Agenda packet — Audit Committee, January 24, 2024 (part 3 of 3)

Government-Wide Financial Statements
The government-wide financial statements provide a long-term view of the District’s activities as a whole and are comprised of the Statement of Net Position and the Statement of Activities.

The Statement of Net Position provides information about the financial position of the District as a whole, including all its capital assets and long-term liabilities. The Statement of Activities provides information about the District’s revenues and all its expenses. The Statement of Activities explains in detail the change in net position for the year.

The Statement of Net Position and the Statement of Activities present information about the following:

Governmental activities - All of the District’s basic services are considered to be governmental activities, including formation, financing, construction, and maintenance activities. These services are supported by formation deposits, special facilities taxes, and annual maintenance assessments. Government-wide financial statements are prepared on the accrual basis of accounting, which means they measure the flow of all economic resources of the District as a whole, similar to that used by the private sector. #3..
- 769 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
9 FINANCIAL ACTIVITIES OF THE DISTRICT AS A WHOLE
This analysis focuses on the net position and changes in net position of the District’s governmental activities in the government-wide financial Statement of Net Position and Statement of Activities that follow.

As of June 30, 2023, total assets amounted to $272,456. The District’s net position from governmental activities increased to $272,456 in 2023 from $91,975 in 2022. The District’s net position has restrictions as follows: $197,498 for acquisition or construction and $74,958 for District maintenance.

The following summarizes Statement of Net Position as of June 30, 2023 and 2022:

Statement of Net Position – Governmental Activities
Description 2023 2022 Change
Asset:

Cash and investments $ 270,727 $ 91,984 $ 178,743
Assessments receivable 1,078 − 1,078
Interest receivable 651 171 480
Total assets 272,456 92,155 180,301
Liabilities:

Current and other liabilities − 180 (180)
Net position:

Restricted for:

Capital projects 197,498 89,951 107,547
District maintenance 74,958 2,024 72,934
Total net position $ 272,456 $ 91,975 $ 180,481
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- 770 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
10 FISCAL YEAR 2023 GOVERNMENTAL ACTIVITIES
The District’s fiscal year 2023 revenue came primarily from maintenance special taxes of $199,819 and investment earnings of $2,471. Facilities special tax revenue was not collected in fiscal year 2023, as these revenues are collected at the time of building permit issuance, and no such development occurred in the District in fiscal year 2023. District expenses of $21,809 were primarily for community development.

The following summarizes the Statement of Activities for the years ended June 30, 2023 and 2022, and the respective changes:

Statement of Activities – Governmental Activities
Description 2023 2022 Change
Revenues:

General revenues:

Time and material fees - $ 7,054 $ (7,054)
Maintenance special taxes 199,819 91,080 108,739
Investment earnings (loss) 2,471 (1,282) 3,753
Total revenues 202,290 96,852 $ 105,438
Expenses:

Community development 21,809 6,201 15,608
Changes in net position 180,481 90,651 $ 89,830
Net position, beginning of year 91,975 1,324
Net position, end of year $ 272,456 $ 91,975
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- 771 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
11 Fund Financial Statements
The fund financial statements report the District’s operations in more detail than the government-wide financial statements and focus primarily on the short-term activities of the District’s two funds. The fund financial statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt, and other longterm amounts.

The fund financial statements provide detailed information about each of the District’s most significant funds, called major funds. Major funds present the major activities of the District for the year and may change from year to year as a result of changes in the pattern of the District’s activities. All of the District’s funds are presented here as major funds; their purpose is explained in Note 1 to the financial statements.

All the District’s funds are governmental funds; financial statements for these funds are prepared on the modified accrual basis of accounting, which means they measure only current financial resources and uses.

Presented on the succeeding page are the condensed Balance Sheets and Statements of Revenues, Expenditures, and Changes in Fund Balances for both the Capital Projects Fund and the Special Revenue Fund for the years ended June 30, 2023, and 2022, and the respective changes:
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- 772 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
12 Balance Sheets – Capital Projects Fund
Description 2023 2022 Change
Assets:

Cash and investments $196,999 $ 89,783 $ 107,216
Assessments receivable − − −
Interest receivable 499 168 $ 331
Total assets $ 197,498 $ 89,951 $ 107,547
Fund Balances:

Restricted for:

Capital projects 197,498 89,951 107,547
District maintenance - -
Total fund balances $ 197,498 $ 89,951 $ 107,547
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- 773 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
13 Balance Sheets – Special Revenue Fund
Description 2023 2022 Change
Assets:

Cash and investments $73,728 $ 2,201 $ 71,527
Assessments receivable 1,078 − 1,078
Interest receivable 152 3 $ 149
Total assets $ 74,958 $ 2,204 $ 72,754
Liabilities:

Accounts payable $ - $ 180 $ (180)
Total liabilities - 180 (180)
Deferred inflows of resources
Unavailable revenue 512 - 512
Total deferred inflows of resources 512 - 512
Fund Balances:

Restricted for:

Capital projects - - -
District maintenance 74,446 2,024 72,422
Total fund balances 74,446 2,024 72,422
Total deferred inflows of resources
and fund balances $ 74,958 $ 2,204 $ 72,754
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- 774 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
14 Statements of Revenues, Expenditures, and Changes in Fund Balances – Capital Projects Fund
Description 2023 2022 Change
Revenues $107,547 $ 89,951 $ 17,596
Expenditures − − −
Changes in fund balance 107,547 89,951 $ 17,596
Fund balance, beginning of year 89,951 −
Fund balance, end of year $ 197,498 $ 89,951
Statements of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund
Description 2023 2022 Change
Revenues $ 94,231 $ 6,901 $ 87,330
Expenditures 21,809 6,201 15,608
Changes in fund balance 72,422 700 $ 71,722
Fund balance, beginning of year 2,024 1,324
Fund balance, end of year $ 74,446 $ 2,024
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- 775 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
15 THE DISTRICT’S FUND FINANCIAL STATEMENTS
At June 30, 2023, the District’s governmental funds reported a combined fund balance of $271,944, an increase of $179,969 compared to fiscal year 2022. The Capital Projects Fund realized a $107,547 increase, while the Special Revenue Fund realized a $72,422 increase.

The increase in the fund balances of both funds is primarily due to the increase in maintenance special tax.

CAPITAL ASSETS
Under GASB Statement No. 34, Basic Financial Statements— and Management’s Discussion and Analysis—for State and Local Governments, the District is required to record all its capital assets, including infrastructure, at their historical cost, and to depreciate these assets over their estimated useful lives. However, title to all infrastructure assets acquired or constructed by the District is turned over to the City upon completion and acceptance. Accordingly, capital outlay expenditures are reported in both the District’s fund and government-wide financial statements.

Therefore, the District reports no long-term capital assets.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
These basic financial statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the District’s finances. Questions about this report should be directed to the City of Modesto, Administrator, Infrastructure Financing Programs, P.O. Box 642, Modesto, California 95353.
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- 776 -
16 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California

STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire District’s financial activities and financial position. They are prepared on the same basis of accounting as that used by most businesses, which means they include all the District’s assets and all its liabilities, as well as all its revenues and expenses. This is known as the full accrual basis of accounting, the effect of all the District’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between District funds have been eliminated.

The Statement of Net Position reports the difference between the District’s total assets and deferred outflows of resources and the District’s total liabilities and deferred inflows of resources, including all the District’s capital assets and all its long-term debt. The Statement of Net Position summarizes the financial position of the District in a single column.

The Statement of Activities reports increases and decreases in the District’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the District’s revenues and all its expenses, regardless of when cash changes hands. This differs from the “modified accrual” basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.

The format of the Statement of Activities presents the District’s expenses, which are listed by program, first. Program revenues, that is, revenues which are generated directly by these programs, are then deducted from program expenses to arrive at the net program revenue (expense). General revenues, that is, revenues which are not generated directly by these programs, are then added to arrive at the change in net position and reconciled with the Statement of Net Position.
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- 777 -
See notes to basic financial statements.
17 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Statement of Net Position – Governmental Activities
June 30, 2023
ASSETS
Cash and investments $ 270,727
Assessments receivable 1,078
Interest receivable 651
Total Assets 272,456

NET POSITION
Restricted for:

Capital projects 197,498
District maintenance 74,958
Total Net Position $ 272,456
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- 778 -
See notes to basic financial statements.
18 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Statement of Activities – Governmental Activities
Year Ended June 30, 2023
Program
Revenues
Net (Expense)
Revenue and
Changes in Net
Position
Functions/Programs Expenses
Operating Grants
and Contributions
Governmental
Activities
Community development $ 21,809 $ − $ (21,809)
$ 21,809 $ − (21,809)
General Revenues:

Maintenance special taxes 199,819
Investment earnings 2,471
Total General Revenues 202,290
Changes in Net Position 180,481
Net Position, Beginning of Year 91,975
Net Position, End of Year $ 272,456
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- 779 -
19 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California

FUND FINANCIAL STATEMENTS
Major funds are defined generally as having significant activities or balances in the current year.

The District determined all its funds to be major funds. They are:

The Capital Projects Fund accounts for all financial resources and uses related to acquisition, construction, and formation/annexation activities.

The Special Revenue Fund accounts for all financial resources and uses related to maintenance of parkways, storm drainage basin facilities, tree pruning, etc. within the District. #3..
- 780 -
See notes to basic financial statements.
20 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Balance Sheet – Governmental Funds
June 30, 2023
Capital
Projects
Fund
Special
Revenue
Fund Total
ASSETS
Cash and investments $ 196,999 $ 73,728 $ 270,727
Assessments receivable − 1,078 1,078
Interest receivable 499 152 651
Total Assets $ 197,498 $ 74,958 $ 272,456

DEFERRED INFLOW OF RESOURCES
Unavailable revenue $ − $ 512 $ 512
Total Deferred Inflow of Resources − 512 512

FUND BALANCES
Restricted for:

Capital projects 197,498 − 197,498
District maintenance − 74,446 74,446
Total Fund Balances 197,498 74,446 271,944
Total Liabilities, Deferred Inflow of
Resources and Fund Balances $ 197,498 $ 74,958 $ 272,456 #3..
- 781 -
See notes to basic financial statements.
21 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Reconciliation of Governmental Funds Balance Sheet to
Governmental Activities Statement of Net Position
June 30, 2023
Total Fund Balances - Governmental Funds $ 271,944
Amounts reported for governmental activities in the Statement of Net Position are different because:

Revenues not available for current-period expenditures are deferred in governmental funds but are considered earned in the Statement of Net Position. 512
Total Net Position - Governmental Activities $ 272,456
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- 782 -
See notes to basic financial statements.
22 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Statement of Revenues, Expenditures, and
Changes in Fund Balances – Governmental Funds
Year Ended June 30, 2023
Capital
Projects Fund
Special
Revenue Fund Total

REVENUES
Maintenance special tax $ 105,561 $ 93,746 $ 199,307
Interest income 2,670 514 3,184
Change in fair value of investments (684) (29) (713)
Total Revenues 107,547 94,231 201,778

EXPENDITURES
Services – professional and other − 21,809 21,809
Total Expenditures − 21,809 21,809
Changes in Fund Balances 107,547 72,422 179,969
Fund Balances, Beginning of Year 89,951 2,024 91,975
Fund Balances, End of Year $ 197,498 $ 74,446 $ 271,944 #3..
- 783 -
See notes to basic financial statements.
23 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to Governmental Activities Statement of Activities Year Ended June 30, 2023
Changes in Fund Balances - Governmental Funds $ 179,969 Amounts reported for governmental activities in the Statement of Activities are different because:

Revenues that are considered earned in the Statement of Activities that did not provide current financial resources in the current year were not reported as revenues in the governmental funds. 512 Changes in Net Position - Governmental Activities $ 180,481 #3..
- 784 -
See notes to basic financial statements.
24 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Statement of Revenues, Expenditures, and Changes in Fund Balance – Special Revenue Fund – Budget and Actual
Year Ended June 30, 2023
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Maintenance special tax $ 40,000 $ 40,000 $ 93,746 $ 53,746 Interest income - - 514 514
Change in fair value of investments - - (29) (29)
Total Revenues 40,000 40,000 94,231 54,231

EXPENDITURES
Services - professional and other 53,169 53,169 21,809 31,360 Utilities 8,100 8,100 - 8,100
Total Expenditures 61,269 61,269 21,809 39,460
Changes in Fund Balance $ (21,269) $ (21,269) 72,422 93,691 Fund Balance, Beginning of Year 2,024
Fund Balance, End of Year $ 74,446
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- 785 -
25 Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description and Reporting Entity
The Community Facilities District Number 2021-1 Woodglen (the District) was formed in July 2021 by a vote of members of the City Council. The District, a separate legal entity, was formed to provide maintenance for landscaped lots, tree pruning, masonry wall maintenance, neighborhood park maintenance, storm drain basin maintenance and other services. The District encompasses property totaling approximately 41.257 acres which will also be subject to levy and collection of special taxes.

The District is an integral part of the City of Modesto, California (the City) and the accompanying financial statements are included as a blended component unit of the basic financial statements prepared by the City. A component unit is a separate governmental unit, agency, or nonprofit corporation which, when combined with all other component units, constitutes the reporting entity as defined in the City’s basic financial statements.

Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and Statement of Activities) report information on all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities normally are supported by taxes and intergovernmental revenues.

The Statement of Activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are clearly identifiable with the community development function. Program revenues include grants and contributions that are restricted to meeting the operational requirements of the community development function. Investment earnings, and other items which are not properly included among program revenues, are reported instead as general revenues.
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- 786 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2023
26 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government-Wide and Fund Financial Statements (Continued) Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.

Basis of Presentation, Basis of Accounting, and Measurement Focus 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. Taxes are recognized as revenues in the year for which they are levied.

Governmental fund financial statements 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 collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District 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.

Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Miscellaneous revenues are considered to be measurable and available only when cash is received by the District.

The District reports the following major governmental funds:

The Capital Projects Fund accounts for all financial resources and uses related to acquisition, construction, and formation/annexation activities.
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- 787 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2023
27 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) The Special Revenue Fund accounts for all financial resources and uses related to maintenance of parkways and open space within the District.

Management’s Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) 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.

Maintenance Special Taxes
The maintenance special taxes are collected by the County of Stanislaus on the property tax bill. The special taxes are due November 1 and February 1 and are delinquent if not paid by December 10 and April 10, respectively. The County of Stanislaus bills and collects the special taxes and remits them to the District. The Rate and Method of Apportionment of Special Tax (RMA), set forth in the District’s Public Report, describes how the tax will be allocated among properties in the District. The Public Report was established during the formation of the District.

A cost of living adjustment is applied to the special taxes annually. #3..
- 788 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2023
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance
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 District 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 District itself, using the District’s highest level of decision-making authority (the City Council). To be reported as committed, amounts cannot be used for any other purpose unless the District 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 District intends to use for a specific purpose. Intent can be expressed by the District at either the highest level of decision-making or by an official or body to which the District delegates the authority.
• Unassigned - The residual classification for the District that includes amounts not contained in the other classifications. In other funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes.
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- 789 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2023
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
The District 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 District through adoption or amendment of the budget or future year budget plan as intended for a specific purpose.

