The First 5 Sacramento Commission on Dec. 1 approved revisions to its advance-payment policy to help smaller community-based organizations manage start-up costs and cash flow.

Under the revised policy, the executive director may authorize an advance payment up to 25% of a contractors annual allocation (up from 20%). The policy also includes a special provision for the new Equity & Action initiative that allows advances of up to 50% of an equity contracts annual allocation to give small organizations greater capacity to hire and launch services on time.

A staff presentation said the change aligns the commission with recent county standards and is designed to support CBOs that may lack prior contracting experience. Staff emphasized that higher advances will come with enhanced monitoring: repayment schedules will be built into monthly invoicing, with a portion of subsequent payments withheld to reimburse the commission until the advance is repaid.

Commissioner Hassett, who served on the Financial Planning Committee that reviewed the policy, said the committee was "very clear that people have to make a case for why they need the funds in advance" and noted the heavy burden reimbursement-only grants can pose for small providers.

Commissioners asked how requests would be assessed. Staff replied that the advance would typically be determined during contract negotiations, when the commission can evaluate specific needs such as hiring and onboarding costs; the policy document in the packet includes repayment terms and monitoring procedures.

The commission voted by roll call to approve the policy (all voting commissioners recorded "Aye").

The policy change is intended to help smaller providers launch programs under the Equity & Action initiative while preserving financial safeguards through fiscal risk assessments, allowable indirect rates, and the potential use of fiscal agents where appropriate.

The commission will implement enhanced oversight and report back as the new advances are used.