Agenda packet — Modesto City Council, February 28, 2023 (part 5 of 5)

The Park maintains two individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for both the General Fund and the Capital Projects Fund.

The governmental funds financial statements can be found on pages 14 through 17 of this report.

Notes to the Basic Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes can be found on pages 18 through 26 of this report.

Required Supplementary Information presents a budgetary comparison schedule for the General Fund to demonstrate compliance with the budget. Required supplementary information can be found on pages 27 through 28 of this report.

GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. Net position of the Park was $7,510,267 at the close of fiscal year 2022, compared with $7,962,162 as of June 30, 2021. #15..
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6 TUOLUMNE RIVER REGIONAL PARK
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
FOR THE YEAR ENDED JUNE 30, 2022
Statement of Net Position – Governmental Activities
2022 2021
Current and other assets $ 1,584,042 $ 514,228
Capital assets 7,166,897 7,525,853
Total assets 8,750,939 8,040,081
Current and other liabilities 55,708 77,919
Total liabilities 55,708 77,919
Deferred inflows of resources
Leases 1,184,964 -
Total deferred inflows of resources 1,184,964 -
Net position
Net investment in capital assets 7,166,897 7,525,853
Unrestricted 343,370 436,309
Total net position $ 7,510,267 $ 7,962,162
The largest portion of net position, $7,166,897, is made up of the Park’s net investment in capital assets. The Park uses these assets to provide its parks and recreation services; consequently, they are not available for future spending.

Current and other assets increased by $1,069,814 or 208.04% primarily due to a change in the reporting for lease receivables brought about by the implementation of GASB 87. The items included in the report identifies future revenue from cell tower leases in the Park.

The resulting unrestricted net position is $343,370. This amount is the balance at year-end which may be used to meet the Park’s ongoing obligations.

The Park’s net position decreased by $451,895 during the current fiscal year. #15..
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7 TUOLUMNE RIVER REGIONAL PARK
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
FOR THE YEAR ENDED JUNE 30, 2022
Statement of Activities – Governmental Activities
2022 2021
Revenues
Program revenues:

Charges for services $ 20,871 $ 24,059
Capital grants and contributions 18,035 195,336
Operating grants and contributions 408,800 385,526
General revenues:

Lease revenue 50,328 -
Interest revenue - leases 16,878 -
Other revenue 1,267 -
Investment earnings (loss) (6,732) (151)
Total revenues 509,447 604,770
Expenses
Parks and recreation 961,342 863,227
Change in net position (451,895) (258,457)
Net position, beginning of year 7,962,162 8,220,619
Net position, end of year $ 7,510,267 $ 7,962,162
The 2022 net position decreased by $451,895 which is mainly attributable to the overall decrease in grant revenue from capital projects. This can vary between fiscal years due to the number of projects that are active in the Park.

FINANCIAL ANALYSIS OF PARK FUNDS
As noted earlier, the Park uses fund accounting to ensure and demonstrate compliance with budgetary decisions.

Governmental funds. The parks and recreation function of the Park is recorded in the General and Capital Projects Funds. The focus of these governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Park’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of net resources available for spending at the end of the fiscal year.

At June 30, 2022, the Park’s governmental funds reported a combined fund balance of $310,278, an increase of $98,975 in comparison with the prior year.

The General Fund is the chief operating fund of the Park. At June 30, 2022, the General Fund had a fund balance of $58,183, a decrease of $5,070 from the prior year. This decrease can be attributed to an increase in expenses for the Park, primarily in tree maintenance and staff time to complete large cleanups of the Park due to the lack of use and/or misuse of the Park.

General and Capital Projects funds revenues totaled $701,361 in fiscal year 2022, an increase of $116,543 or 19.93% from fiscal year 2021. The following table presents the revenues from various sources as well as increases or decreases from the prior year.
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8 TUOLUMNE RIVER REGIONAL PARK
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
FOR THE YEAR ENDED JUNE 30, 2022
Revenues Classified by Source
Governmental Funds
Revenues by Source Amount
Percent of
Total Amount
Percent of
Total Amount Percent
Rents $ 20,871 2.98% $ 24,059 6.66% $ (3,188) -13.25%
Contributions by supporting agencies 408,800 58.29% 385,526 52.83% 23,274 6.04% Intergovernmental 209,949 29.93% 175,384 2.01% 34,565 19.71% Lease revenue 50,328 7.18% - 0.00% 50,328 0.00%
Interest revenue - leases 16,878 2.41% - 0.00% 16,878 0.00% Other (5,465) -0.79% 38.50% (151) (5,314) 3519.21%
$ 701,361 100.00% $ 584,818 100.00% 116,543 $ 19.93%
2022 2021 Change
The increase in revenues is mainly attributable to the increase of contributions by supporting agencies and lease revenue.

The following table presents expenditures by function compared to prior year amounts.

Expenditures by Function
Governmental Funds
Expenditures by Function Amount
Percent of
Total Amount
Percent of
Total Amount Percent
Parks and recreation $ 522,660 86.76% $ 417,348 63.87% $ 105,312 25.23% Capital Outlay 79,726 13.24% 236,038 36.13% (156,312) -66.22% $ 602,386 100.00% $ 653,386 100.00% $ (51,000) -7.81%
2022 2021 Change
Current expenditures for operations showed a decrease, primarily due to decreased project expenses (capital outlay) for the year, with a decrease in activity in active projects. Parks and Recreation expenses experienced an increase in expenses for the Park, primarily in tree maintenance and staff time to complete large cleanups of the Park due to the lack of use and/or misuse of the Park.
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9 TUOLUMNE RIVER REGIONAL PARK
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
FOR THE YEAR ENDED JUNE 30, 2022
The current year changes in fund balances as compared to the prior year are presented in the following table:

Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
2021
General
Fund
Capital
Projects
Fund
Total
Governmental
Funds
Total
Governmental
Funds
Revenues $ 491,412 $ 209,949 $ 701,361 $ 584,818
Expenditures (496,482) (105,904) (602,386) (653,386)
Changes in fund balances (5,070) 104,045 98,975 (68,568) Fund Balances,
Beginning of Year 63,253 148,050 211,303 279,871
Fund Balance,
End of Year $ 58,183 $ 252,095 $ 310,278 $ 211,303
2022
The fund balance of the Park’s General Fund decreased by $5,070 during the fiscal year, compared to the final budget anticipated decrease of $1,062. The key factor was an increase in expenses for maintenance. During the fiscal year, tree maintenance that had not been able to be completed in prior fiscal years was finished. In addition, in the prior fiscal year the park was often not reserved due to COVID related restrictions on organized used. With many of those restrictions lifted, ballfields, buildings and picnic areas were available resulting in an increase in staff costs to prepare for and clean up after reservations.

GENERAL FUND BUDGETARY HIGHLIGHTS
Actual revenues were higher than final budgetary estimates by $8,612. This is mainly attributable to a decrease in rental revenue, which was offset by an increase in contributions from supporting agencies. Actual expenditures were $13,682 higher than final budgetary estimates with a majority focused on maintenance of the Park. Large cleanups of the Park were necessary due to the lack of use and/or misuse of the Park during prior fiscal years, when the park had some closures due to COVID related restrictions.
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10 TUOLUMNE RIVER REGIONAL PARK
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
FOR THE YEAR ENDED JUNE 30, 2022

CAPITAL ASSETS
The Park’s net investment in capital assets as of June 30, 2022, amounted to $7,166,897 (net of accumulated depreciation). This investment in capital assets includes land, buildings and other improvements, and construction in progress. The investment in capital assets decreased by $358,956, or 4.8% over the prior year. The major components of this change were:

Depreciation expense $ (438,682)
Capital asset additions 79,822
Capital asset adjustments (96)
Total $ (358,956)
Additional information on the Park’s capital assets can be found in Note 4 on page 24 of this report.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
In early June 2022, the TRRP Commission approved a budget for FY 2022/23 that included ran increase in the contributions from Stanislaus County and City of Modesto. This budget does not include a contribution from the City of Ceres.

While it was anticipated for rental revenues to continue to recover during FY 2022/23 to pre-pandemic levels, in July 2022 a large fire heavily damaged the American Legion Hall in the Park. Currently, the damage to the hall is still being assessed and it is unknown if the Hall can be restored or if it will need to be demolished. It is anticipated that additional expenses will be incurred to secure the site during the current fiscal year, and that revenues will be less than expected due to loss of revenue for canceled reservations.

The City of Modesto’s Parks, Recreation, and Neighborhoods Department began a project to plan for the future development of the Park when the JPA of the City of Modesto, City of Ceres, and Stanislaus County adopted the Park Master Plan in December 2001. In April 2005, staff began work on the Precise Plan and the Finding of Conformance to the MEIR for the Gateway Parcel project, and in September 2005, the City Council approved the Precise Plan for the Gateway Parcel of the Park. Since then, three phases of restoration work, totaling approximately 63 acres, have been completed.

Staff and the Park Commission continue to seek funding from all appropriate grant sources. During the past few years, the Park received more than $6 million dollars in grant funding for projects such as the Carpenter Road Area (Bellenita) Soccer Complex, the River Pavilion and Learning Theatre at Legion Park, and the TRRP Riverwalk Trail from the Gateway Parcel to Neece Drive. During FY 2021/22, the Park received additional funding from the City of Modesto’s American Rescue Plan Act allocation in the amount of $750,000. This funding will be used for additional park maintenance and to complete projects such as the Park Master Plan Update, Security Cameras and other park renovations.

The three agencies that make up the Park’s JPA continue to work collaboratively to ensure that the vision for this urban river corridor becomes a reality.
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11 TUOLUMNE RIVER REGIONAL PARK
MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)
FOR THE YEAR ENDED JUNE 30, 2022

REQUESTS FOR MORE INFORMATION
This financial report is designed to provide a general overview of the Park’s finances for those interested in its finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of Modesto, Accounting Division, P.O. Box 642, Modesto, California 95353.
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The accompanying notes are an integral part of the financial statements. 12 TUOLUMNE RIVER REGIONAL PARK

STATEMENT OF NET POSITION
JUNE 30, 2022
Governmental
Activities
ASSETS
Cash and investments $ 345,400
Due from other governments 23,884
Lease receivable 1,214,758
Capital assets:

Nondepreciable 3,024,744
Depreciable, net 4,142,153
Total Assets 8,750,939

LIABILITIES
Accounts payable 55,708
Total Liabilities 55,708

DEFERRED INFLOWS OF RESOURCES
Leases 1,184,964
Total Deferred Inflows of Resources 1,184,964

NET POSITION
Net investment in capital assets 7,166,897
Unrestricted 343,370
Total Net Position $ 7,510,267
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The accompanying notes are an integral part of the financial statements. 13 TUOLUMNE RIVER REGIONAL PARK

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
Expenses Charges for Services
Capital Grants and
Contributions
Operating Grants
and Contributions Governmental Activities
$ 961,342 $ 20,871 $ 18,035 $ 408,800 $ (513,636)
$ 961,342 $ 20,871 $ 18,035 $ 408,800 (513,636)
Lease revenue 50,328
Interest revenue - leases 16,878
1,267
Investment earnings (loss) (6,732)
61,741
(451,895)
7,962,162
$ 7,510,267
Program Revenues
Net (Expense) and
Revenues and Changes
in Net Position
Net Position, Beginning of Year
Net Position, End of Year
Functions/Programs
Governmental Activities:

Parks and recreation
Total Governmental
Activities
General Revenues
Other revenue
Total General Revenues
Change in Net Position
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The accompanying notes are an integral part of the financial statements. 14 TUOLUMNE RIVER REGIONAL PARK
BALANCE SHEET – GOVERNMENTAL FUNDS
JUNE 30, 2022
General
Fund
Capital
Projects
Fund
Total
Governmental
Funds
ASSETS
Cash and investments $ 76,167 $ 269,233 $ 345,400
Due from other governments - 23,884 23,884
Lease receivable 1,214,758 - 1,214,758
Total Assets $ 1,290,925 $ 293,117 $ 1,584,042

LIABILITIES
Accounts payable $ 35,197 $ 20,511 $ 55,708
Unearned income 12,581 - 12,581
Total Liabilities 47,778 20,511 68,289

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - 20,511 20,511
Leases 1,184,964 - 1,184,964
Total Deferred Inflows of Resources 1,184,964 20,511 1,205,475

FUND BALANCE
Committed - 252,095 252,095
Unassigned 58,183 - 58,183
Total Fund Balances 58,183 252,095 310,278
Total Liabilities, Deferred Inflows of Resources,
and Fund Balances $ 1,290,925 $ 293,117 $ 1,584,042
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The accompanying notes are an integral part of the financial statements. 15 TUOLUMNE RIVER REGIONAL PARK
RECONCILIATION OF THE BALANCE SHEET – GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION
JUNE 30, 2022
Total Fund Balances - Governmental Funds $ 310,278
33,092
7,166,897
Net Position of Governmental Activities $ 7,510,267
Revenues not available for current-period expenditures are deferred in governmental funds, but are considered earned in the Statement of Net Position.

Capital assets used in governmental activities are not current assets or financial resources and, therefore, are not reported in the governmental funds.

Amounts reported for governmental activities in the Statement of Net Position are different from those reported in the governmental funds because of the following:
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The accompanying notes are an integral part of the financial statements. 16 TUOLUMNE RIVER REGIONAL PARK

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
General
Fund
Capital
Projects
Fund
Total Governmental
Funds

REVENUES
Rents $ 20,871 $ - $ 20,871
Operating grants and contributions 408,800 - 408,800
Intergovernmental - 209,949 209,949
Lease revenue 50,328 - 50,328
Interest revenue - leases 16,878 - 16,878
Investment earnings (loss) (6,732) - (6,732)
Other 1,267 - 1,267
Total Revenues 491,412 209,949 701,361

EXPENDITURES
Contractual services 481,209 26,178 507,387
Materials and supplies 1,635 - 1,635
Insurance and taxes 13,638 - 13,638
Capital outlay - 79,726 79,726
Total Expenditures 496,482 105,904 602,386
Net Change in Fund Balances (5,070) 104,045 98,975
Fund Balances, Beginning of Year 63,253 148,050 211,303 Fund Balances, End of Year $ 58,183 $ 252,095 $ 310,278 #15..
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The accompanying notes are an integral part of the financial statements. 17 TUOLUMNE RIVER REGIONAL PARK

RECONCILIATION OF THE CHANGES IN FUND BALANCES OF THE GOVERNMENTAL FUNDS WITH THE CHANGE

IN NET POSITION OF GOVERNMENTAL ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
Net change in fund balances of the Governmental Funds $ 98,975 (191,914)
Capital outlay expenditures 79,726
Depreciation expense (438,682)
Net capital outlay (depreciation) expenditures (358,956) Change in Net Position of Governmental Activities $ (451,895) Revenues earned in the Statement of Activities in a previous year that did not provide current financial resources in that year were not reported as revenue in the governmental funds until they provided current financial resources this year.

Governmental funds report capital outlay expenditures. However, in the Statement of Activities, the cost of those assets are capitalized and allocated over their estimated useful lives and reported as depreciation expense.

Amounts reported for governmental activities in the Statement of Activities are different from those reported in the governmental funds because of the following:
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TUOLUMNE RIVER REGIONAL PARK

NOTES TO FINANCIAL STATEMENTS
18 NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization: Tuolumne River Regional Park (the Park) was founded in 1972 by an agreement between the County of Stanislaus (the County) and the cities of Modesto and Ceres (the Cities). The agreement provides for financing, development, and maintenance of the Park facilities. The Park includes approximately 180 developed and 330 undeveloped acres with group picnic areas, play equipment lots, ballfields, and Legion Hall. Rent is generated from public use of these facilities. The County and Cities provide additional operating funds. The Park is governed by the Tuolumne River Regional Park Committee, which consists of two members of the County’s Board of Supervisors, two members of the City of Modesto’s City Council, and one member of the City of Ceres’ City Council. Financial transactions initiated by the Park are processed and accounted for by the City of Modesto’s financial system.

Reporting Entity: The Park’s financial statements include the accounts of all Park operations. The criteria for including organizations as component units within the Park’s reporting entity, as set forth in Section 2100 of the Governmental Accounting Standards Board’s (GASB) Codification of Government Accounting and Financial Reporting Standards, include whether:
• the Park is legally separate (can sue and be sued in their own name). • the Park holds the corporate powers of the organization. • the Park appoints a voting majority of the organization’s board. • the Park can impose its will on the organization.
• there is fiscal dependency by the organization on the Park based on the criteria that the Park has no component units.

Measurement Focus, Basis of Accounting and Financial Statement Presentation: The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the Park’s activities. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by contributions, rents, and intergovernmental revenues. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues.

Direct expenses are those that are clearly identifiable with a specific function or segment.

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.

The Statement of Activities demonstrates the degree to which the direct expenses are offset by program revenues.

Direct expenses are those that are clearly identifiable with the parks and recreation function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by the parks and recreation function and 2) grants and contributions that are restricted to meeting the operational requirements of the parks and recreation function. Revenues that are not classified as program revenues, including investment earnings and other revenues, are reported as general revenues. Separate financial statements are provided for governmental funds. #15..
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TUOLUMNE RIVER REGIONAL PARK
NOTES TO FINANCIAL STATEMENTS (continued)
19 NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Measurement Focus, Basis of Accounting and Financial Statement Presentation (continued): Governmental fund financial statements (i.e., Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balances) are reported using the current financial resources measurement focus and the modified accrual basis of accounting.

Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period.

For this purpose, the Park considers revenues to be available if they are collected within 180 days of the end of the current fiscal period. Interest on invested funds is recognized when earned. Intergovernmental revenues that are reimbursements for specific expenditures are recognized when all eligibility requirements are met. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.

Major individual governmental funds are reported as separate columns in the fund financial statements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The Park reports two major governmental funds:

The General Fund is the primary operating fund and accounts for all financial resources of the Park.

The Capital Projects Fund is used to account for financial resources restricted for specific purposes.

The Park adopts annual appropriated budgets for its General Fund, which is a major fund. A budgetary comparison schedule has been provided for this fund to demonstrate compliance with these budgets. The budgetary comparison schedule is presented on a budgetary basis which differs from generally accepted accounting principles in the method of accounting for accruals and encumbrances.

Budget: The budget for the General Fund is prepared on the cash and expenditures/encumbrances basis. Revenues are budgeted in the year receipt is expected; expenditures, which include encumbrances, are budgeted in the year that the applicable warrant requisitions are expected to be issued.

Annual budget requests are submitted by the Park’s staff to the Park’s Board of Directors for review. After public hearing, a budget is approved by the Park’s Board of Directors, with a resolution adopting said budget. Copies of the approved budget are sent to all required agencies.

Cash and Investments: The Park maintains its cash account with the City of Modesto as part of the cash and investment pool. The City of Modesto is restricted by Government Code Section 53635 pursuant to Section 53601 to invest in time deposits, U.S. government securities, state registered warrants, notes or bonds, State Treasurer’s investment pool, bankers’ acceptances, commercial paper, negotiable certificates of deposit, and repurchase or reverse repurchase agreements.

In accordance with GASB Statement No. 43, Accounting and Financial Reporting for Certain Investments and External Investment Pools, investments held by the City of Modesto are stated at fair value. The fair value of pooled investments is determined monthly and is based on current market prices received from the securities custodian.

The balance available for withdrawal is based on the accounting records maintained by the City of Modesto. #15..
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TUOLUMNE RIVER REGIONAL PARK
NOTES TO FINANCIAL STATEMENTS (continued)
20 NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Due From Other Governments: Grant revenues and contributions are recorded as receivables in the funds when they are susceptible to accrual (i.e. when all eligibility requirements have been met and deemed available per the Park’s revenue recognition policies) and not yet received as of year-end. The total amount due from governments for grants and contributions at June 30, 2022 is $23,884. Management believes all amounts are fully collectible, and as such no allowance has been recorded against the due from other governments balance as of June 30, 2022. Additionally, there was no allowance for doubtful accounts.

Capital Assets: Capital assets acquired are recorded at cost or estimated cost where cost is not available. Donated or contributed capital assets are recorded at estimated fair value on the date received. Capital assets are defined by the Park as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. The costs of normal maintenance and repairs are charged to operations as incurred. Improvements are capitalized and depreciated over the remaining useful lives of the related capital assets, as applicable.

Depreciation of capital assets is computed using the straight-line method applied over the estimated useful lives of the assets as follows:

Buildings: 30 Years
Improvements: 20 Years
Deferred Outflows and Inflows of Resources: Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the Park recognizes deferred outflows and inflows of resources.

In addition to assets, the Statements of Net Position will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net position by the Park that is applicable to a future reporting period.

In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net position by the Park that is applicable to a future reporting period. Deferred inflows reported by the Park consist of unearned deferred assessments that have been billed as of year-end, but not collected.

Risk Management: The Park is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Park participates in the City of Modesto’s insurance pool to mitigate the risk of loss and contributes its pro-rata share of estimated losses. The City of Modesto’s insurance pool does not maintain separate records for estimated outstanding liabilities, including incurred but not reported claims. Refer to the City of Modesto’s Annual Comprehensive Financial Report for further information related to the insurance pool. Additional insurance is purchased for special events when certain Park facilities are rented to the public.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Lease Receivable: The Park’s lease receivable is measured at the present value of lease payments expected to be received during the lease term. There are no variable components under the lease agreement. A deferred inflow of resources is recorded for the lease. The deferred inflow of resources is recorded at the initiation of the lease in an amount equal to the initial recording of the lease receivable. The deferred inflow of resources is amortized on a straight-line basis over the term of the lease.
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TUOLUMNE RIVER REGIONAL PARK
NOTES TO FINANCIAL STATEMENTS (continued)
21 NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Net Position: Net position represents the residual interest in the Park’s assets after liabilities are deducted. In accordance with GASB Statement No. 63, the fund equity section on the Statement of Net Position was combined to report total net position and present it in three broad components:

Net investment in capital assets – Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets.

Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature.

Unrestricted – Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.

When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.

Nonspendable – Amounts that are not in spendable form (such as inventory) or are required to be maintained intact. The Park did not have any nonspendable resources as of June 30, 2022.

Restricted – Amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation. The Park did not have any restricted resources as of June 30, 2022.

Committed – Amounts constrained to specific purposes by the Park itself, using its highest level of decisionmaking authority (Park’s Commission). To be reported as committed, amounts cannot be used for any other purpose unless the Park’s Commission takes the same highest-level action to remove or change the constraint.

The Park had $252,095 as committed resources as of June 30, 2022.

Assigned – Amounts the Park intends to use for a specific purpose. Intent can be expressed by the Park or by an official or body to which the Board of Supervisors delegates the authority. The Park did not have any assigned resources as of June 30, 2022.

Unassigned – Amounts that are available for any purpose. $58,183 of the Park’s resources were considered unassigned as of June 30, 2022.

In circumstances when an expenditure is incurred for which restricted, committed, assigned, or unassigned fund balances are available, the Park considers amounts to have been spent first out of restricted funds then committed funds, and finally assigned and unassigned funds, as needed, unless the Park Board has provided otherwise in its commitment or assignment actions.
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TUOLUMNE RIVER REGIONAL PARK
NOTES TO FINANCIAL STATEMENTS (continued)
22 NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Governmental Accounting Standards Update: During the year ending June 30, 2022, the Park implemented the following standards:

GASB Statement No. 87 – Leases. The requirements of this statement are effective for reporting periods beginning after December 15, 2019. Subsequent to issuance, GASB Statement No. 95 postponed the requirements of this statement to reporting periods beginning after June 15, 2021.

GASB Statement No. 92 – Omnibus 2020. The requirements of this statement are effective for reporting periods beginning after June 15, 2020. Subsequent to issuance, GASB Statement No. 95 postponed the requirements of this statement to June 15, 2021.

GASB Statement No. 97 – Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. The requirements of this statement are effective for reporting periods beginning after June 15, 2021.

GASB Statement No. 98 – The Annual Comprehensive Financial Report. The requirements of this statement are effective for reporting periods beginning after December 15, 2021.

Released GASB Statements to be implemented in future financial statements are as follows:

GASB Statement No. 91 – Conduit Debt Obligations. The requirements of this statement are effective for reporting periods beginning after December 15, 2020. Subsequent to issuance, GASB Statement No. 95 postponed the requirements of this statement to reporting periods beginning after December 15, 2021.

GASB Statement No. 93 – Replacement of Interbank Offered Rates. The requirements of this statement are effective for reporting periods beginning after June 15, 2021. Subsequent to issuance, GASB Statement No. 95 postponed the certain requirements of this statement to reporting periods beginning after June 15, 2022.

GASB Statement No. 94 – Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The requirements of this statement are effective for reporting periods beginning after June 15, 2022.

GASB Statement No. 96 – Subscription-Based Information Technology Arrangements. The requirements of this statement are effective for reporting periods beginning after June 15, 2022.

GASB Statement No. 99 – Omnibus 2022. The requirements of this statement are effective for reporting periods beginning after June 15, 2022.

GASB Statement No. 100 – Accounting Changes and Error Corrections. The requirements of this statement are effective for reporting periods beginning after June 15, 2023.

GASB Statement No. 101 – Compensated Absences. The requirements of this statement are effective for reporting periods beginning after December 15, 2023.

Subsequent Events: In compliance with accounting standards, management has evaluated events that have occurred after year-end to determine if these events are required to be disclosed in the financial statements. Management has determined that the event noted in Note 10 requires disclosure in accordance with accounting standards. These subsequent events have been evaluated through November 15, 2022, which is the date the financial statements were available to be issued.
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TUOLUMNE RIVER REGIONAL PARK
NOTES TO FINANCIAL STATEMENTS (continued)
23 NOTE 2 – CASH AND INVESTMENTS
Cash and investments of the Park are pooled with other City of Modesto funds. Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance.

Credit quality ratings are not available for the Park’s investments as all cash is invested as part of the common cash and investment pool of the City of Modesto. Cash in the City Pool is considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The Park does not have any deposits with financial institutions as of June 30, 2022.

Cash and investments as of June 30, 2022 are classified in the accompany financial statements as follows:

Statement of Net Position:

Cash and investments $ 345,400
Total cash and investments $ 345,400
Summary of Deposits:

Cash and investments as of June 30, 2022 consist of the following:
$ 345,400
Total cash and investments $ 345,400
Deposits with City of Modesto
Cash and investments pool
Detailed information concerning the City of Modesto’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City of Modesto’s Annual Comprehensive Financial Report. As of June 30, 2022, the fair value of the Park’s position in the pool is the same as the value of its pool shares.

NOTE 3 – LEASE RECEIVABLE
On December 7, 2020, the Park (the lessor) and Vertical Bridge Development, LLC (the lessee) entered into a land lease agreement for the purpose of erecting, installing, operating, and maintaining radio and communications facilities. The initial lease term will be for five years with a monthly rental payment of $2,000 and $250 for each additional broadband carrier. The lease agreement will automatically renew for five additional five-year terms (extension term). Monthly rent will increase by 2% annually on each anniversary of the commencement date. Lease revenue recognized under the lease agreement was $14,582 for the year ended June 30, 2022. Interest revenue recognized under the lease agreement was $10,467 for the year ended June 30, 2022.

On April 16, 2015, the Park (the lessor) and Sacramento-Valley Limited Partnership, d/b/a Verizon Wireless (the lessee) entered into a land lease agreement for the purpose of constructing, maintaining, repairing, and operating a communications facility. The initial lease term will be for five years with a monthly rental payment of $1,700. The lease agreement will automatically renew for four additional five-year terms (extension term). Monthly rent will increase by 2.5% annually on each anniversary of the commencement date. Lease revenue recognized under the lease agreement was $35,746 for the year ended June 30, 2022. Interest revenue recognized under the lease agreement was $6,411 for the year ended June 30, 2022.
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TUOLUMNE RIVER REGIONAL PARK
NOTES TO FINANCIAL STATEMENTS (continued)
24 NOTE 3 – LEASE RECEIVABLE (continued)
Future minimum lease and interest payments to be received are as follows:

Year Ending
June 30 Principal Interest Total
2023 $ 30,259 $ 18,016 $ 48,275
2024 31,798 17,552 49,350
2025 33,381 17,063 50,444
2026 35,017 16,552 51,569
2027 36,708 16,015 52,723
2028-2032 210,719 71,096 281,815
2033-2037 261,176 53,478 314,654
2038-2042 233,583 33,163 266,746
2043-2047 167,193 19,689 186,882
2048-2052 174,924 6,053 180,977
$ 1,214,758 $ 268,677 $ 1,483,435
NOTE 4 – CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2022, was as follows:

Beginning Balance Additions
Deletions/
Adjustments Ending Balance
Capital assets, not being depreciated:

Land $ 2,528,566 $ - -$ $ 2,528,566
Construction in progress 416,452 79,822 (96) 496,178
Total capital assets not being depreciated 2,945,018 79,822 (96) 3,024,744 Capital assets, being depreciated:

Buildings 455,935 - - 455,935
Improvements 10,689,250 - - 10,689,250
Total capital assets, being depreciated 11,145,185 - - 11,145,185 Less accumulated depreciation for:

Buildings (420,526) (1,424) - (421,950)
Improvements (6,143,824) (437,258) - (6,581,082)
Total accumulated depreciation (6,564,350) (438,682) - (7,003,032) Total capital assets, being depreciated, net 4,580,835 (438,682) - 4,142,153 Capital assets, net $ 7,525,853 $ (358,860) $ (96) $ 7,166,897 Depreciation expense for the year ended June 30, 2022 was $438,682. #15..
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TUOLUMNE RIVER REGIONAL PARK
NOTES TO FINANCIAL STATEMENTS (continued)
25 NOTE 5 – RELATED PARTY TRANSACTIONS
The Park reimburses the City of Modesto for administrative and other costs incurred by the City of Modesto on the Park’s behalf. During the 2022 fiscal year, contractual service expenditures included $136,763 of the City of Modesto’s payroll costs that were allocated to the Park.

