Rehabilitation Specialist shall determine contractor eligibility by conducting the following:

13.2.1 Verify that the City has a Contractor Application on file for each prospective contractor; #10..
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14 13.2.2 If the City does not have a Contractor Application on file for the prospective contractor, the Housing Financial Specialist will make arrangements to ensure the prospective Contractor completes and submits a Contractor Application in a timely manner.

13.3 Upon confirmation that the City has a complete Contractor Application on file, the Housing Rehabilitation Specialist shall conduct the following searches for each prospective contractor:

13.3.1 Debarred/Suspended Search

13.3.1.1 It is the City of Modesto’s policy not to conduct business with contractors who are excluded/debarred from conducting business with any federal agency.

13.3.1.2 The Housing Rehabilitation Specialist shall ensure that the prospective Contractor is not excluded/debarred from conducting business with any federal agency by conducting a search on the federal System for Award Management website at www.sam.gov.

13.3.1.3 To comply with this requirement, Contractors must provide their UEI number on the Contractor Application.

13.3.1.4 Prospective contractors who do not have a UEI number at time of bid submittal, must request one by accessing the following website:
http://fedgov.dnb.com/webform/displayHomePage.do

13.3.1.5 Upon conducting the Sam.gov search, the Housing Rehabilitation Specialist shall print the search results and place a copy in the project file.

13.3.2 California State License Board (CSLB) Search:

13.3.2.1 It is the City of Modesto’s policy not to conduct business with Contractors who do not hold an active CSLB license.

13.3.2.2 The Housing Rehabilitation Specialist shall verify a prospective Contractor holds an active CSLB license by conducting a search on the CSLB website at
https://www2.cslb.ca.gov/OnlineServices/CheckLicenseII/checklicense.as px.

13.3.2.3 The CSLB license must be appropriate for the type of rehabilitation work to be conducted (i.e. General Contractor, Electrical, Carpenter, etc.)

13.3.2.4 Upon conducting the CSLB search, the Housing Financial Specialist shall print the search results and place a copy in the project file.

13.3.3 Better Business Bureau (BBB) Search

13.3.3.1 It is the City of Modesto’s policy not to conduct business with contractors who have negative letter rating score (D+ through F) with the BBB.

13.3.3.2 The Housing Financial Specialist shall verify a prospective Contractor has a positive letter rating score (A+ through C-) with the BBB.

13.3.3.3 Upon conducting the BBB search, the Housing Financial Specialist shall print the search results and place a copy in the project file.

14.0 COST REASONABLENESS AND SCOPE OF WORK:

14.1 As a CDBG recipient, the City of Modesto is held accountable for all funds, property and assets of the CDBG program. The City of Modesto must maintain a financial accounting system for grants that meets the CDBG regulations, 24 CFR Part 84 and OMB Circulars A-87 and A-133.

This includes requirements pertaining to financial management systems and records, allowable costs and audits.
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15 14.1.1 The City of Modesto is required to ensure that CDBG funds are spent only on reasonable and necessary costs associated with approved grant activities and must have a procedure for determining the reasonableness, allowability and allocability of costs.

14.1.1.1 For all assisted projects, the procedure for determining reasonableness will include the preparation of a detailed scope of work and an independent cost estimate.

14.1.1.1.1 A detailed Scope of Work will identify project milestones, reports, deliverables, and end products that are expected to be provided by the performing party. The Scope of Work will also include a timeline for all deliverables.

14.1.1.1.2 An independent cost estimate will be established utilizing local market data and published cost guidelines.

14.1.1.1.3 The project manager and supervisor will work with the appropriate parties to develop the independent cost estimate to ensure the cost estimate is reasonable based on local market data.

14.2 To comply with cost reasonableness requirements, the City of Modesto will review all requests for payments to ensure that costs are allowable under regulations, approved in the CDBG grant application, allocated to the correct program activity and are reasonable.

14.3 A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.

14.3.1 In determining reasonableness of a given cost, consideration shall be given to whether the cost is of a type generally recognized as ordinary and necessary to address the housing condition being considered for repair.

14.3.2 A cost analysis of the scope of work items shall be made and documented in the project file. Cost analysis is the review and evaluation of each element of cost to determine reasonableness, allocability, and allowability.

14.3.3 Cost analysis may be accomplished in various ways, including the comparison of price quotations submitted, market prices and similar indicia, together with discounts.

14.3.4 All change orders will be subject to a cost reasonableness evaluation by the project manager and approval by the HUD Supervisor.

14.4 Cost reasonableness shall be determined by comparing the bids received with the cost estimate prepared by the Housing Rehabilitation Specialist.

14.5 Bids received must be not less than or greater than 15% of the Housing Rehabilitation Specialist’s cost estimate.

14.6 An explanation must be provided to the HRLC for any bid selected that exceeds 15% of the estimate.

14.7 Comparable estimates may also be considered, when optimal, for utilization of subcontractors instead of general contractors for work to be performed.

14.8 The Housing Rehabilitation Specialist will work to manage rehabilitation costs through the most efficient and economically feasible project contracting model.

15.0 ENVIRONMENTAL REVIEW:
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16 15.1 All assisted properties shall be subject to environmental review as required by the funding source(s). No funds shall be committed and/or released until all environmental reviews have been conducted to the satisfaction of City of Modesto. Refer to HUD Policies and Procedures Manual, Section 14 – Environmental Review Plan – for environmental review process.

16.0 HOUSING REHABILITATION LOAN COMMITTEE (HRLC) APPROVAL:

16.1 All Housing Rehabilitation Program activities shall be subject to majority vote approval by the City of Modesto Housing Rehabilitation Loan Committee (HRLC). The HRLC shall be comprised of the following voting members (all terms are four (4) years in length):

16.1.1 One Councilmember (appointed by the Mayor)

16.1.2 One financial institution representative.

16.1.3 One service provider representative.

16.1.4 One general contractor (active or retired).

16.1.5 One Housing Authority of the County of Stanislaus (HACS) representative.

16.1.6 One Citizen-at-Large.

16.1.7 One Citizen’s Housing and Community Development Committee Representative.

16.2 The City of Modesto Community Development Manager may appoint a substitute voting member using alternative criteria if existing circumstances do not allow for a Committee make-up as specified above and time constraints warrant a substitution.

16.3 All actions of the HRLC shall be reflected in meeting minutes to be prepared by staff of the City of Modesto Community Development Division.

17.0 WRITTEN AGREEMENTS:

17.1 A written agreement must be entered into between the City and all homeowners receiving assistance under this program. The written agreement forms the basis for the contractual obligation between the parties to fund and implement the activity or program. The written agreement will identify responsibilities attributable to each party, and shall outline in exact measure the scope of services to be provided, methods of accountability, and a schedule for payment.

