terms a “Junior Accessory Dwelling Unit,” which results from the conversion of space contained entirely within an existing single-family residence. In addition to bolstering the housing supply of a community, ADU’s also have a critical role in building the financial security of a homeowner via the equity of the home due to the improvements and the potential for rental income for the homeowner.
The City of Modesto completed updates to Title 10 (Zoning Regulations) regarding accessory dwelling unit (ADU) regulations in early 2023. However, since that time, State laws governing ADUs have been amended by the Legislature. The most recent amendments to ADU laws were enacted by Assembly Bill No. 976 (Chapter 751, Statues of 2023), Assembly Bill No. 1033 (Chapter 752, Statues of 2023) which became effective on January 1, 2024, Senate Bill No. 477 (Chapter 7, Statues of 2024) which became effective on March 25, 2024, and Senate Bill No. 1211 (Chapter 296, Statutes of 2024), which takes effect on January 1, 2025.1 Further, as part of the review of the City of Modesto’s 6th Cycle Housing Element, the City received comments from the California Department of Housing and Community Development (HCD) regarding necessary corrections and clarifications needed in the City’s ADU regulations to align with State law.
At the regularly scheduled meeting of the Planning Commission on July 15, 2024, staff was asked to make the following changes to the proposed ordinance and directed staff to bring the item back to the Planning Commission’s next regularly scheduled meeting on August 5, 2024. o Reduce the maximum height of ADUs on lots developed with an existing or proposed Place of Worship to sixteen (16) feet; and,
o Clarified the maximum size of an attached ADU.
However, the August 5, 2024, Planning Commission meeting was cancelled due to lack of a quorum. Therefore, the Planning Commission considered the proposed ordinance at their next regularly scheduled meeting on August 19, 2024 and adopted a resolution recommending the City Council adopt the ordinance.
Additionally, to carry out a program that can achieve the benefits that ADU’s may provide for the community the City approved $450,000 for an ADU Revolving Loan Fund as part of the Fiscal Year 2024-2025 budget. The City approached Valley First Credit Union (VFCU) to develop a program because of their extensive experience in preparing loan programs for Modesto residents.
Headquartered in Modesto, Valley First Credit Union has been serving the community since 1949.
Valley First’s primary mission is to create access to financial products and services to individuals of low- and moderate-income and other disadvantaged communities.
DISCUSSION:
Zoning Code Amendment
The purpose of the amendment is to bring Modesto’s Municipal Code in line with recent changes to State law governing Accessory Dwelling Units (ADUs); address comments received from the California Department of Housing and Community Development (HCD); and to provide additional 1 Minor changes were made to the Ordinance to comply with SB 1211 after consideration by the Planning Commission, which occurred prior to adoption of SB 1211. 108
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ADU development opportunities on properties owned by Places of Worship. Additionally, internal references were corrected and remnants from earlier versions of the Code were removed.
Moreover, the following Sections and Tables of the Modesto Municipal Code are to be revised by this action:
• Table 4.1-1 (Residential Development Standards), Section 10-4.102 of title 10, chapter 4 (Development Standards), article 1 (Residential Zones); • Sections 10-4.107 and 10-4.108 of Title 10, Chapter 4 (Development Standards), Article 1 (Residential Zones);
• Section 10-4.114 of title 10, Chapter 4 (Development Standards), Article 1 (Residential Zones);
• Sections 10-4.501, 10-4.502, 10-4.503, 10-4.504, 10-4.505, 10-4.506, 10-4.507, 10-
4.508, 10-4.509, and 10-4.510, Article 5 (Accessory Dwelling Units) of title 10, Chapter 4 (Development Standards);
• Addition of Section 10-4.511, Article 5 (Accessory Dwelling Units) of title 10, Chapter 4 (Development Standards)
Modesto’s 6th Cycle Housing Element 2023-2031 was found to be in substantial compliance with State housing law by the California Department of Housing and Community Development on April 10, 2024. The Housing Element includes goals, policies, programs and quantified objectives designed to help ensure housing opportunities for existing and future residents of the community.
Additionally, the Housing Element provides a plan to accommodate the Regional Housing Needs Allocation (RHNA).
One of the Housing Programs specified in the Housing Element, Program Number A-18, Housing Opportunity on Religious-Owned Property is being implemented as part of this code amendment.
Allowing ADUs on Religious-Owned Property is not a requirement of State law but is rather something the City is proposing in order to further increase the supply of affordable housing units.
The following is proposed to create additional ADU opportunities on a lot with an existing or proposed church or place of worship.
o Church is on a lot zoned Residential or Commercial
o Excludes churches on lots in the Industrial zones (C-M, M-1, and M-2) o Allows the development of up to two (2) detached ADUs o Each ADU may not exceed 1,200 square feet in floor area; o Min. four (4) foot side and rear setbacks;2
o Max. height of sixteen (16) feet; and
o ADUs may use existing church parking, if one (1) space is reserved for each ADU.
Agreement with Valley First Credit Union
The City, through its partnership with VFCU aims to address critical needs particularly for the access to capital for homeowners who desire to build an attached or detached ADU on their property. By partnering with VFCU, the City can leverage the local unique capabilities and 2 The Ordinance presented to the Planning Commission stated that the side and rear setbacks would be five (5) feet.