NOTE 6 – INTERFUND TRANSACTIONS
Interfund transactions are reported as either loans, services provided, reimbursements, or transfers. Loans are reported as interfund receivables and payables, as appropriate, and are subject to elimination upon consolidation.

Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Reimbursements occur when a fund incurs a cost, charges the appropriate benefitting fund, and reduces its related costs as a reimbursement. All other interfund transactions are treated as transfers. Transfer amounts of governmental or proprietary funds are netted as part of the reconciliation to the government-wide financial statements.

The Park had no transfers in/transfers out for the year ended June 30, 2022.

NOTE 7 – DEFICIENCY OF EXPENDITURES OVER APPROPRIATIONS For the year ended June 30, 2022, expenditures exceeded appropriations as follows:

Expenditures Amount
General Fund:

Contractual services $ (14,174)
Materials and supplies (135)
NOTE 8 – CONTINGENCIES
Coronavirus Pandemic: Management has determined the events regarding the novel coronavirus (COVID-19) require disclosure in accordance with accounting standards. On March 4, 2020, Governor Newsom issued an emergency proclamation declaring a State of emergency in California due to COVID-19. The COVID-19 outbreak is ongoing, and the ultimate geographic spread of the virus, the duration and severity of the outbreak and the economic and other actions that may be taken by governmental authorities to contain the outbreak or to treat its impact are uncertain.

A vaccination has been created and is being administered throughout the State, including the Park’s service area.

The ultimate impact of COVID-19 on the operations and finances of the Park is unknown.

NOTE 9 – CHANGE IN ACCOUNTING PRINCIPLE
GASB Statement No. 87, Leases, establishes specific criteria used to account for contracts that meets the definition of a lease. Implementation of GASB Statement No. 87 requires lessee to recognize a lease liability and an intangible right-to-use asset, and lessor to recognize a lease receivable and a deferred inflow of resources. The Statement is to enhance the relevance and consistency of information about governments’ leasing activities.

As of June 30, 2022, the District had two leases that meets the criteria of GASB Statements No. 87 and the Park has implemented the Statement accordingly. The Statement is applied retroactively and the financial statements are restated for all prior periods presented. As of June 30, 2022, the Park recognized a lease receivable of $1,214,758 and deferred inflow of resources of $1,184,964 for the leases in which the Park is a lessor. #15..
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TUOLUMNE RIVER REGIONAL PARK
NOTES TO FINANCIAL STATEMENTS (continued)
26 NOTE 10 – SUBSEQUENT EVENT
On July 21, 2022, a fire severely damaged the American Legion Hall (the Hall) that is located in the Park. It is anticipated the remaining structure cannot be repaired and will need to be completely removed. The fire remains under investigation, though investigators have said it may have been started by a homeless individual. The Hall is currently unusable and all future event reservations have been canceled.

The Hall is the main source of room rental income for the Park, which totaled approximately $14,000 in FY22. It is anticipated the Park will receive close to $2 million related to the insurance claim for the Hall. There will also be up to $500,000 in expenses to clean up and demolish the building. There has not been a decision made on the future of the Hall, whether it should be rebuilt or not.
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TUOLUMNE RIVER REGIONAL PARK

REQUIRED SUPPLEMENTARY INFORMATION
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27 TUOLUMNE RIVER REGIONAL PARK
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – GENERAL FUND – BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Original Final

REVENUES
Rents $ 74,000 $ 74,000 $ 20,871
Operating grants and contributions 408,800 408,800 408,800 Lease revenue - - 50,328
Interest revenue - leases - - 16,878
Investment earnings (loss) - - (6,732)
Other - - 1,267
Total Revenues 482,800 482,800 491,412

EXPENDITURES
Contractual services 467,055 467,035 481,209
Materials and supplies 1,500 1,500 1,635
Insurance and taxes 21,145 14,265 13,638
Total Expenditures 489,700 482,800 496,482

OTHER FINANCING SOURCES (USES)
Transfers out - (1,062) -
Total Other Financing Sources (Uses) - (1,062) -
Changes in Fund Balance $ (6,900) $ (1,062) (5,070)
Fund Balance, Beginning of Year 63,253
Fund Balance, End of Year $ 58,183
8,612
Budgeted Amounts
Actual Amounts
Variance With
Final Budget
1,267
-
$ (53,129)
(6,732)
50,328
16,878
$ (6,132)
(14,174)
(135)
627
(13,682)
(1,062)
(1,062)
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TUOLUMNE RIVER REGIONAL PARK

NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
28 NOTE 1 – BUDGETS AND BUDGETARY ACCOUNTING
Tuolumne River Regional Park (the Park) operates under the general laws of the State of California and annually adopts a budget for its General Fund to be effective July 1 the ensuing fiscal year. The budget must be approved by each of the legislative bodies of the parties to the joint powers agreement. From the effective date of the budget, which is adopted and controlled at the fund level, the amounts stated therein as proposed expenditures become appropriations. The Park may amend the budget by approval from each of the legislative bodies of the parties to the agreement during the fiscal year. The budget for the General Fund is prepared on the cash and expenditures/encumbrance basis. Revenues are budgeted in the year receipt is expected; expenditures, which include encumbrances, are budgeted in the year that the applicable warrant requisitions are expected to be issued.

There were no encumbrances outstanding as of June 30, 2022, so the actual budgetary-basis expenditures are the same as the actual GAAP-basis expenditures.
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7473 N. INGRAM AVE., SUITE 102 ⬧ FRESNO, CA 93711
_______________________________________________________________________________________________ P (559) 412-7576 ⬧ F (559) 493-5325 ⬧ WWW.HHCCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE

AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS
To the Tuolumne River Regional Park Commission,
The Board of Supervisors of the County of Stanislaus, California, and The City Councils of Modesto and Ceres, California
Tuolumne River Regional Park
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund of the Tuolumne River Regional Park (the Park) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the Park’s basic financial statements, and have issued our report thereon dated November 15, 2022.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Park’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Park’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Park’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
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30 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Park’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.

However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Park’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Park’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

HUDSON HENDERSON & COMPANY, INC.

Fresno, California
November 15, 2022
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31 TUOLUMNE RIVER REGIONAL PARK

SCHEDULE OF FINDINGS AND RESPONSES
FOR THE YEAR ENDED JUNE 30, 2022
There were no current year financial statement findings to be reported in accordance with Government Auditing Standards.
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32 TUOLUMNE RIVER REGIONAL PARK

SCHEDULE OF PRIOR YEAR FINDINGS AND RESPONSES
FOR THE YEAR ENDED JUNE 30, 2021
Finding 2021-001 – Significant Deficiency
Accounts Payable Cutoff Procedures
Criteria:

Tuolumne River Regional Park (the Park) should design and implement internal controls over the accounts payable year end accrual process to ensure that balances can be vouched, tested, and presented in accordance with generally accepted accounting principles (GAAP).

Condition:

Per testing performed over subsequent disbursements, we noted expenditures for goods and services that were incurred prior to the end of the fiscal year that were not properly recorded in the correct accounting period. This resulted in material adjustments to accrue those expenses as accounts payable as of the fiscal year-end.

Cause of Condition:

The Park lacked a proper cut-off financial closing procedure that identified all payables that should be recorded back in the current fiscal year.

Effect of Condition:

This resulted in expenditures not being accrued or posted to the correct fiscal year and thus a material audit adjustment was recorded.

Recommendation:

We recommend that the Park implement and develop, as part of the year-end closing procedures, a process to review subsequent disbursements to identify those disbursements that were incurred in the previous fiscal year.

Management’s Response:

The City, Financial Analyst III, assigned to the Park will coordinate regular meetings with Park Management staff, to request updates on outstanding invoices to ensure all invoices outstanding after the end of the fiscal year are accrued back to the proper fiscal year. Financial Analyst in coordination with Park Management staff will analyze the payment history for all vendors to confirm there are no missing invoices. Additional training and guidance will be provided by the Accounting Manager to department staff on how to address outstanding invoices which may have charges in dispute that prevent timely payment prior to the end of the fiscal year or shortly after.

Current Year Status:

Implemented
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33 TUOLUMNE RIVER REGIONAL PARK
SCHEDULE OF PRIOR YEAR FINDINGS AND RESPONSES (continued) FOR THE YEAR ENDED JUNE 30, 2021
Finding 2021-002 – Significant Deficiency
Accounts Receivable/Revenue Procedures
Criteria:

Tuolumne River Regional Park (the Park) should design and implement internal controls over the accounts receivable year end accrual process to ensure that balances can be vouched, tested, and presented in accordance with generally accepted accounting principles (GAAP).

Condition:

During our fieldwork, we noted the Park did not have adequate procedures to accurately report accounts receivable balances and revenues as of year-end and for the year then ended. The procedures currently in place did not ensure the year-end account balances were accurately presented for revenues, receivables, and unearned revenues, including the reconciliation of funds to be available within the proper revenue recognition period; resulting in material audit adjustments to reconcile these balances.

Cause of Condition:

Internal controls have not been suitably designed and implemented over the accounts receivable closing process to ensure current year revenues, receivables, and unearned revenue accurately reflect current year activity in accordance with the modified accrual basis of accounting, which resulted in current year balances of revenue, receivables, and unearned revenue to be incorrect prior to the start of the audit.

Effect of Condition:

Revenues and receivables not properly stated in accordance with GAAP resulted in material audit adjustments of current year revenues, receivables, and unearned revenues.

Recommendation:

We recommend that the Park implement stronger policies and closing procedures over revenue recognition and deferrals as part of the year-end closing procedures. This should include training and assistance in the original posting of entries to allow ease of reconciliation and reporting for the financial reporting process.

Management’s Response:

Additional training and guidance will be provided by the Accounting Manager to staff responsible for accounting for the revenues, receivables and unearned revenues for the Park. The Financial Analyst responsible for the year-end revenue accrual and deferral processes will be required to update the year-end check list to address the analysis of all outstanding receivable balances, revenue recognition and deferrals as of the end of the fiscal year.

Current Year Status:

Implemented.
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CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS

FINANCIAL STATEMENTS
WITH
INDEPENDENT AUDITORS’ REPORT

FOR THE YEAR ENDED
JUNE 30, 2022
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TABLE OF CONTENTS
Page
Independent Auditors’ Report.......................................................................................................................... 1 Basic Financial Statements:

Fund Financial Statements:

Balance Sheet – Local Transportation Special Revenue Funds................................................................. 4 Statement of Revenues, Expenditures, and Changes in Fund Balances Local Transportation Special Revenue Funds ......................................................................................... 5 Statement of Net Position – Bus Enterprise Fund .................................................................................... 6 Statement of Revenues, Expenses, and Changes in Fund Net Position Bus Enterprise Fund................................................................................................................................ 7 Statement of Cash Flows – Bus Enterprise Fund ...................................................................................... 8 Notes to the Financial Statements ........................................................................................................... 10 Other Reports:

Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and the Transportation Development Act ................................................................................................................... 18 #15..
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7473 N. INGRAM AVE., SUITE 102 ⬧ FRESNO, CA 93711
_______________________________________________________________________________________________ P (559) 412-7576 ⬧ F (559) 493-5325 ⬧ WWW.HHCCPAS.COM
INDEPENDENT AUDITORS’ REPORT
To the Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, business activities and major funds of the Local Transportation Special Revenue Funds and the Bus Enterprise Fund (collectively known as the Transportation Development Act Funds) of the City of Modesto, California (the City) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the Transportation Development Act Funds basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business activities and major funds of the Transportation Development Act Funds, as of June 30, 2022, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Transportation Development Act Funds and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter
As discussed in Note 1, the financial statements of the Transportation Development Act Funds of the City are intended to present the financial position, the changes in financial position, and, where applicable, cash flows of only that portion of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City that is attributable to the transactions of the Transportation Development Act Funds. They do not purport to, and do not present fairly the financial position of the City as of June 30, 2022, the changes in its financial position, or, where applicable, its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

Other Matters
The financial statements include summarized prior-year comparative information. Such information does not include all of the information required or sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the financial statements for the year ended June 30, 2021, from which such summarized information was derived. We have previously audited the 2021 financial statements, and we expressed an unmodified audit opinion on the financial statements in our report dated November 24, 2021. #15..
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2 In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2021, is consistent, in all material respects, with the audited financial statements from which it has been derived.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Transportation Development Act Funds’ ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Transportation Development Act Funds’ internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Transportation Development Act Funds’ ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information
Management has omitted management’s discussion and analysis (MD&A) and the respective budgetary comparison schedules for the special revenue funds that accounting principles generally accepted in the United States of America require to be presented to supplement the financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.
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3 Other Reporting Required by Government Auditing Standards and the Transportation Development Act In accordance with Government Auditing Standards, we have also issued our report dated November 8, 2022, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters as it relates to the Transportation Development Act Funds. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance as it relates to the Transportation Development Act Funds.

That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance as it relates to the Transportation Development Act Funds.

HUDSON HENDERSON & COMPANY, INC.

Fresno, California
November 8, 2022
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The accompanying notes are an integral part of the financial statements. 4 CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS

BALANCE SHEET - LOCAL TRANSPORTATION SPECIAL REVENUE FUNDS JUNE 30, 2022
(with comparative totals as of June 30, 2021)
NonMotorized
Streets
and Roads 2022 2021
ASSETS
Cash and investments $ 1,496,567 $ 238,274 $ 1,734,841 $ 1,467,398 Interest receivable - - - 2,454
Due from other governments - - - 189,759
Total Assets $ 1,496,567 $ 238,274 $ 1,734,841 $ 1,659,611

LIABILITIES
Unearned revenue $ 1,494,791 $ 238,274 $ 1,733,065 $ 1,657,835

FUND BALANCES
Restricted 1,776 - 1,776 1,776
Total Liabilities and
Fund Balances $ 1,496,567 $ 238,274 $ 1,734,841 $ 1,659,611 Totals
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The accompanying notes are an integral part of the financial statements. 5 CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

LOCAL TRANSPORTATION SPECIAL REVENUE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(with comparative totals for the year ended June 30, 2021) NonMotorizedStreets
and Roads 2022 2021

REVENUES
Intergovernmental:

Local transportation funds $ 1,101 $ 427,374 $ 428,475 $ 286,083 Interest 665 - 665 11,898
Change in fair value of investments - - - (12,094)
Other - - - 14
Total Revenues 1,766 427,374 429,140 285,901

EXPENDITURES
Maintenance and supplies 1,058 - 1,058 330
Total Expenditures 1,058 - 1,058 330
Excess (Deficiency) of Revenues
Over (Under) Expenditures 708 427,374 428,082 285,571

OTHER FINANCING SOURCES (USES)
Transfers:

Out to other funds of the City (708) (427,374) (428,082) (285,569) Total Other Financing
Sources (Uses) (708) (427,374) (428,082) (285,569)
Changes in fund balances - - - 2
Fund Balances, Beginning of Year 1,776 - 1,776 1,774
Fund Balances, End of Year $ 1,776 -$ $ 1,776 $ 1,776
Totals
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The accompanying notes are an integral part of the financial statements. 6 CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS
STATEMENT OF NET POSITION – BUS ENTERPRISE FUND
JUNE 30, 2022
(with comparative totals as of June 30, 2021)
2022 2021
ASSETS
Current Assets:

Cash and investments $ - $ 8,265,827
Accounts receivable - 304,695
Interest receivable - 19,897
Prepaid expenses - 5,582
Due from other governments - 9,540,773
Total Current Assets - 18,136,774
Noncurrent Assets:

Capital assets:

Land and construction in progress - 6,852,312
Other capital assets, net - 33,787,902
Total Noncurrent Assets - 40,640,214
Total Assets - 58,776,988

DEFERRED OUTFLOWS OF RESOURCES
Deferred OPEB - 108,362
Deferred pensions - 475,530
Total Deferred Outflows of Resources - 583,892

LIABILITIES
Current Liabilities:

Accounts payable - 3,400,202
Accrued salaries and benefits - 88,159
Advances from other funds - 471,416
Unearned revenue other - 45,361
Unearned revenue CALEMA - 117,245
Unearned revenue capital transit - 6,486,649
Unearned revenue LTF/LCTOP - 5,621,643
Total Current Liabilities - 16,230,675
Noncurrent Liabilities:

Net pension liability - 3,861,752
Net OPEB liability - 466,582
Total Noncurrent Liabilities - 4,328,334
Total Liabilities - 20,559,009

DEFERRED INFLOWS OF RESOURCES
Deferred OPEB - 24,443
Deferred pensions - 13,869
Total Deferred Inflows of Resources - 38,312

NET POSITION
Net investment in capital assets - 40,640,214
Unrestricted - (1,876,655)
Total Net Position $ - $ 38,763,559
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The accompanying notes are an integral part of the financial statements. 7 CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS

STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN FUND NET POSITION – BUS ENTERPRISE FUND
FOR THE YEAR ENDED JUNE 30, 2022
(with comparative totals for the year ended June 30, 2021) 2022 2021

OPERATING REVENUES
Charges for services $ - $ 1,118,636
Miscellaneous - 505,531
Total Operating Revenues - 1,624,167

OPERATING EXPENSES
Contractual services - 17,392,463
Depreciation - 3,479,732
Maintenance and supplies - 3,389,110
Salaries and wages - 1,665,914
Administrative services - 1,850,804
Employee benefits - 787,615
Allocated indirect administrative costs - 375,632
Utilities - 197,821
Insurance - 43,573
Other - 137,652
Total Operating Expenses - 29,320,316
Operating Loss - (27,696,149)

NONOPERATING REVENUES (EXPENSES)
Intergovernmental:

Local transportation funds - 9,152,886
Federal transit administration - 15,974,448
Proposition 1B - 251,011
CMAQ grants - 49,768
Low carbon transit operations program - 323,940
Other - 112,283
Gain (loss) on disposition of capital assets - (258,570) Interest income (loss) - (2,421)
Rental income - 135,914
Change in fair value of investments - (103,414)
Total Nonoperating Revenues (Expenses) - 25,635,845
Income (Loss) Before Capital Contributions, transfers & special items - (2,060,304)
Capital contributions and transfers:

Local transportation funds - 2,462,281
Federal transit administration - 2,979,321
Low carbon transit operations program - (62,756)
Transfers in from other funds of the City - 29,516
Transfers out to other funds of the City (19,328,677) (2,107,313) Total capital contributions and transfers (19,328,677) 3,301,049 SPECIAL ITEM:

Loss on transfer of operations (19,461,712) -
Change in net position (38,790,389) 1,240,745
Prior Period Adjustment 26,830 -
Net Position, Beginning of Year 38,763,559 37,522,814
Net Position, End of Year $ 38,763,559 - $
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The accompanying notes are an integral part of the financial statements. 8 CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS
STATEMENT OF CASH FLOWS – BUS ENTERPRISE FUND
FOR THE YEAR ENDED JUNE 30, 2022
(with comparative totals for the year ended June 30, 2021) 2022 2021

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and users $ 304,695 $ 1,426,891 Payments to suppliers (3,394,620) (22,936,570)
Payments to employees (88,159) (1,183,952)
Net Cash Used in Operating Activities (3,178,084) (22,693,631)

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Cash receipts/(payments) from grants:

Local transportation funds (4,569,276) 12,911,800
State transit assistance - -
Federal transit administration 49,127 12,586,432
CMAQ grant for rideshare program - 49,768
Low carbon transit operations program - 323,940
Other (89,998) (6,750,955)
Transfers in from other funds of the City - 29,516
Transfers out to other funds of the City (26,077) (2,107,313) Advances from other funds of the City (471,416) 471,416 Net Cash Provided (used) by Noncapital Financing Activities (5,107,640) 17,514,604

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition and construction of capital assets - (5,488,844) Capital contributions:

Local transportation funds - 2,462,281
Federal transit administration - 2,979,321
Low carbon transit operations program - (62,756)
Net Cash Used in Capital and Related
Financing Activities - (109,998)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment earnings (loss) 19,897 (86,526)
Rental income received - 135,914
Net Cash Provided by Investing Activities 19,897 49,388 Change in cash and investments (8,265,827) (5,239,637)
Cash and Investments, Beginning of Year 8,265,827 13,505,464 Cash and Investments, End of Year $ - $ 8,265,827
Non-cash investing, capital, and
financing activities:

Transfer of fixed assets upon transfer of operations $ 38,737,483 $ - Relief of payroll related debt and associated
deferred outflows/inflows upon transfer of operations $ 3,782,754 $ - #15..
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The accompanying notes are an integral part of the financial statements. 9 CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS
STATEMENT OF CASH FLOWS – BUS ENTERPRISE FUND (continued) FOR THE YEAR ENDED JUNE 30, 2022
(with comparative totals for the year ended June 30, 2021) 2022 2021

RECONCILIATION OF OPERATING LOSS TO NET
CASH USED IN OPERATING ACTIVITIES:

Operating loss $ - $ (27,696,149)
Adjustments to reconcile operating loss to net cash
used in operating activities:

Depreciation - 3,479,732
Changes in assets and liabilities:

Accounts receivable 304,695 (197,276)
Prepaid expenses 5,582 98,910
Accounts payable (3,400,202) 1,139,190
Accrued salaries and benefits (88,159) 35,851
Net OPEB liability and related deferred
outflows/inflows of resources - (62,816)
Net pension liability and related
deferred outflows/inflows of resources - 508,927
Net Cash Used in Operating Activities $ (3,178,084) $ (22,693,631) #15..
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CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS

NOTES TO THE FINANCIAL STATEMENTS
10 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Reporting Entity: The City of Modesto, California (the City) accounts for California Transportation Development Act (TDA) monies in the Local Transportation Special Revenue Funds and the Bus Enterprise Fund (TDA Funds). These funds are a part of the City and not a separate legal entity. As such, these financial statements only present the fund financial statements and not the government-wide information or financial statements. The Local Transportation Special Revenue Funds are combined and presented as a special revenue fund in the City’s Comprehensive Annual Financial Report (ACFR) along with the Bus Enterprise Fund. These financial statements are intended to reflect the financial position, changes in financial position, and cash flows, where applicable, of the TDA Funds in accordance with accounting principles generally accepted in the United States of America.

Basis of Presentation, Basis of Accounting, and Measurement Focus: The Local Transportation Special Revenue Funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible with the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 180 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual basis of accounting. Intergovernmental and interest revenues are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Under Governmental Accounting Standards Board (GASB) Statement No. 34, budgetary comparison information is required to be presented for each major special revenue fund with a legally adopted budget. The City is not legally required to adopt a budget for the TDA Funds. Therefore, budget comparison information is not included in these financial statements.

The Bus Enterprise Fund is reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.

The financial statements include certain prior-year summarized comparative information in total but not at the level of detail required for a presentation in accordance with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the TDA Funds financial statements for the year ended June 30, 2021, from which the summarized information was derived.

Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

The City reports the following Local Transportation Special Revenue Funds:

The Non-Motorized Fund accounts for monies received and spent under Article 3, Section 99234 of the TDA.

The Streets and Roads Fund accounts for monies received and to be spent under Article 8, Section 99400(a) of the TDA.

The City reports the following Enterprise Fund:

The Bus Enterprise Fund accounts for monies received and spent under Article 4, Section 99250 (public transit) of the TDA. The Bus Enterprise Fund also receives federal funds through the Federal Transit Administration, and other state and local grants, in addition to operating revenues.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise fund are charges to customers for bus fares, sales, and services. Operating expenses for the enterprise fund includes the cost of sales and services, depreciation on capital assets, and administrative expenses. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. #15..
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CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS
NOTES TO THE FINANCIAL STATEMENTS (continued)
11 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Management’s Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Due from Other Governments/Unearned Revenue: Grants, entitlements, or shared revenues are recorded as receivables and revenues in the special revenue funds when they are received or susceptible to accrual. Grants awarded for enterprise funds are recorded as receivables and nonoperating revenues when they are earned.

Unearned revenue consists of grant funds received in excess of qualified expenditures. Grant revenue is recognized in the period of qualified expenditure/expenses.

Capital Assets: Capital assets are defined by the City as assets with an initial individual cost of more than $5,000 and estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated assets are recorded at estimated fair value at the date of donation.

Capital projects funded by the Local Transportation Special Revenue Funds, including infrastructure (roads, curbs, gutters, streets, bridges, sidewalks, drainage systems, lighting systems, right-of-ways, and land related to such assets), are recorded as transfers out to other City funds and capital outlay expenditures of the Local Transportation Special Revenue Funds. These expenditures are capitalized in the City’s government-wide financial statements as the related capital assets become the property of the City and are maintained by the City.

In the Bus Enterprise Fund, buildings and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which are 30 years for buildings, 20 years for improvements, 12 years for buses, 10 years for furnishings and equipment, and 2 to 10 years for vehicles. Depreciation is included in operating expenses.

Fund Equity: In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the City is bound to honor constraints on how specific amounts can be spent.
• Nonspendable – Amounts that are not in spendable form (such as inventory) or are required, either legally or contractually, to be maintained intact.
• Restricted – Amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional or enabling legislation.
• Committed – Amounts constrained to specific purposes by the City, using the highest level of decisionmaking authority (City Council). To be reported as committed, amounts cannot be used for any other purpose unless the City takes the same highest level action to remove or change the constraint. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. • Assigned – Amounts the City intends to use for a specific purpose. Intent can be expressed by the City at either the highest level of decision-making authority or by an official or body to which the City delegates the authority.
• Unassigned – For the TDA Special Revenue Funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes. #15..
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CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS
NOTES TO THE FINANCIAL STATEMENTS (continued)
12 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Fund Equity (continued): The City establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through adoption or amendment of the budget. A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved construction contracts. Assigned fund balance is established by the City through adoption or amendment of the budget or future year budget plan as intended for a specific purpose.

In circumstances where an expenditure is incurred for which restricted, committed, assigned, or unassigned funds are available for use, it is the City’s policy to use restricted resources first, followed by the committed, assigned, and unassigned resources as they are needed.

Net Position: Net position represents the residual interest in the City’s assets after liabilities are deducted. In accordance with GASB Statement No. 63, the fund equity section on the Statement of Net Position was combined to report total net position and present it in three broad components:
• Net investment in capital assets – Amount consists of capital assets, including infrastructure, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets.
• Restricted – Amount consists of net position restricted by external creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabled legislature.
• Unrestricted – Amount consists of all net position that does not meet the definition “net investment in capital assets” or “restricted” net position.

When both restricted and unrestricted net position are available, restricted resources are depleted first before unrestricted resources are used.

Governmental Accounting Standards Update: During the year ending June 30, 2022, the City implemented the following standards:

GASB Statement No. 98 – The Annual Comprehensive Financial Report. The requirements of this statement are effective for reporting periods beginning after December 15, 2021.

Released GASB Statements to be implemented in future financial statements are as follows:

CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS
NOTES TO THE FINANCIAL STATEMENTS (continued)
13 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Governmental Accounting Standards Update (continued): GASB Statement No. 93 – Replacement of Interbank Offered Rates. The requirements of this statement are effective for reporting periods beginning after June 15, 2021.

Subsequent to issuance, GASB Statement No. 95 postponed the certain requirements of this statement to reporting periods beginning after June 15, 2022.

GASB Statement No. 96 – Subscription-Based Information Technology Arrangements. The requirements of this statement are effective for reporting periods beginning after June 15, 2022.

GASB Statement No. 99 – Omnibus 2022. The requirements of this statement are effective for reporting periods beginning after June 15, 2022.