18.0 PROJECT CONTINGENCIES

18.1 All rehabilitation activities approved by the HRLC shall be contingent on meeting the following requirements:

18.1.1 Execution of a construction contract and Notice to Proceed;

18.1.2 Construction Schedule mutually agreed to by the Homeowner, Contractor, and Housing Rehabilitation Specialist;

18.1.3 On-site monitoring and inspections by the Housing Rehabilitation Specialist to verify scope of work, materials, and construction schedule conform to contract requirements;

18.1.4 Written final inspection and approval documentation by the Housing Rehabilitation Specialist;

18.1.5 Recorded Notice of Completion, signed by the homeowner, following final inspection and approval by the Housing Rehabilitation Specialist; .
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17 18.2 Written change orders, subject to the criteria listed below, shall be required for any changes in the work write-up, such as eliminating an item completely, eliminating one item and substituting another, or adding items:

18.2.1 Contractor must notify Housing Rehabilitation Specialist and homeowner if Contractor deems a change order for work is necessary; Contractor’s Change Order request shall be submitted in writing and list the change order items with dollar value for each change;

18.2.2 Housing Rehabilitation Specialist shall review and determine if Change Order requests and costs are reasonable and work with Contractor to modify Change Order items if necessary;

18.2.3 Upon reviewing and approving Change Order requests, Housing Rehabilitation Specialist must prepare a City of Modesto Change Order Request Approval form and submit to Housing Rehabilitation Supervisor for final approval signature;

18.2.4 Upon final approval by the Housing Rehabilitation Supervisor, Change Order shall be signed by Homeowner and Contractor;

18.2.5 The combined total of all approved Change Orders shall not exceed the approved financing and contingences;

18.2.6 Homeowners cannot request (non-health and safety) change orders in excess of the approved financing (not including contingency), unless HRLC approves the use of additional funds (Attachment A).

18.3 The homeowner shall maintain Homeowner’s insurance on the property for the duration of the program loan(s). This insurance must be adequate to cover all encumbrances on the property.

The insurer must identify City of Modesto as Additional Insured for the amount of the program loans. A copy of the homeowner’s insurance policy shall be provided to City of Modesto annually.

18.4 Homes located within a 100-year flood zone will be considered on a case-by-case basis. If approved for assistance, the Borrower is required to maintain flood insurance during the term of the assistance and in an amount adequate to secure the program loan and all other encumbrances. The insurer must identify City of Modesto as Loss Payee for the amount of the program loans. A copy of the homeowner’s flood insurance policy shall be provided to City of Modesto annually.

19.0 CONTRACTOR LIST

19.1 The Housing Rehabilitation Specialist shall maintain a Contractor List that includes contractors that have participated in the Homeowner Rehabilitation Program. These contractors must have been vetted through the City’s Contractor Eligibility Process as outlined in CONTRACOR ELIGIBILITY SECTION. The list shall contain the names, addresses, license numbers, CSLB license expiration dates, UEI Number, insurance information, and business license numbers, expiration dates, insurance information, and business license information for contractors who have been formally approved for participation in the housing rehabilitation programs.

19.1.1 Information on the Contractors List will be updated on an annual basis, or more frequently, if deemed necessary.

19.1.2 The Contractors List will be available to the public, upon request. If the public requests a copy of the Contractors List, a disclaimer must appear on the top of the list as referenced in the desk manual.

19.2 Any person, partnership, or corporation with a current California General Contractor’s License is eligible to have bids considered on a housing rehabilitation project. #10..
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18 19.2.1 In accordance with 24 CFR 85.36(c)(4) the City shall encourage qualified contractor participation to ensure that enough bids are received for a successful and adequate solicitation. Staff shall engage in continuous contractor outreach and engagement in order to provide for the maximum open and free competition that will not preclude other potential bidders from qualifying during the bid solicitation period.

20.0 CONTRACTOR DISQUALIFICATION/REMOVAL FROM CONTRACTOR LIST

20.1 Contractor failure to comply with program requirements and/or local, state, and federal laws may be grounds for disqualification from participation in this program.

20.1.1.1 Breach of the terms of a program contract by a willful or material failure to perform in accordance with the terms thereof.

20.1.1.2 Substandard performance on any public contract, including, without limitation:

20.1.1.2.1 A material breach thereof;

20.1.1.2.1.1 A failure to complete work required thereunder in a timely manner or within the contract price when such failure is attributable to the negligent or wrongful actions or inactions of such contractor or such contractor’s subcontractors or suppliers;

20.1.1.2.2 Substandard quality of work; or

20.1.1.2.2.1 Any negligent or wrongful failure to cooperate with the contracting agency during performance of the public contract.

20.1.2 Any other grounds that the Community Development Manager determines would impair the ability of the Contractor to perform a public contract or any part thereof.

20.1.3 In any case, the Community Development Manager may have the discretion to consider the facts and circumstances of a violation, and may impose a different disqualification period and/or condition(s) to satisfy the cure of the violation and allow participation in future bid processes.

20.2 Written Complaint Procedure:

20.2.1 In the case a written complaint is submitted to staff regarding a contractor who is on the contractor list; the contractor will be notified in writing of the complaint.

20.2.2 Housing Rehabilitation Supervisor and staff will make reasonable efforts to resolve the complaint;

20.2.3 Written complaint will be kept on file for the duration of the time the contractor remains on the contractor list and will be available as part of public record.

20.3 Scope of Disqualification: Disqualification of a contractor under this Section constitutes disqualification of that Contractor from submitting bids or proposals to the City for the purpose of entering into or in any manner participating in any City contract, or any part thereof, and shall apply to all individuals, divisions, subsidiaries, affiliates and parent corporations of that Contractor unless the decision to qualify is limited by its terms to one or more specifically identified individuals, divisions, subsidiaries, affiliates, parents or other organizational elements.

20.4 Disqualification Procedures: The following procedures will be taken by the City when disqualifying a Contractor from program participation:

20.4.1 City will send a written notice to the Contractor informing him/her that a disqualification is being considered;

20.4.2 The written notice will include the grounds for the proposed disqualification including the specific conduct or action(s) upon which the proposed disqualification is based; #10..
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19 20.4.3 The written notice will include the intended period of disqualification.

20.5 Hearing Request:

20.5.1 A Hearing Officer will be appointed by the Director of Community & Economic Development

20.5.2 Within fifteen (15) calendar days after mailing of the notice of the proposed disqualification, the Contractor may submit a written request for a hearing on the proposed disqualification.

20.5.2.1 Such written request shall specify the name and address of the person to which all subsequent notices and communications should be mailed.

20.5.2.2 Failure of the Contractor to submit a written request for a hearing within the time provided by this subsection, or failure of Contractor to appear at the requested hearing, shall be deemed to be a waiver by Contractor of Contractor’s right to request a hearing on the proposed disqualification and the Hearing Officer’s decision shall be final.

20.5.3 The hearing will be held within thirty 30 days of the request and the Hearing Officer’s decision shall be final.

21.0 PROGRESS INSPECTIONS

21.1 The Housing Rehabilitation Specialist shall conduct routine progress inspections on all housing rehabilitation projects to verify the Contractor is adhering to the agreed upon Contract Schedule.

21.1.1 Routine progress inspections shall mean onsite inspections once weekly, unless project timelines call for more frequent inspections.

21.2 The Housing Rehabilitation Specialist shall track each progress inspection by completing a Progress Inspection Report, documenting the results and date of the inspection, and place the completed Progress Inspection Report in the project file.

21.3 If applicable, the Housing Rehabilitation Specialist shall include the reasons for any project delays within the Progress Inspection Report and describe a revised project schedule agreed upon by the Contractor, Homeowner, and Housing Rehabilitation Specialist.

21.4 Revised project schedules shall be signed by the Contractor, Homeowner and Housing Rehabilitation Specialist.

21.5 Further unjustified project delays by the Contractor resulting in non-compliance with the agreed upon project schedule shall result in a credit to the Homeowner until the project has been substantially completed or terminated as defined within the section entitled “Time is of the Essence in the Performance of this Agreement” in the Rehabilitation Program Contract.

21.6 Contractor progress payment requests shall reflect the percentage of the project completed through the time period for which payment is requested. The project completion percentage may be indicated on the internal payment request form.

