Economic Development Committee
June 3, 2024

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www.modestogov.com
AGENDA
City of Modesto

ECONOMIC DEVELOPMENT COMMITTEE

COUNCIL WORKSHOP
2001-40 Del Puerto Room.

Tenth Street Place, 1010 10th Street
Modesto, California
Monday, June 03, 2024 at 4:00 PM
Roll Call: Chris Ricci, Chair
Eric Alvarez, Vice-Chair
Sue Zwahlen, Member
Alternates: Nick Bavaro, Rosa Escutia-Braaton, Jeremiah Williams, David Wright Council has not delegated directive or final approval authority to the Committees.

Committee actions are recommendations to the full City Council, not final decisions on an issue. * Public Comment will only be in-person. Members of the public who wish to address the Committee, by providing public comment, during the meeting must do so in-person in the 2001-40 Del Puerto Room. As an alternative, members of the public may also provide written public comment submitted via email as indicated in the Submitting Comments by Email instructions on this agenda. Zoom will still be available for viewing and Wordly translation. *Members of the public will be allowed to provide public comment through Zoom if a Committee Member is participating remotely pursuant to the provisions of Assembly Bill 2449. *Effective March 1, 2023, if a technical issue arises with Zoom or the phone dial-in option, the Committee meeting will continue unless the meeting is being held pursuant to the provisions of Assembly Bill 2449. Alternative viewing options are listed below, and the meeting is physically open to the public.
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"Wordly" puede traducir a más de 25 idiomas diferentes! Para acceder a la traducción durante la reunión, por favor escanee el código QR o haga clic en el enlace https://attend.wordly.ai/join/RJDY-6364.

THE MEETING CAN BE VIEWED BY ZOOM VIDEO

CONFERENCING OR TELEPHONE
Joining the Committee meeting via Zoom
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PUBLIC COMMENTS IN PERSON
Three-minute time limit per speaker.

Only interested persons in the audience may present these matters.

Under State law, Committee Members may respond to matters being presented under this item only as follows:
a. Briefly respond to statements made or questions raised. b. Ask a question for clarification.
c. Provide a reference to staff or other resources for factual information. d. Request staff to report back at a subsequent meeting. e. Finally, a Committee Member or the Committee itself may take action to direct staff to place a matter of business on a future agenda.

SUBMITTING COMMENTS BY E-MAIL
Written comments may be submitted via email to: [email protected] (include Agenda Item Number in the subject line). All comments will be shared with the Committee - 2 -
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Members and placed in the record but will not be read aloud during the meeting. Written comments must be received two hours before the meeting.

This Agenda is on file in the City Clerk’s Office, Sixth Floor, 10th Street Place, Posting Board at entry of 10th Street Place, and is available on the City’s Web site at www.modestogov.com.

Materials related to an item on this Agenda submitted to the Council after distribution of the agenda packet are available for public inspection in the Clerk’s office during normal business hours. Such documents are also available online, subject to staff’s ability to post the documents before the meeting, at the following website www.modestogov.com/councilmeetings In accordance with the requirements of Title II of the Americans with Disabilities Act (“ADA”) of 1990, the Fair Employment & Housing Act (“FEHA”), the Rehabilitation Act of 1973 (as amended), Government Code section 11135 and other applicable codes, the City of Modesto (“City”) will not discriminate against individuals on the basis of disability in the City’s services, programs, or activities. For more information, please visit the City of Modesto website at https://www.modestogov.com/865/Americans-with-Disabilities-Act-ADA In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk (209) 577-5396. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting
Any and all of the following agenda items are subject to action by the Modesto City Council.

CONSENT ITEMS – ROLL CALL VOTE REQUIRED:

Information concerning the consent items listed below has been forwarded to each Committee Member prior to this meeting for study. Unless some member of the audience or Committee Member has a question concerning an item and asks that it be withdrawn from the consent list, the Committee approves the items at one time. The action taken by the Committee in approving consent items is set forth in the explanation of this individual item.

CONSENT
An item may be removed from consent and discussed at the request of an audience member or committee member.

Consent

1. Consider a Resolution of Intention to form City of Modesto Community Facilities District (CFD) No. 2024-1 (Tivoli), an area bounded by Claratina Avenue to the north, Oakdale Road to the west, Sylvan Avenue to the south, and Roselle Avenue, and a Resolution of Intention to incur debt for CFD No. 2024-1 and forwarding to Council for approval. (Funding Source: Developer Deposit)
 Motion recommending a Resolution of Intention to form City of Modesto Community Facilities District (CFD) No. 2024-1 (Tivoli), establish - 3 -
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Improvement Area No. 1, and designate a future annexation area, as well as a Resolution of Intention to incur debt, and forwarding to Council for approval.

CED; Edgar Garcia, 209-577-5211, [email protected] Consent

2. Consider the summary vacation of an existing 60 feet wide road right-of-way dedication located at APN 033-089-037 and forwarding to Council for approval. (Funding Source: Not Applicable)
 Motion recommending the summary vacation of an existing 60 feet wide by approximately 192 feet long (11,505.95 square foot) road right-of-way located at APN 033-089-037 and forwarding to Council for approval.

ENGINEERING SERVICES; Jaspreet Mangat, 209-577-5253,
[email protected]
Consent

3. Consider an Agreement with Hach Company, Loveland, CO, for field services and parts for a total amount not to exceed $389,405 over three years and forwarding to Council for approval. (Funding Source: Sewer Operations Fund)  Motion recommending the Sole Source Agreement with Hach Company, Loveland, CO, for field services and parts for a three-year Agreement for an estimated annual amount of $123,134, and a total amount not to exceed $389,405 over three years and forwarding to Council for approval.

UTILITIES; Jeff Daniels, 209-577-6255, [email protected],

NEW BUSINESS

4. Consider amendments to the Capital Facilities Fees Policies and Procedures and forwarding to Council for approval. (Funding Source: Capital Facilities Fees)  Motion recommending amendments to the Capital Facilities Fees Policies and Procedures, and forwarding to Council for approval.

CED; Edgar Garcia, 209-577-5211, [email protected]

5. Consider a Modesto Forward Grant Agreement with Stanislaus 2030 to support inhome childcare entrepreneurship, for a total amount not to exceed $156,758 and forwarding to Council for approval. (Funding Source: American Rescue Plan Act Funds)
 Motion recommending a Modesto Forward Grant Agreement with Stanislaus 2030 to support in home childcare entrepreneurship for a total amount not to exceed $156,758 and forwarding to Council for approval.

CED; Trevin Barber, 209-571-5566, [email protected]

6. Consider a Modesto Forward Grant Agreement with HealthForce Partners for the implementation of Modesto Forward for a Workforce Development Program, for a total amount not to exceed $500,000 over two and a half years and forwarding to Council for approval. (Funding Source: American Rescue Plan Act Funds) - 4 -
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 Motion recommending a Modesto Forward Grant Agreement with HeathForce Partners for a Workforce Development Program, for a total amount not to exceed $500,000 and forwarding to Council for approval.

CED; Trevin Barber, 209-571-5566, [email protected]

ADJOURNMENT
Posted pursuant to Government Code Section 54954.2 on the bulletin board at Tenth Street Place on at by
date time signature
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CITY OF MODESTO

COMMITTEE AGENDA REPORT
DATE OF MEETING:

June 3, 2024
Date: April 26, 2024
TO: Economic Development Committee
Chris Ricci, Chair
Eric Alvarez, Vice-Chair
Sue Zwahlen, Member
THROUGH: Joseph P. Lopez, City Manager
FROM: Jessica Hill, Director of Community and Economic Development SUBJECT: Formation of City of Modesto Community Facilities District No. 2024-1 (Tivoli) CONTACT: Edgar Garcia, Community Development Manager, [email protected], 209-577-5211
DESCRIPTION:

Consider a Resolution of Intention to form City of Modesto Community Facilities District (CFD) No. 2024-1 (Tivoli), an area bounded by Claratina Avenue to the north, Oakdale Road to the west, Sylvan Avenue to the south, and Roselle Avenue, and a Resolution of Intention to incur debt for CFD No. 2024-1 and forwarding to Council for approval. (Funding Source: Developer Deposit)
STRATEGIC PLAN ELEMENT:

The recommended action supports the City Council’s 2020-2025 Strategic Plan, Goal D:

Provide Safe, Efficient, and Reliable Infrastructure through proactive community investment, maintenance and sustainability efforts.

BACKGROUND:

In 1982, the Mello-Roos Community Facilities Act of 1982 (Act) was adopted by the State of California as a method for financing infrastructure improvements and services associated with new developments. The Act allows infrastructure improvements and services to be funded through a special tax paid by property owners.

The Tivoli Specific Plan approved by City Council in 2008 by Ordinance No. 3479-C.S., is a 454-acrea area located in an unincorporated area of Stanislaus County. The project is located within the City of Modesto’s Sphere of Influence. The site is bounded by the planned Claratina Avenue on the north, Oakdale Road on the west, Sylvan Avenue on the south, and Roselle Avenue on the east.
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Economic Development Committee, June 3, 2024
Formation of City of Modesto Community Facilities District No. 2024-1 (Tivoli)

The Specific Plan provides for uses including commercial, school, parks, and residential development of a variety of densities as outlined by the land use diagram and development standards of the Specific Plan. Similar to the Village One Specific Plan to the south, the Tivoli Specific Plan is divided into multiple Area Plans. Each Area Plan would ensure that the street circulation, utility infrastructure, land use, density and project design are planned for the area and would conform to the principles of the Specific Plan and requires adoption by the Planning Commission prior to development.

On September 9, 2016, by Ordinance No. 3654-C.S., the City of Modesto Amended the Tivoli Specific Plan Amendment No. 1 for property located North of Sylvan Avenue, South of Future Claratina Avenue, East of Oakdale Road, West of Roselle Avenue to include minor land use adjustments regarding the relocation of the school site with the overall density and intensity remaining essentially the same, minor internal street alignment adjustments, removal of four roundabouts, as well as minor adjustments and technical changes.

On March 22, 2022, the Director of Community and Economic Development administratively approved Amendment No. 2 to the Tivoli Specific Plan as allowed by Section 9.3.4.1 of the Specific Plan, to amend and update street cross-section details with associated minor text changes.

On November 1, 2022, by Resolution No. 2022-450, the City Council approved Amendment No.3 to the Tivoli Specific Plan, to change the land use designation of 25 acres from Regional Serving Commercial (RSC) to Residential (R) and 27 acres from Medium Density Residential (MDR) to Low Density Residential (LDR).

DISCUSSION:

The Mello-Roos Community Facilities Act requires that within 90 days after receiving a petition, the legislative body shall adopt a Resolution of Intention (ROI). The ROI is the first step in establishing a CFD. A Resolution of Intention to Incur Debt is also required since CFD No. 2024-1 is proposed to include an annual facilities special tax which may secure CFD bonds.

While the boundaries of CFD No. 2024-1 will ultimately encompass the entire Tivoli area, the initial boundaries will consist of three parcels totaling 47.33 acres that will be designated as Improvement Area No. 1. KB Homes and Mid Valley Engineering are the owners of the three parcels. Additional properties will annex to CFD No. 2024-1 as they are ready to develop. The proposed boundary map also identifies the future annexation area and is provided as Attachment 3. Additional improvement areas may be designated as parcels identified in the future annexation area are annexed into the City.

The facilities and services to be provided by CFD No. 2024-1, include but are not limited to:

Additional Street Lanes, Traffic Signals, Roundabouts, Water, Wastewater and Storm Drains, Central Basin and Park Improvements. Services encompass maintenance for landscaped lots, tree pruning, masonry wall maintenance, neighborhood park maintenance, storm drain basin maintenance and other services set forth in Attachment 1.

Prior to the August 13, 2024, City Council meeting, the project proponents will have submitted the appropriate executed forms, which include the Request, Consent and Waiver and Landowner-Voter Ballot, to the City for the formation to proceed. The Landowner-Voter Ballot #1..
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Economic Development Committee, June 3, 2024
Formation of City of Modesto Community Facilities District No. 2024-1 (Tivoli)

indicates the Owners have voted in favor of authorizing the levy of the special tax on the Properties. The Request, Consent and Waiver form requests the City execute and record a notice of special tax lien, pertaining to the Properties, and record it within the official records of the County Recorder.

It is the sole discretion of CFD No. 2024-1 as to if and when Bonds will be issued. During the formation of the CFD, it may be determined that there is a need for the issuance of bonds to pay for the Facilities required for the CFD. If bonds are required, documents relating to the issuance and sale of the bonds will be brought to the Council for its approval. The proposed maximum CFD bond authorization is $120 million, and this serves as a “not to exceed” bond amount for the CFD is based on the financing of Facilities costs. The Annual Facilities Special Tax which includes a conservative buffer to prevent the authorization from serving as a constraint. If additional capacity is required within the maximum special tax rates. The CFD is a separate legal entity and the land within the CFD secures the bonds, sale of CFD bonds will not impact the City’s bonding capacity.

The Rate and Method of Apportionment (RMA) that identifies the maximum special tax rates for the parcel types within CFD No. 2024-1, as well as a description of how the special taxes are calculated and collected, is attached as Attachment 2.

Only three parcels are requesting to be part of the initial CFD No. 2024-1 boundaries and only those three parcels will be subject to levy and collection of the special taxes until additional properties annex to CFD No. 2024-1 in the future.

The annual special tax is only levied on a parcel after a building permit has been issued for that property (except for single family detached which commences after a final map is recorded).

The One-Time Facilities Special Tax is levied prior to issuance of a certificate of occupancy.

The maximum special tax rates for CFD No. 2024-1 are as follows:

Maximum Special Tax Rates Fiscal Year 2024-25
Special Tax
Category
Maximum One-Time
Facilities Special Tax
Fiscal Year 2024-25
Maximum Annual Facilities
Special Tax
Fiscal Year 2024-25
Maximum Annual
Maintenance
Special Tax
Fiscal Year 2024-25
Very Low Density
Residential
$100,000 per Net Taxable
Acre
$5,724 per Net Taxable Acre $5,589 per Net Taxable Acre Low Density
Residential
$100,000 per Net Taxable
Acre
$10,260 per Net Taxable Acre $5,589 per Net Taxable Acre Medium Density
Residential
$100,000 per Net Taxable
Acre
$13,725 per Net Taxable Acre $5,589 per Net Taxable Acre Medium High Density
Residential
$100,000 per Net Taxable
Acre
$13,087 per Net Taxable Acre $5,589 per Net Taxable Acre Non-Residential $100,000 per Net Taxable
Acre
$7,375 per Net Taxable Acre $5,589 per Net Taxable Acre On July 1, 2025, and on each July 1 thereafter, all figures shown in the table above shall be increased by the annual Escalation Factor, except the Annual Facilities Special Tax, which shall be increased by 2% per year. In any Fiscal Year, the annual Escalation Factor will be the #1..
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Formation of City of Modesto Community Facilities District No. 2024-1 (Tivoli)

greater of either, the percentage increase, if any, in the construction cost index for the San Francisco region for the prior twelve (12) month period as published in the Engineering News Record or other comparable source if the Engineering News Record is discontinued or otherwise not available, or four percent (4.0%).

At least thirty (30) days, and no more than sixty (60) days, following the date of the adoption of the ROI, the City Council will hold a public hearing and consider a Resolution of Formation. The public hearing is currently scheduled for August 13, 2024. The special tax may only be levied if approved by the unanimous written consent of the property owners or by the property owners through an election. Unanimous written consent simplifies the process because this allows for consent to be provided via a signed Waiver and Declaration of Landowner proposed to be included in the forming Community Facilities District. The alternative option would require ballots to be sent to all property owners within the proposed boundary and would require approval of two-thirds of property owners within the boundaries.

FISCAL IMPACT:

The formation of CFD No. 2024-1 is paid by the applicant through a developer deposit. There is no General Fund impact.

RECOMMENDED COMMITTEE ACTION:

Staff Recommendations:

Motion recommending a Resolution of Intention to form City of Modesto Community Facilities District (CFD) No. 2024-1 (Tivoli), establish Improvement Area No. 1, and designate a future annexation area, as well as a Resolution of Intention to incur debt, and forwarding to Council for approval.

Approved by:

Jessica Hill, Director of Community
and Economic Development
Joseph P. Lopez, City Manager
Attachments:

1. List of Facilities and Services

2. Rate and Method of Apportionment

3. Proposed Boundary Map for CFD No. 2024-1 (Tivoli)
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CITY OF MODESTO
COMMUNITY FACILITIES DISTRICT NO. 2024-1
(TIVOLI)

LIST OF FACILITIES
The types of Facilities and Services proposed to be financed by Community Facilities District No. 2024-1 (CFD) are as follows:

Authorized Facilities:

The CFD shall be authorized to finance all or any part of the costs of acquisition, construction and improvement of the following facilities (the “Facilities”):
 Claratina On-Site
o 6 Lanes at Oakdale to Roselle
o Signals at Claratina & Oakdale
o Claratina- Roselle Roundabout
o Water & Storm Drains Oakdale to Roselle
 Roselle
o 4 Lanes at Claratina to Sylvan
o Signals at Roselle & Aria
o Wastewater & Storm Drains Claratina to Sylvan
 Sylvan Ave
o 4 Lanes at Oakdale to Roselle
o Sylvan – Aria Roundabout
o Water Aria to McReynolds
 Oakdale
o 6 Lanes at Claratina to Sylvan
o Signals at Oakdale & Mable
o Signals at Oakdale & Bridgewood
o Water & Storm Drains Claratina to Sylvan
 Bridgewood
o 2 Lanes Oakdale to Aria
o Aria Roundabout
o Wood Sorrel Roundabout
o Water, Wastewater & Storm Drains Oakdale to Aria
 Aria
o 2 Lanes Sylvan to Roselle
o Roundabouts at “A”, “B”, “C”, & “D”
o Water at Sylvan to “C” Street, “A” Street to Roselle, and “C” Street to “A” Street o Wastewater and Storm Drains Sylvan to Roselle
 “A” Street
o 2 Lanes at Claratina to Aria
o “B” Street Roundabout
o Water Claratina to Aria, Aria to Mable
o Storm Drain Claratina to Aria
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 McReynolds
o Roundabout McReynolds to “C” Street
 Roundabout
o Roundabout To Be Determined
 Irrigation (MID)
 Central Basin
 Park Improvements
 Improvements to Existing Neighborhoods
 Right of Way
The Facilities shall include all hard and soft costs associated with the improvements, including the costs of acquisition of land and rights-of-way, the costs of design, engineering and planning, the costs of environmental or traffic studies, surveys or other reports, costs related to landscaping and irrigation, soils testing, permits, plan check, and inspection fees, insurance, legal and related overhead costs, coordination and supervision and any other costs or appurtenances related to any of the foregoing. The CFD may also fund, and the special taxes may also be used to directly pay for, the purchase, construction, expansion, improvement or rehabilitation of any of the Facilities, and to reimburse the City or any third parties for advances made to purchase, construct, expand, improve or rehabilitate any of the Facilities. #1..
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The services to be funded in whole or in part by the CFD include all direct and incidental costs related to providing the maintenance of public infrastructure within the area of the CFD, the future annexation area, and areas adjacent to or in the vicinity of such areas. More specifically, the services shall include, but not be limited to: maintenance, repair and replacement of parkways, tree pruning, landscaped medians, masonry walls, neighborhood pocket park, storm drainage basin facilities, including but not limited to, catch basins, manholes, underground infiltration trenches and pipes, landscaped bio-swale lots and medians, storm water treatment devices and filters, shrubs, vines, ground cover, and irrigation systems.

The services to be provided include, but are not limited to, litter and debris removal, pruning, staking, fertilizing, plant replacement and restoration, fire and weed control, erosion control, trimming of vegetation, and storm drain system maintenance. Authorized services shall also include the following: (i) related reserves for the replacement of plants and materials, replacement of storm water treatment filters and other storm drainage facilities, and (ii) a sinking fund for services that could not otherwise be funded in a given fiscal year.

The services to be financed by the CFD are in addition to those provided in the territory of the CFD before the date of creation of the CFD and will not supplant services already available within that territory when the CFD was created.

Administrative Expenses
The administrative expenses to be funded by the CFD include the direct and indirect expenses incurred by the City in carrying out its duties with respect to the CFD including, but not limited to, the levy and collection of special taxes, fees and expenses of attorneys, any fees of the County of Stanislaus related to the CFD or the collection of special taxes, an allocable share of the salaries of the City staff related thereto, and expenses incurred by the City in undertaking action to foreclose on properties for which the payment of special taxes is delinquent, and all other costs and expenses of the City in any way related to the CFD.
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Tivoli CFD No. 2024-1, IA No. 1 1 May 17, 2024
IMPROVEMENT AREA NO. 1 OF THE

CITY OF MODESTO
COMMUNITY FACILITIES DISTRICT NO. 2024-1
(TIVOLI)

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES
Special Taxes applicable to each Assessor’s Parcel in Improvement Area No. 1 of the City of Modesto Community Facilities District No. 2024-1 (Tivoli) shall be levied and collected according to the tax liability determined by the City Council through the application of the appropriate amount or rate for Taxable Property, as described below. All of the property in Improvement Area No. 1, unless exempted by law or by the provisions of Section H below, shall be taxed for the purposes, to the extent, and in the manner herein provided, including property subsequently annexed into Improvement Area No. 1 unless a separate Rate and Method of Apportionment is adopted for the annexation area.

A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Acre” or “Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable Final Map or other Development Plan.
“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, (commencing with Section 53311), Division 2 of Title 5 of the California Government Code. “Administrative Expenses” means any or all of the following: the fees and expenses of any fiscal agent or trustee (including any fees or expenses of its counsel) employed in connection with any Bonds, and the expenses of the City in carrying out its duties with respect to Improvement Area No. 1, the CFD and the Bonds, including, but not limited to, the levy and collection of Special Taxes, the fees and expenses of its counsel, charges levied by the County in connection with the levy and collection of Special Taxes, costs related to property owner inquiries regarding the Special Taxes, costs associated with appeals or requests for interpretation associated with the Special Taxes and this RMA, amounts needed to pay rebate to the federal government with respect to Bonds, costs associated with complying with continuing disclosure requirements for the City and any major property owners or other obligated parties, costs associated with foreclosure and collection of delinquent Special Taxes, and all other costs and expenses of the City in any way related to the establishment or administration of Improvement Area No. 1 and the CFD. “Administrator” shall mean the person or firm designated by the City to administer the Special Tax according to this RMA.
“Annual Facilities Special Tax” means a special tax levied in any Fiscal Year to pay the Annual Facilities Special Tax Requirement, as defined below.
“Annual Facilities Special Tax Requirement” means the amount necessary in any Fiscal Year to: (i) pay principal and interest on Bonds that are due in the calendar year that begins in such #1..
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Tivoli CFD No. 2024-1, IA No. 1 2 May 17, 2024
Fiscal Year; (ii) pay periodic costs on the Bonds, including but not limited to, credit enhancement, liquidity support, and rebate payments on the Bonds; (iii) replenish reserve funds created for the Bonds under the Indenture to the extent such replenishment has not been included in the computation of the Special Tax Requirement in a previous Fiscal Year; (iv) cure any delinquencies in the payment of principal or interest on Bonds which have occurred in the prior Fiscal Year; (v) pay Administrative Expenses; and (vi) pay directly for Authorized Facilities, so long as such levy under this clause (vi) does not increase the Special Tax levied on Undeveloped Property. The amounts referred to in clauses (i) and (ii) of the definition of Special Tax Requirement may be reduced in any Fiscal Year by: (a) interest earnings on or surplus balances in funds and accounts for the Bonds to the extent that such earnings or balances are available to apply against such costs pursuant to the Indenture; (b) in the sole and absolute discretion of the City, proceeds received from the collection of penalties associated with delinquent Special Taxes; and (c) any other revenues available to pay such costs, each as determined in the sole discretion of the City. “Annual Maintenance Special Tax” means a special tax levied in any Fiscal Year to pay the Annual Maintenance Special Tax Requirement, as defined below. “Annual Maintenance Special Tax Requirement” means the amount of revenue needed in any Fiscal Year to pay for: (i) Authorized Services, (ii) establishment of reserves, (iii) Administrative Expenses, and (iv) amounts needed to cure any delinquencies in the payment of Annual Maintenance Special Taxes which have occurred in prior Fiscal Years. “Assessor’s Parcel” or “Parcel” means a lot or parcel shown on an Assessor’s Parcel Map with an assigned Assessor’s Parcel number.
“Assessor’s Parcel Map” means an official map of the County Assessor designating parcels by Assessor’s Parcel Number.
“Assessor’s Parcel Number” means a unique number assigned to an Assessor’s Parcel by the County Assessor for purposes of identifying a property. “Authorized Facilities” means the public facilities authorized to be funded by the CFD as set forth in the documents adopted by the City Council when the CFD was formed. “Authorized Services” means the public services authorized to be funded by the CFD as set forth in the documents adopted by the City Council when the CFD was formed. “Bonds” means bonds or other debt (as defined in the Act), whether in one or more series, secured by the Annual Facilities Special Tax and issued or assumed by the CFD to fund Authorized Facilities.
“Building Permit” means a permit that allows for vertical construction of a building or buildings, which shall not include a separate permit issued for construction of the foundation thereof. “Capitalized Interest” means funds in any capitalized interest account available to pay debt service on Bonds.
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Tivoli CFD No. 2024-1, IA No. 1 3 May 17, 2024
“Certificate of Occupancy” means the first certificate, including any temporary certificate of occupancy, issued by the City to confirm that a building or a portion of a building has met all of the building codes and can be occupied for residential and/or non-residential use. “CFD” means the City of Modesto Community Facilities District No. 2024-1 (Tivoli). “CFD Formation” means the date on which the Resolution of Formation to form the CFD was adopted by the City Council.
“City” means the City of Modesto.
“City Council” means the City Council of the City of Modesto, acting as the legislative body of the CFD.
“County” means the County of Stanislaus.
“Density Category” means, individually, Very Low Density Residential Property, Low Density Residential Property, Medium Density Residential Property, or Medium High Density Residential Property.
“Developed Property” means, in any Fiscal Year, the following:

For purposes of levying the Annual Maintenance Special Tax and Annual Facilities Special Tax:
• for Single Family Detached Property, all Parcels for which a Final Map was recorded prior to June 30 of the preceding Fiscal Year but not prior to June 30, 2023; • for Multi-Family Property, all Parcels for which a Building Permit was issued prior to June 30 of the preceding Fiscal Year but not prior to June 30, 2023; and • for Non-Residential Property, all Parcels for which a Building Permit was issued prior to June 30 of the preceding Fiscal Year but not prior to June 30, 2023.

For purposes of levying the One-Time Facilities Special Tax, all Parcels for which a Certificate of Occupancy was issued prior to June 30 of the preceding Fiscal Year but not prior to June 30, 2023.
“Development Class” means, individually, Developed Property, Taxable Owners Association Property, Taxable Welfare Exemption Property, and Taxable Public Property. “Escalation Factor” means, in any Fiscal Year, the greater of (i) the percentage increase, if any, in the construction cost index for the San Francisco region for the prior twelve (12) month period as published in the Engineering News Record or other comparable source if the Engineering News Record is discontinued or otherwise not available, or (ii) four percent (4.0%). “Expected Land Uses” means the Net Taxable Acreage of each Land Use Class expected on an Original Parcel based on reference to the Land Use Diagram and Attachment 2 hereto, the latter of which will be updated with each annexation of property into Improvement Area No. 1. #1..
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Tivoli CFD No. 2024-1, IA No. 1 4 May 17, 2024
“Final Map” means a final map, or portion thereof, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq) that creates SFD Lots.

The term “Final Map” shall not include any large-lot subdivision map, Assessor’s Parcel Map, or subdivision map or portion thereof, that does not create SFD Lots, including Assessor’s Parcels that are designated as remainder parcels.
“First Bond Sale” means issuance of the first series of Bonds secured, in whole or in part, by Annual Facilities Special Taxes levied and collected from Parcels of Taxable Property in Improvement Area No. 1.
“Fiscal Year” means the period starting July 1 and ending on the following June 30. “Future Annexation Area” means that geographic area that, at the time of CFD Formation, was considered potential annexation area for the CFD and which was, therefore, identified as “future annexation area” on the recorded CFD boundary map. Such designation does not mean that any or all of the Future Annexation Area will annex into the CFD, but should property designated as Future Annexation Area choose to annex, the annexation may be processed pursuant to the streamlined annexation procedures provided in the Act.
“Improvement Area No. 1” means Improvement Area No. 1 of the CFD. “Indenture” means an indenture, fiscal agent agreement, or other agreement authorizing issuance of the Bonds.
“Land Use Class” means one of the five mutually-exclusive land use classes identified in Table 1 in Section C below. The City shall, in its sole discretion, determine the appropriate Land Use Class for a Parcel of Taxable Property.
“Land Use Diagram” means the exhibit in the Tivoli Specific Plan entitled “Tivoli Specific Plan Land Use Diagram”, as may be amended from time to time. The Land Use Diagram at CFD Formation is included as Attachment 1 hereto.
“Low Density Residential Property” means all Parcels of Taxable Property that are developed or expected to be developed at an average density range of 4 to 6 dwelling units per gross acre.

Such Parcels are identified by an LDR designation in the Land Use Diagram. “Maximum Annual Facilities Special Tax” means the greatest amount of Annual Facilities Special Tax that can be levied on an Assessor’s Parcel in any Fiscal Year determined in accordance with Sections C and D below.
“Maximum Annual Facilities Special Tax Revenues” means the aggregate amount that could be generated at any point in time if the Maximum Annual Facilities Special Tax was levied and collected on all Parcels of Taxable Property in Improvement Area No. 1. “Maximum Annual Maintenance Special Tax” means the greatest amount of Annual Maintenance Special Tax that can be levied on an Assessor’s Parcel in any Fiscal Year determined in accordance with Sections C and D below.
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Tivoli CFD No. 2024-1, IA No. 1 5 May 17, 2024
“Maximum One-Time Facilities Special Tax” means the greatest amount of One-Time Facilities Special Tax that can be levied on an Assessor’s Parcel in any Fiscal Year determined in accordance with Sections C and D below.
“Maximum Special Taxes” means, collectively for any Parcel, the Maximum One-Time Facilities Special Tax, Maximum Annual Facilities Special Tax, and Maximum Annual Maintenance Special Tax.
“Medium Density Residential Property” means all Parcels of Taxable Property that are developed or expected to be developed at an average density range of 7 to 17 dwelling units per gross acre. Such Parcels are identified by an MDR designation in the Land Use Diagram. “Medium High Density Residential Property” means all Parcels of Taxable Property that are developed or expected to be developed at an average density range of 18 to 24 dwelling units per gross acre. Such Parcels are identified by an MDHR designation in the Land Use Diagram. For purposes of this RMA, Medium High Density Residential Property shall also include any property that is zoned at an average density range higher than 18 to 24 dwelling units per acre, regardless of the designation that is assigned to such Parcel(s).
“Multi-Family Property” means all Parcels of Developed Property for which Building Permits have been issued for construction of a residential structure consisting of two or more residential units that share common walls, including but not limited to, townhomes, condominiums, duplexes, triplexes, fourplexes, and apartment units. If a Building Permit has not yet been issued on the Parcel, the Administrator shall reference the Tivoli Specific Plan and/or the Parcel’s zoning designation to determine whether the Parcel is Multi-Family Property. “Net Taxable Acreage” or “Net Taxable Acre” means the total acreage within a Final Map or Parcel less arterial road right-of-ways and property that is defined in the Final Map for use as a park site, school site, or City-owned storm drainage basin. If a Subdivision Map is recorded which is not a Final Map for some or all Parcels created by the subdivision, the Administrator shall calculate the Net Taxable Acreage of such unsubdivided Parcels by identifying the Acreage of the Parcel and (i) adding a portion of the acreage of any non-arterial right-of-way that fronts the Parcel determined by drawing lines at right angles to the right-of-way, and (ii) subtracting a portion of the acreage of any arterial right-of-way that fronts the Parcel determined by drawing lines at right angles to the right-of-way. The Net Taxable Acreage of a Parcel or Final Map shall be determined in the sole discretion of the City.
“Non-Residential Property” means any Parcel of Taxable Property in the CFD that does not fit within the definition of Residential Property, Taxable Owners Association Property, Taxable Public Property, or Taxable Welfare Exemption Property, as determined by the Administrator. “One-Time Facilities Special Tax” means a Special Tax levied and collected in full by the City prior to issuance of a Certificate of Occupancy for a Parcel of Taxable Property. “Original Parcel” means an Assessor’s Parcel in Improvement Area No. 1 at the time of CFD Formation, or added to Improvement Area No. 1 upon annexation, as identified in Attachment 3 (which shall be updated after each annexation). A Successor Parcel that is being further subdivided shall also be considered an Original Parcel for purposes of determining the Maximum Special Taxes pursuant to Section C below.
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Tivoli CFD No. 2024-1, IA No. 1 6 May 17, 2024
“Owners Association” means a homeowners association or property owners association that provides services to, and collects assessments, fees, dues, or charges from, property within Improvement Area No. 1.
“Owners Association Property” means any property within the boundaries of Improvement Area No. 1 that is owned in fee or through easement by the Owners Association, not including any such property that is located directly under a residential structure. “Per-Acre Special Taxes” means the per-acre Special Taxes identified in Table 1 in Section C below.
“Proportionately” means, for each Development Class, that the ratio of the actual Special Tax levied in any Fiscal Year to the Maximum Special Tax authorized to be levied in that Fiscal Year is equal for all parcels assigned to the Development Class. “Public Property” means any property within the boundaries of Improvement Area No. 1that is owned by the federal government, State of California, County, City, or other public agency. “RMA” means this Rate and Method of Apportionment of Special Taxes. “Required Coverage” means the amount by which the Maximum Annual Facilities Special Tax Revenues must exceed the Bond debt service and priority Administrative Expenses (if any), as set forth in the Indenture, Certificate of Special Tax Consultant, or other formation or bond document that sets forth the minimum required debt service coverage. “Residential Property” in any Fiscal Year means, collectively, all Very Low Density Residential Property, Low Density Residential Property, Medium Density Residential Property, and Medium High Density Residential Property.
“SFD Lot” means an individual residential lot, identified and numbered on a recorded Final Map, on which a Building Permit has been or is permitted to be issued for construction of an SFD Unit without further subdivision of the lot and for which no further subdivision of the lot is anticipated pursuant to an approved Tentative Map.
“SFD Unit” means a residential dwelling unit that does not share a common wall with another residential dwelling unit.
“Special Taxes” means, collectively, the One-Time Facilities Special Tax, the Annual Facilities Special Tax, and the Annual Maintenance Special Tax.
“Special Tax Category” means, individually, the One-Time Facilities Special Tax, the Annual Facilities Special Tax, and the Annual Maintenance Special Tax.