This was a typographical error, as a maximum of four-foot setbacks are permitted by Gov. Code 66314(d)(7). https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=66314.&nodeTreePath=11.1.30.2& lawCode=GOV
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relationships of a local credit union to establish an efficient and streamlined loan program that supports the production of ADUs and helps build financial security for homeowners. A partnership with VFCU serves as a step to help address financial barriers to individuals who traditionally would not have access to the capital required to build an ADU.
City staff is proposing an ADU loan program in the amount of $450,000 that would function as follows:
Loan Terms:
• $50,000 from the City of Modesto or higher based on demonstrated need and demonstrated ability to adhere to all requirements of the program. • Fixed Rate – 5 points below Wall Street Prime Rate
• Fixed Term – Up to 120 months
o Those interested in a loan may opt for an extended term but the extension will require a half-point increase in interest. For example, if the Wall Street Prime Rate is 8.5%, the loan term category add-on is calculated in the following manner:
Term
(in months)
Base
Rate Add-on
Final
Rate
60 3.50% 0.00% 3.50%
84 3.50% 0.50% 4.00%
120 3.50% 1.00% 4.50%
• The loan is secured by real estate where the ADU will be built. • The borrower shall make monthly payments.
• Will be in the last lien position after any existing liens (i.e. Home Equity loans, solar loans). • Will be in the last lien position after any new liens (i.e. Home Equity loans, solar loans) if such new loan is needed to complete the project.
Applicant Requirements:
• Must be a member of Valley First Credit Union
• Subject property must be under 10 acres and non-income producing • The applicant must have owned the home for at least six (6) months. • Any owner listed on the deed must be on the loan.
• We will only allow a maximum of one (1) properties financed by Valley First per borrower maximum.
• All property taxes and supplemental taxes must be current • Valid form of identification for notary signing
• Property Ownership: Must own the property within the City of Modesto, where the ADU will be built.
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• Building Code Compliance: All ADUs must comply with local building codes and zoning regulations. Applicant must provide approved plans.
• Construction Contractor: Only licensed contractors registered with the state are used for any construction work related to the ADU.
• Title Insurance: Obtain title insurance coverage naming the lender as loss payee. ADU must be completed within one (1) year of building permit issuance.
By partnering with VFCU, the City can leverage the local unique capabilities and relationships of a local credit union to establish an efficient and streamlined loan program that supports the production of ADUs and helps build financial security for homeowners allowing the City to build financial security for local homeowners, increase the local housing stock, and help meet the goals outlined in the City’s Housing Element.
FISCAL IMPACT:
The code amendment was initiated by the City to bring the municipal code in alignment with State regulations. The cost in staff time to prepare these amendments was paid from the current Planning Division budget. Additionally, the City’s Fiscal 2024-2025 budget includes an allocation of $450,000 from the approved Measure H Spending Plan, for the establishment of an ADU Revolving Loan Program. All funds dedicated to the program will be exclusively for the program and there are no additional costs associated with the program in partnership with VFCU.
COMMITTEE RECOMMENDATION:
The code amendment was heard by the Planning Commission on July 15 and August 19, 2024.
On August 19, 2024, the Planning Commission made a motion directing staff to Amend Chapter 4 (Development Standards) of Title 10 of the City of Modesto Municipal Code, Article 1 by amending Section 10-4.507 (b) (4), to read: A height of eighteen (18) feet on a lot with an existing or proposed multifamily, multistory dwelling. Following that motion, the Planning Commission recommended the amendments be forwarded to Council for approval.
The ADU Revolving Loan Fund agreement was presented to the Citizens’ Housing and Community Development Committee on October 10, 2024 and was recommended to forward to Council for approval.
CEQA/NEPA REQUIREMENTS:
The proposed amendments are Statutorily Exempt from CEQA pursuant to Section 15282 (h) of the State CEQA Guidelines that exempt the adoption of an ordinance regarding second units in a single-family or multi-family residential zone by a city or county to implement the provisions of Government Code Section 66310 et. seq.
RECOMMENDED COUNCIL ACTION:
Staff Recommendations:
Motion introducing and waiving the first reading of the Ordinance amending various Sections and Tables within Title 10 of the Modesto Municipal Code relating to Accessory Dwelling Units.
Resolution approving an Agreement with Valley First Credit Union Modesto, California for Accessory Dwelling Unit (ADU) Revolving Loan Fund to increase the development of ADUs in the community for a total amount not to exceed $450,000 and authorizing the City Manager, or his designee, to negotiate and execute the Agreement.