22.0 CONTRACTOR COMPENSATION

22.1 Contractor progress payments shall be subject to Housing Rehabilitation Specialist verification, acknowledgement and certification that the work being invoiced for is reflective of the work verified through the Housing Rehabilitation Specialist’s progress inspection(s) and through the time period indicated on the payment request.
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20 22.1.1 All contractor progress payments must be accompanied by the “Invoice Checklist” including all required items listed on the invoice checklist for an invoice to be processed by the City’s Finance Department.

22.1.2 Progress payment to contractors and reimbursement from HUD will occur only after the Housing Rehab Specialist has verified that the work for which reimbursement is being issued, has been completed.

22.1.2.1 Verification of work completion will take place by conducting onsite progress inspections and including an inspection report reflecting a “pass”.

22.2 Contractor payment requests will only be processed if signed by the Contractor, Homeowner, Housing Rehabilitation Specialist, and Housing Rehabilitation Specialist Supervisor. Invoices must be detailed enough to determine payment eligibility, along with accompanying documentation. All efforts will be made to reimburse qualified invoices within a 30-day time frame.

22.3 If the Homeowner is not satisfied with the completed work, or the Contractor has not completed the work in accordance with the Rehabilitation Program Contract, Community Development Division staff will meet with the Homeowner and Contractor to resolve the dispute.

22.4 If such informal resolution is unsuccessful, the Homeowner and the Contractor must follow the arbitration steps and tribunal procedures as outlined in the Rehabilitation Program Contract.

23.0 MONITORING

23.1 The Housing Rehabilitation Staff will mail out annual self-re-certification forms throughout the duration of the affordability term to verify the units remain owner occupied.

23.1.1 Participants will be sent two requests to return re-certification documentation prior to triggering repayment of grant/loan;

23.1.1.1 A pay-off demand will be sent out for any non-compliance.

24.0 LEAD BASED PAINT OPERATING PROCEDURES FOR UNITS BUILT PRIOR TO 1978

24.1 All program applicants shall receive notification of Lead-Based Painting hazards as follows:

24.1.1 The City will provide a Lead Hazard Information Pamphlet “Protect Your Family from Lead in Your Home” to all program applicants.

24.2 Homeowner Rehabilitation Federal Assistance Up to $5,000:

24.2.1 Lead Based Paint Presumption: Paint testing will not be conducted for housing rehabilitation projects not exceeding $5,000. The City will presume the presence of lead-based paint for all housing projects assisted with an amount not exceeding $5,000. If the rehabilitation project will disturb painted surfaces all lead based paint mitigation activities, other than the actual testing, will be implemented as prescribed by HUD.

24.2.2 If the housing unit is built prior to 1978, the homeowner will be provided a “Notice that Lead-Based Paint or Lead Based Paint Hazards Are Presumed to be Present” to occupants within 5 business days of making such presumption. #10..
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21 24.2.3 Visual Inspection: A visual inspection shall be made by the Rehabilitation Specialist or other staff assigned to make the inspection, to determine if the project will disturb any painted areas. If the project will not disturb any painted areas, the case file shall be so documented and the property owner or tenant advised in writing. No additional compliance steps with lead-based paint regulations are required.

24.2.4 Repair Work: If the project will disturb paint, then the City will require the rehabilitation contractor to be certified as a lead-based paint abatement supervisor or as a certified lead safe worker; or the rehabilitation contractor will secure a certified lead base paint abatement supervisor to monitor safe work practices in those areas where painted surfaces will be disturbed by the rehabilitation work. Safety precautions for occupant protection ((§35.1345), work site preparation and cleanup activities and prohibited methods of removal (§35.140) of lead base paint materials must be followed.

24.2.5 De Minimis Levels: Safe work practices are not required for projects which are determined to disturb surfaces below de minimis levels (§35.1350). The case file shall be documented and a Notice of Completion and Notice of Clearance is not required.

24.2.6 Notice of Completion and Notice of Clearance: A clearance examination of the work site (the area in which the rehabilitation construction was performed) is the responsibility of the rehabilitation contractor and must be performed by a certified lead-based paint inspector/assessor. Once work is completed, the City will provide the owner a report entitled “Summary Notice of Completion Lead Base Paint Hazard Reduction Activity” within fifteen (15) days of the completion date (the date on which clearance is achieved). A copy shall be placed in the project file as documentation.

24.3 Homeowner Rehabilitation Federal Assistance $5,001-$25,000

24.3.1 Information Pamphlet: The City shall provide the pamphlet “Protect Your Family from Lead in Your Home” to the applicant.

24.3.2 De Minimis Levels: Safe work practices are not required for projects which are determined to disturb surfaces below de minimis levels (§35.1350). The case file shall be documented and a Notice of Completion and Notice of Clearance is not required.

24.3.3 Paint Testing or Presumption: For projects of this funding level ($5,001-$25,000), presumption of the presence of lead base paint shall be made.

24.3.4 Noticing: The City shall provide the occupants with a “Summary Notice of Lead Based Paint Inspection” after such inspection is made by a certified lead base paint inspector/assessor in accordance with §35.1320(a).

24.3.5 Risk Assessment: The City shall order test samples of those painted surfaces to be disturbed by the rehabilitation construction or, upon visual inspection by the rehabilitation specialist, on any painted surfaces that are deteriorated. If lead is found in the test samples, a risk assessment shall be ordered by the City and conducted by a certified lead inspector/assessor in accordance with §35.1320(b) before #10..
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22 rehabilitation construction begins. The lead base paint inspector/assessor will provide a copy of the results to the City who will notify the owners of the property with the “Summary Notice of Lead-Based Risk Assessment.”

24.3.6 Interim Controls: If the risk assessment indicates the presence of lead base paint then lead hazard mitigation activities, including paint standards, interim controls and paint stabilization must be performed on all identified lead paint hazards in accordance with §35.1330. Safety precautions for occupant protection (§35.1345), work site preparation and cleanup activities and prohibited methods of removal (§35.140) of lead base paint materials must be followed.

24.3.6.1 A person performing paint standards, interim controls or stabilization must be trained in accordance with 29 CFR 1926.59 and be a certified lead base paint safe worker or certified lead base paint abatement supervisor.

24.3.7 Relocation: As stated in section §35.1345, temporary relocation is required unless: (1) the work will not disturb lead based paint or lead based paint hazards; (2) only exterior work is being conducted and openings to the interior are closed during the work and lead-hazard-free entry to the dwelling is provided; (3) the interior work will be completed in 8 hours, the work sites are contained to prevent dust release into other areas, and no other health or safety hazards are created; or (4) interior work will be completed in 5 consecutive days, work sites are contained, no other health or safety hazards are created, work sites and areas 10 feet from the containment are cleaned at the end of each work day, and occupants have safe access to sleeping, kitchen and bathroom facilities.

24.3.7.1 Safe access to sleeping, kitchen and bathroom facilities can be provided in another convenient location outside of the work site, thereby avoiding unnecessary relocation of residents.

24.3.8 Clearance: Clearance shall be the responsibility of the rehabilitation contractor who will order the clearance inspection from a certified lead base paint inspector/assessor and in accordance with §35.1340(b).

24.3.9 Notice of Completion and Notice of Clearance: Once work is completed and after a clearance examination of the work site is performed by a certified lead paint inspector/assessor, a copy shall be placed in the project file as documentation. The City will provide a “Summary Notice of Completion of Lead Based Paint Hazard Reduction Activity” to the owner within 5 business days from project completion date.

The lead base paint inspector/assessor will provide a “Lead Hazard Evaluation Report” (Form DHS 8552) to the City, the owner and to the Department of Health Services.