“Subdivision Map” means a Final Map, large lot subdivision map, or other map recorded with the County that results in the subdivision of an Original Parcel into two or more Successor Parcels. #1..
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Tivoli CFD No. 2024-1, IA No. 1 7 May 17, 2024
“Successor Parcel” means an Assessor’s Parcel of Taxable Property created by the subdivision or reconfiguration of an Original Parcel on which construction of a residential or non-residential structure is permitted.
“Taxable Owners Association Property” means, in any Fiscal Year after the First Bond Sale, any Parcel of Owners Association Property that satisfies all three of the following conditions: (i) the Parcel had not been Owners Association Property on the date of the First Bond Sale; (ii) based on reference to Attachments 1 and 2, the Parcel was not anticipated to be Owners Association Property as determined by the Administrator; and (iii) if the Parcel were to be exempt from the Special Tax because it is Owners Association Property, the Maximum Annual Facilities Special Tax Revenues would be reduced to a point at which Required Coverage could not be maintained. “Taxable Property” means all of the Assessor’s Parcels within the boundaries of Improvement Area No. 1 that are not exempt from the Special Taxes pursuant to law or Section H below. “Taxable Public Property” means in any Fiscal Year after the First Bond Sale, any Parcel of Public Property that satisfies all three of the following conditions: (i) the Parcel had not been Public Property on the date of the First Bond Sale; (ii) based on reference to Attachments 1 and 2, the Parcel was not anticipated to be Public Property as determined by the Administrator; and (iii) if the Parcel were to be exempt from the Special Tax because it is Public Property, the Maximum Facilities Special Tax Revenues would be reduced to a point at which Required Coverage could not be maintained.
“Taxable Welfare Exemption Property” means in any Fiscal Year after the First Bond Sale, any Parcel of Welfare Exemption Property that satisfies all three of the following conditions: (i) the Parcel had not been Welfare Exemption Property on the date of issuance of the First Bond Sale; (ii) based on reference to Attachments 1 and 2, the Parcel was not anticipated to be Welfare Exemption Property based on the Expected Land Uses, as determined by the Administrator; and (iii) if the Parcel were to be exempt from the Special Tax because it has become Welfare Exemption Property, the Maximum Annual Facilities Special Tax Revenues would be reduced to a point at which Required Coverage could not be maintained. “Tentative Map” means a tentative map or substantial conformance exhibit for property in the CFD, including any adjustments or amendments thereto.
“Tivoli Specific Plan” means the specific plan for development within the Tivoli project that was originally adopted by the City Council on February 26, 2008, further updated on September 27, 2016, and as may be amended from time to time.
“Undeveloped Property” means, in any Fiscal Year, all Parcels of Taxable Property that are not Developed Property, Taxable Owners Association Property, Taxable Public Property, or Taxable Welfare Exemption Property as defined herein.
“Very Low Density Residential Property” means all Parcels of Taxable Property that are developed or expected to be developed as large lot, rural-oriented estate homes with an average density range of 1 to 3 dwelling units per acre. Such Parcels are identified by a VLDR designation in the Land Use Diagram.
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Tivoli CFD No. 2024-1, IA No. 1 8 May 17, 2024
“Welfare Exemption Property” means, in any Fiscal Year, any Parcels in Improvement Area No. 1 that have received a welfare exemption under subdivision (g) of Section 214 of the Revenue and Taxation Code and for which such welfare exemption is still in place.

B. DATA FOR ANNUAL ADMINISTRATION
On or about July 1 of each Fiscal Year, the Administrator shall identify the current Assessor’s Parcel Numbers for all Parcels of Taxable Property in Improvement Area No. 1. The Administrator shall also: (i) assign each Parcel of Taxable Property to the appropriate Development Class; (ii) categorize each Parcel of Residential Property into the appropriate Density Category; (iii) determine the Net Taxable Acreage of each Parcel; and (iv) determine the Annual Facilities Special Tax Requirement and Annual Maintenance Special Tax Requirement.

In any Fiscal Year, if it is determined that: (i) a Subdivision Map for property in Improvement Area No. 1 was recorded after January 1 of the prior Fiscal Year (or any other date after which the Assessor will not incorporate the newly-created Parcels into the then current tax roll), (ii) because of the date the Subdivision Map was recorded, the Assessor does not yet recognize the new Parcels created by the Subdivision Map, and (iii) one or more of the newly-created Parcels is in a different Development Class than other Parcels created by the subdivision, the Administrator shall calculate the Special Taxes for the property affected by recordation of the Subdivision Map by determining the Special Taxes that apply separately to the property within each Development Class, then applying the sum of the individual Special Taxes to the Parcel that was subdivided by recordation of the Subdivision Map.

C. MAXIMUM SPECIAL TAXES
The Administrator shall use the procedures set forth below to calculate the Maximum Special Taxes for each Parcel in Improvement Area No. 1 in each Fiscal Year. The Per-Acre Special Taxes set forth in Table 1 below shall be used for purposes of Sections C.1 and C.2 below:

Table 1
Per-Acre Special Taxes
Fiscal Year 2024-25 *
Land Use Class
Per-Acre Special Tax:

One-Time
Facilities Special Tax
Per-Acre Special Tax:

Annual Facilities
Special Tax
Per-Acre Special Tax:

Annual Maintenance
Special Tax
Very Low Density
Residential Property
$100,000 per
Net Taxable Acre
$5,724 per
Net Taxable Acre
$5,589 per
Net Taxable Acre
Low Density
Residential Property
$100,000 per
Net Taxable Acre
$10,260 per
Net Taxable Acre
$5,589 per
Net Taxable Acre
Medium Density
Residential Property
$100,000 per
Net Taxable Acre
$13,725 per
Net Taxable Acre
$5,589 per
Net Taxable Acre
Medium High Density
Residential Property
$100,000 per
Net Taxable Acre
$13,087 per
Net Taxable Acre
$5,589 per
Net Taxable Acre
Non-Residential
Property
$100,000 per
Net Taxable Acre
$7,375 per
Net Taxable Acre
$5,589 per
Net Taxable Acre
* All Per-Acre Special Taxes shown in Table 1 are subject to the annual adjustments described in Section D below. #1..
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Tivoli CFD No. 2024-1, IA No. 1 9 May 17, 2024

1. Original Parcels
The Maximum Special Taxes for each Land Use Class expected on the Original Parcels as of CFD Formation are identified in Attachment 2, which will be updated by the Administrator as needed to reflect Original Parcels added to Improvement Area No. 1 due to annexations. Until an Original Parcel is subdivided, the Maximum Special Taxes shown in Attachment 2 (escalated as set forth herein) shall be the Maximum Special Taxes for the Parcel unless the zoning on the Original Parcel changes to a Land Use Class that has higher Per-Acre Special Taxes based on reference to Table 1 above. Upon approval of such a change in zoning by the City Council, the Administrator shall multiply the applicable PerAcre Special Taxes by the Net Taxable Acreage of each Land Use Class that is expected on the Parcel based on the rezone. The Administrator shall then update Attachment 2 to reflect the higher Maximum Special Taxes for the Parcel. If a rezone results in a Land Use Class that has a lower Per-Acre Special Tax than the previous Expected Land Uses, there shall be no corresponding reduction in the Maximum Special Taxes for the Parcel. The potential reduction in Maximum Special Tax revenues must be considered separately for each Special Tax Category. If the rezone would cause a reduction in the Maximum Special Tax revenues in any Special Tax Category, the Maximum Special Tax identified for that Special Tax Category shall remain the same as originally assigned to the Original Parcel.

2. Successor Parcels
a. All Successor Parcels are SFD Lots
If all Parcels created by a recorded Subdivision Map are SFD Lots, the Administrator shall apply the following steps to allocate the Maximum Special Taxes for the Original Parcel to each of the Successor Parcels created by the subdivision:

Step 1. Determine the greater of: (i) the sum of the Maximum Special Taxes assigned to each Expected Land Use for the Original Parcel, or (ii) the sum of the Net Taxable Acreage of each Density Category within the Subdivision Map multiplied by the Per-Acre Special Taxes for each Density Category.

Step 2. Separately for each Density Category created by the Subdivision Map, divide the Maximum Special Taxes from Step 1 by the number of Successor Parcels to determine the Maximum Special Taxes for each SFD Lot. b. No Successor Parcels are SFD Lots
If none of the Successor Parcels created by recordation of a Subdivision Map are SFD Lots, the Administrator shall apply the following steps to allocate the Maximum Special Taxes assigned to the Original Parcel to each of the Successor Parcels:

Step 1. Identify the Expected Land Uses for the Original Parcel.

Step 2. Determine the Net Taxable Acreage within each Land Use Class created by the Subdivision Map.
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Tivoli CFD No. 2024-1, IA No. 1 10 May 17, 2024
Step 3. If the Net Taxable Acreage of each Land Use Class from Step 2 is the same as the Expected Land Uses, the Maximum Special Taxes assigned to each of the Expected Land Uses on the Original Parcel shall be allocated to the Successor Parcels based on the Acreage of each Land Use Class that occurs on each Successor Parcel.

Step 4. If the Net Taxable Acreage within each Land Use Class from Step 2 is different than the Expected Land Uses for the Original Parcel, the Administrator shall apply the following steps separately for each Special Tax Category:

Step 4a. Multiply the applicable Per-Acre Special Tax by the Net Taxable Acreage of each Land Use Class created by the Subdivision Map.

Step 4b. If the amount calculated in Step 4a is greater than the Maximum Special Tax assigned to the Original Parcel, multiply the Net Taxable Acreage of each Land Use Class on each Successor Parcel by the applicable Per-Acre Special Tax from Table 1 above to determine the Maximum Special Tax for each Successor Parcel.

Step 4c. If the amount calculated in Step 4a is less than the Maximum Special Tax assigned to the Original Parcel: (i) identify the Maximum Special Tax that was assigned to each of the Expected Land Uses on the Parcel, (ii) divide the Maximum Special Tax for each Land Use Class by the Net Taxable Acreage of each Land Use Class actually created by the Subdivision Map, and (iii) multiply the per-acre Maximum Special Tax calculated in (ii) by the Net Taxable Acreage of each Land Use Class on each
Successor Parcel to determine the Maximum Special Tax for each Parcel.

If the Land Use Classes on a Successor Parcel or Parcels are different than the Expected Land Uses for that Parcel(s) and such difference would result in a reduction in the Maximum Special Tax assigned to the Original Parcel for any Special Tax Category, the Maximum Special Tax assigned to the Original Parcel shall either be distributed equally on a per-acre basis to the Successor Parcels or, if multiple Land Use Classes are created by the Subdivision Map, the Maximum Special Tax from the Original Parcel shall be distributed to each Land Use Class so that the peracre tax for each Land Use Class has the same proportional relationship as the Per-Acre Special Taxes in Table 1 above. c. Some, But Not All, Successor Parcels are SFD Lots
If a Subdivision Map divides an Original Parcel into Successor Parcels, of which some are SFD Lots and some are not, the Administrator shall (i) break out the aggregate Net Taxable #1..
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Tivoli CFD No. 2024-1, IA No. 1 11 May 17, 2024
Acreage of all SFD Lots separately from the Net Taxable Acreage of other Land Use Classes, (ii) for the aggregate Net Taxable Acreage of the SFD Lots, apply the steps in Section C.2a to determine the Maximum Special Taxes for each SFD Lot, and (iii) apply the steps in Section C.2b above to determine the Maximum Special Taxes for the other Land Use Classes on the Parcel.

If, after subdivision of an Original Parcel, a Successor Parcel is further subdivided, the Successor Parcel shall be treated as an Original Parcel for purposes of allocating Maximum Special Taxes pursuant to Section C.2a, C.2b, or C.2c, as appropriate. After each reallocation of the Maximum Special Taxes upon subdivision or reconfiguration of Original Parcels, the sum of the Maximum Special Taxes assigned to Successor Parcels shall never be less, but may be more, than the Maximum Special Taxes assigned to the Original Parcels prior to such reallocation.

D. CHANGES TO THE MAXIMUM SPECIAL TAXES

1. Escalation of Special Taxes
1a. One-Time Special Tax
On July 1, 2025 and on each July 1 thereafter, the Maximum One-Time Facilities Special Tax assigned to each Parcel and the Per-Acre Special Tax shown in Table 1 above shall be adjusted annually by the Escalation Factor. 1b. Annual Facilities Special Tax
On July 1, 2025 and on each July 1 thereafter, the Maximum Annual Facilities Special Tax assigned to each Parcel and the Per-Acre Special Tax shown in Table 1 above shall be increased by two percent (2%) of the amount in effect in the prior Fiscal Year. 1c. Annual Maintenance Special Tax
On July 1, 2025 and on each July 1 thereafter, the Maximum Annual Maintenance Special Tax assigned to each Parcel and the Per-Acre Special Tax shown in Table 1 above shall be adjusted annually by the Escalation Factor. Each annual adjustment of the Maximum Annual Maintenance Special Tax shall become effective on the subsequent July 1.

2. Partial Prepayment of Maximum Annual Facilities Special Tax If a Parcel makes a partial prepayment of the Annual Facilities Special Tax pursuant to Section I below, the Administrator shall recalculate the Maximum Annual Facilities Special Tax for the Parcel pursuant to Section I.2. In addition, the Administrator shall update Attachment 2 to reflect the prepayment and the revised Maximum Annual Facilities Special Tax Revenues for Improvement Area No. 1. Such updates shall be maintained internally by the Administrator and shall not require recordation of an amended RMA. After the prepayment has been received, the application of Sections F and I of this RMA shall be based on the adjusted Expected Maximum Annual Facilities Special Tax Revenues after the prepayment. #1..
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Tivoli CFD No. 2024-1, IA No. 1 12 May 17, 2024

3. Conversion of a Parcel of Public Property to Private Use If, in any Fiscal Year, a Parcel of Public Property is converted to private use, such Parcel shall be subject to the levy of the Special Taxes, and the Administrator shall determine the appropriate Maximum Special Taxes for the Parcel based on the Net Taxable Acreage of the Parcel.

E. ANNEXATIONS
If, in any Fiscal Year, a property owner within the Future Annexation Area wants to annex property into Improvement Area No. 1, the Administrator shall apply the following steps as part of the annexation proceedings:

Step 1. Working with City staff and the landowner, the Administrator shall determine the Land Use Classes that are expected within the area to be annexed.

Step 2. The Administrator shall prepare and keep on file an updated Attachment 2 that identifies the Assessor’s Parcel Number(s), Expected Land Use, Expected Net Taxable Acreage, One-Time Facilities Special Tax, Maximum Annual Facilities Special Tax, and Maximum Annual Maintenance Special Tax for the annexed property.

Step 3. The Administrator shall prepare and keep on file an updated Attachment 3 that adds the Assessor’s Parcel(s) in the annexed area to the Original Parcels in Improvement Area No. 1.

Step 4. The Administrator shall ensure that a Notice of Special Tax Lien is recorded against all Parcels that are annexed to Improvement Area No. 1.

Step 5. The Administrator shall recalculate the Public Facilities Requirement used in the prepayment calculation in Section I below to include the estimated net proceeds that can be generated to fund Authorized Facilities based on the Maximum Annual Facilities Special Tax capacity from the annexed area. The adjusted Public Facilities Requirement shall be calculated by (i) dividing the increased Maximum Annual Facilities Special Tax Revenues that can be collected after the annexation by the Maximum Annual Facilities Special Tax Revenues that were in place prior to the annexation, and (ii) multiplying the quotient by the Public Facilities Requirement that was in place prior to the annexation.

F. METHOD OF LEVY OF THE SPECIAL TAXES

1. One-Time Facilities Special Tax
The Maximum One-Time Facilities Special Tax determined pursuant to Sections C and D above shall be levied on all Taxable Property in Improvement Area No. 1 and shall be collected as set forth in Section G below.
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Tivoli CFD No. 2024-1, IA No. 1 13 May 17, 2024

2. Annual Facilities Special Tax
Each Fiscal Year, the Administrator shall determine the Annual Facilities Special Tax Requirement for the Fiscal Year and levy the Annual Facilities Special Tax on all Parcels of Taxable Property as follows:

Step 1: The Annual Facilities Special Tax shall be levied Proportionately on each Parcel of Developed Property within Improvement Area No. 1 up to 100% of the Maximum Annual Facilities Special Tax for each Parcel for such Fiscal Year until the amount levied on Developed Property is equal to the Annual Facilities Special Tax Requirement prior to applying any Capitalized Interest that is available in the CFD accounts.

Step 2: If additional revenue is needed after Step 1, the Annual Facilities Special Tax shall be levied Proportionately on each Parcel of Taxable Welfare Exemption Property up to 100% of the Maximum Annual Facilities Special Tax for each Parcel of Taxable Welfare Exemption Property for such Fiscal Year until the amount levied is equal to the Annual Facilities Special Tax Requirement.

Step 3: If additional revenue is needed after Step 2, the Annual Facilities Special Tax shall be levied Proportionately on each Parcel of Taxable Owners Association Property up to 100% of the Maximum Annual Facilities Special Tax for each Parcel of Taxable Owners Association Property until the amount levied is equal to the Annual Facilities Special Tax Requirement.

Step 4: If additional revenue is needed after Step 3, the Annual Facilities Special Tax shall be levied Proportionately on each Parcel of Taxable Public Property up to 100% of the Maximum Annual Facilities Special Tax for each Parcel of Taxable Public Property until the amount levied is equal to the Annual Facilities Special Tax Requirement.

No Annual Facilities Special Tax shall be levied in any Fiscal Year on Parcels of Undeveloped Property.

3. Annual Maintenance Special Tax
Each Fiscal Year, the Administrator shall determine the Annual Maintenance Special Tax Requirement for the Fiscal Year and levy the Annual Maintenance Special Tax on Parcels of Taxable Property as follows:

Step 1: The Annual Maintenance Special Tax shall be levied Proportionately on each Parcel of Developed Property within Improvement Area No. 1 up to 100% of the Maximum Annual Maintenance Special Tax for each Parcel for such Fiscal Year until the amount levied on Developed Property is equal to the Annual Maintenance Special Tax Requirement.

Step 2: If additional revenue is needed after Step 1, the Annual Maintenance Special Tax shall be levied Proportionately on each Parcel of Taxable Welfare Exemption Property up to 100% of the Maximum Annual Maintenance #1..
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Tivoli CFD No. 2024-1, IA No. 1 14 May 17, 2024
Special Tax for each Parcel of Taxable Welfare Exemption Property for such Fiscal Year until the amount levied is equal to the Annual Maintenance Special Tax Requirement.

Step 3: If additional revenue is needed after Step 2 the Annual Maintenance Special Tax shall be levied Proportionately on each Parcel of Taxable Owners Association Property up to 100% of the Maximum Annual Maintenance Special Tax for each Parcel of Taxable Owners Association Property until the amount levied is equal to the Annual Maintenance Special Tax Requirement.

Step 4: If additional revenue is needed after Step 3, the Annual Maintenance Special Tax shall be levied Proportionately on each Parcel of Taxable Public Property up to 100% of the Maximum Annual Maintenance Special Tax for each Parcel of Taxable Public Property until the amount levied is equal to the Annual Maintenance Special Tax Requirement.

No Annual Maintenance Special Tax shall be levied in any Fiscal Year on Parcels of Undeveloped Property.

G. MANNER OF COLLECTION OF SPECIAL TAXES
The Maximum One-Time Facilities Special Tax shall be collected prior to a Certificate of Occupancy being issued for any residential or non-residential structure on Taxable Property within Improvement Area No. 1 and shall be immediately delinquent if not so paid.

The Annual Facilities Special Tax and Annual Maintenance Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that prepayments are permitted as set forth in Section I below and provided further that the City may directly bill, collect at a different time or in a different manner, and/or collect delinquent Annual Facilities Special Taxes and Annual Maintenance Special Taxes through foreclosure or other available methods.

The Annual Facilities Special Tax shall be levied and collected until principal and interest on Bonds have been repaid, costs of constructing or acquiring Authorized Facilities from Annual Facilities Special Tax proceeds have been paid, and all Administrative Expenses have been reimbursed. However, in no event shall Annual Facilities Special Taxes be levied after Fiscal Year 2074-75. The Annual Maintenance Special Tax shall be levied in perpetuity unless and until the City determines that the Annual Maintenance Special Tax is no longer needed to pay for Authorized Services. Under no circumstances may the Annual Facilities Special Tax on a Parcel of Developed Property in residential use be increased in any Fiscal Year as a consequence of delinquency or default in payment of the Annual Facilities Special Tax levied on another Parcel or Parcels by more than ten percent (10%) above the amount that would have been levied in that Fiscal Year had there never been any such delinquencies or defaults.

H. EXEMPTIONS
Notwithstanding any other provision of this RMA, no One-Facilities Special Tax or Annual Facilities Special Tax shall be levied in any Fiscal Year on the following: (i) Public Property, #1..
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Tivoli CFD No. 2024-1, IA No. 1 15 May 17, 2024
except Taxable Public Property, (ii) Owners Association Property, except Taxable Owners Association Property, (iii) Welfare Exemption Property, except Taxable Welfare Exemption Property, and (iv) Parcels of Undeveloped Property. In addition, no Annual Facilities Special Tax shall be levied on (i) Parcels that are owned by a public utility for an unmanned facility, (ii) Parcels that are subject to an easement that precludes any other use on the Parcel, and (iii) Parcels that have fully prepaid the Annual Facilities Special Tax obligation assigned to the Parcel pursuant to the formula set forth in Section I below.

No Annual Maintenance Special Tax shall be levied on the following: (i) Public Property, including Taxable Public Property, (ii) Owners Association Property, including Taxable Owners Association Property, and (iii) Welfare Exemption Property, including Taxable Welfare Exemption Property.

I. PREPAYMENT OF THE ANNUAL FACILITIES SPECIAL TAX
The following definitions apply to this Section I:
“Outstanding Bonds” means all Previously Issued Bonds which remain outstanding, with the following exception: if an Annual Facilities Special Tax has been levied against, or already paid by, an Assessor’s Parcel making a prepayment, and a portion of the Annual Facilities Special Tax will be used to pay a portion of the next principal payment on the Bonds that remain outstanding (as determined by the Administrator), that next principal payment shall be subtracted from the total Bond principal that remains outstanding, and the difference shall be used as the amount of Outstanding Bonds for purposes of this prepayment formula.
“Previously Issued Bonds” means all Bonds that have been issued prior to the date of prepayment.
“Public Facilities Requirement” means either $3.7 million in 2024 dollars, which shall increase on January 1, 2025, and on each January 1 thereafter by two percent (2%) of the amount in effect in the prior year, or such other number as shall be determined by the City as sufficient to fund improvements that are authorized to be funded by the CFD. The Public Facilities Requirements shown above will be adjusted each time there is an annexation of property into Improvement Area No. 1.
“Remaining Facilities Costs” means the Public Facilities Requirement minus public facility costs funded by Previously Issued Bonds, developer equity, and any other source of funding.

1. Full Prepayment
The Annual Facilities Special Tax obligation applicable to an Assessor’s Parcel in Improvement Area No. 1 may be prepaid and the obligation of the Assessor’s Parcel to pay the Annual Facilities Special Tax permanently satisfied as described herein, provided that a prepayment may be made only if there are no delinquent Annual Facilities Special Taxes with respect to such Assessor’s Parcel at the time of prepayment. The Annual Maintenance Special Tax may not be prepaid. An owner of an Assessor’s Parcel intending to prepay the Annual Facilities Special Tax obligation #1..
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Tivoli CFD No. 2024-1, IA No. 1 16 May 17, 2024
shall provide the City with written notice of intent to prepay. Within 30 days of receipt of such written notice, the City or its designee shall notify such owner of the prepayment amount for such Assessor’s Parcel. Prepayment must be made not less than 75 days prior to any redemption date for Bonds to be redeemed with the proceeds of such prepaid Annual Facilities Special Taxes. The Prepayment Amount shall be calculated as follows: (capitalized terms as defined below):

Bond Redemption Amount
plus Remaining Facilities Amount
plus Redemption Premium
plus Defeasance Requirement
plus Administrative Fees and Expenses
less Reserve Fund Credit
equals Prepayment Amount
As of the proposed date of prepayment, the Prepayment Amount shall be determined by application of the following steps:

Step 1. Compute the amount that could be collected from the Parcel prepaying the Annual Facilities Special Tax in the Fiscal Year in which prepayment would be received by the City.

Step 2. Divide the Maximum Annual Facilities Special Tax from Step 1 by the current Maximum Annual Facilities Special Tax Revenues.

Step 3. Multiply the quotient computed pursuant to Step 2 by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the “Bond Redemption Amount”).

Step 4. Compute the current Remaining Facilities Costs (if any).

Step 5. Multiply the quotient computed pursuant to Step 2 by the amount determined pursuant to Step 4 to compute the amount of Remaining Facilities Costs to be prepaid (the “Remaining Facilities Amount”).

Step 6. Multiply the Bond Redemption Amount computed pursuant to Step 3 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the “Redemption Premium”).

Step 7. Compute the amount needed to pay interest on the Bond Redemption Amount starting with the first Bond interest payment date after which the prepayment will be received until the earliest redemption date for the Outstanding Bonds. However, if Bonds are callable at the first interest payment date after the prepayment has been received, Steps 7, 8, and 9 of this prepayment formula will not apply.

Step 8: Compute the amount of interest the City reasonably expects to derive from reinvestment of the Bond Redemption Amount plus the Redemption Premium from the first Bond interest payment date after which the #1..
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Tivoli CFD No. 2024-1, IA No. 1 17 May 17, 2024
prepayment has been received until the redemption date for the Outstanding Bonds.

Step 9: Subtract the amount computed pursuant to Step 8 from the amount computed pursuant to Step 7 (the “Defeasance Requirement”).

Step 10. The administrative fees and expenses associated with the prepayment will be determined by the Administrator and include the costs of computing the prepayment, redeeming Bonds, and recording any notices to evidence the prepayment and the redemption (the “Administrative Fees and Expenses”).

Step 11. If and to the extent so provided in the Bond Indenture, a reserve fund credit shall be calculated as a reduction in the applicable reserve fund for the Outstanding Bonds to be redeemed pursuant to the prepayment (the “Reserve Fund Credit”).

Step 12. The Facilities Special Tax prepayment is equal to the sum of the amounts computed pursuant to Steps 3, 5, 6, 9, and 10, less the amount computed pursuant to Step 11 (the “Prepayment Amount”).

Step 13. From the Prepayment Amount, the amounts computed pursuant to Steps 3, 6, and 9 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to Step 5 shall be deposited into the Improvement Fund. The amount computed pursuant to Step 10 shall be retained in the account or fund that is established to pay Administrative Expenses.

Once a full prepayment of a Parcel’s Annual Facilities Special Tax obligation has been received, a Notice of Cancellation of Annual Facilities Special Tax Lien shall be recorded against the Parcel to reflect the discharge of the Parcel’s obligation to pay the Annual Facilities Special Tax.

However, a Notice of Cancellation of Annual Facilities Special Tax Lien shall not be recorded until all Special Taxes levied on the Parcel in the current and prior Fiscal Years have been collected.

2. Partial Prepayment
A partial prepayment of the Annual Facilities Special Tax may be made in an amount equal to any percentage of full prepayment desired by the party making a partial prepayment, except that the full amount of Administrative Fees and Expenses determined in Step 10 shall be included in the partial prepayment. The Maximum Annual Facilities Special Tax that can be levied on a Parcel after a partial prepayment is made shall be equal to the portion of the Maximum Annual Facilities Special Tax that was not prepaid. Once a partial prepayment has been received, an Amended Notice of Special Tax Lien shall be recorded against the Parcel to reflect the reduced Annual Facilities Special Tax lien for the Parcel, and the Administrator shall update Attachment 2 to show the revised Maximum Annual Facilities Special Tax for the Parcel. However, an Amended Notice of Special Tax Lien shall not be recorded until all Special Taxes levied on the Parcel in the current and prior Fiscal Years have been collected.
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Tivoli CFD No. 2024-1, IA No. 1 18 May 17, 2024
If an owner that has prepaid the Annual Facilities Special Tax obligation assigned to a Parcel subsequently rezones the Parcel to a Land Use Class that has a higher Per-Acre Annual Facilities Special Tax, the City may, in its sole discretion and as a condition of approval of the rezoning, collect the additional Annual Facilities Special Tax prepayment that would have applied had the Parcel been rezoned at the time of the original prepayment for the Parcel.

3. Maintaining Required Coverage
Notwithstanding the foregoing, if at any point in time the Administrator determines that the Maximum Annual Facilities Special Tax Revenue that can be collected from Taxable Property that remains subject to the Annual Facilities Special Tax after the proposed prepayment is less than the Required Coverage on Bonds that will remain outstanding after defeasance or redemption of Bonds from proceeds of the estimated prepayment, the amount of the prepayment shall be increased until the amount of Bonds defeased or redeemed is sufficient to reduce remaining annual debt service to a point at which Required Coverage is maintained.

I. INTERPRETATION OF SPECIAL TAX FORMULA
The City reserves the right to make minor administrative and technical changes to this document that does not materially affect the rates or method of apportioning Special Taxes. In addition, the interpretation and application of any section of this document shall be left to the City’s discretion.

Interpretations may be made by the City by ordinance or resolution for purposes of clarifying any vagueness or ambiguity in this RMA.
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ATTACHMENT 1
IMPROVEMENT AREA NO. 1 OF THE

CITY OF MODESTO
COMMUNITY FACILITIES DISTRICT NO. 2024-1
(TIVOLI)
Tivoli Specific Plan
Land Use Diagram
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ATTACHMENT 2
IMPROVEMENT AREA NO. 1 OF THE

CITY OF MODESTO
COMMUNITY FACILITIES DISTRICT NO. 2024-1
(TIVOLI)
Maximum Special Taxes Assigned to Expected Land Uses
Within Each Original Parcel
Event
Adding
Parcel
to CFD
Assessor’s
Parcel
Number
Expected
Land Use /1
Expected
Net Taxable
Acreage
Maximum
One-Time
Facilities
Special Tax
(FY 2024-25) /2
Maximum
Annual
Facilities
Special Tax
(FY 2024-25) /2
Maximum
Annual
Maintenance
Special Tax
(FY 2024-25) /2
CFD
Formation 083-004-059-000 MDR 4.50 $450,000 $61,761 $25,151 CFD
Formation 083-004-060-000 MDR 4.78 $478,000 $65,604 $26,715 CFD
Formation 083-004-068-000 LDR 35.89 $3,589,000 $368,244 $200,589

1. VLDR = Very Low Density Residential, LDR = Low Density Residential, MDR = Medium Density Residential, MHDR = Medium High Density Residential, and NR = Non-Residential

2. The Maximum Special Taxes set forth above shall be adjusted pursuant to Section D of the RMA.

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ATTACHMENT 3
IMPROVEMENT AREA NO. 1 OF THE

CITY OF MODESTO
COMMUNITY FACILITIES DISTRICT NO. 2024-1
(TIVOLI)
Original Parcels in Improvement Area No. 1
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2 083-004-059-000
3 083-004-060-0004 083-004-068-000
1 083-003-017-0005 083-004-076-0006 083-004-083-0007 083-004-088-0008 083-003-003-0009 083-003-014-000 10 083-003-015-00011 083-003-016-00012 083-004-008-00013 083-004-013-00014 083-004-023-00015 083-004-043-00016 083-004-044-00017 083-004-047-00018 083-004-048-00019 083-004-050-00020 083-004-057-00021 083-004-058-00022 083-004-063-00023 083-004-064-00024 083-004-070-00025 083-004-071-00026 083-004-072-00027 083-004-073-00028 083-004-078-00029 083-004-079-00030 083-004-085-00031 083-004-086-00032 083-004-087-00033 083-005-016-000 #1..
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CITY OF MODESTO

COMMITTEE AGENDA REPORT
DATE OF MEETING:

June 3, 2024
Date: May 14, 2024
TO: Economic Development Committee
Chris Ricci, Chair
Eric Alvarez, Vice-Chair
Sue Zwahlen, Member
THROUGH: Joseph P. Lopez, City Manager
FROM: Toby Wells, Director of Engineering Services/City Engineer SUBJECT: Summary Vacation of Right-of-Way Dedication located at APN 033-089-037 CONTACT: Jaspreet Mangat, Senior Civil Engineer, [email protected], 209-577-5253
DESCRIPTION:

Consider the summary vacation of an existing 60 feet wide road right-of-way dedication located at APN 033-089-037 and forwarding to Council for approval. (Funding Source: Not Applicable) STRATEGIC PLAN ELEMENT:

The recommended action supports the City’s 2020-2025 Strategic Goal “Ensure Safe, Efficient, and Reliable Infrastructure”.

