The Modesto City Council on Tuesday will consider approving two programs that would spend as much as $450,000 in federal money to improve the economic outlook of low- and moderate-income residents, according to a city report.
One program would provide as much as $200,000 to help home-based caterers and child-care providers in west Modesto; the second program would provide as much as $250,000 in loans to small businesses. The funding for both proposals would come from money Modesto receives from the U.S. Department of Housing and Urban Development’s community development block grant program.
The first program calls for Modesto to work with the Stanislaus Multicultural Community Health Coalition-West Modesto King-Kennedy Neighborhood Collaborative. The group runs the King-Kennedy Memorial Center on behalf of the city.
The program would be for two years. The city has earmarked $70,000 to help west Modesto food entrepreneurs, primarily home-based caterers with no more than five employees. The money would pay for the cost of operating the King-Kennedy Memorial Center’s commercial kitchen, where entrepreneurs could test recipes and production methods; would provide entrepreneurs with technical and financial assistance; and would cover the program’s costs.
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The city has earmarked $130,000 to help child-care providers. A city report states that one of the program’s goals is to help meet the demand for high-quality child care in west Modesto. The program would partner with the Stanislaus County Office of Education, Modesto City Schools and the Alliance Small Business Development Center.
The program would provide financial assistance to help new and existing home-based child-care businesses with such expenses as licenses, insurance and minor home repairs. The businesses would pay back the assistance by providing an equivalent amount of free child care, according to a city report.
Modesto is working with the Fresno Community Development Financial Institution on the loan program. The city essentially is lending the organization $250,000 over five years. A city report states the organization would leverage that money with other funding to provide $500,000 in small loans in Modesto.
The report states that community development financial institutions are certified by the U.S. Department of Treasury and work in market niches underserved by traditional financial institutions. It states that Modesto will get the $250,000 plus $2,500 in interest back after five years.
The agreement calls for the Fresno institution to absorb the loss of any loan defaults. As much as 15 percent of the $250,000 could be spent on services provided by the Alliance SBDC or the city’s business center with approval from the city.
More information on both programs can be found at www.modestogov.com/ccl/agendas. Click on the link for the agenda for Tuesday’s meeting. The council will meet at 5:30 p.m. in the basement chambers of Tenth Street Place, 1010 10th St.