GASB Statement No. 100 – Accounting Changes and Error Corrections. The requirements of this statement are effective for reporting periods beginning after June 15, 2023.

GASB Statement No. 101 – Compensated Absences. The requirements of this statement are effective for reporting periods beginning after December 15, 2023.

Management has determined no events require disclosure in accordance with accounting standards. These subsequent events have been evaluated through November 8, 2022, which is the date the financial statements were available to be issued.
#15..
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CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS
NOTES TO THE FINANCIAL STATEMENTS (continued)
14 NOTE 2 – CASH AND INVESTMENTS
Cash and investments of the Transportation Development Act Funds are pooled with other City of Modesto funds.

Interest earned on pooled cash and investments is credited to each participant in the pool based on each participant’s average monthly cash balance. Credit quality ratings are not available for the Transportation Development Act Funds’ investments as all cash is invested as part of the common cash and investment pool of the City of Modesto. Cash in the City Pool is considered unclassified as to credit risk because it is not evidenced by securities that exist in physical or book entry form. The Transportation Development Act Funds do not have any deposits with financial institutions as of June 30, 2022.

Cash and investments as of June 30, 2022 are classified in the accompanying financial statements as follows:

Balance Sheet- Local Transportation
Special Revenue Funds:

Cash and investments $ 1,734,841
Statement of Net Position- Bus Enterprise Fund:

Cash and investments -
Total cash and investments $ 1,734,841
Summary of Deposits: Cash and investments as of June 30, 2022 consist of the following:

Deposits with City of Modesto
Cash and Investment Pool: $ 1,734,841
Total cash and investments $ 1,734,841
Detailed information concerning the City of Modesto’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City of Modesto’s Annual Comprehensive Financial Report. As of June 30, 2022, the fair value of the TDA Fund’s position in the pool is the same as the value of its pool shares. #15..
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CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS
NOTES TO THE FINANCIAL STATEMENTS (continued)
15 NOTE 3 – CAPITAL ASSETS
Capital asset activity for the Bus Enterprise Fund for the year ended June 30, 2022, was as follows:

Beginning Additions/ Deletions/ Ending
Balance Transfers In Transfers Out Balance
Capital Assets, Not
Being Depreciated:

Land $ 4,060,454 $ - (4,060,454) $ -
Construction in Progress 2,791,858 - (2,791,858) -
Total Capital Assets,
Not Being Depreciated 6,852,312 - (6,852,312) -
Capital Assets, Being Depreciated:

Buildings 23,803,489 - (23,803,489) -
Improvements 4,653,536 - (4,653,536) -
Furnishings and equipment 2,792,829 - (2,792,829) -
Vehicles 184,771 - (184,771) -
Buses and fareboxes 36,638,467 - (36,638,467) -
Total Capital Assets,
Being Depreciated 68,073,092 - (68,073,092) -
Less Accumulated Depreciation for:

Buildings (10,125,083) - 10,125,083 -
Improvements (2,481,179) - 2,481,179 -
Furnishings and equipment (1,621,653) - 1,621,653 -
Vehicles (163,458) - 163,458 -
Buses and fareboxes (19,893,817) - 19,893,817 -
Total Accumulated
Depreciation (34,285,190) - 34,285,190 -
Total Capital Assets, Being
Depreciated, Net 33,787,902 - (33,787,902) -
Total Capital Assets, Net $ 40,640,214 $ - $ (40,640,214) $ - Depreciation expense for the year ended June 30, 2022 was $0. #15..
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CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS
NOTES TO THE FINANCIAL STATEMENTS (continued)
16 NOTE 4 – CALIFORNIA OFFICE OF EMERGENCY SERVICES GRANT (CALEMA) Unearned revenue for the CALEMA Funds for the year ended June 30, 2022, was as follows:

Project Name
Beginning
Unearned
Revenue Interest
New
Receipts
Expended/
Transferred
Ending
Unearned
Revenue
Transit Center Video
Surveillance System $ 117,245 $ - $ - $(117,245) $ -
Total $ 117,245 $ - $ - $(117,245) $ -
NOTE 5 – LOCAL TRANSPORTATION FUNDS UNEARNED REVENUE
Unearned revenue for the TDA Funds for the year ended June 30, 2022, was as follows:

Non-Motorized Streets and Roads Total
Unearned revenue, beginning of year $ 1,230,461 $ 427,374 $ 1,657,835 TDA funds allocated 266,096 238,274 504,370
TDA funds earned (1,766) (427,374) (429,140)
Unearned revenue, end of year $ 1,494,791 $ 238,274 $ 1,733,065 Local Transportation Special Revenue Funds
LTF/LCTOP Capital Transit Total
Unearned revenue, beginning of year $ 5,621,643 $ 6,486,649 $ 12,108,292 TDA funds allocated - - -
TDA funds earned (5,621,643) (6,486,649) (12,108,292)
Unearned revenue, end of year $ - $ - $ -
Bus Enterprise Fund
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CITY OF MODESTO

TRANSPORTATION DEVELOPMENT ACT FUNDS
NOTES TO THE FINANCIAL STATEMENTS (continued)
17 NOTE 6 – CONTINGENCY
Coronavirus Pandemic: Management has determined the events regarding the novel coronavirus require disclosure in accordance with accounting standards. On March 4, 2020 Governor Newsom issued an emergency proclamation declaring a state of emergency in California due to the novel coronavirus (COVID-19). The COVID-19 outbreak is ongoing, and the ultimate geographic spread of the virus, the duration and severity of the outbreak and the economic and other actions that may be taken by government authorities to contain the outbreak or treat its impact are uncertain. A vaccination has been created and is being administered throughout the State, including the City’s service area. The ultimate impact of COVID-19 on the operations and finances of the City remains unknown.

NOTE 7 – DISPOSAL OF TRANSIT OPERATIONS
On January 26, 2021, the City Council authorized the Joint Powers Agency Agreement to form the Stanislaus Regional Transit Authority (StanRTA), which consolidated Stanislaus County’s public transportation services and City of Modesto’s public transportation services into one regionalized public transportation agency. This consolidation has the potential to enhance transit service, reduce overall costs of service and will lead to a more “easy to use” public transportation option for residents by having more coordinated transit services in the County. Effective July 1, 2021, the City transferred all of its transit operations to StanRTA. This led to the closing of the Bus Enterprise Fund, transit assets and liabilities were transferred to StanRTA to support the new transit operator for the County. All remaining transit assets held by the City after the dissolution of the Bus Fund were transferred to other City funds. This disposal of transit operations led to a loss on transfer of operations of $19,461,712 for year ended June 30, 2022.

NOTE 8 – PRIOR PERIOD ADJUSTMENT
A prior period adjustment of $26,830 was posted to the bus enterprise fund beginning net position for the year ended June 30, 2022. The adjustment was to correct a previous error in recording transfers out as improperly recorded in the prior year.
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7473 N. INGRAM AVE., SUITE 102 ⬧ FRESNO, CA 93711
_______________________________________________________________________________________________ P (559) 412-7576 ⬧ F (559) 493-5325 ⬧ WWW.HHCCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE

AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS AND THE TRANSPORTATION DEVELOPMENT ACT Honorable Members of the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Local Transportation Special Revenue Funds and the Bus Enterprise Fund (collectively known as the Transportation Development Act Funds) of the City of Modesto, California (the City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, and have issued our report thereon dated November 8, 2022.

Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting as it relates to the Transportation Development Act Funds (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s Transportation Development Act Funds financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including the applicable statutes, rules and regulations of the Transportation Development Act. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards or the Transportation Development Act.
#15..
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19 Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards and the Transportation Development Act in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

HUDSON HENDERSON & COMPANY, INC.

Fresno, California
November 8, 2022
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CITY OF MODESTO

SINGLE AUDIT REPORT

FOR THE YEAR ENDED
JUNE 30, 2022
#15..
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TABLE OF CONTENTS
Page
Reports:

Schedule of Expenditures of Federal Awards.................................................................................................... 6 Notes to Schedule of Expenditures of Federal Awards ..................................................................................... 10 Findings and Questioned Costs:

Schedule of Findings and Questioned Costs...................................................................................................... 11 Status of Prior Year Findings and Questioned Costs.......................................................................................... 13 #15..
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7473 N. INGRAM AVE., SUITE 102 ⬧ FRESNO, CA 93711
_______________________________________________________________________________________________ P (559) 412-7576 ⬧ F (559) 493-5325 ⬧ WWW.HHCCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE

AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS
To the City Council
City of Modesto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Modesto, California (the City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 9, 2022.

Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. #15..
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2 Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

HUDSON HENDERSON & COMPANY, INC.

Fresno, California
December 9, 2022
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7473 N. INGRAM AVE., SUITE 102 ⬧ FRESNO, CA 93711
_______________________________________________________________________________________________ P (559) 412-7576 ⬧ F (559) 493-5325 ⬧ WWW.HHCCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY

THE UNIFORM GUIDANCE
To the City Council
City of Modesto, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Program
We have audited the City of Modesto, California’s (the City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2022. The City’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2022.

Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditors’ Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs.

Auditors’ Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.
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4 In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis.

A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the Auditors’ Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated December 9, 2022, which contained unmodified opinions on those financial statements.

Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.
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5 Purpose of Report
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance.

Accordingly, this report is not suitable for any other purpose.

HUDSON HENDERSON & COMPANY, INC.

Fresno, California
December 9, 2022
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CITY OF MODESTO

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2022
The accompanying notes are an integral part of the Schedule of Expenditures of Federal Awards. 6 PassThrough to
Federal Grant Sub- Federal
CFDA No. Number recipients Expenditures
Federal Grantor/ Pass-through
Grantor/ Program or Cluster Title
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Direct Programs
CDBG - Entitlement Grants Cluster
Community Development Block Grants (CDBG)/Entitlement Program 14.218 B-17-MC-060002 $ - $ 4,897 Community Development Block Grants (CDBG)/Entitlement Program 14.218 B-18-MC-060002 - 40,455 Community Development Block Grants (CDBG)/Entitlement Program 14.218 B-19-MC-060002 - 378,871 Community Development Block Grants (CDBG)/Entitlement Program 14.218 B-20-MC-060002 16,618 640,854 Community Development Block Grants (CDBG)/Entitlement Program 14.218 B-21-MC-060002 169,959 896,177

14.218 B-20-MW-060002 251,481 316,147
Total CDBG - Entitlement Grants Cluster 438,058 2,277,401 Emergency Solutions Grant Program 14.231 E-20-MC-060002 49,649 60,131 Emergency Solutions Grant Program 14.231 E-20-MW-060002 1,098,492 1,617,284 Emergency Solutions Grant Program - CARES Act 14.231 E-21-MC-060002 11,164 47,318 Total Emergency Solutions Grant Program 1,159,305 1,724,733 Home Investment Partnerships Program 14.239 M-15-MC-060207 - 21,746 Home Investment Partnerships Program 14.239 M-16-MC-060207 - 38,344 Home Investment Partnerships Program 14.239 M-17-MC-060207 - 1 Home Investment Partnerships Program 14.239 M-18-MC-060207 - 9,429 Home Investment Partnerships Program 14.239 M-19-MC-060207 - 72,466 Home Investment Partnerships Program 14.239 M-21-MC-060207 - 40,294 Total Home Investment Partnerships Program - 182,280
TOTAL U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 1,597,363 4,184,414 U.S. DEPARTMENT OF JUSTICE
Direct Programs
Coronavirus Emergency Supplemental Funding 16.034 2020VDBX0954 - 226,782 Public Safety Partnership and Community Policing Grants 16.710 15JCOPS-21-GG-02447-SPPS - 4,513 Community Development Block Grants (CDBG)/Entitlement
Program - CARES Act
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CITY OF MODESTO
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (continued)
FOR THE YEAR ENDED JUNE 30, 2022
The accompanying notes are an integral part of the Schedule of Expenditures of Federal Awards. 7 PassThrough to
Federal Grant Sub- Federal
CFDA No. Number recipients Expenditures
Federal Grantor/ Pass-through
Grantor/ Program or Cluster Title
Passed through the County of Stanislaus
Edward Byrne Memorial Justice Assistance Grant 16.738 2017-DJ-BX-0939 $ - $ 2,484 Edward Byrne Memorial Justice Assistance Grant 16.738 2018-DJ-BX-0826 - 40,079 Edward Byrne Memorial Justice Assistance Grant 16.738 2019-DJ-BX-0693 - 129,909 Edward Byrne Memorial Justice Assistance Grant 16.738 2020-DJ-BX-0226 - 88,815 Edward Byrne Memorial Justice Assistance Grant 16.738 115PBJA-21-GG-01178-JAGX - 65,547 Total Edward Byrne Memorial Justice Assistance Grant - 326,834 TOTAL U.S. DEPARTMENT OF JUSTICE - 558,129
U.S. DEPARTMENT OF TRANSPORTATION
Direct Programs
Airport Improvement Program 20.106 AIP-041 - 5,348
Airport Improvement Program 20.106 AIP-044 - 23,000
Airport Improvement Program - CARES Act 20.106 AIP-043 - 339,000 Total Airport Improvement Program - 367,348
Federal Transit Cluster
Federal Transit - Capital Investment Grants 20.500 CA-04-0198 - 398,169 Bus and Bus Facilities Formula & Discretionary Program 20.526 CA-2019-002-00 - 286,260 Total Federal Transit Cluster - 684,429
Passed through the California Department of Transportation Highway Planning and Construction Cluster
Highway Planning and Construction 20.205 BRLS-5938(167) - 36,541 Highway Planning and Construction 20.205 TGHPLUL-5059(230) - 3,867,276 Highway Planning and Construction 20.205 CML-5059(186) - 925,314 Highway Planning and Construction 20.205 CML-5059(185) - 292 Highway Planning and Construction 20.205 STPL-5059(205) - 145,172 Highway Planning and Construction 20.205 CML-5059(217) - 26,975 Highway Planning and Construction 20.205 CML-5059(219) - 1,877,276 Highway Planning and Construction 20.205 CML-5059(222) - 16,687 Highway Planning and Construction 20.205 CML-5059(223) - 644,496 Highway Planning and Construction 20.205 ATPL-5059(233) - 250,967 #15..
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CITY OF MODESTO
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (continued)
FOR THE YEAR ENDED JUNE 30, 2022
The accompanying notes are an integral part of the Schedule of Expenditures of Federal Awards. 8 PassThrough to
Federal Grant Sub- Federal
CFDA No. Number recipients Expenditures
Federal Grantor/ Pass-through
Grantor/ Program or Cluster Title
Passed through the California Department of Transportation (continued) Highway Planning and Construction Cluster (continued)
Highway Planning and Construction 20.205 STPL- 5059 (208) $ - $ 2,413,539 Highway Planning and Construction 20.205 NH-P099(647) - 441,477 Highway Planning and Construction 20.205 HSIPL-5059(227) - 7,075 Highway Planning and Construction 20.205 CML-5059(229) - 146,389 Highway Planning and Construction 20.205 STPL-5059(234) - 94,788 Highway Planning and Construction 20.205 CML-5059(236) - 12,332 Highway Planning and Construction 20.205 HSIPL-5059(237) - 5,083 Highway Planning and Construction 20.205 HSIPL-5059(238) - 114,482 Highway Planning and Construction 20.205 STPL-5059(242) - 151,753 Highway Planning and Construction 20.205 STPL-5059(250) - 9,516 Highway Planning and Construction 20.205 CML-5059(244) - 18,519 Highway Planning and Construction 20.205 CML-5059(245) - 24,164 Highway Planning and Construction 20.205 CML-5059(246) - 25,157 Highway Planning and Construction 20.205 CMLNI-5059-(247) - 1,468 Highway Planning and Construction 20.205 CMLNI-5059-(248) - 486,505 Highway Planning and Construction 20.205 CMLNI-5059-(249) - 1,320 Highway Planning and Construction 20.205 CML-5059-(235) - 26,603 Highway Planning and Construction 20.205 CML-5059-(240) - 19,103 Total Highway Planning and Construction Cluster - 11,790,269 Passed through the California Office of Traffic Safety
Highway Safety Cluster
State and Community Highway Safety 20.600 PS22007 - 14,646 State and Community Highway Safety 20.600 PT22034 - 72,783 State and Community Highway Safety 20.600 PS21034 - 42,487 State and Community Highway Safety 20.600 PT21110 - 18,594 Total State and Community Highway Safety - 148,510
Minimum Penalties for Repeat Offenders for Driving While Intoxicated 20.608 PT22034 - 112,678 Minimum Penalties for Repeat Offenders for Driving While Intoxicated 20.608 PT21110 - 35,072 Total Minimum Penalties for Repeat Offenders for Driving While Intoxicated - 147,750 Total Highway Safety Cluster - 296,260
TOTAL U.S. DEPARTMENT OF TRANSPORTATION - 13,138,306
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CITY OF MODESTO

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
10 NOTE 1 – GENERAL
The accompanying Schedule of Expenditures of Federal Awards presents all the activity of all the federal award programs of the City of Modesto (the City) for the year ended June 30, 2022. The City reporting entity is defined in Note 1 to the City’s basic financial statements. Federal awards received directly from federal agencies as well as federal awards passed through other government agencies are included on the schedule.

NOTE 2 – BASIS OF ACCOUNTING & PRESENTATION
Consistent with the City’s method of filing federal financial reports, the accompanying Schedule of Expenditures of Federal Awards is prepared using the accrual basis method of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S., Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

Therefore, some of the amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the basic financial statements. The amounts reported in the accompanying Schedule of Expenditures of Federal Awards agree, in all material respects, to amounts reported within the City’s basic financial statements.

NOTE 3 – RELATIONSHIP TO FEDERAL FINANCIAL REPORTS
Amounts reported in the accompanying schedule agree with the amounts reported in the related periodic federal financial reports.

NOTE 4 – CATALOG OF FEDERAL DOMESTIC ASSISTANCE (CFDA)
The CFDA numbers included in the accompanying Schedule of Expenditures of Federal Awards were determined based on the program name, review of the grant or contract information and the Office of Management and Budget’s Catalog of Federal Domestic Assistance.

NOTE 5 – PASS-THROUGH ENTITY IDENTIFYING NUMBERS
When Federal awards were received from a pass-through entity, the Schedule of Expenditures of Federal Awards show, if available, the identifying number assigned by the pass-through entity. When no identifying number is shown, the City has either determined that no identifying number is assigned for the program or the City was unable to obtain an identifying number from the pass-through entity.

NOTE 6 – INDIRECT COST RATE LIMITATION
The City does not use the 10 percent de minimis indirect cost rate. #15..
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CITY OF MODESTO

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2022
11 SECTION I – SUMMARY OF AUDITORS’ RESULTS
Financial Statements
Type of auditors' report issed: Unmodified
Internal control over financial reporting
● Material weakness identified? Yes X No
● Significant deficiency(ies) identified that are not
considered to be material weaknesses? Yes X No
Noncompliance material to financial statements noted? Yes X No Federal Awards
Internal control over major federal programs:
● Material weakness identified? Yes X No
● Significant deficiency(ies) identified that are not
considered to be material weaknesses? Yes X No
Noncompliance material to federal awards? Yes X No
Yes X No
Type of auditors' report issued on compliance for major Federal programs: Unmodified
Identification of major programs:

Name of Federal Program or Cluster
Coronavirus State and Local Fiscal Recovery Funds
Staffing for Adequate Fire and Emergency Response
Dollar threshold used to distinguish
Between Type A and B programs: $856,679
Auditee qualified as a low risk auditee? X Yes No
CFDA Number:

21.023
Any audit findings disclosed that are required to be reported in accordance with 2CRF section 200.516(a).

21.027

97.083
Emergency Rental Assistance Program - American
Rescue Plan Act
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CITY OF MODESTO
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (continued)
FOR THE YEAR ENDED JUNE 30, 2022
12 SECTION II – FINANCIAL STATEMENT FINDINGS
There are no financial statement findings to be reported in accordance with Government Auditing Standards.

SECTION III – FEDERAL AWARD FINDINGS
There are no financial statement findings to be reported in accordance with the Uniform Guidance. #15..
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Finance Department
P.O. Box 642
Modesto, California 95354
209.577.5249
Maria Garnica
[email protected]

PRIOR YEAR FINDINGS AND QUESTIONED COSTS
Reference: 2021-001
Type of Finding: Significant Deficiency
Category of Finding: Allowable Costs/Cost Principles
Criteria:

Per Uniform Guidance Section 200.303, it is the City’s responsibility to establish and maintain effective internal controls over Federal awards that provide reasonable assurance that the City is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. The requirement ensures that only allowable costs are charged to federal programs.

Condition:

Per audit procedures performed over expenditures charged to the Emergency Rental Assistance Program (the Program), we noted an invoice that was incorrectly calculated and charged to the program. The service charge was calculated on a combined federal and state program total, which resulted in the City’s Program being overcharged.

The overcharge included costs that should have been allocated to the State funding programs as opposed to the federal program, resulting in questioned costs to the Program.

Cause:

Although the City has sufficient internal control processes over expenditures, including proper review, approval and recording; the overcharge was due to the vendor providing one invoice which combined charges for both federal and state funded programs that was overlooked when the invoice was submitted for payment to the federal program.

Effect:

The City is out-of-compliance with the allowable costs/cost principles requirement of the Program in that the federal program was overcharged for the fiscal year ended June 30, 2021.

Questioned Costs:
$68,738
Recommendations:

We recommend that management require vendors to split charges and/or implement additional reviews when processing payments for invoices with multiple funding sources.

Current Year Status:

Corrected
13 #15..
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STANISLAUS COUNCIL OF GOVERNMENTS
MEASURE L – CITY OF MODESTO

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED
JUNE 30, 2022
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Government-Wide Financial Statements:

Statement of Net Position................................................................................................................... 4 Statement of Activities........................................................................................................................ 5 Fund Financial Statements:

Balance Sheet- Governmental Fund.................................................................................................... 6 Statement of Revenues, Expenditures and Changes in
Fund Balance- Governmental Fund................................................................................................... 7 Statement of Revenues, Expenditures and Changes in Fund Balance- Budget to Actual (GAAP)- Special Revenue Fund .............................................................................. 8 Notes to Financial Statements........................................................................................................................... 9 Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards and the Measure L Program........................................................................ 14 Supplemental Schedule:

Schedule of Expenditures by Project............................................................................................................ 16 #15..
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7473 N. INGRAM AVE., SUITE 102 ⬧ FRESNO, CA 93711
_______________________________________________________________________________________________ P (559) 412-7576 ⬧ F (559) 493-5325 ⬧ WWW.HHCCPAS.COM
INDEPENDENT AUDITORS’ REPORT
To the Policy Board
Stanislaus Council of Governments
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of the governmental activities and major fund of the Measure L Fund of the City of Modesto, California (the Measure L Fund), pertaining to certain provisions of Measure L: Local Road First Transportation Funding Measure (the Measure L Program), issued by the Stanislaus Council of Governments acting as the Stanislaus County Transportation Authority as of and for the year ended June 30, 2022, the budgetary comparison schedule for the special revenue fund and the related notes to the financial statements, which collectively comprise the Measure L Fund’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and major fund of the Measure L Fund, as of June 30, 2022, and the respective changes in financial position and budgetary comparison for the special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Measure L Fund and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Measure L Fund’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. #15..
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2 Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Measure L Fund’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Measure L Fund’s ability to continue as a going concern for a reasonable period of time.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis be presented to supplement the financial statements. Management has omitted such information. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by the missing information.

Supplementary Information
Our audit was conducted for the purpose of forming an opinion the financial statements the collectively comprise the Measure L Funds’ basic financial statements. The schedule of expenditures by project (supplemental schedule) is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplemental schedule is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental schedule is fairly stated in all material respects in relation to the basic financial statements as a whole.
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3 Emphasis-of-Matters
As discussed in Note 1 to the financial statements, the financial statements present only the Measure L Fund referred to above and are not intended to present the financial position of the City of Modesto, California as a whole and the respective changes in financial position, or where applicable, its cash flows for the year then ended, in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 19, 2022 on our consideration of the Measure L Fund’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Measure L Fund’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Measure L Fund’s internal control over financial reporting and compliance.

HUDSON HENDERSON & COMPANY, INC.

Fresno, California
October 19, 2022
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The accompanying notes are an integral part of the financial statements. 4 STANISLAUS COUNCIL OF GOVERNMENTS

MEASURE L - CITY OF MODESTO

STATEMENT OF NET POSITION
JUNE 30, 2022
Governmental
Activities
ASSETS
Cash and investments $ 29,066,983
Accounts receivable 3,910,247
Total Assets 32,977,230

LIABILITIES
Accounts payable 205,249
Total Liabilities 205,249

NET POSITION
Restricted 32,771,981
Total Net Position $ 32,771,981
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The accompanying notes are an integral part of the financial statements. 5 STANISLAUS COUNCIL OF GOVERNMENTS

MEASURE L - CITY OF MODESTO

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
Net (Expense)
and Revenue
Program and Changes
in Net Position
Capital Grants
and Governmental
Functions/Programs Expenses Contributions Activities
Governmental Activities:

Public ways and facilities $ 3,224,904 $ 14,333,438 $ 11,108,534 Totals $ 3,224,904 $ 14,333,438 11,108,534
General Revenues:

Investment earnings (losses) (726,586)
Project refund transfers in 409,129
Total General Revenues (317,457)
10,791,077
Net Position, Beginning of Year 22,452,320
Prior Period Adjustment (471,416)
Net Position, End of Year $ 32,771,981
Revenues
Change in Net Position
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The accompanying notes are an integral part of the financial statements. 6 STANISLAUS COUNCIL OF GOVERNMENTS

MEASURE L - CITY OF MODESTO

BALANCE SHEET

GOVERNMENTAL FUND
JUNE 30, 2022
ASSETS
Cash and investments $ 29,066,983
Accounts receivable 3,910,247
Total Assets $ 32,977,230

LIABILITIES
Accounts payable $ 205,249
Total Liabilities 205,249

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 4,503
Total Deferred Inflows of Resources 4,503

FUND BALANCE
Restricted 32,767,478
Total Fund Balance 32,767,478
Total Liabilities, Deferred Inflows of Resources, and Fund Balance $ 32,977,230 Reconciliation of the Balance Sheet of the Governmental Fund to the Statement of Net Position:

Total Fund Balance - Governmental Fund $ 32,767,478
Adjustments to the Balance Sheet of the Governmental Fund to reconcile with the Statement of Net Position:

Revenues were considered earned in the Statement of Net Position in the prior period, but are considered deferred in the governmental funds. 4,503
Total Net Position - Governmental Activities $ 32,771,981 #15..
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The accompanying notes are an integral part of the financial statements. 7 STANISLAUS COUNCIL OF GOVERNMENTS

MEASURE L - CITY OF MODESTO

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE

GOVERNMENTAL FUND
FOR THE YEAR ENDED JUNE 30, 2022

REVENUES
Measure L funds $ 14,333,438
Investment earnings (losses) (726,586)
Project refund transfers in 409,129
Total Revenues 14,015,981

EXPENDITURES
Public ways and facilities 3,224,904
Total Expenditures 3,224,904
Net Change in Fund Balance 10,791,077
Fund Balance, Beginning of Year 22,447,817
Prior Period Adjustment (471,416)
Fund Balance, End of Year $ 32,767,478
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of the Governmental Fund to the Statement of Activities:

Net change in Fund Balance - Governmental Fund $ 10,791,077 Adjustments to the Statement of Revenues, Expenditures and Changes in Fund Balance of the Governmental Fund to reconcile with the Statement of Activities:

None -
Change in Net Position - Governmental Activities $ 10,791,077 #15..
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The accompanying notes are an integral part of the financial statements. 8 STANISLAUS COUNCIL OF GOVERNMENTS

MEASURE L - CITY OF MODESTO

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET TO ACTUAL (GAAP)-

SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2022
Actual Variance with
Original Final (GAAP Basis) Final Budget

RESOURCES (INFLOWS)
Measure L funds $ 9,206,639 $ 14,206,639 $ 14,333,438 $ 126,799 Investment earnings (losses) - - (726,586) (726,586)
Project refund transfers in - - 409,129 409,129
Total Resources (Inflows) 9,206,639 14,206,639 14,015,981 (190,658)

CHARGES TO

APPROPRIATIONS (OUTFLOWS)
Streets and roads 7,093,500 10,838,257 2,179,779 8,658,478 Bike and pedestrian 948,848 1,286,744 67,090 1,219,654
Traffic management 1,214,688 1,077,377 978,035 99,342
Total Charges to
Appropriations (Outflows) 9,257,036 13,202,378 3,224,904 9,977,474 Net Change in Fund Balance $ (50,397) $ 1,004,261 10,791,077 $ 9,786,816 Fund Balance, Beginning of Year 22,447,817
Prior Period Adjustment (471,416)
Fund Balance, End of Year $ 32,767,478
Budgeted Amounts
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STANISLAUS COUNCIL OF GOVERNMENTS

MEASURE L - CITY OF MODESTO

NOTES TO FINANCIAL STATEMENTS
9 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements present only the City of Modesto’s Measure L Fund and are not intended to present fairly the financial position, changes in financial position, or cash flows of the City of Modesto, California (the City) as a whole in accordance with accounting principles generally accepted in the United States of America.