BACKGROUND:

On November 22nd, 1976, by Resolution 76-1268, City Council approved the Final Map of Scott Estates, in the general vicinity of Yosemite Avenue east of Mariposa. Multiple parcels were created along with easements and road reservations for a potential future roadway north of Yosemite Avenue. As the area was developed over the years, some of the reserved areas were not utilized to build the roads as the development patterns changed the ultimate road configuration in the area. As a result, the previously dedicated road right-of-way can be abandoned in order to develop new businesses. Thus, TPC CS Holdings I, LLC, an Idaho Limited Liability Company, has requested the summary vacation of a 60 feet wide strip of property consisting of 11,505.95 square feet on their property at APN 033-089-037.

DISCUSSION:

As stated in California Streets and Highways Code - Division 9, Part 3, Chapter 4 Article 1, Section 8331:
“The legislative body of a local agency may summarily vacate a street or highway if both of the following conditions exist:
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Economic Development Committee, June 3, 2024
Summary Vacation of road located at APN 033-089-037

(a) For a period of five consecutive years, the street or highway has been impassable for vehicular travel.
(b) No public money was expended for maintenance on the street or highway during such period.”
The street was never built or accepted by the City. This area was reserved for future road construction and dedication but as development occurred, it became clear that further road construction was not required. There are no City utilities or other easements in this area. This vacation of the street will allow Dutch Bros Coffee shop to be built on the undeveloped parcel.

Staff recommends the summary vacation consistent with the California Streets and Highways Code - Division 9, Part 3, Chapter 4 Article 1, Section 8331.

FISCAL IMPACT:

There is no fiscal impact to the City caused by this vacation.

RECOMMENDED COMMITTEE ACTION:

Staff Recommendations:

Motion recommending the summary vacation of an existing 60 feet wide by approximately 192 feet long (11,505.95 square foot) road right-of-way located at APN 033-089-037 and forwarding to Council for approval.

Approved by:

Toby Wells, Director of Engineering Services
Joseph P. Lopez, City Manager
Attachments:

1. Exhibit A & B
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CITY OF MODESTO

COMMITTEE AGENDA REPORT
DATE OF MEETING:

June 3, 2024
Date: May 10, 2024
TO: Economic Development Committee
Chris Ricci, Chair
Eric Alvarez, Vice-Chair
Sue Zwahlen, Member
THROUGH: Joseph P. Lopez, City Manager
FROM: William Wong, Director of Utilities
SUBJECT: Sole Source Agreement for Field Services and Parts CONTACT: Jeff Daniels, Acting Wastewater Division Manager, [email protected], 209-577-6255
DESCRIPTION:

Consider an Agreement with Hach Company, Loveland, CO, for field services and parts for a total amount not to exceed $389,405 over three years and forwarding to Council for approval. (Funding Source: Sewer Operations Fund)
STRATEGIC PLAN ELEMENT:

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

BACKGROUND:

The Utilities Wastewater Recycling Facilities have installed various Hach Company instruments at both sites. These instruments ensure process control and compliance by monitoring and collecting critical data needed for the City’s National Pollutant Discharge Elimination System (NPDES) Permit. The instruments also assist the operations staff in maintaining equipment and processes with real-time data. This service agreement includes, but is not limited to, onsite calibration, onsite routine maintenance, and parts necessary to keep equipment in service.

Hach Company’s factory-trained service personnel are authorized to perform any repair, start-up service, or maintenance on these instruments. This will ensure accuracy of critical data points required for plant optimization and regulatory compliance, as well as dependability of the instruments, to minimize downtime of the facility and potential lost water sales to the North Valley Regional Recycled Water Project. Staff will receive field service reports that will demonstrate a proper maintenance program, which will be especially valuable during State audits of our #3..
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Economic Development Committee, June 3, 2024
Sole Source Agreement for Field Services and Parts

maintenance records for compliance of permit-required meters. A maintenance program performed by authorized field service technicians is subject to less scrutiny than a City operated maintenance program. This contract will also prevent additional costs associated with spare parts, calibration standards and equipment, replacement units and manufacturer service fees. Hach Company will also provide full replacement of any failed units under this agreement for as long as the unit is a supported product.

On July 6, 2021, by Resolution No. 2021-265, Council approved a sole source agreement with Hach Company, Loveland, CO, for field services for a one (1) year agreement with two (2) oneyear extension options, for an estimated annual amount of $27,922 and a total amount not to exceed $86,305 over three (3) years. Because all of the parts had been purchased, and were new, this Agreement was for field services only and did not include the funds to purchase parts.

DISCUSSION:

This agreement is crucial to the reliability of critical process control and compliance instruments.

Between Phase 1 and Phase 2 of the tertiary treatment facility, there are thirty (30) meters and twenty (20) controllers needing regular service. This agreement will ensure dependable service and warranty compliance for these units.

Modesto Municipal Code Section 8-3.204 generally requires all purchases in excess of one hundred thousand dollars ($100,000) to follow formal bid procedures. However, MMC 8-3.204(b) provides that a purchase may be exempted from the City’s formal bidding requirement where the Purchasing Agency’s requirements can be met solely by a single article or process. Hach Company, Loveland, CO should be exempt from the formal bidding procedure in accordance with Modesto Municipal Code 8-3.204(b) since they are the original equipment manufacturer and the only vendor that is able to service the equipment. Therefore, this purchase qualifies for exemption from the formal bidding procedures.

FISCAL IMPACT:

The actual expenditures for both, the current agreement for field services, and parts that were not included in the current Annual Agreement, are listed below:

Agreement
Year
Expenditure
1 $34,203
2 $92,450
3 $68,668
TOTAL $195,321
ANTICIPATED AGREEMENT EXPENDITURES:
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Economic Development Committee, June 3, 2024
Sole Source Agreement for Field Services and Parts

There is a significant increase requested for the new three-year Agreement to allow for the purchase of replacement parts that will be meeting the end of their life cycle during the term of this Agreement.

Year 1 Year 2 Year 3 Total
Annual Cost for Service $43,134 $44,860 $46,723 $134,717 Parts* $80,000 $84,800 $89,888 $254,688
Total $123,134 $129,660 $136,611 $389,405
*Includes a 6% increase in Year 2 and Year 3 for additional replacement parts Year Amount
6%
Increase
for Parts
Total
One $80,000 0 $80,000
Two $80,000 $4,800 $84,800
Three $84,800 $5,088 $89,888
Parts Total - Not to Exceed $254,688
The estimated first year expenditure of $123,134, is based on the $43,134 for year-one of the service Agreement with an $80,000 estimated cost for new and replacement parts, for a new three-year Agreement not to exceed $389,405.

Agreement Years 2-3 includes a 6% increase per year for additional replacement parts. Sufficient funds are budgeted in Fiscal Year 2024-25 in the Sewer Operations Fund.

RECOMMENDED COMMITTEE ACTION:

Staff Recommendation:

Motion recommending the Sole Source Agreement with Hach Company, Loveland, CO, for field services and parts for a three (3) year agreement for an estimated annual amount of $123,134, and a total amount not to exceed $389,405 over three (3) years and forwarding to Council for approval.

Approved by:

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

1. Agreement

2. Exhibit B – Hach Service Partnership Quote and Parts Quote

3. Bid Waiver w/Sole Source
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1 ANNUAL AGREEMENT NO 272374

FOR FIELD SERVICES AND PARTS

HACH COMPANY
This agreement, hereinafter called AGREEMENT, made and entered into in the City of Modesto, State of California, this _______ day of _____________, 2024, by and between the City of Modesto, a municipal corporation of the State of California, hereinafter called CITY, and Hach Company, hereinafter called CONTRACTOR.

W I T N E S E T H:

WHEREAS, the Modesto City Council adopted Resolution No. 2024- _______ authorizing an agreement for Field Services and Parts to CONTRACTOR, attached hereto as Exhibit “A” and made a part hereof, and
WHEREAS, the CONTRACTOR is the sole manufacture and service provider for Field Services and Parts, and
WHEREAS, the CONTRACTOR shall provide services to CITY as defined in the “Hach Service Partnership Quotation” and “Parts Quotation” that best meets the CITY needs, attached hereto as Exhibit “B” and made a part hereof, and
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2 WHEREAS, the CITY and CONTRACTOR shall enter into an agreement for furnishing of Field Services and Parts as described in the “Hach Partnership Quotation and Parts Quotation” attached herto as Exhibit “B” made a part hereof, and
WHEREAS, the City shall have the authorization to add additional parts and services as needed throughout the life of the agreement, and
NOW, THEREFORE, the parties hereto mutually agree as follows:

1. THE WORK:
a) CONTRACTOR shall furnish all labor, materials, equipment, fuel, tools, licenses and insurance necessary to perform and complete the required work as specified in Exhibit “B”, and in strict accordance with the conditions of the complete AGREEMENT. b) CONTRACTOR shall do and perform the work contemplated hereby in a good workmanlike manner under the direction of and to the satisfaction of the CITY Representative. c) CONTRACTOR shall maintain proper insurance with the CITY for the duration of the AGREEMENT.
d) CONTRACTOR shall maintain a CITY business license for the duration of the AGREEMENT.
e) CONTRACTOR shall furnish said services at the following AGREEMENT rates for an estimated annual amount $123,134. The total amount paid by CITY to CONTRACTOR over the full term of the AGREEMENT shall not exceed $389,405. Unless the services provided are for a lump sum or flat fee, fees for work performed by CONTRACTOR on an hourly basis shall not exceed the amounts shown on the “Hach Service Partnership Quotation” and “Parts Quotation”attached hereto as Exhibit B. #3..
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3 AGREEMENT PRICING

SERVICE RATES
Part Number Description Qty Unit
Price
Year 1
Extended
Price
Year 2
Extended
Price
Year 3
Extended
Price
FSPLDO2
Fld Svc LDO2-1 Visit
Field Service Partnership provides full coverage,
including one (1) on-site annual preventive
maintenance/calibration service and probe
replacement upon failure.
11 $496.65 $5,463.15 $5,463.15 $5,463.15
FSPSC200 Fld Svc-1V SC200 Controller 20 $334.95 $6,699.00 $6,699.00 $6,699.00 FSPUVASPRB Fld Svc-2V UVAS Sensor 2 $1,735.65 $3,471.30 $3,471.30 $3,471.30 BSPPLUSDR6000
BenchPlus-DR6000
The Bench Service Plus Partnership includes
repairs at the Hach Service Center, one (1) on-site
start-up or preventative maintenance/calibration
visit, unlimited technical support calls, and free
software upgrades.
1 $1861.65 $1,861.65 $1,861.65 $1,861.65
FSPCL17
aa Fld Svc-2V CL17 (current version) For CL17
p/n 5440000 only. Field Service includes all parts,
labor and travel for on-site repairs, two (2)
preventative maintenance visits per year (including
required parts), unlimited technical support calls,
and free firmware updates.
2 $1,726.20 $3,452.40 $3,452.40 $3,452.40
PMP-GLPHORP1V PMP-GLI pH ORP PROBE-1V 4 $369.60 $1,478.40 $1,478.40 $1,478.40 FSPTU53XX-4
VISIT
Fld Svc TU53XX 4 VST
Field Service includes: All parts, labor, and travel
for on-site repairs, four (4) on-site calibrations per
year, factory recommended maintenance
(including required parts), unlimited technical
support calls, and free firmware updates. Please
see service terms and conditions for additional
details on our service plans, and to ensure you
have an opportunity to review our environmental
and safety requirements. Cleaning Module
Accessory is not covered under this offering
12 $1,167.60 $14,011.20 $14,011.20 $14,011.20
FSPTUACM Fld Svc TU Automatic Cleaning Module 12 $274.05 $3,288.60 $3,288.60 $3,288.60

FSPAMTAXSC
aa Fld Svc-sV Amtax SCV Field Service includes:

All parts, labor, and travel for on-site repairs, 2 onsite calibrations per year, factory recommended maintenance (including required parts), unlimited
technical support calls, and free firmware updates.

Separate FSP coverage for the Filtrax or Filter
Probe must also be purchased.
1 $3,408.30 $3,408.30 $3,408.30 $3,408.30
Year 2 Increase $1,725.36
Year 3 Increase $3,588.75
Total $43,134.00 $44,859.36 $46,722.75
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4 PARTS PRICING
Year 1 Pricing
Part Number Description QTY Unit Price Extended Price
9020000 Hach LDO sc Model 2, DO Probe with Luminescent
Dissolved Oxygen Technology. Standard lead time 3 days. 11 $3,337.94 $36,718.00 LXV525.99A11551
SC4500 Controller, Prognosys, 5x mA Output, 2 digital
Sensors, 100-240 VA, withour power cord, Standard lead
time 3 days.
20 $3,560.54 $71,220.00
8572300
CL17sc Colorimetric Chlorine Analyzer with Standpipe
Installation Kit, w/o Reagants. Standard lead time 3 days. 2 $3,661.24 $7,3220.00 LXV418.99.90002 UVAS plus sc UV Sensor, 50 mm path length, with automatic cleaning. Standard lead time 3 days. 2 $28,009.44 $56,018.00 LPV441.99.00012
DR6000 UV VIS Spectrophotometer wth RFID
Technology. Standard lead time 3 days. 1 $14,630.12 $14,630.00 LXV445.99.53112
TU5 Series TU5300sc Low Range Laser Turbidimeter
with Flow Sensor, Automatic Cleaning, RFID, and System
Check, EPA Version. Standard lead time 10 days.
12 $4,224.10 $50,688.00
DPD1R1 Hach pHD sc Online Process pH Sensor – pH Sensor for Clean Water. Standard lead time 3 days. 3 $1,566.68 $4,701.00 DPD2P1 Hach pHD sc Online Process pH Sensor – General Purpose Insertion Mount pH Sensor. Standard lead time 3 days. 1 $1,724.62 $1,725.00 LXV421.99.43002
db AMTAX SC (0.02-5 MG/L NH4-N), 1 CHAN.

Standard lead time 23 days. 1 $24,064.12 $24,064.00
Subtotal $267,086.00
Year 2 Pricing
Part Number Description QTY Unit Price Extended Price
9020000
Hach LDO sc Model 2, DO Probe with Luminescent
Dissolved Oxygen Technology. Standard lead time 3 days. 11 $3,538.00 $38,918.00 LXV525.99A11551
SC4500 Controller, Prognosys, 5x mA Output, 2 digital
Sensors, 100-240 VA, withour power cord, Standard lead
time 3 days.
20 $3,774.00 $75,480.00
8572300
CL17sc Colorimetric Chlorine Analyzer with Standpipe
Installation Kit, w/o Reagants. Standard lead time 3 days. 2 $3,881.00 $7,762.00 LXV418.99.90002
UVAS plus sc UV Sensor, 50 mm path length, with
automatic cleaning. Standard lead time 3 days. 2 $29,690.00 $59,380.00 LPV441.99.00012
DR6000 UV VIS Spectrophotometer wth RFID
Technology. Standard lead time 3 days. 1 $15,508.00 $15,508.00 LXV445.99.53112
TU5 Series TU5300sc Low Range Laser Turbidimeter
with Flow Sensor, Automatic Cleaning, RFID, and System
Check, EPA Version. Standard lead time 10 days.
12 $4,478.00 $53,736.00
DPD1R1
Hach pHD sc Online Process pH Sensor – pH Sensor for
Clean Water. Standard lead time 3 days. 3 $1,661.00 $4,983.00 DPD2P1
Hach pHD sc Online Process pH Sensor – General Purpose
Insertion Mount pH Sensor. Standard lead time 3 days. 1 $1,828.00 $1,828.00 LXV421.99.43002
db AMTAX SC (0.02-5 MG/L NH4-N), 1 CHAN.

Standard lead time 23 days. 1 $25,508.00 $25,508.00
Subtotal $283,103.00
Year 3 Prcing
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5 Part Number Description QTY Unit Price Extended Price 9020000
Hach LDO sc Model 2, DO Probe with Luminescent
Dissolved Oxygen Technology. Standard lead time 3 days. 11 $3,750.00 $41,261.00 LXV525.99A11551
SC4500 Controller, Prognosys, 5x mA Output, 2 digital
Sensors, 100-240 VA, withour power cord, Standard lead
time 3 days.
20 $4,001.00 $80,020.00
8572300
CL17sc Colorimetric Chlorine Analyzer with Standpipe
Installation Kit, w/o Reagants. Standard lead time 3 days. 2 $4,114.00 $8,228.00 LXV418.99.90002
UVAS plus sc UV Sensor, 50 mm path length, with
automatic cleaning. Standard lead time 3 days. 2 $31,471.00 $62,942.00 LPV441.99.00012
DR6000 UV VIS Spectrophotometer wth RFID
Technology. Standard lead time 3 days. 1 $16,438.00 $16,438.00 LXV445.99.53112
TU5 Series TU5300sc Low Range Laser Turbidimeter
with Flow Sensor, Automatic Cleaning, RFID, and System
Check, EPA Version. Standard lead time 10 days.
12 $4,746.00 $56,952.00
DPD1R1
Hach pHD sc Online Process pH Sensor – pH Sensor for
Clean Water. Standard lead time 3 days. 3 $1,760.00 $5,280.00 DPD2P1
Hach pHD sc Online Process pH Sensor – General Purpose
Insertion Mount pH Sensor. Standard lead time 3 days. 1 $1,938.00 $1,938.00 LXV421.99.43002
db AMTAX SC (0.02-5 MG/L NH4-N), 1 CHAN.

Standard lead time 23 days. 1 $27,038.00 $27,038.00
Subtotal $300,097.00

2. CITY REPRESENTATIVE:

CITY Representative is: Ben Koehler, WCQ Superintendent Chief Plant Operator, (209) 342- 5402
Purchasing Representative: Melvin Rosal, Buyer, (209) 577-5420 The CITY Representative is not authorized to commit the CITY to changes in specifications, requirements, or scope of work, changes in price(s), period of performance or delivery date(s) or method of shipment. Changes of a contractual or business nature shall be effective only by written change to the AGREEMENT, issued by the City of Modesto, Purchasing Division.

3. CONTRACTOR:

Julia Johnson, Regional Sales Manager, (916) 479-6512, [email protected]

4. TERM OF AGREEMENT:

The term of the AGREEMENT shall be for a period of three (3) years.

Year 1: July 9, 2024 through July 8, 2025
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6 Year 2: July 9, 2025 through July 8, 2026
Year 3: July 9, 2026 through July 8, 2027
Pricing as set forth in Section 1.e above, shall remain firm for the three years of the AGREEMENT.

Price increases for any Agreement years, shall not exceed the percentage change in the Consumer Price Index (CPI) for West Urban Area in any one Agreement year, and shall be negotiated through the Purchasing Division. Requests for price increases shall be submitted by CONTRACTOR in writing 90 days prior to the annual anniversary date of the AGREEMENT to be effective for the subsequent year.

5. LIABILITY INSURANCE:

The CONTRACTOR shall provide, at its own expense, and maintain at all times the following insurance with insurance companies licensed in the State of California and shall provide evidence of such insurance to the CITY as may be required by the City Clerk of the CITY. The policies or certificates thereof shall provide that, at least 30 days prior to cancellation or material change in the policy, notices of same shall be given to the Risk Manager of the CITY via PINS Advantage Insurance Program, for all of the following stated insurance policies.
a. 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. The insurance shall indicate on the certificate of insurance the following coverage and indicate the policy aggregate limit applying to: premises and operations; broad form contractual; independent contractors and subcontractors; products and completed operations; and/or professional liability.
b. Automobile Liability – insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage and transportation related pollution liability. This insurance shall cover any automobile for bodily injury and property damage.
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7 c. Workers' Compensation – in compliance with the statutes of the State of California, plus employer's liability with a minimum limit of liability of $1,000,000 per accident for bodily injury or disease.

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 CONTRACTOR shall promptly obtain a new policy, submit the same to the CITY’s Risk Manager for approval and submit a certificate thereof as hereinabove provided. Upon failure of the CONTRACTOR 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 CONTRACTOR to obtain and/or maintain any required insurance shall not relieve the CONTRACTOR from any liability under this Agreement, nor shall the insurance requirements be construed to conflict with or otherwise limit the obligations of the CONTRACTOR concerning indemnification.

The CITY, its officers, officials, employees, agents and volunteers shall be named as an additional insured on all insurance policies required herein, except Workers' Compensation.

The Workers' Compensation insurer shall agree to waive all rights of subrogation against the CITY, its officers, officials, employees, agents and volunteers for losses arising from work performed by CONTRACTOR for the CITY.

The CONTRACTOR’s insurance policy(ices) 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 insurer(s) with acceptable Best's rating of A:VII or with approval of the CITY’s Risk Manager.

For any claims related to this AGREEMENT, the CONTRACTOR’s insurance coverage shall be primary insurance as respects CITY, its officers, officials, employees, agents and volunteers. Any insurance or selfinsurance maintained by CITY, its officers, officials, employees, agents and volunteers shall be excess of the CONTRACTOR’s insurance and shall not contribute with it.

6. PAYMENT:

CONTRACTOR shall invoice CITY not less than once per month based on the cost for services performed and reimbursable costs incurred prior to the invoice date. All invoices shall be paid in full the #3..
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8 following payment terms within thirty days after completion and acceptance of the Services by the CITY, and receipt of a properly prepared invoice, CITY will pay CONTRACTOR Net 30 Days via manual check. The CITY is exempt from payment of Federal Excise Tax, and all invoices shall be exclusive of such excise tax.

Invoice to: City of Modesto
Attn: Accounts Payable
P.O. Box 642
Modesto, CA 95353
Email to: [email protected]
At a minimum, invoices shall state the following:
 This AGREEMENT number 272374
 CITY department/division name and address
 Billing period
 Service hours worked day and week
 Unit price, extended price, sales tax and total

7. INDEMNITY:

The CONTRACTOR shall hold the CITY, its officers, officials, employees, agents and volunteers, harmless from and save, defend and indemnify them against any and all claims, losses, liabilities, judgments or damages from every cause, including but not limited to injury to person or property or wrongful death, including reasonable costs and expenses of defense of any judicial or administrative action, arising directly or indirectly out of any negligent or intentional act or omission of CONTRACTOR, or its officers, officials, employees, agents and volunteers relating to or during the performance of its obligations under this AGREEMENT. CONTRACTOR’s obligation to defend, indemnify, and hold the CITY, its officers, officials, employees, agents, and volunteers harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this AGREEMENT for CONTRACTOR to procure and maintain a policy of insurance.

Any and all indemnification obligations imposed upon CONTRACTOR are limited to the extent of those damages proportionately caused by CONTRACTOR'S breach of the Agreement, negligence, wrongful conduct, #3..
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9 or violations of law. In no case is CONTRACTOR liable for any damages caused by negligence, misuse or misapplication of goods by others.

8. VENUE & GOVERNING LAW:

Venue for any dispute or claim arising or related to this AGREEMENT its performance, breach, or interpretation (including issues about its validity or enforceability), shall be exclusively in the Superior Court of Stanislaus County or the United States District Court for the Eastern District of California This AGREEMENT shall be deemed made in, governed by, performed in, and construed and enforced in accordance with the laws of the State of California, without giving effect to its conflicts of laws provisions or principles.

9. LIMITATION ON LIABILITY:

The total liability of CONTRACTOR and its subsidiaries, affiliates, employees, directors, officers and agents arising out of performance, nonperformance, or obligations in connection with the design, manufacture, sale, delivery, and/or use of goods and/or services in no circumstance includes any liquidated, penalty, incidental or consequential damages of any kind, nor exceed $1,000,000, except only in the case of damages arising due to CONTRACTOR'S willful misconduct.

10. ATTORNEYS’ FEES:

If a party to this AGREEMENT brings any action, including an action for declaratory relief, to enforce or interpret the provision of this AGREEMENT, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose.

11. COMMENCEMENT AND COMPLETION OF THE WORK:

The work contemplated herein shall be commenced as immediately after the agreement administrator receives and has on file:

Proofs of insurance (approved by CITY Risk Manager); and Executed Agreement;
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10 a. Exhibit A – Resolution No.2024-_______;
b. Exhibit B – Hach Service Partnership Quatation and Parts Quotation c. Insurance Certificates;
d. CONTRACTOR City of Modesto business license

12. TERMINATION OF SERVICES:

Termination for Default: In the event either party fails to perform under this AGREEMENT or breaches any condition contained herein, the other party shall notify in writing the breaching party of the nonperformance. Within 10 days after receipt of notification, the breaching party shall correct any non-performance to the reasonable satisfaction of the non-breaching party, or such other time as may be identified in the notice.

Failure to correct any non-performance shall allow the non-breaching party to terminate this AGREEMENT for cause.

Termination by City for Convenience:

The City may also terminate this AGREEMENT the Contractor's performance under the Agreement, either in whole or in part, at its own discretion and without cause.

Post-Termination Procedure
Upon receipt of a written notice of termination pursuant to either of the foregoing paragraphs, the CONTRACTOR shall:
a. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, subcontractors and agents are notified of such termination and act as specified in the notice of termination; b. Terminate all orders and subcontracts except as necessary to complete any portion of the SERVICES that are not terminated;
c. If directed in writing by the CITY to do so, assign all right, title and interest in subcontracts and materials in progress to CITY, in which case the CITY will have the right at its discretion to settle, or pay any or all claims arising out #3..
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11 of the termination of such, but in no event shall recovery by any CONTRACTOR or subcontractor include lost profits for portions of the SERVICES not completed or undertaken, including materials not delivered; d. Deliver or otherwise make available to the CITY all data, drawings, specifications, reports, estimates, summaries and such other information and material as may have been accumulated by the CONTRACTOR in performing the SERVICES whether completed or in process;
e. Settle outstanding liabilities and claims, subject to the approval of CITY; f. Complete performance of such part of the SERVICES as has not been terminated; g. Take such other actions as may be necessary, or as may be directed by the CITY for the protection and preservation of the SERVICES and/or property related to the SERVICES;
h. If CITY so requests, and at CITY's cost, CONTRACTOR shall provide sufficient oral or written status reports to make CITY reasonably aware of the status of CONTRACTOR’s work on the SERVICES.
i. CONTRACTOR understands and agrees that CITY may, in CITY’s sole discretion, refuse to pay CONTRACTOR for that portion of CONTRACTOR's SERVICES which were performed by CONTRACTOR on the project prior to the termination date and which remain unacceptable and/or not useful to CONTRACTOR as of the termination date.

CITY will pay CONTRACTOR for SERVICES actually completed prior to the receipt of the termination notice or otherwise completed in accordance with the notice of termination. The final payment to the CONTRACTOR after termination for convenience shall be limited to amounts due and owing under the AGREEMENT at time of termination, including the following:
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12 SERVICES such as subcontractor agreements or contracts for materials; b. The AGREEMENT price allocable to the portion of the SERVICES properly performed or goods supplied to the work site by the CONTRACTOR as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums previously paid to the CONTRACTOR for such SERVICES.

13. COMPLIANCE WITH ALL LAWS:

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

14. FAILURE TO PERFORM SATISFACTORY WORK:

It is agreed and understood that if the CONTRACTOR fails to perform the SERVICES as specified herein, CITY's representative may:
a. Consent to accept such unsatisfactory service with an appropriate adjustment in contract price, based on established cost factors,
b. Recommend termination of AGREEMENT between said the CONTRACTOR and the City of Modesto.

Those discrepancies and deficiencies in the SERVICES that remains uncorrected after the date set for correction may be the necessary justification for a billing adjustment in the month following the occurrence.

Unless otherwise negotiated, billing adjustments for this incomplete or uncorrected work shall be permanent retention of 100% of the estimated monthly cost for the SERVICES not corrected or completed.

15. ASSIGNMENT OF RIGHTS:

The CONTRACTOR offers and agrees, and will require all subcontractors and suppliers to agree, to assign to the CITY all rights, title, and interest in and to all causes of action it and they may have under #3..
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13 Section 4 of the Clayton Act (15 United States code, Section 15) or under the Cartwright Act (Business and Professions Code, Section 16700 et seq.), arising from the acquisition of goods, services, or materials pursuant to this AGREEMENT or any allowed subcontract. The assignment made by CONTRACTOR and all assignments made by subcontractors and suppliers shall be made and become effective at the time the CITY makes final payment to The CONTRACTOR, without further acknowledgment by the parties (Government Code, Sections 4550-4554).

16. CITY PROCESS/PROCEDURE APPROVALS:

CITY approval of any process or procedure shall not relieve CONTRACTOR of its responsibility to furnish the required SERVICES meeting all specifications contained herein.

17. CONTRACTOR'S RESPONSIBILITY FOR DAMAGES:

If CONTRACTOR damages any property belonging to the CITY or a third party, the CONTRACTOR will be required to make repairs immediately, at CONTRACTOR’s sole cost and expense, to the satisfaction of the CITY. In the event that CONTRACTOR fails to perform the necessary repairs, the CITY may either retain from the money due to CONTRACTOR an amount sufficient to repair the damage or perform the repairs and send an invoice to the CONTRACTOR for such costs, which shall be paid within thirty (30) days.

18. NOTICES:

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

CONTRACTOR: Hach Company
P.O. Box 389
5600 Lindbergh Drive
Loveland, CO 80539-0389
CITY: City of Modesto
Purchasing Division
P.O. Box 642
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14 Modesto, CA 95353
Each party may change its address for delivery of notice by delivering written notice of such change of address to the other party.

19. SIGNATORY(IES) FOR CONTRACTOR:

Each signatory for CONTRACTOR below warrants and represents that it is legally competent to, and have full authority to, execute the AGREEMENT.

20. QUANTITIES:

No minimum or maximum is guaranteed or implied.

21. FUNDING:

All annual extensions are based upon continuous funding for that purpose by the City Council.

Failure to fund any annual extension shall result in an immediate termination of the AGREEMENT without redress.

22. OTHER GOVERNMENT/PUBLICLY FUNDED AGENCIES:

If mutually agreeable to all parties, the issuance of any resultant contract/purchase order referencing these specifications and modified by mutual agreement between all parties may be extended to other government or publicly funded agencies. It shall be understood that all terms and conditions as specified herein shall apply.

23. NON-DISCRIMINATION:
a. During the performance of this AGREEMENT, CONTRACTOR and any allowed subcontractors shall not unlawfully discriminate against any employee or applicant for employment because of race, color, ancestry, religion, sex, national origin, marital status, age, medical condition (cancer related), physical handicap (including AIDS), sexual orientation, or any other basis prohibited by Federal or California law. Equal employment opportunity extends, but is not limited to recruitment, compensation, benefits, layoff, termination, and all other conditions of employment. The CONTRACTOR and any allowed subcontractors shall ensure that the evaluation and treatment of their employees and applicants for employment are free of such discrimination. #3..
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15 The CONTRACTOR and any allowed subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code, Section 12900 et seq.) and the applicable regulations promulgated thereunder (California Administrative Code, Title 2, and Section 7285.0 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code, Section 12900, set forth in Chapter 5 of Division 4 of Title 2 of the California Administrative Code are incorporated into this contract by reference and made a part hereof as if set forth in full. b. The CONTRACTOR and any allowed subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement.
c. The CONTRACTOR shall include the nondiscrimination and compliance provisions of this clause in any allowed subcontracts to perform SERVICES. d. The Contractor shall permit access by representatives of the Department of Fair Employment and Housing and the CITY upon reasonable notice at any time during the normal business hours, but in no case less than 24 hours notice, to such of its books, records, accounts, other sources of information and its facilities as said Department or CITY shall require to ascertain compliance with this AGREEMENT. e. By executing this AGREEMENT, CONTRACTOR certifies that it shall follow and be in compliance with the Americans with Disabilities Act of 1990, the applicable administrative requirements promulgated in response thereto, and any other applicable Federal laws and regulations relating to handicap discrimination and participation, and will continue to do so for at least the duration of the AGREEMENT and any extensions thereof.

24. CONTRACTOR LICENSES & PERMITS:

CONTRACTOR warrants and represents that it possesses and shall maintain all licenses, and shall secure and maintain all necessary permits, necessary to perform the SERVICES.

25. RECORDS:
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16 All final versions of reports, data, maps, models, charts, studies, surveys, photographs, memoranda, plans, studies, specifications, records, files, or any other documents or materials, in electronic or any other form, that CONTRACTOR prepares or obtains pursuant to this Agreement and that relate to the matters covered hereunder shall be the property of the CITY. CONTRACTOR hereby agrees to deliver those documents to the CITY upon termination of the AGREEMENT, and the CITY may use, reuse or otherwise dispose of the documents without CONTRACTOR’s permission. It is understood and agreed that the documents and other materials, including but not limited to those described above, prepared pursuant to this AGREEMENT are prepared specifically for the City and are not necessarily suitable for any future or other use.

CONTRACTOR retains all rights in and to any intellectual property and confidential information created or procured by it or its representatives at any time, and CONTRACTOR grants CITY a non-exclusive, nontransferable, and non-revocable license to use such intellectual property and information to the extent necessary and solely for CITY’s use of SERVICES purchased hereunder.

26. FACILITIES AND EQUIPMENT:

Except as set forth herein, CONTRACTOR shall, at its sole cost and expense, provide all facilities and equipment that may be necessary to perform the services required by this AGREEMENT. CITY shall make available to CONTRACTOR only the facilities and equipment listed in EXHIBIT “B” and only under the terms and conditions set forth herein.