When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, followed by the committed, assigned, and unassigned resources as they are needed.

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 District recognizes deferred outflows and inflows of resources.

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

In addition to liabilities, the Statement of Net Position and Balance Sheet will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets by the District that is applicable to a future reporting period.

Deferred inflows reported by the District consist of unearned deferred assessments that have been billed as of year-end, but not yet collected.
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- 790 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2023
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position
Net position represents the residual interest in the District’s assets after liabilities are deducted.

In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, 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 those assets' acquisition, construction, or improvement. • 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.
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- 791 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2023
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update
During the year ended June 30, 2023, the District implemented the following Governmental Accounting Standards Board (GASB) standards with no effect on the financial statements:

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.

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

GASB Statement No. 100 – Accounting Changes and Error Corrections. The requirements of this statement are effective for reporting periods beginning after June 15, 2023.
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- 792 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2023
32 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update (Continued)
GASB Statement No. 101 – Compensated Absences. The requirements of this statement are effective for reporting periods beginning after December 15, 2023.

NOTE 2 CASH AND INVESTMENTS
Cash and investments of the District are pooled with other City 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 District’s investments as all cash is invested as part of the common cash and investment pool of the City.

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 District does not have any deposits with financial institutions as of June 30, 2023.

Cash and investments as of June 30, 2023 are classified in the accompanying financial statements as follows:

Statement of Net Position – Governmental Activities
Cash and investments $ 270,727
Total cash and investments $ 270,727
Deposits with the City
Cash and investment pool $ 270,727
Total cash and investments $ 270,727
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- 793 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2023
33 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Concentration of Credit Risk
The District is required to disclose investments that represent a concentration of five percent (5%) or more of investments in any one issuer held by individual funds in the securities of issuers other than U.S. Treasury securities, mutual funds, and external investment pools. At June 30, 2023, no investments represented a concentration of five percent (5%) or more of investments in any one issuer held by the District in the securities of issuers other than U.S.

Treasury securities, mutual funds, and external investment pools.

Fair Value Hierarchy
The District categorizes its fair value measurements within the fair value hierarchy established by U.S. GAAP. The hierarchy is based on the valuation inputs used to measure the fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The inputs and techniques used for valuing securities are not necessarily an indication of risk associated with investing in those securities. The District’s investment in the City’s pool and money market fund are exempt from fair value measurement disclosures.

Detailed information regarding 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, 2023, the fair value of the District’s position in the pool is the same as the value of its pool shares. #3..
- 794 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2023
34 NOTE 3 RESTRICTED FUND BALANCES
Restrictions of Fund Balances
Fund balances are all presented in the restricted category (see Note 1 for a description of fund balance categories). As of June 30, 2023, restrictions included:

Restricted for Capital Projects - the portion of fund balance legally restricted for the acquisition, construction, and formation/annexation activities.

Restricted for District Maintenance - the portion of fund balance legally restricted for maintenance of parkways and open space within the District.

NOTE 4 DELINQUENCIES AND FORECLOSURES
The District has made a covenant under the Trust Indenture of the Special Tax Bonds that will initiate foreclosures proceedings against delinquent parcels as follows:
(a) Any parcel that is delinquent for three consecutive payments. Foreclosure against these parcels is to be initiated within the 120 days after the third delinquency. (b) All parcels delinquent at June 30 when the District received Special Taxes totaling less than 95% of the total Special Tax levied for that fiscal year. Foreclosure against these parcels is to be initiated by September 1 following the end of the fiscal year.

At June 30, 2023, the District had 1 parcel that was delinquent. The District received 100% of the maintenance special taxes levied during the year ended June 30, 2023. #3..
- 795 -
Community Facilities District
Number 2021-1 Woodglen
City of Modesto, California
Notes to Basic Financial Statements
Year Ended June 30, 2023
35 NOTE 5 SUBSEQUENT EVENTS
The District has evaluated events subsequent to the balance sheet date through November 17, 2023, the date the financial statements were available to be issued. Based upon this evaluation, it was determined that no subsequent events occurred that require recognition or disclosure in the financial statements.
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36 Independent Auditor’s 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 The 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 (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the City of Modesto Community Facilities District Number 2021-1 Woodglen (the District), as of and for the year ended June 30, 2023, the budgetary comparison for the special revenue fund for the year ended June 30, 2023 and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 17, 2023.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’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 District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.
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37 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.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’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. #3..
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38 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.

Glendale, California
November 17, 2023
#3..
- 799 -
www.vasquez.cpa
Vasquez & Company LLP has over 50 years of experience in performing audit, accounting & consulting services for all types of nonprofit organizations, for-profit companies, governmental entities and publicly traded companies. Vasquez is a member of the RSM US Alliance. RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM™ logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • Ph. (213) 873-1700 • Fax (213) 873-1777
#3..
- 800 -
City of Modesto, California
Abandoned Vehicle Abatement Program
Annual Financial Report
For the Year Ended June 30, 2023
with Independent Auditor’s Report
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- 801 -
City of Modesto, California
Abandoned Vehicle Abatement Program
Annual Financial Report
For the Year Ended June 30, 2023
with Independent Auditor’s Report
#3..
- 802 -
Abandoned Vehicle Abatement Program
City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Report 1
Financial Statements
Statement of Revenues and Costs 5
Notes to Financial Statement 6
Independent Auditor’s 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 AVA Program Handbook 8 #3..
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1 Independent Auditor’s Report
Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statement
Opinion
We have audited the statement of revenues and costs of the City of Modesto, California, (the City) Abandoned Vehicle Abatement Program (the Program), for the year ended June 30, 2023, and the related notes to the financial statement.

In our opinion, the accompanying financial statement referred to above present fairly, in all material respects, the revenues and costs of the Program for the year ended June 30, 2023, in accordance with the cash basis of accounting described in Note 1.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and certain provisions of the Abandoned Vehicle Abatement (AVA) Program Handbook, issued by the California Highway Patrol. Our responsibilities under those standards are further described in the Auditor's responsibilities for the Audit of the Financial Statement section of our report.
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2 We are required to be independent of the City 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.

Emphasis of Matter – Basis of Accounting
We draw attention to Note 1 of the financial statement, which describes the basis of accounting.

The financial statement is prepared on the cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. As discussed in Note 1, the Program is intended to present the statement of revenues and costs of the Program. It does not purport to and does not present fairly the financial position of the City as of June 30, 2023, 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 these matters.

Responsibilities of Management for the Financial Statement Management is responsible for the preparation and fair presentation of this financial statement in accordance with the cash basis of accounting described in Note 1, and for determining that the cash basis of accounting is an acceptable basis for the preparation of the financial statement in the circumstances. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of a financial statement that is free from material misstatement, whether due to fraud or error.
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3 Auditor's Responsibilities for the Audit of the Financial Statement Our objectives are to obtain reasonable assurance about whether the financial statement as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. 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 GAAS, Government Auditing Standards, and certain provisions of the AVA Program Handbook 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 statement.

In performing an audit in accordance with GAAS, Government Auditing Standards, and certain provisions of the AVA Program Handbook we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statement, 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 statement.
• 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 City’s internal control as it relates to the Program. Accordingly, no such opinion is expressed. #3..
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4 • 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 statement.

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.

Other Reporting Required by Government Auditing Standards and AVA Program Handbook
In accordance with Government Auditing Standards and certain provisions of the AVA Program Handbook, we have also issued our report dated November 17, 2023, 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 Program. 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 Program. That report is an integral part of an audit performed in accordance with Government Auditing Standards and certain provisions of the AVA Program Handbook in considering the City’s internal control over financial reporting and compliance as it relates to the Program.

Glendale, California
November 17, 2023
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See Notes to Financial Statement
5 City of Modesto, California
Abandoned Vehicle Abatement Program
Statement of Revenues and Costs
Year Ended June 30, 2023
Revenues received
Registration fees $ 165,139
Costs disbursed
Personnel 124,933
Services and supplies 33,814
Total Costs Disbursed 158,747
Excess of revenues received over costs disbursed 6,392
Surplus, Beginning of Year 638,261
Surplus, End of Year $ 644,653
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6 City of Modesto, California
Abandoned Vehicle Abatement Program
Notes to Financial Statement
Year ended June 30, 2023
NOTE 1 GENERAL PROGRAM DESCRIPTION
The Abandoned Vehicle Abatement Program (the Program) is a statewide program administered by the California Highway Patrol (CHP). The City of Modesto (the City) administers and operates the local vehicle abatement program pursuant to Section 22710 of the Vehicle Code, Modesto Municipal City Code Section 3-2.1002 et seq., and the Stanislaus Council of Governments (StanCOG) Abandoned Vehicle Program and Plan.

Section 9250.7 of the Vehicle Code establishes the funding source for the abatement of abandoned vehicles by a county-based Service Authority (the Authority), pursuant to the provisions of Section 22710 of the Vehicle Code. The Vehicle Code imposes a service fee of one dollar ($1) on vehicles registered to an owner with an address in the County of Stanislaus that established the Authority. This fee is paid to the Department of Motor Vehicles (DMV) at the time of registration or renewal of registration. The DMV, after deducting its administrative costs, at least quarterly transmits the net amount collected to the State Controller’s Office (SCO) for deposit in the Abandoned Vehicle Trust Fund. All money in the fund is continuously appropriated to the SCO for allocation to an Authority that has an approved Program pursuant to Section 22710 of the Vehicle Code, and for payment of the administrative costs of the SCO. StanCOG, the Authority established pursuant to Section 22710 of the Vehicle Code, distributes Program funds to participating entities based on the allocations determined in the Vehicle Abatement Services Agreement. The receipts and costs of the Program are included in the General Fund of the City’s basic financial statements. The financial statement presents the Statement of Revenues and Costs of the Program. It does not purport to, and does not present fairly the financial position of the City of Modesto, California as of June 30, 2023, 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 (U.S. GAAP).
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City of Modesto, California
Abandoned Vehicle Abatement Program
Notes to Financial Statement
Year ended June 30, 2023
7 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statement Presentation
The financial statement is prepared on the method of accounting prescribed by the CHP and the Abandoned Vehicle Abatement (AVA) Program Handbook. The financial statement presents the information requested by the CHP and, therefore, does not purport to reflect results of operations in accordance with U.S. GAAP.

Basis of Accounting
The financial statement for the Program is prepared on the cash basis of accounting in which revenue is recognized when received and costs are recognized as disbursed and claimed in accordance with the AVA Program Handbook.

NOTE 3 SUBSEQUENT EVENTS
Management has evaluated events that have occurred after year-end to determine if these events are required to be disclosed in the financial statement. Management has determined that no events require disclosure in accordance with accounting standards. These subsequent events have been evaluated through November 17, 2023 which is the date the financial statement was available to be issued.
#3..
- 810 -
8 Independent Auditor’s 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 AVA Program Handbook
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; and certain provisions of the Abandoned Vehicle Abatement (AVA) Program Handbook, issued by the California Highway Patrol, the statement of revenues and costs of the City of Modesto, California, (the City), Abandoned Vehicle Abatement Program (the Program) for the year ended June 30, 2023, and the related notes to the financial statement, and have issued our report thereon dated November 17, 2023.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statement, we considered the City’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 opinion on the Program’s financial statement, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control as it relates to the Program. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control as it relates to the Program. #3..
- 811 -
9 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 Program’s financial statement 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.

However, material weaknesses or significant deficiencies may exist that were not identified.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Program’s financial statement is 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 Program’s financial statement. 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 AVA Program Handbook.
#3..
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10 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 as it relates to the Program. This report is an integral part of an audit performed in accordance with Government Auditing Standards and the AVA Program Handbook in considering the City’s internal control and compliance as it relates to the Program. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 17, 2023
#3..
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www.vasquez.cpa
Vasquez & Company LLP has over 50 years of experience in performing audit, accounting & consulting services for all types of nonprofit organizations, for-profit companies, governmental entities and publicly traded companies. Vasquez is a member of the RSM US Alliance. RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP.

RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM™ logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • Ph. (213) 873-1700 • Fax (213) 873-1777
#3..
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Modesto-Ceres Fire Protection Agency
Annual Financial Report
As of and for the Year Ended June 30, 2023
With Independent Auditor’s Report
#3..
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Modesto-Ceres Fire Protection Agency
Annual Financial Report
As of and for the Year Ended June 30, 2023
With Independent Auditor’s Report
#3..
- 816 -
Modesto-Ceres Fire Protection Agency
Table of Contents
PAGE
Independent Auditor’s Report 1
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position 6
Statement of Activities 7
Fund Financial Statements:

Balance Sheet – Governmental Fund 8
Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Fund 9
Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget to Actual – General Fund 10
Notes to Basic Financial Statements 12
Other Information
Schedule of Officers 22
Independent Auditor’s 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 23 #3..
- 817 -
1 Independent Auditor’s Report
To the Board of Directors
Modesto-Ceres Fire Protection Agency
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and major fund of the Modesto-Ceres Fire Protection Agency (the Agency) as of and for the year ended June 30, 2023, the budgetary comparison statement for the general fund for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Agency’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and major fund of the Agency, as of June 30, 2023, and the respective changes in financial position and the budgetary comparison for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. #3..
- 818 -
2 Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Agency 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.

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 Agency’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.
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3 Auditor’s 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 auditor’s report that includes our opinions. 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 GAAS 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 GAAS 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 Agency’s internal control. Accordingly, no such opinion is expressed.
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4 • 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 Agency’s ability to continue as a going concern for a reasonable period of time.

Other Information
Management is responsible for the other information included with the basic financial statements. The other information comprises the schedule of officers but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon.
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- 821 -
5 In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 17, 2023, on our consideration of the Agency’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 Agency’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 Agency’s internal control over financial reporting and compliance.