24.4 Homeowner Rehabilitation Federal Assistance greater than $25,000 (Identify and Eliminate lead hazards)

24.4.1 Information Pamphlet: The City shall provide the pamphlet “Protect Your Family From Lead In Your Home” to the applicant.

24.4.2 If the amount of assistance is more than $25,000, the following is required:

24.4.2.1 Paint testing as outlined in Paint testing or Presumption sub-section above;

24.4.2.2 Abatement of all lead-based paint hazards identified or produced;

24.4.2.3 Use of interim controls on exterior surfaces not disrupted by rehabilitation; and all applicable lead-based paint notices.
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23 24.4.3 A certified Inspector/Assessor shall perform all risk assessments, and clearances. A trained supervisor may oversee interim controls; however, a certified supervisor and workers will perform all abatement.

25.0 LOAN MODIFICATIONS

25.1 Loan Modification requests may be considered by the City of Modesto only under the following circumstances:

25.1.1 For projects claiming contractor work to be substandard, project completion must have been within the past 5 years;

25.1.2 If making payments on City Loan and Borrower is facing a financial hardship, modification may be considered to prevent borrower from defaulting on primary or City loan which may trigger foreclosure

25.2 The following information will be collected from the borrower to consider a modification:

25.2.1 Housing Quality Standards Inspection

25.2.2 Financial hardship documentation, if applicable

25.2.3 Borrower must meet current program requirements

25.2.3.1 Income eligibility guidelines (income must not exceed 80% of the Area Median Income);

25.2.3.2 Front and Back End debt to income requirements

25.2.4 Record of any payments made toward the loan

25.2.5 Letter from the borrower which outlines concerns and reason for modification

25.3 If Staff determines the borrower meets the requirements for a loan modification, the request will be presented to the Homeowner Rehabilitation Loan Committee for consideration.
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

December 13, 2022
Date: November 14, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jaylen French, Community and Economic Development Director SUBJECT: Agreement with Catholic Charities Diocese of Stockton for Environmental Justice Outreach Services
CONTACT: Jessica Hill, Community Development Manager
[email protected], 209-577-5321
DESCRIPTION:

Consider approving an Agreement with Catholic Charities Diocese of Stockton to provide Environmental Justice Outreach component of the Affordable Housing and Sustainable Communities Grant application in an amount not to exceed $175,000 for the next three years for Archway Commons Phase II. (Funding source: Affordable Housing and Sustainable Communities)
STRATEGIC PLAN ELEMENT:

The recommended actions support the City’s 2020-2025 Strategic Plan Goal I, Promoting Trust and Engagement.

BACKGROUND:

On November 1, 2019, the State of California issued a Notice of Funding Availability (NOFA) for $550 million under the Affordable Housing and Sustainable Communities (AHSC) program. The City of Modesto and EAH submitted a joint grant application for funding in February 2020 for the development of Phase II of Archway Commons Housing Development located at 1101 Carver Road.

On July 2020, the City received an AHSC award letter notifying the City the project was successfully awarded a grant in the amount of $24,766,157 for housing and transportation related costs. Of the total grant award, $14,276,157 will be directly used for construction of Archway Commons Phase II, and $10,000,000 will be used for transportation related infrastructure improvements along 9th Street. The improvements include transit realignment of the Modesto Area Express (MAX) route connecting Archway Commons to the Modesto Transit Center located to the south as well as to Modesto Junior College (MJC) and retail centers in the area; purchase of an Altamont Corridor Express (ACE) rail car, and up to three miles of new bike and walking path extending 9th Street from Carpenter Road to L Street. #11..
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City Council, December 13, 2022
Agreement with Catholic Charities Diocese of Stockton for Environmental Justice Outreach Services Page 2 of 4
The grant also included project components that were proposed in the application and approved by the department. The projects were to be scored based on the reduction of greenhouse gas emissions. The total program costs allocated for this component totaled $490,000. One of the programs was the support of an outreach program conducted by Catholic Charities in partnership with the City of Modesto, Stanislaus Council of Governments (StanCOG) and EAH, to support outreach to the impacted communities of the Archway Commons.

On September 18, 2020, City Council, by Resolution No. 2020-429, approved the submission of the AHSC grant. On April 27, 2021, by Resolution No. 2021-154, City Council approved an AHSC Program Disbursement Agreement between the City of Modesto and EAH.

DISCUSSION:

Catholic Charities, in partnership with the City of Modesto, StanCOG and EAH, will support outreach to the impacted communities of the Archway Commons Housing Development.

Outreach and education regarding the transit/transportation impact to the community and the related issues of air quality, healthy lifestyles and sustainable communities will be provided. The budget for these activities is $58,333 per year for support staff time for a three-year period totaling a not to exceed amount of $175,000.

The program has three interrelated areas of focus: to educate and raise awareness regarding environmental issues at the local, regional and State level; to advocate for clean air and other regional issues that impact health and economic disparities in the Central Valley; and to advocate for sustainable communities via engagement in local planning and civic engagement.

The target community is within a one-mile radius of the Archway Commons Development. The strategies to implement the program include the following:

Outreach Activities:
 Community Engagement
 Host Town Hall/Public meetings for Phase I residents and surrounding neighborhood residents.
 Create and provide outreach/informational material in English/Spanish according to demographics of current housing development and immediate surrounding community.
 Connect local stakeholders such as City of Modesto, Public Health, Transit officials, Sustainable Communities Coalition, and community programs with the broader community in the project area.
 Utilize social media, distribute fliers to Archway Commons Residents and post in common areas of the residence.

Presentations/Community Education: These will emphasize existing transportation/ transit use as well as surveying the concerns and needs of future transportation expansion in the project area.
 Schedule presentations and workshops developed in collaboration with the Project partners.
 Document outcomes and produce follow-up action reports as needed.  Create educational materials and collaborate with organizations that provide technical assistance in the areas of transit use, air quality and its impact on healthy living. #11..
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City Council, December 13, 2022
Agreement with Catholic Charities Diocese of Stockton for Environmental Justice Outreach Services Page 3 of 4
 Trainings will be provided on sustainable communities’ engagement.

Modesto Municipal Code (MMC) Section 8-3.203 generally requires all purchases in excess of fifty thousand dollars ($50,000) to follow formal bid procedures. However, MMC section 8.3.204 provides that formal bid procedures are not required when the City’s requirements “can be met solely by a single article or process.” Here, the AHSC Grant identifies Catholic Charities as the entity that will provide the outreach activities and selecting any other entity to perform the work would be inconsistent with the requirements of the Grant award.

The total agreement will not exceed $175,000 over the next three years and is attached as Attachment 2.

FISCAL IMPACT:

The funding is from the Affordable Housing and Sustainable Communities grant and implemented through the Standard Agreement authorized by Council Resolution No. 2021-154.

There is no impact to the General Fund.

COMMITTEE RECOMMENDATION:

This item was presented to the Citizen Housing and Community Development Committee (CH&CDC) on November 10, 2022 and recommended forwarding to Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving an Agreement with Catholic Charities Diocese of Stockton to provide the Environmental Justice Outreach component of the Affordable Housing and Sustainable Communities Grant application in an amount not to exceed $175,000 for the next three years for Archway Commons Phase II and authorizing the City Manager or designee to execute the Agreements.

Resolution amending the Fiscal Year 2022-2023 Multi-Year Fund Budget to establish applicable revenue and expense budgets for the Catholic Charities Environmental Justice Program Agreement to be funded with the Affordable Housing and Sustainable Communities Grant (AHSC) and authorizing the City Manager or his designee, to take the necessary steps to implement the provisions of this resolution.