27. INDEPENDENT CONTRACTOR; NOT AGENT:

At all times during the term of this AGREEMENT, CONTRACTOR shall be an independent contractor and shall not be an employee of CITY. CITY shall have the right to control CONTRACTOR only insofar as the results of CONTRACTOR’s services rendered pursuant to this AGREEMENT. Except as City may specify in writing, CONTRACTOR shall have no authority, express or implied, to act on behalf of CITY in any capacity whatsoever as an agent. CONTRACTOR shall have no authority, express or implied, pursuant to this AGREEMENT to bind City to any obligation whatsoever.

28. DRUG FREE WORKPLACE:
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17 CONTRACTOR certifies that it is following and in compliance with Sections 8350 - 8355 of Chapter 5.5 of the Government Code, Drug Free Workplace Act whereby each person or organization awarded a contract/purchase order or grant for the procurement of any property or service from any state agency (city) shall certify to the contracting or granting agency that it will provide a drug free workplace.

29. ASSIGNMENT:

Neither this AGREEMENT nor any SERVICES hereunder shall be subcontracted or assigned by CONTRACTOR without the prior written consent of the CITY in each and every instance.

30. WAIVER:

The waiver by any party to this AGREEMENT of a breach of any provision hereof shall be in writing and shall not operate or be construed as a waiver of any other or subsequent breach hereof unless specifically stated in writing.

31. HEADINGS NOT CONTROLLING:

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

32. MISCELLANEOUS:

Time is of the essence in CONTRACTOR’s performance under each provision of this AGREEMENT.

33. ENTIRE AGREEMENT:

This Agreement and its exhibits contain the entire understanding between CONTRACTOR and CITY. Additional or new terms contained in this AGREEMENT which vary from CONTRACTOR’S bid are controlling and are deemed accepted by CONTRACTOR by performance of any SERVICES or other commencement of performance hereunder. The terms and conditions of the quote, attached hereto as Exhibit B, are incorporated herein. In the event of a conflict between the quote and this AGREEMENT, this AGREEMENT shall control. All previous bids, offers and communications relative to this Agreement, whether oral or written, are hereby superseded except to the extent that they have been incorporated into this Agreement. #3..
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18 No future waiver or exception to any of the terms, conditions, and provisions of this AGREEMENT shall be considered valid unless specifically agreed to in writing by the parties.

34. PARTIAL INVALIDITY:

If any provision in this AGREEMENT is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.

35. WARRANTY:

CONTRACTOR warrants that it will perform all Services in accordance with its standard practices and that the Services will be free from defects in workmanship for a period of ninety (90) days from their date of performance. If CONTRACTOR breaches this warranty and the CITY notifies CONTRACTOR of such breach within 30 days of the end of the applicable warranty period, CONTRACTOR will, at its option, reperform any nonconforming Services, or refund the amounts paid by CITY to CONTRACTOR for the nonconforming Services. THIS IS THE EXCLUSIVE REMEDY FOR ANY BREACH OF WARRANTY.

CONTRACTOR EXPRESSLY DISCLAIMS ANY REMEDIES OF “COVER” AND ANY WARRANTIES

IMPLIED BY LAW, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

36. FORCE MAJEURE:

Under no circumstances shall CONTRACTOR have any liability for any breach relating to nonperformance or underperformance caused by extreme weather, natural disaster, fire, accident or other act of God; strike, lock out or other labor shortage or disturbance, except by CONTRACTOR’s employees; lock down, boycott, embargo or tariff; terrorism or act of terrorism, war or war condition or civil disturbance or riot; failure of public or private telecommunications networks; delay of carriers or other industrial, agricultural or transportation disturbance; failure of normal sources of supply; epidemics, pandemics, contagion, disease or quarantine; law, regulation or any act of government; or any other cause beyond CONTRACTOR’s reasonable #3..
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19 control. CONTRACTOR’s performance shall be excused and deemed suspended during the continuation of such event or events and, for a reasonable time thereafter, delayed or adjusted accordingly. #3..
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56 IN WITNESS WHEREOF, the CITY OF MODESTO, a municipal corporation, has authorized the execution of this Agreement by its City Manager and attested by its City Clerk under authority of Resolution No. 2024 -_______, adopted by the Council of the City of Modesto on the _____________ day of _____________________, 2024 and Hach Company has caused this Agreement to be duly executed. #3..
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Melvin Rosal (Mar 26, 2024 08:12 PDT)
Melvin Rosal Mar 26, 2024 Mar 26, 2024 Dianne Love (Mar 26, 2024 11:48 PDT) Dianne Love Mar 26, 2024 Mar 26, 2024
Hach Company is the Sole Source manufacturer and distributor of Hach equipment and services.
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CITY OF MODESTO

COMMITTEE AGENDA REPORT
DATE OF MEETING:

June 3, 2024
Date: April 25, 2024
TO: Economic Development Committee
Chris Ricci, Chair
Eric Alvarez, Vice-Chair
Sue Zwahlen, Member
THROUGH: Joseph P. Lopez, City Manager
FROM: Jessica Hill, Director of Community and Economic Development SUBJECT: Capital Facilities Fees Policies and Procedures Update CONTACT: Edgar Garcia, Community Development Manager
[email protected], 209-577-5211
DESCRIPTION:

Consider amendments to the Capital Facilities Fees Policies and Procedures and forwarding to Council for approval. (Funding Source: Capital Facilities Fees) STRATEGIC PLAN ELEMENT:

The recommended action supports the City Council’s 2020-2025 Strategic Plan, Goal D:

Provide Safe, Efficient, and Reliable Infrastructure through proactive community investment, maintenance and sustainability efforts.

BACKGROUND:

In 1987, the City of Modesto established a Capital Facilities Fee (CFF) Program to mitigate the impacts of new development as outlined in the California Government Code. The CFF collected may be used for the purchase, construction, expansion, rehabilitation or acquisition of public facilities. New development projects that are assessed a CFF include, but are not limited to, new building and construction projects, commercial building additions and changes of use to more intensive land use categories. Since that time, there have been several updates and amendments that have set policy direction on the amount and administration of fees collected for impacts associated with new development. The City’s Capital Facilities Fees Policies and Procedures (“CFF Policies and Procedures”) were last revised September 22, 2020, by Resolution 2020-407.

The CFF Policies and Procedures provide guidance on the administration of the City’s CFF Program. The CFF Policies and Procedures also streamline the ability for a project applicant to understand the rules that govern the implementation of the CFF Program. #4..
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Economic Development Committee, June 3, 2024
Capital Facilities Fees Policies and Procedures Update

DISCUSSION:

The key recommendations from staff include the following to ensure that the CFF policies align with the City’s 6th Cycle Housing Element – the following recommended modifications need to take place in the following areas: Junior Accessory Dwelling Units, Affordable Housing Exemptions, and Farmworker Housing Exemptions.

I. CFF Undefined Land Uses

CFF is based on specific land use categories. As a matter of policy, a broad range of uses have been generally categorized as being residential, commercial, office or industrial. Undefined uses, as outlined in Table 2 of the CFF policy, are charged at rates that are determined by the CFF Administrator using similar land use determinations. Currently the CFF Undefined Land Uses on Table 2 of the CFF Policies and Procedures do not include Junior Accessory Dwelling Units (JADUs). Staff recommends the adding Junior Accessory Dwelling Units to Table 2- Undefined Land Uses:

Junior Accessory Dwelling Unit
California law allows for the creation of junior accessory dwelling units (JADU) in singlefamily residential zones. The code limits the number of JADUs to one per residential lot zoned for single-family residents with a single-family residence built, proposed to be built, on the lot. Any JADU under 500 sq. ft. is exempt from impact fees.

California law allows for one Accessory Dwelling Unit (ADU) and one Junior Accessory Dwelling Unity (JADU) per lot with a proposed or existing single-family dwelling.

II. CFF Exemptions
Exemptions are provided to foster the development of residential units. Based on the 6th Cycle Housing element staff recommends expanding the types of affordable units exempt from the CFF. Currently, affordable units restricted to very-low income households are exempt from the CFF. The proposed update would expand that exemption to include affordable units restricted to low-income households and adding exemptions for Farmworker Housing to align with the approved Housing Element. Staff recommends the following policy modifications:

Very Low-Income Housing
o Very Low-Income Housing will now be defined as Affordable Housing o Current Area Median Income (AMI) for Very Low-Income Housing: fifty percent (50%)
o Proposed AMI for Affordable Housing: eighty percent (80%) o Affordable Housing restricted to households under 80% AMI is proposed to be eligible for a CFF exemption.

Farmworker Housing
o Agricultural and/or Farmworker Housing is proposed to be eligible for a CFF exemption.
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Economic Development Committee, June 3, 2024
Capital Facilities Fees Policies and Procedures Update

FISCAL IMPACT:

The recommended action is the adoption of the revised CFF Policies and Procedures for the City of Modesto’s Capital Facilities Fees Program (“CFF Program”) which will exempt future eligible projects from impact fees. There is no impact to the General Fund.

RECOMMENDED COMMITTEE ACTION:

Staff Recommendations:

Motion recommending amendments to the Capital Facilities Fees Policies and Procedures and forwarding to Council for approval.

Approved by:

Jessica Hill, Director of Community
and Economic Development
Joseph P. Lopez, City Manager
Attachments:

1. 2024 Capital Facilities Fees Policies and Procedures- Redline Update #4..
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City of Modesto Capital Facilities Fees
Policies and Procedures
Amended Policies and Procedures Adopted on September Month 22X, 202020XX
City Council Resolution 202020XX-407
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page i

TABLE OF CONTENTS
INTENT ..........................................................................................................................................................1 ADMINISTRATIVE ORGANIZATION & RESPONSIBILITY..................................................................................1 CFF Administrator .....................................................................................................................................1 ADMINISTRATIVE REQUIREMENTS ...............................................................................................................1 Factors Considered....................................................................................................................................1 Annual Report ...........................................................................................................................................1 Five-Year Report........................................................................................................................................2 Annual Inflationary Adjustments ..............................................................................................................3 CFF Program Updates................................................................................................................................3 Land Value Updates ..................................................................................................................................3 DETERMINATION OF CFF ..............................................................................................................................3 COLLECTION OF FEES ....................................................................................................................................4 Calculation and Collection of CFF..............................................................................................................4 Payments...................................................................................................................................................4 Refunds .....................................................................................................................................................4 Protests .....................................................................................................................................................4 Appeals......................................................................................................................................................4 EXEMPTIONS, DEFERRALS AND CREDITS ......................................................................................................4 Credits and Exemptions ............................................................................................................................5 Deferrals....................................................................................................................................................5 DEVELOPMENT DEDICATIONS ......................................................................................................................5 Residential Streets ....................................................................................................................................5 Expressways ..............................................................................................................................................5 Arterial & Major Collector Streets.............................................................................................................6 REIMBURSEMENT & OTHER RELATED AGREEMENTS ...................................................................................6 Initial Request for Reimbursement ...........................................................................................................7 Reimbursement Agreement......................................................................................................................7 Timing........................................................................................................................................................7 Notice to Proceed .....................................................................................................................................7 Reimbursement Payments........................................................................................................................7 CONSTRUCTION CONTRACTOR REQUIREMENTS..........................................................................................7 Three Competitive Bids .............................................................................................................................8 Licensing....................................................................................................................................................8 Payment of Prevailing Wages....................................................................................................................8 Indemnification .........................................................................................................................................8 Overtime & Change Orders.......................................................................................................................8 TABLE 1 - CFF LAND USE CATEGORIES ........................................................................................................10 #4..
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page ii
TABLE 2 - CFF UNDEFINED LAND USES .......................................................................................................11 TABLE 3 - CFF CREDITS AND EXEMPTIONS..................................................................................................12 TABLE 4 - CFF DEFERRALS ...........................................................................................................................15 TABLE 5 - CFF FEE SCHEDULE ......................................................................................................................17 APPENDIX A - DEFINITIONS........................................................................................................................19 #4..
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 1
INTENT
In 1987, the City of Modesto established a Capital Facilities Fee (CFF) Program to mitigate the impacts of new development as outlined in §6600 of the California Government Code. The CFF collected may be used for the purchase, construction, expansion, rehabilitation or acquisition of public facilities. New development projects that are assessed a CFF include, but are not limited to, new building and construction projects, commercial building additions and changes of use to more intensive land use categories.

The following policies and procedures (Policies and Procedures) shall guide in the administration of the City of Modesto CFF Program. This administrative manual elaborates upon the administrative directions contained in the Modesto’s Municipal Code, California State Code and City Council Resolutions.

ADMINISTRATIVE ORGANIZATION & RESPONSIBILITY
CFF Administrator
The Administrator of Infrastructure Financing Programs shall serve as the CFF Administrator and is charged with the overall administration and oversight of the CFF Program. The CFF Administrator has the responsibility of ensuring all issues relating to the CFF Program are managed in accordance with applicable rules and regulations.

ADMINISTRATIVE REQUIREMENTS
Factors Considered
The City Council has determined that the CFF adopted by the City of Modesto shall be based on the following two factors: (i) reflect full cost allocation to each category of new development of capital facilities necessary to serve growth; and (ii) be reviewed annually to consider an escalation to account for inflation.

Annual Report
Annual reporting of a local agency’s impact fee program is required by Government Code §66006. The impact fees collected must be segregated from general and other funds containing fees collected for other improvements. Interest on each impact fee fund or account must be credited to that fund or account and be used only for the purpose for which the impact fee was collected.

California Government Code §66006(b) requires that a local agency make the following information available to the public for each separate impact fee fund on an annual basis and that the local agency review that information at a public meeting. The law also requires the annual report include the following information for the prior fiscal year and be made available within 180 days after the last day of each fiscal year:
 Description of the type of impact fee in the account or fund. #4..
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 Identification of the amount of the impact fee.
 The beginning and ending balance of the account or fund.  The amount of impact fees collected and interest earned.  Identification of each public improvement on which impact fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with the impact fee.
 Identification of an approximate date by which the construction of the public improvements will commence, if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement and the public improvement remains incomplete.
 Description of each interfund transfer or loan made from the account or fund, including the public improvements on which the transferred or loaned impact fees were expended, and, in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the account or fund will receive on the loan.
 The amount of refunds made due to sufficient funds being collected to complete financing on incomplete public improvements, and the amount of reallocation of impact funds made to administrative costs of refunding unexpended revenues exceeding the amount to be refunded.

In addition to the requirements above, the City Council has determined that the annual report should also contain the following information:
 The cumulative inventory of exempt residential units and the percent of anticipated total exempt units at build-out.
 A comparison of cumulative exempt units to total units built since 1989. During recessions and other times of low production of market-rate housing, it is acknowledged that the cumulative, exempt units may exceed two percent (2%) of the total units built.

Five-Year Report
California Government Code §66001(d) also requires that the local agency make all of the following findings every fifth year with respect to that portion of the account remaining unexpended, whether committed or uncommitted:
 Identify the purpose to which the impact fee is to be allocated.  Demonstrate a reasonable relationship between the impact fee and the purpose for which is it charged.
 Identify all sources and amounts of funding anticipated to complete financing of incomplete improvements.
 Designate the approximate dates on which the funding is expected to be deposited into the appropriate account or fund.
 In any action imposing a fee as a condition of approval of a development project by a local agency, the local agency shall determine how there is a reasonable #4..
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relationship between the amount of the impact fee and the cost of the public facility or portion of the public facility attributable to the development on which the impact fee is imposed.

Annual Inflationary Adjustments
In an effort to ensure that all fees collected are adequate, an annual inflationary adjustment is applied each year to the CFF Program. The annual inflationary adjustments are:
 Administratively adjusted annually by the CFF Administrator or his/her designee for all land use categories to account for inflation or deflation.  Based on the annual change in the San Francisco Bay Area Engineering News Record Construction Cost Index through the month of December the year preceding each inflationary adjustment.
 Becomes effective on or about July 1st of each year.

The City will provide at least one (1) meeting with stakeholders and other interested parties at least sixty (60) days in advance of the effective date of the adjustment. While the annual adjustment is an administrative function, the item should be submitted to the City Council for their information.

CFF Program Updates
The imposition of development impact fees requires identification of the facilities to be provided and the fee amounts imposed must not exceed the cost of the necessary facilities.

To fulfill this requirement, the City shall undertake periodic studies to identify the facilities needed and their costs.

Land Value Updates
In an effort to keep pace with market conditions affecting the City’s ability to construct public facilities, the City shall annually update the land values of its CFF Program. The intent of the annual updates is to ensure that new development pays for its share of future infrastructure necessary to serve the needs of the City.

DETERMINATION OF CFF
CFF is based on specific land use categories. As a matter of policy, a broad range of uses have been generally categorized as being residential, commercial, office or industrial. Table 1 identifies the approved land use categories. Full definitions of approved land use categories can be found in Appendix A. Undefined uses, as outlined in Table 2, are charged at rates that are determined by the CFF Administrator using similar land use determinations.

An applicant may request a reduction in the CFF if it is determined that the project will generate a lower number of trips than the trip generation rates that were used as the basis for the current CFF. Any such fee reduction must be based on a trip generation study, using accepted methodology, as determined by the City. The fee reduction shall be no greater than #4..
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a proportionate reduction in trips demonstrated in the trip generation study. Any such reduction shall be approved by the City Manager.

COLLECTION OF FEES
Calculation and Collection of CFF
As codified in the Modesto Municipal Code, the CFF is collected at the time of building permit issuance. For fee assessments, the Director of the Community and Economic Development Department has the final authority on the determination of land use.

Payments
CFF is collected by the Building Safety Division prior to issuance of a building permit. In the event the payment subsequently proves to be invalid due to insufficient funds, improper execution or for any other reason, the Finance Department shall notify the fee payer, the contractor, and the property owner and a hold shall be placed on the permit and subsequent inspections until the required CFF is paid.

Refunds
If a building permit expires, is revoked, voluntarily surrendered or voided, and no construction or improvement of land has commenced, then the fee payer is entitled to a refund, without interest and less a two and one-half percent (2.5%) administrative fee.

Requests for refunds must be made in writing and addressed to the CFF Administrator.

Refunds shall be issued within four (4) weeks of the written request.

Protests
In the event a fee payer agrees to pay CFF in protest at the time of building permit issuance, a notification of the protested payment must be made in writing to the CFF Administrator at the time the fees are paid. The protest shall be scheduled for review by the CFF Review Committee and a written response shall be sent to the fee payer.

Appeals
Any individual calculation of the CFF made may be appealed in accordance with the Modesto Municipal Codes 1-4.01 – 1.4.05. Appeals shall be limited to disputes regarding the calculation of CFF due.

EXEMPTIONS, DEFERRALS AND CREDITS
The City of Modesto supports economic development through the growth of Modesto businesses. It also encourages the construction Very Low and Low Income Affordable Housing development projects within the City. CFF deferral, credit and exemption programs #4..
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benefit economic growth and development by allowing the deferral, credit and/or waiver of impact fees.

Credits and Exemptions
In some situations, credits are provided to acknowledge that the expansion, replacement or reconstruction of a building will have no additional impact on facilities needed as a result of new development. Exemptions are also provided to foster the development of residential units affordable to Very Low Income households, Affordable Housing for persons earning 80% of the Area Median Income (AMI), as well as certain qualifying residential units affordable to Low Income households. CFF Credit and Exemption descriptions, qualifications and requirements are provided in Table 3. With respect to Very Low and Low Income Affordable Housing exemptions, the total number of housing exemptions granted are not to exceed two percent (2%) of the cumulative total CFF program housing units. However, it is acknowledged that during recessions and other times of low production of market-rate housing, the cumulative, exempt units may exceed two percent (2%) of the total units built. Exemptions that meet the requirements of these Policies and Procedures, including the attached Tables, may be approved by the City Manager. The City Manager, in his or her discretion, may refer any exemption application to the City Council for action. However, any exemptions granted above the two (2%) threshold described above require the approval of the City Council.

Deferrals
The CFF Program allows for two types of deferrals. The first allows non-residential developers to pay a portion of the CFF at the time of building permit issuance and defer payment of the balance over a five (5) year period with interest. The second deferral allows developers of Low Income Housing units to defer payment of CFF for a period of time, not to exceed twenty (20) years, with interest. Table 4 identifies the CFF deferral program guidelines for Low Income Housing and non-residential development projects. All deferrals require an agreement with the City, along with a promissory note and deed of trust recorded on the property to secure payment of the CFF, prior to building permit issuance. CFF Deferrals that meet the requirements of these Policies and Procedures, including the attached Tables, may be approved by the City Manager. The City Manager, in his or her discretion, may refer any exemption application to the City Council for action.

DEVELOPMENT DEDICATIONS
Residential Streets
The collector and local streets required by new development shall be dedicated and improved by the abutting developer in accordance with City Standard Specifications.

Expressways
Expressway improvements shall be constructed as required by the conditions of approval. #4..
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 The developer shall be reimbursed the cost of said improvements and right-ofway dedication pending the availability of CFF funds and provided funding for said improvements are included in the CFF Program.
 All reimbursements shall be detailed in a CFF Reimbursement Agreement in advance of construction or dedication in accordance with the municipal code.  When interim improvements are required to facilitate current development prior to future expressway improvements, the interim improvements shall be funded and provided by the abutting developer.
 When extra facilities are required specifically for a particular development at hand (i.e.: deceleration/acceleration lanes, slip ramps, etc.), the extra facilities shall be funded and provided by the abutting developer without reimbursement.

Arterial & Major Collector Streets
Arterial and major collector streets shall be constructed per City Standard Specifications. A standard width of forty (40) feet shall be dedicated and improved to City Standard Specifications. In all cases described in this section, the forty (40) foot width shall be measured from the new property line on each side of the street towards the street centerline. This dedication is a requirement of development and not subject to reimbursement.
 When a developer is required to dedicate and improve more than the required forty (40) feet, the cost of right-of-way and improvements in excess of forty (40) feet shall be reimbursed to the developer pending the availability of CFF funds and provided funding for said improvements are included in the CFF Program.  All reimbursements shall be detailed in a CFF Reimbursement Agreement in advance of construction or dedication in accordance with the municipal code.  When there is an existing street, where the forty (40) feet dedication and improvements have been previously made, any additional dedication and improvements shall be subject to appropriate reimbursement to the developer.  When there is an existing street and if the streets have not been previously improved to City Standard Specifications, only the dedication or improvements in excess of forty (40) feet will be subject to the appropriate reimbursement.  When extra facilities are required specifically for a particular development at hand (i.e.: deceleration/acceleration lanes, slip ramps, etc.), the extra facilities shall be funded and provided by the abutting developer without reimbursement.

The City’s Standard Specifications can be found online at www.modestogov.com. Appendix B details the City’s Street Exaction Policy.

REIMBURSEMENT & OTHER RELATED AGREEMENTS
The planning contained in the City’s Capital Improvement Program (CIP) and the CFF Program shall guide the amount and the schedule of reimbursements to be paid from CFF funds for reimbursement. Prior to commencement of any work that is eligible for reimbursement, a #4..
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Reimbursement Agreement between the developer and the City must be approved per Modesto Municipal Code §8-3.102. A Reimbursement Agreement will be required where the development occurs fronting a planned CFF fund project, or which required CFF funded work off-site. All such work shall be done by developer advances and will be subject to reimbursement pursuant to the terms of the Reimbursement Agreement.

Initial Request for Reimbursement
It is the obligation of the developer, landowner and/or the developer’s engineer to submit a request to the CFF Administrator for reimbursement. Requests will not be granted if the dedication or improvements have already been made or started prior to execution of a Reimbursement Agreement. Each request shall include:
 An Engineer’s Estimate of the work to be performed that is eligible for reimbursement.
 All exhibits relating to the improvements or right-of-way including the plat and, where applicable, closure calculations.
 Design costs incurred prior to the execution of the Reimbursement Agreement for completed and accepted City-funded facilities as determined and approved by the CFF Administrator.

Reimbursement Agreement
Prior to the issuance of a construction permit and recording of a final map for dedication, the developer will be required to enter into all necessary agreements in a form provided by the City and consistent with these Policies and Procedures. All agreements will be reviewed and approved as to form by the CFF Administrator, City Attorney and others as the City deems appropriate. City Council approval shall be required for all reimbursements over $49,999.

Timing
The planning contained in the CFF Program and the City’s annual adopted Capital Improvement Program shall guide the amount and the schedule of reimbursements to be paid from CFF funds. Furthermore, the CFF Administrator shall determine the fiscal year(s) in which funds will become available and appropriate for reimbursement.

Notice to Proceed
Once the appropriate agreement(s) are executed, a Notice to Proceed shall be issued by the CFF Administrator to the developer to commence construction of reimbursable improvements.

Reimbursement Payments
Upon completion, verification of invoices and acceptance of improvements, reimbursements shall be issued from the applicable CFF fund in the manner set forth in the Reimbursement Agreement.
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CONSTRUCTION CONTRACTOR REQUIREMENTS
In retaining construction contractors for work which is reimbursable by the City of Modesto and where a Reimbursement Agreement (or other similar agreement) with the City is less than $300,000.00, the developer shall abide by the following bid process:

Three Competitive Bids
The developer shall provide three (3) competitive bids. If the developer desires to award to a contractor other than the low bidder, a written request must be submitted to the City. The City may allow this if the developer can provide adequate justification.

Licensing
The developer shall make sure that all contractors and subcontractors are licensed in accordance with §7000 through §7145 inclusive, of the California Business and Professions Code and maintain adequate insurance for any work or services performed. Developer, its contractors and subcontractors shall have and maintain a City business license during the term of any agreement.

Payment of Prevailing Wages
In accordance with California Labor Code §1770, developer shall require the payment of prevailing wages based on the rates determined by the California Director of Industrial Relations. Unless otherwise directed by the City, developer’s construction schedule shall provide adequate time for completion of the work such that no holiday or overtime labor shall be required. The City shall not reimburse developer for any labor costs which exceed the normal and customary straight time rates as described in the City of Modesto General Provisions, §4.19, for the work performed unless the City authorizes the use of overtime or legal holiday time, in advance and in writing.

The developer shall maintain certified payroll records for all labor costs incurred on all City reimbursable work for a minimum period of four (4) years from the issuance of the Notice of Completion. Said payroll records shall be made available to the City or any state regulatory agency for review, audit and inspection or copying upon request.

Indemnification
Developer shall indemnify and hold the City harmless for ensuring that the project is bid and constructed in accordance with City standards, and in compliance with all applicable local, state and federal laws. Developer shall also indemnify and hold the City harmless for any damages, claims or actions arising out of said construction activities in a form approved by the City Attorney and the Risk Manager.
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Overtime & Change Orders
The City shall retain the right to be in attendance to inspect all bids and change orders. Any extra work or charges during construction for which reimbursement is sought shall be justified and documented. Except in the case of an emergency, any such charges shall be approved by the City in advance and in writing. In the case of an emergency, any such charges may be authorized by the City if the developer provides adequate justification that an emergency existed and that the extra work or charges incurred were reasonable. Said justification shall be provided within a reasonable time after the emergency ends and prior to reimbursement for any such charges.
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TABLE 1 - CFF LAND USE CATEGORIES

CATEGORY DESCRIPTION

RESIDENTIAL
Single-Family Single-family detached homes on individual lots. Density of development is typically ten (10) dwellings per acre or less.

Multiple-family dwelling units and multi-family residential planned unit developments greater than a density of ten (10) units per acre.  Duplexes  High & Low Rise Apartments
 Triplexes  High & Low Rise Condominiums
Multi-Family
 Mobile Homes  Medium-Density Developments
Senior Housing Retirement communities restricted to adults or senior citizens, congregate care facilities, and similar residential uses.

Hotel Hotel and motel rooms

COMMERCIAL
Retail Retail, including, but not limited to:
 Convenience Markets  General Merchandise  Paint Stores  < 49,999 SF  Supermarkets  Building Materials  Hardware Stores  50,000 – 99,999 SF  Drug Stores  Lumber Stores  Video Arcades  Department Stores
 New & Used Car Sales
Nursery Sales/Displays
 Specialty Retail Stores
 Racquetball Courts
 Discount Stores
 Health Club
Locker Rooms
and Showers
Restaurants, including, but not limited to:
 Fast Food
 Sit Down Restaurants
 Bars
 Cocktail Lounges
 Drinking
Establishments
 Covered and
Enclosed Patio
Dining
Banks:
 Banks  Savings & Loans  Credit Unions
Other:
 100,001 – 299,999 SF
 > 300,000 SF
 Storage facilities, also known as “mini” storage facilities for personal items and not associated with industrial use.

COMMERCIAL - OTHER
Church Structures primarily designed as a place for worship. Also includes church multi-purpose rooms.

Daycare & School An educational, vocational, daycare facility or gyms for private schools.

Hospital
Structures designed for healing services, both in-patient and out-patient, that includes surgical care of the sick, injured, or physically ill and/or therapeutic treatment for the mentally ill. Included as an integral part of a hospital are laboratories, out-patient departments, training facilities, central service facilities, and hospital staff offices on the same site. The preceding ancillary uses are considered “professional offices” if located off-site, unless a multi-site campus is covered by a P-D zone or hospital uses. Separate sets of offices on the same site for physicians are considered “professional offices”.

CATEGORY DESCRIPTION

COMMERCIAL - OTHER
Nursing Home
Structures designed for use as a convalescent hospital, retirement home, or a twenty-four (24) hour care center for seven (7) or more persons in addition to members of the family.

OFFICE
Medical Office
Offices and clinics devoted to the practice of medical professions or providing medical services, including pseudo-medical services, but excluding hospitals and nursing homes which are treated separately.

General Office All other types of general and professional offices.

INDUSTRIAL
Facilities in which the primary activity is the production of finished items through manufacture, fabrication, processing, packaging, or treatment of raw materials or parts, except heavy industrial uses. Uses which are considered include:
 Electronics Assembly  Food Processor, Brewery, or Bakery  Paper Products  Junk Handling, Processing, or Storage  Metal Fabricator  Septic Tank and Cesspool Storage
 Bottling Plant  Vehicle Salvaging and Wrecking
 Cabinet Shop
 Machine Shop
 Burning Operations for Wood and Lumber
Products
 Sheet-Metal Shop
 Pulp/Paper Mill
 Landfill, Waste Product Disposal, and
Transfer Stations
 Welding Shop
 Wholesale Shop
 Reduction, Processing, Storage of Offal,
Dead Animals, Bones, or similar materials
 Recycling Facility
 Rock Crushing
 Stockyard
 Manufacture, Fabrication, Processing,
Treatment of Explosives, Great Products,
Chemicals, Chemical Products, and Oil
 Tannery  Material Testing, Labor Manufacturer
 Equipment Rental
Yard
Manufacturing,
Light Industrial, &
Industrial Park
Note: When a development proposal contains more than an incidental mixture of mixed industrial uses, the general type of uses should be segregated and treated separately.

Facilities in which the primary activity is the storage, shipping or receiving of materials. Uses in this category include, but are not limited to:
 Freight  Moving and Storage Services
 Warehousing  Bulk Feed Storage
Warehousing,
Distribution,
& Heavy Industrial
 Corporation Yard  Greenhouses, Barns, and Silos
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 Freight Yard
 Lumberyard
 Sand, Gravel, and Building Materials
Dealer
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TABLE 2 - CFF UNDEFINED LAND USES

BUILDING USE DESCRIPTION
Shell Buildings
Builders will often apply for a building permit to construct the “shell” of a building.  The shell use shall be determined at the time of building permit issuance.  The first tenant improvements to the shell building shall be charged according to land use.

Roof Structures When an open area exists and a roof structure is added, 100% of the total CFF shall be charged if the structure is supported by the addition of one (1) or more side walls. 50% of the total CFF shall be charged if the structure has no side walls.

Multiple Use Structures
With the exception of commercial uses, if there is more than one (1) primary land use within a building, and the applicant can document that a secondary land use accounts for more that fifteen percent (15%) of the gross floor area of the structure, then the CFF shall be calculated separately for each use and the results summed.

Canopy Construction
When an open area exists and a canopy structure is added, 100% of the total CFF shall be charged if the canopy is enclosed on three (3) or more sides and 50% of the total CFF shall be charged if the canopy is enclosed on one (1) or two (2) sides. Canopied business or storefront entryways and freestanding membrane canopies with no sides are exempt.

Mezzanines When a second floor open area or balcony exists, 100% of the total CFF shall be charged.

Change of Use for Existing Buildings
With the exception of shell buildings, any alteration or change of use to an existing building does not trigger the payment of CFF provided that no additional square footage is added. If additional square footage is added, the CFF shall be charged based on the additional square footage and land use. Should the change of use fall within a lower land use category, no refunds or credits for the previously paid CFF shall be made.

Ancillary Recreation Buildings The CFF paid on the dwelling unit or room basis is deemed adequate for ancillary recreation buildings such as mobile home clubhouses, cabanas, weight rooms, lounges, or activity buildings which are primarily oriented to the residential development.

Accessory Dwelling Unit
California law (Government Code §65852.2) exempts Accessory Dwelling Units (ADU) less than 750 sq. ft. from local impact fees and requires that fees for an ADU of 750 sq. ft. or greater must be charged proportionately in relation to the square footage of the primary dwelling unit. For example, if an ADU is 900 square feet and the primary dwelling unit is an 1,800 square foot single family home, the impact fees can’t be greater than 50% of the single-family CFF rate. Fee Calculation: (900 sq. ft./1,800 sq. ft.) * $15,016 = $7,508 (50% of the single-family CFF rate). However, in no event shall the impact fees for the ADU exceed the CFF rate for Multi-Family residential.

CFF ADU Impact Fee Example*
Primary dwelling gross floor area (sq. ft.) 100%
Proposed Accessory Dwelling Unit Size (sq. ft.) 50%
ADU Impact Fee Total $7,508.00
*$15,016 CFF Single Family Residential/Dwelling through June 30, 2020 #4..
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Junior Accessory Dwelling Unit
California law (Government Code 65852.22) allows for the creation of junior accessory dwelling units (JADU) in single-family residential zones. The codeState law limits the number of JADUs to one per residential lot zoned for single-family residecesnts with a single-family residence built, proposed to be built, on the lot. Similar to the ADU any JADU under 750 sq. ft. is exempt from impact fees.