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City Council, November 12, 2024
Amendment to Title 10 regarding Accessory Dwelling Units and Accessory Dwelling Unit Revolving Loan Fund
Approved by: ______
Jessica Hill, Director
Community and Economic Development
Department
Joseph P. Lopez, City Manager
Attachments:
1. Ordinance Amending Title 10 of the Modesto Municipal Code
2. Resolution – ADU Revolving Loan Fund
3. Planning Commission Minutes
4. Notice of Exemption
5. Draft Agreement with Valley First Credit Union
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11/12/2024/CED/EGarcia/Item 21 2024-427
MODESTO CITY COUNCIL
RESOLUTION NO. 2024-427
RESOLUTION APPROVING AN AGREEMENT WITH VALLEY FIRST
CREDIT UNION MODESTO, CALIFORNIA FOR ACCESSORY DWELLING
UNIT (ADU) REVOLVING LOAN FUND TO INCREASE THE DEVELOPMENT
OF ADUS IN THE COMMUNITY FOR A TOTAL AMOUNT NOT TO EXCEED $450,000 AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO
NEGOTIATE AND EXECUTE THE AGREEMENT
WHEREAS, like many cities across the State, Modesto has a limited affordable housing inventory. In recent years, accessory dwelling units have become a critical part of the housing stock of a community; and
WHEREAS, ADUs can be detached, such as a small cottage or guest house on the same parcel as a single-family home, and they can also be attached, such as an addition on a primary structure and be created from the conversion of existing space, such as a garage; and
WHEREAS, in addition to bolstering the housing supply of a community, ADU’s also have a critical role in building the financial security of a homeowner via the equity of the home due to the improvements and the potential for rental income for the homeowner; and
WHEREAS, to carry out a program that can achieve these benefits for the community, the City approved $450,000 for an ADU Revolving Loan Fund that was approved as part of the Fiscal Year 2024-2025 Measure H Spending Plan budget; and WHEREAS, the City approached Valley First Credit Union (VFCU) because of their extensive experience in preparing loan programs for Modesto residents to develop a program. Headquartered in Modesto, Valley First Credit Union has been serving the community since 1949; and
4D_ADU Revolving Loan Fund Program Authorization
(Agenda Report & Resolution No. 2024-427)
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WHEREAS, Valley First’s primary mission is to create access to financial products and services to individuals of low- and moderate-income and other disadvantaged communities; and
WHEREAS, the City, through its partnership with VFCU aims to address critical needs particularly the access to capital for homeowners who desire to build an attached or detached ADU on their property and by partnering with VFCU, the City can leverage the local unique capabilities and relationships of a local credit union to establish an efficient and streamlined loan program that supports the production of ADUs and helps build financial security for homeowners; and
WHEREAS, a partnership with VFCU serves as a critical step to help address financial barriers to individuals who traditionally would not have access to the capital required to build an ADU and City staff is proposing an ADU loan program in the amount of $450,000; and
WHEREAS, further, by partnering with VFCU, the City can leverage the local unique capabilities and relationships of a local credit union to establish an efficient and streamlined loan program that supports the production of ADUs and helps build financial security for homeowners and help build the local housing stock in the community, and WHEREAS, City’s Fiscal Year 2024-2025 Measure H Spending Plan budget approved an allocation of $450,000, specifically for the establishment of an ADU Revolving Loan Program and all funds dedicated to the program will be exclusively for the program; there are no additional costs associated with the establishment of the program from VFCU; and
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WHEREAS, this project was presented to the Citizens’ Housing and Community Development Committee on October 10, 2024, and was recommended to forward to Council for approval.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the Agreement with Valley First Credit Union Modesto, California for Accessory Dwelling Unit (ADU) Revolving Loan Fund to increase the development of ADU’s in the community for a total amount not to exceed $450,000.
BE IT FURTHER RESOLVED, that the City Manager, or his designee, is authorized to negotiate and execute the Agreement, in a form approved by the City Attonrey.
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11/07/2023/CED/JHill/Item 18 2023-495
MODESTO CITY COUNCIL
RESOLUTION NO. 2023-495
RESOLUTION AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE,
TO SOLICIT PROPOSALS FOR BRIDGE HOUSING SITES AND
ALLOCATING $3,000,000 FOR POTENTIAL PROJECTS
WHEREAS, to help achieve the deliverables outlined in the 2021 Stanislaus Regional Homeless Strategic Plan, on October 20, 2023, the City Council considered a comprehensive update on available housing and homelessness programs and explored potential new programs that can be made available to meet the growing needs of the population, including: Bridge Housing, and
WHEREAS, Bridge Housing, often also referred to as non-congregate shelter options and is the first level of housing for individuals who are transitioning out of homelessness, and
WHEREAS, these are temporary manufactured homes with approximately 60 sq. ft. of space for individuals and 120 sq. ft. for families, and WHEREAS, based on feedback from the Homeless Workshop on October 20, 2023, staff is developing a framework and implementation strategy for multiple Bridge Housing sites around the City, and
WHEREAS, to assist with the facilitation, the City is in the process of releasing a request for proposals to bring additional resources to our community, and WHEREAS, this request for proposals is to solicit social service providers who can provide case management, operators who have experience operating these sites, and bridge housing vendors who produce types of temporary units, and 4G_City Council Resolutions Supporting Bridge Housing Sites and Projects (Reso. No. 2023-495 for soliciting proposals for Bridge Housing sites & Reso No. 2024-338 for 1530 Owens Dr. - Grace Gardens)