Reporting Entity: The City of Modesto’s Measure L Fund (the Measure L Fund), is a special revenue fund of the City.

Stanislaus Council of Governments (StanCOG) is the regional transportation planning agency and the metropolitan planning organization of Stanislaus County, which oversees the Measure L Initiative. Measure L provides for the implementation of the Expenditure Plan as approved and adopted by StanCOG, which provides funding for countywide local street and road improvements, arterial street widening, signalization, pedestrian, bicyclist and driver safety improvements. These needed improvements are funded by Measure L, the one-half of one percent retail transactions and use tax established for a twenty-five-year period, April 1, 2017 – March 31, 2042. The revenues will be deposited in a special fund, used solely for the transportation projects, improvements and programs described in the Expenditure Plan which is considered a part of Ordinance, and incorporated into Measure L Policies and Procedures.

The City’s Department of Public Works and Planning staff provides the necessary services such as maintenance and accounting to the Measure L Fund on a reimbursement basis with no allocation of payroll expenses.

Measurement Focus, Basis of Accounting and Financial Statement Presentation: The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the Measure L fund activities. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported as general revenues.

Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements. • Government-Wide Financial Statements
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements are met.
• Governmental Fund Financial Statements
Governmental fund financial statements (i.e., Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance) are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Revenues susceptible to accrual are property taxes, interest on investments, and intergovernmental revenues. Property taxes are recorded as revenues in the fiscal year in which they are levied, provided they are collected in the current period or within sixty days thereafter. A one-year availability period is used for all other revenues. Interest on invested funds is recognized when earned. Intergovernmental revenues that are reimbursements for specific expenditures are recognized when all eligibility requirements are met. Expenditures generally are recorded when a liability is incurred, as under accrual accounting; however, debt service expenditures are recorded only when payment is due.
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STANISLAUS COUNCIL OF GOVERNMENTS

MEASURE L - CITY OF MODESTO
NOTES TO FINANCIAL STATEMENTS (continued)
10 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Measurement Focus, Basis of Accounting and Financial Statement Presentation (continued): Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The Measure L Fund reports one major governmental fund:

The Special Revenue Fund is the primary operating fund and accounts for all financial resources of the Measure L Fund of the City.

The Measure L Fund adopts annual appropriated budgets for its special revenue fund, which is a major fund.

Budgetary comparison schedules have been provided for this fund to demonstrate compliance with the budgets.

Cash and Investments: In order to maximize the flexibility of its investment program and to aid in cash budgeting, the City pools the cash of all funds, except for monies deposited with fiscal agents in accordance with related bond indentures. The cash and investments balance in each fund represents that fund’s equity share of the City’s cash and investment pool, as the City places no restrictions on the deposit account for the participating funds.

Interest income earned on pooled cash and investments is allocated quarterly. Interest income on restricted cash and investments with fiscal agents is credited directly to the related fund.

Accounts Receivable: The Measure L Fund utilizes the allowance method of accounting for and reporting uncollectible or doubtful accounts. At June 30, 2022, management considered all accounts to be fully collectible and, therefore, no allowance was recorded in the accompanying financial statements.

Accounts Payable: Certain costs are incurred by the Measure L Fund during the current reporting period but are not paid until after the beginning of the next fiscal period. These costs are reported as accounts payable in the financial statements. The Measure L Fund current accounts payable balance is $205,249 as of June 30, 2022.

Net Position: Net position represents the residual interest of all assets after liabilities are deducted. In accordance with GASB Statement No. 34, the fund equity section on the Statement of Net Position was combined to report total net position and present it in three broad components: net investment in capital assets, restricted, and unrestricted.

Net position, net investment in capital assets, includes capital assets net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, construction, or improvement of those assets.

Net position is restricted when constraints are imposed by third parties or by law through constitutional provisions or enabling legislation. All other net position is unrestricted. The Measure L Fund’s policy is to first apply restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position is available.

Management’s Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
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STANISLAUS COUNCIL OF GOVERNMENTS

MEASURE L - CITY OF MODESTO
NOTES TO FINANCIAL STATEMENTS (continued)
11 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Deferred Outflows and Inflows of Resources: Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the Measure L Fund recognizes deferred outflows and inflows of resources.

In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net position by the Measure L Fund that is applicable to a future reporting period.

In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net position by the Measure L Fund that is applicable to a future reporting period. Deferred inflows of resources reported by the Measure L Fund consist of intergovernmental revenues earned, but not yet received.

Fund Balance: In the fund financial statements, in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, governmental funds report fund balance as nonspendable, restricted, committed, assigned or unassigned based primarily on the extent to which the Measure L Fund is bound to honor constraints on how specific amounts can be spent.
• Nonspendable – Amounts that are not in spendable form (such as inventory) or are required to be maintained intact. The Measure L Fund did not have any nonspendable resources as of June 30, 2022. • Restricted – Amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation. The Measure L Fund considers all of its resources to be restricted. • Committed – Amounts constrained to specific purposes by the Measure L Fund itself, using its highest level of decision-making authority (City Council). To be reported as committed, amounts cannot be used for any other purpose unless the City Council takes the same highest-level action to remove or change the constraint. The Measure L Fund did not have any committed resources as of June 30, 2022. • Assigned – Amounts the Measure L Fund intends to use for a specific purpose. Intent can be expressed by the Measure L Fund or by an official or body to which the City Council delegates the authority. The Measure L Fund did not have any assigned resources as of June 30, 2022. • Unassigned – Amounts that are available for any purpose. The Measure L Fund did not have any unassigned resources as of June 30, 2022.

The Measure L Fund establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through adoption and amendment of the budget. A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved contracts. Assigned fund balance is established by the Measure L Fund through adoption or amendment of the budget or future year budget plan as intended for a specific purpose. The Measure L Fund’s policy is to first apply restricted, committed or assigned resources when an expense is incurred for purposes for which both restricted, committed or assigned and unassigned fund balance is available.

Governmental Accounting Standards Update: During the year ending June 30, 2022, the Measure L Fund implemented the following standards with no financial impact:

STANISLAUS COUNCIL OF GOVERNMENTS

MEASURE L - CITY OF MODESTO
NOTES TO FINANCIAL STATEMENTS (continued)
12 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Governmental Accounting Standards Update (continued): GASB Statement No. 97 – Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. The requirements of this statement are effective for reporting periods beginning after June 15, 2021.

Released GASB Statements to be implemented in future financial statements are as follows:

GASB Statement No. 96 – Subscription-Based Information Technology Arrangements. The requirements of this statement are effective for reporting periods beginning after June 15, 2022.

GASB Statement No. 98 – The Annual Comprehensive Financial Report. The requirements of this statement are effective for reporting periods beginning after December 15, 2021.

GASB Statement No. 99 – Omnibus 2022. The requirements of this statement are effective for reporting periods beginning after June 15, 2022.

GASB Statement No. 100 – Accounting Changes and Error Corrections. The requirements of this statement are effective for reporting periods beginning after June 15, 2023.

GASB Statement No. 101 – Compensated Absences. The requirements of this statement are effective for reporting periods beginning after December 15, 2023.

Management has determined that no events require disclosure in accordance with accounting standards. These subsequent events have been evaluated through October 19, 2022, which is the date the financial statements were available to be issued.

NOTE 2 – CASH AND INVESTMENTS
Cash and investments as of June 30, 2022 are classified in the accompanying financial statements as follows:

Statement of Net Position:

Cash and investments $ 29,066,983
Total cash and investments $ 29,066,983
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STANISLAUS COUNCIL OF GOVERNMENTS

MEASURE L - CITY OF MODESTO
NOTES TO FINANCIAL STATEMENTS (continued)
13 NOTE 2 – CASH AND INVESTMENTS (continued)
Summary of Deposits:

Cash and investments as of June 30, 2022 consist of the following:

Deposits with City of Modesto $ 29,066,983
Total cash and investments $ 29,066,983
See the City of Modesto’s Annual Comprehensive Financial Report (ACFR) for disclosures related to risks and fair value measurements.

NOTE 3 – RISK MANAGEMENT
The Measure L Fund is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City provides coverage for these losses through commercial insurance policies and/or through participation in the City of Modesto program. Refer to the City of Modesto’s ACFR for additional information.

NOTE 4 – COMMITMENTS AND CONTINGENCIES
Commitments and contingencies, undeterminable in amount, include normal recurring pending claims and litigation.

In the opinion of management, based upon discussion with legal counsel, there is no pending litigation which is likely to have a material adverse effect on the financial position of the Measure L Fund.

NOTE 5 – COVID-19 CONTINGENCY
On March 4, 2020, Governor Newsom issued an emergency proclamation declaring a State of Emergency in California due to COVID-19. The COVID-19 outbreak is ongoing, and the ultimate geographic spread of the virus, the duration and severity of the outbreak, and the economic and other actions that may be taken by governmental authorities to contain the outbreak or to treat its impact are uncertain. A vaccination has been created and is being administered throughout the state, including the Measure L Fund’s service area. The ultimate impact of COVID-19 on the Measure L Fund is unknown.

NOTE 6 – PRIOR PERIOD ADJUSTMENT
A prior period adjustment of ($471,416) was recorded to the special revenue fund and governmental activities beginning fund balance and net position, to account for revenues recorded as earned in the prior period that were disbursed to the Stanislaus Regional Transit Authority for transit operations, and were incorrectly recorded by the Measure L Fund.
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7473 N. INGRAM AVE., SUITE 102 ⬧ FRESNO, CA 93711
_______________________________________________________________________________________________ P (559) 412-7576 ⬧ F (559) 493-5325 ⬧ WWW.HHCCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE

AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS AND THE MEASURE L PROGRAM To the Policy Board
Stanislaus Council of Governments
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and certain provisions of the Measure L: Local Road First Transportation Funding Measure (the Measure L Program), issued by the Stanislaus Council of Governments acting as the Stanislaus County Transportation Authority, the financial statements of the governmental activities and major fund of the Measure L Fund of the City of Modesto (the Measure L Fund), as of and for the year ended June 30, 2022, the budgetary comparison schedule for the special revenue fund and the related notes to the financial statements, which collectively comprise the Measure L Fund’s basic financial statements, and have issued our report thereon dated October 19, 2022.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Measure L Fund’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Measure L Fund’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Measure L Fund’s internal control.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Measure L Fund’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.
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15 However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

HUDSON HENDERSON & COMPANY, INC.

Fresno, California
October 19, 2022
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STANISLAUS COUNCIL OF GOVERNMENTS
MEASURE L – CITY OF MODESTO

SUPPLEMENTAL SCHEDULE
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16 STANISLAUS COUNCIL OF GOVERNMENTS

MEASURE L - CITY OF MODESTO

SCHEDULE OF EXPENDITURES BY PROJECT
FOR THE YEAR ENDED JUNE 30, 2022
Category
Project
Number Project Name
Expense Budget
-Local Control
Measure L
FY 21-22
Expenses
Project to Date
Expenses
through
6/30/2022
Budget
Remaining for
Future Fiscal
Years
Local Streets & Roads 100806 2016 Pavement Rehab Project $ 338,537 $ 63,572 $ 63,572 $ 274,965 Local Streets & Roads 100942 Paradise Road Improvements 415,000 - - 415,000 Local Streets & Roads 100966 Pelandale from Sisk to Dale 700,000 187,385 487,249 212,751 Local Streets & Roads 101036 Carpenter Street Improvements 2,628,392 - 2,628,392 - Local Streets & Roads 101037 Lakewood Street Improvements 2,365,558 - 2,365,558 - Local Streets & Roads 101038 Wylie,Floyd,Carver Improvements 2,250,469 - 2,250,469 - Local Streets & Roads 101042 Paradise Road ATP - Construction Portion 760,000 - - 760,000 Local Streets & Roads 101088 Standiford Avenue Pavement Rehab 2,788,144 - 2,788,144 - Local Streets & Roads 101118 Claus Road Pavement Rehab 1,183,203 - 1,183,203 - Local Streets & Roads 101120 Village One Slurry Seal 2,554,544 - 2,554,544 - Local Streets & Roads 101141 Downtown Master Plan 108,450 - 108,450 - Local Streets & Roads 101168 Scenic Dr Pavement Rehab Phase 1 (Lakewood to Claus) 1,345,720 1,025,638 1,241,781 103,939 Local Streets & Roads 101169 Scenic Dr Pavement Rehab Phase 2 (Downey to 3,100,000 161,945 198,571 2,901,429 Local Streets & Roads 101170 Tully Road Pavement Rehab 2,011,496 433 2,011,496 - Local Streets & Roads 101171 Coffee Road Pavement Rehab Phase 1 3,186,604 361 3,186,604 - Local Streets & Roads 101214 Granger Neighborhood Pavement Rehabilitation 2,830,000 76,329 269,975 2,560,025 Local Streets & Roads 101245 2020 Pvmnt Condition Survey 300,000 182,932 182,932 117,068 Local Streets & Roads 101246 Briggsmore-McHenry to Oakdale 5,267,500 166,827 368,465 4,899,035 Local Streets & Roads 101248 Orangeburg Ave. Pvmt Rehab Ph1 1,851,500 143,696 226,159 1,625,341 Local Streets & Roads 101249 Pelandale Nghbrhd Pvmt Maintenance 1,871,250 130,183 273,238 1,598,012 Local Streets & Roads 101314 Coffee Road Pavement Rehab Phase 2 2,748,500 13,660 13,660 2,734,840 Local Streets & Roads 101315 Dale Road Pavement Rehabilitation 285,000 26,816 26,816 258,184 Total Local Streets and Roads $ 40,889,867 $ 2,179,778 $ 22,429,278 $ 18,460,589 Traffic Management 100634 Upgrade Traffic Signals - 2013 $ 175,000 $ 29,581 $ 169,432 $ 5,568 Traffic Management 100719 Traffic Signals 2013 (Ros/Bel) - - - - Traffic Management 100720 Traffic Signals 2013 (Pres/Mt. Vrn) 122,080 - 122,080 - Traffic Management 100884 Emergency Vehicle Pre-Emption 61,500 - 61,500 - Traffic Management 100990 System Safety Analysis Program 32,500 526 30,018 2,482 Traffic Management 101039 Task Force for School Safety 45,000 11,212 34,353 10,647 #15..
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17 STANISLAUS COUNCIL OF GOVERNMENTS

MEASURE L - CITY OF MODESTO
SCHEDULE OF EXPENDITURES BY PROJECT (continued)
FOR THE YEAR ENDED JUNE 30, 2022
Category
Project
Number Project Name
Expense Budget
-Local Control
Measure L
FY 21-22
Expenses
Project to Date
Expenses
through
6/30/2022
Budget
Remaining for
Future Fiscal
Years
Traffic Management 101040 Orville Wright Elementary Improve. $ 586,702 $ 2,500 $ 534,084 $ 52,618 Traffic Management 101043 Replace Traffic Controllers 584,437 - 584,437 - Traffic Management 101089 Tully Road Safety Improvement 511,183 3,962 34,794 476,389 Traffic Management 101122 Install 2 Flashing Beacons 9,970 - 9,970 - Traffic Management 101123 Fiber Drop Traffic Signal Cabinet 420,372 225,633 225,789 194,583 Traffic Management 101124 Replace 35 Traffic Controllers 178,250 - 150,149 28,101 Traffic Management 101125 Traffic Signal Analysis Study 250,000 - 243,270 6,730 Traffic Management 101172 School Safety Program Study 250,000 72,388 131,613 118,387 Traffic Management 101173 School Area All Stop Beacon 48,000 - 48,000 - Traffic Management 101174 Advance School Zone Beacons at 13 Schools 130,000 125,011 125,011 4,989 Traffic Management 101175 School Crosswalk Beacon 986,861 29,794 55,180 931,681 Traffic Management 101176 Upgrade Crosswalk to RRFB 37,457 103 37,456 1 Traffic Management 101177 Upgrade RRFB - Elliot School 20,000 - 19,670 330 Traffic Management 101178 Neighborhood Traffic Calming 650,000 39,285 59,666 590,334 Traffic Management 101179 HAWK System at Hetch-Hetchy on Tully and Prescott 470,711 - 25,846 444,865 Traffic Management 101192 Upgrade ATMS - 2019 439,628 - - 439,628 Traffic Management 101221 School Safety Program Study - Projects 575,000 - - 575,000 Traffic Management 101242 Install Video Detection 410,000 399,971 399,971 10,029 Traffic Management 101247 Virginia Corridor Trail Maintenance 58,900 - - 58,900 Traffic Management 101316 Adaptive Traffic Control Software 700,000 - - 700,000 Traffic Management 101317 Fiber Drop Carpenter/Prescott/Maze 40,000 4,669 4,670 35,330 Traffic Management 101318 Fiber Drop Downtown Corridors - G St. and H St. 30,000 4,448 4,449 25,551 Traffic Management 101322 Claus Road Signal Coordination 138,750 14,183 14,452 124,298 Traffic Management 101323 Scenic Drive Signal Coordination 185,000 14,766 14,983 170,017 Traffic Management 101383 Oakdale Road Improvement 16,390 109 109 16,281 Traffic Management 101384 Sylvan/Standiford PHB's 11,150 93 93 11,057 Total Traffic Management $ 8,174,841 $ 978,236 $ 3,141,045 $ 5,033,796 Bike and Pedestrian 100882 MJC Bike Path Phase 2 $ 202,047 $ - $ 202,047 $ - Bike and Pedestrian 101041 Active Transportation Plan 300,000 24,440 242,334 57,666 Bike and Pedestrian 101042 Paradise Road ATP 60,000 - 25,000 35,000 #15..
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18 STANISLAUS COUNCIL OF GOVERNMENTS

We have audited the financial statements of the governmental activities and major fund of the Measure L Fund of the City of Modesto, California (the Measure L Fund) pertaining to certain provisions of Measure L: Local Road First Transportation Funding Measure, (the Measure L Program) issued by the Stanislaus Council of Governments acting as the Stanislaus County Transportation Authority as of for the year ended June 30, 2022, the budgetary comparison schedule for the special revenue fund and the related notes to the financial statement, which collectively comprise the basic financial statements. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated August 31, 2022. Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Measure L Fund are described in Note 1 to the financial statements. No new significant accounting policies were adopted and the application of existing policies was not changed during 2022. We noted no transactions entered into by the Measure L Fund during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. There were no sensitive estimates affecting the financial statements.

The financial statement disclosures are neutral, consistent, and clear.

Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements.

In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole. #15..
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Stanislaus Council of Governments
Measure L – City of Modesto
October 20, 2022

Page 2 of 2 ends

Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations
We have requested certain representations from management that are included in the management representation letter dated October 19, 2022.

Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the Measure L Fund’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Measure L Fund’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Matters
We were engaged to report on the Schedule of Expenditures by project, the supplemental schedule, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

Restriction on Use
This information is intended solely for the information and use of the Policy Board and management of the City of Modesto and is not intended to be, and should not be, used by anyone other than these specified parties.

Sincerely,
HUDSON HENDERSON & COMPANY, INC.

By: Brian Henderson, CPA
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AUDIT PRESENTATION TO THE

CITY OF MODESTO
June 30, 2022 Audit Results &
Required Communications
Audit Committee, January 23, 2023
Presented by:

Brian Henderson, CPA, Partner
Hudson Henderson & Company, Inc.
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Agenda
• Introduction
• Required Communications
• Audit Results & Overview of Findings
• City ACFR & Smaller audits
• Single Audit
• Measure L
• Closing
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INTRODUCTION
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Introduction
• Audits are conducted under the following standards:
• Generally Accepted Auditing Standards
• Governmental Auditing Standards (Yellow Book)
• Uniform Guidance (Single Audit)
• Transportation Development Act Compliance
• TDA audit (LTF Special Revenue Fund only as bus transit operations transferred to StanRTA)
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Introduction (continued)
• Our Responsibility:
• Issue an Opinion: Provide reasonable assurance that the financial statements are presented in all material respects (free of material misstatement)
• Does not address the financial condition of the City
• Purpose of the audit is not to detect fraud. We cannot take responsibility for finding fraud, if it existed • Consider internal control over financial reporting for the purpose of expressing our opinion on the financial statements, but not for expressing an opinion on the effectiveness of internal control • Perform tests of the City’s compliance with certain provisions of law, regulations, contracts and grant agreements, with which could have a material effect on the financial statements, but not for the purpose of expressing an opinion on compliance with these provisions #15..
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Introduction (continued)
• City’s Responsibility:
• Preparation and fair presentation of the financial statements • Accurate and complete in accordance with accounting principles generally accepted in the United States of America
• Maintain effective internal controls
• Design, implementation and maintenance relevant to the fair presentation of the financial statements free from material misstatement, whether due to fraud or error #15..
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REQUIRED COMMUNICATIONS
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Required Communications
• Sensitive estimates affecting the financial statements • ACFR: Pension Liability ,OPEB Liability, Claims Liability and Leases Liability • FS Disclosures are neutral, consistent with PY and clear • No significant difficulties encountered in performing the audit • All misstatements noted during the audit corrected by mgmt. • No major disagreements with management
• We obtained representations from management (dated in conjunction with various audit issuance dates) • We are unaware of any management consultations with other independent accountants #15..
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Required Communications (continued)
• Audit Procedures
• Audit testing and fieldwork (Mix of remote and limited in-office in CY) • Interim in June 2 weeks
• Final in Sep 1 week and Oct 2 Weeks
• Testing included Risk Based Audit Approach, which includes test of controls over significant accounting transaction cycles (no findings noted).
• Cash Disbursements (including approvals, contracts, contract limits, and purchase orders) • Cash Receipts (including recording, reconciling, review and approval) • Utility Billing (including recording, reconciling, review and approval) • Payroll (including initiation, approval, timesheet review, recording and reconciliation) #15..
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Required Communications (continued)
• Risk Based Audit Approach also includes additional testing possible areas of fraud, abuse and areas of concern. • Employee Reimbursements (10 random selections) (no findings noted) • Contract Change Orders (8 Selections) (Proper approvals, use and expense) • Amazon purchases and order limits (Review of Amazon limits, controls over purchasing, random testing of Amazon purchases) (no findings noted)
• Completed audit reports and financials in Oct/Nov/Dec #15..
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CITY ACFR & SMALLER
AUDITS
June 30, 2022
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City ACFR & Smaller Audits
• Audit Reports- Unmodified Opinion
• City ACFR: 12/9/22 (Yellow Book)
• AVA: 10/7/22 (Yellow Book and AVA Program Handbook)
• CFD’s: All 12 11/7/22 (Yellow Book)
• GANN Annual Appropriations AUP: 9/23/22: No findings per procedures performed • Ceres-Modesto Fire Protection Agency: 10/11/22 (Yellow Book) • TRRP: 11/15/22 (Yellow Book)
• TDA: 11/8/22 (Yellow Book and TDA Compliance) (close out of TDA Bus Fund) #15..
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City ACFR & Smaller Audits (continued)
• Current Year Findings
• None noted.
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City ACFR & Smaller Audits (continued)
• Follow Up on Prior Year Findings
• TRRP
• Significant Deficiency: Accounts Payable: Material adjustment for expenditures incurred not properly accrued as of year-end. Implemented.
• Significant Deficiency: Accounts Receivable/Revenue: Material adjustments for revenues/receivable not properly accrued as of year-end. Implemented. #15..
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SINGLE AUDIT
June 30, 2022
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Introduction- Single Audit
• Our Responsibility:
• Issue an Opinion on Compliance for Each Major Federal Program: Provide reasonable assurance that the City complied with all compliance requirements as required by the Uniform Guidance that could have a direct and material effect on each major federal program • Does not address the financial condition of the City/programs or legal opinion on compliance • Schedule of Expenditures Awards (SEFA) – opinion in relation to the financial statements of the City
• Purpose of the audit is not to detect fraud. We cannot take responsibility for finding fraud, if it existed • Consider internal control over compliance for the purpose of expressing our opinion on compliance for each major federal program
• Perform tests of the City’s compliance in accordance with the Uniform Guidance 16 #15..
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Introduction- Single Audit (continued)
• City’s Responsibility:
• Preparation and fair presentation of the SEFA
• Accurate and complete in accordance with accounting principles generally accepted in the United States of America and Uniform Guidance
• Maintain effective internal controls over the SEFA
• Design, implementation and maintenance relevant to the fair presentation of the SEFA and it is free from material misstatement, whether due to fraud or error 17 #15..
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Single Audit
• Audit Reports- Unmodified Opinion (in compliance in all material respects) • City ACFR: 12/9/22 (Yellow Book)
• Single Audit: 12/9/22 (Uniform Guidance)
• No current year findings with internal control or compliance • Audited 3 Major Programs for FY22
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Single Audit
• Follow Up on Prior Year Findings
• Federal Program- 21.023- Emergency Rental Assistance Program • Significant Deficiency: Allowable Costs/Cost Principles (Corrected) • Invoice included State/Federal Charges (multiple funding sources) for software implementation. City is working on obtaining a refund for State portion. Full amount was charged to the program, resulting in $68,738 of unallowable (questioned) costs
• 2021 SEFA was properly adjusted to remove the $68,738 in questioned costs
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MEASURE L AUDIT
June 30, 2022
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Measure L Audit
• Hired by StanCOG Policy Board to audit all Measure L Agencies, including the City of Modesto • Audit Report- Unmodified Opinion
• Issued Audit Report in accordance with Governmental Auditing Standards and Measure L Compliance (Internal Control and Compliance) 10/19/2022- unmodified opinion (no significant deficiencies, material weaknesses or instances of noncompliance) • Measure L Compliance
• Expenditures
• Level of Effort
• Reporting
• Admin Limit
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Measure L Audit (continued)
• Measure L Fund Financial Update
• Ending Net Position: $32,767,478
• Increase in Net Position: $10,791,077
• 2022 Revenue: $14,015,981
• 2022 Expenses: $3,224,904
• Budget: Expenses under budget by $9,977,474
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CLOSING
June 30, 2022
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Questions???
Contact Information
Brian Henderson, CPA
[email protected]
7473 N. Ingram Ave., Suite 102
Fresno, CA 93711
559-412-7576
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

February 28, 2023
Date: January 25, 2023
TO: Mayor & City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Bill Sandhu, Director of Public Works
SUBJECT: Increasing Director’s Authority for Contingency of the Rectangular Rapid Flashing Beacon Project
CONTACT: James P. Ashby, Traffic Operations Engineer, [email protected], 209-571-5116
DESCRIPTION:

Consider approving an increase of the Director’s Authority of contingency amount of $74,455 with Gruendel Inc. DBA Ray’s Electric in an amount not to exceed $148,910 for the Rectangular Rapid Flashing Beacon Installation Project. (Funding Source: Measure L Road Tax Fund) STRATEGIC PLAN ELEMENT:

The recommended action supports the 2020-2025 City’s Strategic Plan Area of Focus: “Quality of Life Goals and Strategies”; engage partners across the community to ensure the safety, resilience, and attractiveness of Modesto; Goal D: “provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance and sustainability efforts.” BACKGROUND:

The Rectangular Rapid Flashing Beacon (RRFB) Installation Project installs RRFBs at ten school locations throughout the City of Modesto. RRFBs are pedestrian-actuated conspicuity enhancements used in combination with a pedestrian, school, or trail crossing warning sign to improve safety at uncontrolled, marked crosswalks. The device includes two rectangular shaped yellow indications, each with a Light Emitting Diode (LED)-array-based light source, that flash with high frequency when activated.

The ten chosen locations currently have inoperable in-roadway lighted crosswalks, or no lighted walk at all. In addition, all locations will be solar powered and will include American Disability Act (ADA) upgrades to curb ramps. Below is a list of the locations included in this project:

1. *Mt. Vernon Drive and Cheryl Lane

2. Rumble Road and Bay Lane

3. Rumble Road and Wales Street

4. College Avenue and Morris Avenue
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City Council, February 28, 2023
Approve Increasing Director’s Authority for Contingency of the Rectangular Rapid Flashing Beacon Project

Page 2 of 3 ends

5. College Avenue and Terminal Avenue

6. Coldwell Avenue and Campus Way

7. Tully Road and Hetch-Hetchy Trail

8. Prescott Road and Hetch-Hetchy Trail

9. Maze Boulevard and Emerald Avenue

10. Teresa Street and Carver Road
*This location was converted to an all way stop, but will have ADA upgrades completed DISCUSSION:

The project was advertised for bids on September 21, 2021. Bids were publicly opened on October 19, 2021, and Gruendel Inc. DBA Ray’s Electric of Oakland, CA was the apparent low bidder and awarded the contract for construction.