California law (Government Code §66323 (a)) allows for one Accessory Dwelling Unit (ADU) and one Junior Accessory Dwelling Unity (JADU) per lot with a proposed or existing single-family dwelling.

TABLE 3 - CFF CREDITS AND EXEMPTIONS

TYPE DESCRIPTION & QUALIFICATIONS

REQUIREMENTS
(Prior To Issuance of a
Building Permit)
RES
IDE
NTI
AL
Accessory Dwelling Unit  Second dwelling unit located adjacent or connected a single-family dwelling unit.  Units less than 750 sq. ft.
 No Charge
Junior Accessory Dwelling Unit  Second dwelling unit connected to a single-family dwelling unit.  Units less than 75500 sq. ft.
 No Charge
Very Low and Low Income Housing  Any Very Low and Low Income housing units constructed or expanded by the Housing Authority of the County of Stanislaus or by any entity in which the Housing Authority is a major partner.  Application
 City Manager Approval if
project meets all
requirements, otherwise CC
approval.

CHDO Housing  Housing constructed or expanded by a CHDO Organization that will be made affordable to households earning sixty (60%) or less of the Area Median Income.
 CDHO Organization must meet all CDHO Housing qualification for ten (10) year period and residential units must satisfy affordability requirements for 10 year period.
 If a resale or refinance occurs within the ten (10) year period, the new buyer will be allowed to assume the remainder of the exemption if the buyer meets the CHDO Housing criteria.
 Staff reports for exemption request shall indicate the cumulative inventory of exempt units and the percent of anticipated total exempt units at build out. The staff report shall also provide a comparison of units to total units built since 1989.  If a resale or refinance occurs within the ten (10) year period and the new buyer does not qualify for the exemption, full payment of CFF, equal to the CFF in effect when building permits were issued, would become due, with no interest thereon.  Application
 Agreement, Promissory
Note, Deed of Trust
 CH & CDC Approval
 City Manager Approval if
project meets all
requirements, otherwise CC
approval.

Very Low Income Housing  Housing constructed or expanded that will be made affordable to households earning fifty (50%) or less of the Area Median Income.  Residential units must be maintained as affordable to Very Low Income households for a period of 10 years.  If a resale or refinance occurs within the ten (10) year period, the new buyer will be allowed to assume the remainder of the exemption if the buyer meets the Very Low Income criteria.
 Staff reports for exemption request shall indicate the cumulative inventory of exempt units and the percent of anticipated total exempt units at build out. The staff report shall also provide a comparison of units to total units built since 1989.  If a resale or refinance occurs within the ten (10) year period and the new buyer does not qualify for the exemption, full payment of CFF would become due, with no interest thereon.
 Application
 Agreement, Promissory
Note, Deed of Trust
 CH & CDC Approval
 City Manager Approval if
project meets all
requirements, otherwise CC
approval.

Shelters  Any facility with overnight sleeping accommodations, the primary purpose of which is to provide temporary or transitional shelter for the homeless in general or for special populations of the homeless. (Examples include emergency shelters, transitional housing and Safe Havens)
 No Charge
Recreational Buildings  For residential projects, the CFF on a dwelling unit or room basis are deemed adequate for ancillary recreation buildings that are oriented and primary to the residential development.  No Charge
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 Mobile home park club houses, cabanas, weight rooms, lounges, and activity buildings.

Alterations & Additions  Any alteration or addition to a residential structure provided that no new dwelling units are created.  No Charge Farmworker Housing  Housing constructed or expanded that will be used exclusively to house members of the farmworker community  Application  Agreement, Promissory
Note, Deed of Trust
 CH & CDC Approval
 City Manager Approval if
project meets all
requirements, otherwise CC
approval.

Affordable Housing  Housing constructed or expanded that will be made affordable to households earning eighty percent (80%) or less of the Area Median Income.
 Residential units must be maintained as affordable to persons earning 80% of less AMI households for a period of 10 years.  If a resale or refinance occurs within the ten (10) year period, the new buyer will be allowed to assume the remainder of the exemption if the buyer meets the 80% AMI criteria.
 Staff reports for exemption request shall indicate the cumulative inventory of exempt units and the percent of anticipated total exempt units at build out. The staff report shall also provide a comparison of units to total units built since 1989.  If a resale or refinance occurs within the ten (10) year period and the new buyer does not qualify for the exemption, full payment of CFF would become due, with no interest thereon.
 Application
 Agreement, Promissory
Note, Deed of Trust
 CH & CDC Approval
 City Manager Approval if
project meets all
requirements, otherwise CC
approval.

Single-Family Replacement &
Reconstruction
 Any replacement or reconstruction of a residential structure that has been destroyed or demolished provided that no new dwelling units are created.
 Satisfactory documentation must be presented to the CFF Administrator of the existence of the previous residential structure.  Non-transferrable.
 The residential structure is located on the same property of the demolished or abandoned residential structure.  No Charge
Multi-Family Replacement &
Reconstruction
 Any replacement or reconstruction of a multi-family residential structure that has been destroyed or demolished provided that the square footage of the new structure is equal to or less than that of the previous structure and the number of units in the new structure is equal to or less than that of the previous structure.  Satisfactory documentation must be presented to the CFF Administrator of the existence of the previous multi-family residential structure.  Non-transferrable.
 The new multi-family residential structure is located on the same property of the demolished or abandoned multi-family residential structure.
 No Charge
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 15
TABLE 3 - CFF CREDITS AND EXEMPTIONS (Con’t.)

TYPE DESCRIPTION & QUALIFICATIONS

REQUIREMENTS
(Prior To Issuance of a
Building Permit)

RESIDENTIAL
Replacement due to Eminent
Domain
 Any replacement of an existing building that has been or shall be vacated due to eminent domain proceedings, or the threat of such proceedings.
 Building permit for replacement structure must be applied for within two (2) years after the transfer of title or within two (2) years after the property has been vacated.
 No additional dwelling units are created and no additional square footage is added.  Use is not devoted to a higher-density capacity and/or does not result in the generation of additional peak hour trip ends.  Satisfactory documentation must be presented to the CFF Administrator of the existence of the previous building and land use type.  The new building is located on the same property of the demolished or abandoned building.  Non-transferrable.
 Exception: If the new building is CFF Land Use that is intensified from the CFF Land Use of the previous building, the incremental difference between the new building CFF Land Use and the previous building CFF Land Use shall be due at building permit issuance.  Exception: Additional square footage added shall be subject to payment of applicable CFF at building permit issuance.  No Charge
 Time Sensitive
Sales & Construction Trailers  Maximum term use of two (2) years.  No Charge All Other Trailers  All other types of temporary trailers are charged the full CFF. The CFF is refundable (less 2.5% administrative fee) if requested, in writing, within six (6) years of payment of the CFF.
 CFF Charged
 Refundable
Truck Loading Bays  Canopied and enclosed and not used as staging area for storage or protection or product.  No Charge Parking Garages  Public and private garages.  No Charge Agricultural  Shade structures, lath houses, and netted areas.  No Charge Outdoor Dining Patio  Uncovered and enclosed dining areas.  No Charge Commercial Replacement &
Reconstruction
 Any replacement or reconstruction of a non-residential structure that has been destroyed or demolished.  New building is located on the same property as the destroyed or demolished building.  Based on prior CFF Land Use and building square footage.  Non-transferrable.
 Satisfactory documentation must be presented to the CFF Administrator of the existence of the previous building and land use type.  The new building is located on the same property of the demolished or abandoned building.  Exception: Additional square footage added shall be subject to payment of applicable CFF at building permit issuance.  No Charge

COMMERCIAL
Tenant Improvements
(excluding Shell Buildings) and
Changes of Use
 Any alteration or change of use to an existing building, if no new square footage is added.  No refunds for diminished use capacities or reduced square footage.  Exception: Additional square footage added shall be subject to payment of applicable CFF at building permit issuance.  No Charge
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 16
TABLE 3 - CFF CREDITS AND EXEMPTIONS (Con’t.)

TYPE DESCRIPTION & QUALIFICATIONS
REQUIREMENTS (Prior
to Issuance of a Building
Permit)
Tenant Improvements
in Shell Buildings and
Changes of Use
 Tenant improvements within a shell building if the improved use is (1) devoted to the same CFF Land Use that the Shell Building paid or (2) is devoted to a CFF Land Use with a lower impact.
 No refunds for diminished use capacities or reduced square footage.  Exception: If tenant improvements are for a CFF Land Use that is intensified from what was paid for the Shell Building, the incremental difference between the Shell Building CFF Land Use and the Tenant Improvement CFF Land Use shall be due at building permit issuance.  Exception: Additional square footage added shall be subject to payment of applicable CFF at building permit issuance.  No Charge
Replacement due to Eminent
Domain
 Any replacement of an existing building that has been or shall be vacated due to threat of/or eminent domain proceedings.  Building permit for replacement structure must be applied for within two (2) years after the transfer of title or within two (2) years after the property has been vacated.
 No additional dwelling units are created and no additional square footage is added.  The use is not devoted to a higher-density capacity and does not result in the generation of additional peak hour trip ends.  No Charge
 Time Sensitive

COMMERCIAL
Commercial/Industrial Relocation
Credit
 Transfer of CFF credit from existing building to a new building.  Project involves commercial and/or industrial job retention of at least twenty-five (25) jobs or redevelopment of blighted area.  Beneficiary of the relocation credit must be the owner of the existing building or the existing building was demolished and paid CFF when rebuilt.
 No Charge
 CC Approval
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 17
TABLE 4 - CFF DEFERRALS

TYPE DESCRIPTION QUALIFICATIONS

REQUIREMENTS
(Prior to Issuance of a
Building Permit)
Low Income
Housing
 Payment of CFF is deferred for twenty (20) years (“Deferral Period”). No payments are due during the first five (5) years. Annual payments of principal and simple interest begin in the sixth (6th) year.  Interest will not accrue during the first five (5) years.  In the sixth (6th) year, simple interest will be calculated at the rate of 5%.

Interest may be waived with approval of the City Council.  A lien is placed on the property.
 If the property is sold or refinanced within the Deferral Period, the new buyer will be allowed to assume the Deferral Payment Agreement if the buyer continues to satisfy the affordability requirements.  If the property is sold or refinanced within the Deferral Period and the buyer does not qualify to assume the Deferral Payment Agreement, the full CFF deferral, including interest, would become due immediately.  Interest penalties apply if fees are not paid within the Deferral Period.  CFF fee and accrued interest become immediately due if housing unit no longer meets affordability requirements.
 Any housing unit that is affordable to Low Income Housing unit constructed by any person or entity.
 The housing unit me must be purchased by, or rented to, a homebuyer earning between fifty-one and eighty percent
(51 – 80%) of the Area Median Income who will use it as their principal place of residence for the duration of the deferral time period. The units must be sold or rented at an affordable price, such that tenant does not pay more than 30% of adjusted household income for housing costs.
 The affordability restrictions must be in place for 30 years.  Application
 Deferred Payment
Agreement and Notice
of Lien
 Promissory Note
 City Deed of Trust
 CH&CDC Approval
 City Manager Approval
if project meets all
requirements,
otherwise CC approval.

Commercial,
Industrial and
Multi-Family
 Twenty percent (20%) of total CFF paid at building permit issuance.  Remaining eighty percent (80%), plus interest, paid annually over five (5) years.
 Interest is equal to the five percent (5%) or the Wall Street Journal Prime Rate in effect at the time of Agreement execution, whichever is greater.

Interest may be waived with approval of the City Council  A lien is placed on the property.
 If the property is sold or transferred within the deferral period, payment of the full CFF deferral, including interest, would become due immediately.
 Interest penalties apply if fees are not paid within the deferral period.  Any commercial, industrial or multi-family development project in which CFF is being assessed.
 For those projects where a mitigated negative declaration or an Environmental Impact Report (EIR) has been certified, no CFF deferral shall be allowed to the extent that one (1) or more of the mitigation measures consists of payment of CFF or construction or installation of a public improvement, the cost of which, subject to funding availability, may be eligible for reimbursement of CFF.
 Application
 Deferral of CFF, Water
Connection and/or
Wastewater Capacity
Agreement and Notice
of Lien
 Promissory Note
 Deed of Trust
 $250 Administrative
Fee
 $500 Title Report Fee
 CH&CDC Approval
 City Manager Approval
if project meets all
requirements,
otherwise CC approval.

Single-Family
Residential
 Payment of CFF, as well as water connection and/or waste water capacity fees, may be deferred until final inspection.
 A lien is placed on the property.
 If the property is sold or transferred within the deferral period, payment of the full CFF deferral would become due immediately.
 Any single-family residence may apply for deferral  Application  Deferral of CFF, Water
Connection and/or
Wastewater Capacity
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 18
 Interest penalties apply if fees are not paid within the deferral period. Agreement and Notice of Lien
 City Manager Approval
if project meets all
requirements,
otherwise CC approval
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 19
TABLE 5 - CFF FEE SCHEDULE
2020-2021 CFF PROGRAM - Development within City Limits
Fee
Category
Unit
Measure Per Streets PublicTransp.

Parks & Air
Quality Police Fire General Gov’t. Admin Total
Single-Family Residential Dwelling Unit $ 6,822 $ 99 $ 6,248 $ 634 $ 395 $ 522 $ 296 $ 15,016 Multi-Family Residential Dwelling Unit 4,726 69 4,299 382 182 320 159 10,138 Senior Housing Dwelling Unit 4,116 37 4,193 372 178 314 113 9,323 Hotel/Motel Room 3,548 62 144 69 121 89 4,034
Retail <50,000 SF 1,000 SF 10,256 204 172 83 145 277 11,137 Retail 50,000-100,000 SF 1,000 SF 8,514 168 172 82 144 231 9,310 Retail 100,000-300,000 SF 1,000 SF 7,186 142 173 83 145 196 7,924 Retail >300,000 SF 1,000 SF 6,704 130 172 82 145 183 7,416 Medical Office 1,000 SF 12,956 259 287 138 240 357 14,237 General Office 1,000 SF 6,269 111 287 138 241 161 7,208 Hospital 1,000 SF 9,085 160 287 138 241 226 10,137
Daycare 1,000 SF 5,017 88 287 138 241 130 5,902
Church 1,000 SF 1,069 19 291 139 245 37 1,800
Nursing Home 1,000 SF 1,565 27 290 139 244 49 2,313
Industrial (Manufacturing) 1,000 SF 2,431 42 123 59 103 62 2,821 Industrial (Warehousing) 1,000 SF 1,704 30 124 59 103 46 2,066 2020-2021 CFF PROGRAM - Development within City’s Sphere of Influence Fee
Category
Unit
Measure Per Streets PublicTransp.

Parks & Air
Quality Police Fire General Gov’t. Admin Total
Single-Family Residential Dwelling Unit $ 7,417 $ 79 $ 1,504 $ 191 $ 9,191 Multi-Family Residential Dwelling Unit 5,338 57 953 130 6,478 Senior Housing Dwelling Unit 3,123 34 1,043 103 4,304
Hotel/Motel Room 3,739 39 56 3,834
Retail <50,000 SF 1,000 SF 10,669 112 155 10,936
Retail 50,000-100,000 SF 1,000 SF 8,883 93 130 9,106
Retail 100,000-300,000 SF 1,000 SF 7,530 80 111 7,720
Retail >300,000 SF 1,000 SF 7,034 76 103 7,213
Medical Office 1,000 SF 13,564 144 199 13,907
General Office 1,000 SF 6,639 69 101 6,810
Hospital 1,000 SF 9,500 100 142 9,743
Daycare 1,000 SF 5,357 57 83 5,496
Church 1,000 SF 1,282 13 27 1,323
Nursing Home 1,000 SF 1,808 19 34 1,861
Industrial (Manufacturing) 1,000 SF 2,584 27 39 2,650
Industrial (Warehousing) 1,000 SF 1,844 20 29 1,893
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 20

APPENDIX A - DEFINITIONS
The intent and meaning of the terms that are used shall be as defined in these CFF Policies & Procedures except as specifically noted, revised or added.

Definitions – A
Accessory Dwelling Unit. An accessory dwelling unit (ADU) is a smaller, independent residential dwelling unit located on the same lot as a stand-alone (i.e., detached) single-family home or multi-family structure. ADUs go by many different names including accessory apartments, secondary suites, and granny flats. ADUs can be converted portions of existing homes (i.e., internal ADUs), additions to new or existing homes (i.e., attached ADUs), or new stand-alone accessory structures or converted portions of existing stand-alone accessory structures (i.e., detached ADUs).

Affordable Housing. Affordable Housing is a Qualified Occupant(s) earning not more than eighty percent (80%) of the Area Median Income (AMI) Applicant. The applicant for a building permit for which an impact fee is due pursuant to the provisions of these CFF Policies and Procedures.

Area Median Income. Area Median Income also known as AMI is the household income for the median/ middle income for a household in a given region.

Arterial. A moderate or high-volume street with four (4) to six (6) travel lanes which carries large volumes of traffic between areas in urban centers, with flow usually consisting of large, signaled intersections with other arterials and many collector roads.

Definitions – B
Banks. Full service banking institutions with or without drive up windows. (CFF Rate = Retail)
Building Inspection. The Building Safety Division of the Community & Economic Development Department for the City of Modesto.

Building Safety Division. The Building Safety Division of the Community & Economic Development Department for the City of Modesto.

Definitions – C
Capital Facilities Fee. Impact fees established to mitigate the impacts of new development as outlined in §66000 of the California Government Code for the purchase, construction, expansion, rehabilitation, or acquisition of public facilities.

Certificate of Occupancy. Final sign off of a building permit. #4..
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 21
CHDO Housing. Shall mean housing found to be affordable to households earning sixty percent (60%) or less of the Area Median Income as determined from time to time by the United States Department of Housing and Urban Development.

CHDO Organization. A specific type of nonprofit organization that has been certified by HOME Investment Partnership Program (HOME) as a Community Housing Development Organization.

CFF Administrator. The Administrator of the Infrastructure Financing Programs for the City of Modesto.

Church. Structures primarily designed or used as a place of public worship. (CFF Rate = Church)
City. The City of Modesto.

City Attorney. The City Attorney, or his or her designee, of the City of Modesto.

City Council. The City Council of the City of Modesto (CC).

City Engineer. The City Engineer, or his or her designee, of the City of Modesto.

Collector. A low or moderate-capacity road, usually consisting of a mixture of signaled intersections with arterial roads and signals, circles or stop signs with other collector and local roads.

Commercial. Commercial and retail uses. (CFF Rate = Retail) Community & Economic Development. The Community & Economic Development Department of the City of Modesto.

Convenience Markets. Convenience markets, with or without on-site pumps and open 24 hours or extended hours. (CFF Rate = Retail)
Definitions – D
Daycare/School. An educational, vocational or daycare facility. (CFF Rate = Daycare)
Development Project. Any project undertaken for the purpose of development.

Development projects include projects involving issuance of a permit for construction or reconstruction but not a permit to operate.

Developer. See Applicant.
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 22
Director. Director of Community and Economic Development.

Definitions – E
Expressway. A high-volume, access-controlled roadway with three classes consisting of four (4) to six (6) lanes where spacing between interchanges with arterial roadways is limited to one mile.

Definitions – F
Facilities. See Public Facilities
Farmworker. Agricultural workers are defined as persons whose primary incomes are earned through permanent or seasonal agricultural labor.

Farmworker Housing. Housing dedicated to affordable housing for farmworkers.

Fee. A monetary exaction other than a tax or special assessment whether established for a broad class of projects by legislation of general applicability or imposed on a specific project on an ad-hoc basis, that is charged by a local agency to the applicant in conjunction with approval of a development project for the purposes of defraying all or a portion of the cost of public facilities related to the development project. This does not include fees specified in §66477, fees for processing applications for governmental regulatory actions or approvals, fees collected under development agreements adopted pursuant to Article 2.5 (commencing with §65864) of Chapter 4, or fees collected pursuant to agreements with redevelopment agencies which provide for their development of property in furtherance or for the benefit or a development project for which a redevelopment plan has been adopted pursuant to the Community Redevelopment Law (Part 1 (commencing with §33000) of Division 24 of the Health and Safety Code).

Fee Payer. See Applicant.

Finance. The Finance Department of the City of Modesto.

Definitions – G (Reserved)
Definitions – H
Hospital. A structure designed for health services, both inpatient and outpatient; that includes surgical care of the sick, injured or the physically ill and/or therapeutic treatment for the mentally ill. Included as an integral part of a hospital are laboratories, outpatient departments, training facilities, central services facilities, and hospital staff offices on the same site. The preceding ancillary uses are considered #4..
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 23
“professional offices” if located off-site unless a multi-site campus is covered by a PD Zone or hospital uses. A separate set of offices on the same site for physicians is considered “professional offices.” (CFF Rate = Hospital) Definitions – I
Improvements. See Public Facilities.

Industrial Land Use. (CFF Rate = Industrial(Manufacturing)) Manufacturing, Light Industrial & Industrial Parks Uses:
 Electronic assembly, paper products
 Metal fabricator
 Bottling plant
 Cabinet shop
 Machine shop
 Sheet-metal shop
 Welding shop
 Wholesale shop
 Printing plant
 Mini-warehouse
 Materials testing labors manufacturer
 Food processor, brewery, bakery
 Recycling facility
 Burning operations for lumber and wood products
 Junk handling, processing and storage
 Landfill and waste products disposal or transfer station  Manufacture, fabrication, processing, packaging and treatment of explosives, oil, great products, chemicals, and chemical products.  Rock crushing
 Pulp and paper mill
 Reduction, processing, and storage or offal, dead animals, bones or similar materials
 Septic tank and cesspool services
 Stockyard
 Tannery
 Vehicle salvaging and wrecking
Mixed Industrial Uses
When a development project contains more than an incidental mixture of uses, the general types of uses should be segregated and treated separately for the purposes of calculating development fees.

Definitions – J
Junior Accessory Dwelling Unit. A Secondary unit to be constructed within the walls of the proposed or existing single-family residence.
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 24
Definitions – L
Low Income Housing. Housing found to be affordable to households earning fiftyone to eighty (51 - 80%) percent of the Area Median Income as determined from time to time by the United States Department of Housing and Urban Development.

Definitions – M
Medium Density Residential. Duplex or triplex buildings located on a single lot designated for occupancy by two (2) or three (3) families. (CFF Rate = Multi-Family Residential)
Multi-Family Residential. Multiple family dwelling units of several types, including high and low rise apartments, high and low rise condominiums, and multi-family residential planned unit developments greater than a density of ten (10) units per acre. The category also applies to mobile homes. (CFF Rate = Multi-Family Residential)
Definitions – N
Nursing Home. Structures designated for use as a convalescent hospital, retirement home, or a twenty-hour care center for seven (7)or more persons in addition to members of the family. (CFF Rate = Nursing Home)
Definitions – O
Office (General). General and professional offices excluding medical offices. (CFF Rate = General Office)
Office (Medical). Offices and clinics devoted to the practice of medical and dental professions or providing medical or dental services, including pseudo-medical services, but excluding hospitals and nursing homes which are treated separately. (CFF Rate = Medical Office)
Definitions – P
Parks, Recreation & Neighborhoods. The Parks, Recreation & Neighborhoods Department of the City of Modesto.

Public Facilities. Public buildings include the following:
 Public buildings including park, recreation, police, fire and administration buildings.
 Facilities for storage, treatment, and distribution of nonagricultural water.  Facilities for the collection, treatment, reclamation and disposal of water.  Facilities for the collection and disposal or storm waters and for flood control purposes.
 Facilities for the generation of electricity and the distribution of gas and electricity.
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 25
 Facilities for the distribution of information, including radio and communication like towers and satellite dishes.
 Transportation and transit facilities, including but not limited to streets and supporting improvements, roads, overpasses, bridges, harbors, ports, airports, parkways and related facilities.
 Parks and recreation facilities, including bike trails, public landscape areas and community centers.

Public Works. The Public Works Department of the City of Modesto.

Definitions – Q (Reserved)
Definitions – R
Recreational Buildings. Ancillary recreational buildings that are oriented primarily to a residential development.

Restaurants (Fast Food). Fast food restaurants with or without sit-down facilities and with or without drive up windows. Generally food is ordered and taken to be consumed outside the restaurant building, however some on-site seating is usually provided. (CFF Rate = Retail)
Restaurants (Sit-Down – high turnover). Sit-down restaurants where food is ordered and consumed in the restaurants and customers generally stay less than one (1) hour. Sit-down restaurants typically serve breakfast, lunch or dinner and also include drinking establishments such as bars and cocktail lounges. (CFF Rate = Retail)
Restaurants (Sit-Down – low turnover). Sit-down restaurants which generally have turnover rates of one (1) hour or longer and typically do not serve breakfast, and may or may not serve lunch. (CFF Rate = Retail) Retail. Includes a wide range of retail service uses, both freestanding and in shopping centers, including but not limited to supermarkets, drug stores, department stores, general merchandise, building materials or lumber stores, specialty retail stores, discount stores, hardware/paint stores, video arcades, and new and used car sales, auto repair shops, and car washes. (CFF Rate = Retail) Definitions – S
Savings & Loans. Includes thrift and credit unions, with or without drive-up windows and which typically offer fewer financial services than banks and are smaller in gross floor area than banks. If a given Savings & Loan is 5,000 gross feet or more, or provides full banking services, it should be treated as a bank. (CFF Rate = Retail)
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 26
Senior Housing Residential. Retirement communities restricted to adults or senior citizens, congregate care facilities, and similar residential uses. (CFF Rate = Senior Housing Residential)
Shelter. Any facility with overnight sleeping accommodations, the primary purpose of which is to provide temporary or transitional shelter for the homeless in general or for special populations of the homeless.

Single-Family Residential. Single-family detached homes on individual lots, such as in residential subdivisions, but could also be in planned developments. Density of development may vary, but is typically ten (10) dwellings per acre or less. (CFF Rate = Single-Family Residential)
Square Foot (sf). As used for the calculation of impact fees is the same as the square footage for determination of the issuance of building permits.

Definitions – T (Reserved)
Definitions – U
Utility Planning & Projects. The Utility Planning & Projects Department of the City of Modesto.

Definitions – V (Reserved)
Very Low Income Housing. Shall mean housing found to be affordable to households earning fifty percent (50%) or less of the Area Median Income as determined from time to time by the United States Department of Housing and Urban Development.

Definitions – W
Warehouse Distribution & Heavy Land Use. Facilities in which the primary activity is the storage of materials or in which the primary activity is receiving and shipping of materials. Uses which are considered to be in this category include freight, warehousing, corporation yard, freight yard, equipment rental yard, moving and storage services, bulk feed storage and lumberyard. (CFF Rate = Industrial (Warehousing)
Definitions X,Y, & Z (Reserved)
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 27
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City of Modesto
CFF Policies and Procedures
Adopted September 22, 2020
Resolution No. 2020-407 Page 28

APPENDIX B - STREET EXACTIONS POLICY
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CITY OF MODESTO

COMMITTEE AGENDA REPORT
DATE OF MEETING:

June 3, 2024
Date: May 15, 2024
TO: Economic Development Committee
Chris Ricci, Chair
Eric Alvarez, Vice-Chair
Sue Zwahlen, Member
THROUGH: Joseph P. Lopez, City Manager
FROM: Jessica Hill, Director of Community and Economic Development SUBJECT: Agreement with Stanislaus 2030 to support in-home childcare entrepreneurship CONTACT: Trevin Barber, Economic Development Manager
[email protected], 209-571-5566
DESCRIPTION:

Consider a Modesto Forward Grant Agreement with Stanislaus 2030 to support in-home childcare entrepreneurship, for a total amount not to exceed $156,758 and forwarding to Council for approval. (Funding Source: American Rescue Plan Act Funds) STRATEGIC PLAN ELEMENT:

The recommended action supports the City’s 2020-2025 Strategic Plan Goal E. Drive Economic Vitality: Drive the success of a vibrant and economically sustainable business climate.

BACKGROUND:

American Rescue Plan Act (ARPA)
On March 11, 2021, President Joe Biden signed the American Rescue Plan Act (ARPA) into law.

The City of Modesto received approximately $45.8 million in ARPA funds in two tranches to help address the continued impact of the COVID-19 pandemic on the economy, public health, individuals, and businesses.

The City of Modesto may use ARPA funds to address a number of areas, including:

1. Replace revenue that was lost, delayed, or decreased as determined based on the projections as of January 27, 2020 as a result of the COVID-19 emergency.

2. Respond to the COVID-19 emergency and address its economic effects, including through aid to households, small businesses, nonprofits, and industries such as tourism and hospitality.

3. Cost overruns incurred as a result of the COVID-19 emergency #5..
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Economic Development Committee, June 3, 2024
Agreement with Stanislaus 2030 to support in-home childcare entrepreneurship

On May 25, 2021, the City Council approved Resolution No. 2021-194 approving the Pandemic Recovery Strategy, Modesto Forward, and the associated spending plan for the American Rescue Plan funds; and authorizing the City Manager to carry out the necessary steps to implement the strategy and spending plan. The Modesto Forward plan allocated $1,000,000 in funding to support the “Small biz support with expansion and retention.”
Pandemic Exacerbates Childcare Shortage
Modesto, a vibrant city in California’s Central Valley, and 19th largest City in California faces significant challenges related to childcare availability. In 2002 there were 769 home-based childcare businesses and 144 childcare centers. Compared to 2023 with 320 home-based childcare businesses and 132 childcare centers. This represents a consistent two-decade decline in childcare services, and more specifically a decline in home-based care1.

The childcare industry’s struggle is not just a local issue but a national concern, with four out of every five childcare centers reporting staffing shortages, and 15% experiencing a “major shortage” of workers. Most of California is a childcare desert with only one licensed space for every four children. The shortage is greatest for children under two years old. The COVID-19 pandemic exacerbated this trend. This shortage limits the capacity to serve families, directly impacting the nation’s economic progress and the well-being of its future generations.

According to research report from the Small Business Majority2, 59% of small business owners affirm that barriers to childcare access are preventing them from growing their business, with about a quarter of founders noting that they’ve had to shutter their company entirely and return to the broader workforce that offers more flexibility, because of childcare problems.

DISCUSSION:

One of the key areas of focus in Stanislaus 2030 is the expansion of childcare, recognizing its role in supporting working families. The initiative is also working on small business supports, governance and capacity building, talent development, and traded sector development. Childcare entrepreneurship done right offers family sustaining income. By supporting new childcare businesses with technical assistance and start up grants, the community can make an impact on the childcare worker shortage while also creating high-road jobs.

Stanislaus 2030 approached City staff to support a new partnership with Nurture, a non-profit organization dedicated to the expansion of in-home childcare entrepreneurship. This partnership was initiated in 2023 to address the childcare shortage in Stanislaus County, specifically focusing on the need for licensed infant and toddler care. Of the seven most high-demand low-income communities, four are within Modesto.

The partnership launched an In-Home Childcare Expansion Project, which aims to increase the supply of home-based child-care businesses. The project is part of Stanislaus 2030's broader efforts to tackle the county's childcare crisis and support the local workforce. 1 Stanislaus County Office of Education (2024). Child and Family Services. 2 Small Business Majority. (2024). Small Business Majority Survey Report. Retrieved from https://smallbusinessmajority.org/our-research/workforce/opinion-poll-small-businesses-support-policysolutions-address-our-nation-s-childcare-challenges#overlay-context=user #5..
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Economic Development Committee, June 3, 2024
Agreement with Stanislaus 2030 to support in-home childcare entrepreneurship

The collaboration with Nurture is data-driven and innovative. It includes extensive research and the development of practical solutions to transform work in the childcare economy into a path to economic security. The anticipated results of this partnership include incubating 1,000 new home childcare businesses, expanding 500 existing childcare facilities, and creating 12,000 permanent, licensed childcare spaces.

Jennifer Brooks, the Founder and CEO of Nurture, brings 25 years of experience in microenterprise, workforce development, financial security, asset-building, and child care to this partnership. She is passionate about women’s economic self-determination and committed to equitably building and scaling practical solutions to make jobs in the care economy paths to financial security.

The City of Modesto has been actively coordinating with Stanislaus 2030 on a proposal to fund their partnership with Nurture. The proposed funding amount is $156,758, which is part of the American Rescue Plan Act (ARPA) funding. Allocations will be used to fund $5,000 start-up grants for 31 new childcare businesses $2,500 would be utilized to help fund the curriculum, and $2,500 would be utilized as a grant to start the childcare facility in the home. This collaboration aims to address the childcare shortage in Modesto. The anticipated results of this partnership include incubating new home childcare businesses, expanding existing childcare facilities, and creating permanent, licensed childcare spaces in Modesto. This initiative is a testament to the city's commitment to supporting the local workforce and contributing to the county's economic development.

FISCAL IMPACT:

The project is currently budgeted in the Modesto Forward ARPA grant allocation for Small Business Development, Project Number 101553 which was $188,222 as of May 5, 2024. The proposed Grant Agreement will not exceed $156,758.

RECOMMENDED COMMITTEE ACTION:

Staff Recommendations:

Motion recommending a Modesto Forward Grant Agreement with Stanislaus 2030 to support in home childcare entrepreneurship for a total amount not to exceed $156,758 and forwarding to Council for approval.

Approved by:

Jessica Hill, Director Community and Economic
Development
Joseph P. Lopez, City Manager
Attachments:

1. Stanislaus Childcare Report

2. Modesto Forward Grant Agreement
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Stanislaus County Home Child Care Business Expansion
Analysis, Insights and Implementation Plan

FROM CHILD CARE

DESERT TO OASIS
APRIL 2024
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Brooks, J. (2024). From Child Care Desert to Oasis,
Stanislaus County Home Child Care Expansion:

Analysis Insights and Implementation Plan.