Glendale, California
November 17, 2023
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- 822 -
See notes to basic financial statements.
6 Modesto-Ceres Fire Protection Agency
Statement of Net Position
June 30, 2023
Governmental
Activities
ASSETS
Cash and investments $ 272,064
Interest receivable 1,444
Taxes receivable 26,535
Prepaid expenses 1,085
Total Assets 301,128

LIABILITIES
Accounts payable 299,969
Total Liabilities 299,969

NET POSITION
Unrestricted 1,159
Total Net Position $ 1,159
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- 823 -
See notes to basic financial statements.
7 Modesto-Ceres Fire Protection Agency
Statement of Activities
Year Ended June 30, 2023
Program
Revenues
Net
(Expenses)
Revenues and
Changes in
Net Position
Functions/Programs Expenses
Charges for
Services
Governmental
Activities
Governmental Activities:

Fire and ambulance services $ 687,040 $ - $ (687,040)
Total Governmental Activities $ 687,040 $ - (687,040)
General Revenues
Taxes 684,862
Interest 4,739
Investment loss (2,561)
Total General Revenues 687,040
Changes in Net Position -
Net Position, Beginning of Year -
Prior Period Adjustment 1,159
Net Position, End of Year $ 1,159
#3..
- 824 -
See notes to basic financial statements.
8 Modesto-Ceres Fire Protection Agency
Balance Sheet – Governmental Fund
Year Ended June 30, 2023
General Fund
ASSETS
Cash and investments $ 272,064
Interest receivable 1,444
Taxes receivable 26,535
Prepaid expenses 1,085
Total Assets $301,128

LIABILITIES AND FUND BALANCE
Liabilities
Accounts payable $ 299,969
Total Liabilities 299,969
Fund Balance
Unassigned 1,159
Total Fund Balance 1,159
Total Liabilities and Fund Balance $ 301,128
#3..
- 825 -
See notes to basic financial statements.
9 Modesto-Ceres Fire Protection Agency
Statement of Revenues, Expenditures, and Changes
in Fund Balance – Governmental Fund
Year Ended June 30, 2023
General Fund

REVENUES
Taxes $ 684,862
Interest 4,739
Change in fair value of investments (2,561)
Total Revenues 687,040

EXPENDITURES
Professional services 5,190
Liability insurance 1,177
City of Modesto - administrative fee 2,985
Other 2,842
Total Expenditures 12,194
Excess of revenues over expenditures 674,846

OTHER FINANCING USES
Distributions to member agencies
City of Modesto (374,877)
City of Ceres (299,969)
Total Other Financing Uses (674,846)
Changes in Fund Balance -
Fund Balance, Beginning of Year -
Prior Period Adjustment 1,159
Fund Balance, End of Year $ 1,159
#3..
- 826 -
See notes to basic financial statements.
10 Modesto-Ceres Fire Protection Agency
Statement of Revenues, Expenditures, and Changes
in Fund Balance – Budget to Actual – General Fund
Year Ended June 30, 2023
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Taxes $ 679,561 $ 695,561 $ 684,862 $ (10,699)
Interest 2,500 2,500 4,739 2,239
Change in fair value of investments - - (2,561) (2,561) Total Revenues 682,061 698,061 687,040 (11,021)

EXPENDITURES
Professional services 5,300 5,300 5,190 110
Liability insurance 1,300 1,300 1,177 123
City of Modesto - administrative fee 4,500 4,500 2,985 1,515 Other 3,000 3,000 2,842 158
Total Expenditures 14,100 14,100 12,194 1,906
Excess of Revenues Over
Expenditures 667,961 683,961 674,846 (9,115)
(Continued)
#3..
- 827 -
Modesto-Ceres Fire Protection Agency
Statement of Revenues, Expenditures, and Changes
in Fund Balance – Budget to Actual – General Fund (Continued) Year Ended June 30, 2023
See notes to basic financial statements.
11 Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with
Final
Budget

OTHER FINANCING USES
Distributions to Member Agencies:

City of Modesto $ (371,052) $ (379,940) $ (374,877) $ 5,063 City of Ceres (296,909) (304,021) (299,969) 4,052
Total Other Financing Uses $ (667,961) $ (683,961) $ (674,846) $ 9,115 Changes in Fund Balance $ - $ - - $ -
Fund Balance, Beginning of Year -
Prior Period Adjustment 1,159
Fund Balance, End of Year $ 1,159
#3..
- 828 -
12 Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Modesto-Ceres Fire Protection Agency (the Agency) was formed on March 13, 2007 by a joint powers agreement made in accordance with Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (commencing with Section 6500) between the Industrial Fire District (the District), the City of Modesto, and the City of Ceres, for the cities to provide fire protection and administrative services within the District. The Agency operates under the Fire Protection District Law of 1987 and the Health and Safety Code, Sections 13801- 13999.

Revenue to finance the Agency's operation is derived from the County of Stanislaus property tax rolls.

Reporting Entity
The Agency’s financial statements include the accounts of all Agency operations. The criteria for including organizations as component units within the Agency’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 organization is legally separate (can sue and be sued in their own name). • The Agency holds the corporate powers of the organization. • The Agency appoints a voting majority of the organization’s board. • The Agency can impose its will on the organization.
• The organization has the potential to impose a financial benefit/burden on the Agency. • There is fiscal dependency by the organization on the Agency.

Based on the criteria, the Agency has no component units. #3..
- 829 -
Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2023
13 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 Agency’s 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.

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.

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 in 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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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2023
14 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Fund Financial Statements (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.

As of and for the year ended June 30, 2023, there were no differences between the government-wide financial statements and the governmental fund financial statements.

The Agency reports one major governmental fund:

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

The Agency adopts annual appropriated budgets for its general fund which is a major fund. A budgetary comparison statement has been provided for this fund to demonstrate compliance with the budgets. The budgetary comparison statement 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.
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2023
15 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Budget (Continued)
Annual budget requests are submitted by the Agency staff to the Agency’s Board of Directors for review. After a public hearing, a budget is approved by the Agency’s Board of Directors, with a resolution adopting said budget. Copies of the approved budget are sent to all required agencies.

The General Fund budget is prepared within the limit on spending as regulated by Proposition 4 Appropriations Limitation. Unencumbered appropriations for annual budgeted funds lapse at year-end.

Proposition 4
The Proposition 4 Appropriations Limitation for the year ended June 30, 2023, was $1,428,473.

Cash and Investments
The Agency 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. #3..
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2023
16 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Property Tax
Secured property taxes are attached as an enforceable lien on real property as of the 1st day of January. Taxes are payable in two installments on November 1st and February 1st and become delinquent if not paid before December 10th and April 10th. Unsecured property taxes are billed in one installment, are due March 15th, and become delinquent if not paid on or before August 31st. The County of Stanislaus bills and collects all property taxes and remits to the Agency its share of the 1% property tax allocation.

Employees’ Retirement Plan
The Agency no longer participates in the County of Stanislaus retirement plan since firefighters are paid by the cities of Modesto and Ceres.

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) 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.

Net Position
Net position represents the residual interest in the Agency’s assets after liabilities are deducted.

In accordance with GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, the fund equity section on the Statement of Net Position was combined to report the total net position and present it in three broad components:
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2023
17 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position (Continued)
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.

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 Agency 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 Agency did not have any nonspendable resources as of June 30, 2023.
• 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 Agency did not have any restricted resources as of June 30, 2023. #3..
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2023
18 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Committed - Amounts constrained to specific purposes by the Agency itself, using its highest level of decision-making authority, the Board of Directors (Agency Board). To be reported as committed, amounts cannot be used for any other purpose unless the Agency Board takes the same highest-level action to remove or change the constraint. The Agency did not have any committed resources as of June 30, 2023. • Assigned - Amounts the Agency intends to use for a specific purpose. Intent can be expressed by the Agency or by an official or body to which the Agency Board delegates the authority. The Agency did not have any assigned resources as of June 30, 2023. • Unassigned - Amounts that are available for any purpose. The Agency reported $1,159 in unassigned resources as of June 30, 2023.

In circumstances when an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the Agency considers amounts to have been spent first out of committed funds then assigned funds, and finally unassigned funds, as needed, unless the Board has provided otherwise in its commitment or assignment actions.

Governmental Accounting Standards Update
During the year ended June 30, 2023, the Agency implemented the following standards with no effect on the financial statements:

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.
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2023
19 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 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.

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

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. #3..
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2023
20 NOTE 2 CASH AND INVESTMENTS
Cash and investments of the Agency 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 Agency’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 Agency does not have any deposits with financial institutions as of June 30, 2023.

Cash and investments as of June 30, 2023 are classified in the accompanying financial statements as follows:

Statement of Net Position:

Cash and investments $272,064
Total cash and investments $272,064
Summary of Deposits
Cash and investments as of June 30, 2023 consist of the following:

Deposits with City of Modesto:

Cash and investments pool $272,064
Total cash and investments $272,064
Detailed information regarding 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, 2023, the fair value of the Agency’s position in the pool is the same as the value of its pool shares. #3..
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Modesto-Ceres Fire Protection Agency
Notes to Basic Financial Statements
Year Ended June 30, 2023
21 NOTE 3 PRIOR PERIOD ADJUSTMENT
A prior period adjustment of $1,159 was recorded in the governmental activities and general fund beginning net position and fund balance, respectively, to account for interest income that was not reflected in the financial statements in the prior year.

NOTE 4 SUBSEQUENT EVENTS
The Agency has evaluated events subsequent to the balance sheet date through November 17, 2023, the date the financial statements were available to be issued. Based upon this evaluation, it was determined that no subsequent events occurred that require recognition or disclosure in the financial statements.
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OTHER INFORMATION
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22 Modesto-Ceres Fire Protection Agency
Schedule of Officers
June 30, 2023
President Joseph P. Lopez – City of Modesto
City Manager
Secretary Juana Lynch – City of Modesto
Executive Assistant
Member Richard Collins – City of Ceres
Police Chief
Member Alan Ernst – City of Modesto
Fire Chief
Member Vacant – City of Ceres
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23 Independent Auditor’s 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 Board of Directors Modesto-Ceres Fire Protection Agency 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 (Government Auditing Standards), the financial statements of the governmental activities and major fund of the Modesto-Cere Fire Protection Agency (the Agency), as of and for the year ended June 30, 2023, the budgetary comparison statement for the general fund for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Agency’s basic financial statements, and have issued our report thereon dated November 17, 2023.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Agency’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 Agency’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Agency’s internal control.
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24 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 Agency’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.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Agency’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.
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25 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 Agency’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 Agency’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 17, 2023
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www.vasquez.cpa
Vasquez & Company LLP has over 50 years of experience in performing audit, accounting & consulting services for all types of nonprofit organizations, for-profit companies, governmental entities and publicly traded companies. Vasquez is a member of the RSM US Alliance. RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM™ logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • Ph. (213) 873-1700 • Fax (213) 873-1777
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Tuolumne River Regional Park
Annual Financial Report
As of and for the Year Ended June 30, 2023
With Independent Auditor’s Report
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Tuolumne River Regional Park
Annual Financial Report
As of and for the Year Ended June 30, 2023
With Independent Auditor’s Report
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Tuolumne River Regional Park
Table of Contents
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis 5
Basic Financial Statements
Government-Wide Financial Statements:

Statement of Net Position 17
Statement of Activities 18
Fund Financial Statements:

Balance Sheet – Governmental Funds 19
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 20
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Fund 21
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and the Changes in Fund Balances to the Statement of Activities 23 Notes to Financial Statements 24

REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balances – General Fund – Budget and Actual 40
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Tuolumne River Regional Park
Table of Contents
PAGE
Schedule of Revenues, Expenditures, and Changes in Fund Balances – Special Revenue Fund – Budget and Actual 42
Note to the Required Supplementary Information 43
Independent Auditor’s 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 44 #3..
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1 Independent Auditor’s Report
To the Tuolumne River Regional Park Commission,
The Board of Supervisors of the County of Stanislaus, California, and The Honorable Members of the City Councils of Modesto and Ceres, California Tuolumne River Regional Park
Report on the Audit of the Financial Statements
Opinions
We have audited 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, 2023, and the related notes to the financial statements, which collectively comprise the Park’s basic financial statements as listed in the table of contents.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards).
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2 Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Park 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.

Auditor’s 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 auditor’s report that includes our opinions. 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 GAAS 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. #3..
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3 In performing an audit in accordance with GAAS 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 Park’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 Park’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 on pages 5 - 16 and budgetary comparison information on pages 40 - 42 be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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 #3..
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4 operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 17, 2023, on our consideration of the Park’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 Park’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 Park’s internal control over financial reporting and compliance.

Glendale, California
November 17, 2023
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5 Tuolumne River Regional Park
Management’s Discussion and Analysis
Year Ended June 30, 2023
This section of the annual financial report presents a discussion and analysis of financial performance of Tuolumne River Regional Park (the Park) during the past fiscal year. Please read it in conjunction with the Park’s financial statements, which follow this section.

FINANCIAL HIGHLIGHTS
The assets of the Park exceeded liabilities at the close of the 2023 fiscal year by $10,253,384 (net position). Of this amount, $6,630,342 is invested in capital assets, and $3,623,042 (unrestricted net position) may be used to meet ongoing obligations to citizens and creditors. • Total net position increased by $2,743,117 from current year activity. • At June 30, 2023, the Park’s funds reported combined fund balance of $3,497,144, an increase of $3,186,866 in comparison with the prior year. • At the end of the fiscal year, the General Fund had a fund balance of $188,451.

OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to Park’s basic financial statements. The basic financial statements are made up of three components: 1) GovernmentWide Financial Statements, 2) Fund Financial Statements, and 3) Notes to Financial Statements. Required Supplementary Information is included in addition to the basic financial statements.

Government-Wide Financial Statements are designed to provide readers with a broad overview of Park finances, in a manner similar to a private-sector business.

The Statement of Net Position presents information on all assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Park is improving or deteriorating. #3..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
6 The Statement of Activities presents information showing how net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash inflows or outflows in future fiscal periods.

The sole function of the Park is the administration of parks and recreation. It is principally supported by contributions from the three participating agencies of the Park joint powers agreement, the County of Stanislaus and the Cities of Modesto and Ceres, rather than by user fees, and thus, is considered a governmental activity.

The government-wide financial statements can be found on pages 17 and 18 of this report.

Fund Financial Statements provide evidence of accountability by demonstrating compliance with budgetary decisions. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or purposes stipulated by laws, regulations, or policies. All Park funds are governmental funds.

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental funds financial statements focus on nearterm inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds financial statements 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 longterm impact of the government’s near-term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes #3..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
7 in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The Park maintains three 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 the General Fund, Special Revenue Fund, and the Capital Projects Fund.

The governmental funds financial statements can be found on pages 19 through 23 of this report.

Notes to 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 24 through 39 of this report.

Required Supplementary Information presents a budgetary comparison schedule for the General Fund and Special Revenue Fund to demonstrate compliance with the budget.

Required supplementary information can be found on pages 40 through 43 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 $10,253,384 at the close of fiscal year 2023, compared with $7,510,267 as of June 30, 2022.
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
8 Statements of Net Position– Governmental Activities
Description 2023 2022
Assets:

Current and other assets $4,938,772 $1,584,042
Capital assets 6,630,342 7,166,897
Total assets 11,569,114 8,750,939
Liabilities:

Current and other liabilities 180,338 55,708
Total liabilities 180,338 55,708
Deferred inflows of resources:

Leases 1,135,392 1,184,964
Total deferred inflows of resources 1,135,392 1,894,694 Net position:

Net investment in capital assets 6,630,342 7,166,897
Unrestricted 3,623,042 343,370
Total net position $10,253,384 $7,510,267
The largest portion of net position, $6,630,342, 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 $3,354,730 or 211.78% primarily due to the proceeds from insurance recoveries related to the fire at the American Legion Hall in July 2022.

The remaining net position of $3,623,042 is unrestricted. This amount is the balance at yearend which may be used to meet the Park’s ongoing obligations.