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WHEREAS, the private-public partnership in addressing homelessness has been essential for the City to create new programs and housing options for the homeless individuals in our community, and
WHEREAS, to continue with this partnership, the City is in the process of issuing a request for proposals to assist with identifying potential sites to add additional units of Bridge Housing and the sites will serve as short-term non-congregate shelter opportunities and serve as a bridge to longer-term housing, and WHEREAS, the proposals will be sought from public and private entities with available land that can serve as a site for short- term non-congregate shelter, and WHEREAS, the proposal would have to agree to utilizing the best practices for a Bridge Housing site as established by the City and will include identifying and screening potential participants based on eligibility requirements, ensuring clients are adhering to site requirements, producing intake and exit procedures, ensuring safety and fire protocols are in place, maintaining utilities and on-site maintenance, and coordinating onsite services with service providers, and WHEREAS, upon approval of a project, the City will be working alongside the proposers of a particular site to partner them and provide a list of potential operators and service providers to ensure a successful project, for the proposer to engage with, and WHEREAS, the City will work with the proposer to determine outside funding sources including but not limited to: Federal, State, and County funding, and WHEREAS, based on other sites, the City is anticipating that the overall cost per unit would be approximately $75,000 which is inclusive of required infrastructure improvements and accessory buildings, and
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MODESTO CITY COUNCIL
RESOLUTION NO. 2024-338
RESOLUTION APPROVING A FIRST AMENDMENT TO THE AGREEMENT
WITH STANISLAUS COUNTY AFFORDABLE HOUSING CORPORATION
(STANCO) FOR MASTER DEVELOPMENT SERVICES FOR BRIDGE
HOUSING PROJECTS INCREASING THE AGREEMENT AMOUNT BY
$394,640 TO A NEW TOTAL AMOUNT OF $469,640 AND AUTHORIZING THE
CITY MANAGER OR HIS DESIGNEE TO NEGOTIATE AND EXECUTE THE
REQUIRED AGREEMENTS
WHEREAS, on November 7, 2023, by Resolution No. 2023-495, Council approved City staff to solicit proposals for Bridge Housing sites and allocating $3,000,000 sleeping cabin acquisition, site infrastructure and improvements; and WHEREAS, on November 7, 2023, the City Council adopted Resolution No. 2023-496, Council approved amending the fiscal year 2023-2024 Multi-Year NonCapital Multi-Year budget to create a new project and establish revenue, expense, and transfer budgets for the Bridge Housing projects to be funded with Measure H funds in the amount of $3,000,000; and
WHEREAS, on May 3, 2024, the City finalized an agreement Stanislaus County Affordable Housing Corporation to assist with the project management of bridge housing projects, develop project designs, and provide construction oversight for an amount not to exceed $75,000 for a period of 2 years, with 1 year extension option; and WHEREAS, City staff has developed a project construction budget at an estimated amount of $394,640, to allow StanCo to enter into the Agreement with the general contractor and oversee the construction and installation of sleeping cabins on behalf of the City of Modesto; and
WHEREAS, the total construction and unit acquisition cost is $635,647 which is approximately $52,971 per unit; and
4G_City Council Resolutions Supporting Bridge Housing Sites and Projects (Reso. No. 2023-495 for soliciting proposals for Bridge Housing sites & Reso No. 2024-338 for 1530 Owens Dr. - Grace Gardens)
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WHEREAS, City staff is recommending an additional allocation of Measure H funding in the amount of $394,640 for an amount not to exceed $469,640 to allow Stanislaus County Affordable Housing Corporation to manage and oversee all general contractor costs associated to the bridge housing site located at 1530 Owens Drive, Modesto.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves a First Amendment to the Agreement with Stanislaus County Affordable Housing Corporation for master development services for bridge housing projects increasing the Agreement amount by $394,640 to a new total amount of $469,640.
BE IT FURTHER RESOLVED that the City Manager, or his designee, is authorized to negotiate and execute any required agreements for the operations of the program.
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CITY OF MODESTO
COUNCIL AGENDA REPORT
DATE OF MEETING:
October 14, 2025
Date: September 8, 2025
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jessica Hill, Director of Community and Economic Development SUBJECT: First Amendment to the Homeless Housing, Assistance and Prevention funding for the Jenny’s Place Housing Project
CONTACT: Edgar Garcia, Community Development Manager,
[email protected], 209-577-5211
DESCRIPTION:
Consider approving a First Amendment to the Memorandum of Agreement between the County of Stanislaus Community Services Agency (CSA) and the City of Modesto to increase the funding amount by $342,626 from $1,775,077 to a new total award of $2,117,703, for the operations of the Permanent Supportive Housing Units to be passed to Modesto Homekey LP in an amended grant agreement located at 710 N. 9th Street, Modesto CA 95350. (Funding Source: Homeless Housing, Assistance and Prevention (HHAP) Grant)
STRATEGIC PLAN ELEMENT:
The recommended action supports the City’s 2025-2026 Strategic Plan, Goal C: Develop a Homelessness and Housing Plan.
BACKGROUND:
Modesto Homekey LP for this project for the rehabilitation of the Jenny’s Place housing project (formerly known as the Traveler’s Motel) located at 710 N. 9th Street to serve as a 54-unit permanent supportive housing project with one on-site manager unit and 37 units to serve youth experiencing homelessness and the remaining 16 units for the general population that is experiencing homelessness.
On May 2, 2023, by Resolution 2023-212 and 2023-210 the City committed the allocation of $2,274,923 and the commitment of $1,775,077 from Stanislaus County Community Services Agency (CSA), both allocations intended to fill the gap needed to support the development of the project. On September 26, 2023, the City was notified of the Homey Round 3 award to the City and Modesto Homekey, LP Development in the amount of $16,059,562.