The engineer’s estimate was completed in February of 2021 and the first project within the City of Modesto installing multiple RRFB locations. City staff was anticipating potential higher costs due to the unknown pricing within the area and increases in material prices due to COVID related delays. On December 14, 2021, by Resolution 2021-499, Council approved an Agreement with Gruendel Inc. DBA Ray’s Electric of Oakland, CA in the amount of $744,555 to construct this project.

Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment, or contractual services to follow the formal bid procedures. An award and agreement for construction of this project, for the Public Works Department to use Gruendel Inc. DBA Ray’s Electric of Oakland, CA, conforms to the Modesto Municipal Code, 8-3.203.

The City’s “Change Order Approval Policy”, enacted by Council Resolution No. 94-443 on July 19, 1994, was updated by Resolution No. 2019-326 on July 9, 2019, establishing a contract change order authority of 10% for construction contracts at least $250,000 but less than $1,000,000. While the contingency policy is utilized for each construction contract awarded by the City, it is not written into each contract, nor is it a guaranteed amount included in the final compensation to the contractor. Prior to bidding a project, staff works diligently to ensure that all projects and bid packages contain well-defined scopes of work and that all projects stay within budget.

Additionally, considering the size and complexity of the project, with multiple unknowns, and requirements to comply with the Americans with Disabilities Act (ADA), additional work is needed to address unexpected conditions that require changes in the project scope that may exceed the Director’s Authority of 10%. Throughout this project, there have been several unknown unmarked utilities found by the contractor that required significant design changes and extra work in the field. These unknown changes were also affected by and required more work due to requirements to comply with ADA accessibility such as extra sidewalk repair. Necessary unanticipated lighting had also been added to this project for pedestrian safety at crossings in low lighted areas.

Therefore, staff requests approval of increasing the Director’s Authority to approve changes in project scope in the amount from 10% ($74,455) to 20% ($148,910) in an amount not to exceed $148,910.
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City Council, February 28, 2023
Approve Increasing Director’s Authority for Contingency of the Rectangular Rapid Flashing Beacon Project

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FISCAL IMPACT:

Funding for the construction, contingency, construction administration, and City staff engineering/design/administration support is budgeted in the current Fiscal Year (FY) 2022- 2023 Capital Improvement Program budget in Account:
101175 – Measure L - Streets CIP Projects - 3300 “Rectangular Rapid Flashing Beacon Installation”
DESIGN BUDGET:

Engineering/Design/Administration Support – City Staff $45,000 ANTICIPATED CONSTRUCTION EXPENDITURES Total
Original Construction Contract $744,555
Construction Contingency (20%) $148,910
Construction Admin City Staff (13%) $106,471
Design Support During Construction (2%) $16,380
TOTAL ANTICIPATED EXPENDITURES: $1,016,316
COMMITTEE RECOMMENDATION:

This item was presented to the Safety and Communities Committee on January 18, 2023, and recommended to forward to Council for approval.

CEQA/NEPA REQUIREMENTS:

Environmental review has been provided through a Categorical Exemption under CEQA Section 15301, EA/PW 2019-022, filed July 10, 2019.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving an increase in the Director’s Authority to issue Change Orders for the Rectangular Rapid Flashing Beacon Installation Project from 10% ($74,455) to 20% ($148,910) of the construction contract price to Gruendel Inc. DBA Ray’s Electric of Oakland, CA in an amount not to exceed $148,910.

Approved by:

Bill Sandhu, Director of Public Works
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Resolution No. 1994-443

3. Resolution No. 2019-326

4. Resolution No. 2021-499
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1 2023-

MODESTO CITY COUNCIL
RESOLUTION NO. 2023-
RESOLUTION APPROVING AN INCREASE IN THE DIRECTOR’S

AUTHORITY TO ISSUE CHANGE ORDERS FOR THE RECTANGULAR
RAPID FLASHING BEACON INSTALLATION PROJECT FROM 10% ($74,455) to 20% ($148,910) OF THE CONSTRUCTION CONTRACT PRICE TO GRUENDEL INC. DBA RAY’S ELECTRIC OF OAKLAND, CA IN AN AMOUNT NOT TO EXCEED $148,910
WHEREAS, the City’s “Change Order Approval Policy”, enacted by Council Resolution No. 94-443 on July 19, 1994, and updated by Resolution No. 2019-326 on July 9, 2019, established a contract change order budget of 10% for projects over $250,000 but less than $1,000,000; and
WHEREAS, considering the size and complexity of the project, with multiple unknowns, and requirements to comply with the Americans with Disabilities Act, additional work may be needed to address unexpected conditions that require changes in the project scope that may exceed the Director’s Authority of 10% ($74,455) of the contract amount of $744,555; and
WHEREAS, staff is requesting authorization to increase the Directors authority to issue change orders to 20% ($148,910) of the contract amount of $1,016,316 due to the nature of the project and the unknown challenges.

NOW, THEREFORE BE IT RESOLVED by the Council of the City of Modesto that it hereby authorizes the Director of Public Works to issue change orders for the Rectangular Rapid Flashing Beacon (RRFB) Installation Project from 10% ($74,455) to 20% ($148,910) of the construction contract price of $819,010 with Gruendel Inc. DBA Ray’s Electric of Oakland, CA.
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2 2023-
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 28th day of February 2023, 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 NAYERES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY:

JOSE M. SANCHEZ, City Attorney
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MODESTO CITY COUNCIL
RESOLUTION NO. 94-443

A RESOLUTION ESTABLISHING A CHANGE ORDER APPROVAL POLICY FOR THE

CITY OF MODESTO CAPITAL IMPROVEMENT CONSTRUCTION PROJECTS WHEREAS, each Public Works construction contract includes language which provides the Public Works and Transportation Director with the authority to execute Change Orders during the course of construction; and
WHEREAS, providing a written policy establishes clear
guidelines within which the Public Works and Transportation Department can issue Contract Change Orders consistent with current construction principles and practices while maintaining council Control over budgetary concerns.

NOW, THEREFORE BE IT RESOLVED by the Council of the City of Modesto that it does hereby adopt a policy entitled, "Change Order Approval Policy", a copy of which is attached hereto marked Exhibit "A" and incorporated herein by reference.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 19th day of July, 1994, by councilmember Friedman, who moved its adoption, which motion being duly seconded by councilmember Dobbs , was upon roll call carried and the resolution adopted by the following vote:

AYES:

NOES:

ABSENT:
councilmembers: Cogdill, Dobbs, Friedman, Mcclanahan,
Muratore, Mayor Lang
Councilmembers: None
Councilmembers: Patterson
AI' ' /J~ ATTEST: (e;t,Y
NORRINE COYL", C1ty Clerk
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CHANGE ORDER APPROVAl POLICY

EXHIBIT A ------
The Public Works and Transportation Director is authorized to issue changes in construction contracts via written change o~ders within the limitations established below after determining that the change order IS within the onglnal project scope, both reasonable and necessary, and that funds are available in the approved Capital Improvement Program budget.

1. For contracts originally awarded for a cost of less than $250,000, the Director has the authority to issue change orders for an increase in contract price of up to $25,000, provided that the sum of all such change orders for any single contract does not exceed $25,000.

2. For contracts originally awarded for a cost of at least $250,000, but less than $1,000,000, the Director has the authority to issue change orders, provided the sum of all such change orders for any single contract does not exceed ten percent (10%) of the original contract price.

3. For contracts originally awarded for a cost of at least $1,000,000, but less than $10,000,000, the Director has the authority tq issue change orders, provided the sum of all such change orders for any single contract does not exceed eight percent (8%) of the original contract price.

4. For contracts originally awarded for a price of $10,000,000 or more, the Director has the authority to issue change orders, provided the sum of all such change orders for any single contract does not exceed six percent (6%) of the original contract price.

Any individual change order in excess of $20,000 will require the approval of both the Director and the City Manager.

6. Variance from the above limitations may be requested at the time of bid award for unusual situations, including, but not limited to contracts for building renovations. In addition, variances may be requested in response to unforeseen conditions which may arise in the field.

7. Notwithstanding the above limitations, if in the Director's discretion it becomes necessary to issue a change order in order to:
• Prevent the interruption of work which has the potential to result in a substantial increase in cost to the City; or
• Protect the work, equipment, or materials to be used in the work, human safety, or the environment at or near the site of the work, from substantial and immediate danger or injury; or
• Protect, where damage or injury has occurred, the work, equipment, or materials to be used in the work, human safety, or the environment, at or near the site of the work from further damage, injury or deterioration caused by man, nature or other sources; then the Director shall have the authority to issue change orders in such sums as may reasonably be necessary for such purposes; provided, however, in the event any such action exceeds the specific authority set forth in the above, the Director shall report to the City Council regarding any such action as soon as is reasonably possible, but no later than thirty (30) days subsequent. If said change orders will require an adjustment to the approved budget for the project, prior approval shall be obtained from the City Manager. #16..
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MODESTO CITY COUNCIL
RESOLUTION 94-444
A RESOLUTION AMENDING THE FISCAL YEAR 1994-95 ANNUAL BUDGET TO ESTIMATE

AND APPROPRIATE FUNDING FOR A NEW CAPITAL IMPROVEMENT PROGRAM PROJECT: PVEA MODESTO CITY TRAFFIC SIGNAL RETIMING AND UPGRADE PROJECT.

WHEREAS, staff applied for federal funding under the Petroleum Violation Escrow Account (PVEA) grant program for this project and was successful in obtaining federal funds for 100% of the project, for a total amount of $125,000.

WHEREAS, this project involves retimeing of traffic signals at 98 intersections on 15 arterial and collector streets in the city.

WHEREAS, it is necessary to appropriate these funds in a new CIP project.

WHEREAS, the following adjustments are necessary.

Fund/Agy/Org
Expenditures
070-160-E952-6040
Revenue
070-510-9510-3504
Gas Tax Fund
PVEA TIS Retiming & Upgrade
Federal Funds
Increase
(Decrease)
$125,000
$125,000
BE IT FURTHER RESOLVED that the Finance Director is hereby authorized to take the necessary steps to implement the provisions of this resolution. #16..
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The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 19th day of ...11""ulc,LY___, 1994, by Councilmember Friedman , who moved its adoption, which motion being duly seconded by Councilmember -,D~o",b><!b""s,--__, was upon roll call carried and the resolution adopted by the following vote:

AYES:

NOES:

ABSENT:
(SEAL)
Councilmembers: Cogdill, Dobbs, Friedman, McClanahan
Muratore, Mayor Lang
Councilmembers: None
Councilmembers: Patterson
AnEST:-:-:-::~~~~.f-}.~~"7~::'-__ NORR
APPROVED AS TO FO\:

MICHAEL D. MILICH, City Attorney
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

February 28, 2023
Date: February 8, 2023
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: William Wong, Director of Utilities
SUBJECT: Award La Loma Phase 3A Strengthen & Replace Water Mains Project CONTACT: Edgar Vargas, Associate Civil Engineer, [email protected], 209-577-5424 DESCRIPTION:

Consider approving the Plans and Specifications for the La Loma Phase 3A Strengthen & Replace Water Mains Project; accepting the Bid and Awarding a Construction Contract to United Pavement Maintenance, Inc., of Hughson, CA, in the amount of $6,229,282, plus $622,928 for contingency (if needed), for a total amount not to exceed $6,852,210; authorizing the increase in Director’s Authority from 8% ($498,343) to 10% ($622,928) of the construction contract price of $6,229,282 to issue Change Orders; and amending the Fiscal Year 2022-23 Capital Improvement Program Budget in the amount of $2,379,021. (Funding Source: Water 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 La Loma Neighborhood is one of many prioritized areas in the City’s water service area that require replacement of current, aging water infrastructure. The La Loma Phase 3A Strengthen and Replace Water Mains Project will replace and upgrade approximately 20,000 lineal feet of deficient water mains, associated valves, services, and fire hydrants to improve system reliability, flows, and pressures. The project area is bounded by Encina Avenue on the North, Trask Lane on the East, El Vista Avenue to the West, and Yosemite Boulevard (State Route 132) to the South.

On May 2, 2017, by Resolution No. 2017-169, Council approved an agreement with Provost & Pritchard Consulting Group, Inc., Modesto, CA, for Design Services for the Strengthen and Replace La Loma Neighborhood – El Vista Avenue to Riverside Drive Phase 1 Project in an amount not to exceed $97,918 for the identified scope of services, plus $9,792 for additional services (if needed), for a maximum total amount of $107,710. #17..
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City Council, February 28, 2023
Award La Loma Phase 3A Strengthen & Replace Water Mains Project

Page 2 of 4 ends

On September 8, 2020, by Resolution No. 2020-378, Council approved a first amendment to the agreement with Provost & Pritchard Consulting Group, Modesto, CA, for Design Services for the Strengthen and Replace La Loma Neighborhood – El Vista Avenue to Riverside Drive Phase 1 Project in the amount of $37,508 for the identified scope of services, for an amended total amount not to exceed $145,218.

During the preliminary design of the Strengthen and Replace La Loma Neighborhood – El Vista Avenue to Riverside Drive Project, the project approach was refined to be consistent with the other two phases of the La Loma Strengthen & Replacement Water Mains Projects. Consequently, the project was renamed to La Loma Phase 3A Strengthen & Replace Water Mains Project and separated into 3 sub-phases prioritized by volume of service calls for leak repairs and water pressure issues. Future phases will include Phase 3B and 3C projects.

DISCUSSION:

The project was advertised for bids on November 16, 2022. Bids were publicly opened on January 10, 2023, pursuant to City Charter Section 1307, and United Pavement Maintenance Inc., Hughson, CA, was the responsible bidder with the lowest responsive bid. The bid tabulation is attached.

The bid analysis is:

Number of bids received 9
Number of bids within 10% of engineer’s estimate 5
Number of bids above the engineer’s estimate 7
Number of bids below the engineer’s estimate 2
Percent low bid is below the engineer’s estimate 5.46%
United Pavement Maintenance Inc., of Hughson, CA, was 5.46% below the engineer’s estimate.

The next lowest bid was 3.37% below the engineer’s estimate. Five of the nine bids were within 10% of the engineer’s estimate, where two were below the engineer’s estimate and seven were above the engineer’s estimate. The highest bid was 44.37% above the engineer’s estimate.

Bidder competition and participation were evident as the City received nine bids.

Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to be formally bid. The award of contract for the construction of the La Loma Phase 3A Strengthen & Replace Water Mains Project to United Pavement Maintenance Inc., Hughson, CA, conforms to the Modesto Municipal Code, 8-3.203.

Therefore, staff recommends awarding the contract to United Pavement Maintenance Inc., of Hughson, CA.

The City’s “Change Order Approval Policy” enacted by Council Resolution No. 1994-443 on July 19, 1994, and revised on July 9, 2019 by Council Resolution No. 2019-326, established a contract change order authority of 8% for construction contracts of this dollar value. However, after reviewing the plans and specifications, and given the nature of rehabilitation projects where unforeseen utilities or buried structures, and other unaccounted for issues may arise, it is likely that this project could exceed the Director’s Authority of 8% ($498,343) of the contract amount of $6,229,282. Therefore, City staff is requesting an increase in the Director’s Authority for the Construction Contingency to 10% ($622,928) of the construction contract price of $6,229,282 with United Pavement Maintenance Inc., of Hughson, CA.
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City Council, February 28, 2023
Award La Loma Phase 3A Strengthen & Replace Water Mains Project

Page 3 of 4 ends

While the contingency policy is utilized for each construction contract awarded by the City, it is not written into each contract, nor is it a guaranteed amount included in the final compensation to the contractor. Prior to bidding a project, staff works diligently to ensure that all projects and bid packages contain well-defined scopes of work and that all projects stay within budget.

FISCAL IMPACT:

The total estimated cost for the construction phase of this project is $7,839,648. Funding for the construction, contingency, administration, and design support, will be budgeted in the current FY 2022-23 Capital Improvement Program (CIP) budget in project account:
100953 – UPP.Engineering Design – La Loma-El Vista to Riverside EXPENDITURES TO DATE:

Engineering/Design/Administration $254,258
Construction Administration $2,396
TOTAL EXPENDITURES TO DATE: $256,654
ANTICIPATED CONSTRUCTION EXPENDITURES:

Construction Contract – United Pavement Maintenance Inc. $6,229,282 Construction Contingency (10%) $622,928
Construction Administration – City Staff (10%) $622,928 Design Support During Construction – City Staff (4%) $249,171 City Construction Forces (1.5%) $93,439
Engineering Support During Construction – Provost & Pritchard $21,900 TOTAL ANTICIPATED CONSTRUCTION EXPENDITURES: $7,839,648 To fund the La Loma Phase 3A Strengthen & Replace Water Mains Project, a budget adjustment in the amount of $2,379,021 from Water Fund Reserves is necessary.

COMMITTEE RECOMMENDATION:

This project was presented to the Finance Committee on November 9, 2022, as a report on upcoming Capital Improvement construction projects where it was recommended that it be forwarded to Council for future award of construction. As stated in that Committee report, as bids are received, staff will present projects directly to Council for award of construction.

CEQA/NEPA REQUIREMENTS:

Environmental review has been provided through a Categorical Exemption under CEQA Section 15301 Class 1(b).

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving Plans and Specifications for the La Loma Phase 3A Strengthen & Replace Water Mains Project, accepting the Bid, and approving a Construction Contract with United Pavement Maintenance Inc., of Hughson, CA, in the amount of $6,229,282, plus $622,928 in contingency (if needed), for a total amount not to exceed $6,852,210 and authorizing the City Manager, or his designee, to execute the Agreement.

Resolution authorizing an increase in the Director’s Authority to issue Change Orders for the La Loma Phase 3A Strengthen & Replace Water Mains Project from 8% ($498,343) to 10% #17..
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City Council, February 28, 2023
Award La Loma Phase 3A Strengthen & Replace Water Mains Project

Page 4 of 4 ends

($622,928) of the construction contract amount of $6,229,282 with United Pavement Maintenance Inc., of Hughson, CA.

Resolution amending the Fiscal Year 2022-23 Capital Improvement Program Budget in the amount of $2,379,021 to be transferred into the Project from Water Fund Reserves in order to fund the Construction Phase of the La Loma Phase 3A Strengthen & Replace Water Mains Project.

Approved by:

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

1. Resolutions (3)

2. Bid Results

3. Construction Contract with United Pavement Maintenance Inc. & Financial Interest Disclosure Form
#17..
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1 2023-

MODESTO CITY COUNCIL
RESOLUTION NO. 2023-

RESOLUTION APPROVING PLANS AND SPECIFICATIONS FOR THE LA LOMA PHASE 3A STRENGTHEN & REPLACE WATER MAINS PROJECT,

ACCEPTING THE BID, AND APPROVING A CONSTRUCTION CONTRACT WITH UNITED PAVEMENT MAINTENANCE INC., OF HUGHSON, CA, IN THE AMOUNT OF $6,229,282, PLUS $622,928 IN CONTINGENCY (IF NEEDED), FOR A TOTAL AMOUNT NOT TO EXCEED $6,852,210 AND

AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE

THE AGREEMENT
WHEREAS, the La Loma Neighborhood is one of many prioritized areas in the City’s water service area that requires replacement of current, aging water infrastructure, and
WHEREAS, the La Loma Phase 3A Strengthen and Replace Water Mains Project will replace and upgrade approximately 20,000 lineal feet of deficient water mains, associated valves, services, and fire hydrants to improve system reliability, flows, and pressures, and
WHEREAS, the Project was advertised for bids on November 16, 2022, and WHERAS, January 10, 2023, bids were publicly opened, pursuant to City Charter Section 1307; Nine bids were received and United Pavement Maintenance Inc., Hughson, CA, was the responsible bidder with the lowest responsive bid, and WHEREAS, Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to be formally bid, and
WHEREAS, the award of contract for the construction of the La Loma Phase 3A Strengthen & Replace Water Mains Project to United Pavement Maintenance Inc., Hughson, CA, conforms to the Modesto Municipal Code, 8-3.203, and #17..
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2 2023-
WHEREAS, staff recommends awarding the contract to United Pavement Maintenance Inc., Hughson, CA.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the plans and specifications for the La Loma Phase 3A Strengthen & Replace Water Mains Project; accepting the bid and awarding a construction contract to United Pavement Maintenance Inc., Hughson, CA, for a total of $6,229,282 plus $622,928 in contingency (if needed) for a total amount not to exceed $6,852,210.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the contract, in a form approved by the City Attorney. #17..
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3 2023-
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 28th of February 2023, 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
#17..
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1 2023-

MODESTO CITY COUNCIL
RESOLUTION NO. 2023-
RESOLUTION AUTHORIZING AN INCREASE IN THE DIRECTOR’S
AUTHORITY TO ISSUE CHANGE ORDERS FOR THE LA LOMA PHASE 3A STRENGTHEN & REPLACE WATER MAINS PROJECT FROM 8% ($498,343) TO 10% ($622,928) OF THE CONSTRUCTION CONTRACT AMOUNT OF $6,229,282 WITH UNITED PAVEMENT MAINTENANCE INC., OF HUGHSON, CA
WHEREAS, the City’s “Change Order Approval Policy”, enacted by Council Resolution No. 1994-443 on July 19, 1994, and updated by Resolution No. 2019-326 on July 9, 2019, established a contract change order budget of 8% for construction contracts of this dollar value, and
WHEREAS, given the nature of rehabilitation projects where unforeseen utilities or buried structures, and other unaccounted for issues may arise, it is likely that this project could exceed the Director’s Authority of 8% ($498,343) of the contract amount of $6,229,282, and
WHEREAS, staff is requesting an increase in the Director’s Authority for the Construction Contingency to 10% ($622,928).

NOW, THEREFORE BE IT RESOLVED by the Council of the City of Modesto that it hereby authorizes an increase of the Director of Utilities authority to issue change orders for the La Loma Phase 3A Strength & Replace Water Mains Project from 8% ($498,343) to 10% ($622,928) of the construction contract price of $6,229,282 with United Pavement Maintenance Inc., of Hughson, CA.
#17..
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2 2023-
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 28th day of February, 2023, 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
#17..
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1 2023-

MODESTO CITY COUNCIL
RESOLUTION NO. 2023-
RESOLUTION AMENDING THE FISCAL YEAR 2022-23 CAPITAL
IMPROVEMENT PROGRAM BUDGET IN THE AMOUNT OF $2,379,021 TO

BE TRANSFERRED INTO THE PROJECT FROM WATER FUND RESERVES

IN ORDER TO FUND THE CONSTRUCTION PHASE OF THE LA LOMA
PHASE 3A STRENGTHEN & REPLACE WATER MAINS PROJECT
WHEREAS, certain budgetary transactions are necessary in the amount of $2,379,021, in order to fund the La Loma Phase 3A Strengthen & Replace Water Mains Project, and
WHEREAS, the Fiscal Year 2022-23 Capital Improvement Program budget must be amended.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the amendment of the Fiscal Year 2022-23 Capital Improvement Program Budget in the amount of $2,379,021.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to implement the provisions of this resolution. #17..
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2 2023-
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 28th of February 2023, 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
#17..
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Bid Tabulation Wednesday, January 11, 2023
Project Title: La Loma Phase 3A Strengthen & Replace Water Mains Project ID #: 2023-06
Vault ID #: 08-D-01031
Account# 100953
Bid Opening: 1/10/2023 at 11:00 AM
Basis of Award: By Base Bid Designer: Provost & Pritchard Design Manager: Edgar Vargas
Project Description: Water mains improvement project located in the La Loma Neighborhood generally bounded by Trask Ln. on the East, Encina Ave. on the North, El Vista Ave. on the West, and Yosemite Blvd. on the South.