The Park’s net position increased by $2,743,117 during the current fiscal year. #3..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
9 Statements of Activities – Governmental Activities
Description 2023 2022
Revenues:

Program revenues:

Charges for services $6,648 $20,871
Capital grants and contributions 235,203 18,035
Operating grants and contributions 625,183 408,800
General revenues:

Lease revenue 50,374 50,328
Interest revenue - leases 20,166 16,878
Other revenue 3,000 1,267
Investment loss (520) (6,732)
Transfers, net 51,862 -
Insurance recoveries 3,316,441 -
Total revenues 4,308,357 509,447
Expenses:

Parks and recreation 1,565,240 961,342
Total expenses 1,565,240 961,342
Change in net position 2,743,117 (451,895)
Net position, beginning of year 7,510,267 7,962,162
Net position, end of year $10,253,384 $7,510,267
The 2023 net position increased by $2,743,117 which is mainly attributable proceeds received from insurance recoveries related to the fire at the American Legion Hall in July 2022. #3..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
10 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, Special Revenue 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, 2023, the Park’s governmental funds reported a combined fund balance of $3,497,144, an increase of $3,186,866 in comparison with the prior year.

The General Fund is the chief operating fund of the Park. At June 30, 2023, the General Fund had a fund balance of $188,451, an increase of $130,268 from the prior year. This increase can be attributed to the increase in contributions made by participating agencies in FY2023 and the revenues received for the sale of property to the City of Modesto.

General, Special Revenue and Capital Projects funds revenues totaled $847,248 in fiscal year 2023, an increase of $145,887 or 20.80% from fiscal year 2022. The following table presents the revenues from various sources as well as increases or decreases from the prior year. #3..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
11 Revenues Classified by Source
Governmental Funds
Revenues by Source
2023
Amount
2023
Percent
2022
Amount
2022
Percent
Change
(Amount)
Change
(Percent)
Rents $6,648 0.78% $20,871 2.98% $(14,223) (68.15%)
Operating grants
and contributions 625,183 73.82% 408,800 58.29% 216,383 52.93% Intergovernmental 142,397 16.81% 209,949 29.93% (67,552) (32.18%) Lease revenue 50,374 5.95% 50,328 7.18% 46 (0.09%)
Interest revenue - leases 20,166 2.39% 16,878 2.41% 3,288 19.48% Other 2,480 0.29% (5,465) -0.79% 7,945 145.38%
$847,248 100.00% $701,361 100.00% $145,887 20.80%
The increase in revenues is mainly attributable to the increase of contributions by participating agencies. The decrease in rents was anticipated due to the closure of America Legion Hall and will be standard until additional rentable facilities are constructed. #3..
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
12 The following table presents expenditures by function compared to prior year amounts.

Expenditures by Function
Governmental Funds
Expenditures by
Function
2023
Amount
2023
Percent
2022
Amount
2022
Percent
Change
(Amount)
Change
(Percent)
Parks and recreation $1,106,686 90.78% $522,660 86.76% $584,026 111.74% Capital outlay 112,449 9.22% 79,726 13.24% 32,723 41.04% $1,219,135 100.00% $602,386 100.00% $616,749 102.38%
Current expenditures for operations showed an increase, primarily due to increased project expenses for the year. 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.

The current year changes in fund balances as compared to the prior year are presented in the following table:
#3..
- 860 -
Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
13 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
Description
General
Fund
Special
Revenue
Fund
Capital
Projects
Fund
2023 Total
Governmental
Funds
2022 Total
Governmental
Funds
Revenues $651,988 $157,648 $37,612 $847,248 $701,361
Expenditures (597,763) (157,648) (463,724) $(1,219,135) (602,386) Excess (deficiency) of
revenues over
(under) expenditures 54,225 - (426,112) (371,887) 98,975 Other financing
sources 76,043 - 3,482,710 3,558,753 -
Change in fund balance 130,268 - 3,056,598 3,186,580 98,975 Fund balance,
beginning of year 58,183 - 252,095 310,278 211,303
Fund balance, end of year $188,451 $- $3,308,693 $3,497,144 $310,278 The fund balance of the Park’s General Fund increased by $130,268 during the fiscal year, compared to the final budget anticipated increase of $19,672. The key factor in this increase was the sale of land that resulted in additional funding for the Park.

GENERAL FUND BUDGETARY HIGHLIGHTS
Actual revenues were higher than final budgetary estimates by $21,146. This is mainly attributable to an increase in rental revenues. Actual expenditures were $89,450 lower than final budgetary estimates with a majority focused on maintenance of the Park. There were less expenditures associated with the upkeep and maintenance due to the closure of American Legion Hall in July 2022.
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Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
14 CAPITAL ASSETS
The Park’s net investment in capital assets as of June 30, 2023, amounted to $6,630,342 (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 $536,555, or (7.49)% over the prior year. The major components of this change were:

Capital Asset Activities
Description Amount
Depreciation expense $(438,048)
Capital asset additions 112,449
Capital asset adjustments (210,956)
Total $536,555
Additional information on the Park’s capital assets can be found in Note 4 on page 37 of this report.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
City of Modesto staff and the TRRP Commission continue to seek funding opportunities from all appropriate grant sources. Although no new grant funding was awarded during the past fiscal year, there are many projects in development and design that are using previously awarded grant funds. Projects such as the River Pavilion and Learning Theatre at Legion Park, Riverwalk Trail from Gateway to Neece, and the Riverwalk Trail from Gateway to Legion are in design and anticipated to complete construction in the next few years. During FY 2023/24, staff anticipates that two other major grant funded projects will be completed: the Carpenter Road Area (Bellenita) Soccer Fields and the Neece Drive Boat Launch. Both projects are critical to encouraging positive use of the park and are anticipated to bring in revenue in future fiscal years.
#3..
- 862 -
Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
15 During FY 2021/22, TRRP was allocated funding from the City of Modesto’s American Rescue Plan Act allocation in the amount of $750,000. Some of this funding has been expended on park maintenance and the TRRP Master Plan Update, with the remaining fund being used over the next few years to install security cameras and other park renovations.

Recently, the City of Modesto’s Parks, Recreation, and Neighborhoods Department began the process of updating the TRRP Master Plan. The last update to the TRRP Master Plan was adopted by the member agencies in December 2001. This update will be a critical project to plan for the fiscal and operational sustainability of TRRP and is anticipated to be completed by the end of FY 2023/24.

In July 2022, a fire heavily damaged the American Legion Hall. It was deemed a total loss, and the building was demolished in early 2023. The closure of this building resulted in a decrease of rental revenues for the fiscal year when compared to prior years. The Park received a significant insurance payment in the net amount of $3,316,440, which was deposited in the TRRP Capital Fund (6710). Due to the high cost of maintaining and operating the American Legion Hall it was determined that it would not be in the best interest of TRRP to rebuild at this time. These insurance funds will be used to improve/maintain many areas of the park over the next few years.

There were two property transactions approved in FY 2022/23 that effected TRRP and an additional transaction that is anticipated to be completed in FY 2023/24:

The first property transaction is the sale of 5.01 acres of TRRP property along Robertson Road to the City of Modesto Utilities Department to be used for an improved entrance at the City of Modesto Primary Treatment Plant. The sale resulted in $190,450 of revenue to the park that was deposited in the TRRP General Fund (6700) and will be used to cover operating costs in TRRP.
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- 863 -
Tuolumne River Regional Park
Management’s Discussion and Analysis (Unaudited)
Year Ended June 30, 2023
16 The second property transaction was an exchange of City of Modesto property with a private property owner to obtain approximately 11 acres of land along the Tuolumne River between Dry Creek and South Santa Cruz Drive. This property is a key property for TRRP to allow for the development of the full 7-mile frontage of the north side of the Tuolumne River.

The third property transaction will be completed in FY 2023/24 and is the sale of approximately 4 acres of TRRP property along Robertson Road to the Housing Authority for the development of affordable housing. The sale is anticipated to result in approximately $470,000 of revenue that will be deposited into the TRRP General Fund (6700) and is anticipated to be used to help cover operating costs in TRRP.

In May 2023, the TRRP Commission approved a budget for FY 2023/24 that included a 4.5% increase in the contribution from the City of Modesto and no increase in the contribution from Stanislaus County. This budget does not include a contribution from the City of Ceres.

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 and there are ongoing discussions to determine an appropriate level of contribution from the City of Ceres in the future.

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. #3..
- 864 -
See notes to financial statements.
17 Tuolumne River Regional Park
Statement of Net Position
June 30, 2023
Governmental
Activities
ASSETS
Cash and investments $3,619,218
Interest receivable 527
Dues from other governments 133,659
Lease receivable 1,185,368
Capital assets
Nondepreciable 2,946,743
Depreciable, net 3,683,599
Total Assets 11,569,114

LIABILITIES
Accounts payable 180,338
Total Liabilities 180,338

DEFERRED INFLOWS OF RESOURCES
Leases 1,135,392
Total Deferred Inflows of Resources 1,135,392

NET POSITION
Net investment in capital assets 6,630,342
Unrestricted 3,623,042
Total Net Position $10,253,384
#3..
- 865 -
See notes to financial statements.
18 Tuolumne River Regional Park
Statement of Activities
Year Ended June 30, 2023
Program
Revenues
Net (Expense)
Revenue and
Changes in
Net Position
Functions/Programs Expenses
Charges
for
Services
Capital
Grants and
Contributions
Operating
Grants and
Contributions
Governmental
Activities
Governmental activities:
parks and recreation $1,565,240 $6,648 $235,203 $625,183 $(698,206) Total Governmental
Activities $1,565,240 $6,648 $235,203 $625,183 (698,206) General Revenues
Lease revenue 50,374
Interest revenue -
leases 20,166
Investment loss (520)
Other revenue 3,000
Transfers, net 51,862
Insurance recoveries 3,316,441
Changes in Net Position 2,743,117
Net position, Beginning
of Year 7,510,267
Net Position, end
of Year $10,253,384
#3..
- 866 -
See notes to financial statements.
19 Tuolumne River Regional Park
Balance Sheet – Governmental Funds
June 30, 2023

DESCRIPTION
General
Fund
Special
Revenue
Fund
Capital
Projects
Fund
Total
Government
al Funds
ASSETS
Cash and investments $228,601 32,650 3,357,967 $3,619,218 Interest receivable 527 - - 527
Due from other governments - - 133,659 133,659
Lease receivable 1,185,368 - - 1,185,368
Total Assets $1,414,496 $32,650 $3,491,626 $4,938,772

LIABILITIES
Accounts payable $90,254 $32,650 $57,434 $180,338
Total Liabilities 90,254 32,650 57,434 180,338

DEFERRED INFLOWS OF

RESOURCES
Unavailable revenues 399 - 125,499 125,898
Leases 1,135,392 - - 1,135,392
Total Deferred Inflows of Resources 1,135,791 - 125,499 1,261,290

FUND BALANCE
Committed - - 3,308,693 3,308,693
Unassigned 188,451 - - 188,451
Total Fund Balances 188,451 - 3,308,693 3,497,144
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $1,414,496 $32,650 $3,491,626 $4,938,772 #3..
- 867 -
See notes to financial statements.
20 Tuolumne River Regional Park
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position
June 30, 2023
Amounts reported for governmental activities in the Statement of Net Position are different from those reported in the governmental funds because of the following:

Total Fund Balances - Governmental Funds $3,497,144
Revenues not available for current-period expenditures are deferred in governmental funds but are considered earned in the Statement of Net Position.
125,898
Capital assets used in governmental activities are not current assets or financial resources and, therefore, are not reported in the governmental funds. 6,630,342
Total Net Position - Governmental Activities $10,253,384 #3..
- 868 -
See notes to financial statements.
21 Tuolumne River Regional Park
Statement of Revenues, Expenditures, and Changes in
Fund Balances – Governmental Fund
Year Ended June 30, 2023

DESCRIPTION
General
Fund
Special
Revenue
Fund
Capital
Projects
Fund
Total
Government
al Funds

REVENUES
Rents $6,648 $- $- $6,648
Operating grants and contributions 572,320 52,863 - 625,183 Intergovernmental - 104,785 37,612 142,397
Lease revenue 50,374 - - 50,374
Interest revenue - leases 20,166 - - 20,166
Change in fair value of investments (520) - - (520)
Other 3,000 - - 3,000
Total Revenues 651,988 157,648 37,612 847,278

EXPENDITURES
Contractual services 574,583 157,648 351,275 1,083,506
Materials and supplies 5,435 - - 5,435
Insurance and taxes 17,745 - - 17,745
Capital outlay - - 112,449 112,449
Total Expenditures 597,763 157,648 463,724 1,219,135
Excess (Deficiency) of Revenues Over
(Under) Expenditures 54,225 - (426,112) (371,887)
(Continued)
#3..
- 869 -
Tuolumne River Regional Park
Statement of Revenues, Expenditures, and Changes in
Fund Balances – Governmental Fund (Continued)
Year Ended June 30, 2023
See notes to financial statements.
22 DESCRIPTION
General
Fund
Special
Revenue
Fund
Capital
Projects
Fund
Total
Government
al Funds

OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets $190,450 $- $- $190,450 Proceeds from insurance recoveries - - 3,316,441 3,316,441 Transfer in - - 166,269 166,269
Transfer out (114,407) - - (114,407)
Net Other Financing Sources 76,043 - 3,482,710 3,558,753 Changes in Fund Balances 130,268 - 3,056,598 3,186,866
Fund Balances, Beginning of Year 58,183 - 252,095 310,278 Fund Balances, End of Year $188,451 $- $3,308,693 $3,497,144 #3..
- 870 -
See notes to financial statements.
23 Tuolumne River Regional Park
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and the Changes in Fund Balances to the Statement of Activities Year Ended June 30, 2023
Net change in fund balances of the Governmental Funds $3,186,866 Amounts reported for governmental activities in the Statement of Activities are different from those reported in the governmental funds because of the following:

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. 92,806
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.

Capital outlay expenditures $112,449
Depreciation expense (438,048) (325,599)
Governmental funds report proceeds from the disposal of capital assets. regardless of whether a gain or loss is realized. However, in the Statement of Activities, gains and losses on disposal of capital assets are reported.

Proceeds from disposal of fixed assets (190,450)
Loss from disposal of fixed assets (20,506) (210,956)
Changes in Net Position of Governmental Activities $2,743,117 #3..
- 871 -
24 Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
NOTE 1 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.
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- 872 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
25 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 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.

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. #3..
- 873 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
26 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
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. Substantially all taxes and interest, including the net increase (decrease) in the fair value of investments, are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period.

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 governmentwide 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 three major governmental funds:

The General Fund is the primary operating fund and accounts for all financial resources of the Park.
#3..
- 874 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
27 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
The Special Revenue Fund is used to account for financial resources restricted for specific purposes.

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

The Park adopts annual appropriated budgets for its General and Special Revenue Funds, which are major funds. Budgetary comparison schedules have been provided for these funds 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 budgets for the General and Special Revenue Fund are 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 member agencies.
#3..
- 875 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
28 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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.

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, 2023 is $133,659.