On December 5, 2023, the Board of Supervisors for the County of Stanislaus authorized an allocation of Stanislaus Community System of Care’s (SCOC) Homeless Housing Assistance and Prevention Program (HHAP) funding, in the amount of $1,775,077 in the form of a grant to be managed by the City for this project. On January 23,2024 by Resolution 2024-030 the City 4K_City Council Staff Report & Council Resolution (No. 2025-363) Jenny’s Place Housing Project
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approved an agreement with Stanislaus Community Services Agency (CSA) for the acceptance of the Homeless Housing, Assistance and Prevention (HHAP) funding in the amount of $1,775,077 approved a grant to Modesto Homekey LP for the development at 710 N. 9th Street.
DISCUSSION:
In partnership with UPholdings and RH Community Builders (Modesto Homekey LP), the City of Modesto utilized the capital funding through Homekey, to begin construction in February 2024.
The original project consisted of an acquisition and rehabilitation project with 54 studio and 1 onebedroom units serving households with incomes at 30 percent of Area Median Income (AMI) and 1 manager's unit. Each studio unit proposed to serve 37 homeless or at risk of homelessness youth households and 16 households experiencing homelessness. The project was completed in April 2025.
To support housing stabilization the initial Homekey application included operating subsidies through housing vouchers from Stanislaus Regional Housing Authority and Stanislaus County Behavioral Health and Recovery Services (BHRS). Since the initial application regulatory changes have affected the availability of housing vouchers due to federal budget reductions. The significant reduction of voucher availability created a gap in the operating budget for the project.
Modesto Homekey LP (owner and operator) submitted a formal request to Stanislaus Community System of Care (CSOC) to request funding that will support the affordability of the project. The funding request was in the amount of $342,626 to support tenant/subsidy matching, support lease-up expenses, and long-term operating subsidy support. On June 26, 2025, the CSOC approved to increase the HHAP funding allocation by $342,626 from $1,775,077 to $2,117,703, for the provision of funding for the Travelers Motel for the ongoing operating expenses of the permanent supportive housing project.
To allocate the funds, the HHAP grant is required to be approved by the Stanislaus County Board of Supervisors which will authorize the allocation to the City. The City will subsequently allocate the funds to the Modesto Homekey LP to support ongoing operating expenses.
FISCAL IMPACT:
The funding for this program will come from Stanislaus County Community Services Agency (CSA) Homeless Housing, Assistance and Prevention (HHAP) Grant. There is no impact to the General Fund.
COMMITTEE RECOMMENDATION:
This item was presented to the Citizen Housing and Community Development Committee on November 9, 2023, and recommended forwarding to Council for acceptance.
RECOMMENDED COUNCIL ACTION:
Staff Recommendations:
Resolution approving a First Amendment to the Memorandum of Agreement between the County of Stanislaus Community Services Agency (CSA) and the City of Modesto to increase the funding amount by $342,626 from $1,775,077 to a new total award of $2,117,703, for the operations of the Permanent Supportive Housing Units project located at 710 N. 9th Street, Modesto CA 95350 and authorizing the City Manager or his designee to execute an agreement.
Resolution approving a First Amendment to the Grant Agreement with Modesto Homekey, L.P. of Fresno, CA to increase the funding amount by $342,626 from $1,775,077 to a new total award 124
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of $2,117,703, for the operations of the Permanent Supportive Housing for the project located at 710 N. 9th Street, Modesto CA 95350 and authorizing the City Manager or his designee to execute an agreement.
Resolution amending project (101575) to increase the homeless housing assistance and prevention program (HHAP) budget new total amount of $2,117,703 and authorizing the city manager, or his designee, to take the necessary steps to implement the provisions of this resolution.
Approved by:
Jessica Hill, Director of Community and Economic Development Joseph P. Lopez, City Manager
Attachments:
1. Resolution
2. Resolution – Grant Agreement
3. Budget Resolution
4. First Amendment to MOA between CSA and the City of Modesto
5. Executed Original MOA between CSA and the City of Modesto
6. First Amendment to the Grant Agreement with Modesto Homekey LP
7. Executed Original Grant Agreement with Modesto Homekey LP 125
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MODESTO CITY COUNCIL
RESOLUTION NO. 2025-363
RESOLUTION APPROVING A FIRST AMENDMENT TO THE
MEMORANDUM OF AGREEMENT BETWEEN THE COUNTY OF
STANISLAUS COMMUNITY SERVICES AGENCY (CSA) AND THE CITY OF MODESTO TO INCREASE THE FUNDING AMOUNT BY $342,626 FROM $1,775,077 TO A NEW TOTAL AWARD OF $2,117,703, FOR THE OPERATIONS
OF THE PERMANENT SUPPORTIVE HOUSING UNITS PROJECT LOCATED AT 710 N. 9TH STREET, MODESTO CA 95350 AND AUTHORIZING THE CITY
MANAGER OR HIS DESIGNEE TO NEGOTIATE AND EXECUTE AN
AMENDMENT
WHEREAS, on December 5, 2023, the Board of Supervisors for the County of Stanislaus authorized an allocation of Stanislaus Community System of Care’s (SCOC) Homeless Housing Assistance and Prevention Program (HHAP) funding, in the amount of $1,775,077 in the form of a grant to be managed by the City for this project; and WHEREAS, on January 23, 2024, by Resolution 2024-030 the City approved an agreement with Stanislaus Community Services Agency (CSA) for the acceptance of the Homeless Housing, Assistance and Prevention (HHAP) funding in the amount of $1,775,077 and approved a grant to Modesto Homekey LP for the development at 710 N. 9th Street; and
WHEREAS, to support housing stabilization the initial Homekey application included operating subsidies through housing vouchers from local partners; and WHEREAS, since the initial application regulatory changes have affected the availability of housing vouchers due to federal budget uncertainties and shifting priorities; and
WHEREAS, the significant reduction of voucher availability created a gap in the operating budget for the project; and
WHEREAS, the City approached the Stanislaus Community System of Care 4K_City Council Staff Report & Council Resolution (No. 2025-363) Jenny’s Place Housing Project
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(CSOC) to request support in long term solutions to ensure the placement and affordability of the project; and
WHEREAS, on June 26, 2025, the CSOC approved to increase the HHAP funding allocation by $342,626 from $1,775,077 to $2,117,703, for the provision of funding for the Travelers Motel for the rehabilitation and operations of Permanent Supportive Housing Units.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it approves a First Amendment to the Memorandum of Agreement between the County of Stanislaus Community Services Agency (CSA) and the City of Modesto to increase the funding amount by $342,626 from $1,775,077 to a new total award of $2,117,703, for the operations of the Permanent Supportive Housing Units for the project located at 710 N. 9th Street, Modesto CA 95350.