Item # Item Description Units Quantity Unit Price Extension Apparent Low Bidder
United Pavement Maintenance Inc.
(209) 883-4345 PO Box 1017, Hughson, CA, 95326
Base Bid
1 Mobilization/Demobilization LS 1 $398,157.00 $398,157.00 2 Monument Preservation LS 1 $28,230.00 $28,230.00
3 Traffic Control/Handling, Signage, and LS 1 $193,476.00 $193,476.00 Permitting
4 COZEEP (Construction Zone Enhanced LS 1 $150,462.00 $150,462.00 Enforcement Program)
5 Storm Water Pollution Prevention Plan LS 1 $53,000.00 $53,000.00 (SWPPP)
6 Clear Alleys, Remove Debris & Maintain LS 1 $38,500.00 $38,500.00 7 Shoring, Bracing, and Sheeting LS 1 $90,709.00 $90,709.00 8 Sawcut and Remove Existing Pavement LS 1 $82,325.00 $82,325.00 9 Abandonment of Water Lines, Valves, LS 1 $228,500.00 $228,500.00 and Services
10 Remove and Abandon Existing Fire EA 10 $2,950.00 $29,500.00 Hydrant Assembly
11 4-inch DR14 PVC Pipe (C900) LF 15 $444.80 $6,672.00
12 6-inch DR18 PVC Pipe (C900) LF 942 $87.50 $82,425.00 13 8-inch DR14 PVC Pipe (C900) LF 8058 $133.50 $1,075,743.00 14 8-inch DR18 PVC Pipe (C900) LF 5415 $102.60 $555,579.00 15 12-inch DR14 PVC Pipe (C900) LF 351 $260.00 $91,260.00 16 12-inch DR18 PVC Pipe (C900) LF 5520 $144.10 $795,432.00 17 4-inch Gate Valve EA 1 $2,350.00 $2,350.00
18 8-inch Gate Valve EA 51 $2,913.00 $148,563.00
19 12-inch Gate Valve EA 30 $4,519.00 $135,570.00
20 ARV and Connector Piping EA 2 $11,489.00 $22,978.00
21 Fire Hydrant Assembly with 6-inch Gate EA 34 $10,100.00 $343,400.00 Valve
22 1-inch Water Service, including meter EA 220 $2,137.30 $470,206.00 Box
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Item # Item Description Units Quantity Unit Price Extension 23 2-inch Water Service, including meter EA 2 $5,551.00 $11,102.00 box
24 Remove and Reconstruct Concrete Alley SF 1260 $58.70 $73,962.00 Approach
25 Remove and Reconstruct Concrete Curb LF 352 $254.00 $89,408.00 & Gutter
26 Remove and Reconstruct Concrete SF 5632 $25.25 $142,208.00 Sidewalk
27 Hot Mix Asphalt TON 2547 $192.00 $489,024.00
28 New Detector Traffic Loop EA 2 $7,150.00 $14,300.00
29 Restore Traffic Striping, Markings, and LS 1 $48,385.00 $48,385.00 Signage
30 Class II Aggregate Base CY 5324 $59.00 $314,116.00
31 Paint Curbs Red at Fire Hydrants EA 34 $110.00 $3,740.00 32 MID Power Pole Coordination LS 1 $20,000.00 $20,000.00 Total: $6,229,282.00
Percent From Engineer's Estimate: -5.46%
Mozingo Construction
(209) 848-0160 751 Wakefield Court, Oakdale, CA 95361
Base Bid
1 Mobilization/Demobilization LS 1 $185,000.00 $185,000.00 2 Monument Preservation LS 1 $10,500.00 $10,500.00
3 Traffic Control/Handling, Signage, and LS 1 $298,000.00 $298,000.00 Permitting
4 COZEEP (Construction Zone Enhanced LS 1 $40,000.00 $40,000.00 Enforcement Program)
5 Storm Water Pollution Prevention Plan LS 1 $50,000.00 $50,000.00 (SWPPP)
6 Clear Alleys, Remove Debris & Maintain LS 1 $43,500.00 $43,500.00 7 Shoring, Bracing, and Sheeting LS 1 $38,000.00 $38,000.00 8 Sawcut and Remove Existing Pavement LS 1 $129,500.00 $129,500.00 9 Abandonment of Water Lines, Valves, LS 1 $135,000.00 $135,000.00 and Services
10 Remove and Abandon Existing Fire EA 10 $565.00 $5,650.00 Hydrant Assembly
11 4-inch DR14 PVC Pipe (C900) LF 15 $88.00 $1,320.00
12 6-inch DR18 PVC Pipe (C900) LF 942 $90.00 $84,780.00 13 8-inch DR14 PVC Pipe (C900) LF 8058 $122.00 $983,076.00 14 8-inch DR18 PVC Pipe (C900) LF 5415 $100.00 $541,500.00 15 12-inch DR14 PVC Pipe (C900) LF 351 $206.00 $72,306.00 16 12-inch DR18 PVC Pipe (C900) LF 5520 $147.00 $811,440.00 17 4-inch Gate Valve EA 1 $2,100.00 $2,100.00
18 8-inch Gate Valve EA 51 $2,900.00 $147,900.00
19 12-inch Gate Valve EA 30 $4,000.00 $120,000.00
20 ARV and Connector Piping EA 2 $5,250.00 $10,500.00
21 Fire Hydrant Assembly with 6-inch Gate EA 34 $9,200.00 $312,800.00 Valve
22 1-inch Water Service, including meter EA 220 $2,475.00 $544,500.00 box
23 2-inch Water Service, including meter EA 2 $3,650.00 $7,300.00 Box
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Item # Item Description Units Quantity Unit Price Extension 24 Remove and Reconstruct Concrete Alley SF 1260 $66.00 $83,160.00 Approach
25 Remove and Reconstruct Concrete Curb LF 352 $238.00 $83,776.00 & Gutter
26 Remove and Reconstruct Concrete SF 5632 $15.00 $84,480.00 Sidewalk
27 Hot Mix Asphalt TON 2547 $263.00 $669,861.00
28 New Detector Traffic Loop EA 2 $7,850.00 $15,700.00
29 Restore Traffic Striping, Markings, and LS 1 $57,000.00 $57,000.00 Signage
30 Class II Aggregate Base CY 5324 $145.00 $771,980.00
31 Paint Curbs Red at Fire Hydrants EA 34 $365.00 $12,410.00 32 MID Power Pole Coordination LS 1 $13,500.00 $13,500.00 Total: $6,366,539.00
Percent From Engineer's Estimate: -3.37%
Mid Cal Pipeline & Utilities, Inc.
(209) 383-7473 P.O. Box 2406, Merced, CA 95344
Base Bid
1 Mobilization/Demobilization LS 1 $300,000.00 $300,000.00 2 Monument Preservation LS 1 $28,000.00 $28,000.00
3 Traffic Control/Handling, Signage, and LS 1 $150,000.00 $150,000.00 Permitting
4 COZEEP (Construction Zone Enhanced LS 1 $45,000.00 $45,000.00 Enforcement Program)
5 Storm Water Pollution Prevention Plan LS 1 $23,000.00 $23,000.00 (SWPPP)
6 Clear Alleys, Remove Debris & Maintain LS 1 $40,000.00 $40,000.00 7 Shoring, Bracing, and Sheeting LS 1 $30,000.00 $30,000.00 8 Sawcut and Remove Existing Pavement LS 1 $300,000.00 $300,000.00 9 Abandonment of Water Lines, Valves, LS 1 $85,000.00 $85,000.00 and Services
10 Remove and Abandon Existing Fire EA 10 $2,000.00 $20,000.00 Hydrant Assembly
11 4-inch DR14 PVC Pipe (C900) LF 15 $200.00 $3,000.00
12 6-inch DR18 PVC Pipe (C900) LF 942 $130.00 $122,460.00 13 8-inch DR14 PVC Pipe (C900) LF 8058 $125.00 $1,007,250.00 14 8-inch DR18 PVC Pipe (C900) LF 5415 $120.00 $649,800.00 15 12-inch DR14 PVC Pipe (C900) LF 351 $200.00 $70,200.00 16 12-inch DR18 PVC Pipe (C900) LF 5520 $190.00 $1,048,800.00 17 4-inch Gate Valve EA 1 $2,900.00 $2,900.00
18 8-inch Gate Valve EA 51 $3,500.00 $178,500.00
19 12-inch Gate Valve EA 30 $7,200.00 $216,000.00
20 ARV and Connector Piping EA 2 $5,200.00 $10,400.00
21 Fire Hydrant Assembly with 6-inch Gate EA 34 $13,000.00 $442,000.00 Valve
22 1-inch Water Service, including meter EA 220 $3,200.00 $704,000.00 box
23 2-inch Water Service, including meter EA 2 $5,500.00 $11,000.00 Box
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Item # Item Description Units Quantity Unit Price Extension 24 Remove and Reconstruct Concrete Alley SF 1260 $64.00 $80,640.00 Approach
25 Remove and Reconstruct Concrete Curb LF 352 $230.00 $80,960.00 & Gutter
26 Remove and Reconstruct Concrete SF 5632 $14.00 $78,848.00 Sidewalk
27 Hot Mix Asphalt TON 2547 $230.00 $585,810.00
28 New Detector Traffic Loop EA 2 $8,500.00 $17,000.00
29 Restore Traffic Striping, Markings, and LS 1 $95,000.00 $95,000.00 Signage
30 Class II Aggregate Base CY 5324 $40.00 $212,960.00
31 Paint Curbs Red at Fire Hydrants EA 34 $900.00 $30,600.00 32 MID Power Pole Coordination LS 1 $33,000.00 $33,000.00 Total: $6,702,128.00
Percent From Engineer's Estimate: 1.72%
Mitchell Engineering
(415) 227-1040 1395 Evans Avenue, San Francisco, CA 94124 Base Bid
1 Mobilization/Demobilization LS 1 $350,000.00 $350,000.00 2 Monument Preservation LS 1 $1,594.00 $1,594.00
3 Traffic Control/Handling, Signage, and LS 1 $201,938.00 $201,938.00 Permitting
4 COZEEP (Construction Zone Enhanced LS 1 $80,352.00 $80,352.00 Enforcement Program)
5 Storm Water Pollution Prevention Plan LS 1 $2,336.00 $2,336.00 (SWPPP)
6 Clear Alleys, Remove Debris & Maintain LS 1 $16,613.00 $16,613.00 7 Shoring, Bracing, and Sheeting LS 1 $6,753.00 $6,753.00 8 Sawcut and Remove Existing Pavement LS 1 $920,000.00 $920,000.00 9 Abandonment of Water Lines, Valves, LS 1 $121,489.00 $121,489.00 and Services
10 Remove and Abandon Existing Fire EA 10 $1,855.00 $18,550.00 Hydrant Assembly
11 4-inch DR14 PVC Pipe (C900) LF 15 $130.00 $1,950.00
12 6-inch DR18 PVC Pipe (C900) LF 942 $140.00 $131,880.00 13 8-inch DR14 PVC Pipe (C900) LF 8058 $150.00 $1,208,700.00 14 8-inch DR18 PVC Pipe (C900) LF 5415 $130.00 $703,950.00 15 12-inch DR14 PVC Pipe (C900) LF 351 $240.00 $84,240.00 16 12-inch DR18 PVC Pipe (C900) LF 5520 $186.00 $1,026,720.00 17 4-inch Gate Valve EA 1 $1,279.00 $1,279.00
18 8-inch Gate Valve EA 51 $2,273.00 $115,923.00
19 12-inch Gate Valve EA 30 $3,945.00 $118,350.00
20 ARV and Connector Piping EA 2 $9,029.00 $18,058.00
21 Fire Hydrant Assembly with 6-inch Gate EA 34 $9,428.00 $320,552.00 Valve
22 1-inch Water Service, including meter EA 220 $3,128.00 $688,160.00 box
23 2-inch Water Service, including meter EA 2 $4,584.00 $9,168.00 box
24 Remove and Reconstruct Concrete Alley SF 1260 $34.00 $42,840.00 Approach
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Item # Item Description Units Quantity Unit Price Extension 25 Remove and Reconstruct Concrete Curb LF 352 $122.00 $42,944.00 & Gutter
26 Remove and Reconstruct Concrete SF 5632 $22.00 $123,904.00 Sidewalk
27 Hot Mix Asphalt TON 2547 $115.00 $292,905.00
28 New Detector Traffic Loop EA 2 $823.00 $1,646.00
29 Restore Traffic Striping, Markings, and LS 1 $48,275.00 $48,275.00 Signage
30 Class II Aggregate Base CY 5324 $43.00 $228,932.00
31 Paint Curbs Red at Fire Hydrants EA 34 $100.00 $3,400.00 32 MID Power Pole Coordination LS 1 $569.00 $569.00
Total: $6,933,970.00
Percent From Engineer's Estimate: 5.24%
Steve P. Rados, Inc.
(714) 835-4612 PO Box 15128 Santa Ana, CA 92735
Base Bid
1 Mobilization/Demobilization LS 1 $700,000.00 $700,000.00 2 Monument Preservation LS 1 $40,000.00 $40,000.00
3 Traffic Control/Handling, Signage, and LS 1 $146,000.00 $146,000.00 Permitting
4 COZEEP (Construction Zone Enhanced LS 1 $20,000.00 $20,000.00 Enforcement Program)
5 Storm Water Pollution Prevention Plan LS 1 $50,000.00 $50,000.00 (SWPPP)
6 Clear Alleys, Remove Debris & Maintain LS 1 $9,000.00 $9,000.00 7 Shoring, Bracing, and Sheeting LS 1 $50,000.00 $50,000.00 8 Sawcut and Remove Existing Pavement LS 1 $70,000.00 $70,000.00 9 Abandonment of Water Lines, Valves, LS 1 $60,000.00 $60,000.00 and Services
10 Remove and Abandon Existing Fire EA 10 $3,000.00 $30,000.00 Hydrant Assembly
11 4-inch DR14 PVC Pipe (C900) LF 15 $240.00 $3,600.00
12 6-inch DR18 PVC Pipe (C900) LF 942 $110.00 $103,620.00 13 8-inch DR14 PVC Pipe (C900) LF 8058 $168.00 $1,353,744.00 14 8-inch DR18 PVC Pipe (C900) LF 5415 $156.00 $844,740.00 15 12-inch DR14 PVC Pipe (C900) LF 351 $315.00 $110,565.00 16 12-inch DR18 PVC Pipe (C900) LF 5520 $188.00 $1,037,760.00 17 4-inch Gate Valve EA 1 $2,100.00 $2,100.00
18 8-inch Gate Valve EA 51 $2,600.00 $132,600.00
19 12-inch Gate Valve EA 30 $4,500.00 $135,000.00
20 ARV and Connector Piping EA 2 $4,000.00 $8,000.00
21 Fire Hydrant Assembly with 6-inch Gate EA 34 $12,000.00 $408,000.00 Valve
22 1-inch Water Service, including meter EA 220 $1,200.00 $264,000.00 box
23 2-inch Water Service, including meter EA 2 $4,200.00 $8,400.00 box
24 Remove and Reconstruct Concrete Alley SF 1260 $55.00 $69,300.00 Approach
25 Remove and Reconstruct Concrete Curb LF 352 $65.00 $22,880.00 & Gutter
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Item # Item Description Units Quantity Unit Price Extension 26 Remove and Reconstruct Concrete SF 5632 $19.00 $107,008.00 Sidewalk
27 Hot Mix Asphalt TON 2547 $210.00 $534,870.00
28 New Detector Traffic Loop EA 2 $7,500.00 $15,000.00
29 Restore Traffic Striping, Markings, and LS 1 $45,000.00 $45,000.00 Signage
30 Class II Aggregate Base CY 5324 $118.00 $628,232.00
31 Paint Curbs Red at Fire Hydrants EA 34 $118.00 $4,012.00 32 MID Power Pole Coordination LS 1 $15,000.00 $15,000.00 Total: $7,028,431.00
Percent From Engineer's Estimate: 6.67%
Teichert Construction
(916) 767-6400 400 Sunrise Ave, Suite 300, Roseville, CA 95661 Base Bid
1 Mobilization/Demobilization LS 1 $740,000.00 $740,000.00 2 Monument Preservation LS 1 $50,000.00 $50,000.00
3 Traffic Control/Handling, Signage, and LS 1 $309,000.00 $309,000.00 Permitting
4 COZEEP (Construction Zone Enhanced LS 1 $50,000.00 $50,000.00 Enforcement Program)
5 Storm Water Pollution Prevention Plan LS 1 $22,000.00 $22,000.00 (SWPPP)
6 Clear Alleys, Remove Debris & Maintain LS 1 $100,000.00 $100,000.00 7 Shoring, Bracing, and Sheeting LS 1 $100,000.00 $100,000.00 8 Sawcut and Remove Existing Pavement LS 1 $140,000.00 $140,000.00 9 Abandonment of Water Lines, Valves, LS 1 $200,000.00 $200,000.00 and Services
10 Remove and Abandon Existing Fire EA 10 $2,000.00 $20,000.00 Hydrant Assembly
11 4-inch DR14 PVC Pipe (C900) LF 15 $240.00 $3,600.00
12 6-inch DR18 PVC Pipe (C900) LF 942 $185.00 $174,270.00 13 8-inch DR14 PVC Pipe (C900) LF 8058 $155.00 $1,248,990.00 14 8-inch DR18 PVC Pipe (C900) LF 5415 $125.00 $676,875.00 15 12-inch DR14 PVC Pipe (C900) LF 351 $290.00 $101,790.00 16 12-inch DR18 PVC Pipe (C900) LF 5520 $200.00 $1,104,000.00 17 4-inch Gate Valve EA 1 $2,249.00 $2,249.00
18 8-inch Gate Valve EA 51 $2,750.00 $140,250.00
19 12-inch Gate Valve EA 30 $4,300.00 $129,000.00
20 ARV and Connector Piping EA 2 $5,500.00 $11,000.00
21 Fire Hydrant Assembly with 6-inch Gate EA 34 $5,500.00 $187,000.00 Valve
22 1-inch Water Service, including meter EA 220 $2,300.00 $506,000.00 box
23 2-inch Water Service, including meter EA 2 $7,500.00 $15,000.00 box
24 Remove and Reconstruct Concrete Alley SF 1260 $42.00 $52,920.00 Approach
25 Remove and Reconstruct Concrete Curb LF 352 $60.00 $21,120.00 & Gutter
26 Remove and Reconstruct Concrete SF 5632 $17.00 $95,744.00 Sidewalk
27 Hot Mix Asphalt TON 2547 $340.00 $865,980.00
28 New Detector Traffic Loop EA 2 $5,000.00 $10,000.00
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Item # Item Description Units Quantity Unit Price Extension 29 Restore Traffic Striping, Markings, and LS 1 $38,000.00 $38,000.00 Signage
30 Class II Aggregate Base CY 5324 $50.00 $266,200.00
31 Paint Curbs Red at Fire Hydrants EA 34 $100.00 $3,400.00 32 MID Power Pole Coordination LS 1 $11,500.00 $11,500.00 Total: $7,395,888.00
Percent From Engineer's Estimate: 12.25%
Flowline Contractors, Inc.
(916) 383-7525 6560 Asher Lane, Sacramento, CA, 95828
Base Bid
1 Mobilization/Demobilization LS 1 $135,661.00 $135,661.00 2 Monument Preservation LS 1 $3,300.00 $3,300.00
3 Traffic Control/Handling, Signage, and LS 1 $190,894.00 $190,894.00 Permitting
4 COZEEP (Construction Zone Enhanced LS 1 $113,622.00 $113,622.00 Enforcement Program)
5 Storm Water Pollution Prevention Plan LS 1 $29,830.00 $29,830.00 (SWPPP)
6 Clear Alleys, Remove Debris & Maintain LS 1 $38,860.00 $38,860.00 7 Shoring, Bracing, and Sheeting LS 1 $63,201.00 $63,201.00 8 Sawcut and Remove Existing Pavement LS 1 $113,200.00 $113,200.00 9 Abandonment of Water Lines, Valves, LS 1 $186,064.00 $186,064.00 and Services
10 Remove and Abandon Existing Fire EA 10 $2,341.00 $23,410.00 Hydrant Assembly
11 4-inch DR14 PVC Pipe (C900) LF 15 $956.00 $14,340.00 12 6-inch DR18 PVC Pipe (C900) LF 942 $212.00 $199,704.00 13 8-inch DR14 PVC Pipe (C900) LF 8058 $155.00 $1,248,990.00 14 8-inch DR18 PVC Pipe (C900) LF 5415 $144.00 $779,760.00 15 12-inch DR14 PVC Pipe (C900) LF 351 $209.00 $73,359.00 16 12-inch DR18 PVC Pipe (C900) LF 5520 $219.00 $1,208,880.00 17 4-inch Gate Valve EA 1 $2,177.00 $2,177.00
18 8-inch Gate Valve EA 51 $3,245.00 $165,495.00
19 12-inch Gate Valve EA 30 $5,182.00 $155,460.00
20 ARV and Connector Piping EA 2 $11,076.00 $22,152.00
21 Fire Hydrant Assembly with 6-inch Gate EA 34 $10,542.00 $358,428.00 Valve
22 1-inch Water Service, including meter EA 220 $4,243.00 $933,460.00 box
23 2-inch Water Service, including meter EA 2 $6,614.00 $13,228.00 box
24 Remove and Reconstruct Concrete Alley SF 1260 $37.00 $46,620.00 Approach
25 Remove and Reconstruct Concrete Curb LF 352 $100.00 $35,200.00 & Gutter
26 Remove and Reconstruct Concrete SF 5632 $36.00 $202,752.00 Sidewalk
27 Hot Mix Asphalt TON 2547 $324.00 $825,228.00
28 New Detector Traffic Loop EA 2 $2,178.00 $4,356.00
29 Restore Traffic Striping, Markings, and LS 1 $58,061.00 $58,061.00 Signage
30 Class II Aggregate Base CY 5324 $44.00 $234,256.00
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Item # Item Description Units Quantity Unit Price Extension 31 Paint Curbs Red at Fire Hydrants EA 34 $132.00 $4,488.00 32 MID Power Pole Coordination LS 1 $17,491.00 $17,491.00 Total: $7,501,927.00
Percent From Engineer's Estimate: 13.86%
West Valley Construction Co Inc
(408) 371-5510 PO Box 5639, San Jose, CA 95150
Base Bid
1 Mobilization/Demobilization LS 1 $582,000.00 $582,000.00 2 Monument Preservation LS 1 $29,000.00 $29,000.00
3 Traffic Control/Handling, Signage, and LS 1 $345,000.00 $345,000.00 Permitting
4 COZEEP (Construction Zone Enhanced LS 1 $21,000.00 $21,000.00 Enforcement Program)
5 Storm Water Pollution Prevention Plan LS 1 $50,000.00 $50,000.00 (SWPPP)
6 Clear Alleys, Remove Debris & Maintain LS 1 $46,000.00 $46,000.00 7 Shoring, Bracing, and Sheeting LS 1 $26,000.00 $26,000.00 8 Sawcut and Remove Existing Pavement LS 1 $53,000.00 $53,000.00 9 Abandonment of Water Lines, Valves, LS 1 $406,000.00 $406,000.00 and Services
10 Remove and Abandon Existing Fire EA 10 $1,800.00 $18,000.00 Hydrant Assembly
11 4-inch DR14 PVC Pipe (C900) LF 15 $254.00 $3,810.00
12 6-inch DR18 PVC Pipe (C900) LF 942 $135.00 $127,170.00 13 8-inch DR14 PVC Pipe (C900) LF 8058 $150.00 $1,208,700.00 14 8-inch DR18 PVC Pipe (C900) LF 5415 $143.00 $774,345.00 15 12-inch DR14 PVC Pipe (C900) LF 351 $258.00 $90,558.00 16 12-inch DR18 PVC Pipe (C900) LF 5520 $176.00 $971,520.00 17 4-inch Gate Valve EA 1 $2,300.00 $2,300.00
18 8-inch Gate Valve EA 51 $3,100.00 $158,100.00
19 12-inch Gate Valve EA 30 $5,000.00 $150,000.00
20 ARV and Connector Piping EA 2 $7,900.00 $15,800.00
21 Fire Hydrant Assembly with 6-inch Gate EA 34 $10,350.00 $351,900.00 Valve
22 1-inch Water Service, including meter EA 220 $2,600.00 $572,000.00 box
23 2-inch Water Service, including meter EA 2 $4,100.00 $8,200.00 box
24 Remove and Reconstruct Concrete Alley SF 1260 $47.00 $59,220.00 Approach
25 Remove and Reconstruct Concrete Curb LF 352 $196.00 $68,992.00 & Gutter
26 Remove and Reconstruct Concrete SF 5632 $22.00 $123,904.00 Sidewalk
27 Hot Mix Asphalt TON 2547 $528.00 $1,344,816.00
28 New Detector Traffic Loop EA 2 $2,750.00 $5,500.00
29 Restore Traffic Striping, Markings, and LS 1 $48,000.00 $48,000.00 Signage
30 Class II Aggregate Base CY 5324 $50.00 $266,200.00
31 Paint Curbs Red at Fire Hydrants EA 34 $116.00 $3,944.00 #17..
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Item # Item Description Units Quantity Unit Price Extension 32 MID Power Pole Coordination LS 1 $4,000.00 $4,000.00 Total: $7,934,979.00
Percent From Engineer's Estimate: 20.43%
Ranger Pipelines, Inc.
(415) 822-3700 P.O. Box 24109, San Francisco, CA 94124
Base Bid
1 Mobilization/Demobilization LS 1 $200,000.00 $200,000.00 2 Monument Preservation LS 1 $10,000.00 $10,000.00
3 Traffic Control/Handling, Signage, and LS 1 $100,000.00 $100,000.00 Permitting
4 COZEEP (Construction Zone Enhanced LS 1 $50,000.00 $50,000.00 Enforcement Program)
5 Storm Water Pollution Prevention Plan LS 1 $5,000.00 $5,000.00 (SWPPP)
6 Clear Alleys, Remove Debris & Maintain LS 1 $50,000.00 $50,000.00 7 Shoring, Bracing, and Sheeting LS 1 $50,000.00 $50,000.00 8 Sawcut and Remove Existing Pavement LS 1 $150,000.00 $150,000.00 9 Abandonment of Water Lines, Valves, LS 1 $50,000.00 $50,000.00 and Services
10 Remove and Abandon Existing Fire EA 10 $2,000.00 $20,000.00 Hydrant Assembly
11 4-inch DR14 PVC Pipe (C900) LF 15 $300.00 $4,500.00
12 6-inch DR18 PVC Pipe (C900) LF 942 $310.00 $292,020.00 13 8-inch DR14 PVC Pipe (C900) LF 8058 $320.00 $2,578,560.00 14 8-inch DR18 PVC Pipe (C900) LF 5415 $325.00 $1,759,875.00 15 12-inch DR14 PVC Pipe (C900) LF 351 $325.00 $114,075.00 16 12-inch DR18 PVC Pipe (C900) LF 5520 $370.00 $2,042,400.00 17 4-inch Gate Valve EA 1 $1,000.00 $1,000.00
18 8-inch Gate Valve EA 51 $3,500.00 $178,500.00
19 12-inch Gate Valve EA 30 $4,500.00 $135,000.00
20 ARV and Connector Piping EA 2 $5,000.00 $10,000.00
21 Fire Hydrant Assembly with 6-inch Gate EA 34 $8,000.00 $272,000.00 Valve
22 1-inch Water Service, including meter EA 220 $2,000.00 $440,000.00 box
23 2-inch Water Service, including meter EA 2 $4,000.00 $8,000.00 box
24 Remove and Reconstruct Concrete Alley SF 1260 $40.00 $50,400.00 Approach
25 Remove and Reconstruct Concrete Curb LF 352 $75.00 $26,400.00 & Gutter
26 Remove and Reconstruct Concrete SF 5632 $12.00 $67,584.00 Sidewalk
27 Hot Mix Asphalt TON 2547 $200.00 $509,400.00
28 New Detector Traffic Loop EA 2 $2,000.00 $4,000.00
29 Restore Traffic Striping, Markings, and LS 1 $70,000.00 $70,000.00 Signage
30 Class II Aggregate Base CY 5324 $45.00 $239,580.00
31 Paint Curbs Red at Fire Hydrants EA 34 $400.00 $13,600.00 32 MID Power Pole Coordination LS 1 $10,000.00 $10,000.00 Total: $9,511,894.00
Percent From Engineer's Estimate: 44.37%
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Item # Item Description Units Quantity Unit Price Extension Engineer's Estimate
Base Bid
1 Mobilization/Demobilization LS 1 $143,000.00 $143,000.00 2 Monument Preservation LS 1 $12,000.00 $12,000.00
3 Traffic Control/Handling, Signage, and LS 1 $80,000.00 $80,000.00 Permitting
4 COZEEP (Construction Zone Enhanced LS 1 $20,000.00 $20,000.00 Enforcement Program)
5 Storm Water Pollution Prevention Plan LS 1 $5,000.00 $5,000.00 (SWPPP)
6 Clear Alleys, Remove Debris & Maintain LS 1 $10,000.00 $10,000.00 7 Shoring, Bracing, and Sheeting LS 1 $24,000.00 $24,000.00 8 Sawcut and Remove Existing Pavement LS 1 $66,800.00 $66,800.00 9 Abandonment of Water Lines, Valves, LS 1 $132,000.00 $132,000.00 and Services
10 Remove and Abandon Existing Fire EA 10 $2,000.00 $20,000.00 Hydrant Assembly
11 4-inch DR14 PVC Pipe (C900) LF 15 $104.00 $1,560.00
12 6-inch DR18 PVC Pipe (C900) LF 942 $119.00 $112,098.00 13 8-inch DR14 PVC Pipe (C900) LF 8058 $131.00 $1,055,598.00 14 8-inch DR18 PVC Pipe (C900) LF 5415 $130.00 $703,950.00 15 12-inch DR14 PVC Pipe (C900) LF 351 $170.00 $59,670.00 16 12-inch DR18 PVC Pipe (C900) LF 5520 $168.00 $927,360.00 17 4-inch Gate Valve EA 1 $1,900.00 $1,900.00
18 8-inch Gate Valve EA 51 $3,400.00 $173,400.00
19 12-inch Gate Valve EA 30 $4,250.00 $127,500.00
20 ARV and Connector Piping EA 2 $5,000.00 $10,000.00
21 Fire Hydrant Assembly with 6-inch Gate EA 34 $14,000.00 $476,000.00 Valve
22 1-inch Water Service, including meter EA 220 $3,800.00 $836,000.00 box
23 2-inch Water Service, including meter EA 2 $4,000.00 $8,000.00 box
24 Remove and Reconstruct Concrete Alley SF 1260 $20.00 $25,200.00 Approach
25 Remove and Reconstruct Concrete Curb LF 352 $70.00 $24,640.00 & Gutter
26 Remove and Reconstruct Concrete SF 5632 $10.00 $56,320.00 Sidewalk
27 Hot Mix Asphalt TON 2547 $360.00 $916,920.00
28 New Detector Traffic Loop EA 2 $1,000.00 $2,000.00
29 Restore Traffic Striping, Markings, and LS 1 $30,000.00 $30,000.00 Signage
30 Class II Aggregate Base CY 5324 $95.00 $505,780.00
31 Paint Curbs Red at Fire Hydrants EA 34 $500.00 $17,000.00 32 MID Power Pole Coordination LS 1 $5,000.00 $5,000.00 Total: $6,588,696.00
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

February 28, 2023
Date: February 24, 2023
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: William Wong, Director of Utilities
SUBJECT: Approve Generator Rental Purchase Order Increase CONTACT: Jason Farnsworth, Wastewater Division Manager, [email protected], (209) 577-6255
DESCRIPTION:

Consider approving the increase of a Purchase Order (PO) for Bay City Electric Works, Poway, CA, for the Rental of a Standby Generator for an amount not to exceed $202,040. (Funding Source: Sewer Operations Fund)
STRATEGIC PLAN ELEMENT:

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

Provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance, and sustainability efforts.

BACKGROUND:

The City’s National Pollutant Discharge Elimination System (NPDES) permit for wastewater treatment mandates the City maintain a standby electrical power generator for the Sutter Effluent Pump Station. The standby generator is utilized to provide power to the Effluent Pump Station in the event of a power failure.

In the event of a power failure, Sutter Operations is only able to operate and hold influent wastewater for a maximum of two and one-half hours before the plant would potentially begin discharging untreated wastewater to the Tuolumne River, which is considered “Waters of the United States”, therefore violating the NPDES permit.

On December 14, 2022, through routine preventative maintenance, staff discovered the electrical power backup/standby generator was inoperable and identified water in the generator’s oil. Maintenance staff quickly responded and contacted the City’s generator repair and maintenance vendor, Bay City Electric Works to deliver a rental generator. In order to maintain NPDES permit compliance and given the urgent necessity of a backup generator, there was not sufficient time to follow the typical bid process for the rental of a backup generator. Wastewater staff worked closely with Purchasing staff to issue a Purchase Order in #18..
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City Council, February 28, 2023
Approve Generator Rental Purchase Order Increase

Page 2 of 2 ends

the amount of $39,914 for the generator rental, and Bay City Electric Works was available to mobilize immediately.