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, 2023. 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. #3..
- 876 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
29 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Capital Assets (Continued)
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 and Fund Balance Sheet will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets by the Park that is applicable to a future reporting period.

In addition to liabilities, the Statement of Net Position and Fund Balance Sheet will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets 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 and the deferred inflows related to lease receivable.
#3..
- 877 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
30 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 (ACFR) for further information related to the insurance pool. Additional insurance is purchased for special events when certain Park facilities are rented to the public.

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.
#3..
- 878 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
31 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Net Position
Net position represents the residual interest in the Park’s assets after liabilities are deducted.

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.

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 Park is bound to honor constraints on how specific amounts can be spent. #3..
- 879 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
32 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• 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, 2023.
• 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, 2023.
• Committed - Amounts constrained to specific purposes by the Park itself, using its highest level of decision-making 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 $3,308,693 as committed resources as of June 30, 2023.
• 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 authority. The Park did not have any assigned resources as of June 30, 2023. • Unassigned – Amounts that are available for any purpose. $188,451 of the Park’s resources were considered unassigned as of June 30, 2023.

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.
#3..
- 880 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
33 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update
During the year ended June 30, 2023, the District implemented the following Governmental Accounting Standards Board (GASB) standards with no effect on the financial statements:

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 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.
#3..
- 881 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
34 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Governmental Accounting Standards Update (Continued)
Released GASB Statements to be implemented in future financial statements are as follows:

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.

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, 2023.

Cash and investments as of June 30, 2023 are classified in the accompanying financial statements as follows:

Statement of Net Position:

Cash and investments $3,619,218
Total cash and investments $3,619,218
#3..
- 882 -
Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
35 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Summary of Deposits
Cash and investments as of June 30, 2023 consist of the following:

Deposits with City of Modesto
Cash and investments pool $3,619,218
Total cash and investments $3,619,218
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 ACFR. As of June 30, 2023, 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 $24,997 for the year ended June 30, 2023. Interest revenue recognized under the lease agreement was $11,264 for the year ended June 30, 2023.
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
36 NOTE 3 LEASE RECEIVABLE (CONTINUED)
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 $25,377 for the year ended June 30, 2023. Interest revenue recognized under the lease agreement was $8,902 for the year ended June 30, 2023.

Future minimum lease and interest payments to be received are as follows:

Year Ending June 30 Principal Interest Total
2024 $31,793 $17,565 $49,358
2025 33,383 17,077 50,460
2026 35,024 16,565 51,589
2027 36,718 16,028 52,746
2028 38,466 15,465 53,931
2029-2033 220,423 67,927 288,350
2034-2038 272,634 49,519 322,153
2039-2043 205,811 29,853 235,664
2044-2048 173,458 17,138 190,596
2049-2052 137,658 3,682 141,340
Total $1,185,368 $250,819 $1,436,187
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
37 NOTE 4 CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2023, was as follows:

Description
Beginning
Balance Additions
Deletions/
Adjustments
Ending
Balance
Capital assets, not being depreciated
Land $2,528,566 $- $(190,450) $2,338,116
Construction in progress 496,178 112,449 - $608,627
Total capital assets not being
depreciated 3,024,744 112,449 (190,450) 2,946,743
Capital assets, being depreciated:

Buildings 455,935 - (320,451) 135,484
Improvements 10,689,250 - (247,514) 10,441,736
Total capital assets, being depreciated 11,145,185 - (567,965) 10,577,220 Less accumulated depreciation for:

Buildings (421,950) (1,425) 308,630 (114,745)
Improvements (6,581,082) (436,623) 238,829 (6,778,876)
Total accumulated depreciation (7,003,032) (438,048) 547,459 (6,893,621) Total capital assets, being
depreciated, net 4,142,153 (438,048) (20,506) 3,683,599 Capital assets, net $7,166,897 $(325,599) $(210,956) $6,630,342 Depreciation expense for the year ended June 30, 2023 was $438,048. #3..
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
38 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 2023 fiscal year, contractual service expenditures included $146,076 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 net transfers for the year ended June 30, 2023 amounting to $51,862.

NOTE 7 DEFICIENCIES OF EXPENDITURES OVER APPROPRIATIONS For the year ended June 30, 2023, expenditures exceeded appropriations as follows:

Expenditures Amount
General Fund:

Materials and supplies $435
Special Revenue Fund:

Contractual services $157,648
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Tuolumne River Regional Park
Notes to Financial Statements
Year Ended June 30, 2023
39 NOTE 8 SUBSEQUENT EVENT
The Park has evaluated events subsequent to the balance sheet date through November 17, 2023, the date the financial statements were available to be issued. Based upon this evaluation, it was determined that no subsequent events occurred that require recognition or disclosure in the financial statements.
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REQUIRED SUPPLEMENTARY INFORMATION
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40 Tuolumne River Regional Park
Schedule of Revenues, Expenditures, and
Changes in Fund Balances – General Fund – Budget and Actual Year Ended June 30, 2023
Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Rents $58,522 $58,522 $6,648 $(51,874)
Operating grants and contributions 572,320 572,320 572,320 - Lease revenue - - 50,374 50,374
Interest revenue - leases - - 20,166 20,166
Investment earnings (loss) - - (520) (520)
Other - - 3,000 3,000
Total Revenues 630,842 630,842 651,988 21,146

EXPENDITURES
Contractual services 664,468 664,468 574,583 89,885
Materials and supplies 5,000 5,000 5,435 (435)
Insurance and taxes 17,745 17,745 17,745 -
Total Expenditures 687,213 687,213 597,763 89,450
Excess (Deficiency) of Revenues Over
(Under) Expenditures (56,371) (56,371) 54,225 110,596
(Continued)
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41 Tuolumne River Regional Park
Schedule of Revenues, Expenditures, and
Changes in Fund Balances – General Fund – Budget and Actual (Continued) Year Ended June 30, 2023
Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

OTHER FINANCING SOURCES (USES)
Proceeds from sales of capital assets $190,450 $190,450 $190,450 $- Transfers out (114,407) (114,407) (114,407) -
Total Other Financing Sources (Uses) 76,043 76,043 76,043 - Changes in Fund Balance $19,672 $19,672 130,268 $110,596 Fund Balance, Beginning of Year 58,183
Fund Balance, End of Year $188,451
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42 Tuolumne River Regional Park
Schedule of Revenues, Expenditures, and
Changes in Fund Balances – Special Revenue Fund – Budget and Actual Year Ended June 30, 2023
Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Operating grants and
contributions $225,000 $225,000 $52,863 $(172,137)
Intergovernmental 175,000 175,000 104,785 (70,215)
Total Revenues 400,000 400,000 157,648 (242,352)

EXPENDITURES
Contractual services - - 157,648 (157,648)
Total Expenditures - - 157,648 (157,648)
Changes in Fund Balance $400,000 $400,000 - $(400,000)
Fund Balance, Beginning of Year -
Fund Balance, End of Year $-
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43 Tuolumne River Regional Park
Note to the Required Supplementary Information
Year Ended June 30, 2023
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 and Special Revenue Funds to be effective July 1 the ensuing fiscal year. The budgets must be approved by each of the legislative bodies of the parties to the joint powers agreement. From the effective date of the budgets, which is adopted and controlled at the fund level, the amounts stated therein as proposed expenditures become appropriations. The Park may amend the budgets by approval from each of the legislative bodies of the parties to the agreement during the fiscal year. The budgets for the General and Special Revenue Funds are 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, 2023, so the actual budgetary-basis expenditures are the same as the actual GAAP-basis expenditures. #3..
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44 Independent Auditor’s 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 Honorable Members of 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, 2023, 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 17, 2023.

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.
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45 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.

However, material weaknesses or significant deficiencies may exist that were not identified.

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. #3..
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46 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.

Glendale, California
November 17, 2023
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www.vasquez.cpa
Vasquez & Company LLP has over 50 years of experience in performing audit, accounting & consulting services for all types of nonprofit organizations, for-profit companies, governmental entities and publicly traded companies. Vasquez is a member of the RSM US Alliance. RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM™ logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • Ph. (213) 873-1700 •Fax (213) 873-1777
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City of Modesto, California
Transportation Development Act Funds
Annual Financial Report
As of and for the Year Ended June 30, 2023
With Independent Auditor’s Report
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City of Modesto, California
Transportation Development Act Funds
Annual Financial Report
As of and for the Year Ended June 30, 2023
With Independent Auditor’s Report
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City of Modesto
Transportation Development Act Funds
Table of Contents
PAGE
Independent Auditor’s Report 1
Basic Fund Financial Statements
Balance Sheet 5
Statement of Revenues, Expenditures, and Changes in Fund Balances 6 Notes to Financial Statements 7
Independent Auditor’s 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 13
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1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of the Transportation Development Act (TDA) Funds of the City of Modesto, California as of and for the year ended June 30, 2023, and the related notes to the financial statements, as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of the TDA Funds of the City of Modesto, California, as of June 30, 2023, and the changes in financial position 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 (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City of Modesto, California 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.
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2 Emphasis of Matter
As discussed in Note 1, the financial statements present only the TDA Funds of the City of Modesto, California and do not purport to, and do not, present fairly the financial position of the City of Modesto, California, as of June 30, 2023, and the changes in its 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 Matter
Prior-Year Comparative Information
The financial statements of TDA Funds, as of and for the year ended June 30, 2022, were audited by other auditors, whose report, dated November 8, 2022, expressed an unmodified opinion on those statements. The summarized comparative information presented herein as of and for the year ended June 30, 2022, is consistent, in all material respects, with the audited financial statements from which it has been derived.

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 #3..
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3 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 GAAS 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 City of Modesto, California’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.

Required Supplementary Information
Management has omitted management’s discussion and analysis 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 basic 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 #3..
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4 appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

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 of Modesto, California’s internal control over financial reporting or on compliance as it relates to the TDA Funds. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Modesto, California’s internal control over financial reporting and compliance as it relates to the TDA Funds.

Glendale, California
November 17, 2023
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See notes to basic fund financial statements.
5 City of Modesto
Transportation Development Act Funds
Balance Sheet
June 30, 2023
(With Summarized Prior Year Data for Comparison Purposes Only) NonMotorized
Streets
and
Roads
Total
2023
Total
2022
ASSETS
Cash and investments $1,467,992 $238,274 $1,706,266 $1,734,841 Due from other governments 297,316 - $297,316 -
Total Assets $1,765,308 $238,274 $2,003,582 $1,734,841

LIABILITIES
Unearned revenue $1,763,532 $238,274 $2,001,806 $1,733,065

FUND BALANCES
Restricted 1,776 - 1,776 1,776
Total Liabilities and Fund
Balances $1,765,308 $238,274 $2,003,582 $1,734,841
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See notes to basic fund financial statements.
6 City of Modesto
Transportation Development Act Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances Year Ended June 30, 2023
(With Summarized Prior Year Data for Comparison Purposes Only) NonMotorized
Streets
and
Roads
Total
2023
Total
2022

REVENUES
Intergovernmental
Local transportation funds $28,574 $- $28,574 $428,475
Interest 59,698 - 59,698 665
Total Revenues 88,272 - 88,272 429,140

EXPENDITURES
Maintenance and supplies - - - 1,058
Total Expenditures - - - 1,058
Excess (Deficiency) of Revenues
Over (Under) Expenditures 88,272 - 88,272 428,082

OTHER FINANCING SOURCES (USES)
Transfers:

Out to other funds of the City (88,272) - (88,272) (428,082) Total Other Financing Sources (Uses) (88,272) - (88,272) (428,082) Changes in Fund Balance - - - -
Fund Balance, Beginning of the Year 1,776 - 1,776 1,776 Fund Balance, End of Year $1,776 $- $1,776 $1,776
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7 City of Modesto
Transportation Development Act Funds
Notes to Financial Statements
Year Ended June 30, 2023
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 (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 TDA Funds are combined and presented as a special revenue fund in the City’s Comprehensive Annual Financial Report (ACFR). These financial statements are intended to reflect only the financial position and changes in financial position of the City’s TDA Funds in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

Basis of Presentation, Basis of Accounting, and Measurement Focus The City’s TDA 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, Basic Financial Statements— and Management’s Discussion and Analysis—for State and Local Governments, 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. #3..
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City of Modesto
Transportation Development Act Funds
Notes to Financial Statements
Year Ended June 30, 2023
8 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) 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 U.S. GAAP.

Accordingly, such information should be read in conjunction with the City’s TDA Funds financial statements for the year ended June 30, 2022, 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 TDA 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.

Management’s Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP 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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City of Modesto
Transportation Development Act Funds
Notes to Financial Statements
Year Ended June 30, 2023
9 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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.

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

Capital Outlay
Capital projects funded by the TDA 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 TDA Funds. These expenditures are capitalized in the City’s governmentwide financial statements as the related capital assets become the property of the City and are maintained by the City.

Fund Balance
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. #3..
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City of Modesto
Transportation Development Act Funds
Notes to Financial Statements
Year Ended June 30, 2023
10 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Committed - Amounts constrained to specific purposes by the City, using the highest level of decision-making 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 City’s TDA Funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes.

The TDA Funds’ total fund balance as of June 30, 2023 is restricted for programs under Article 3, Section 99234 and Article 8, Section 99400(a) of the TDA.

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. #3..
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City of Modesto
Transportation Development Act Funds
Notes to Financial Statements
Year Ended June 30, 2023
11 NOTE 2 CASH AND INVESTMENTS
Cash and investments of the TDA Funds are pooled with other City 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 TDA Funds’ investments as all cash is invested as part of the common cash and investment pool of the City. 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 TDA Funds do not have any deposits with financial institutions as of June 30, 2023.

Cash and investments as of June 30, 2023 are classified in the accompanying financial statements as follows:

Description Amount
Balance Sheet – Local Transportation
Special Revenue Funds:

Cash and investments $1,706,266
Total cash and investments $1,706,266
Summary of Deposits
Cash and investments as of June 30, 2023 consist of the following:

Description Amount
Deposit with the City
Cash and investments pool $1,706,266
Total cash and investments $1,706,266
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City of Modesto
Transportation Development Act Funds
Notes to Financial Statements
Year Ended June 30, 2023
12 NOTE 2 CASH AND INVESTMENTS (CONTINUED)
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’s ACFR. As of June 30, 2023, the fair value of the TDA Funds’ position in the pool is the same as the value of its pool shares.

NOTE 3 UNEARNED REVENUE
Unearned revenue for the TDA Funds for the year ended June 30, 2023, was as follows:

NonMotorizedStreets and
Roads Total
Unearned revenue, beginning of year $1,494,791 $238,274 $1,733,065 TDA funds allocated 357,013 - 357,013
TDA funds earned (88,272) - (88,272)
Unearned revenue, end of year $1,763,532 $238,274 $2,001,806 NOTE 4 SUBSEQUENT EVENTS
The City has evaluated events subsequent to the balance sheet date through November 17, 2023, the date the financial statements were available to be issued. Based upon this evaluation, it was determined that no subsequent events occurred that require recognition or disclosure in the financial statements.
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13 Independent Auditor’s 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
The 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 (Government Auditing Standards), the financial statements of the Transportation Development Act (TDA) Funds of the City of Modesto, California (the City), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s TDA Funds basic financial statements, and have issued our report thereon dated November 17, 2023.