BE IT FURTHER RESOLVED that the City Manager or his designee is authorized to execute the Amendment, in a form approved by the City Attorney. 127
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CITY OF MODESTO
COUNCIL AGENDA REPORT
DATE OF MEETING:
July 14, 2026
Date: June 22, 2026
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Brandon Gillespie, Chief of Police
SUBJECT: Non-Emergency Transport Application for Khan Healthcare CONTACT: Joseph Bottoms, Police Lieutenant, [email protected], 209-572- 9500
DESCRIPTION:
Hearing to consider approving the application and issuance of a Permit to operate as a Non-Emergency Medical Transport Company to Khan Healthcare in the City of Modesto. (Funding Source: General Fund)
STRATEGIC PLAN ELEMENT:
This item is related to the City Council 2025-2026 Strategic Plan goal of improving community safety and quality of life through a combination of prevention and intervention efforts that address safety and its underlying issues. (Goal A of Quality of Life Goals and Strategies)
BACKGROUND:
The City of Modesto allows non-emergency medical transport companies to apply for a non-emergency transport permit. In addition to the application, the transport company is required to pay a filing fee of $1,000 and provide all the necessary documents and information as outlined in Modesto Municipal Code sections 3-9.01 to 3-9.20. Once the application, documentation, and necessary fees have been received by the Modesto Police Department (MPD), a background investigation must be completed by the department. Upon successful completion of the background investigation, the application proceeds to a hearing before the City Council to determine whether the public convenience and necessity require the proposed service. The Council must grant the applicant a permit upon making the following findings:
(a) That the vehicles described in the application and proposed to be used are appropriate for the purpose of nonemergency transport;
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City Council, July 14, 2026
Non-Emergency Transport Application for Khan Healthcare
(b) That the color scheme, insignia, name, monogram or other distinguishing characteristics proposed to be used upon such nonemergency transport vehicles is not in conflict with and do not imitate any color scheme, insignia, name, monogram or other distinguishing characteristics used by any other person, in such manner as to mislead or tend to mislead, deceive, or defraud the public; (c) That the applicant is fit, willing and able to perform nonemergency transport service and to conform to the provisions of this chapter, and such rules and regulations as may be promulgated by the Council. In making such findings, the Council shall take into consideration the character, experience, and responsibility of the applicant;
(d) That the proposed nonemergency transport service is required by the public convenience and necessity. In making such finding, the Council shall take into consideration the number of nonemergency transport vehicles already in operation, whether existing nonemergency transport service is adequate to meet public need, and the probable effect of increased nonemergency transport service on local traffic conditions; and
(e) None of the factors enumerated in Section 3-9.07 of the Modesto Municipal Code exist, such as misleading color schemes, disqualifying background factors, and proof of insurance.
Currently there are eleven (11) permitted ambulance companies in Modesto to provide non-emergency transport: Allstar Ambulance, America West, Amwest Ambulance, Bay Medic Transportation, Citizens Medical Transport, Heavenly Medical Transport LLC, NorCal Ambulance, Provident Senior Solutions, Inc, Quality Care Transport Inc, Star Nonemergent Transportation and Trauma Life Care & Medical Transport.
DISCUSSION:
Khan Healthcare has applied to operate a non-emergency medical transportation service in the City of Modesto. Khan Healthcare has paid the $1,000 filing fee to cover administrative, investigative, and other incidental costs associated with the application and have provided all necessary information as outlined in Sections 3-9.01 to 3-9.20 of the Modesto Municipal Code. Additionally, photos of the proposed vehicles were provided. They depict vehicles that are appropriate for their intended use, and the vehicle color and markings are not misleading.
In reviewing the application and subsequent background check, it appears the applicant can perform the proposed services, and these services benefit the public convenience and necessity based on the number of licensed providers currently operating in the city.
There are no disqualifying factors at this time. The MPD concluded the required background investigation on Khan Healthcare indicating the applicant has complied with #26..
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City Council, July 14, 2026
Non-Emergency Transport Application for Khan Healthcare
the requirements contained in Modesto Municipal Code sections 3-9.01 through 3-9.20 and recommends that staff proceed with Council approval to issue the operational permit.