DISCUSSION:

Due to supply chain issues, parts deliveries and the unknown extent of the generator damage, the amount and estimated time of repair cannot be determined at this time and staff is requesting authorization to extend the rental agreement and increase the existing PO 238191 through August for an amount not to exceed $202,040.

In order to prevent violating the City’s NPDES permit, staff requested the emergency rental of a standby generator. Modesto Municipal Code Section 8-3.204(c) provides that compliance with the formal bid procedures contained in Section 8-203 is not required when calling for bids on a competitive basis is undesirable due to exigent circumstances. Here, compliance with the formal bid requirement would pose a risk to the life, health and property due to the urgent need of fixing the generator.

FISCAL IMPACT:

ANTICIPATED RENTAL EXPENDITURES
Rental Through August 31, 2023 $202,040
Existing PO No. 238191 $39,914
TOTAL INCREASE $162,126
Funds are currently budgeted in the Sewer Operations Fund.

COMMITTEE RECOMMENDATION:

Given the unforeseen nature of this occurrence and the urgent need for a backup generator, there was not sufficient time to present this item to Committee.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the increase of a Purchase Order with Bay City Electric Works, Poway, CA, for the Rental of a Standby Generator by $162,126 from $39,914 for a revised total amount not to exceed $202,040, and authorizing the Purchasing Manager, or her designee to increase the Purchase Order.

Approved by:

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

1. Resolution

2. Pricing

3. PO
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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2023-XX

RESOLUTION APPROVING THE INCREASE OF A PURCHASE ORDER WITH

BAY CITY ELECTRIC WORKS, POWAY, CA, FOR THE RENTAL OF A STANDBY GENERATOR BY $162,126 FROM $39,914 FOR A REVISED TOTAL AMOUNT NOT TO EXCEED $202,040 AND AUTHORIZING THE PURCHASING MANAGER, OR HER DESIGNEE TO INCREASE THE PURCHASE ORDER.

WHEREAS, The City’s National Pollutant Discharge Elimination System (NPDES) permit for wastewater treatment mandates the City maintain a standby electrical power generator for the Sutter Effluent Pump Station. The standby generator is utilized to provide power to the Effluent Pump Station in the event of a power failure, and WHEREAS, in the event of a power failure, Sutter Operations is only able to operate and hold influent wastewater for a maximum of two and one-half hours before the plant would potentially begin discharging untreated wastewater to the Tuolumne River, which is considered “Waters of the United States”, therefore violating the NPDES permit, and WHEREAS, on December 14, 2022, through routine preventative maintenance, staff discovered the electrical power backup/standby generator was inoperable and identified water in the generator’s oil. Maintenance staff quickly responded and contacted the City’s generator repair and maintenance vendor, Bay City Electric Works to deliver a rental generator. In order to maintain NPDES permit compliance and given the urgent necessity of a backup generator, there was not sufficient time to follow the typical bid process for the rental of a backup generator. Wastewater staff worked closely with Purchasing staff to issue a Purchase Order in the amount of $39,914 for the generator rental, and Bay City Electric Works was available to mobilize immediately, and
WHEREAS, due to supply chain issues, parts deliveries and the unknown extent of the generator damage, the amount and estimated time of repair cannot be determined at this #18..
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2 time and staff is requesting authorization to extend the rental agreement and increase the existing PO 238191 through August for an amount not to exceed $202,040, and WHEREAS, in order to prevent violating the City’s NPDES permit, staff requested the emergency rental of a standby generator. Modesto Municipal Code Section 8-3.204(c) provides that compliance with the formal bid procedures contained in Section 8-203 is not required when calling for bids on a competitive basis is undesirable due to exigent circumstances. Here, compliance with the formal bid requirement would pose a risk to the life, health and property due to the urgent need of fixing the generator.

NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Modesto that it hereby approves the increase of the Purchase Order with Bay City Electric Works, Poway, CA, for the rental of a standby generator by $162,126 from $39,914 for a revised total amount not to exceed $202,040.

BE IT FURTHER RESOLVED that the Acting Purchasing Manager, or her designee, is hereby authorized to update the Purchase Order, in a form approved by the City Attorney.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 28th day of February, 2023, 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:
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3 ATTEST:

DIANE NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY:

JOSE M. SANCHEZ, City Attorney
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-Page 1of 4-
13625 Danielson Street
Poway, CA 92064
Phone: (619) 938-8200
Fax: (619) 938-8214
www.bcew.com
Date: February 16, 2023
Quotation Number: 164580-R1
Customer Name: Richard Christenson
Company Name: City of Modesto - Waste Water
Phone #: (209) 606-4302 E-mail address: [email protected] Reference: 1000kW generator set with 50’ cable run
Thank you for your interest in our generator rental services, and for allowing us to submit the following quotation for your consideration.

OVERVIEW OF SERVICES REQUESTED / PROJECT SPECIFICATIONS:

Provide a temporary, portable generator set capable of providing 1200 Amps at 480VAC, 3 phase, 3 wire, 60 hertz power. Unit will be used to provide standby power during stationary generator repairs. Rental began on December 12, 2022, and rental duration was requested to be extended through August 12, 2023 for use at the Waste Water Treatment Plant located at 1221 Sutter Ave, Modesto, CA 95351. Replacement parts are expected to arrive by April 1, 2023, and rental would be terminated shortly after repairs are completed, actual termination date is unknown at this time.

EQUIPMENT PROPOSED AND RENTAL RATES:
1000kW (1000kW standby / 900kW prime) generator set @ single shift .........$2250.00 per day ................................................... $6000.00 per week ...........................................$17400.00 per month P/M Service Surcharge .................Waived, was not quoted at the time of deployment Cable rental: Ten (10) 4/0 x 50’ (500’ total) ........................................ $500.00 per week .........................................................................................................$1100.00 per month Single Shift: 1.0 x single shift rate: 00-08 hours/day, 00-040 hours/week, 000-160 hours/month Double Shift: 1.5 x single shift rate: 08-16 hours/day, 40-080 hours/week, 160-320 hours/month Triple Shift: 2.0 x single shift rate: 16-24 hours/day, 80-168 hours/week, 320-672 hours/month Monthly rate is based on 4 weeks (28 days) billing cycle. 0-24 hours = 1 day (same day only) 3-7 days = 1 week 3-4 weeks = 1 month ENVIRONMENTAL CHARGES:

A 4% environmental fee will be added to all rental items billed.

FUEL CHARGES AND CONSUMPTION RATES:

Generator set will be shipped to your site with no more than 200 gallons of fuel onboard unit due to CHP restrictions, generator must not have more than 200 gallons of fuel onboard during the return trip due to the same CHP restrictions. Fuel service can be provided upon request. We can supply CARB diesel fuel on site at $9.00 per gallon – price is subject to daily change. Fuel drop fee during regular business hours is $175.00. Any after-hours, weekend or holiday fuel drops are assessed applicable overtime/double time rates. The 1000kW burns approximately 73.2GPH @ full load, 50GPH @ 75% load, or 36.7GPH @ 50% load. The tank size on this unit varies pending equipment availability at the time of order. #18..
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TRANSPORTATION:

Delivery and pick up charge to jobsite during regular business hours. .............................................................................................$1875.00 flat rate each way DAMAGE WAIVER:

Damage waiver charge is required unless customer has supplied us with a proper certificate of insurance prior to commencement of rental. In lieu of a proper certificate, and for an additional fee of 10% of the total equipment rental charges, we agree to waive claims for damage to equipment while in your possession. This waiver is defined in our Terms and Conditions, please request separate to this quote. It does not cover theft, mysterious disappearance, service charges or obvious neglect on your part. Customer understands that a damage waiver is not insurance. The damage waiver charge is optional PROVIDED the customer supplies us with a proper insurance certificate naming us as additionally insured for the full value of the rental equipment prior to commencement of the rental. A proper insurance certificate must include both a general liability policy and a separate property damage policy covering the rental equipment. Replacement value of the 1000kW is $493,400.00.

LABOR:

This quotation excludes any labor services such as layout, installation, connect or disconnect. This would be quoted by the Service Department.

CABLE DAMAGE:

All cabling supplied to customer job site must be rolled up prior to calling for pick up. In the event cable is not coiled back up there will be an additional charge of $50.00 per cable. Damaged cables will be replaced at market rate plus 20%.

MAINTENANCE
The customer is responsible for daily inspection and maintenance of proper levels of engine oil and coolant. Bay City Electric Works will provide all routine maintenance for the duration of your project. Units that are run for prime power applications will require servicing every 300-hours of operation. This is an additional service and may require a travel charge in addition to the P/M Service Surcharge per each occurrence (where applicable) and as being performed on site during normal business hours. After hours, and holiday charges will be added to pricing if outside normal hours and will be invoiced as additional charges to this quote when applicable.

SERVICE
Bay City Electric Works’ Service Department is available to respond 24 hours every day.

TERMS AND CONDITIONS
• Prices shown are firm for acceptance within 30 days.
• Quotation is subject to equipment availability.
• Prices are based on specifications provided by the customer. Any variation in those specifications may result in additional charges.
• Terms of payment are net at invoice. Subject to credit approval. • Prices quoted may not include and as such are subject to applicable taxes. • All permits (excluding standard Statewide Air Permit) and city fees are the responsibility of the customer. Bay City is exempt from paying all permitting or fees to run equipment.
• Customer / operator is responsible for complying with all Federal, State, and local air quality requirements and regulations.
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The following is an estimated cost for use in completing your paperwork. It is only an estimate, and it is based on a rental period from December 12, 2022, through August 12, 2023 at single shift. Fuel charges are not estimated, and customer will be billed on actual consumption where applicable. Unit is not expected to run during this standby application. Please call me if you have any questions or if there is any change in the actual scope of work.

Rental:
1000kW @ 1-month (28-days) single shift 12/12 – 1/8 17,400.00 December 2022 Cycle bill #2 1/9 – 2/5 17,400.00 January 2023
Cycle bill #3 2/6 – 3/5 17,400.00 February
Cycle bill #4 3/6 – 4/2 17,400.00 March
Cycle bill #5 4/3 – 4/30 17,400.00 April
Cycle bill #6 5/1 – 5/28 17,400.00 May
Cycle bill #7 5/29 – 6/25 17,400.00 June
Cycle bill #8 6/26 – 7/23 17,400.00 July
Cycle bill #9 7/24 – 8/12 12,000.00 August (2-weeks)
Cable Rental: Ten (10) 4/0 x 50’ (500’ Total) Tails included 1,100.00 December 2022 Cycle bill #2 1,100.00 January 2023
Cycle bill #3 1,100.00 February
Cycle bill #4 1,100.00 March
Cycle bill #5 1,100.00 April
Cycle bill #6 1,100.00 May
Cycle bill #7 1,100.00 June
Cycle bill #8 1,100.00 July
Cycle bill #9 1,000.00 August (2-weeks)
4% environmental fee on all rental 6,440.00
Damage waiver charges 16,100.00
CAHERS1 CA state code 1656.5, Section 31201-31203 Waived Sales/use tax on rental @ 7.875% Modesto 14,453.78
Subtotal of rental charges $197,993.78
Freight:

Site delivery (Outside hauler portal to portal) 1,875.00 Site pickup (Outside hauler portal to portal) 1,875.00
*Fuel/Freight Surcharge Waived (*Pending carrier)
Sales/use tax on freight @ 7.875% 295.31
Subtotal of freight charges $4,045.31
If you have any further questions, please give me a call on my cell phone at (909) 520-1603. Thank you.

Best regards,
Wayne Stalcup
Rental Department
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Quotation Number: 164580-R1
Date of Quotation: 02/16/2023

PROPOSAL ACCEPTANCE
To accept this proposal, please complete, sign, fax, or e-mail scan this page with the information completed back to our office.

Requested Delivery Date & Time: _____________________________________ Site Contact: __________________________________________ Site Contact phone number: ______________________________ Site Address: _____________________________________________________ _____________________________________________________
_____________________________________________________
Job Number: _________________ Purchase Order #: _________________ Signature: __________________________________ Date: ____________ Title: ______________________________________
Please Request a Copy of our full Terms and ConditionsNOTES:
1221 Sutter Ave, Modesto, CA 95351
1000kW, 480V, no neutral = 10 @ 4/0 x 50' with male tails Update on 02/14/2023:

Can you please provide me pricing ASAP for extending the rental through August 12, 2023? We may not need it that long but we need to get the funds approved JIC.

Thank you,
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PURCHASE ORDER
City of Modesto
Purchasing Division
1010 Tenth St.,Suite 5300
Modesto, CA, 95354
Tel: (209) 577-5405 Fax: (209) 544-8821
Purchase Order No: 238191
Deliver By : 12-FEB-2023
FOB :

Terms : Net 30
Buyer : Carolanne Wattle
Requestor : Christine Black
Issue Date : 16-DEC-2022
Page : 1 of 2 Revision:

Vendor: Ship To: Invoice To:

BAY CITY ELECTRIC WORKS
PO BOX 32993
PHOENIX,AZ, 85064POL_SPACE?>
UPP.Wastewater Services
Administration
1221 Sutter Ave
Modesto, CA 95351
City of Modesto Accounts Payable
PO Box 642
Modesto, CA 95353

Vendor Contact: Email: Fax:

LINE QTY UOM ITEM - DESCRIPTION UNIT PRICE EXTENDED PRICE 1 2 Each JCB 1000kW Generator Set rental for
possibly 2 months.
17,400.0000 34,800.00
2 20 Each 4/0 x 50' cam/cam cable (500') 110.0000 2,200.00 Note to Supplier: Work Order 221212-0072 Generator
Rental
SALES TAX: $ 2,913.75

IMPORTANT INSTRUCTIONS

1. EMAIL INVOICE PROMPTLY TO [email protected].

2. INVOICE EACH PURCHASE ORDER SEPARATELY.

3. ALL ITEMS F.O.B DESTINATION UNLESS OTHERWISE SPECIFIED.

4. CITY RESALE PERMIT NO.SRAM 28-043875.

5. ORDER SUBJECT TO CONDITIONS SET FORTH ON FACE OF ORDER AND ATTACHED TERMS AND CONDITIONS.

TOTAL: $ 39,913.75

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PURCHASE ORDER-TERMS & CONDITIONS

1.PAYMENTS: Payments shall be made upon submission of itemized invoices in duplicate at the prices stipulated herein for supplies delivered and accepted or services rendered and accepted, less deductions, if any, as herein provided. Payment for partial deliveries may be made whenever amounts due so warrant or when requested by the Vendor and approved by the Purchasing Manager.

2.INSPECTION: All materials and workmanship are subject to inspection and test by the City for compliance with specifications as included herein, within a reasonable time after delivery. In the event articles or services are detective or not in conformity with this order, the City shall have the rights to either reject the items or require correction. Defective articles or services shall be removed from City premises and/or corrected by and at the expense of the Vendor. Failure to inspect and accept or reject shall not relieve the Vendor from responsibility for compliance with specifications. Final acceptance shall be conclusive except as regards to latent defects, fraud, or such gross mistakes as amount to fraud.

3.RESPONSIBILITY: Unless otherwise specified, the Vendor shall be responsible for all items covered by this Purchase Order until delivered at the designated delivery point and the Vendor shall bear all risks as to items rejected or requiring correction after notice of such rejection or correction is given.

4.SHIPMENT: All items F.O.B. Destination unless otherwise specified. When authorized, freight to be prepaid. Do not ship collect. Original receipted freight bill must accompany invoice. Shipment must be made within the time stated on Purchase Order, failing which City reserves the right to purchase elsewhere and Charge Vendor with any loss incurred, unless delay in making shipment is due to unforeseeable causes beyond the control, and without the fault or negligence of the Vendor.

5.CHANGES: This Purchase Order may at any time, by written order, be changed in regard to the materials or service to be furnished, quantities ordered, unit price, discount, delivery point or arrange¬ments, terms or any other matters affecting a valid order. In the event such change causes an Increase or decrease in the cost of performance hereunder, and equitable adjustment will be made for the cost thereof, subject to the approval of the Purchasing Manager, and written notice given therefore.

6.WARRANTY: Notwithstanding any other provisions of the order, Vendor warrants that the materials, supplies or other services furnished shall be of the most suitable grade and exactly as specified in this order. Such warranty shall include the following:
performance, workmanship, labor, materials, seller's design or engineering contributions. If a defect is discovered In any item of materials, supplies or services covered in this order, Vendor shall correct at its expense, including transportation/freight, such defects as are reported within one year of final acceptance. Upon expiration of the applicable warranty period. all such liability shall terminate except for fraud, or such gross mistakes as amount to fraud, latent defects or specific failure to comply with the terms of this order.

7.DISCOUNT: In connection with any discount offered, time will be computed from date of delivery to carrier when delivery and acceptance are at point of origin, or from date of delivery and acceptance if at destination or from date correct Invoice is received by City if invoice date is later than date of delivery.

8.INSURANCE: All orders where work, maintenance, or service is performed on City property require appropriate insurance and indemnification. Services will be suspended without proper insurance certificates being on file with the City. Contact the City Purchasing Office to verify the type and amount of insurance required.

9.EXEMPTIONS: The City is exempt from payment of Federal Excise Tax. All invoices shall be exclusive of such excise lax. If purchase is not subject to Sales Tax, the statement tor resale will appear in body of Purchase Order.

10.INFRINGEMENT: Vendor agrees to protect. indemnify and save harmless the City as buyer, its agents, officers, employees, and volunteers from any claim, loss or damage from infringement of trademarks patents, copyrights and unfair competition action with respect to this Purchase Order.

11.INDEMNITY: The Vendor shall hold the City,its agents, officers, employees, 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 Vendor, or its agents, officers, employees, or volunteers relating to or during the performance of its obligations under this Agreement. Vendor's obligation to defend, indemnify, and hold the City, its agents, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this Agreement for Vendor to procure and maintain a policy of insurance. In the indemnity clause contained herein Vendor agrees to defend, indemnify and hold City harmless from the negligence of its employees, among other risks. With reference to the foregoing, the parties agree that all risk of loss, including but not limited to damages, property losses and defense of third party suits, arising out of or relating to the operation of City owned vehicles by Vendor's employees is apportioned to Vendor in accordance with the provisions contained in Indemnity.

12.GOVERNING LAW: This Purchase Order shall be deemed made in, governed by, performed in, and construed and enforced in accordance with the laws of the State of California, U.S.A., without giving effect to its conflicts of laws, provisions or principles.

13.LIABILITY: The City shall not be responsible for any damage that may accrue by reason of the death or injury of the person of the Vendor's officers, agents, employees, invitees, or licensees, or be set up at any time because of personal injury or damage to property sustained by any other person or persons, which may have been caused or contributed to, approximately or remotely, by reason of or in the course of performance of the Purchase Order. The Vendor shall assume full responsibility for the defense of any claim arising under the Purchase Order and the Vendor shall save, keep, and bear harmless the City, all officers and employees thereof, from all damages, costs, or expenses because of personal injury or property damage based on the performance of this Purchase Order or asserted against It.

14.DISPUTES: All disputes concerning questions of fact which may arise under this Purchase Order, and not disposed of by mutual consent, shall be decided by the Purchasing Manager.

15.OFFER AND ACCEPTANCE: Vendor represents its acceptance to provide products and/or services as follows: City's offer to purchase products and/or services is expressly conditioned upon Vendor's assent to the terms and conditions set forth in City's purchase order documents, specifications, supporting data, and these articles. Vendor agrees that Vendor's Order Acknowledgment terms and conditions received prior to, during, or after order placement by City are hereby rejected. City purchase orders signed by the City's Purchasing Manager or his/her designated agent and issued to Vendor constitute written notification to Vendor of City's rejection of any and all of Vendor Order Acknowledgments, counter offers and changes to the City's terms and conditions.

16.CANCELLATION: The City reserves the right to cancel the order with the vendor upon failure to meet contractual expectations and/or obligations, as recommended by the Purchasing Manager or his/her designee. Either party may terminate the contract in its unilateral discretion for any or no reason by providing at least sixty(60) days written notice of its desire to terminate.

17.ASSIGNMENT: Neither this purchase order nor any portion thereof shall be subcontracted or assigned without the written consent of the City in each and every instance.

18.MISCELLANEOUS: Time is of the essence in each and every provision of this purchase order. #18..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

February 28, 2023
Date: February 14, 2023
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Brandon Gillespie, Chief of Police, [email protected], 209-572-9500 SUBJECT: Modesto Police Department Fixed Wing Aircraft Procurement CONTACT: Ivan Valencia, Assistant Chief of Police, [email protected], 209-572-9500
DESCRIPTION:

Consider approving the Purchase of a GippsAero GA8 airplane from CNC Technologies, Oak Park, CA for a total amount not to exceed $741,578. (Funding Source: Traffic Safety Fund and State Law Enforcement Supplemental Fund)
STRATEGIC PLAN ELEMENT:

The recommended action supports the City’s 2020-2025 Strategic Plan goal of improving safety and quality of life through a combination of prevention and intervention efforts that address safety and its underlying issues.

BACKGROUND:

Many public safety agencies throughout the country take advantage of the benefits offered by an air support unit with the primary goal of providing a level of service that contributes to the overall success of crime fighting efforts. An air support unit enhances officer and public safety, reduces the incidence of crime and thus reduces the fear of crime. Air assets can provide support to ground units by being first on scene; police agencies report air support units arrive first anywhere from 65 to 97 percent of the time. Once air support has arrived at the scene, suspects usually cease their activity because of their immediate desire to hide or escape.

Air support units have the ability to scan large areas increasing the chances of halting crime and apprehending suspects. While on patrol they are on constant look out for criminal activity including traffic violations and drunk drivers. An air support unit can respond quickly to crimes that are in progress, resulting in more arrests and recovery of stolen property.

Air support crews are able to cancel responding patrol units altogether or help manage resources by tailoring the number of officers required. This allows ground units to remain available to handle higher priority incidents or focus on proactivity. Air support units are #20..
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recognized as force multipliers. Force multipliers are assets or equipment that increases the effectiveness of law enforcement personnel. In this case, one flight crew has been equated to

6.5 ground units during routine patrol and the equivalent of 21 officers during area searches such as looking for a missing person or fleeing suspect. Studies have shown that the probability of catching a fleeing suspect is reduced by 80 percent if a police unit takes more than 3 minutes to arrive.

A study commissioned by NASA and conducted by the Jet Propulsion Laboratory’s (JPL) Space Technology Applications reported the following findings for the Los Angeles Police Department1:
 The number of Part 1 Property Crimes is reduced when a helicopter is overhead.  The number of arrests associated with radio calls is three times higher with the involvement of aircrews.

Flight crews can be used to monitor traffic flows, detect and help with enforcement of traffic laws, respond to traffic collisions, help with resource and incident management, and assist with be on look outs (BOLO’s) of reported traffic violators. Officers and supervisors can use an air support unit as a pursuit management tool which allows ground units to reduce speeds and distance themselves from fleeing vehicles, reducing the potential of collisions arising from high speed pursuits.

DISCUSSION:

In April of 2021, the Modesto Police Department entered into a five-and-a-half-month partnership with the BLENDABLE Foundation, a nonprofit organization with a mission to enhance law enforcement by developing a low-cost air support alternative.

The foundation provided a 2017 Auto Gyro, Cavalon which was outfitted with state-of-the-art public safety equipment such as a Forward Looking Infrared (FLIR) day and night camera, high powered light emitting diode (LED) search light, police radios and mapping system. The gyroplane was incorporated into the Modesto Police Department’s crime reduction efforts. It should be noted that in 2021, which includes the time period the air support pilot program was operational, the City of Modesto experienced reductions in several crime categories, including double-digit decreases in commercial burglaries, vehicle thefts, and residential burglaries.

The gyroplanes primary function was to respond to calls for service generated through the 911 system. When not actively on a call or assisting officers with searches, the flight crew proactively patrolled commercial corridors within the City of Modesto in an effort to deter crime.

The air support unit flew 152 flights and responded to 258 incidents. The air support unit was first on-scene on 92 calls for service and handled 72 calls without additional assistance from ground units. The air support pilot program assisted with 69 arrests, 11 pursuits, 24 warrant services, 24 traffic related incidents, 39 mutual aid requests and proactively initiated 41 calls.

A modern police helicopter that is “ready for service” can cost anywhere between $1.5 million to $4 million. They're also expensive to operate, averaging approximately $650 per hour. In July of 2019, the Stockton Police Department deployed its first ever helicopter. The Bell 505 Jet Ranger was equipped with public safety equipment and cost over $3 million. The San Joaquin County Sheriff’s Department opted for a more affordable fixed wing option costing approximately $1.275 million, fully equipped. The Stanislaus Sheriff’s Department primarily uses two helicopters to 1 https://www.lapdonline.org/office-of-the-chief-of-police/office-of-special-operations/air-support-division/historyof-the-air-support-division/ #20..
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provide air support services with estimated yearly annual budget of $845,000. The key to implementing a successful air support unit at the Modesto Police Department is to find a costeffective aerial platform that can be operated efficiently and economically. Helicopters are a more expensive solution and have high operating costs which limits an agency’s ability to deploy the aerial units more frequently.

In the police department’s search for a cost-effective aerial patrol platform, the Modesto Police Department has identified a 2012 GippsAero GA8 airplane being sold by CNC Technologies out of Oak Park, CA. The airplane was originally purchased by the State of Pennsylvania for public safety use. The aircraft is equipped with equipment to assist in law enforcement efforts. The airplane includes a FLIR Starsafire 380 high definition (HD) camera, retractable camera pod, Motorola radio, downlink equipment, and Churchill moving map system at a cost of $685,000.

This is a turnkey solution that is immediately ready for use and is only for sale as the State of Pennsylvania has procured a new and faster aircraft for their particular needs which includes flying the span of the entire state. The estimated cost of a new purchase for the same aircraft and equipment is approximately $1,759,632.

In the department’s search, no other vendor has been found to offer an aircraft equipped with the needed public safety equipment required for law enforcement use. Air Bear Tactical Aircraft LLC out of Santa Ana, CA has quoted the Modesto Police Department $1,200,000 to procure and outfit a late model aircraft. By purchasing a used aircraft with all of the public safety equipment already installed, the department is able to save more than $400,000 in installation and associated public safety equipment cost alone.

On January 23, 2023, the aircraft classifieds website Controller had two GippsAero GA8 listed for sale. Airside Aviation Inc advertised a 2017 model for $800,000. SkyQuest International LLC had a 2012 model for $569,000. Neither of the aircraft listed had the specialized equipment needed for public safety use which would be an addition of at least $400,000.

If approved, this purchase would enter into escrow with Insured Aircraft Title Service, LLC, one of the most respected aircraft title and escrow companies in the world with 60 years of experience facilitating aircraft transactions across the world. There are several steps in the escrow process to ensure both the purchaser (City) and the seller are protected during the process. A formal inspection has been completed per the provision in the purchase agreement in section 5.

Modesto Municipal Code (MMC) Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment, or contractual services to be formally bid. However, exceptions to the formal bidding process are granted in MMC 8-3.204(d) “where the Purchasing Manager, in his or her discretion, determines that a process other than the formal bid procedure set forth in Section 8-3.203 will result in procurement for the City at the lowest possible cost commensurate with the desired quality.” Here, CNC Technologies, Oak Park, CA, should be exempt from the formal bidding procedure in accordance with MMC 8-3.204(d) as the department’s research has shown that at current, no other alternative can match the price, quality and public safety equipment of the available GippsAero GA8.

FISCAL IMPACT:
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The anticipated cost for the initial purchase of the GippsAero GA8 from CNC Technologies is $741,578 and will be funded by splitting the cost 50/50 between the Traffic Safety Fund (Fund 1600) and the State Supplemental Law Enforcement Services Fund (SLESF). The breakdown of the cost for the purchase is outlined below:

Description Cost
Aircraft – Airvan $550,000
FLIR Starsafire 380 HD + assorted ISR equipment $135,000 Escrow Fees $1,800
Formal Inspection Fee $800*
Sales Tax $53,978
TOTAL $741,578
*Inspection fee may not be an expense the City has to pay.

The cost to transport the aircraft from Pennsylvania to Modesto will be an additional $8,800 which includes fuel, hotels and fees for a service contract with an independent pilot.

In addition to the cost to procure the aircraft and transport it from Pennsylvania to Modesto, there are on-going costs that will be part of an air support unit. Those costs are detailed below and will be budgeted in the department operating budget during the annual development process.

Annual Maintenance – cost per hour: The estimated annual cost for an air support unit is $334 per hour. This cost encompasses the cost of the hangar space (monthly rental), regular maintenance, engine replacement (every 2,000 hours or two years), and insurance. Multiplied by the 1,000 hours of anticipated flight time annually, that puts the annual operating cost at $334,000. Below is the general breakdown:

Description Hourly Cost Annual Cost
Fuel $145 $145,000
Engine Replacement $35 $35,000*
Maintenance $109 $109,000
Hangar Rental $30 $30,000
Insurance $15 $15,000
*Engines need to be replaced every 2,000 hours. Based on anticipated flight time annually, this will require the Police Department to replace the engine every two years at a total cost of $70,000.