Report on 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) 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 City’s internal control as it relates to the TDA Funds. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control as it relates to the TDA Funds.
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14 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 may exist that were not identified.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s TDA 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, noncompliance with which could have a direct and material effect on the TDA Funds 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 or the Transportation Development Act. #3..
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15 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 City’s internal control and compliance as it relates to the TDA Funds. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
November 17, 2023
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www.vasquez.cpa
Vasquez & Company LLP has over 50 years of experience in performing audit, accounting & consulting services for all types of nonprofit organizations, for-profit companies, governmental entities and publicly traded companies. Vasquez is a member of the RSM US Alliance. RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM™ logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • Ph. (213) 873-1700 • Fax (213) 873-1777
#3..
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City of Modesto, California
Single Audit Report
For the Year Ended June 30, 2023
with Independent Auditor’s Report
#3..
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City of Modesto, California
Single Audit Report
For the Year Ended June 30, 2023
with Independent Auditor’s Report
#3..
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City of Modesto, California
Table of Contents
PAGE
Independent Auditor’s Reports
Independent Auditor’s 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 1 Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 4 Schedule of Expenditures of Federal Awards 9
Notes to Schedule of Expenditures of Federal Awards 22
Schedule of Findings and Questioned Costs 24
Summary Schedule of Prior Audit Findings 28
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1 Independent Auditor’s 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 The Honorable Mayor and the 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 (Government Auditing Standards), the financial statements of the governmental activities, 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, 2023, 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 8, 2023.

Report on 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) 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 City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control.
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2 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.

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 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. #3..
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3 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 entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Glendale, California
December 8, 2023
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4 Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
The Honorable Mayor and the Members of the City Council City of Modesto, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Modesto, California’s (the City) compliance with the types of compliance requirements identified as subject to audit 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, 2023. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its major federal programs for the year ended June 30, 2023.

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 (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United #3..
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5 States (Government Auditing Standards); 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 Auditor’s 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.

Auditor’s 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 GAAS, 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 #3..
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6 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.

In performing an audit in accordance with GAAS, 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 #3..
- 924 -
7 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 Auditor’s 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.

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.

Report on the 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, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon, dated December 8, 2023, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of #3..
- 925 -
8 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 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 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.

Glendale, California
December 8, 2023
#3..
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See Notes to Schedule of Expenditures and Federal Awards. 9 City of Modesto
Schedule of Expenditures of Federal Awards
Year ended June 30, 2023
Federal Grantor/Pass-through Grantor/Cluster/Program
Assistance
Listing
Number
Grant
Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF AGRICULTURE
Passed through the California Office of Emergency Services:

Cooperative Fire Protection Agreement 10.703 $450,364 $- TOTAL U.S. DEPARTMENT OF AGRICULTURE 450,364 -
U.S. DEPARTMENT OF INTERIOR
Passed through the California Department of Parks and Recreation:

Outdoor Recreation Acquisition, Development and Planning - Ralston Tower Park 15.916 LW-50-028 531,554 -
TOTAL U.S. DEPARTMENT OF INTERIOR 531,554 - *
U.S. DEPARTMENT OF HOMELAND SECURITY
Direct Program:

Staffing for Adequate Fire and Emergency Response (SAFER) 97.083 EMW-2020 -FF01443 1,466,161 -
TOTAL U.S. DEPARTMENT OF HOMELAND SECURITY 1,466,161 -
(Continued)
#3..
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2023
See Notes to Schedule of Expenditures and Federal Awards. 10 Federal Grantor/Pass-through Grantor/Cluster/Program Assistance
Listing
Number
Grant
Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Direct Programs:

CDBG - Entitlement Grants Cluster
Community Development Block Grants (CDBG)/Entitlement
Program 14.218
B-13-MC060002 $7,125 $-
Community Development Block Grants (CDBG)/Entitlement
Program 14.218
B-14-MC060002 25,874 -
Community Development Block Grants (CDBG)/Entitlement
Program 14.218
B-18-MC060002 11,577 -
Community Development Block Grants (CDBG)/Entitlement
Program 14.218
B-19-MC060002 1,286 -
Community Development Block Grants (CDBG)/Entitlement
Program 14.218
B-20-MC060002 235,270 42,881
Community Development Block Grants (CDBG)/Entitlement
Program – CARES Act 14.218
B-20-MW060002 738,416 455,947
(Continued)
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- 928 -
City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2023
See Notes to Schedule of Expenditures and Federal Awards. 11 Federal Grantor/Pass-through Grantor/Cluster/Program Assistance
Listing
Number
Grant
Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
(CONTINUED)
Community Development Block Grants (CDBG)/Entitlement
Program 14.218
B-21-MC060002 $982,778 $-
Community Development Block Grants (CDBG)/Entitlement
Program 14.218
B-22-MC060002 669,927 308,362
Total CDBG – Entitlement Grants Cluster 2,672,253 807,190 Emergency Solutions Grant Program 14.231
E-20-MW060002 882,503 708,597
Emergency Solutions Grant Program - CARES Act 14.231
E-21-MC060002 115,117 14,303
Emergency Solutions Grant Program 14.231
E-22-MC060002 105,926 79,938
Total Emergency Solutions Grant Program 1,103,546 802,838 (Continued)
#3..
- 929 -
City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2023
See Notes to Schedule of Expenditures and Federal Awards. 12 Federal Grantor/Pass-through Grantor/Cluster/Program Assistance
Listing
Number
Grant
Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
(CONTINUED)
Home Investment Partnerships Program 14.239
M-18-MC060207 $15,116 $-
Home Investment Partnerships Program 14.239
M-19-MC060207 220,538 -
Home Investment Partnerships Program 14.239
M-20-MC060207 32,431 -
Home Investment Partnerships Program 14.239
M-21-MC060207 4,350 -
Home Investment Partnerships Program 14.239
M-21-MP060207 18,311 -
Total CDBG – Entitlement Grants Cluster 290,746 -
(Continued)
#3..
- 930 -
City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2023
See Notes to Schedule of Expenditures and Federal Awards. 13 Federal Grantor/Pass-through Grantor/Cluster/Program Assistance
Listing
Number
Grant
Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
(CONTINUED)
Economic Development Initiative 14.251 $3,070 $-
TOTAL U.S. DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT 4,069,615 1,610,028
U.S. DEPARTMENT OF JUSTICE
Direct Programs
Coronavirus Emergency Supplemental Funding 16.034
2020-VD-BX0954 131,975 -
Public Safety Partnership and Community Policing Grants

16.710
15JCOPS-21-
GG-02447-
SPPS 4,244 -
136,219 -
(Continued)
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- 931 -
City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2023
See Notes to Schedule of Expenditures and Federal Awards. 14 Federal Grantor/Pass-through Grantor/Cluster/Program Assistance
Listing
Number
Grant
Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF JUSTICE (CONTINUED)
Passed through the County of Stanislaus:

Edward Byrne Memorial Justice Assistance Grant 16.738
2020-DJ-BX0226 $52,965 $-
Edward Byrne Memorial Justice Assistance Grant 16.738
115PBJA-21-
GG-01178-
JAGX 68,939 -
Total Edward Byrne Memorial Justice Assistance Grant 121,904 - **
TOTAL U.S. DEPARTMENT OF JUSTICE 258,123 -
(Continued)
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- 932 -
City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2023
See Notes to Schedule of Expenditures and Federal Awards. 15 Federal Grantor/Pass-through Grantor/Cluster/Program Assistance
Listing
Number
Grant
Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION
Direct Programs:

Federal Transit Cluster
Transit, Maintenance & Capital Purchases 20.526
CA- 2019-
002-00 $678,595 $-
Transit, Maintenance & Capital Purchases 20.526
CA-2021-003-
00 2,006,514 -
Total Federal Transit Cluster 2,685,109 - *
Passed through the California Department of Transportation:

Airport Improvement Program 20.106 AIP-045 59,000 -
Highway Planning and Construction 20.205
BRLS5938(167) 51,551 -
(Continued)
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2023
See Notes to Schedule of Expenditures and Federal Awards. 16 Federal Grantor/Pass-through Grantor/Cluster/Program Assistance
Listing
Number
Grant
Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION (CONTINUED)
Highway Planning and Construction 20.205
TGHPLUL5059(230) $1,126,494 $-
Highway Planning and Construction 20.205
CML5059(186) 658 -
Highway Planning and Construction 20.205
STPL5059(208) 129,458 -
Highway Planning and Construction 20.205
CML5059(217) 221,595 -
Highway Planning and Construction 20.205
CML5059(219) 61,814 -
Highway Planning and Construction 20.205
CML5059(222) 313,872 -
Highway Planning and Construction 20.205
ATPL5059(233) 58,839 -
(Continued)
#3..
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2023
See Notes to Schedule of Expenditures and Federal Awards. 17 Federal Grantor/Pass-through Grantor/Cluster/Program Assistance
Listing
Number
Grant
Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION (CONTINUED)
Highway Planning and Construction 20.205
HSIPL5059(227) $499,488 $-
Highway Planning and Construction 20.205
CML5059(229) 11,663 -
Highway Planning and Construction 20.205
STPL5059(234) 9,905 -
Highway Planning and Construction 20.205
CML5059(236) 12,619 -
Highway Planning and Construction 20.205
HSIPL5059(237) 24,895 -
Highway Planning and Construction 20.205
HSIPL5059(238) 870,612 -
Highway Planning and Construction 20.205
STPL5059(242) 198,827 -
(Continued)
#3..
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2023
See Notes to Schedule of Expenditures and Federal Awards. 18 Federal Grantor/Pass-through Grantor/Cluster/Program Assistance
Listing
Number
Grant
Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION (CONTINUED)
Highway Planning and Construction 20.205
STPL5059(250) $16,471 $-
Highway Planning and Construction 20.205
CML5059(244) 21,639 -
Highway Planning and Construction 20.205
CML5059(245) 12,185 -
Highway Planning and Construction 20.205
CML5059(246) 9,877 -
Highway Planning and Construction 20.205
CMLNI-5059-
(247) 925 -
Highway Planning and Construction 20.205
CMLNI-5059-
(248) 26,213 -
(Continued)
#3..
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City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2023
See Notes to Schedule of Expenditures and Federal Awards. 19 Federal Grantor/Pass-through Grantor/Cluster/Program Assistance
Listing
Number
Grant
Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION (CONTINUED)
Highway Planning and Construction 20.205
CMLNI-5059-
(249) $6,526 $-
Highway Planning and Construction 20.205
CML-5059-
256 27,195 -
Highway Planning and Construction 20.205
CML-5059-
(235) 3,092 -
Highway Planning and Construction 20.205
CML-5059-
(240) 27,498 -
Total Highway Planning and Construction 3,743,911 -
(Continued)
#3..
- 937 -
City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2023
See Notes to Schedule of Expenditures and Federal Awards. 20 Federal Grantor/Pass-through Grantor/Cluster/Program Assistance
Listing
Number
Grant
Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF TRANSPORTATION
Passed through the California Office of Traffic Safety:

Highway Safety Cluster
State and Community Highway Safety 20.600 PS22007 $2,720 $- State and Community Highway Safety 20.600 PT22034 48,605 - State and Community Highway Safety 20.600 PT23045 65,894 - State and Community Highway Safety 20.600 PS23005 10,168 - Total Highway Safety Cluster 127,387 -
Minimum Penalties for Repeat Offenders for
Driving While Intoxicated 20.608 PT22034 14,646 -
Minimum Penalties for Repeat Offenders for
Driving While Intoxicated 20.608 PT23045 185,666 -
Total Minimum Penalties for Repeat Offenders for
Driving While Intoxicated 200,312 -
TOTAL U.S. DEPARTMENT OF TRANSPORTATION 6,815,719 -
(Continued)
#3..
- 938 -
City of Modesto
Schedule of Expenditures of Federal Awards (Continued)
Year ended June 30, 2023
See Notes to Schedule of Expenditures and Federal Awards. 21 Federal Grantor/Pass-through Grantor/Cluster/Program Assistance
Listing
Number
Grant
Identifying
Number
Federal
Award
Expenditures
Passedthrough to
Subrecipients
U.S. DEPARTMENT OF THE TREASURY
Direct program:

Coronavirus State and Local Fiscal Recovery Funds 21.027 $13,590,395 $1,253,272 Passed through State Water Resources Board:

Coronavirus State and Local Fiscal Recovery Funds 21.027 3,679,958 - *** TOTAL U.S. DEPARTMENT OF THE TREASURY 17,270,353 1,253,272 *
TOTAL EXPENDITURES OF FEDERAL AWARDS $30,861,889 $2,863,300 * Denotes major program
** 2020 BJAG expenses were overstated by $95,643 in prior fiscal years. $4,880 of the $95,643 in expenses should have been reported under 2021 BJAG costs.
*** State Water Resource Board grants were fully spent during FY22 but were not reported on the SEFA. #3..
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22 City of Modesto
Notes to Schedule of Expenditures of Federal Awards
Year ended June 30, 2023
NOTE 1 BASIS OF PRESENTATION
The accompanying schedule of expenditures of federal awards (SEFA) presents the activity of all federal financial assistance programs of the City of Modesto, California (the City). For purposes of this schedule, financial awards include federal awards received directly from a federal agency, as well as federal funds received indirectly by the City from a non-federal agency or other organization. Only the portions of program expenditures reimbursable with federal funds are reported in the accompanying schedule. Program expenditures in excess of the maximum reimbursement authorized, if any, or the portion of the program expenditures that were funded with other state, local or other non-federal funds are excluded from the accompanying schedule.

The information in the SEFA 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). Because the SEFA presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying SEFA is presented using the modified accrual basis of accounting, which is described in Note 1 of the notes to the City’s basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

The City has elected not to use the 10-percent de minimis indirect cost rate allowed in the Uniform Guidance.
#3..
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City of Modesto
Notes to Schedule of Expenditures of Federal Awards
Year ended June 30, 2023
23 NOTE 3 RELATIONSHIP TO FEDERAL FINANCIAL REPORTS
Grant expenditure reports for the year ended June 30, 2023, which have been submitted to grantor agencies, will, in some cases, differ from the amounts disclosed herein. The reports prepared for grantor agencies are typically prepared at a later date and often reflect refined estimates of the year-end accruals.