Approved By: _______________________________________________ Jaylen French, Community and Economic Development Director _______________________________________________
Joseph P. Lopez, City Manager
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City Council, December 13, 2022
Agreement with Catholic Charities Diocese of Stockton for Environmental Justice Outreach Services Page 4 of 4
Attachments:

1. Resolution

2. Environmental Justice Program Agreement
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12-13-2022/C&ED/JHill 1 2022-

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION APPROVING AN AGREEMENT WITH CATHOLIC

CHARITIES DIOCESE OF STOCKTON TO PROVIDE THE

ENVIRONMENTAL JUSTICE OUTREACH COMPENENT OF THE

AFFORDABLE HOUSING AND SUSTAINABLE COMMUNITIES GRANT
APPLICATION IN AN AMOUNT NOT TO EXCEED $175,000 OVER THE NEXT

THREE YEARS FOR ARCHWAY COMMONS PHASE II AND AUTHORIZING

THE CITY MANAGER OR DESIGNEE TO EXECUTE THE AGREEMENTS
WHEREAS, on November 1, 2019, the State of California’s Round 5 issued a Notice of Funding Availability (NOFA) for $550 million in in funding under the AHSC program, and
WHEREAS, the City of Modesto and EAH submitted a joint grant application for funding in February 2020 for the development of Archway Commons, and WHEREAS, on July 2020, the City received an AHSC award letter notifying the City the project was successfully awarded a grant in the amount of $24,766,157 for housing & transportation related costs, and
WHEREAS, of the total grant award, $14,276,157 will be directly used for construction of Archway Commons Phase II, and $10,000,000 will be used for transportation related infrastructure improvements along 9th Street, and WHEREAS, the improvements included: transit realignment of the Modesto Area Express (MAX) route connecting Archway Commons to the Modesto Transit Center located to the south as well as to Modesto Junior College (MJC) and retail centers in the area, purchase of an Altamont Corridor Express (ACE) rail car, and up to three miles of new bike path extending 9th Street from Carpenter Road to L Street, and WHEREAS, the grant also included Program Costs (PGM) Costs totaling $490,000, one of the programs was the support of an outreach program conducted by #11..
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12-13-2022/C&ED/JHill 2 2022-
Catholic Charities in partnership with the City of Modesto, Stan COG and EAH, to support outreach to the impacted communities of the Archway Commons Housing Development at 1101 Carver Road, and
WHEREAS, on September 18, 2020, City Council, by Resolution No. 2020-429, approved the submission of the Affordable Housing and Sustainable Communities (AHSC) grant On April 27, 2021, by Resolution No. 2021-154, City Council approved an Affordable Housing and Sustainable Communities Program Disbursement Agreement between the City of Modesto and EAH Inc., and
WHEREAS, Catholic Charities in partnership with the City of Modesto, StanCOG and EAH, will support outreach to the impacted communities of the Archway Commons Housing Development at 1101 Carver Road, and
WHEREAS, the program will complete outreach and education regarding the transit/transportation impact to the community and the related issues of air quality, healthy lifestyles and sustainable communities with a budget of $58,333 per year to support staff-time for a three-year period for a total of $175,000, and WHEREAS, the program has three interrelated areas of focus: to educate and raise awareness regarding environmental issues at the local, regional and State level, to advocate for clean air and other regional issues that impact health and economic disparities in the Central Valley, and to advocate for sustainable communities via engagement in local planning and civic engagement, and
WHEREAS, the target community is the one-mile radius surrounding the Archway Commons Development and strategies to implement the program for the threeyears, and #11..
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12-13-2022/C&ED/JHill 3 2022-
WHEREAS, strategies include outreach activities such as community engagement, hosting town hall/public meetings for Phase I residents and surrounding neighborhood residents, creating and providing outreach and informational material in English and Spanish according to demographics of current housing development and immediate surrounding community, connecting local stakeholders such as City of Modesto, Public Health, Transit officials, Sustainable Communities Coalition, and community programs with the broader community in the project area, utilizing social media, distributing fliers to Archway Commons Residents and post in common areas of the residence, and
WHEREAS, presentation and community education strategies to emphasize existing transportation and transit use as well as surveying the concerns and needs of future transportation expansion in the project area include scheduling presentations and workshops developed in collaboration with the project partners, documenting outcomes and producing follow-up action reports as needed, creating educational materials and collaborating with organizations that provide technical assistance in the areas of transit use, air quality and its impact on healthy living and providing trainings on sustainable communities’ engagement, and
WHEREAS, Modesto Municipal Code (MMC) Section 8-3.203 generally requires all purchases in excess of fifty thousand dollars ($50,000) to follow formal bid procedures. However, MMC section 8.3.204 provides that formal bid procedures are not required when the City’s requirements “can be met solely by a single article or process.” Here, the AHSC Grant identifies Catholic Charities as the entity that will provide the #11..
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12-13-2022/C&ED/JHill 4 2022-
outreach activities and selecting any other entity to perform the work would be inconsistent with the requirements of the Grant award, and WHEREAS, the total agreement will not exceed $175,000 over the next three years.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves agreement with Catholic Charities to provide environmental justice outreach in an amount not to exceed $175,000 through the Affordable Housing and Sustainable Communities Grant (AHSC) for Archway Commons Phase II.

BE IT FURTHER RESOLVED that the City Manager, or his designee, to authorizing the City Manager or his designee to execute the agreement with such changes as determined by the City Attorney.
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12-13-2022/C&ED/JHill 5 2022-
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 13h day of December, 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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12/13/2022/CED/JHill/ 1 2022-

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-
RESOLUTION AMENDING THE FISCAL YEAR 2022-2023 MULTI-YEAR FUND

BUDGET TO ESTABLISH APPLICABLE REVENUE AND EXPENSE BUDGETS

FOR THE CATHOLIC CHARITIES ENVIRONMENTAL JUSTICE PROGRAM

AGREEMENT TO BE FUNDED WITH THE AFFORDABLE HOUSING AND

SUSTAINABLE COMMUNITIES GRANT (AHSC) AND AUTHORIZING THE

CITY MANAGER OR HIS DESIGNEE, TO TAKE THE NECESSARY STEPS TO

IMPLEMENT THE PROVISIONS OF THIS RESOLUTION
WHEREAS, on November 1, 2019, the State of California’s Round 5 issued a Notice of Funding Availability (NOFA) for $550 million in in funding under the AHSC program; and
WHEREAS, the City of Modesto and EAH submitted a joint grant application for funding in February 2020 for the development of Archway Commons; and WHEREAS, on July 2020, the City received an AHSC award letter notifying the City the project was successfully awarded a grant in the amount of $24,766,157 for housing & transportation related costs; and
WHEREAS, the grant also included Program Costs (PGM) Costs totaling $490,000, one of the programs was the support of an outreach program conducted by Catholic Charities in partnership with the City of Modesto, the Stanislaus Council of Governments (StanCOG) and EAH Housing, to support outreach to the impacted communities of the Archway Commons Housing Development at 1101 Carver Road; and WHEREAS, the program will complete outreach and education regarding the transit/transportation impact to the community and the related issues of air quality, healthy lifestyles and sustainable communities with a budget of $58,333 per year to support stafftime for a three-year period for a total of $175,000; and WHEREAS, if approved the fiscal year 2022-2023 Multi-Year budget must be amended.
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12/13/2022/CED/JHill/ 2 2022-
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby amends the fiscal year 2022-2023 multi-year fund budget to establish applicable revenue, expense and transfer budgets for the Catholic Charities Environmental Justice Program Agreement to be funded with the Affordable Housing and Sustainable Communities Grant (AHSC).