Nurture for Stanislaus 2030.
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The Stanislaus 2030 Investment Blueprint articulated a shared vision for economic prosperity in the County and the key investments necessary to achieve that vision. The Blueprint identified child care as a critical non-skill barrier to employment. Child care is essential for economic prosperity; investing in child care both creates jobs and enables workforce participation by others.

Increasing public investment in high-quality [early care and education, (ECE)] … would stimulate growth. One impact of more funding would be to generate greater revenues for providers, sending ripples of increased activity through the region through an economic multiplier effect.

The biggest benefits of ECE expenditures, however, are the increased employment, earnings, and productivity of parents – an unrealized source of potential gains for California’s economy. (Anna Powell, 2019)
However, only 17 percent of working parents in Stanislaus County have access to licensed child care. The County needs an additional 36,000 spaces for children zero to 12 to meet demand (Stanislaus Child Development Local Planning Council, 2020). Further, two-thirds of the prime working-age adults who are sitting out of the labor force are women. In Stanislaus County, a substantially higher percentage of prime-age nonworking adults are caring for children (60 percent), compared to nationally (40 percent) (U.S. Census Bureau, 2021). The Home Child Care Business Expansion initiative is the primary strategy Stanislaus 2030 is investing in to address this shortage.

The long-term goal of the Home Child Care Business Expansion initiative is to turn Stanislaus County’s child care deserts into child care oases. In child care deserts, there are one or fewer licensed spaces for every three children who need one. The initiative intends to dramatically expand the supply of care in high-need ZIP codes, so that parents can choose from an ample supply of licensed care that is provided by caregivers who earn family-sustaining incomes.

The Home Child Care Expansion Pilot was funded in the summer of 2023 by Stanislaus County, with federal American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds. The objective of the pilot phase was two-fold. The first objective was to test and learn from an innovative and scalable child care entrepreneurship development program.

The second was to identify system-alignment issues critical to the success of initiative implementation at scale.
01 BACKGROUND
Increasing public investment in high-quality [early care and education, (ECE)] … would stimulate growth. One impact of more funding would be to generate greater revenues for providers, sending ripples of increased activity through the region through an economic multiplier effect.

The biggest benefits of ECE expenditures, however, are the increased employment, earnings, and productivity of parents – an unrealized source of potential gains for California’s economy. (Anna Powell, 2019)
– UC Berkeley Center for Labor Research and Education
We aim to turn child care deserts into oases, where parents can find care and caregivers can earn a good living
Photo: Center for American Progress
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02 This report is divided into four sections. In the first section, we review the context for the pilot, i.e., what we knew about the child care economy at the outset of the pilot. We then review an analysis of local data to paint a picture of the child care landscape in Stanislaus County and what it will take to solve the most acute pain points.

The second section reflects on the pilot. It explains the rationale for utilizing Nurture’s unique approach, reflects on outcomes and lessons learned, and evaluates our success in preparing entrepreneurs to run successful home child care businesses.

The third section articulates the necessity for systems alignment and outlines emerging service linkages with other parts of the public sector service delivery ecosystem. It lays out a case for broad and shared ownership for addressing the shortage of licensed care in the County.

The final section of this report lays out an achievable 10-year implementation plan for closing the gap in supply of licensed care, improving job quality for caregivers, and enabling greater labor force participation among parents.

The report lays out the case for broad and shared responsibility for addressing the County’s shortage of licensed child care REPORT SUMMARY Photo: Center for American Progress
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LANDSCAPE

ANALYSIS
Fundamentals of the Child Care Economy
Why Home-Based Child Care
Shortage of Licensed Care in Stanislaus County
Where and for Whom is Shortage Most Acute
Employer and Worker Perspectives
Critical Role of Child Care Subsidies
Broadly Available Subsidies … A Game-Changer
Lack of Awareness of Available Subsidies
Concurrent Expansion of Supply and Demand
PILOT

REFLECTIONS
What is Nurture?
A Solution to Match the Scale of the Problem
Designing for Marginalized Prospective
Entrepreneurs
Pilot Experience, Lessons, and Results
Recruitment
Nurture Coursework
State Child Care Licensure
Business Starts

SYSTEMS

ALIGNMENT
Public Mandate to Support Child Care
Entrepreneurs
Public Resources to Support Child Care
Entrepreneurship
Potential Service Linkages

IMPLEMENTATION
PLAN
Theory of Change
Activities, Timeline, Outcomes
Implementation Budget
Impact Infographic

TABLE OF CONTENTS
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Child care is a market failure. Because most parents cannot afford to pay the true cost of care, wages in the sector are artificially depressed, and the supply of care lags demand. The forces that classical economic theory suggests will bring a market into equilibrium are ineffective when a market fails. Caregivers cannot raise prices high enough for child care to be an attractive profession. Parents cannot decide that, based on price, they do not “need” care.

Families who can afford to pay a premium are able to access the limited supply of privately provided quality child care. Those who cannot pay are generally left with unlicensed, informal care, which often equates with lower quality. (The supply of publicly subsidized quality care, such as Head Start, does not come close to meeting demand.) Children who miss out on quality early learning start kindergarten behind, and often stay behind. Parents who cannot find care, sit out of the workforce, and cannot contribute to the economic vitality of the region. Child care providers, who play a critical role in preparing the next generation, struggle to make ends meet.

Shoring up the fundamentals of the child care economy requires sweeping changes to the public child care system, such as reimbursement rate reform. However, even as advocates and policymakers wrangle for common ground, we should celebrate a “rose among the thorns” when we find one. Child

LANDSCAPE ANALYSIS
Fundamentals of the Child Care Economy
04 care entrepreneurship is a
bright spot in an otherwise
dysfunctional market.

Supporting the development of
home-based child care
businesses has the potential to
make a big impact for children,
parents, and caregivers. This
strategy can increase earnings
for those providing care,
improve the quality of care for
children, and increase supply of
care so that parents can work.

CHILD CARE IS A MARKET FAILURE
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WHY HOME-BASED CHILD CARE … A ROSE AMONG THE THORNS
Stanislaus County is a “child care desert” where there is one or fewer licensed space for every three children (Center for American Progress, 2020). The shortage of care, however, is not evenly distributed among children of all ages. Of the 36,000 children in the County who need licensed care, nearly half, or 17,000, are age 0 – 2 (Stanislaus Child Development Local Planning Council, 2020).

Infants and toddlers are generally cared for in home-based settings, due to both parental choice and the economics for child care centers—the required adult-child ratios make caring for this age group unprofitable. By focusing efforts on increasing the supply of home-based care, we are targeting the child care setting that is most in-demand.

Further, child care entrepreneurship provides a unique opportunity for a family-sustaining income in a sector where the median wage in California is just over $10 per hour, adjusted for cost of living (UC Berkeley Center for the Study of Child Care Employment, 2020).

Child care entrepreneurs in the Central Valley who care for children with subsidies and apply sound business practices can net, after expenses, $50,000 annually (Nurture, 2022).

Finally, licensed child care entrepreneurship has low barriers to entry for those with few other opportunities for economic security. Neither a high school diploma, legal work authorization, nor the ability to speak English is required to be licensed by the state of California. 05 #5..
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For essentially the past two decades, the supply of licensed child care in Stanislaus County has been shrinking.

The decline has been most pronounced among home-based child care programs—the setting that is more likely to meet the needs of families with infants and toddlers, as well as those who work nontraditional hours, and those who prefer care in a language other than English.

The shortage of licensed care is also more pronounced in certain geographies and for certain populations. In general, child care deserts, like those in Stanislaus County, tend to be poorer, and more rural and Latinx, compared to places with an adequate supply of licensed care (Center for American Progress, 2020).

Shortage of Child Care in Stanislaus County
06 Number of Stanislaus County Child Care Facilities
By Year, 2002 – 2023
769 in 2002
320 in 2023
Home-Based Child Care Businesses Child Care Centers
Source: Stanislaus County Office of Education, 2024
144 132
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Stanislaus County needs 150 new home child care businesses per year for the next 10 years to address the most acute shortage

WHERE AND FOR WHOM IS THE SHORTAGE OF LICENSED CARE MOST ACUTE High-Demand, Low-Income Communities
To understand which communities in Stanislaus County have the highest need, we compiled local data—with assistance from University of the Pacific researcher Thomas Pogue, Ph.D.— from the Stanislaus County Office of Education, Stanislaus County Workforce Development, and the U.S. Census Bureau.

Analyzing data on the shortage of care, numbers of workers, poverty rates, and labor force participation gaps, we identified seven high-demand, low-income ZIP codes.

We calculated that addressing the shortage of infant and toddler care in these communities will require an additional 6,000 licensed child care spaces. Factoring in capacity limits, that number translates to 1,500 new or expanded businesses. Over the next decade, Stanislaus County will need to incubate 150 new or expanded home child care businesses annually.

HIGH-DEMAND, LOW-INCOME COMMUNITIES
07 Infant/Toddler
Care Shortage,
Small Home
License
Workers
150% of
Poverty,
Individuals
Prime-Age
Employment
Gap
ZIP Code Low-Income
Neighborhood
-334 26,747 16% 26% 93507 Ceres
-330 27,878 22% 31% 95351 Rouse (Modesto)
-268 31,359 15% 26% 95350 Aurora (Modesto)
-212 26,087 19% 25% 95380 W Central
Turlock
-137 17,816 15% 29% 95358
Bret Harte,
Shackleford
(Modesto)
-137 14,262 15% 28% 95354 NE Downtown
Modesto
-91 6,036 17% 33% 95386 Waterford
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Concurrently, we fielded a survey of workers and potential workers in Stanislaus County, to which more than 700 individuals responded. The survey, which was primarily shared with workers via email from their employers, initially yielded very few Spanish speakers.

To increase representation of Spanish speakers, we supplemented data collection with inperson surveying of patrons and workers at the Ceres flea market on December 3. The low variance among the 50 Spanish in-person survey responses gives us reasonable confidence that differences between Spanish and English speakers reflect population-level differences.

Workers and potential workers reported a high demand for care, particularly Spanish speakers. Two-thirds of Spanish speakers need care in order to work; three-quarters indicated that they would use care if it were available near their home or employer.

In November 2023, we fielded a survey of
Stanislaus County employers. Seventy-one
firms, government entities and organizations,
representing more than 100,000 workers
responded to the brief survey.

The survey showed that absenteeism and
difficulty filling vacancies were—regardless of
shift—substantial pain points for employers
with 500 or more employees.

EMPLOYER AND WORKER PERSPECTIVES
Employer Pain Points
Worker and Potential Worker Needs
Large employers frequently have difficulty
filling vacancies and/or with absenteeism
08 English Spanish
High demand for child care,
particularly among Spanish speakers
Employee Need for Care and Customer Demand
68%
76%
52%
Need Care to Work Would Use Care if Available
Frequent
Large Employer Difficulty Filling
Vacancies and/or Absenteeism
59% 56% 52% 48%
8:00 AM – 5:00 PM
Early Mornings
Overnight
Late Night
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The County’s state subsidy funding
increased 10x in the past five years
Research has demonstrated not only that high-quality early education drives individual success in school and in life, but also that it creates better health, social, and economic outcomes more broadly (Heckman, 2012). Unfortunately, many children cannot access quality early learning.

Because most parents cannot afford the true cost of care, subsidies are necessary to correct the market failure. Historically, however, California has provided insufficient funding to support all those families who are income-eligible for financial assistance.

After a decade of largely flat state subsidy funding, policymakers began incrementally increasing funding to help parents pay for care beginning in fiscal year 2018-19. The Covid19 pandemic, however, put a spotlight on the essential role child care plays to a functioning economy. Policymakers responded by dramatically increasing the number of families who could receive a subsidy. In the past five years, subsidy funding in Stanislaus County has increased by a factor of 10.

While this expanded investment was more
than welcomed and long overdue, without a
corresponding investment in the supply of
care, many parents have been unable to find a
provider with space to care for their child.

Currently, there are literally hundreds of
parents in the County who have been approved
for a child care subsidy but cannot find a
provider to care for their child.

Experience from the Stanislaus County Office of Education, which enrolls parents in subsidy programs and helps them find care, illustrates the shortage, particularly for infants and toddlers. Staff have stories of heroic efforts to help parents with subsidies to find a caregiver.

Stanislaus County, like other child care deserts, lags in expending state subsidy dollars. As of February 2024, more than $10 million of FY 22-23 funding remained unallocated. Nearly $40 million in additional funding for FY 23-24 is available and has yet to be tapped.

Strategically expending state subsidy funding is necessary not only for families to access the care they need, but also for child care to be a viable career option for entrepreneurs.

I was helping a parent who qualified for a child care subsidy to find a space for her infant. I called 44 child care centers and home-based programs looking for vacancies. Only eight programs had any vacancy whatsoever. – Child Care Navigator, Stanislaus County Office of Education Critical Role of Child Care Subsidies
BROADLY AVAILABLE SUBSIDIES … A GAME-CHANGER
09 Stanislaus County Subsidy Funding
By Fiscal Year, 2005 – 2023
$4.4M, FY2017-18
Source: Stanislaus County Office of Education, 2024
$40M, FY2022-23
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Increasing the supply of licensed child care must go hand-in-hand with connecting families with the subsidies to pay for it In the face of historic underfunding, many counties logically opted to preserve their limited resources for services, rather than marketing; although many families were income-eligible, few would ultimately receive a subsidy. As a result, the current availability of financial assistance to pay for care is an unintentionally well-kept secret.

There is a profound lack of
awareness among families
that they may qualify for help
paying for child care. The
worker survey, fielded in
November 2023, showed that
only one in four Englishspeakers, and fewer than one
in five Spanish-speakers was
aware of financial assistance
available to help pay for child
car worker survey, fielded in
November 2023, showed that
only one in four Englishspeakers, and fewer than one
in five Spanish-speakers was
aware of financial assistance
available to help pay for child
care.

I didn’t know that subsidies to help pay for child care existed. Where do parents have to go to get help? What do they have to do? Who are the organizations that are
promoting this assistance? They are not at the health fairs. – Promotora
Addressing the lack of awareness among parents is as important as addressing the shortage of care. Further, we must concurrently increase the supply of care and work to enroll more families in the subsidy system.

Without subsidies, families in low-income communities cannot pay child care providers enough for the entrepreneur to stay in business.

There is a woman in my area who watches five children; she takes four to school and watches the youngest all day. The mother works six days a week and she can only pay the provider $40/day for all five children. Why would we help people like her set up a daycare if they can’t earn much income?
– Promotora

LACK OF AWARENESS OF AVAILABLE SUBSIDIES

CONCURRENT EXPANSION OF SUPPLY AND DEMAND
10 Aware Unaware Aware Unaware
26%
English Speakers
17%
Spanish Speakers
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To illustrate the critical importance of subsidies in making home-based child care entrepreneurship a good job, consider that a licensed child care entrepreneur who cares for children with subsidies—and who applies sound business administration practices—can earn more than $70,000 annually, and take home, after expenses, approximately $50,000 (Nurture, 2022). Informal caregivers who are paid through the subsidy system, by contrast, earn 30 percent less than licensed providers and have stricter limits on the number of children they may care for, further restricting their earning capacity. Informal caregivers paid directly by parents are constrained by parents’ ability to pay, which in low-income communities, can mean earning $25 – $75 per day.

Pragmatically, we must also be mindful of geography as we incubate new child care businesses and raise awareness of subsidy availability. Parents generally prefer child care that is either close to home or to work. A geographic mismatch in supply and demand could easily derail progress for both parents and child care entrepreneurs.

Further, while Stanislaus County has an immediate opportunity to fully expend its allocated state subsidy dollars, current funding is insufficient to subsidize all families in the county who are income-eligible. (As a point of reference, a two-adult, two-child family earning less than $95,000 is income-eligible to receive a child care subsidy.) While states rules dictate that families with the lowest income who have been waiting for care the longest should receive support first, in the absence of a “waiting list,” any incomeeligible family will be given a subsidy on a first-come, first-served basis. Efforts to increase awareness of subsidy availability should ensure that resources are equitably deployed to those who are furthest from opportunity.

Effectiveness and Equity
Efforts to increase awareness of subsidies must ensure resources are equitably deployed to those furthest from opportunity 11 $687 $687
$833 $833
$766 $766 $766 $766
Licensed Home Child Care
Maximum
Annual Reimbursement
$73,000
Optimized Enrollment,
Monthly Subsidy Payments
$583 $536 $481
Informal Subsidized Care
Maximum
Annual Reimbursement
$20,000
Typical Maximum Monthly
Subsidy Payments
Typical Scenario: Unsubsidized Care
in Low-Income Community
$1,065 monthly total for 5 children
Informal Care
Annual Parent Payment
$12,480
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Nurture’s sequenced content is divided into courses to
deliver highly salient information at the moment when
entrepreneurs need it. The pilot tested the Business
Start-Up track, which includes the Accelerated State
Licensing and Business Essentials courses. The 12-week
track takes prospective entrepreneurs through the state licensing process and prepares them with the essential
business skills needed to launch their business.

In each week of the coursework, entrepreneurs complete a Learning Pathway on a particular topic. They watch videos, explore resources, and reflect on how the content they are EARNING learning applies to their future business. They make decisions and commitments, which become their business plan, and create essential customized business tools, such as a budget, marketing flyer, curriculum outline, parent contract, etc., via interactive technology.

In 2021, with funding from the James Irvine Foundation, and in partnership with Merced County Worknet, Nurture engaged in its first human-centered design cycle to develop content for marginalized entrepreneurs. Nurture began delivering direct services in 2022 with funding from the Central California Small Business Development Center Network.

Building on decades of wisdom and insights from the child care, small business development, and workforce development fields, Nurture’s evolving business content is co-created with entrepreneurs. Its service delivery model is anchored by partnerships with local stakeholders.

Nurture’s financial model relies on philanthropic support for design and evaluation of new services while leveraging public funding to support ongoing service delivery.

What is Nurture?
Nurture’s mission is to equitably design, build, and scale solutions that create financial security for child care entrepreneurs and meet the demand for care in child care deserts.

Nurture is a nonprofit with fiscal sponsorship by Mission Asset Fund, a Community Development Financial Institution with deep expertise in equitably delivering innovative tech-forward services.

As a baseline for comparison, approximately 25 new home child care business per year are licensed in Stanislaus County. At that rate, it would take 60 years to increase the supply to meet demand in the County’s high-need ZIP codes. To move the needle on the shortage of licensed care in the region, the solution must match the scale of the problem.

Nurture’s approach combines scalable app-based learning content, virtual group support, proactive one-on-one coaching, and access to financial capital, to efficiently prepare diverse entrepreneurs for child care business ownership.

A SOLUTION TO MATCH THE SCALE OF THE PROBLEM

ENTREPRENEURSHIP DEVELOPMENT PILOT
12 Cost Structure and Scale
Total Cost (in millions)
Nurture Typical Brick-and-Mortar Training
0 100 200 300 400 500
$.5
$0
$1
$1.5
$2
$2.5
Annual Volume of Entrepreneurs
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Nurture is committed to equitably building and scaling practical solutions that turn child care entrepreneurship into a path to economic security. From Nurture’s inception, it has cultivated proximity to the communities for whom it advances equity—marginalized women and men, who are often low-income and immigrants, with few other opportunities to earn familysustaining incomes.

Nurture designs with and for aspiring and
struggling entrepreneurs in child care deserts,
who have been involved at every step of the
human-centered design process. All of
Nurture’s content and support is available in
Spanish and English.

A culturally and linguistically trusted coach
convenes cohorts virtually each week to foster
shared accountability, support, and
persistence. The coach monitors
entrepreneurs’ progress and quality of work
and proactively supports those who need
help mastering a concept or using
technology.

Nurture’s technology interface (smartphone
app, rather than a computer) and user
experience were developed based on
patterns of technology usage among our
target audience and refined with ongoing
user feedback and input.

Nurture defines success from the vantage
point of marginalized entrepreneurs.

Everything, from recruitment to the
technology experience and one-on-one
support, is designed—and redesigned— with
that entrepreneur’s success as its North Star.

When entrepreneurs complete the coursework and obtain a California Family Child Care Home License, they receive a $2,500-grant to cover licensing and business start-up expenses.

Nurture follows entrepreneurs for a year or more, tracking business starts and vitality, and inviting engagement with additional learning opportunities.

Nurture’s technology-forward service design enables it to nimbly expand the number of entrepreneurs supported without a one-to-one increase in costs. In fact, Nurture’s cost structure becomes more efficient as the volume of entrepreneurs increases.

The shortage of licensed child care is a regional problem, to which Nurture is taking a regional approach. The team is concurrently working to expand resources in surrounding counties, which will only serve to increase the cost-efficiency of the model.

DESIGNING FOR MARGINALIZED PROSPECTIVE ENTREPRENEURS
Do low-income and Latinx households
use technology?
While computer, tablet, and smartphone
usage is nearly ubiquitous among upperincome households in the United States, a digital divide, by both income and race &
ethnicity, persists.

The gap in technology usage, however, is
greatest for computers and broadband
access, not smartphones.

For example, 93 percent of those earning
more than $100,000 reported home
broadband access, compared to only 57
percent of those earning less than
$30,000. Differences by race and ethnicity
show that Black and Latinx adults are less
likely than White adults to report using a
computer or broadband at home.

There were, however, no reported racial or
ethnic differences in use of smartphones;
85 percent of both White and Latinx
adults, and 83 percent of Black adults,
report using a smartphone.
(Pew Research Center, 2021)
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A core supposition of Nurture’s service delivery model, which it sought to test in the Pilot, was whether partnerships with trusted community organizations that have relationships with marginalized County residents would be sufficient to open doors and provide credibility to engage with our target audience.

Beginning in the summer of 2023, Nurture engaged in a range of outreach activities to increase awareness of the opportunity, primarily among community organizations.

Initial activities included:

1. Meetings with staff at community organizations

2. Developing and sharing Spanish and English social media collateral

3. In-person meeting with potential entrepreneurs at West Modesto Collaborative

4..Targeted door-knocking by North Valley Central Labor Council The key metric of success for the Child Care Entrepreneurship Development Pilot was state licensure and preparation of 25 entrepreneurs with the essential skills to launch successful child care businesses. In addition to the potential direct positive impact of 25 new child care businesses in the County, however, the Pilot also sought to learn about the challenges and opportunities related to recruiting diverse prospective child care entrepreneurs. The following sections reflect on experience, lessons, and results related to recruitment, Nurture’s coursework, state licensure, and new business starts.

The first wave of outreach resulted in
more English- than Spanish-speakers.

Using language as a proxy for economic
marginalization, Nurture decided to test
additional strategies to reach a greater
number of disconnected potential
entrepreneurs.

Pilot Experience, Lessons, and Results

RECRUITMENT
How did we identify and attract diverse potential entrepreneurs? 14 #5..
137
In the fall, Nurture tried three additional strategies:

5. Meeting with one of the promotora networks

6. Engaging flea market patrons and workers in Ceres

7. Strategically hanging flyers in targeted ZIP codes
Angelica, Nurture graduate, and David, Nurture
Generalist, at the Ceres flea market
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138
Diana, Nurture graduate, and Crystal, Nurture
Coach, at CVOC farmworker fairs
We paused to reflect on effectiveness of
strategies tried to date (see appendix),
before testing three additional strategies in
January and February:

8. Incentivized outreach by Nurture
graduates (see box on page 17)

9. Partnering with the Ceres Unified School
District to reach elementary school
parents (see box on page 18)

10. Tabling at Central Valley Opportunity
Center’s farmworker fairs
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Emerging Sketch of Nurture
Ambassador Program

OUTREACH EXPERIMENTATION
December – January: Nurture Graduates as Outreach Ambassadors Early Results
Graduates are eager to share their experiences. Simple encouragement to share was sufficient to spur action. Spanish speakers responded particularly well to word-of mouth recruitment.

Low-effort referrals surfaced some “natural” ambassadors among graduates.

Graduates are quite willing to hang flyers in
their neighborhoods, and even to drive to
other ZIP codes, especially when provided
some financial compensation.

Pairing a Nurture staff with a graduate at
tabling events effectively conveyed the
message: “If I can do it, you can too!”
Ambassador Profile
Successful Nurture graduates
in target ZIP codes
What We Did
Mailed graduates who had launched businesses a postcard and small gift—logoed shopping bag, pen, or mug—congratulating them and encouraging them to spread the word.

Asked several entrepreneurs in target ZIP codes to hang flyers in businesses they frequent.

Compensated entrepreneurs a nominal amount for hanging 10 flyers each.

Added question to onboarding process, “How did you hear about Nurture?” to capture referrals .

Identified graduates to join coach for tabling events, for which they were compensated.

Value Proposition
Engage in easy outreach activities:

Hang flyers at local businesses
Post on your own social media
Have one-on-one conversations with your
friends, family, and acquaintances
Receive incentives:

Regalitos—small gifts of appreciation
Referral incentives: Gift cards for successful
referrals
Opportunity to participate in additional
Nurture courses and workshops
Pipeline to Identify Leaders for Deeper Engagement
Paid outreach roles, e.g., representing Nurture at events Leadership roles, e.g., facilitating group Zooms
17 #5..
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OUTREACH EXPERIMENTATION
January – February: Reaching Parents via Ceres Unified School District The mothers in the community are natural promoters. They are the ones that have the most need and interest in their children.
– Promotora
Early Results
Text message traffic and web hits spiked after social media collateral were shared via Parent Square school communication app.

For two-week period after flyers and images deployed, 40 percent of all app downloads/new profiles created were from Ceres ZIP code.

More than one-quarter of the 21 entrepreneurs enrolled in the February cohort reside in the Ceres target ZIP code 95307.

What We Did
Presentation to Community Liaisons for each school.

Included eye-catching flyer in backpacks of children at two elementary schools, which were selected based on low socio-economic status of students.

Created video reel and static social media collateral, which were shared via Parent Square family communication app.

Created new Nurture orientation video series and landing page, and automated, trackable SMS Learn More/Más información message thread capability
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Many potential participants voiced initial skepticism—both about the ability to get a child care license and the offer of start-up grants. Misperceptions abound regarding the licensing process; two of the most common are regarding the need to own one’s home and to have legal work authorization. As Nurture heard these misperceptions, it adjusted recruitment materials to address common concerns.
“I was a little skeptical at first. I’m like, ‘Is it that easy?’ And my friend was like, ‘Yeah, all you have to do is meet once a week, and they walk you through it.’ It’s literally step-by-step; Nurture gives you what you need.”
– Rosa, Program Graduate
I have a neighbor, and another a few blocks away, who I told about the program. I said, ‘You’re already caring for children, why don’t you get your license?’ And they said, ‘No, it’s too difficult.’ I‘ve told them about the program and they don’t believe me. They think I am lying! One said that the licensing office told her that they won’t give a license to someone who doesn’t have papers.
– Josefina, Program Graduate
Ultimately, one of the most reliable strategies for recruiting participants, especially Spanish speakers, is a personal referral. To illustrate, in early January 2024, Nurture sent a request to graduates via Nurture’s WhatsApp groups asking them to “Tell your friends and family that Nurture is starting a new cohort on January 10,” and asked them to Like or Share a Facebook post.

Power of Personal Testimony
WHAT ARE WE LEARNING ABOUT RECRUITMENT?
Overcoming Initial Skepticism and Misinformation
How January Enrollees Learned About Nurture
Multiple Central California Counties
Spanish English
2 12
Someone known personally Flyer
19 2
1 6
3 1
1 1
Someone known personally
Stanislaus County Office of Ed
Worknet (Merced County)
Small Business Development Center
In-Home Supportive Services
Social media
Flyer
Nurture enrolled 28 participants (from several
Central Valley counties) within one week. More than
85% of the Spanish speakers (and a sizeable
minority of English speakers) cited an acquaintance,
family, or friend as their introduction to Nurture.
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In the six-month pilot project, Nurture raised sufficient awareness and interest to exceed targets. In fact, responding to interest, the County provided supplemental funding in November to enroll an additional 12 participants in the program.

Scaling up a brand-new program in the County, however, will require patience, flexibility, and investment. To attract the necessary number of entrepreneurs to solve the County’s child care shortage, Nurture will need to continue to raise awareness both about child care entrepreneurship in general and about this specific opportunity.

Further, to reach the most marginalized community members will take commitment, creativity, and trust. In addition to dispelling myths and making the dollars-and-cents case for licensed child care entrepreneurship, Nurture must also lean-in and respond to the lived experiences of those who have learned to expect little from government and formal services.

Nurture will need to continue to listen, experiment, and adjust if it is to change the narrative about child care entrepreneurship.

Strategies must recognize that marginalized people have learned to expect little from government and formal services
You are standing up a brand-new program in the Central Valley. Raising awareness is going to take, not just time, but a substantial financial investment. – Jorge DeNava, Central Valley Opportunity Center
Patience, Investment, and Narrative Change
20 Current Narrative
Child care
is a bad job
My landlord
would never
agree
I don’t know
where to
start
I can’t get
licensed
because I’m not
here legally
I don’t have
money for
start-up costs
Parents can’t pay
enough to make it
worth it
Net up to
$50,000
You can
run a daycare
in your
apartment
Step-by-step
guidance to
help you
Get licensed
regardless of
immigration
status
Grants to
cover start-up costs
Most parents
qualify for help
paying of care
New Storyline
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Language
English Spanish
64%
36%
Household Income
16%
Financially
Insecure
Financially
Secure
84%
A total of 26 entrepreneurs completed
Nurture’s Business Start-Up coursework
between October 2023 and January 2024.

Nine additional program participants are on
track to complete coursework by the end of
March 2024. Twenty-four participants who
started coursework in mid-February will
finish in May 2024.

The following demographic analysis reflects
only those entrepreneurs who completed
the coursework as of February 2024.

The pilot effectively targeted entrepreneurs who were
financially struggling. The majority, 84 percent, of
participants had household incomes below the SelfSufficiency Standard, adjusted for their family size.

Initial recruitment efforts resulted in more Englishthan Spanish-speakers, which is reflected in the higher percentage of English-speaking program graduates.

Of note, by adjusting recruitment tactics, we effectively flipped the percentages of Spanish- and Englishspeakers: 60 percent of those recruited in January and February are Spanish-speakers; 40 percent are Englishspeakers.

NURTURE COURSEWORK
Who completed the Business Start-Up courses? (as of February 2024) 21 Stanislaus County Participants
by Cohort Completion Month and Language
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Nurture conducted a retrospective pre- and
post-test to evaluate participants’ selfreported knowledge and skill development.

Nurture used this research design to reduce
response shift bias—the tendency for
humans to “not know what we don’t know”
and inaccurately assess pre-program
knowledge.

Most participants reported that they began
the program with little or no knowledge of
child care business administration or the
licensing process.

Ninety-six percent of participants left the
program confident that they had sufficient
knowledge to launch their child care
business.

Across all the topics covered in Nurture’s
Business Start-Up courses, participants
reported the most growth in the areas of
understanding business start-up costs,
identifying a target market, and utilizing a
parent contract and policy handbook.

Nurture made no attempt to recruit from specific ZIP codes for the pilot, as it had not yet identified the seven target communities. Organically, however, Nurture found that 36 percent of completers reside in those targeted areas.

Did entrepreneurs learn the skills they need to launch successful businesses? 22 95355 (NE Modesto)
95380 (Turlock, Chemurgic, Cortez, Hatch)
95307 (Ceres, Keyes)
95354 (Central Modesto and along Rt 132)
95358 (Modesto, Ceres, West Modesto, Parklawn, Bret Harte, Riverdale Park, Twin Rivers) 95360 (Newman, Hills Ferry, Timba)
95363 (Patterson, Westly, Grayson)
Other ZIP codes
3 5
2 6
ZIP Code
2 2
2 3
Median Knowledge Growth
All Topics, Self-Assessment Before & After Course
Enough to Start
Some
None
Before Today
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At the conclusion of the course, each entrepreneur participated in a one-on-one exit interview with a Nurture coach to ensure knowledge transfer, and for us to gain insights about program aspects that might be improved. Participants generally reported feeling “successful” as learners, and confident in their comprehensive understanding of multiple dimensions of child care entrepreneurship.

I am confident and ready to start my business knowing I have the tools Nurture provided.
– Maria, Nurture Graduate
This program is great, I do best with step-by-step guidance. Nurture really catered to my learning style.
– Kelly, Nurture Graduate
I was never really good at schooling, but the way all of the steps and information are laid out here with Nurture, I felt comfortable I was learning everything I should. – Denisse, Nurture Graduate
A few people told me I could never get my license, I still cannot believe how easy the process has been. With Nurture, I feel secure; they have my back. – Josefina, Nurture Graduate
I am ready to serve my community, and, at the same time support my household, with all of the business practices I have learned.
– Araceli, Nurture Graduate
23 Average Knowledge Growth
Self-Assessment Before & After Course
Enough to Start
Some
None
Before Course Today
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To establish a baseline, Nurture conducted in-depth interviews with four licensed home child care providers who had been operating for less than three years. Interviewees were recruited in partnership with the Stanislaus County Office of Education and were compensated for their time.

Across the board, entrepreneurs in the comparison group were less confident that they had sufficient business knowledge to run their business.

The gap was most pronounced related to financial aspects of business administration— budgeting and monitoring finances and recordkeeping, as well as understanding who their target customers were.

Comparison Group
24 As of the end of February, 80 percent of participants had received their state license. The remainder have not yet received their license for a variety of reasons, including delays with background check clearance, financial hardship, unsupportive family members, and personal preference. Nurture expects that the overwhelming majority of graduates will complete the licensing process within one to two months.