FISCAL IMPACT:
Khan Healthcare will be required to obtain a City Business license and renew it annually – which currently costs $75 and includes a $4 fee to the State of California for Disability Act AB1379. Additionally, Khan Healthcare will be required to pay mill tax, which is currently at a rate of 0.002, on their gross receipts while operating in the city. Fees and mill tax paid to the City are revenue to the General Fund.
COMMITTEE ACTION:
This item was not presented to Safety and Communities Committee. The June 8, 2026 meeting was cancelled, and the item was approved to be presented to City Council for approval.
CEQA/NEPA REQUIREMENTS:
This item does not constitute a “project” within the meaning of California Environmental Quality Act (CEQA) Guidelines Section 15378 and requires no environmental review.
RECOMMENDED COMMITTEE ACTION:
Staff Recommendations:
Resolution approving the application and issuance of a Permit to operate as a NonEmergency Medical Transport Company to Khan Healthcare in the City of Modesto.
Approved by:
Brandon Gillespie, Chief of Police
Joseph P. Lopez, City Manager
Attachments:
1. Resolution
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07/14/2026/MPD/JBottoms/Item XX # 2026-XX
MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XX
RESOLUTION APPROVING THE APPLICATION AND ISSUANCE OF A
PERMIT TO OPERATE AS A NON-EMERGENCY MEDICAL TRANSPORT
COMPANY TO KHAN HEALTHCARE IN THE CITY OF MODESTO
WHEREAS, Khan Healthcare has submitted an application to provide non-emergency medical transport services within the City of Modesto; and
WHEREAS, the City allows non-emergency medical transport companies to apply for a non-emergency transport permit. In addition to the application, the transport company is required to pay a filing fee of $1,000 and provide all the necessary documents and information as outlined in Modesto Municipal Code 3-9.01 to 3-9.20; and WHEREAS, once the application, documentation, and necessary fees have been received by the Modesto Police Department (MPD), a background investigation must be completed by the department; and WHEREAS, upon successful completion of the background
investigation, the application proceeds to a hearing before the City Council to determine whether the public convenience and necessity require the proposed services; and
WHEREAS, the Modesto Police Department has completed
background investigations regarding Khan Healthcare, per Modesto Municipal Code Section 3-9.05; and
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07/14/2026/MPD/JBottoms/Item XX # 2026-XX
WHEREAS, Council approval is required for Khan Healthcare to function as a non-emergency medical transport service provider within the City of Modesto; and
WHEREAS, a duly noticed public hearing was held by the City Council of the City of Modesto on July 14, 2026, at 5:30 p.m. in the Tenth Street Place Chambers located at 1010 Tenth Street, Modesto, California, to consider authorizing the issuance of a permit to Khan Healthcare for a non-emergency medical transport service within the City of Modesto; and WHEREAS, Modesto City Council finds that Khan Healthcare will serve the public convenience and necessity requirements.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the application of Khan Healthcare and issues Khan Healthcare a permit to operate as a non-emergency medical transport company in the City of Modesto.
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07/14/2026/MPD/JBottoms/Item XX # 2026-XX
The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the 14th day of July 2026, by Councilmember ________, who moved its adoption, which motion being duly seconded by Councilmember ______, was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ATTEST: _____________________________
DIANE NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:
BY: _________________________________
JOSE M. SANCHEZ, City Attorney
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CITY OF MODESTO
COUNCIL AGENDA REPORT
DATE OF MEETING:
July 14, 2026
Date: June 22, 2026
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Brandon Gillespie, Chief of Police
SUBJECT: Non-Emergency Transport Application for Heartway Transport LLC CONTACT: Joseph Bottoms, Police Lieutenant, [email protected], 209-572- 9500
DESCRIPTION:
Hearing to consider approving the application and issuance of a Permit to operate as a Non-Emergency Medical Transport Company to Heartway Transport LLC in the City of Modesto. (Funding Source: General Fund)
STRATEGIC PLAN ELEMENT:
This item is related to the City Council 2025-2026 Strategic Plan goal of improving community safety and quality of life through a combination of prevention and intervention efforts that address safety and its underlying issues. (Goal A of Quality of Life Goals and Strategies)
BACKGROUND:
The City of Modesto allows non-emergency medical transport companies to apply for a non-emergency transport permit. In addition to the application, the transport company is required to pay a filing fee of $1,000 and provide all the necessary documents and information as outlined in Modesto Municipal Code sections 3-9.01 to 3-9.20. Once the application, documentation, and necessary fees have been received by the Modesto Police Department (MPD), a background investigation must be completed by the department. Upon successful completion of the background investigation, the application proceeds to a hearing before the City Council to determine whether the public convenience and necessity require the proposed service. The Council must grant the applicant a permit upon making the following findings:
(a) That the vehicles described in the application and proposed to be used are appropriate for the purpose of nonemergency transport;
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City Council, July 14, 2026
Non-Emergency Transport Application for Heartway Transport LLC
(b) That the color scheme, insignia, name, monogram or other distinguishing characteristics proposed to be used upon such nonemergency transport vehicles is not in conflict with and do not imitate any color scheme, insignia, name, monogram or other distinguishing characteristics used by any other person, in such manner as to mislead or tend to mislead, deceive, or defraud the public; (c) That the applicant is fit, willing and able to perform nonemergency transport service and to conform to the provisions of this chapter, and such rules and regulations as may be promulgated by the Council. In making such findings, the Council shall take into consideration the character, experience, and responsibility of the applicant;
(d) That the proposed nonemergency transport service is required by the public convenience and necessity. In making such finding, the Council shall take into consideration the number of nonemergency transport vehicles already in operation, whether existing nonemergency transport service is adequate to meet public need, and the probable effect of increased nonemergency transport service on local traffic conditions; and
(e) None of the factors enumerated in Section 3-9.07 of the Modesto Municipal Code exist, such as misleading color schemes, disqualifying background factors, and proof of insurance.