BE IT FURTHER RESOLVED that the City Manager or his designee is authorized to take the necessary steps to implement the provisions of this resolution.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 13th day of December, 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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Environmental Justice Agreement – City and Catholic Charities

ENVIRONMENTAL JUSTICE PROGRAM AGREEMENT
Between

CITY OF MODESTO

AND CATHOLIC CHARITIES
This Environmental Justice Program Agreement (“Agreement”) is entered into in the City of Modesto, State of California, this ____ day of _________________ 20____ (“Effective Date”) by and between the City of Modesto, a California municipal corporation (“City”) and Catholic Charities of the Diocese of Stockton (“Recipient”). The City and Catholic Charities shall be collectively referred to hereinafter as the “Parties”.

This Agreement is made with regard to the following recitals:

WHEREAS, The City of Modesto and EAH submitted a joint grant application for funding in February 2020 for the State of California’s Round 5 Notice of Funding Availability (NOFA) for $550 million in funding under the Affordable Housing and Sustainable Communities program (AHSC); and
WHEREAS, on July 2020, the City received an AHSC award letter notifying the City the project was successfully awarded a grant in the amount of $24,766,157 for housing and transportation related costs, and
WHEREAS, as part of the AHSC grant award process, the City must provide a resolution to the State of California whereby the City accepts the grant and approves entering into an AHSC Standard Agreement with the State of California, and WHEREAS, the City entered into an Affordable Housing and Sustainable Communities Program Disbursement Agreement (AHSC) with EAH Inc.(“EAH”) and; WHEREAS, on April 27, 2021, by Resolution No. 2021-154, Council approved the Affordable Housing and Sustainable Communities Program Disbursement Agreement between The City and EAH; and
WHEREAS, Exhibit B section 4 of the Agreement states The Scope of Work for this Agreement for Program (“PGM”) Costs (“PGM Work”); and
WHEREAS, Catholic Charities in partnership with the City of Modesto, Stan COG and EAH, will support outreach to the impacted communities of the Archway Commons Housing Development at 1101 Carver Road; and
WHEREAS, the proposed scope of work includes outreach and education regarding the transit/transportation impact to the community and the related issues of air quality, healthy lifestyles and sustainable communities; and
WHEREAS, the budget, $58,333 per year for these activities supports staff time and expenses for a three-year period; and
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Environmental Justice Agreement – City and Catholic Charities WHEREAS, the City and Recipient desire to enter into this Agreement to establish the terms and conditions of Recipient’s acceptance and use of the budget to support the activities outlined in the scope of work.

NOW THEREFORE, the City and Recipient agree as follows:

1. Purpose
The purpose of this Agreement is to carry out the terms and conditions of the Recipients scope of work listed in the Affordable Housing and Sustainable Communities Program Disbursement Agreement, knowns as the Environmental Justice Program.

2. Term
The term of this Agreement (the “Term”) shall commence upon the Effective Date and shall terminate upon the Recipient’s completion of all requirements of this Agreement.

3. Scope of Work
A. The City shall provide Recipient with payment for services rendered on a request for disbursement basis. The total amount of the agreement is One Hundred SeventyFive Thousand Dollars ($175,000) Disbursement of request is dependent upon Recipient providing all records and documentation reasonably required by the City.

The Recipient shall use the funds to support the Environmental Justice program by providing outreach and education services regarding transit/transportation impact to the community and the related issues of air quality, healthy lifestyles and sustainable communities, as further descripted in Exhibit B, attached hereto and incorporated herein (the “Activities”).

B. The Recipient shall operate within the territorial limits of the City of Modesto and the beneficiaries, if any, of the Activities shall be the residents of the City of Modesto.

4. Recipient’s Obligations
A. Throughout the Term of this Agreement, the Recipient shall obtain and maintain all licenses, permits, qualifications and approvals legally required to conduct business.

The Recipient warrants that it has all of the necessary professional capabilities and experience, as well as all tools, instrumentalities, facilities and other resources necessary to perform the Activities specified by this Agreement. Recipient shall perform the Activities required pursuant to this Agreement according to the standards observed by a competent practitioner of the profession in which Recipient is engaged.

B. The Recipient shall provide appropriate acknowledgement of the Environmental Justice Program by using the City’s logo or making a written acknowledgement in its publicity, promotional materials, information materials, press materials, at public occasions relating to the Activities, and on any website maintained by the Recipient. #11..
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5. Reporting Requirements
Recipient shall submit quarterly reports to the City on such other form as required by the City. Recipient shall also submit an overall Annual Report of documenting the use of funds.

6. Audit Requirements
A. In addition to all other reports and records required by this Agreement, the Recipient shall keep and make available proper books of account and records of the financial management of the Environmental Justice Program provided under this agreement, in accordance with generally accepted business and accounting practices. Such records shall include, but not be limited to, records providing a full description and accounting of each activity undertaken.

B. Recipient agrees to keep all necessary books and records required by this Agreement for five (5) years following the end of this Agreement, and shall document all transactions so that all expenditures may be properly audited.

C. Recipient agrees that City or any authorized representative has access to and the right to examine all records, books, papers, or documents related to the project.

Recipient shall allow the City or any authorized representative access to all records, books, papers, or documents related to the project within forty-eight (48) hours of a request to examine.

7. Termination, Suspension and/or Repayment
The City may terminate, suspend and/or require repayment in the event of any of the following circumstances, after notice from the City and a reasonable opportunity to cure:

A. The Recipient fails to provide the Activities, or any portion of the Activities, described in Exhibit B of this Agreement or substandard performance of the Activities;
B. The Recipient suspends or fails to carry on and continuously conduct its operations, or there is a disruption on the performance of the Activities; C. The Recipient has a partisan political affiliation and/or participates in partisan political activities.

D. The Recipient uses funding for a purpose or activity other than those specified in Exhibit B.

E. The Recipient becomes bankrupt or insolvent, goes into receivership or becomes subject to the provisions of any bankruptcy, insolvency, or any other Act for the benefit of creditors, or makes a general assignment for the benefit of its creditors or otherwise acknowledges its insolvency;
F. The Recipient fails to provide to the City with any report, record, or documentation required by this Agreement, or fails to provide any documentation requested by the City in accordance with the terms of this Agreement; G. The Recipient has made any material misrepresentation to the City or its representatives with respect to any of the matters contained herein and/or in the Recipient’s funding submission/proposal/application for the Environmental Justice Program, or which have been made or may be made in the future surrounding these matters;
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Environmental Justice Agreement – City and Catholic Charities H. The Recipient breaches any term of this Agreement, after notice from the City and a reasonable opportunity to cure the breach;

8. Compliance with Applicable Laws
Recipient shall carry out, and cause its contractors, consultants, employees and agents to carry out, the Activities, in compliance all applicable federal, state and local laws, rules, ordinances, orders, and regulations, including without limitation and to the extent applicable, the state prevailing wage laws pursuant to Labor Code Section 1770 et seq.

9. Non-Assignment
The Recipient shall not transfer or assign this Agreement, or any part thereof, without the Prior written consent of the City. Any assignment in violation of this section shall require an immediate repayment of any expended funds from the Environmental Justice Program to City by the Recipient.

10. Indemnity and Liability
A. The Recipient shall indemnify, defend with counsel acceptable to City, and hold harmless the City, its officials, officers, employees, and agents (“Indemnitees”) from and against all liability, loss, cost, expense (including without limitation attorneys’ fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively “Claims”) which, directly or indirectly, arises out of or relates to this Agreement, the use of funding for the Environmental Justice Program, or the performance of the Activities, except to the extent the Claims are caused by the sole negligence or willful misconduct of City.