STATE CHILD CARE LICENSURE
Did entrepreneurs achieve state licensure?
Self-Assessment of Business Knowledge
Nurture Graduates & Comparison Group
Enough to Start/Run
my Business
None
Budgeting
& Monitoring
Finances
Recordkeeping Target Market Marketing &
Attracting
Customers
Child
Development
Comparison Group (n=4) Nurture Graduates (n=19)
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The licensing process was more efficient and less stressful compared to the experience of navigating the process without Nurture’s support.

Among those who followed Nurture’s schedule for submitting their license application to the Community Care Licensing agency, the total average length time to state licensure (including the steps prior to submitting application) was 12 weeks—the same duration as Nurture’s coursework. Some highly motivated participants were licensed in as few as six or nine weeks.

The timeline for those whose licensing process spanned the winter holidays was approximately two weeks longer.

Not all participants completed the process as efficiently, however. Some chose to delay submitting their application for personal reasons—aware that they might be foregoing the opportunity to receive a start-up grant. Still others, who have household members with (cleared or expunged) criminal records, continue to await resolution by the state’s Care Provider Management Bureau.

In contrast with the comparison group, Nurture’s approach was both shorter in duration and simpler. Comparison group reflections mirrored comments from other child care entrepreneurs who have shared their stories. They painted a picture of a cumbersome process that is both time-consuming and difficult to navigate.

One Nurture participant who started the licensing process independently before she joined a Nurture cohort reflected on the value she perceived of Nurture’s support through the licensing process.

Was the licensing process more efficient?
The licensing process took a very long time.
– Sara, Comparison Group
From the beginning to the day I got my license was exactly one year. – Teresa, Comparison Group
It was really hard!
– Yolanda, Comparison Group
I wish I had Nurture when I started getting my license. My process took such a long time, and I really had no idea what I was doing. With the app, everything you need is right here, at your fingertips.
– Adriana, Nurture Graduate
25 84
average
44 shortest
114
longest
Licensing Process Duration
Among Participants Who Followed Nurture Schedule
days
days
days
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Licensing agency staffing
The Department of Social Services Community Care Licensing (CCL) Regional Offices are stretched thin. For example, there is one home inspector for the entire region from Modesto to Fresno, with little staffing redundancy. Data from CCL show that, over the past three years, the agency has decreased the average time it takes to process an application by 5 percent.

However, as we significantly increase the number of licensing applicants, wait times for application processing will likely lengthen.

Obtaining a license to operate a Family Child Care Home is necessarily a bureaucratic process.

However, building relationships with the human beings who run that process reduces time and potential frustration. Nurture encourages each applicant to proactively communicate with Community Care Licensing staff to ensure their application is on track, or address issues, if it isn’t. Nurture also developed direct relationships with Regional Office staff. Further, it developed and vetted an application coversheet and checklist for Nurture entrepreneurs to clearly convey to Community Care Licensing staff any pertinent details about their application.

Structural Issues
WHAT DID WE LEARN ABOUT THE CHILD CARE STATE LICENSING PROCESS? Proactive Communication Helps
26 Already, we are hearing concerning anecdotes of
significantly longer wait-times to schedule the required home inspection. Nurture applicants who started the
licensing process in late summer 2023 were able to
schedule inspections within a few weeks of completing all other requirements. By contrast, a participant whose
application had been complete since late December 2023
was told by the Regional Office in mid-February that she would not be able to even schedule her inspection until mid- to late-March.

Need for consistency and modernization
Applicants faced a range of solvable barriers to efficiently completing the licensing process. Barriers include
inconsistent guidance, inconsistent Spanish-language
translation, and out-of-date technology.

As an example of inconsistent guidance, official licensing forms explicitly contradict the practices of Regional Office staff, leading to unnecessary delays. The licensing
application form and instructions (279A) clearly state—in CAPITALIZED, underlined, and italicized font—that
applicants should not submit Landlord Notification and
Consent forms to the Regional Office. Yet, applications are regularly rejected because those forms were not included in applicants’ submissions.
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Official correspondence from Regional Office staff to those who have submitted their applications in Spanish is regularly sent in English, creating confusion and the need for Nurture staff to translate. The Department of Social Services is aware of these issues. It affirmed its commitment to equal access to services and information, regardless of language, and noted that consistently providing multilingual materials will be a continuous effort.

Applicants are also faced with technology that does not consistently execute its basic functions. The state requires applicants to participate in a licensing orientation, either online or in-person. The user interface to register for the online orientation malfunctions for a substantial minority of applicants, requiring intervention and advocacy by Nurture staff, usually over multiple days, to resolve. (Spanish-language in-person orientations are not consistently offered at a frequency for that setting to be a viable alternative to the online orientation.) Background clearance
California’s background check process works efficiently for those with spotless records. The Department of Social Services reports a seven-day average for clearance of those with no criminal history, administrative actions, or child abuse flags. However, for any applicant or other adult in the household who has anything on their record—even if has been expunged or cleared—the clearance process takes many months. While the Department of Social Services’ website states that clearance for those with a criminal record will take up to 75 days, Nurture participant experience has been significantly longer.

Landlords
The Keeping Kids Close to Home Act (SB 234), which took effect in 2020, expanded housing protections for renters and homeowners seeking to operate home-based child care. Many landlords and housing providers, however, are unaware of the policy change.

To illustrate, among an initial pool of 35 Nurture entrepreneurs, seven experienced pushback from their landlords—including the landlord asserting that the tenant could not operate a child care, threatening eviction, or threatening to raise rents.

We empowered these entrepreneurs with resources from the Child Care Law Center. Those entrepreneurs whose landlords were unpersuaded, we connected directly to Law Center advocates to evaluate the merits of each situation. Unfortunately, however, several entrepreneurs chose to drop-out of the program rather than jeopardize their tenuous housing situation.
27 #5..
150
Child care businesses started
to date will generate $4.6
million in economic activity in
the first year alone
Given the short duration of the pilot, it is premature to evaluate success in terms of business starts; typically, it takes six to 12 months to launch a new small business, depending on business type. However, by the beginning of March, 17 of the licensed graduates had launched their child care businesses and opened their doors to families.

These businesses translate to 136 new
permanent licensed child care spaces (or
68 infant/toddler spaces). This additional
capacity will generate $4.6 million in
economic activity in the first year alone
(Bipartisan Policy Center, 2021). This
economic impact derives from greater
labor force participation by parents who
can enter the workforce or work more,
reduced worker turnover, higher
productivity, and higher tax revenues.

An additional nine entrepreneurs are on
track to open businesses within the next
few months, which will result in a total of
208 permanent licensed spaces.

The 31 current training participants have
the potential to create nearly 250
additional licensed spaces by summer.

BUSINESS STARTS
28 Pilot Results
As of March 6, 2024
In Training
Course
Course
Complete
Licensed In Business
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151
Before Today
0 1
1 2
2 Licensing
Start-Up Costs
Marketing & Attracting Customers
Target Market
Budgeting & Monitoring Finances
Recordkeeping
Child Development
Parent Communication
Learning Environment
After learning about Nurture via a friend’s Facebook post, Nicole joined the first cohort that was offered as part of the Stanislaus 2030 pilot. She jumped into the coursework, applying everything she was learning to her emerging business. For example, after learning about the demographics of her potential customers, she was able to define a target market—both Spanish and English speakers who live in her neighborhood and are likely to qualify for child care subsidies.

Nicole, Child Care Entrepreneur, Turlock, CA

NURTURE GRADUATE PROFILE
It took Nicole three months to compete the
licensing process and Nurture’s coursework,
at which point she qualified for a $2,500 startup grant. Nicole shared, “I was very blessed to be able to get a lot of the things I needed
from my church, but I still needed sleeping
mats, an outdoor playset, and to stock up on
cleaning supplies.” The grant allowed her to
make those investments. By Thanksgiving,
she was ready to start enrolling children.

Amanda Silva, who was interviewed as part of
a recent story in The Modesto Bee, was the
first family Nicole enrolled. Amanda, who had
left the workforce after the birth of her third
child, was able to return to work because she
found care at Tiny Titans, Nicole’s child care
business.

Nicole has eight children enrolled—ranging from 6 months to 4 years—who attend a mix of full- and part-time. Some parents pay for care via a subsidy, while others pay out-of-pocket.

As someone who grew up in the foster care system, Nicole has always wanted to care for others. She says, “I feel like that’s where we step in, we can work alongside parents and communicate in a community to raise the next generation.” 29 Enough
None
Some
Nicole’s Knowledge Growth
Self-Assessment, Before & After Course
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Since the mid-1980s, the Child Care Initiative Project (CCIP) has provided dedicated state funding to increase capacity and improve quality in home-based child care. The amount of funding, however, is no match for the scale of the shortage of licensed care. In FY 2023-24, CCIP was funded at $5 million statewide. Of that total, the Department of Social Services allocated approximately $70,000 to Stanislaus County.

By comparison, in FY 2022-23 Stanislaus County Workforce Development spent approximately $5 million on training for adults, including entrepreneurship training.

Even funding sources that are limited to certain populations are orders-of-magnitude greater than child care-specific funding. For example, welfare-to-work training funding FY 2022-23 was more than $600,000. Training support targeted to farmworkers, as another example, totaled $3,000,000.

Funding to support small businesses—training, coaching
and other supports—totaled just over $250,000.

For illustrative purposes, allocating just 10 percent of available resources to child care entrepreneurship would fund creation of 150 new business annually.

Although child care entrepreneurship sits at the
nexus of several public systems, there has until now
been little effort to marshal disparate resources in
service of a common goal.

A core tenet of Nurture’s approach is to embed child
care entrepreneurship development into existing
systems—both to reach potential entrepreneurs and
to maximize access to public financial resources.

In addition to child care resource & referral, numerous systems, including small business development,
workforce development, safety net programs,
farmworker supports, public education, and
community colleges, all arguably have a public
mandate to support child care entrepreneurship.

SYSTEMS ALIGNMENT
Public Mandate to Support Child Care Entrepreneurs

PUBLIC RESOURCES TO SUPPORT CHILD CARE ENTREPRENEURSHIP 30 Job Training & Entrepreneurship
Funding Available in Stanislaus County
Farmworker
supports
Safety net
programs
Child care
resource &
referral
Workforce
development
Small
business
development
Public
education
Community
colleges
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Throughout the duration of the pilot, we explored a range of public funding sources, and will continue this investigation as part of the implementation phase. For example, a new area of inquiry is adult education funding, which is delivered via the Stanislaus County Office of Education (SCOE) and local school districts.

We recognize, however, that workforce development funding—both for the general population and farmworkers—is critical to scaling child care entrepreneurship. To access the core pool of workforce funding, Nurture’s coursework must be approved by the California Employment Development Department.

We have worked collaboratively, over several months, with Stanislaus County Workforce Development and SCOE’s Educational Options Division to apply for inclusion on the State’s Eligible Training Provider List under SCOE’s auspices.

Once Nurture’s training is approved by the state, we will develop a coordinated recruitment and service process to provide child care entrepreneurship training to participants who are enrolled as clients with Workforce Development and Central Valley Opportunity Center.

PATHS TO FUNDING AT SCALE
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154
In addition to financial resources to
directly support child care business
development, local public and
nonprofit agencies also have service
relationships with those who may be
situationally inclined toward child
care entrepreneurship.

We identified five target groups
around which to pursue service
linkages: informal caregivers, parents
of school-age children, welfare-towork parents, agricultural workers, and community college students.

We identified anchor institutions that
currently serve these groups and are
laying the groundwork for symbiotic
service relationships with these
agencies and institutions.

In the implementation phase, we
intend to further develop these and
other opportunities to recruit likely
child care entrepreneurs in a manner
that simultaneously enables
recruitment partners to meet their
own organizational mandates.

POTENTIAL SERVICE LINKAGES
Audience Agency or Institution
Family, Friend &
Neighbor Caregivers
County Office of Education
Community Services Agency
Choices for Children
Parents of Elementary
School Children Individual School Districts
Welfare-to-Work
Participants Community Services Agency
Agricultural Workers Central Valley Opportunity Center
Community College
Students Modesto Junior College
Welfare-to-Work Parents
Often single moms, required to work or
participate in education or training
Family, Friends & Neighbors
Informal caregivers paid directly by parents
or through the subsidy system
Parents of Schoolage Children
Out of the workforce to care for family
Agricultural Workers
Looking for alternative work for themselves
or their spouses
Community College Students
Often younger, seeking a good job or career
32 #5..
155
Implementation Opportunity
If a substantial number of Welfare-to-Work participants are interested in becoming licensed child care businesses, the Community Services Agency is open to further exploration to assess whether CalWORKs funding could directly support training costs.

During the pandemic, more than half of Stanislaus County’s 4,000 CalWORKs recipients were deemed to have a “good
cause” exemption from work participation requirements. In May 2023, the state lifted the COVID-19 Public Health
Emergency, at which point counties had 60 days, or “as soon as is administratively feasible,” to reengage participants. As of the fourth quarter of 2023, the Stanislaus County Community Services Agency had a caseload of more than 2,000
participants yet to reengage.

A significant barrier to reengagement in a work activity (e.g., training, education, or a job) is lack of child care. CalWORKs participants are eligible for a subsidy to pay for care; however, the shortage of licensed care means that they may be unable to find a child care provider with whom to use that subsidy.

To test whether Welfare-to-Work
participants would be interested in
becoming licensed child care entrepreneurs,
the Community Services Agency entered
into a memorandum of understanding with
Nurture to enable information-sharing about
participants. Nurture’s coursework counts
toward Welfare-to-Work participation
requirements, which enables participants to
leverage CalWORKs funding to cover costs
associated with licensing.

We are in the early stages of testing outreach
to Welfare-to-Work participants. To date, we
have shared the opportunity with CalWORKs
managers. The Community Services Agency
is including information about Nurture on
video boards in customer service lobbies, and
we plan to coordinate a mailing to Welfareto-Work participants with young children.

The Agency has also invited Nurture to share
information at an agency-wide staff fair in
May 2024.

EMERGING SERVICE LINKAGE—COMMUNITY SERVICES AGENCY
33 #5..
156
percent lower than licensed home child care. Unlicensed providers who care for “private pay” children receive whatever they negotiate with families. Anecdotally, we know providers in lowincome communities are paid as little as $25/day.

Over the years, Child & Family Services (CFS) has tried a variety of strategies to increase engagement with the unlicensed providers it pays through the subsidy system—both to encourage licensure, as well as to encourage participation in quality-improvement opportunities.

Generally, however, providers have not taken advantage of these opportunities. In partnership with CFS, we have begun to dive more deeply to find out why. We have had initial discussions to surface working assumptions about informal caregivers’ perceived lack of interest.

We have plans to recruit a range of informal caregivers—both those who participate in the subsidy system and those who do not—for a listening session. Based on what we learn, we will prototype and test messages and recruitment strategies, with the goal of increasing interest in becoming licensed.

Nurture Graduates
In every county, the child care resource and referral agency and subsidy administrators (which, in Stanislaus County, are CFS, Choices for Children, and the Community Services Agency) are the backbone of the public child care system. Child & Family Services refers interested license applicants to Nurture, and Nurture refers participants to CFS because of its role at the nexus of child care supply and demand. As with any large agency, however, it is sometimes confusing for customers to find the “right door” to the services they seek. To facilitate a strong connection to both the subsidy system and to the wealth of professional development opportunities CFS offers, Nurture has begun inviting CFS staff to join the final Zoom session with graduates.

Implementation Opportunity
We have laid a strong foundation during the pilot to continue deepening coordination between Nurture and SCOE services offered by CFS. Doing so will improve every aspect of this collaborative venture—from recruitment to licensing to supports for graduates.

Subsidy-Eligible Parents
Implementation Opportunity
As described in the Landscape Analysis, concurrently expanding the supply of licensed care and the enrollment of parents in the child care subsidy system is essential. In the implementation phase, CFS is committed to engaging in a collaborative design sprint to learn from and with parents and providers, rapidly ideating and testing prototyped concepts, and designing and implementing refined solutions.

Family, Friend, and Neighbor Caregivers
In the wake of the Great Recession, many home-based child care providers lost their businesses along their homes to foreclosure. More than a decade later, the total number of Family Child Care Homes is still well below pre-recession levels.

Informal care—often referred to as family, friend, and neighbor, or unlicensed care —replaced some, but by no means all, of the “supply.”
Legally, unlicensed providers may care for the children of one family in addition to their own relations. If they care for children with subsidies, they are paid at a rate 30 34 EMERGING SERVICE LINKAGES— COUNTY OFFICE OF EDUCATION #5..
157
For four weeks, in January and February, we partnered to test outreach to parents of schoolage children. Efforts included educating school community liaisons, targeting two low-socio-economic status (SES) elementary schools with flyers (1,000+ children), and digital outreach via Parent Square parent communication app (10,000+ children).

More than 50 parents either sent a text or scanned a QR code to learn more. Of the 16 parents downloaded the app, six are enrolled in the February cohort, and several more are continuing to explore child care entrepreneurship in the Nurture app.

Reflecting with CUSD and family resource center leadership, we concluded that the recruitment results warranted further engagement; CUSD has the infrastructure in place to efficiently reach large numbers of parents who are situationally inclined toward home child care entrepreneurship.

Implementation Opportunities
Refresh recruitment collateral materials and retest outreach for mid-May cohort, focusing on two other low-SES elementary schools in the District.

Follow Ceres child care entrepreneurs through Nurture course and offer opportunities to develop into Nurture Ambassadors post-graduation. Intentionally involve Ambassadors in school-based family resources center supports.

EMERGING SERVICE LINKAGE—SCHOOL DISTRICTS
Parents of Schoolage Children
Approximately 13,000 children, pre-K – 12, are enrolled in Ceres Unified School District (CUSD), which is in one of the high-demand, low-income ZIP codes targeted for implementation. The Ceres Healthy Start Program is a school-based family resource center that comprehensively serves all students and families living within CUSD’s attendance area. Its mission is to strengthen families’ ability to access services and resources that support health, wellness, and education of their children, ultimately promoting the sustainability of a healthy community.

Replicate in other school districts
thatserve high-demand, lowincome neighborhoods. Begin
exploration with Turlock Unified
School District, which has a similar
framework forengaging and
supporting families.
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158
EMERGING SERVICE LINKAGE—CENTRAL VALLEY OPPORTUNITY CENTER Agricultural Workers
Central Valley Opportunity Center (CVOC) is the federal- and state-designated Workforce Innovation and Opportunity Act farmworker-funded agency, serving hundreds of farmworker households annually in Stanislaus County. Nurture is a mission-aligned and trusted partner of CVOC, filling a gap by providing child care entrepreneurial support to CVOC constituents.

In fall of 2023, CVOC planned
implementation of Farmworker
Resource Fairs, funded by federal, state,
and county dollars. To date, CVOC has
hosted two well-attended Fairs— in
Grayson and Patterson. More than 200
farmworkers attended the first; over 150
attended the second. Three more are
planned—in Hughson, Riverbank and
South Modesto—for the coming months.

Nurture was one of 12 partner
organizations invited to participate in the
fairs. At each event, Nurture engaged
with an average of 150 farmworkers. The
Fairs provided an opportunity to have indepth conversations with potential entrepreneurs, answer questions, and
address common misperceptions about
home child care entrepreneurship.

Implementation Opportunity
Nurture has been collaborating with
Workforce Development and the
Stanislaus County Office of Education to
apply to be included on the state’s
Eligible Training Provider List, which is a
prerequisite for accessing training
resources through both Workforce
Development and CVOC.

If and when that process is successful,
CVOC has committed to continuing to
recruit from among its constituency and
to underwriting the cost of training for up
to 20 individuals annually who are eligible
for CVOC services.
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EMERGING SERVICE LINKAGE—MODESTO JUNIOR COLLEGE
EMERGING SERVICE LINKAGE—VALLEY SIERRA

SMALL BUSINESS DEVELOPMENT CENTER
Community College Students
Ten percent of Modesto Junior College’s (MJC) approximately 15,000 students are declared Child Development majors. In addition, MJC’s English for Life and Work program includes an innovative course that teaches English language skills specifically for those who work in an early learning environment.

We have had initial conversations with the leadership of the Child Development Department, in which we recognized our philosophical and pedagogical alignment and shared commitment to equity. As an initial step, MJC has committed to recruit for a mid-May cohort from among their Child Development and English language learner students.

Implementation Opportunity
We identified a number of ideas for further exploration in the implementation phase, including:

Creating a Business & Child Care certificate offered by MJC that leverages Nurture’s content and app platform. Development of the certificate would be a one- to two-year process.

Developing a MJC contextualized learning Child Care Business Math course that would satisfy General Ed requirements.

Completion of the math general education requirement is often a barrier to attaining an associate degree.

Entrepreneurship Support Services
The Central California Small Business Development Center (SBDC) Network, which covers 14 counties including Stanislaus, has been funding Nurture entrepreneurs since 2022. Valley Sierra, a member of the SBDC Network, provides direct support to entrepreneurs in Stanislaus County.

Whereas the Network’s funding can offset some of the overall cost of Nurture’s training, Valley Sierra’s resources can support one-on-one and group support for Nurture graduates.

As of January, Nurture is now established as a Valley Sierra business consultant. Our first foray into collaboration will be to support adoption of free financial recordkeeping software among graduates. Some Nurture entrepreneurs, particularly those who are less comfortable with technology, are reluctant to adopt digital recordkeeping practices. Yet, doing so is ultimately a critical strategy for efficiently running a profitable business. Nurture can provide augmented support to those entrepreneurs who need it with Valley Sierra’s support.

Implementation Opportunity
We will continue to identify content areas
where Nurture graduates could benefit
from enhanced and/or one-on-one support
to ensure we continue to scaffold their
development as successful business owners.
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ALIGN
Leverage existing, and new public & private resources
Coordinate with conventional & unconventional allies
Intentionally build child care supply and demand
LEARN
Utilize human-centered design cycles to improve
effectiveness
Rigorously evaluate approach to demonstrate
effectiveness
ADVOCATE Share pain-points and effective strategies with policymakers

EQUITABLY
SCALE
Define success with equity and scale as a doublebottom-line Investigate strategies to further improve child care job quality

IMPLEMENTATION NORTH STARS
In this section, we lay out an achievable 10-year implementation plan for closing the gap in the supply of licensed care, improving job quality for child care entrepreneurs, and enabling greater labor force participation among parents.

The graphic, at right,
articulates our North
Stars, which will guide
implementation.

Below, we present a
theory of change,
followed by a map of
activities, timeline and
outcomes, and proposed
implementation budget
narrative and 10-year
capital stack.

We end the report with
an infographic
summarizing the topline
impacts of an investment.

Theory of change

IMPLEMENTATION PLAN
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Activities, Timeline, Outcomes
Activities Year 1 Year 2 Year 3 Year 4 Year 5
10-Year
Cumulative
Outcomes
Incubate new businesses
Recruit, support, graduate 100 – 150/year
150 150 125 115 100
1,000 new
child care
businesses,
6,000 – 8,000
spaces
Develop Business Expansion course
Design & test course to deepen
business acumen, navigate licensing
expansion, connect to financial capital
Implement course: recruit, support, graduate 25 – 50 per year ✓
course
designed
25 35 50
500 child care
businesses
expand,
3,000 – 4,000
spaces
Subsidy system alignment design sprint
Understand user perspective, prototype
and test solutions, implement effective
strategies
Deploy 100% of subsidy funding
✓
design
sprint
$40M
state
subsidies
utilized
$40M
state
subsidies
utilized
$40M
state
subsidies
utilized
$40M
state
subsidies
utilized
Subsidies
maximized,
aligned with
expanding
supply
Annual implementation funding raised
Qualify Nurture on state Eligible
Training Provider List to access
workforce and farmworker funds
Demonstrate interest to establish
rationale for CalWORKs funding
Develop and seed donor fund
Apply for and win competitive
government and philanthropic grants
Maintain/increase public funding:
workforce, farmworker, small business
$1M
raised
$1.1M
raised
$.95M
raised
$.93M
raised
$.9M
raised
$9 million
invested to
sustain child
care business
development
Evaluate Nurture outcomes
Third-party evaluator rigorously assesses Nurture model ✓ ✓
Impact &
effectiveness
justifies
investment
State policy advocacy
Increase subsidy funding
Strengthen landlord notification of
provider rights
Increase Community Care Licensing
resources
✓ ✓ ✓ ✓
Supportive processes,
budget and
regulatory
practices
Explore strategies to improve job quality
Access to benefits, retirement savings
Homeownership
✓ ✓ ✓ ✓
Child care
entrepreneurs
build wealth
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Proposed Implementation Budget
Resources required to accomplish the activities and achieve the outcomes described in this plan total approximately $9 million over 10 years. The average annual investment is $1 million. We assume, however, that annual costs will start slightly higher and decline over the decade, driven by several factors.

First, we assume front-loaded County and City of Modesto American Rescue Plan Act (ARPA) funding in Years 1 and 2. This timing, which is consistent with federal spend-down requirements, will jumpstart the 10-year investment. Second, we have built essential systems alignment and program expansion into the early years of the timeline to reap the greatest benefits. Third, we assume that efficiency will increase over time, especially as we shift gears from focusing exclusively on new start-ups to also supporting business expansion.

The proposed capital stack would leverage ARPA funding as a jumping-off point. However, success will require that we tap permanent public funding sources to anchor the initiative for the long-run. We will also need to compete for funding—from foundations and government sources, as well as make the case to employers and individual donors. We are confident in the value proposition of the Implementation Plan and also recognize that raising these funds will require significant effort.

Costs beyond Year 5 and resource assumptions beyond Year 2 are estimates only. 40 Potential 10-Year Capital Stack
Home Child Care Business Expansion Initiative
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Home Child Care
Businesses Expanded
Annual Economic Impact
Home Child Care
Businesses Created
1,000
500
$408M
12,000
Permanent Licensed Spaces Created
IMPACT
Home Child Care Business
Expansion Initiative
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ADVISORY COMMITTEE

ANALYSIS OF OUTREACH STRATEGIES

SUMMARY OF INTERVIEWS WITH COMPARISON GROUP

THEMES OF CONVERSATION WITH PROMOTORAS

EMPLOYER AND EMPLOYEE SURVEYS

WORKS CITED

ACKNOWLEDGEMENTS
42 APPENDIX Photo: Center for American Progress
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ADVISORY COMMITTEE

ORGANIZATION INDIVIDUAL
Aspiranet Brianna Ligon, Mark Tiano
Center for Human Services Kaylee Brown, Paul Corona, Tamberly Stone Central California SBDC Network Kurtis Clark
Central Valley Opportunity Center Jorge De Nava
Choices for Children Elizabeth Andreini
Debrief Nancy Martinez
First 5 Stanislaus Shameram Karim
Learning Quest Yvonne Downs
Modesto Junior College Jessica Brennan, Gisele Flores
North Valley Labor Federation Will Kelly
Nurture Jennifer Brooks
Opportunity Stanislaus Brianna Taylor
Parent Resource Center Susan Beasley
Project Sentinel Ana Andrade
Sierra Vista Karina Franco, Mayra Landeros
Stanislaus 2030 Amanda Hughes
Stanislaus County Community Services Agency Ed Cuellar, Richard Daniels, Rosalia Esguerra Stanislaus County Office of Education Ronda Coito, Veronica Garcia, Heather Haubrich, Lisa Henry, Tony Jordan, Elisha Nunez, Roberto Ponce
Stanislaus County Workforce Development Sara Redd
Stanislaus Cradle to Career Megan Lowery, Mary Padraza, Ninfa Smith United Way of Stanislaus Keristopher Seryani
Valley First Credit Union Kathryn Davis
Valley Sierra SBDC German Zavalza
West Modesto Community Collaborative Blanca Marin, Reyna Perales, Perfecto Muñoz 43 #5..
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STRATEGY INSIGHT
Partner info sessions Info may not reach frontline staff Social media Low-effort, effective only for English
In-depth orientation for orgs. Promising, follow-up is necessary Stand-alone info session Tie to events turning-out target audience Targeted door-knocking Highly targeted, though high-effort Promotora network Need intermediary to convene
Flea market tabling Needs to be regular to make impact
Elem. school engagement Effective targeting and engagement Nurture ambassadors Graduates are eager to share experiences Farmworker fair Improved effectiveness with repetition

EFFECTIVENESS
EFFORT
targeted door-knocking
flea market tabling
elementary school engagement
social media
flyers in targeted ZIPs
Nurture ambassadors
promotora network
tabling at community events
partner info session stand-alone community events
in-depth sessions with partners

HIGH EFFECTIVENESS, LOW EFFORT

LOW EFFECTIVENESS, HIGH EFFORT
Optimally, outreach strategies
should balance effort (cost)
with effectiveness, which, in
our definition, means the
strategy recruits those furthest
from opportunity (equity), and
recruits sufficient numbers of
entrepreneurs to achieve
implementation plan targets
(scale).

Midway through the pilot, we
assessed outreach strategies
tried to date. The figure, at
right, maps those strategies in
terms of effort and
effectiveness. (For this report,
we added strategies to the
figure that were tried after this
assessment was initially
conducted.)
We named and elevated
insights about the ways
strategies could be adjusted to
increase effectiveness. The
chart, at right, summarizes
those insights.

In addition to the strategies
tested in the pilot, the
implementation plan builds in
additional outreach strategies
to explore. These strategies
include a Spanish-language
radio ad-buy, earned Spanishlanguage media, and building an intentional recruitment
pipeline to Nurture from
Modesto Junior College.
44 ANALYSIS OF OUTREACH STRATEGIES
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In fall 2023, we interviewed four family child care providers who had been in business for less than three years to get a baseline understanding of what it was like for them to get licensed and start a homebased child care business in Stanislaus County. Three of the four had been in business for less than a year-and-a-half; the median time since receiving a state license was 16.5 months. Three of the four had household income below the Self-Sufficiency Standard in the most recent tax year, with the fourth just above that threshold. Because interviewees were recruited via the Stanislaus County Office of Education, we can assume that they are connected to the County’s established child care subsidy and resource & referral systems.

Interviewees reflected on their experience getting licensed by the California Department of Social Services. Their comments, which are consistent with anecdotal comments from other child care entrepreneurs, paint a picture of a bureaucratic system that is both time-consuming and difficult to navigate.

Interviewees accepted subsidies as well as direct payment from families. Their median monthly revenue was $6,250, or $1,100 per child, which equates to per child revenue that is higher than the County’s subsidy reimbursement rate.

We asked about their experience with the subsidy system. Their comments focused on the length of time it takes for families to enroll and for providers to be reimbursed for care. Note that it is possible that interviewees’ comments reflect experiences with the system in the past few years, rather than the present experience of providers currently participating in the subsidy system.

We asked interviewees to assess their child care business acumen. They were confident in their ability to effectively communicate with, recruit, and bill/collect payments from families.

Although their median child enrollment was 66 percent of licensed capacity, three believed they were fully enrolled, suggesting a need for tools that provide greater visibility into this aspect of business administration.

Both their self-assessment and the limited tactics reported for financial management suggest there is also a clear need for guidance and tools to enable them to budget for and monitor their revenue and expenses.

The plus side is that I automatically get paid. The downside is that it takes them a very long time to enroll families, which is not okay for the families, since they don’t know if they qualify and will have to pay out of pocket. It is pretty stressful. – Laura Getting paid every six weeks is really hard to work with. – Sara Communication from parents’ subsidy specialist was the worst. Long timelines. Lack of communication. [For example,] a call was never made to a parent that time was coming for recertification. … One program didn’t pay me for 3 months. I will never recommend them to anyone. – Teresa
The licensing process took a very long time. – Sara
From the beginning to the day I got my license was exactly one year. – Teresa It was really hard! – Yolanda
45 COMPARISON GROUP INTERVIEWS SUMMARY
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ADVICE ON OUTREACH STRATEGIES
Target existing groups of promotoras. Make presentations to each of the 13 communities Meeting online is better than in-person
Elementary Schools

MISCONCEPTIONS ABOUT REQUIREMENTS & OPPORTUNITIES FOR HOME CHILD CARE Need for Documentation
There is fear of engaging with formal systems when you are undocumented.

Once clarified, promotoras saw home child care entrepreneurship as good opportunity for undocumented people in their community.

Home/Space Requirements
There is a lack of understanding about the requirements to be a licensed child care provider.

There is an assumption that one needs a dedicated space, which has to be set-up like center.

LACK OF AWARENESS OF SUBSIDIES AND R&R SERVICES
I didn’t know that subsidies to help pay for child care existed. Where do parents have to go to get help? What do they have to do? Who are the organizations that are promoting this assistance? They are not at the health fairs.

It would be good if there were a directory of daycares.

The best thing would be if people could be supported to start a daycare and we, as promotoras, could promote a list of licensed programs with parents.

When we are going to look for people to care for our children, it is going to be word-of-mouth.

There are people that I work with that provide informal care. They need help in growing and responding to a child who is fighting with someone.

In October 2023, we met with one of the promotora networks at Digital Nest. The following are key themes that emerged from the meeting.
46 THEMES OF CONVERSATION WITH PROMOTORAS
Earning Potential
There is a women in my area who watches 5 children; she takes 4 to school and watches the youngest all day. The mother works 6 days a week and she can only pay $40/day for all five children. Why would we help them set up a day care if they can’t earn much income.

As promotoras, we know a lot or people. People ask us questions about everything because the see us as knowledgeable. Maybe we could share this info with the promotora groups.