NOTE 4 RELATIONSHIP TO ANNUAL COMPREHENSIVE FINANCIAL REPORT Amounts reported in the accompanying SEFA agree, in all material respects, to amounts reported within the City’s Annual Comprehensive Financial Report. #3..
- 941 -
24 City of Modesto
Schedule of Findings and Questioned Costs
Year Ended June 30, 2023
SECTION I – SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor’s report issued on whether the
financial statements audited were prepared
in accordance with GAAP Unmodified
Internal control over financial reporting:
• Material weakness(es) identified? No
• Significant deficiency(ies) identified? None reported Noncompliance material to financial
statements noted No
Federal Awards
Internal control over major programs:
• Material weakness(es) identified? No
• Significant deficiency(ies) identified? None reported Type of auditor’s report issued on compliance
with respect to major federal programs: Unmodified
Any audit findings disclosed that are required to be reported in accordance with Section 2 CFR 200.516(a)? No
#3..
- 942 -
City of Modesto
Schedule of Findings and Questioned Costs (Continued)
Year Ended June 30, 2023
25 SECTION I – SUMMARY OF AUDITOR'S RESULTS (CONTINUED) Identification of Major Programs:

Assistance Listing Number Name of Federal Program or Cluster

15.916 Outdoor Recreation Acquisition, Development
and Planning

20.526 Federal Transit Cluster

21.027 Coronavirus State and Local Fiscal
Recovery Funds
Dollar threshold used to distinguish between
Type A and Type B programs $925,857
Auditee qualified as a low-risk auditee? Yes
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City of Modesto
Schedule of Findings and Questioned Costs (Continued)
Year Ended June 30, 2023
26 SECTION II – FINANCIAL STATEMENT FINDINGS
There were no financial statement findings noted during the fiscal year ended June 30, 2023. #3..
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City of Modesto
Schedule of Findings and Questioned Costs (Continued)
Year Ended June 30, 2023
27 SECTION III – FEDERAL AWARD FINDINGS
There were no federal award findings noted during the fiscal year ended June 30, 2023. #3..
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28 City of Modesto
Summary Schedule of Prior Audit Findings
Year ended June 30, 2023
There were no prior year findings reported during the fiscal year ended June 30, 2022. #3..
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www.vasquez.cpa
Vasquez & Company LLP has over 50 years of experience in performing audit, accounting & consulting services for all types of nonprofit organizations, for-profit companies, governmental entities and publicly traded companies. Vasquez is a member of the RSM US Alliance. RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP.

Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International.

The RSM™ logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • Ph. (213) 873-1700 • Fax (213) 873-1777
#3..
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City of Modesto
Annual Financial Report
Measure H Fund
of the City of Modesto, California
As of and for the Year Ended June 30, 2023
With Independent Auditor’s Report
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City of Modesto
Annual Financial Report
Measure H Fund
of the City of Modesto, California
As of and for the Year Ended June 30, 2023
With Independent Auditor’s Report
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City of Modesto, California
Measure H Fund
Table of Contents
PAGE
Independent Auditor’s Report 1
Basic Fund Financial Statements
Balance Sheet 5
Statement of Revenues, Expenditures, and Changes in Fund Balance 6 Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 7
Notes to Basic Fund Financial Statements 8
Independent Auditor’s 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 13 #3..
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1 Independent Auditor’s Report
The Honorable Members of the City Council
City of Modesto, California
Report on the Audit of Financial Statements
Opinion
We have audited the accompanying financial statements of the Measure H Fund of the City of Modesto, California, as of and for the year ended June 30, 2023, the budgetary comparison statement for the year ended June 30, 2023 and the related notes to the financial statements, which collectively comprise the Measure H Fund’s basic fund financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of the Measure H Fund of the City of Modesto, California as of June 30, 2023, and the changes in its financial position and budgetary comparison for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter
As discussed in Note 1, the financial statements present only the Measure H Fund and do not purport to, and do not present fairly the financial position of the City of Modesto, California, as of June 30, 2023, and the changes in its financial position 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.

Auditor’s 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 auditor’s report that includes our opinion. 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 GAAS 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. #3..
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3 In performing an audit in accordance with GAAS 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 City of Modesto, California’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.

Required Supplementary Information
Management has omitted management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic fund 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 fund financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic fund financial statements is not affected by this missing information. #3..
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4 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 17, 2023, on our consideration of the City of Modesto, California’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 Measure H Fund. 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 of Modesto, California’s internal control over financial reporting or on compliance as it relates to the Measure H Fund. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Modesto, California’s internal control over financial reporting and compliance as it relates to the Measure H Fund.

Glendale, California
November 17, 2023
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See notes to basic fund financial statements.
5 City of Modesto
Measure H Fund
Balance Sheet
June 30, 2023
ASSETS
Cash and investments $1,981,120
Taxes receivable 8,641,284
Interest receivable 1,758
Total Assets $10,624,162

LIABILITIES
Accounts payable $334,668
Total Liabilities 334,668

FUND BALANCE
Unassigned 10,289,494
Total Fund Balance 10,289,494
Total Liabilities and Fund Balance $10,624,162
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See notes to basic fund financial statements.
6 City of Modesto
Measure H
Statement of Revenues, Expenditures, and
Changes in Fund Balance
Year Ended June 30, 2023

REVENUES
Sales tax $11,116,219
Change in fair value of investments 584
Total Revenues 11,116,803

EXPENDITURES
Public safety 48,420
Parks and recreation 280,617
Public works 498,272
Total Expenditures 827,309
Changes in Fund Balance 10,289,494
Fund Balance, Beginning of Year -
Fund Balance, End of Year $10,289,494
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See notes to basic fund financial statements.
7 City of Modesto
Measure H
Statement of Revenues, Expenditures, and
Changes in Fund Balance – Budget and Actual
Year Ended June 30, 2023
Description
Original
Budgeted
Amounts
Final
Budgeted
Amounts
Actual
Amounts
Variance
with Final
Budget

REVENUES
Sales tax $- $- $11,116,219 $11,116,219
Change in fair value of
investments - - 584 584
Total Revenues - - 11,116,803 11,116,803

EXPENDITURES
Public safety
Fire protection 440,000 440,000 34,944 405,056
Police protection 596,929 596,929 13,476 583,453
Parks and recreation
Operations service and
maintenance 1,155,214 1,155,214 280,617 874,597
Public works
Streets 1,873,960 1,873,960 498,272 1,375,688
Capital outlay 410,900 410,900 - 410,900
Total Expenditures 4,477,003 4,477,003 827,309 3,649,694 Changes in Fund Balance $(4,477,003) $(4,477,003) 10,289,494 $14,766,497 Fund Balance, Beginning of
Year -
Fund Balance, End of Year $10,289,494
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8 City of Modesto
Measure H Fund
Notes to Basic Fund Financial Statements
Year Ended June 30, 2023
NOTE 1 GENERAL
On November 8, 2022, the City of Modesto, California (the City) voters approved Measure H, a one-cent sales tax for general City services. Measure H is expected to provide the City an approximately $39 million annually in additional sales tax revenues into its General Fund.

Measure H funding seeks to improve City services over public safety, blight, and homelessness and to fund citywide deferred maintenance across multiple city departments.

Measure H specifies that the rate of the transactions tax shall be one-cent of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in the City and that the rate of the transactions and use tax shall be one-cent of the sales price of tangible personal property stored, used, or otherwise consumed in the City. The tax shall be in effect until it is repealed by the voters. The California Department of Tax and Fee Administration collects the tax from retailers subject to the tax and remits the funds to the City.

Measure H Fund is 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 Measure H Fund is presented as part of the General Fund in the City’s Comprehensive Annual Financial Report (ACFR). These financial statements are intended to reflect only the financial position and changes in financial position of the City’s Measure H Fund in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
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City of Modesto
Measure H Fund
Notes to Basic Fund Financial Statements
Year Ended June 30, 2023
9 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Measurement Focus, Basis of Accounting and Financial Statement Presentation The accompanying fund financial statements for the Measure H Fund of the City, have been prepared on the modified-accrual basis of accounting. Revenues are recognized when they become “susceptible to accrual,” that is, measurable and available to finance expenditures of the current period. Expenditures are recorded when the liability is incurred.

Governmental funds are accounted for on spending or “financial flow” measurement focus. This means that generally, only current assets and current liabilities are included on their balance sheet. Statement of revenues, expenditures, and changes in fund balance for governmental funds generally present increases (revenues and other financing sources) and decreases (expenditures and other financial uses) in net current assets.

Budget
The City is required by its Charter to adopt an annual budget. On or before the first day of June each year, the City Manager shall submit to City Council a proposed budget for all departments.

The said budget shall include estimates for all revenues and expenditures for the ensuing year.

From the effective date of the budget, the amounts stated therein, as proposed expenditures become appropriations to various City departments. The City adopts annual appropriated budgets for its General and Special Revenue Funds, which are major funds. Budgetary comparison statement has been provided for this fund to demonstrate compliance with the budget. The budgetary comparison statement is presented on a budgetary basis which differs from U.S. GAAP in the method of accounting for accruals and encumbrances. #3..
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City of Modesto
Measure H Fund
Notes to Basic Fund Financial Statements
Year Ended June 30, 2023
10 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 the 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 monthly. Interest income on restricted cash and investments with fiscal agents is credited directly to the related fund.

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 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 to be maintained intact. The Measure H Fund did not have any nonspendable resources as of June 30, 2023.
• 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 H Fund did not have any restricted resources as of June 30, 2023.
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City of Modesto
Measure H Fund
Notes to Basic Fund Financial Statements
Year Ended June 30, 2023
11 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Balance (Continued)
• Committed – Amounts constrained to specific purposes by the City, 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 highestlevel action to remove or change the constraint. The Measure H Fund did not have any committed resources as of June 30, 2023.
• Assigned – Amounts the Measure H Fund intends to use for a specific purpose. Intent can be expressed by the Measure H Fund or by an official or body to which the City Council delegates the authority. The Measure H Fund did not have any assigned resources as of June 30, 2023.
• Unassigned – Amounts that are available for any purpose. The Measure H unassigned resources as of June 30, 2023 amounted to $10,289,494.

The Measure H 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 City through adoption or amendment of the budget or future year budget plan as intended for a specific purpose. The City’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.
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City of Modesto
Measure H Fund
Notes to Basic Fund Financial Statements
Year Ended June 30, 2023
12 NOTE 3 CASH AND INVESTMENTS
Unspent funds received for the Measure H Fund are pooled with the City’s other cash and investments. The Measure H Fund’s share of the interest earned from the cash and investment pool is allocated monthly based on each fund’s respective average monthly cash balance.

Detailed information concerning the City’s pooled cash and investments, including information regarding the fair value of investments, may be found in the City’s ACFR.

NOTE 4 SUBSEQUENT EVENTS
The City has evaluated events subsequent to the balance sheet date through November 17, 2023, the date the financial statements were available to be issued. Based upon this evaluation, it was determined that no subsequent events occurred that require recognition or disclosure in the financial statements.
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13 Independent Auditor’s 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 The 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 (Government Auditing Standards), the financial statements of the Measure H Fund of the City of Modesto, California (the City) as of and for the year ended June 30, 2023, the budgetary comparison statement for the year then ended June 30, 2023 and the related notes to the financial statements, which collectively comprise the Measure H Fund’s basic financial statements, and have issued our report thereon dated November 17, 2023.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the Fund’s financial statements, we considered the City’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 opinion on the Fund’s financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control as it relates to the Measure H Fund. Accordingly, we do not express an opinion on the effectiveness of City’s internal control as it relates to the Measure H Fund.
#3..
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14 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.

However, material weaknesses or significant deficiencies may exist that were not identified.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s Measure H Fund 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 City’s Measure H Fund 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.
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15 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 as it relates to Measure H Fund. 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 as it relates to Measure H Fund.

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

Glendale, California
November 17, 2023
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www.vasquez.cpa
Vasquez & Company LLP has over 50 years of experience in performing audit, accounting & consulting services for all types of nonprofit organizations, for-profit companies, governmental entities and publicly traded companies. Vasquez is a member of the RSM US Alliance. RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM™ logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • Ph. (213) 873-1700 • Fax (213) 873-1777
#3..
- 966 -

CITY OF MODESTO

COMMITTEE REPORT
DATE OF MEETING:

January 24, 2024
Date: December 5, 2023
TO: Audit Committee
Sue Zwahlen, Chair
Nick Bavaro, Vice-Chair
David Wright, Member
Camille Garnica, Public Member
Jennifer Barillas, Public Member
THROUGH: Joseph P. Lopez, City Manager
FROM: DeAnna Christensen, Director of Finance
SUBJECT: Fiscal Year 2022-2023 Auditor’s Report on Compliance of the Measure L: Local Roads First Transportation Funding Measure
CONTACT: Maria Garnica, Accounting Manager 209-577-5249; [email protected] DESCRIPTION:

Consider the Auditors’ Reports and Schedule of Measure L Program Revenues and Expenditures for Fiscal Year ended June 30, 2023, and forwarding to Council for approval. (Funding Source: Not Applicable)
STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto 2020-2025 Strategic Plan focus of Governance and Service Delivery under Goal H: Achieve Financial Sustainability.

BACKGROUND:

In November of 2016 the voters of Stanislaus County approved the county wide, 25-year, halfcent sales tax increase known as Measure L. As part of the safeguards built into the expenditure plan an annual independent audit and annual reporting must be completed. On page 8 of the expenditure plan, the ordinance states “Annual fiscal and compliance audits will be conducted by a CPA, to assure that the revenues expended are necessary and reasonable.” The ordinance also requires an audit annually to ensure that administrative expenses were no more than 1% of revenues expended and that the jurisdiction meets its maintenance of effort.

On December 12, 2017, per Resolution 2017-505, Council approved the Measure L master funding agreement with the Stanislaus Council of Governments (StanCOG). The agreement #4..
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Audit Committee, January 24, 2024
Fiscal Year 2022-2023 Measure L Auditor’s Report

Page 2 of 3 ends

states in Article II: Funding Prerequisites and Requirement that the recipient shall annually submit to StanCOG, “An annual independent audit of all of recipients Measure L accounts which audit shall be conducted at recipient’s sole cost and expense.” For the audit related to FY 2022-2023, the City received information from StanCOG that they would be continuing to conduct the annual audit and that it would be at the expense of StanCOG as part of the 1% allowable administrative expenses within the Measure L ordinance.

The accounting firm of Henderson CPAs, was selected by StanCOG conducted the Fiscal Year 2022-2023 audit report.

DISCUSSION:

As part of the City’s Fiscal Year 2022-2023 Measure L Program Audit, the accounting firm verified the revenues and expenditures, fund balances, and that the Maintenance of Effort requirement was met.

In order to accomplish the audit, the City provided the following information to the firm:
 Receipt of payment for all cash received from StanCOG  Detail of all payroll charges and expenditures supporting documentation  Copies of completed monthly reports submitted to StanCOG  Revenue and Expenditure General Ledger detail and the trial balance for all Measure L funds
 Copy of the certification for the maintenance of effort  List of all Measure L projects and a copy of the Strategic Plan After all the information was provided, staff worked closely with the firm to ensure that any requested documents and questions asked were addressed in a timely manner.

On December 15, 2023, Hudson Henderson & Company, Inc. issued the final independent auditor’s report of the Measure L program for the fiscal year ending on June 30, 2023. In addition, on December 15, 2023, the firm issued a letter to the Policy Board of Stanislaus Council of Governments with the final report. Both the final report and the letter to StanCOG did not have any findings for the year ending June 30, 2023.