Currently there are eleven (11) permitted ambulance companies in Modesto to provide non-emergency transport: Allstar Ambulance, America West, Amwest Ambulance, Bay Medic Transportation, Citizens Medical Transport, Heavenly Medical Transport LLC, NorCal Ambulance, Provident Senior Solutions, Inc, Quality Care Transport Inc, Star Nonemergent Transportation and Trauma Life Care & Medical Transport.
DISCUSSION:
Heartway Transport LLC has applied to operate a non-emergency medical transportation service in the City of Modesto. Heartway Transport LLC has paid the $1,000 filing fee to cover administrative, investigative, and other incidental costs associated with the application and have provided all necessary information as outlined in Sections 3-9.01 to 3-9.20 of the Modesto Municipal Code. Additionally, photos of the proposed vehicles were provided. They depict vehicles that are appropriate for their intended use, and the vehicle color and markings are not misleading.
In reviewing the application and subsequent background check, it appears the applicant can perform the proposed services, and these services benefit the public convenience and necessity based on the number of licensed providers currently operating in the city.
There are no disqualifying factors at this time. The MPD concluded the required background investigation on Heartway Transport LLC indicating the applicant has complied with the requirements contained in Modesto Municipal Code sections 3-9.01 #27..
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City Council, July 14, 2026
Non-Emergency Transport Application for Heartway Transport LLC
through 3-9.20 and recommends that staff proceed with Council approval to issue the operational permit.
FISCAL IMPACT:
Heartway Transport LLC will be required to obtain a City Business license and renew it annually – which currently costs $75 and includes a $4 fee to the State of California for Disability Act AB1379. Additionally, Heartway Transport LLC will be required to pay mill tax, which is currently at a rate of 0.002, on their gross receipts while operating in the city.
Fees and mill tax paid to the City are revenue to the General Fund.
COMMITTEE ACTION:
This item was not presented to Safety and Communities Committee. The June 8, 2026 meeting was cancelled, and the item was approved to be presented to City Council for approval.
CEQA/NEPA REQUIREMENTS:
This item does not constitute a “project” within the meaning of California Environmental Quality Act (CEQA) Guidelines Section 15378 and requires no environmental review.
RECOMMENDED COMMITTEE ACTION:
Staff Recommendations:
Resolution approving the application and issuance of a Permit to operate as a NonEmergency Medical Transport Company to Heartway Transport LLC in the City of Modesto.
Approved by:
Brandon Gillespie, Chief of Police
Joseph P. Lopez, City Manager
Attachments:
1. Resolution
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07/14/2026/MPD/JBottoms/Item XX # 2026-XX
MODESTO CITY COUNCIL
RESOLUTION NO. 2026-XX
RESOLUTION APPROVING THE APPLICATION AND ISSUANCE OF A
PERMIT TO OPERATE AS A NON-EMERGENCY MEDICAL TRANSPORT
COMPANY TO HEARTWAY TRANSPORT LLC IN THE CITY OF MODESTO WHEREAS, Heartway Transport LLC has submitted an application to provide non-emergency medical transport services within the City of Modesto; and
WHEREAS, the City allows non-emergency medical transport companies to apply for a non-emergency transport permit. In addition to the application, the transport company is required to pay a filing fee of $1,000 and provide all the necessary documents and information as outlined in Modesto Municipal Code 3-9.01 to 3-9.20; and WHEREAS, once the application, documentation, and necessary fees have been received by the Modesto Police Department (MPD), a background investigation must be completed by the department. Upon successful completion of the background investigation, the application proceeds to a hearing before the City Council to determine whether the public convenience and necessity require the proposed services; and WHEREAS, the Modesto Police Department has completed
background investigations regarding Heartway Transport LLC, per Modesto Municipal Code Section 3-9.05; and
WHEREAS, Council approval is required for Heartway Transport LLC to function as a non-emergency medical transport service provider within the City of Modesto; and
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07/14/2026/MPD/JBottoms/Item XX # 2026-XX
WHEREAS, a duly noticed public hearing was held by the City Council of the City of Modesto on July 14, 2026, at 5:30 p.m. in the Tenth Street Place Chambers located at 1010 Tenth Street, Modesto, California, to consider authorizing the issuance of a permit to Heartway Transport LLC for a non-emergency medical transport service within the City of Modesto; and
WHEREAS, Modesto City Council finds that Heartway Transport LLC will serve the public convenience and necessity requirements.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the application of Heartway Transport LLC and issues Heartway Transport LLC a permit to operate as a non-emergency medical transport company in the City of Modesto.
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07/14/2026/MPD/JBottoms/Item XX # 2026-XX
The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the 14th day of July 2026, by Councilmember ________, who moved its adoption, which motion being duly seconded by Councilmember ______, was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ATTEST: _____________________________
DIANE NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:
BY: _________________________________
JOSE M. SANCHEZ, City Attorney
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