The mothers in the community are natural promoters. They are the ones that have the most need and interest in their children.
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Stanislaus 2030 and Nurture fielded an employer survey from October 31 to December 6, 2023. Seventy-one employers responded, representing more than 100,000 employees. The survey, which was shared by email, included five questions:

2. Does your firm/organization have difficulty
filling vacancies or experience absenteeism?

3. Do most of your employees know
about financial assistance available
to help them pay for child care?

4. Is your firm/organization interested in helping
employees address their child care needs?
Frequent
Yes No Not sure
56%
Employee Knowledge of Subsidies
41%
4% Yes Maybe
0 20
40 60
80 100
Increase awareness
Subsidize costs
Expand nearby supply
Restructure shifts
Provide onsite care
Employer Interest in Helping
Employees Address Child Care Needs
20%
58%
46%
35%
36%
33%
38%
33%
49%
25%
47 EMPLOYER SURVEYS
Yes No

5. May we follow up with you if we
have further questions?
68%
32%

1. How many employees does your
firm or organization employ?
Firm Size
9 16 15
4 6
20 1
1,001 – 5,000
5,000+
501 – 1,000
251 – 500
51 – 250
11 – 50
1 – 10
Large Employer Difficulty Filling
Vacancies and/or Absenteeism
59% 56% 52% 48%
8:00 AM – 5:00 PM
Early Mornings
Overnight
Late Night
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From October 31 to December 6, 2023, Stanislaus 2030 and Nurture fielded a survey of workers and potential workers. 730 individuals responded. Initially, the primary means of reaching workers was via an email from their employers. Due to the low response rate among Spanish speakers, we augmented data collection with in-person surveying. On December 3, we collected 50 responses from Spanish speakers at the Ceres flea market.

Low variance among the Spanish in-person survey responses gives us reasonable confidence that differences between Spanish and English speakers reflect population-level differences. The survey included five questions:

1.Do you need child care during working hours?

2.If there were a child care provider near your home or work, would you use it?

3.How often does not having child care prevent you/your spouse from going to work?

4.What is your ZIP code?

5.What is the name of your employer? (optional)
English Spanish
67%
0 20
40 60
80 100
120
95307
95382
95355
95350
95363
95351
95380
95326
95367
95358
95354
95361
other
95356
95357
95368
95386
95360
95366
95337
95334
95206
95315
95316
95301
93735
95336
95348
95387
95388
93737
95329
95205
95320
95370
95377
95324
Employee ZIP Code
16 15
4 6
20 48

EMPLOYEE SURVEYS
Employee Need for Care and Customer Demand
68%
76%
52%
Need Care to Work Would Use Care if Available
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Anna Powell, S. T. (2019). Investing in Early Care and Education: The Economic Benefits for California.

Berkeley: UC Berkeley Center for Labor Research and Education.

Ben Wolters, A. B. (2021). The Economic Impact of America’s Child Care Gap. Washington: Bipartisan Policy Center.

Center for American Progress. (2020). Child Care Deserts Stanislaus County. Retrieved from https://childcaredeserts.org/?lat=37.60759079965581&lng=- 120.93719399999998&zm=9.564064354966124&lyr=ccpoverty
James Heckman (2012). Invest in early childhood development: Reduce deficits, strengthen the economy. Retrieved from The Heckman Equation: https://heckmanequation.org/ Jennifer Brooks. (2022). Family Child Care Income Calculator. Oakland: Nurture.

Pew Research Center. (2021, June 22). Home broadband adoption, computer ownership vary by race, ethnicity in the U.S. Retrieved from https://www.pewresearch.org/short-reads/2021/07/16/homebroadband-adoption-computer-ownership-vary-by-race-ethnicity-in-the-u-s/ Stanislaus Child Development Local Planning Council. (2020). 2020 Child Care Needs Assessment.

Modesto.

U.S. Census Bureau. (2021). American Community Survey, Employment Status (S2301). Retrieved from https://data.census.gov/tablet=Employment:Employment+and+Labor+Force+Status&g=050XX00US 06047,06077,06099&d=ACS+5-Year+Estimates+Subject+Tables&tid=ACSST5Y2021.S2301 UC Berkeley Center for the Study of Child Care Employment. (2020). Appendix-Table-2.2_2020- Index.pdf. Berkleley, California, United States: UC Berkeley. Retrieved from https://cscce.berkeley.edu/workforce-index-2020/wp-content/uploads/sites/3/2021/06/AppendixTable-2.2_2020-Index.pdf 49 WORKS CITED Photo: Center for American Progress
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This report was written by Jennifer Brooks, Founder and CEO of Nurture, for Stanislaus 2030 in spring 2024.

The author and Stanislaus 2030 Executive Director, Amanda Hughes, would like to express our deepest gratitude to the members of the advisory committee for their commitment to equitably addressing the critical shortage of child care in Stanislaus County. Their invaluable insights and collaborative spirit have helped shape the comprehensive approach outlined in this report, ensuring that it addresses the diverse needs of our community.

A special acknowledgment is due to the Stanislaus County Office of Education Children & Family Services for sharing their expertise, experience, and data on the public child care system. Their commitment to advancing quality child care and willingness to share vital information have greatly enriched the quality and depth of this report. The collaborative efforts between our team and the Child & Family Services have been pivotal in crafting evidence-based recommendations that aim to make a lasting impact on the child care landscape.
50 ACKNOWLEDGEMENTS Photo: Center for American Progress #5..
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Funding Contribution Agreement – Stanislaus 2030

CITY OF MODESTO PANDEMIC RECOVERY STRATEGY

MODESTO FORWARD GRANT AGREEMENT
This Modesto Forward Grant Agreement (“Agreement”) is entered into in the City of Modesto, State of California, this ____ day of ____________ 2024 (“Effective Date”) by and between the City of Modesto, a California municipal corporation (“City”), and the Stanislaus 2030, a subdivision of a California municipal corporation (“Recipient”). The City and Recipient shall be collectively referred to hereinafter as the “Parties”.

This Agreement is made with regard to the following recitals:

WHEREAS, the City of Modesto received an allotment of funds from the United States Department of Treasury through the Coronavirus Local Fiscal Recovery Fund established by the American Rescue Plan Act (“ARPA”); and WHEREAS, on May 25, 2021, by Resolution No. 2021-194, the Council of the City of Modesto approved the Pandemic Recovery Strategy – Modesto Forward, hereinafter referred to as “Modesto Forward”, to support local recovery from the pandemic; and
WHEREAS, in alignment with the City’s 5-Year Strategic Plan, Modesto Forward includes three post pandemic funding initiatives to help the community exit the pandemic period and focused on Economic Vitality, Governance and Service Delivery, and Quality of Life; and
WHEREAS, Economic Vitality initiatives are intended to improve the economic vitality of the community; Governance and Service Delivery initiatives are intended to improve the organization and service delivery for residents; and Quality of Life initiatives are intended to improve the quality of life for residents; and WHEREAS, Modesto Forward includes a comprehensive spending plan, which includes ARPA funding, to programs and services for economic recovery initiatives, Economic Vitality, of which includes expansion of childcare; and recognizing its role in supporting working families.

NOW THEREFORE, the City and Recipient agree as follows:

1. Term
The term of this Agreement (the “Term”) shall commence upon the effective date.

Scope of Work (Exhibit A) deliverables must be completed by December 31, 2026; the Agreement shall terminate upon fulfillment of Federal reporting requirements (Exhibit B), no later than January 15, 2027. #5..
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Funding Contribution Agreement – Stanislaus 2030

2. Grant Award
A. The City shall provide Recipient with a grant of One Hundred Fifty-Six Thousand Seven Hundred Fifty- Eight Dollars ($156,758) (the “Grant”) for the purposes and activities further specified in Exhibit A, attached hereto, and incorporated by referenced (the “Activities”). Disbursement of the Grant is dependent upon Recipient providing all records and documentation reasonably required by the City.

B. Recipient shall expend the Grant solely on the Activities, as specified in Exhibit A, and shall be held responsible to the requirements outlined in Exhibit A. Recipient shall not use the Grant for any other purpose or activity without the prior written consent of the City.

C. 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.

D. Recipient shall expend the entirety of the Grant by no later than December 31, 2026. Any portion of the Grant that has not been expended by December 31, 2026 shall be returned to the City no later than January 10, 2027.

3. 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 requires 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 Grant 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.

4. Quarterly Reporting Requirements
Recipient shall submit quarterly reports to the City on the form attached hereto as Exhibit D, and incorporated herein by reference, or on such other form as required by the City.
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Funding Contribution Agreement – Stanislaus 2030

5. Annual Reporting Requirements
Recipient shall submit an annual report, in accordance with the requirements set forth in Exhibit C, attached hereto and incorporated herein, to the City within 180 days of the end of the Recipient’s fiscal year in a form approved by the City. The annual report shall be in addition to the reporting required by Section 4, and shall include, but not limited to:

A. Summary of activities and accomplishments, mandate and/or mission of the organization;
B. List of Board Directors with title, contact information and mandate term of each Director;
C. Organizational Chart;
D. Project/Program Expenditures-to-date (including receipts); E. Any other information reasonably requested by the City.

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 Grant 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. Preservation of Assets
Any assets purchased with the Grant, the cost of which exceed $5,000, shall be preserved by the Recipient and shall not be sold, leased, given away or otherwise disposed of prior to the end of the useful life of the asset without prior written consent of the City.

8. Termination, Suspension and/or Repayment of Grant
The City may terminate, suspend and/or require repayment of the Grant 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 A of this Agreement or substandard performance of the Activities;
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Funding Contribution Agreement – Stanislaus 2030
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 the Grant for a purpose or activity other than those specified in Exhibit A.

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 Grant, or which have been made or may be made in the future surrounding these matters;
H. The Recipient breaches any term of this Agreement, after notice from the City and a reasonable opportunity to cure the breach;

9. 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 prevailing wage provisions of the federal DavisBacon Act and implementing rules and regulations and state prevailing wages pursuant to Labor Code Section 1770 et seq. Without limiting the foregoing, Recipient shall comply with ARPA, the regulations implement ARPA (31 CFR Part 35), any interpretative guidance issued by the United Stated Department of Treasury, and those Grant terms and conditions attached hereto as Exhibit B, and incorporated herein.

10.Non-Assignment
The Recipient shall not assign this Agreement, the Grant, 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 the Grant to City by the Recipient.

11. 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, #5..
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Funding Contribution Agreement – Stanislaus 2030
directly or indirectly, arises out of or relates to this Agreement or the performance of the Activities, except to the extent the Claims arise from the gross negligence or willful misconduct of City.

B. The City shall not be liable to the Recipient or any other party in relation to the Grant and/or 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.

12.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 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 #5..
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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 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 Entity, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the Entity, its officers, officials, employees, or volunteers shall be excess of the RECIPIENT’S insurance and shall not contribute with it.
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13.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, or sexual orientation, 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.

14.NOTIFICATION
Any notice, communication, amendment, addition or deletion to this Agreement, including change of address of either Party 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, Director of Community and Economic Development 1010 10th Street
Modesto, CA 95354
To Recipient:

Stanislaus 2030
Attn: Amanda Hughes, Executive Director
100 Sycamore Ave.

Modesto, CA 95354
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15.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.

16.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 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. Both 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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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 The 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.

17.INDEPENDENT PARTIES
Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, 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. At all times during the term of this Agreement, Recipient and
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18.ENTIRE AGREEMENT
This Agreement, including the exhibits attached hereto, represents the entire and integrated agreement between City and Recipient 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.

19.GENERAL PROVISIONS
A. Binding Agreement. This agreement shall be binding on and inure to the benefit of the City, the Recipient and their respective successors and assigns. Nothing contained in this Agreement is intended to or shall be deemed to confer upon any 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.

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together shall constitute one instrument. The persons executing this Agreement on behalf of Parties have been duly authorized to do so.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the effective date set forth above.
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EXHIBIT A – SCOPE OF WORK
Objective:

The collaboration between Stanislaus 2030, Nurture, and the City of Modesto aims to address the childcare shortage in Modesto by supporting the expansion of in-home childcare entrepreneurship. This initiative aligns with Stanislaus 2030's broader efforts to tackle the county's childcare crisis and support the local workforce.

Timeline:

The project will be implemented within the timeframe of the Modesto Forward ARPA grant allocation for Small Business Development, Project Number 101553, which extends until December 31, 2026.

Services to be Provided:

1. Incubation of New Home Childcare Businesses:
 Nurture will provide technical assistance and support to incubate 31 new home childcare businesses. Each business will receive a start-up grant of $5,000 to facilitate their establishment.

2. Expansion of Existing Childcare Facilities:
 Funding from the grant will contribute to the expansion of 500 existing childcare facilities in Modesto, thereby increasing the overall capacity to provide licensed childcare services.

3. Creation of Licensed Childcare Spaces:
 The ultimate goal is to create 12,000 permanent, licensed childcare spaces in Modesto through the establishment of new home childcare businesses and the expansion of existing facilities.

4. Curriculum Development:
 $2,500 from the grant will be allocated to support the development of a curriculum tailored to the needs of in-home childcare providers, ensuring high-quality early childhood education.

5. Grant for Starting Childcare Facility:
 Another $2,500 will be utilized as a grant to assist in the establishment of the childcare facility within the homes of the new childcare businesses.

Key Partners:
 Stanislaus 2030
 City of Modesto
City of Modesto

1. The City will keep the Recipient informed of City policy and regulatory changes affecting economic development.

2. The City will attend quarterly meetings with Recipient staff to discuss, share and coordinate activities.

3. The City will advance all funds upon execution of the agreement in good faith to facilitate rapid mobilization of resources.
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EXHIBIT B
U.S. DEPARTMENT OF THE TREASURY

CORONAVIRUS LOCAL FISCAL RECOVERY FUND

AWARD TERMS AND CONDITIONS

1. Use of Funds.
a. Recipient understands and agrees that the funds disbursed under this award may only be used in compliance with section 603(c) of the Social Security Act (the Act), U.S. Department of Treasury’s (“Treasury”) regulations implementing that section, and guidance issued by Treasury regarding the foregoing. b. Recipient will determine prior to engaging in any project using this assistance that it has the institutional, managerial, and financial capability to ensure proper planning, management, and completion of such project.

2. Period of Performance. The period of performance for this award begins on the date hereof and ends on December 31, 2026. As set forth in Treasury’s implementing regulations, Recipient may use award funds to cover eligible costs incurred during the period that begins on March 3, 2021, and ends on December 31, 2026.

3. Reporting. Recipient agrees to comply with any reporting obligations established by Treasury as they relate to this award.

4. Maintenance of and Access to Records
a. Recipient shall maintain records and financial documents sufficient to evidence compliance with section 603(c) of the Act, Treasury’s regulations implementing that section, and guidance issued by Treasury regarding the foregoing. b. The Treasury Office of Inspector General and the Government Accountability Office, or their authorized representatives, shall have the right of access to records (electronic and otherwise) of Recipient in order to conduct audits or other investigations.
c. Records shall be maintained by Recipient for a period of five (5) years after all funds have been expended or returned to Treasury, whichever is later.

5. Pre-award Costs. Pre-award costs, as defined in 2 C.F.R. § 200.458, may not be paid with funding from this award.

6. Administrative Costs. Recipient may use funds provided under this award to cover both direct and indirect costs.

7. Cost Sharing. Cost sharing or matching funds are not required to be provided by Recipient.

8. Conflicts of Interest. Recipient understands and agrees it must maintain a conflict of interest policy consistent with 2 C.F.R. § 200.318(c) and that such conflict of interest policy is applicable to each activity funded under this award. Recipient and subrecipients must disclose in writing to Treasury or the pass-through entity, as appropriate, any #5..
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potential conflict of interest affecting the awarded funds in accordance with 2 C.F.R. § 200.112.

9. Compliance with Applicable Law and Regulations.
a. Recipient agrees to comply with the requirements of section 602 of the Act, regulations adopted by Treasury pursuant to section 602(f) of the Act, and guidance issued by Treasury regarding the foregoing. Recipient also agrees to comply with all other applicable federal statutes, regulations, and executive orders, and Recipient shall provide for such compliance by other parties in any agreements it enters into with other parties relating to this award. b. Federal regulations applicable to this award include, without limitation, the following:
i. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 C.F.R. Part 200, other than such provisions as Treasury may determine are inapplicable to this Award and subject to such exceptions as may be otherwise provided by Treasury.

Subpart F – Audit Requirements of the Uniform Guidance, implementing the Single Audit Act, shall apply to this award.
ii. Universal Identifier and System for Award Management (SAM), 2 C.F.R.

Part 25, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 25 is hereby incorporated by reference.
iii. Reporting Subaward and Executive Compensation Information, 2 C.F.R.

Part 170, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 170 is hereby incorporated by reference.
iv. OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), 2 C.F.R. Part 180, including the requirement to include a term or condition in all lower tier covered transactions (contracts and subcontracts described in 2 C.F.R. Part 180, subpart B) that the award is subject to 2 C.F.R. Part 180 and Treasury’s implementing regulation at 31 C.F.R. Part 19.
v. Recipient Integrity and Performance Matters, pursuant to which the award term set forth in 2 C.F.R. Part 200, Appendix XII to Part 200 is hereby incorporated by reference.
vi. Governmentwide Requirements for Drug-Free Workplace, 31 C.F.R. Part

20. vii. New Restrictions on Lobbying, 31 C.F.R. Part 21. viii. Uniform Relocation Assistance and Real Property Acquisitions Act of 1970 (42 U.S.C. §§ 4601-4655) and implementing regulations. ix. Generally applicable federal environmental laws and regulations. #5..
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c. Statutes and regulations prohibiting discrimination applicable to this award include, without limitation, the following:
i. Title VI of the Civil Rights Act of 1964 (42 U.S.C. §§ 2000d et seq.) and Treasury’s implementing regulations at 31 C.F.R. Part 22, which prohibit discrimination on the basis of race, color, or national origin under programs or activities receiving federal financial assistance; ii. The Fair Housing Act, Title VIII of the Civil Rights Act of 1968 (42 U.S.C. §§ 3601 et seq.), which prohibits discrimination in housing on the basis of race, color, religion, national origin, sex, familial status, or disability; iii. Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794), which prohibits discrimination on the basis of disability under any program or activity receiving federal financial assistance; iv. The Age Discrimination Act of 1975, as amended (42 U.S.C. §§ 6101 et seq.), and Treasury’s implementing regulations at 31 C.F.R. Part 23, which prohibit discrimination on the basis of age in programs or activities receiving federal financial assistance; and
v. Title II of the Americans with Disabilities Act of 1990, as amended (42 U.S.C. §§ 12101 et seq.), which prohibits discrimination on the basis of disability under programs, activities, and services provided or made available by state and local governments or instrumentalities or agencies thereto.

10. Remedial Actions. In the event of Recipient’s noncompliance with section 602 of the Act, other applicable laws, Treasury’s implementing regulations, guidance, or any reporting or other program requirements, Treasury may impose additional conditions on the receipt of a subsequent tranche of future award funds, if any, or take other available remedies as set forth in 2 C.F.R. § 200.339. In the case of a violation of section 602(c) of the Act regarding the use of funds, previous payments shall be subject to recoupment as provided in section 602(e) of the Act and any additional payments may be subject to withholding as provided in sections 602(b)(6)(A)(ii)(III) of the Act, as applicable.

11. Hatch Act. Recipient agrees to comply, as applicable, with requirements of the Hatch Act (5 U.S.C. §§ 1501-1508 and 7324-7328), which limit certain political activities of State or local government employees whose principal employment is in connection with an activity financed in whole or in part by this federal assistance.

12. False Statements. Recipient understands that making false statements or claims in connection with this award is a violation of federal law and may result in criminal, civil, or administrative sanctions, including fines, imprisonment, civil damages and penalties, debarment from participating in federal awards or contracts, and/or any other remedy available by law.

13. Publications. Any publications produced with funds from this award must display the following language: “This project [is being] [was] supported, in whole or in part, by federal award number SLFRP2096 awarded to County of Stanislaus by the U.S.

Department of the Treasury.”
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14. Debts Owed the Federal Government.
a. Any funds paid to Recipient (1) in excess of the amount to which Recipient is finally determined to be authorized to retain under the terms of this award; (2) that are determined by the Treasury Office of Inspector General to have been misused; or (3) that are determined by Treasury to be subject to a repayment obligation pursuant to sections 602(e) and 603(b)(2)(D) of the Act and have not been repaid by Recipient shall constitute a debt to the federal government. b. Any debts determined to be owed the federal government must be paid promptly by Recipient. A debt is delinquent if it has not been paid by the date specified in Treasury’s initial written demand for payment, unless other satisfactory arrangements have been made or if the Recipient knowingly or improperly retains funds that are a debt as defined in paragraph 14(a). Treasury will take any actions available to it to collect such a debt.

15. Disclaimer.
a. The United States expressly disclaims any and all responsibility or liability to Recipient or third persons for the actions of Recipient or third persons resulting in death, bodily injury, property damages, or any other losses resulting in any way from the performance of this award or any other losses resulting in any way from the performance of this award or any contract, or subcontract under this award. b. The acceptance of this award by Recipient does not in any way establish an agency relationship between the United States and Recipient.

16. Protections for Whistleblowers.
a. In accordance with 41 U.S.C. § 4712, Recipient may not discharge, demote, or otherwise discriminate against an employee in reprisal for disclosing to any of the list of persons or entities provided below, information that the employee reasonably believes is evidence of gross mismanagement of a federal contract or grant, a gross waste of federal funds, an abuse of authority relating to a federal contract or grant, a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a federal contract (including the competition for or negotiation of a contract) or grant. b. The list of persons and entities referenced in the paragraph above includes the following:
i. A member of Congress or a representative of a committee of Congress; ii. An Inspector General;
iii. The Government Accountability Office;
iv. A Treasury employee responsible for contract or grant oversight or management;
v. An authorized official of the Department of Justice or other law enforcement agency;
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vi. A court or grand jury; or
vii. A management official or other employee of Recipient, contractor, or subcontractor who has the responsibility to investigate, discover, or address misconduct.
c. Recipient shall inform its employees in writing of the rights and remedies provided under this section, in the predominant native language of the workforce.

17. Increasing Seat Belt Use in the United States. Pursuant to Executive Order 13043, 62 FR 19217 (Apr. 18, 1997), Recipient should encourage its contractors to adopt and enforce on-the-job seat belt policies and programs for their employees when operating company-owned, rented or personally owned vehicles.

18. Reducing Text Messaging While Driving. Pursuant to Executive Order 13513, 74 FR 51225 (Oct. 6, 2009), Recipient should encourage its employees, subrecipients, and contractors to adopt and enforce policies that ban text messaging while driving, and Recipient should establish workplace safety policies to decrease accidents caused by distracted drivers.

ASSURANCES OF COMPLIANCE WITH CIVIL RIGHTS REQUIREMENTS ASSURANCES OF COMPLIANCE WITH TITLE VI OF THE CIVIL RIGHTS ACT OF 1964 As a condition of receipt of federal financial assistance from the Department of the Treasury, the recipient named below (hereinafter referred to as the “Recipient”) provides the assurances stated herein. The federal financial assistance may include federal grants, loans and contracts to provide assistance to the Recipient’s beneficiaries, the use or rent of Federal land or property at below market value, Federal training, a loan of Federal personnel, subsidies, and other arrangements with the intention of providing assistance. Federal financial assistance does not encompass contracts of guarantee or insurance, regulated programs, licenses, procurement contracts by the Federal government at market value, or programs that provide direct benefits.

The assurances apply to all federal financial assistance from or funds made available through the Department of the Treasury, including any assistance that the Recipient may request in the future.

The Civil Rights Restoration Act of 1987 provides that the provisions of the assurances apply to all of the operations of the Recipient’s program(s) and activity(ies), so long as any portion of the Recipient’s program(s) or activity(ies) is federally assisted in the manner prescribed above.

1. Recipient ensures its current and future compliance with Title VI of the Civil Rights Act of 1964, as amended, which prohibits exclusion from participation, denial of the benefits of, or subjection to discrimination under programs and activities receiving federal financial assistance, of any person in the United States on the ground of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury Title VI regulations at 31 CFR Part 22 and other pertinent executive orders such as Executive Order 13166, directives, circulars, policies, memoranda, and/or guidance documents.

2. Recipient acknowledges that Executive Order 13166, “Improving Access to Services for Persons with Limited English Proficiency,” seeks to improve access to federally assisted programs and activities for individuals who, because of national origin, have Limited English proficiency (LEP). Recipient understands that denying a person access to its programs, services, and activities because of LEP is a form of national origin #5..
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discrimination prohibited under Title VI of the Civil Rights Act of 1964 and the Department of the Treasury’s implementing regulations. Accordingly, Recipient shall initiate reasonable steps, or comply with the Department of the Treasury’s directives, to ensure that LEP persons have meaningful access to its programs, services, and activities.

Recipient understands and agrees that meaningful access may entail providing language assistance services, including oral interpretation and written translation where necessary, to ensure effective communication in the Recipient’s programs, services, and activities.

3. Recipient agrees to consider the need for language services for LEP persons when Recipient develops applicable budgets and conducts programs, services, and activities.

As a resource, the Department of the Treasury has published its LEP guidance at 70 FR 6067. For more information on taking reasonable steps to provide meaningful access for LEP persons, please visit http://www.lep.gov.

4. Recipient acknowledges and agrees that compliance with the assurances constitutes a condition of continued receipt of federal financial assistance and is binding upon Recipient and Recipient’s successors, transferees, and assignees for the period in which such assistance is provided.

5. Recipient acknowledges and agrees that it must require any sub-grantees, contractors, subcontractors, successors, transferees, and assignees to comply with assurances 1-4 above, and agrees to incorporate the following language in every contract or agreement subject to Title VI and its regulations between the Recipient and the Recipient’s subgrantees, contractors, subcontractors, successors, transferees, and assignees:

The sub-grantee, contractor, subcontractor, successor, transferee, and assignee shall comply with Title VI of the Civil Rights Act of 1964, which prohibits recipients of federal financial assistance from excluding from a program or activity, denying benefits of, or otherwise discriminating against a person on the basis of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury’s Title VI regulations, 31 CFR Part 22, which are herein incorporated by reference and made a part of this contract (or agreement). Title VI also includes protection to persons with “Limited English Proficiency” in any program or activity receiving federal financial assistance, 42 U.S.C. § 2000d et seq., as implemented by the Department of the Treasury’s Title VI regulations, 31 CFR Part 22, and herein incorporated by reference and made a part of this contract or agreement.

6. Recipient understands and agrees that if any real property or structure is provided or improved with the aid of federal financial assistance by the Department of the Treasury, this assurance obligates the Recipient, or in the case of a subsequent transfer, the transferee, for the period during which the real property or structure is used for a purpose for which the federal 6 6. 7. 8. 9. 10. financial assistance is extended or for another purpose involving the provision of similar services or benefits. If any personal property is provided, this assurance obligates the Recipient for the period during which it retains ownership or possession of the property.

7. Recipient shall cooperate in any enforcement or compliance review activities by the Department of the Treasury of the aforementioned obligations. Enforcement may include investigation, arbitration, mediation, litigation, and monitoring of any settlement agreements that may result from these actions. The Recipient shall comply with information requests, on-site compliance reviews and reporting requirements. #5..
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8. Recipient shall maintain a complaint log and inform the Department of the Treasury of any complaints of discrimination on the grounds of race, color, or national origin, and limited English proficiency covered by Title VI of the Civil Rights Act of 1964 and implementing regulations and provide, upon request, a list of all such reviews or proceedings based on the complaint, pending or completed, including outcome. Recipient also must inform the Department of the Treasury if Recipient has received no complaints under Title VI.

9. Recipient must provide documentation of an administrative agency’s or court’s findings of non-compliance of Title VI and efforts to address the non-compliance, including any voluntary compliance or other agreements between the Recipient and the administrative agency that made the finding. If the Recipient settles a case or matter alleging such discrimination, the Recipient must provide documentation of the settlement. If Recipient has not been the subject of any court or administrative agency finding of discrimination, please so state.

10. If the Recipient makes sub-awards to other agencies or other entities, the Recipient is responsible for ensuring that sub-recipients also comply with Title VI and other applicable authorities covered in this document State agencies that make sub-awards must have in place standard grant assurances and review procedures to demonstrate that that they are effectively monitoring the civil rights compliance of subrecipients.

The United States of America has the right to seek judicial enforcement of the terms of this assurances document and nothing in this document alters or limits the federal enforcement measures that the United States may take in order to address violations of this document or applicable federal law.

Under penalty of perjury, the undersigned official(s) certifies that official(s) has read and understood the Recipient’s obligations as herein described, that any information submitted in conjunction with this assurances document is accurate and complete, and that the Recipient is in compliance with the aforementioned nondiscrimination requirements. #5..
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EXHIBIT C

ANNUAL REPORTING REQUIREMENTS
Contractor shall use Exhibit C to provide an annual performance report.

The initial report will cover the period from the date the contract was executed to the following June 30, and will be due to the Recipient within 15 days after the end of the reporting period.

Thereafter, the report will cover a 12-month period and contractors will be required to submit the report to Recipient within 15 days after the end of the 12-month period (by July 15).

Notes on using this template
All contractors that are recipients of State and Local Fiscal Recovery Funds (SLFRF) awards are required to produce an Annual Report. The Annual Report provides information on the contractor’s project and how they plan to ensure program outcomes are achieved in an effective and equitable manner.

The initial Annual Report will cover the period from the date of award to the following June 30 and must be submitted to Recipient within 15 calendar days after the end of the reporting period.

Thereafter, the Annual Report will cover a 12-month period and contractors will be required to submit the report to Recipient within 15 calendar days after the end of the 12-month period (by July 15).

Annual Report Period Covered Due Date
1 Award – June 30, 2022 July 15, 2022
2 July 1, 2022 – June 30, 2023 July 15, 2023
3 July 1, 2023 – June 30, 2024 July 15, 2024
4 July 1, 2024 – June 30, 2025 July 15, 2025
5 July 1, 2025 – June 30, 2026 July 15, 2026
6 July 1, 2026 – December 31, 2026 January 15, 2027
Instructions:

Contractors should consult the SLFRF Guidance on Recipient Compliance and Reporting Responsibilities (Reporting Guidance) located at
https://home.treasury.gov/system/files/136/SLFRF-Compliance-and-Reporting-Guidance.pdf for detailed guidance on the submission of this report or contact county staff for assistance with completing this exhibit.

Recipient recommends the use of infographics, tables, charts, pictures, case studies, and other explanatory elements in describing their programs.

Text in italics represents the requirements from the Reporting Guidance and is meant to serve as a reference as contractors prepare their Annual Report. This instructions page and the text in italics should be removed before the final transmitted report is published and submitted to Recipient.

Uses of Funds
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Funding Contribution Agreement – Stanislaus 2030

GENERAL OVERVIEW
Uses of Funds
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Funding Contribution Agreement – Stanislaus 2030

EXHIBIT D

QUARTERLY PROJECT AND EXPENDITURE REPORT REQUIREMENTS
Contractor shall use Exhibit D to provide a quarterly project and expenditure report.

The initial report will cover the period from the date the contract was executed through the end of the quarter, and will be due to the Recipient within 15 days after the end of the reporting period.

Thereafter, the report will cover one quarter and contractors will be required to submit the report to Recipient within 15 days after the end of the quarter.

ARPA QUARTERLY PROJECT AND EXPENDITURE REPORT
Reporting on State and Local Fiscal Recovery Funds (SLFRF) Name of Entity:

Stanislaus 2030
Project Name:

In-Home Child Care Expansion
Reporting Period Start Date: Reporting Period End Date:

Expenditure Category:

3.4 Public Sector Capacity: Effective Service Delivery
Please provide a brief description of the activities conducted:

Enhanced Workforce Development Services
Category Cumulative
Expenditures
to date ($)
Cumulative
Obligations
to date ($)
Current Period
Expenditures
Current Period
Obligations
3 General Provisions

3.4 Public Sector Capacity:

Effective Service Delivery

PROJECT

EXPENDITURES

PROJECT STATUS
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Funding Contribution Agreement – Stanislaus 2030
[PLEASE SELECT ONE]
5073279.1
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CITY OF MODESTO

COMMITTEE AGENDA REPORT
DATE OF MEETING:

June 3, 2024
Date: May 15, 2024
TO: Economic Development Committee
Chris Ricci, Chair
Eric Alvarez, Vice-Chair
Sue Zwahlen, Member
THROUGH: Joseph P. Lopez, City Manager
FROM: Jessica Hill, Director of Community and Economic Development SUBJECT: Agreement with HealthForce Partners for a Workforce Development Program CONTACT: Trevin Barber, Economic Development Manager
[email protected], 209-571-5566
DESCRIPTION:

Consider a Modesto Forward Grant Agreement with HealthForce Partners for the implementation of Modesto Forward for a Workforce Development Program, for a total amount not to exceed $500,000 over two and a half years and forwarding to Council for approval. (Funding Source:

American Rescue Plan Act Funds)
STRATEGIC PLAN ELEMENT:

The recommended action supports the City’s 2020-2025 Strategic Plan Goal E. Drive Economic Vitality: Drive the success of a vibrant and economically sustainable business climate.

BACKGROUND:

On March 11, 2021, President Joe Biden signed the American Rescue Plan Act (ARPA) into law.

The City of Modesto received approximately $45.8 million in ARPA funds in two tranches to help address the continued impact of the COVID-19 pandemic on the economy, public health, individuals, and businesses.

The City of Modesto may use ARPA funds to address a number of areas, including:

1. Replace revenue that was lost, delayed, or decreased as determined based on the projections as of January 27, 2020 as a result of the COVID-19 emergency;

2. Respond to the COVID-19 emergency and address its economic effects, including through aid to households, small businesses, nonprofits, and industries such as tourism and hospitality;

3. Cost overruns incurred as a result of the COVID-19 emergency #6..
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Economic Development Committee, June 3, 2024
Agreement with HealthForce Partners
for a Workforce Development Program