FISCAL IMPACT:

While the information contained in this report discloses the financial performance for the City, there is no direct fiscal impact.

RECOMMENDED COMMITTEE ACTION:

Staff Recommendations:

Motion recommending the acceptance of Fiscal Year 2022-2023 Auditor’s Report on Compliance of the Measure L Local Roads First Transportation Funding Measure and forwarding to Council for approval.

Approved by:

DeAnna Christensen, Director of Finance
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Audit Committee, January 24, 2024
Fiscal Year 2022-2023 Measure L Auditor’s Report

Page 3 of 3 ends

Joseph P. Lopez, City Manager
Attachment:

1. Independent Auditors’ Reports and Schedule of Measure L Revenues and Expenditures for Fiscal Year Ended June 30, 2023.

2. Letter to the Policy Board of Stanislaus Council of Governments #4..
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STANISLAUS COUNCIL OF GOVERNMENTS
MEASURE L – CITY OF MODESTO

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED
JUNE 30, 2023
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TABLE OF CONTENTS
Page
Independent Auditor’s Report....................................................................................................................... 1 Basic Financial Statements:

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 Auditor’s 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 #4..
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7086 N. Maple Ave., Suite 104
Fresno, CA 93720
P | (559) 412-7576 F | (559) 493-5325
www.henderson.cpa
INDEPENDENT AUDITOR’S 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, 2023, 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, 2023, 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 Auditor’s 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.

Auditor’s 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 auditor’s report that includes our opinion.
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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 December 15, 2023 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.

HENDERSON CPAs, INC.

Fresno, California
December 15, 2023
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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, 2023
Governmental
Activities
ASSETS
Cash and investments $ 35,179,554
Accounts receivable 3,692,812
Total Assets 38,872,366

LIABILITIES
None -
Total Liabilities -

NET POSITION
Restricted 38,872,366
Total Net Position $ 38,872,366
#4..
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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, 2023
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 $ 8,285,897 $ 14,104,395 $ 5,818,498 Totals $ 8,285,897 $ 14,104,395 5,818,498
General Revenues:

Investment earnings (losses) 286,390
Total General Revenues 286,390
6,104,888
Net Position, Beginning of Year 32,767,478
Net Position, End of Year $ 38,872,366
Revenues
Change in Net Position
#4..
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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, 2023
ASSETS
Cash and investments $ 35,179,554
Accounts receivable 3,692,812
Total Assets $ 38,872,366

LIABILITIES
Liabilities
None $ -
Total Liabilities -

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 1,294,264
Total Deferred Inflows of Resources 1,294,264

FUND BALANCE
Restricted $ 37,578,102
Total Fund Balance 37,578,102
Total Liabilities, Deferred Inflows of Resources, and Fund Balance $ 38,872,366 Reconciliation of the Balance Sheet of the Governmental Fund to the Statement of Net Position:

Total Fund Balance - Governmental Fund $ 37,578,102
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 current period, but are considered deferred in the governmental funds. 1,294,264
Total Net Position - Governmental Activities $ 38,872,366 #4..
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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, 2023

REVENUES
Measure L funds $ 12,810,131
Investment earnings (losses) 286,390
Total Revenues 13,096,521

EXPENDITURES
Public ways and facilities 8,285,897
Total Expenditures 8,285,897
Net Change in Fund Balance 4,810,624
Fund Balance, Beginning of Year 32,767,478
Fund Balance, End of Year $ 37,578,102
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 $ 4,810,624 Adjustments to the Statement of Revenues, Expenditures and Changes in Fund Balance of the Governmental Fund to reconcile with the Statement of Activities:

Revenues were considered earned in the Statement of Net Position in the current period, but are considered deferred in the current year governmental funds. 1,294,264
Change in Net Position - Governmental Activities $ 6,104,888 #4..
- 978 -
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, 2023
Actual Variance with
Original Final (GAAP Basis) Final Budget

RESOURCES (INFLOWS)
Measure L funds $ 11,211,151 $ 13,978,043 $ 12,810,131 $ (1,167,912) Investment earnings (losses) - - 286,390 286,390
Total Resources (Inflows) 11,211,151 13,978,043 13,096,521 (881,522)

CHARGES TO

APPROPRIATIONS
(OUTFLOWS)
Streets and roads 7,593,276 13,618,717 5,533,300 8,085,417 Bike and pedestrian 1,375,000 1,763,610 1,128,495 635,115 Traffic management 925,057 1,238,942 1,624,102 (385,160) Total Charges to
Appropriations (Outflows) 9,893,333 16,621,269 8,285,897 8,335,372 Net Change in Fund Balance $ 1,317,818 $ (2,643,226) 4,810,624 $ 7,453,850 Fund Balance, Beginning of Year 32,767,478
Fund Balance, End of Year $ 37,578,102
Budgeted Amounts
#4..
- 979 -

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.

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, 2023, 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 $0 as of June 30, 2023.

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.
#4..
- 981 -

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, 2023. • 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, 2023. • 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, 2023. • Unassigned – Amounts that are available for any purpose. The Measure L Fund did not have any unassigned resources as of June 30, 2023.

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, 2023, 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. 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. 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.

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

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 no events require disclosure in accordance with accounting standards. These subsequent events have been evaluated through December 15, 2023, which is the date the financial statements were available to be issued.

NOTE 2 – CASH AND INVESTMENTS
Cash and investments as of June 30, 2023 are classified in the accompanying financial statements as follows:

Statement of Net Position:

Cash and investments $ 35,179,554
Total cash and investments $ 35,179,554
#4..
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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, 2023 consist of the following:

Deposits with City of Modesto $ 35,179,554
Total cash and investments $ 35,179,554
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. #4..
- 984 -
7086 N. Maple Ave., Suite 104
Fresno, CA 93720
P | (559) 412-7576 F | (559) 493-5325
www.henderson.cpa
INDEPENDENT AUDITOR’S 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, 2023, 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 December 15, 2023.

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.

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 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.
#4..
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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.

HENDERSON CPAs INC.

Fresno, California
December 15, 2023
#4..
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STANISLAUS COUNCIL OF GOVERNMENTS
MEASURE L – CITY OF MODESTO

SUPPLEMENTAL SCHEDULE
#4..
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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, 2023
Category
Project
Number Project Name
Expense
Budget - Local
Control
Measure L
FY 22-23 Local
Control
Measure L
Expenses
Project to Date
Measure L
Local Control
Expenses
through
6/30/2023
Budget
Remaining for
Future Fiscal
Years
Local Streets & Roads 100806 2016 Pavement Rehab Project $ 176,106 $ 112,534 $ 176,106 $ - Local Streets & Roads 100942 Paradise Road Improvements 415,000 45,156 45,156 369,844 Local Streets & Roads 100966 Pelandale from Sisk to Dale 487,249 - 487,249 - 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 7,847,122 637,847 637,847 7,209,275 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 101157 Tuolumne Blvd. Pavement Rehab 2,502,283 - - 2,502,283 Local Streets & Roads 101168 Scenic Dr Pavement Rehab Phase 1 (Lakewood to Claus) 1,345,720 2,164 1,243,944 101,776 Local Streets & Roads 101169 Scenic Dr Pavement Rehab Phase 2 (Downey to 6,035,580 236,134 434,705 5,600,875 Local Streets & Roads 101170 Tully Road Pavement Rehab 2,011,496 - 2,011,496 - Local Streets & Roads 101171 Coffee Road Pavement Rehab Phase 1 3,186,604 - 3,186,604 - Local Streets & Roads 101214 Granger Neighborhood Pavement Rehabilitation 360,000 29,856 299,831 60,169 Local Streets & Roads 101245 2020 Pvmnt Condition Survey 300,000 6,248 189,180 110,820 Local Streets & Roads 101246 Briggsmore-McHenry to Oakdale 5,374,090 1,432,373 1,800,838 3,573,252 Local Streets & Roads 101248 Orangeburg Ave. Pvmt Rehab Ph1 3,121,267 1,771,012 1,997,171 1,124,096 Local Streets & Roads 101249 Pelandale Nghbrhd Pvmt Maintenance 1,871,250 1,208,011 1,481,249 390,001 Local Streets & Roads 101295 9th St Corridor Improvements 3,956,776 - - 3,956,776 Local Streets & Roads 101314 Coffee Road Pavement Rehab Phase 2 2,748,500 744 14,404 2,734,096 Local Streets & Roads 101315 Dale Road Pavement Rehabilitation 2,185,000 - 26,816 2,158,184 Local Streets & Roads 101392 Orangeburg Ave. Pvmt Rehab Ph2 1,736,500 51,221 51,221 1,685,279 Total Local Streets and Roads $ 59,539,303 $ 5,533,300 $ 27,962,577 $ 31,576,726 #4..
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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, 2023
Category
Project
Number Project Name
Expense
Budget - Local
Control
Measure L
FY 22-23 Local
Control
Measure L
Expenses
Project to Date
Measure L
Local Control
Expenses
through
6/30/2023
Budget
Remaining for
Future Fiscal
Years
Traffic Management 100634 Upgrade Traffic Signals - 2013 $ 169,432 $ - $ 169,432 $ - 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 32,500 393 30,411 2,089 Traffic Management 101039 Task Force for School Safety 46,187 11,834 46,187 - Traffic Management 101040 Orville Wright Elementary Improve. 586,702 6,111 540,195 46,507 Traffic Management 101043 Replace Traffic Controllers 584,437 584,437 - Traffic Management 101066 New Signal Oakdale/Claratina 110,000 11,260 11,260 98,740 Traffic Management 101089 Tully Road Safety Improvement 511,183 3,435 38,229 472,954 Traffic Management 101122 Install 2 Flashing Beacons 9,970 9,970 - Traffic Management 101123 Fiber Drop Traffic Signal Cabinet 420,372 14,366 240,156 180,216 Traffic Management 101124 Replace 35 Traffic Controllers 178,250 - 150,149 28,101 Traffic Management 101125 Traffic Signal Analysis Study 243,270 243,270 - Traffic Management 101157 Tuolumne Blvd. Pavement Rehab 1,023,610 - - 1,023,610 Traffic Management 101172 School Safety Program Study 250,000 40,061 174,148 75,852 Traffic Management 101173 School Area All Stop Beacon 48,000 48,000 - Traffic Management 101174 Advance School Zone Beacons at 13 Schools 129,983 4,972 129,983 - Traffic Management 101175 School Crosswalk Beacon 986,861 906,870 962,050 24,811 Traffic Management 101176 Upgrade Crosswalk to RRFB 37,456 - 37,456 - Traffic Management 101177 Upgrade RRFB - Elliot School 19,670 - 19,670 - Traffic Management 101178 Neighborhood Traffic Calming 1,150,000 133,559 193,522 956,478 Traffic Management 101179 HAWK System at Hetch-Hetchy on Tully and Prescott 470,711 - 25,846 444,865 Traffic Management 101192 Upgrade ATMS - 2019 439,628 286,797 286,797 152,831 Traffic Management 101221 School Safety Program Study - Projects 1,075,000 8,379 8,379 1,066,621 Traffic Management 101242 Install Video Detection 399,971 - 399,971 - Traffic Management 101247 Virginia Corridor Trail Maintenance 258,900 53,380 53,380 205,520 Traffic Management 101316 Adaptive Traffic Control Software 700,000 - 700,000 #4..
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18 STANISLAUS COUNCIL OF GOVERNMENTS

MEASURE L - CITY OF MODESTO
SCHEDULE OF EXPENDITURES BY PROJECT (continued)
FOR THE YEAR ENDED JUNE 30, 2023
Category
Project
Number Project Name
Expense
Budget - Local
Control
Measure L
FY 22-23 Local
Control
Measure L
Expenses
Project to Date
Measure L
Local Control
Expenses
through
6/30/2023
Budget
Remaining for
Future Fiscal
Years
Traffic Management 101317 Fiber Drop Carpenter/Prescott/Maze 40,000 13,927 18,597 21,403 Traffic Management 101318 Fiber Drop Downtown Corridors - G St. and H St. 30,000 11,812 16,261 13,739 Traffic Management 101322 Claus Road Signal Coordination 138,750 7,170 21,622 117,128 Traffic Management 101323 Scenic Drive Signal Coordination 185,000 5,815 20,798 164,202 Traffic Management 101383 Oakdale Road Improvement 66,390 5,788 5,897 60,493 Traffic Management 101384 Sylvan/Standiford PHB's 61,150 10,040 10,133 51,017 Traffic Management 101394 All-Way Stop Beacons - Closed 45,379 45,379 45,379 - Traffic Management 101395 Traffic Safety Analysis 195,000 40,567 40,567 154,433 Traffic Management 101397 Fiber Drop Sisk Road 30,000 2,065 2,065 27,935 Traffic Management 101482 SS4A Action Plan - 122 122 (122) Total Traffic Management $ 10,857,342 $ 1,624,102 $ 4,767,919 $ 6,089,423 Bike and Pedestrian 100882 MJC Bike Path Phase 2 $ 202,047 $ 202,047 $ - Bike and Pedestrian 101041 Active Transportation Plan 300,000 27,054 269,388 30,612 Bike and Pedestrian 101042 Paradise Road ATP 465,718 25,000 440,718 Bike and Pedestrian 101073 Carver/Bangs-Pelandale/Snyder Bike Trail System 205,591 - 205,591 Bike and Pedestrian 101126 Dry Creek Trail Maintenance 685,000 41,537 651,027 33,973 Bike and Pedestrian 101180 Dry Creek Trail Pavement Rehab & ADA Upgrade Phase II 1,447,967 42,311 54,416 1,393,551 Bike and Pedestrian 101247 Virginia Corridor Trail Maintenance 830,683 666,145 713,894 116,789 Bike and Pedestrian 101250 Neighborhood ADA Program 695,534 351,448 358,554 336,980 Bike and Pedestrian 101295 9th St Corridor Improvements 850,057 - - 850,057 Bike and Pedestrian 101391 Nghbrhd ADA Imp Program II 75,000 - - 75,000 Total Bike and Pedestrian $ 5,757,597 $ 1,128,495 $ 2,274,326 $ 3,483,271 Grand Total $ 76,154,242 $ 8,285,897 $ 35,004,822 $ 41,149,420 #4..
- 990 -
7086 N. Maple Ave., Suite 104
Fresno, CA 93720
P | (559) 412-7576 F | (559) 493-5325
www.henderson.cpa
December 15, 2023
To the Policy Board of
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, 2023, the budgetary comparison schedule for the special revenue fund and the related notes to the financial statements, which collectively comprise the basic financial statements of the Measure L Fund. 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 September 9, 2023. 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 2023. 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. No misstatements were detected as a result of audit procedures that were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.
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Stanislaus Council of Governments
Measure L – City of Modesto
December 15, 2023

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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 December 15, 2023.

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,
HENDERSON CPAs, INC.

By: Brian Henderson, CPA
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Audit CommitteeJanuary 24, 2024

Audit Committee
January 24, 2024