Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Raymond Hodges, Director, Department of Housing
Subject: Middlefield Junction Childcare Amendment
RECOMMENDATION:
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Adopt a resolution authorizing the President of the Board to execute an amendment to increase federal Community Development Block Grant (“CDBG”) funding for the development of a childcare center at Middlefield Junction by an additional $900,000 for a total not to exceed amount of $1,891,057, and to extend the term through March 15, 2026.
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BACKGROUND:
In accordance with federal Department of Housing and Urban Development (“HUD”) requirements, the County of San Mateo HOME Consortium develops a Consolidated Plan (“ConPlan”) every five years to identify housing, community development, and economic development needs throughout the County. Through an analysis of current housing needs, the state of the housing market, and comprehensive community engagement process, the County has established a vision, priorities, and goals to allocate its funding from HUD to improve the lives of residents of the County.
At the beginning of each new year in the five-year ConPlan cycle, the County creates an Annual Action Plan, which outlines the expected resources to be received from HUD, the projects to be funded via those resources, and the measurable goals to be achieved via those programs that year. From time-to-time the ConPlan and/or Annual Action Plan must be adjusted, which is called either a minor or substantial amendment, depending on the nature of the change.
On April 22, 2025, under Resolution No. 081080, this Board authorized the allocation of $991,058 in federal Community Development Block Grant (“CDBG”) funding to support the first phases of the Mercy Housing California 96, L.P. (“Mercy Housing”) Middlefield Junction Childcare public facilities activity. Pursuant to that authority, on December 5, 2025, the County entered into an agreement with Mercy Housing to use the CDBG funds for this purpose (the “Agreement”).
Since the Board’s action, the San Mateo County Department of Housing (“DOH”) has re-captured $900,000 in fiscal year 2021-22 and fiscal year 2022-23 CDBG funds from affordable housing construction activities that were postponed and unable to use the funds in a timely manner and/or service agreements that were not expended fully during the grant period. These funds must be reallocated to a CDBG-eligible purpose. The DOH plans to amend the fiscal year 2021-22 and fiscal year 2022-23 HUD Annual Action Plans to allocate the funds to Mercy Housing to assist them with making additional progress on the development of the Middlefield Junction childcare center. An amendment to the Agreement with Mercy Housing will also be required to allocate these funds, subject to this Board’s approval.
DISCUSSION:
The Middlefield Childcare Center will provide safe and healthy childcare exclusively for infants and toddlers. This is the most acute need expressed in the 2022 San Mateo County Child Care Needs Assessment, appendix A-15 (pg. 150), which states that nearly 1,500 children under the age of three need licensed care in Redwood City alone. Furthermore, services will be prioritized to low-income families in the North Fair Oaks neighborhood and then beyond within San Mateo County.
In connection with the reallocation of available CDBG funds, staff recommend that this Board approve an amendment to the Agreement with Mercy Housing to provide an additional $900,000 for the development of this childcare center, for a total not to exceed amount of $1,891,057. The term of the proposed amended agreement is from September 1, 2025, through March 15, 2026. In addition to accelerating progress toward completion of the childcare center, this re-allocation of funding will assist the County with meeting the goals in its CDBG Timeliness Plan.
The County Attorney has reviewed the proposed amendment to the Agreement and resolution as to form.
COMMUNITY IMPACT:
The childcare center being constructed at Middlefield Junction is designed to serve the youngest children in our community - infants and toddlers - that are living in low-income households. According to the August 2025 revisions of the San Mateo County Child Care Supply and Demand Analysis, “a deficit of subsidized child care exists for all ages of children in families with incomes below 500% of Federal Poverty Level ($150,000 annual income for a family of 4), creating a need for additional funding. The County needs an additional 8,065 subsidized infant spaces.”
FISCAL IMPACT:
The County’s maximum fiscal obligation under the amended agreement is not to exceed $1,891,057 and will be funded solely through Federal CDBG funds. The funding for this agreement is included in the Fiscal Year 2025-26 adopted budget. There is no net County cost associated with expenditures under the federal entitlement programs.