B. The City shall not be liable to the Recipient or any other party in relation to the services provided by the Recipient pursuant to the terms of this agreement. The Recipient shall be solely responsible for the payment of any individuals employed, engaged or retained by the Recipient for the purpose of assisting it in the fulfilment of its obligations under this agreement.

11. Insurance
The Recipient 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 the City as may be required by the Risk Manager of the City. 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 the City by certified mail, return receipt requested, for all of the following stated insurance policies.

In the event the certificates of insurance required hereunder do not provide for notice of cancellation to the certificate holder and/or additional insureds, the Recipient shall provide, and shall require its subcontractors to provide, as an express condition precedent to payment hereunder, an endorsement from their insurers providing that the additional insureds identified herein shall be provided 30 days’ notice of the cancellation on the #11..
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Environmental Justice Agreement – City and Catholic Charities policies of insurance required hereunder (10 days’ notice if the policies are cancelled for non-payment of premium). In addition, the named insured on all such policies shall provide to the additional insureds identified herein any notices of cancellation of said insurance policies within 5 business days of receipt of such notice. The Recipient shall, as a further express condition precedent to payment for work performed, affirm under penalty of perjury that the required insurance on the project remains in place and said insurance has not been cancelled.
(a) Worker's 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: premises and operations; broad form contractual; independent The Recipients 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 the City, as to form or substance, or if a company issuing such policy shall be unsatisfactory to the City, the Recipient shall promptly obtain a new policy, submit the same to the Risk Manager for approval and submit a certificate thereof as hereinabove provided. Upon failure of the Recipient to furnish, deliver or maintain such insurance and certificates as above provided, this Agreement, at the election of the City, may be forthwith declared suspended or terminated. Failure of the Recipient to obtain and/or maintain any required insurance shall not relieve the Recipient from any liability under this Agreement, nor shall the insurance requirements be construed to conflict with or otherwise limit the obligations of the Recipient concerning indemnification. The City, its agents, officers, employees, and volunteers shall be named as an additional insured on all insurance policies required herein, except Workers' Compensation and Professional Liability. The Workers' Compensation insurer shall agree to waive all rights of subrogation against the City, its agents, officers, employees, and volunteers for losses arising from work performed by The Recipient for the City. The Recipient's insurance policy(ies) shall include a provision that the coverage is primary as respects the City; shall include no special limitations to coverage provided to additional insured; and, shall be placed with #11..
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Environmental Justice Agreement – City and Catholic Charities insurer(s) with acceptable Best's rating of A:VII or with approval of the Risk Manager.

The Recipient must deliver certificates evidencing existence of the insurance listed above to the City prior to the time the contract is signed.

The Recipient shall provide City with separate endorsements evidencing proof of the City’s additional insured status as to both the general liability and automobile liability insurance policies. In addition, the Recipient 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 Recipient’s insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Recipient’s insurance and shall not contribute with it.

12. Non-Discrimination
Recipient shall not discriminate, on the basis of a person’s race, religion, color, national origin, age, physical or mental handicap or disability, medical condition, marital status, sex, sexual orientation, or any other basis prohibited by state or federal law against any employee, applicant for employment, subcontractor, bidder for a subcontract, or participant in, recipient of, or applicant for any services or programs provided by Recipient under this Agreement. Recipient shall comply with all applicable federal, state, and local laws, policies, rules, and requirements related to equal opportunity and nondiscrimination in employment, contracting, and the provision of any services that are the subject of this Recipient, including but not limited to the satisfaction of any positive obligations required of Recipient thereby.

13. NOTIFICATION
Any notice, communication, amendment, addition or deletion to this Agreement, including change of address of any of the Parties during the term of this Agreement, which Recipient or City shall be required or may desire to make shall be in writing and may be personally served or, alternately, sent by prepaid first-class mail to the respective Parties as follows:

To City:

City of Modesto
Attn: Jessica Hill
P.O. Box 642
Modesto, CA 95353
To Recipient:

Catholic Charities
Attn: Martha Arevalos
1106 N. El Dorado St.

Stockton, CA 95202
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14. SEVERABILITY
If any portion of this Agreement or application thereof to any person or circumstance shall be declared invalid by a court of competent jurisdiction or if it is found in contravention of any federal, state or City statute, ordinance or regulation; the remaining provisions of this Agreement or the application thereof shall not be invalidated thereby and shall remain in full force and effect to the extent that the provisions of this Agreement are severable.

15. DISPUTE RESOLUTION
All claims, controversies, or disputes arising out of, or relating to the formation of this Agreement, or the breach, termination execution, enforcement, interpretation, or validity of this Agreement, including the determination of the scope or applicability of this contract provision shall be determined by binding arbitration in Modesto, California by one arbitrator, except as otherwise specified in this Agreement. The American Arbitration Association shall administer the arbitration under its Arbitration Rules then in effect, subject to the modifications of those rules contained in this paragraph. This agreement to arbitrate shall be specifically enforceable under the prevailing law of any court having jurisdiction, and the award rendered by the arbitrator may be entered in any court having jurisdiction. The appropriate venue for any arbitration or court proceeding relating to or arising out of this provision shall be in Stanislaus County, California.

This paragraph is not intended to and does not waive the claim filing requirements found in California Government Code section 900 et seq. In the event that a timely and legally sufficient, arbitrable claim is filed by the Recipient or with City, and the claim is rejected in whole or in part by City, this paragraph shall result in the conclusive, final, and binding resolution of all the issues presented in the claim by The Recipient so long as any issues presented by the claim are arbitrable. Claims rejected by City or by operation of law, shall be submitted by the Recipient to arbitration pursuant to the Arbitration Rules of the American Arbitration Association within ninety (90) days after mailing of the written rejection by City to the Recipient. Otherwise, the claim or claims shall be deemed waived in their entirety.

The “fast track’ rules of the American Arbitration Association shall apply to any claim or counterclaim less than ONE HUNDRED FIFTY THOUSAND AND 00/100 ($150,000.00) DOLLARS. In arbitration not proceeding under the “fast track” rules, the arbitrator shall have the power to order that depositions be taken and other discovery be made. City and the Recipient shall have the right, upon written notice, to take no more than three (3) depositions of the other as a matter of right in an arbitration proceeding under the “fast track” rules.

Whether or not City and the Recipient may be engaged in interstate commerce, any controversy or dispute mentioned above shall be determined by, and the parties shall be bound by, the substantive law of the State of California, and not the Federal Arbitration Act at 9 USC Section 1 et seq.
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Environmental Justice Agreement – City and Catholic Charities The arbitrator may grant any remedy or relief deemed by the arbitrator just and equitable under the circumstances, whether or not such relief could be awarded in a court of law.

The arbitrator shall be empowered to award monetary sanctions against a party for failure of cooperation in the arbitration. The arbitrator shall, in written award, allocate all the costs of the arbitration, including the fees of the arbitrator and the reasonable attorney fees of the prevailing party, against the party who did not prevail. The prevailing party shall be the party in whose favor the majority of the central issues in the case are resolved.

Notwithstanding anything in this provision to the contrary, the arbitrator shall have no power to award punitive damages or other damages not measured by the party’s actual damages (excluding litigation costs and fees) against any party. This limitation of the arbitrator’s powers under this Agreement shall not operate as an exclusion of the issue of punitive damages from this Agreement to Arbitrate sufficient to vest jurisdiction in a court with respect to that issue.