Pilots: In addition, the department intends to utilize part-time commercial-rated civilian pilots.

The current going per-hour rate is $60. At 1,000 flight hours annually, this will cost an additional $60,000 annually.

COMMITTEE RECOMMENDATION:

This project was presented to the Safety and Communities Committee on February 13, 2023, and the committee recommended forwarding this item to Council for approval.

RECOMMENDED COUNCIL ACTION:
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Staff Recommendations:

Resolution approving the Purchase of a GippsAero GA8 airplane from CNC Technologies, Oak Park, CA for a total amount not to exceed $741,578, and authorizing the City Manager, or his designee, to execute the Agreement and other necessary documents.

Approved by:

Brandon Gillespie, Chief of Police
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Executed Bid Waiver

3. Agreement with CNC Technologies, LLC
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MODESTO CITY COUNCIL
RESOLUTION NO. 2023-?
RESOLUTION APPROVING THE PURCHASE OF A GIPPSAERO GA8

AIRPLANE FROM CNC TECHNOLOGIES, OAK PARK, CA, FOR A
TOTAL AMOUNT NOT TO EXCEED $741,578, AND AUTHORIZING

THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE THE

AGREEMENT AND OTHER NECESSARY DOCUMENTS
WHEREAS, many public safety agencies throughout the country take advantage of the benefits offered by an air support unit with the primary goal of providing a level of service that contributes to the overall success of crime fighting efforts, and WHEREAS, air support units have the ability to scan large areas increasing the chances of halting crime and apprehending suspects, and WHEREAS, in April of 2021, the Modesto Police Department entered into a fiveand-a-half-month partnership with the BLENDABLE Foundation, a non-profit organization with a mission to enhance law enforcement by developing a low-cost air support alternative, and
WHEREAS, the air support unit flew 152 flights and responded to 258 incidents, and
WHEREAS, the air support unit was first on-scene on 92 calls for service and handled 72 calls without additional calls without additional assistance from ground units, and
WHEREAS, the air support pilot program assisted with 69 arrests, 11 pursuits, 24 warrant services, 24 traffic related incidents, 39 mutual aid requests and proactively initiated 41 calls, and
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WHEREAS, in the department’s search for a cost-effective aerial platform, it has identified a 2012 GippsAero GA8 airplane being sold by CNC Technologies out of Oak Park, CA, and
WHEREAS, the airplane was originally purchased by the State of Pennsylvania for public safety use and
WHEREAS, the air craft is equipped with equipment to assist in law enforcement efforts including a Forward Looking Infrared (FLIR) Startsafire 380 high definition (HD) camera, retractable camera pod, Motorola radio, downlink equipment, and Churchill moving map system at a cost of $685,000, and
WHEREAS, this is a turnkey solution that is immediately ready for use, and WHEREAS, if approved, this purchase would enter into escrow with Insured Aircraft Title Service LLC, with several steps in the escrow process to ensure both the purchaser (City) and the seller are protected during the process, and WHEREAS, Modesto Municipal Code (MMC) Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to be formally bid. However, exceptions to the formal bidding process are granted in MMC 8-3.204(d) “where the Purchasing Manager, in his or her discretion, determines that a process other than the formal bid procedure set forth in Section 8-3.203 will result in procurement for the City at the lowest possible cost commensurate with the desired quality”, and
WHEREAS, here CNC Technologies, Oak Park, CA should be exempt from the formal bidding procedure in accordance with MMC 8-3.204 (d) as the department’s #20..
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research has shown that at current, no other alternative can match the price, quality and public safety equipment of the available GippsAero GA8.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it approves the purchase of a GippsAero GA8 airplane from CNC Technologies, Oak Park, CA for a total amount not to exceed $741,578.

BE IT FURTHER RESOLVED by the Council of the City of Modesto authorizing the City Manager, or his designee, to execute the agreement and other necessary documents.

The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the 28th day of February 2023, 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:

DANA SANCHEZ, Interim City Clerk
(SEAL)
APPROVED AS TO FORM:

By: _________________________________
JOSE M. SANCHEZ, City Attorney
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Dianne Love 2/23/23
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AIRCRAFT PURCHASE AGREEMENT – N87AG 1

AIRCRAFT PURCHASE AGREEMENT
THIS AGREEMENT (hereinafter “APA” or “Aircraft Purchase Agreement”) is made and entered into this ____ th day of February, 2023 by and between CNC Technologies, LLC, a Delaware Limited Liability Company having an office at 638 Lindero Canyon Road – Suite 385 – Oak Park, California – 91377 (hereafter “Seller”) and the City of Modesto, a California Municipal Corporation in the State of California (hereinafter "Purchaser”), having its registered office at 1010 10th Street, Modesto, CA 95354, with a mailing address of P.O. Box 642 Modesto, CA 95353, and by and through the Modesto City Council (hereafter “Purchaser”),.

Seller agrees to sell and Purchaser agrees to buy the following Aircraft:

Make & Model: 2012 GippsAero GA8-TC-320
Serial Number: GA8-TC-320-12-186
Registration Number: N87AG
Make & Model of Engines: Lycoming TIO-540-AH1A
Engine Serial Numbers: RL-10670-61A
The specifications of said Aircraft are to the best knowledge of Seller and are defined in Schedule A – “Aircraft Specifications” - attached hereto and made a part hereof, and those specifications are subject to change and/or correction and Purchaser is advised to use their due diligence and own inspection to confirm the accuracy of the specifications. All of the above will hereinafter be referred to collectively as the “Aircraft.” This Aircraft Purchase is subject to the following terms and conditions:

1. The agreed upon purchase price of the Aircraft shall be $685,000.00 (Six Hundred Eighty-Five Thousand and no/100 Dollars) in immediately available funds (hereinafter “Purchase Price”).

2. Seller will immediately set up an Escrow Account with Insured Aircraft Title Service, LLC, Oklahoma City, Oklahoma (hereinafter “Escrow Agent”), and in the event of a successful Closing, Purchaser and Seller will each share in equal amounts, the Escrow fees.

3. At no cost to Purchaser, Purchaser will be provided the opportunity to conduct a cursory physical inspection of the Aircraft to include a demonstration and test flight (hereinafter “Cursory Inspection”), to take place at and from the hangar for the Attorney General of the Commonwealth of Pennsylvania at Capital City Airport (KCXY), New Cumberland, Pennsylvania, 17070 (hereinafter “Delivery Location”).

4. Subsequent to the Cursory Inspection, Purchaser shall have 3 (three) business days within which to inform Seller by way of Purchaser’s completion and execution of Attachment ‘A’ - “Cursory Inspection Determination” - attached hereto and made a part hereof - that Purchaser either:
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AIRCRAFT PURCHASE AGREEMENT – N87AG 2

1. Rejects the Aircraft, in which case Purchaser and Seller shall no further obligations to one another, or

2. Purchaser Accepts the Aircraft and evidences the same by way of Purchaser’s execution of Attachment ‘B’ - “Aircraft Technical Acceptance Certificate” - attached hereto and made a part hereof - in which case Purchaser and Seller will move to Close as described in Paragraphs 7 and 8, or

3. Purchaser wishes to have conducted a subsequent and more formal inspection of the Aircraft (hereinafter “Formal Inspection”), as described in Paragraph 5.

5. If Purchaser elects to have conducted a Formal Inspection, Purchaser and Seller shall:
a. Mutually agree on the FAA approved Part 145 Repair Station at which the Formal Inspection will take place (hereinafter “Inspection Facility”), and b. Mutually agree that any and all expenses incurred and/or necessary in order to reposition the Aircraft from the Delivery Location to - and back from - the Inspection Facility, which shall include but not be limited to: the cost of fuel, oil and lubricants, pilot fees to include travel expenses and per diems, insurance coverage, and landing fees, shall be the sole responsibility of Purchaser, and Purchaser will be responsible for those expenses and fees whether or not Purchaser Technically Accepts the Aircraft at the conclusion of the Formal Inspection, and
c. Mutually agree that a Work Order at the Inspection Facility will be opened only in the name of, and be the sole financial responsibility of, Purchaser, and d. Mutually agree that all costs associated with the conduction of the Formal Inspection as performed by the Inspection Facility shall be the sole responsibility of Purchaser, and
e. Mutually agree that Purchaser will be financially responsible to the Inspection Facility to return the Aircraft to its original condition and state prior to Purchaser’s Formal Inspection, even if Purchaser Technically Rejects the Aircraft at the Conclusion of the Formal Inspection, and
f. The Scope of Work to be performed in the Formal Inspection by the Inspection Facility shall be mutually agreed upon and shall be limited to that work proscribed in mutually executed Attachment ‘C’ – “Formal Inspection Work Scope”- attached hereto and made a part hereof, and
g. Mutually agree that within 2 (two) business days subsequent to the conclusion of the Formal Inspection, Purchaser will either Reject or Technically Accept the Aircraft by way of Purchaser indicating the same on Attachment ‘B’ - “Aircraft Technical Acceptance Certificate,” and immediately forward the same to Escrow Agent.

6. If Purchaser Technically Accepts the Aircraft, Purchaser and Seller will move to Close.

7. Conditions precedent to Closing are:
a. Seller will provide Escrow Agent with a fully executed FAA Form 8050-2 Aircraft Bill of Sale, conveying title and ownership to Purchaser, free and clear of any liens or encumbrances,
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AIRCRAFT PURCHASE AGREEMENT – N87AG 3
b. Purchaser will provide Escrow Agent with a completed and executed FAA Form 8050-1 Application for Aircraft Registration, and the executed Aircraft Technical Acceptance Certificate.
c. Purchaser will cause to be funded with Escrow Agent, the entirety of the Purchase Price, and an additional amount equal to one-half of Escrow Agent fees, and Purchaser’s funding of Purchase Price and Escrow fees obligations may be accomplished by way of sending Escrow Agent a physical bank check, and Purchaser will accomplish the same within 10 (ten) business days subsequent to Purchaser’s execution of the Aircraft Technical Acceptance Certificate. d. Purchaser’s bank check will have cleared as confirmed by Escrow Agent prior to Closing.

8. Closing will take place when all conditions precedent in Paragraph 7 are met, and both Purchaser and Seller shall then Approve Escrow Agent to Close when queried by Escrow Agent to do so.

9. The risk of loss, injury, destruction, or damage to said Aircraft by fire or other casualty or occurrence shall be assumed by Purchaser at the time of Closing of the Aircraft.

10. Purchaser shall complete and execute and return to Seller Attachment ‘D’ – “Aircraft Delivery Receipt.”

11. Title to the Aircraft shall be free and clear of any liens and/or encumbrances.

12. The Aircraft is being sold on an “AS IS – WHERE IS” basis AND THERE ARE NO

WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTION OF THE
AIRCRAFT. SELLER DISCLAIMS ALL EXPRESS OR IMPLIED WARRANTIES

OR REPRESENTATIONS OF ANY KIND OR NATURE WHATSOEVER,

INCLUDING MERCHANTABILITY AND FITNESS FOR SPECIFIC PURPOSE, EXCEPT THAT Seller warrants that the Aircraft will be delivered with the appropriate or required Bill of Sale and other title documents. Aircraft will be free and clear of any and all liens and/or encumbrances. Seller will transfer to Purchaser at the time of the Aircraft Delivery all logbooks and other records to include Aircraft maintenance manuals and wiring diagrams that pertain to the operation and maintenance of the Aircraft to include any and all spare parts or equipment associated with the Aircraft.

13. Final Payment, transfer of Title, and Delivery of the Aircraft to the Purchaser shall be at Closing which shall be subsequent to Purchaser’s Technical Acceptance of the Aircraft as outlined above, and Purchaser shall effect full funding of the Purchase Price and Escrow Fees with Escrow no later than 10 (ten) business days subsequent to Purchaser’s Technical Acceptance of the Aircraft. Delivery shall be at the Delivery Location unless otherwise agreed. Purchaser shall pay all out-of-pocket costs of Delivery, if any. Seller shall not be liable for failure to deliver or delays in delivery due to causes beyond its control, including but not limited to strikes, lockouts or other labor difficulties, machinery breakdowns, inability to obtain shipping space or transportation, delays of carriers or suppliers, fires, floods, weather, acts of God, war or other outbreak of hostilities, mobilization, civil commotion, riots, embargoes, and domestic or foreign governmental regulations or orders. In such event, Purchaser’s sole remedy and Seller’s #20..
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AIRCRAFT PURCHASE AGREEMENT – N87AG 4
sole liability for failure to deliver or delay in delivery, will be limited to the return of Purchase Price which Purchaser may have paid to Seller, less Escrow Fees, if any.

14. The parties hereto acknowledge and agree that the Aircraft and Engine are currently not - and will not be - registered with the Cape Town International Registry (“CTIR”), and Purchaser will have completed the Escrow Agent ‘Waiver’ of Registration affirming the same.

15. If any one or more provisions of this Agreement shall be found to be illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired.

16. This Purchase Agreement may not be assigned by either party without the prior written consent of the other, and Purchaser acknowledges that Title to the Aircraft will necessarily and contemporaneously pass first from the Commonwealth of Pennsylvania to CNC Technologies, LLC, and then to the City of Modesto.

17. This Purchase Agreement shall not be modified or amended except by an instrument in writing signed by duly authorized representatives of the parties.

18. This Purchase Agreement shall be governed by and construed in accordance with the laws of the State of California and of the United States of America.

19. Seller Warrants that there are no outstanding or delinquent taxes attributable to the Aircraft as of the Closing. This warranty shall survive delivery and acceptance of the Aircraft by Purchaser. Purchaser hereby agrees to pay the sales, use, or similar taxes or assessments and duties or fees, which may be imposed by any taxing authority in connection with the delivery, registration or its ownership of the Aircraft, but specifically excluding any capital gains, income, personal property or other similar taxes which may be assessed against Seller.

20. This Agreement may be executed in one or more counterparts and all such counterparts shall constitute one and the same instrument.

21. In connection with any litigation arising out of this Agreement, the prevailing party in such litigation shall be entitled to recover all costs incurred therein from the other party, including reasonable attorney’s fees.

22. The undersigned represent and warrant that they are authorized to execute this Agreement on behalf of their respective entities.

SELLER:

CNC Technologies, LLC,
a Delaware Limited Liability Company
PURCHASER:

The City of Modesto,
a California Municipal Corporation
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AIRCRAFT PURCHASE AGREEMENT – N87AG 5
By: ___________________________ By:_____________________________ Alex Giuffrida Name: __________________________
Title: Managing Member Title: _________________________ Date: __________________________ Date: _________________________ Schedule ‘A’
Aircraft Specifications
2012 GippsAero GA8-TC-320 Airvan
Registration: N87AG Serial Number: GA8-TC-320-12-186
The offer for sale of this Aircraft is subject to an APA contract. Specifications provided are to the best knowledge by Seller but may contain errors, are subject to correction, should be verified by the purchaser, and are not guaranteed for accuracy, and purchaser should rely on their own inspection of the aircraft.

Basic Airframe:

TTAF: Updated Times Prior to Closing
Manufacturing Date: October 2012
Original CASA Certificate of Airworthiness: May 2013
Original US Certificate of Airworthiness: August 2013
Last 100 Hour/Annual Inspection: January 2023 - Summit Aviation Build & Export Standards, Certificates, & Approvals:
 Civil Aviation Safety Authority - Australia
 GippsAero Pty Ltd CASA Production Certificate No. 0793691  Civil Aviation Safety Regulations - 1998 - Part 21 - Australia  Type Certificate: VA 503 Issue 4 - Australia
 Engineering Release: GA8-970004 - GippsAero Pty Ltd
 Master Drawing: GA8-010003 - GippsAero Pty Ltd
 United States FAA Type Certificate Number: A00011LA
Engine - Factory Remanufactured - 2019:

Make: Lycoming
Model: TIO-540-AH1A
Horsepower: 320
S/N: RL-10670-61A
Re-Man By: Lycoming Factory - Williamsport, PA - Zero Time #20..
- 1200 -
AIRCRAFT PURCHASE AGREEMENT – N87AG 6
Re-Man/CoC Date: 11 February 2019
Installed Date: 26 March 2019 - Summit Aviation
TTAF at Install: 1,494 Hours
Current TTAF: Updated Times Prior to Closing
TSMOH: Updated Times Prior to Closing
TBO: 2,000 Hours Recommended
Last Engine Inspection: Updated Times Prior to Closing
Aircraft Specifications (continued)
Propeller - Original:

Make: Hartzell - 3-Blade - Variable Pitch
Model: HC-C3YR-1RF
Hub S/N: PA347B
Blade Model: F8068
Blade #1 S/N: L23190
Blade #2 S/N: L23196
Blade #3 S/N: L23197
Mfg Date: 7 May 2012
8130 Date: 11 July 2012
Installed Date: 22 October 2012
AFTT at On/Install: Nil/Zero Hours
OH Date: 9 February 2019
OH Installed Date: 26 March 2019
TTAF at OH: 1,494 Hours
TTP at OH: 1,494 Hours
Current TTAF: Updated Times Prior to Closing
TTP: Updated Times Prior to Closing
TSPOH: Updated Times Prior to Closing
TBO: 2,400 Hours
Governor - Original:

Make: Hartzell
Model: S-1-25
S/N: G1045NJ
Mfg Date: 12 October 2011
Installed Date: 22 October 2012
AFTT At/On Install: Nil/Zero Hours
OH - 8130 Date: 18 February 2019
OH Installed Date: 26 March 2019
TTAF at OH: 1,494 Hours
TTG at OH: 1,494 Hours
Current TTAF: Updated Times Prior to Closing
TTG: Updated Times Prior to Closing
#20..
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AIRCRAFT PURCHASE AGREEMENT – N87AG 7
TSGOH: Updated Times Prior to Closing
TBO: 2,400 Hours
Primary Avionics & Panel:
 GippsAero Avionics Package Number 44 - Option 172
 Garmin G500 Dual-Screen - Primary & Multifunction Displays  Garmin GTN-750 GPS Touchscreen - MFD/WAAS/TIS/TAWS-B/Nexrad Weather  Garmin GTN-650 Touchscreen GPS
Aircraft Specifications (continued)
 Garmin GTX-345R - ADS-B In & Out - New June 2021 (w/Dual Garmin GA-35 WAAS Antennas)
 Garmin GDC-74A - ADC - Air Data Computer
 Garmin GSR-77 - AHRS - Attitude and Heading Reference System  Garmin GMA-35 Remote Audio Panel
 Bendix King KFC 225 - Auto Pilot & Flight Control System  J P Instruments EDM 800 - Engine/Fuel Management System - New August 2021  Standby: Air Speed Indicator/Altimeter/Tachometer/VSI/ Artificial Horizon  Electronics International VA-1A Panel Volt/Amp Meter
 Kannad AF Compact 406 MHz ELT w/Panel Switch - Option 142 - Battery January 2025  Electric Pitch Trim
 Alternate Static Source
 Control Wheel Steering
 Crew Dimmable Overhead LED Map Light
 Hour Meter-Omron Digital - w/Air Switch
 Whelen LED Landing Lights - Option 169
Other - Powered:
 Main Cabin Intercom System - 6-Way Mono
 Microphone Expansion Unit - Option 74
 Cabin Headphone Jacks - Option 12
 Dual USB Charging Ports
 Dual 14 VDC Outlets
 Intervolt Gen II Maxi 24/24 Power Conditioner to 20 Amp Breaker  Lone Star Cigarette Lighter Adapter - 12 Volt - FAA TSO  PulseLite Model 1210 - Installation - Option 27
 100 Amp/28 Volt Dedicated Mission Power
 Mid Continent Dual USB Charging Port - FAA TSO
 AmeriKing AK-550 28/14 DC/DC Converter - FAA TSO - Option 24 Other - Engine:
 Electric Tanix Engine Pre-Heat
 Mahindra Oil Catch Can System Installed
#20..
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AIRCRAFT PURCHASE AGREEMENT – N87AG 8
 Heavy Duty Starter - Option 160
 Concord RG-35A AGM - Lead Acid Battery
 Airwolf Remote Mounted Oil Filter - w/Gipps Approved Modification Other - Interior & Airframe:
 No Air Conditioning
 2 x Leather Crew Seats - Option 80
 3 x Leather PAX Seats
Aircraft Specifications (continued)
 Direct Vision Window Kit - Openable Sliding Cargo Door Hinged Window  Tinted Windows - Option 157
 Aeromat Blue Vinyl Floor Covering - Option 46
 Main Vertical Cargo Net
 Camera Pod
 Large Nose Fork and Wheel
 Cleveland Wheels & Brakes
 Wind Deflector for In-Flight Main Sliding Door Open Operations - Option 2  Seat Removal Clips
Potentially & Optionally Available ISR/Surveillance Equipment – Inventory To Be Determined in the APA:
 FLIR 380 HD Star SAFIRE - HD Infrared Sensor - HD EO Sensor - HD LL Sensor - Overhauled < 1 Year
 Belly Pod Retraction - 109 Pound Capability
 Churchill ARS-700 Augmenter Reality Mapping System w/Wireless Interface WIFI - May 2019
 Airborne Displays AB-17 17" Color Monitor w/2 Channel HD/Touch-Screen Display - May 2019
 Honeywell Sky Connect LLC Sat Phone
 Sierra Wireless Router
 Airlink MP-70 High Performance Router
 Electronics International VA-1A Panel Volt/Amp Meter - at Mission Console Maintenance:

INSPECTION BASIS: Strict 100 Hour/Annual Inspection Program NOTE: The vast majority of all Maintenance performed on the Aircraft throughout its entire life has been meticulously and very professionally accomplished at & by Summit Aviation - Middletown, DE
Weight & Balance - Last - March 2019:
#20..
- 1203 -
AIRCRAFT PURCHASE AGREEMENT – N87AG 9
Gross Weight: 4,200.00 Pounds
Empty Weight: 2,975.66 Pounds
Usable Weight: 1,224.35 Pounds
Paint:
 Original
 Overall Matterhorn White w/Las Vegas Gold, Garnet, & Black Accent Stripes Aircraft Specifications (continued)
Interior:
 Original - Quick-Change Interior
 Delivered w/3 Pax Seats
 Full Cabin Width & Height Cargo Net Provided
 Custom Window Blackout Covers for all Pax/Cabin Windows  Passenger Safety Briefing Cards
 No Air Conditioning System
 No Crew or Passenger Oxygen System or Provisions
Glass:
 Windshield and All Side Glass are Clear & Without Crazing, Hazing, or Discoloration Damage History:

No Major Repairs:
 Hangar Rash - Replaced Vertical Stabilizer w/Factory New - No 337 - 30 August 2018  Hangar Rash - Replaced L/H Elevator Skin w/Factory new - No 337 - 26 March 2019 The offer for sale of this Aircraft is subject
to APA contract. Specifications provided
are to the best ability by Seller but may
contain errors, are subject to correction,
should be verified by the purchaser, and
are not guaranteed for accuracy, and
purchaser should rely on their own
inspection of the aircraft.
#20..
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AIRCRAFT PURCHASE AGREEMENT – N87AG 10
#20..
- 1205 -
Attachment ‘A’
Cursory Inspection Determination
Purchaser has conducted its Cursory Inspection of the Aircraft on ____ February, 2023 at the Inspection Location, and:
____ Purchaser Rejects the Aircraft, in which case Purchaser and Seller shall no further obligations to one another
____ Purchaser Accepts the Aircraft and evidences the same by way of Purchaser’s execution of Attachment ‘B’ - “Aircraft Technical Acceptance Certificate” - attached hereto and made a part hereof - in which case Purchaser and Seller will move to Close as described in Paragraphs 7 and 8 in the Aircraft Purchase Agreement. ____ Purchaser wishes to have conducted a subsequent Formal Inspection, in accordance with and as described in the Aircraft Purchase Agreement to include Paragraph 5, the expenses for which Purchaser will be entirely and solely responsible.

This ____ day of February, 2023.

For and on behalf of the City of Modesto, in the State of California:
______________________________
Signature
Name: __________________________________
Title: __________________________________
Email Address: __________________________________
Telephone Number: __________________________________
#20..
- 1206 -
12 Attachment ‘B’
Aircraft Technical Acceptance Certificate
Year: 2012
Make: GippsAero
Model: GA8-TC-320 Airvan
Registration: N87AG
Serial Number: GA8-TC-320-12-186
This is to confirm that Purchaser, the City of Modesto, in the State of California, having its registered office at 1010 10th Street, Modesto, CA 95354, with a mailing address of P.O. Box 642 Modesto, CA 95353, and by and through the Modesto City Council, hereby:
____ Technically Accepts the Aircraft with a Purchase Price of $685,000.00 (Six Hundred Eighty-Five Thousand and no/100 Dollars), and will thereby and within 10 (ten) business days, fully fund Escrow with an amount requisite for Closing. ____ Rejects the Aircraft.

IN WITNESS WHEREOF, this instrument has been duly signed by the undersigned authorized representatives.

SELLER: PURCHASER:

Inspection Location: ____________________________________________________________________ It is further Agreed that the Inspection unless otherwise Agreed to by Seller, shall limited in Scope to the following:

1. _____________________________________________________

2. _____________________________________________________

3. _____________________________________________________

4. _____________________________________________________

5. _____________________________________________________

6. _____________________________________________________

7. _____________________________________________________

8. _____________________________________________________

9. _____________________________________________________

10. _____________________________________________________ Should Seller deny Purchaser the opportunity to conduct an Inspection that Buyer finds reason to conduct beyond the above defined Work Scope, Purchaser may Reject the Aircraft by indicating so by way of Attachment ‘B’ – Aircraft Technical Acceptance, but Purchaser’s Formal Inspection financial obligations will be undiminished and will minimally be those proscribed in Paragraph (5) of the Aircraft Purchase Agreement.

SELLER: PURCHASER:

CNC Technologies, LLC The City of Modesto
By: ___________________________ By:_____________________________ Alex Giuffrida Name: __________________________
Title: Managing Member Title: _________________________ Date: __________________________ Date: _________________________ #20..
- 1208 -
14 Attachment ‘D’
Aircraft Delivery Receipt
In accordance with the terms of that certain Aircraft Purchase Agreement by and between CNC Technologies, LLC (“Seller”) and the City of Modesto, California (“Purchaser”) dated the ____ day of February, 2023, Purchaser hereby acknowledges irrevocable acceptance of the Aircraft and the Aircraft Documents described and referred to herein from Seller, at _______ o’clock (am / pm) on the _____ day of February, 2023 at _____________________________________ . “Aircraft” means that certain 2012 GippsAero GA8-TC-320 Airvan Serial Number: GA8-TC-320-12-186 Registration: N87AG, together with One (1) Lycoming TIO-540-AH1A engine bearing manufacturer’s serial number RL10670-61A, with all appurtenances, appliances, parts, instruments, components, accessions, furnishings, and other equipment in Seller’s possession, and all Aircraft Documents
“Aircraft Documents” means all airframe, engine, and accessory logbooks, manuals, and maintenance records relating to the Aircraft that are in Seller’s possession.

TOTAL TIME AIRFRAME AT DELIVERY: ____________ hours
DISCLAIMER AND LIMITATION OF LIABILITY. PURCHASER ACKNOWLEDGES THAT THE AIRCRAFT IS BEING SOLD AND DELIVERED TO PURCHASER IN “AS IS, WHERE IS, AND WITH ALL FAULTS” CONDITION, AND THAT ALL DELIVERY

CONDITIONS SPECIFIED IN THE AGREEMENT SHALL EXPIRE AND BE OF NO

FURTHER FORCE OR EFFECT UPON DELIVERY OF THIS AIRCRAFT DELIVERY RECEIPT TO SELLER. SELLER DOES NOT MAKE, GIVE, OR EXTEND, AND

PURCHASER HEREBY DISCLAIMS AND RENOUNCES, ANY AND ALL WARRANTIES

OR REPRESENTATIONS OF ANY KIND OR NATURE WHATSOEVER, EXPRESS OR

IMPLIED, WHETHER ARISING IN LAW, IN EQUITY, IN CONTRACT, OR IN TORT, AND

INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF

MERCHANTABILITY, AIRWORTHINESS, DESIGN, CONDITION, OR FITNESS FOR A PARTICULAR USE. IN NO EVENT MAY SELLER BE HELD LIABLE TO PURCHASER

FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND.

Modesto City CouncilFebruary 28, 2023

Modesto City Council
February 28, 2023