The Recipient shall include in all subcontracts a specification whereby the subcontractor consents to being joined in an arbitration between City and Recipient involving the work of the subcontractor to be joined. The Recipient’s failure to do so shall be a breach of this Agreement.

The parties hereby waive any rights provided by Title 9.2 of the California Code of Civil Procedure, Section 1296. The arbitrator’s award shall be deemed final, conclusive and binding to the fullest extent allowed by California law.

16. INDEPENDENT PARTIES
Nothing in this Agreement is intended to or shall establish the Parties as partners, coventurers, or principal and agent with one another. At all times during the term of this Agreement, Recipient and City shall be independent parties, and Recipient shall not be an employee of the City. Except as Recipient may specify in writing, Recipient shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Recipient shall have no authority, express or implied, pursuant to this Agreement to bind City to any obligation whatsoever.

17. ENTIRE AGREEMENT
This Agreement, including the exhibits attached hereto, represents the entire and integrated agreement between City and Recipient ant and supersedes all prior negotiations, representations, or agreements, either written or oral. No amendment of any of the terms or provisions of the Agreement shall be deemed valid unless it is in writing and signed by both Parties.

18. GENERAL PROVISIONS
A. Binding Agreement. This agreement shall be binding on and inure to the benefit of the City, Recipient and their respective successors and assigns. Nothing contained in this Agreement is intended to or shall be deemed to confer upon any #11..
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Environmental Justice Agreement – City and Catholic Charities person, other than the Parties and their respective successors and assigns, any rights or remedies hereunder.

B. Severability. Any provision of this agreement, which is or becomes prohibited or unenforceable in any jurisdiction, shall not invalidate or impair the remaining provisions of this agreement which shall be deemed severable from the prohibited or unenforceable provision and any prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable that provision in any other jurisdiction.

C. Waiver. The fact that the City refrains from exercising a remedy it is entitled to exercise under this agreement shall not be considered to be a waiver of such right and, furthermore, partial or limited exercise of a right conferred upon the City shall not prevent the City in any way from later exercising any other right or remedy under this agreement or other applicable law. No waiver of any breach of any covenant or provision of this Agreement shall be deemed a waiver of any other covenant or provision hereof, and no waiver shall be valid unless in writing and executed by the waiving Party
D. Business License. Recipient will have a valid City of Modesto Business License.

E. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, excluding chose of law rules.

F. Construction of Agreement. The section headings and captions used herein are solely for convenience and shall not be used to interpret this Agreement. The Parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since all of the Parties have participated in the negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if all Parties had prepared it.

G. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which taken together shall constitute one instrument. The persons executing this Agreement on behalf of Parties have been duly authorized to do so.

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Environmental Justice Agreement – City and Catholic Charities IN WITNESS WHEREOF, the Parties have executed this MOU as of the effective date set forth above.

CITY OF MODESTO
By: ______________________________
Joseph P. Lopez
City Manager
City of Modesto, State of California
ATTEST: ___________, City Clerk of the City of Modesto, State of California By: ______________________________
City Clerk
APPROVED AS TO FORM:

Jose M. Sanchez,
City Attorney
By: _______________________________
City Attorney

CATHOLIC CHARITIES
By: ______________________________
Elvira Ramirez, Executive Director
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EXHIBIT B

CATHOLIC CHARITIES

ENVIRONMENTAL JUSTICE PROGRAM
The Environmental Justice (EJ) Program has three interrelated areas of focus: to educate and raise awareness regarding environmental issues at the local, regional, and State level; to advocate for clean air and other regional issues that impact health and economic disparities in the Central Valley; and to advocate for sustainable communities via engagement in local planning and civic engagement. The agency partners with other organizations to advocate for policies that promote the rights and responsibilities of the disenfranchised, address barriers to health equity and foster environmental justice. The EJ program has developed and convenes a sustainable communities' coalition in Stanislaus Community that promotes civic engagement and community education.

In partnership with the City of Modesto, Stan COG and EAH, EJ staff will support outreach to the impacted communities of the Archway Commons Housing Development at 1101 Carver Road. The proposed scope of work (SOW) includes outreach and education regarding the transit/transportation impact to the community and the related issues of air quality, healthy lifestyles and sustainable communities. The budget, $58,333 per year for these activities supports staff time for a three-year period.

The target community is the one-mile radius surrounding the Archway Commons Development.

The strategies to implement the SOW (transit education/air quality/healthy living) for the threeyear project will include the following:

Outreach Activities:
 Establish a timeline for providing intentional community engagement.  Host Town Hall/Public meetings for Phase I residents and surrounding neighborhood residents.
 Venue will utilize the Common area of Archway Commons  Create and provide outreach/informational material in English/Spanish according to demographics of current housing development and immediate surrounding community.
 Connect local stakeholders such as City of Modesto, Public Health, Transit officials, Sustainable Communities Coalition, and community programs with the broader community in the project area.
 Utilize social media, distribute fliers to Archway Commons Residents and post in common areas of the residence.

Presentations/Community Education: These will emphasize existing transportation/ transit use as well as surveying the concerns and needs of future transportation expansion in the project area.
 A schedule of presentations and workshops will be developed in collaboration with the Project partners.
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Environmental Justice Agreement – City and Catholic Charities  Catholic Charities EJ program will document outcomes and produce follow-up action reports as needed.
 The EJ program will create educational materials and collaborate with organizations that provide technical assistance in the areas of transit use, air quality and its impact on healthy living.
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

December 13, 2022
Date: December 6, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jaylen French, Director of Community and Economic Development SUBJECT: Third Amendment to Agreement with California Highway Patrol for State Route 132 for Construction Zone Enforcement
CONTACT: John Rawles, Sr. Civil Engineer, [email protected], 209-577-5253 DESCRIPTION:

Consider approving a No-Cost Third Amendment to extend the term of Agreement to June 30, 2023, for the Construction Zone Enhanced Enforcement Program (COZEEP) Agreement No. 19R465000 with the State of California, Department of Highway Patrol for the State Route 132 West Freeway/Expressway Phase 1 Project. (Funding Source: Not Applicable) STRATEGIC PLAN ELEMENT:

This action is consistent with the Council’s 2020-2025 Strategic Plan Goal D, Ensure Safe, Efficient and Reliable Infrastructure. Specifically, this item supports the SR132 West Freeway/Expressway Project and the City’s goal to expand alternative modes of travel, improve transportation flow, and drive economic vitality.

BACKGROUND:

The purpose of the State Route 132 West Freeway/Expressway - Phase 1 Project is to improve regional and interregional circulation, relieve traffic congestion along existing State Route 132 (SR132), and enhance safety and operations for the existing and proposed transportation network.

The Phase 1 Project includes construction of an access-controlled, 2-lane expressway (one lane eastbound and one lane westbound) along a new alignment just south of Kansas Avenue starting from the east side of State Route 99 (SR99) at the west end of the Needham Street Bridge, westbound to Dakota Avenue and then along Dakota Avenue to the existing SR132/Maze Boulevard. The Project also includes grade separations at Rosemore Avenue, Carpenter Avenue, Emerald Avenue, and SR99, and improvements to the 5th and 6th Street connections to the new SR132 expressway and the addition of an auxiliary lane at the northbound SR99 on-ramp at L Street.
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City Council, December 13, 2022
Third Amendment to Agreement with California Highway Patrol for State Route 132 for Construction Zone Enforcement

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Modesto City CouncilDecember 13, 2022

Modesto City Council
December 13, 2022